IRS Corrects Guidance Modifying Procedures For Accounting Method Changes.

Part IV -- Items of General Interest

PURPOSE

The Internal Revenue Service publicly released Rev. Proc. 2009-39 on August 27, 2009, in advance of its publication in the Internal Revenue Bulletin on September 21, 2009. Rev. Proc. 2009-39 amplified, clarified, and modified Rev. Proc. 2008-52, 2008-2 C.B. 587, which provides procedures under which taxpayers may obtain automatic consent of the Commissioner to change certain methods of accounting. Rev. Proc. 2009-39 also modified and clarified Rev. Proc. 97-27, 1997-1 C.B. 680, as amplified and modified by Rev. Proc. 2002-19, 2002-1 C.B. 696, as amplified and clarified by Rev. Proc. 2002-54, 2002-2 C.B. 432, and as modified by Rev. Proc. 2007-67, 2007-2 C.B. 1072, which provides procedures for obtaining the advance consent of the Commissioner of Internal Revenue to change a method of accounting.

Rev. Proc. 2009-39 modified the procedures for a taxpayer that wants to make a change in method of accounting under Rev. Proc. 2008-52 or Rev. Proc. 97-27 while that taxpayer has a refund or credit under review by the Joint Committee on Taxation. This announcement corrects certain procedures described in Rev. Proc. 2009-39 for a taxpayer that has a refund or credit under review by the Joint Committee on Taxation. Rev. Proc. 2009-39, as published in Internal Revenue Bulletin 2009-38, reflects the corrections described in this announcement.

CORRECTIONS

(1) In section 2.02(2) of Rev. Proc. 2009-39, section 3.08 (Under examination) of Rev. Proc. 2008-52 was modified to insert new section 3.08(5) regarding a taxpayer before the Joint Committee on Taxation. Section 2.02(2) of Rev. Proc. 2009-39 is corrected to delete the second paragraph of new section 3.08(5) of Rev. Proc. 2008-52, as modified by Rev. Proc. 2009-39.

(2) In section 2.05(2) of Rev. Proc. 2009-39, sections 6.03(2) (90-day window), 6.02(3) (120-day window), and 6.03(4) (director consent) of Rev. Proc. 2008-52 were modified to insert procedures for a taxpayer before the Joint Committee on Taxation. Section 2.05(2) of Rev. Proc. 2009-39 is corrected to delete the last sentence in the following sections of Rev. Proc. 2008-52, as modified by Rev. Proc. 2009-39: sections 6.03(2)(a); 6.03(3)(a); and 6.03(4)(a).

(3) In section 2.05(2) of Rev. Proc. 2009-39, section 6.03(5) (Changes lacking audit protection) was modified to insert procedures for a taxpayer before the Joint Committee on Taxation. Section 2.05(2) of Rev. Proc. 2009-39 is modified to have section 6.03(5)(b) of Rev. Proc. 2008-52, as modified by Rev. Proc. 2009-39, read as follows:

(b) A taxpayer changing a method of accounting under this section 6.03(5) (or if section 6.02(3)(b) of this revenue procedure applies, the designated shareholder) must provide a copy of the application to the examining agent(s) for any examination that is in process at the same time it files the copy of the application with the national office. The application must contain the name(s) and telephone number(s) of the examining agent(s).

(4) In section 2.05(2) of Rev. Proc. 2009-39, section 6.03(6) (Issue pending) was modified to insert procedures for a taxpayer before the Joint Committee on Taxation. Section 2.05(2) of Rev. Proc. 2009-39 is modified to have section 6.03(6)(b) of Rev. Proc. 2008-52, as modified by Rev. Proc. 2009-39, read as follows:

(b) A taxpayer that requests to change a method of accounting under this section 6.03(6) (or if section 6.02(3)(b) of this revenue procedure applies, the designated shareholder) must provide a copy of the application to the examining agent(s) at the same time it files a copy of the application with the national office. The application must contain the name(s) and telephone number(s) of the examining agent(s).

(5) In section 3.01 of Rev. Proc. 2009-39, Rev. Proc. 97-27 was modified to insert new section 3.07(3) of Rev. Proc. 97-27 regarding a taxpayer before the Joint Committee on Taxation. Section 3.01 of Rev. Proc. 2009-39 is corrected to delete the following sentences in new section 3.07(3) of Rev. Proc. 97-27: the first sentence of the second paragraph; and the fourth and fifth sentences of the third paragraph.

EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2009-39 is modified.

The principal author of this announcement is Karla M. Meola of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this announcement contact Karla M. Meola at (202) 622-4930 (not a toll-free call).