Form 3115 — Application for Change in Accounting Method

This skill produces an audit-grade Form 3115 from the user's facts about their current method, the desired method, the change reason, and the §481(a) adjustment computation. Form 3115 is filed when the taxpayer wants the IRS to consent to a change in accounting method — broadly defined to include overall methods (cash vs. accrual), depreciation methods, inventory methods, and many specific items.

The complexity in Form 3115 lives in three places: (1) classifying the change as automatic (DCN-listed, no user fee, deemed consent) or non-automatic (advance-consent filing required, user fee, IRS reviews), (2) computing the §481(a) adjustment (cumulative income/expense effect of the change, spread over multiple years), and (3) filing logistics (duplicate copy to Ogden, timing, statement of compliance).

The agent must ASK when the change reason is unclear or when the §481 adjustment computation depends on facts the user hasn't supplied — never default.

When to invoke

Engage this skill when any of the following is true: