IRS Updates List of Automatic Accounting Method Changes
The IRS recently issued Rev. Proc. 2025-23, providing an updated list of changes in tax accounting methods to which the automatic change procedures in Rev. Proc. 2015-13, as subsequently modified, apply.
Rev. Proc. 2015-13 had updated and revised general procedures under Sec. 446(e) to obtain the IRS' automatic and advance nonautomatic consent to change an accounting method.
The method changes in Rev. Proc. 2025-23 are listed in 32 sections in Code section order. The revenue procedure makes 17 significant changes to the list of automatic changes in Rev. Proc. 2024-23. Each method change is described, including its applicability. Descriptions may also include conditions of inapplicability and additional requirements. Each method change is given a designated automatic accounting method change number for completing Form 3115.
For example, several paragraphs pertaining to the Sec. 481(a) adjustment are clarified by inserting “for any taxable year in which the election was made” into the second sentence. Also, three noteworthy changes concern changing methods from accrual to cash or cash to accrual, including Rev. Proc. 2025-23, Section 15.12, regarding farmers changing to cash. The section is clarified to state that the change under Section 15.12 is only applicable to a taxpayer’s trade or business of farming and not applicable to any nonfarming trade or business.
Rev. Proc. 2025-23 is generally effective for Forms 3115 filed on or after June 9, 2025, for a year of change ending on or after Oct. 31, 2024, filed under the automatic change procedures of Rev. Proc. 2015-13 as clarified and modified.