FROM THE OFFICE OF PUBLIC AFFAIRS

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Today, the Treasury Department and IRS issued a revenue procedure that sets forth the exclusive administrative procedures that taxpayers must use to obtain automatic consent to change to their method of accounting under the recently issued final regulations on capitalizing costs incurred in acquiring or creating intangible assets.

The procedures issued today generally are consistent with the existing procedures for automatic changes in method of accounting.  However, following the January 24, 2002, issuance of the advance notice of proposed rulemaking regarding capitalization of costs incurred with respect to intangible assets, some taxpayers changed to methods of accounting provided in the final regulations without the consent of the Commissioner. These taxpayers are not eligible to use the procedures issued today unless they amend their prior federal income tax returns to correct their unauthorized changes in method of accounting.

The procedures issued today are available for a taxpayer’s first taxable year ending on or after December 31, 2003. The Service intends to issue future guidance for changes in methods of accounting made for subsequent taxable years, including automatic consent procedures for some or all of the methods of accounting provided in the final regulations.   

Related Documents:

• The text of Rev. Proc. 2004-23