Form 3115 Application for Change in Accounting Method

OMB No. 1545-0152

Expires 11-30-95

(Rev. November 1992) © See instructions specifically for “Automatic Changes in

Accounting Method” and “When Not To File Form 3115”.

All applicants must complete pages 1 and 2. Department of the Treasury

Internal Revenue Service

Name of applicant (if joint return is filed, also give spouse’s name) Identifying number (see instructions)

Number, street, and room or suite no. (If a P.O. box, see page 2 of instructions.) Applicant’s area code and telephone number/Fax number

( )

City or town, state, and ZIP code District Director’s office having jurisdiction

Name of person to contact (If not applicant, power of attorney must be submitted.) Contact person’s telephone number/Fax number

( )

Check one of the following boxes:

Partnership

Check the box(es) for other schedules that will be completed and

attach only the completed schedule(s) to pages 1 and 2 of Form 3115. Individual

Corporation S Corporation Schedule A–Change in Overall Method of Accounting

Insurance Co. (Sec. 816(a)) Schedule B–Changes Within the LIFO Inventory Method

Qualified Personal Service Corporation

(Sec. 448(d)(2))

Cooperative

(Sec. 1381) Schedule C–Change in the Treatment of Long-Term

Contracts, Inventories, or Other Section 263A Assets

Insurance Co. (Sec. 831)

Schedule D–Miscellaneous Changes in Method of

Exempt organization. Enter code section © Accounting

Other (specify) ©

1a Tax year of change begins (mo., day, yr.) © and ends (mo., day, yr.) ©

Enter the 180th day of the tax year © If this date is earlier than the date signed by the applicant

on page 2, see Late Applications in the instructions.

b

2a Enter the principal business activity designated on the latest filed income tax return ©

3 Approval is requested to change (see instructions):

a Overall method of accounting from present method © to new method ©

b The accounting treatment of (identify item) ©

from present method © to new method ©

Attach a separate statement of all relevant facts, including a detailed description of present and proposed methods and an explanation

of the legal basis (statutes, regulations, published rulings, etc.) for making this application.

c If a change is requested on Item 3b above, check the present overall method of accounting that will not change:

Cash Yes No Accrual Hybrid

d Number of tax years present method has been used by the applicant. (See Item 3d in the instructions.) ©

Is the present method a “Designated B” method as defined in section 3.09 of Rev. Proc. 92-20?

e Is the present method a “Designated A” method as defined in section 3.07 of Rev. Proc. 92-20?

g

Has the applicant entered into a transaction to which section 381(c)(4) or (5) applies during the tax year of change or is

the applicant considering this type of transaction during the tax year of change? If “Yes,” attach explanation

h

4a Is this the first tax year the applicant is required to change its method of accounting under section 263A, 447, 448, 460, or 585?

b Does the applicant produce or acquire property for resale subject to section 263A?

In the last 6 years has the applicant applied for or changed its tax year, its overall method of accounting, or its accounting

treatment of any item? If “Yes,” attach a statement describing the changes and the year of change

6a

If “Yes,” has a ruling letter granting approval been received? Attach an explanation if no letter was received or if a

letter was received but the change was not made. Members of an affiliated group, see Item 10e 

b

Does the applicant, an affiliated corporation, or any other related corporation have pending any accounting method,

tax year ruling, or technical advice request in the National Office?

c

If “Yes,” indicate the name(s) of the corporation, type of request (method, tax year, etc.), and the specific issue involved in each

request on an attached statement.

d

For Paperwork Reduction Act Notice, see page 1 of the instructions. Cat. No. 19280E Form 3115 (Rev. 11-92)

( )

( )

If “Yes,” state which section is applicable ©

f

Is the present method a “Category A” method as defined in section 3.06 of Rev. Proc. 92-20?

Has the applicant or any member of the affiliated group been contacted by the IRS prior to submitting Form 3115 to

schedule an examination of any of its Federal income tax returns, or is an examination in process (section 3.02 of Rev.

Proc. 92-20)? If “Yes,” indicate which window period under section 6 of Rev. Proc. 92-20 applies ©

If “Yes,” has a copy of Form 3115 been sent to the district director? See section 10.06 of Rev. Proc. 92-20

Does the applicant have any Federal income tax returns under consideration by an appeals office or before any Federal

court? See section 4 of Rev. Proc. 92-20

If “Yes,” has the applicant attached a written agreement from the appeals officer or counsel for the government?

5a

b

c

d

If “Hybrid” is checked, attach an explanation.

If “Yes” to Item 3e or 3f, indicate the designating document

b Enter business activity code no. (if applicable) (see instructions) ©

If “Yes,” Schedule C, Part III must be completed if the costs to be changed are subject to section 263A.
Form 3115 (Rev. 11-92) Page 2

Gross receipts for the 4 tax years preceding the year of change. (See instructions.)

1st preceding

year ended: mo. yr.

Yes No

$

9a Does the applicant have more than one trade or business?

If “Yes,” is each trade or business accounted for separately? (See instructions.)

10a Is the applicant a member of an affiliated group filing a consolidated return for the tax year of change?

If “Yes,” state the parent corporation’s name, identifying number, address, tax year, and the service center where the

return is filed ©

b

c If 10a is “Yes,” do all other members of the affiliated group use the method of accounting being requested?

If “No,” explain ©

If 10a is “Yes,” are any of the items involved in determining the net section 481(a) adjustment attributable to transactions

between members of the affiliated group? If “Yes,” attach an explanation 

d

e If 10a is “Yes,” provide the information requested in Items 6a and 6b, for each member of the affiliated group

11 Are any of the items involved in determining the net section 481(a) adjustment attributable to transactions between

members of a controlled group or other related parties? If “Yes,” attach an explanation 

12a If the change is approved, will the new method be used for financial reporting purposes?

If “No,” attach an explanation. In addition, explain whether the new method of accounting conforms to GAAP and

whether it will clearly reflect income for Federal income tax purposes.

b

Enter the net section 481(a) adjustment for the year of change, and the net section

481(a) adjustment that would have been required if the requested change had been

made for the tax year preceding the year of change. (See Item 13 in the instructions.)

13 Year of change Preceding year

$ $

14 Has the net adjustment under section 481(a) for the year of change been reduced in any way by a pre-1954 amount?

Signature—All Applicants (See instructions. )

Under penalties of perjury, I declare that I have examined this application, including accompanying schedules and statements, and to the best of my knowledge

and belief, it is true, correct, and complete. Declaration of preparer (other than applicant) is based on all information of which preparer has any knowledge.

Applicant Parent corporation (if applicable)

Officer’s signature and date Parent Officer’s signature and date

Name and title (print or type) Name and title (print or type)

Signature(s) of individual or firm preparing the application and date Name of firm preparing the application

Is Form 2848, Power of Attorney and Declaration of Representative, attached to this application? ©

7a

c

Enter the net operating loss (NOL) (if any) to be carried over to the year of change

Enter the credit carryover (if any) to this year of change (identify)

$

$

2nd preceding

year ended: mo. yr.

$

3rd preceding

year ended: mo. yr.

$

4th preceding

year ended: mo. yr.

$

b

Enter amount of User Fee attached to this application. (See instructions on page 1.) © $

Yes No

Yes No

Members of an affiliated group are to complete Items 7a, 7b, 7c, and 7d on a consolidated basis.

b Enter the NOL (if any) that will expire in the year of change

d Enter the credit carryover (if any) that will expire in the year of change

8a

$

$

Taxable income for the 4 tax years preceding the year of change. (See instructions.)

1st preceding

year ended: mo. yr.

$

2nd preceding

year ended: mo. yr.

$

3rd preceding

year ended: mo. yr.

$

4th preceding

year ended: mo. yr.

$

8b

15 If the net section 481(a) adjustment is less than $25,000 for the year of change, does the applicant elect to take the

entire net section 481(a) adjustment into account in the year of change?

Does the applicant request a conference of right at the IRS National Office? (See instructions.) © Yes No

16

17

18

Checklist
Form 3115 (Rev. 11-92) Page 3

Name of applicant as shown on page 1 Identifying number

Schedule A—Change in Overall Method of Accounting

Federal income tax return or other return (e.g., tax-exempt

organization returns) for that period. If the amounts in Part I,

Item 1 do not agree with those shown on both the profit and

loss statement and the balance sheet, explain the differences on

a separate sheet.

Attach copy(ies) of the profit and loss statement (Schedule F

(Form 1040) for farmers) and the balance sheet, if applicable, as

of the close of the tax year preceding the year of change. On a

separate sheet, state the accounting method used when

preparing the balance sheet. If books of account are not kept,

attach a copy of the business schedules submitted with the

Change in Overall Method (See instructions. )

1 Enter the following amounts as of the end of the tax year preceding the year of change. If none, state “None.” Also provide a

breakdown of the items that make up the “Amount” for lines 1a through 1g.

Amount Excluded from income or

not deducted as expense

Included in income or

deducted as expense

a Income accrued but not received $

b Income received or reported before it was earned.

State nature of income © 

c Expenses accrued but not paid

d Other (specify) ©

e Prepaid expense previously deducted

f Supplies on hand previously deducted

g Inventory on hand $

Inventory reported on applicant’s

return 

Enter the difference

h Net section 481(a) adjustment (add lines 1a—1g) $

2 Type of inventory ©

3 Method used to value inventory: Cost Cost or market, whichever is lower

4 Method of identifying costs in inventory: Specific identification FIFO LIFO

5a If changing to the accrual method, is the applicant also requesting to use the nonaccrual-experience method? © Yes No

b If “Yes,” indicate the system to be used to apply the nonaccrual-experience method © Separate receivable Periodic

6 If changing to the accrual method, is the applicant also requesting the recurring item exception (section 461(h))? Yes No

Change to the Cash Method (Also complete Part I. Farmers complete Part III instead of Part II. See instructions.)

1 Describe the applicant’s trade or business (including operations, services performed, and types of activities, if more than one).

2 Describe the applicant’s investment in capital items and leased equipment used in the trade or business, and the relationship

between these items and the services performed by the business.

3 Describe inventory items (items that produce income when sold), materials and supplies used in carrying out the business.

4 Indicate the number of employees, shareholders, partners, associates, etc., and describe their duties in carrying out the

applicant’s business.

5 Attach a schedule showing the age of receivables for the 4 tax years preceding the year of change.

6 Attach a profit and loss statement based on the cash method for the 4 tax years preceding the year of change.

Farmers—Change to the Cash Method (Also complete Part I. See instructions. )

Is the applicant a corporation or a partnership with a corporation as a partner that had gross receipts of $1 million

or less in each of its tax years beginning after 1975?

1a

b If “No,” is the applicant eligible for any exceptions under section 447? (see instructions)

Other (attach explanation)

Yes No

Yes No

Gross Receipts and Inventory Information

Show by ( ) how treated on last year’s return:

Part I

Part II

Part III

2

1st preceding yr. 2nd preceding yr. 3rd preceding yr. 4th preceding yr. 5th preceding yr.

a Gross receipts from farming

b Inventory: Crops, etc

Livestock held for sale:

Livestock held for draft, breeding,

sport, or dairy purposes:

Purchased

Raised

Purchased

Raised

Total inventory
Form 3115 (Rev. 11-92) Page 4

Name of applicant as shown on page 1 Identifying number

Schedule B—Changes Within the LIFO Inventory Method

LIFO Information

Complete this section if the requested change involves changes within the LIFO inventory method. Check ( u ) the appropriate boxes in

1, 2, 3, or 4 showing both the present method and the proposed method. If the present method shown in boxes 1, 2, 3, or 4 is not the

same as the method shown on Form(s) 970, attach an explanation. Note: Attach the copy(ies) of the Form 970(s), Application to Use

LIFO Inventory Method, filed to adopt or expand the use of the method.

Method for valuing inventories: Present method Proposed method 1

a Unit method

b Dollar value method

2 Method for pooling:

a By line, type, or class of goods (Regulations section 1.472-8(c))

b Natural business unit (Regulations section 1.472-8(b)(1))

c Multiple pools (Regulations section 1.472-8(b)(3)(i))

d Raw material content (Regulations section 1.472-8(b)(3)(ii))

e Simplified dollar value method (section 474)

f Pooling method authorized by Regulations section 1.472-8(e)(3)(iv) 

g Other (describe)

3 Method used to figure the cost of goods in the closing inventory over those in the opening inventory:

a Most recent purchases

b Earliest acquisitions during the year

c Average cost of purchases during the year

d Other (describe)

4 Method for pricing dollar value pools:

a Double-extension method

b Index method*

c Link-chain method*

d Inventory Price Index computation method (see instructions)

e Other method*

* An example of an “other method” is the retail method using the Bureau of Labor Statistics (BLS)

department store indexes. If the applicant is requesting to change to one of these methods, submit:

(1) a description of the particular method, and (2) the reasons why the use of the double-extension

and/or index method(s) is impractical or unsuitable for each pool.

Additional Information

1 Will the change(s) indicated above apply to all of the applicant’s inventory? Yes No

2 If the change(s) indicated above applies to specific inventory pools, identify the pool(s) and describe the contents of each pool.

3 Is the applicant requesting a change in method for its LIFO inventory that is not indicated in Part I above?

If “Yes,” explain. ©

Change in Pooling LIFO Inventories

1 List and describe each dollar value pool and show the base year of each pool under the present and proposed pooling methods.

2 Applicants engaged in the manufacturing or processing of goods and proposing to use natural business unit (NBU) pools:

Attach a description of the applicant’s organization, facilities, manufacturing processes, and product lines in sufficient detail to show

that each proposed NBU pool complies with Regulations section 1.472-8(b).

a

b Does the applicant have inventories of items purchased and held for resale?

If “Yes,” attach a statement indicating that these items will not be included in any proposed NBU pool.

Are all items, including raw materials, goods in process, and finished goods entering into the entire inventory

investment for each proposed NBU pool, presently valued under the LIFO method?

c

If “No,” attach an explanation.

If proposing to use the multiple pooling method, attach information to show that each proposed pool will consist of a group of items

that are substantially similar.

a

If proposing to use raw material content pools, attach information to show that each proposed pool will consist of items that are

substantially similar.

b

4 Applicants engaged in the wholesaling or retailing of goods purchased from others:

Attach information to show that each of the proposed pools is based upon customary business classifications of the applicant’s

trade or business.

a

b If proposing to use natural business unit pools, attach an explanation as to why the natural business unit pooling is appropriate.

Yes No

Yes No

Yes No

Part I

Part II

Part III

3 Applicants engaged in the manufacturing or processing of goods:
Form 3115 (Rev. 11-92) Page 5

Name of applicant as shown on page 1 Identifying number

Schedule C—Change in the Treatment of Long-Term Contracts, Inventories, or Other Section 263A Assets

Change in Reporting Income From Long-Term Contracts (See instructions. Complete this part and Part III

below. )

1 Are the applicant’s contracts long-term contracts as defined in section 460?

2 Is the applicant a manufacturer or a processor?

3 Will the applicant elect the simplified cost-to-cost method for determining the degree of contract completion?

4a Is the same method used for reporting income from all long-term contracts?

b If “No,” explain other method(s). ©

Do any (or all) of the applicant’s contracts qualify for any of the exceptions under section 460(e) for

certain construction contracts?

5a

b If “Yes,” provide a separate cost allocation worksheet (Part III below) for the contracts and the method used for computing the

percentage of completion method under Regulations section 1.451-3(c)(2), if applicable.

6a Is the change requested for all contracts that were outstanding at the beginning of the tax year of change?

b If “No,” explain. ©

7a Are the applicant’s contracts either cost-plus long-term contracts or Federal long-term contracts?

b If “Yes,” answer Items 3 through 6 above for each of those contracts. Also complete Part III below.

8 Net adjustment required under section 481(a) $

Change in Valuing Inventories (See instructions and complete Part III if applicable. )

1 Describe inventory goods being changed ©

2 Describe inventory goods (if any) not being changed ©

3 Does the proposed change involve a change in the treatment of package design costs?

4 Is the applicant’s present inventory valuation method in compliance with section 263A? 

Check ( u ) the appropriate boxes below that identify the present and proposed

inventory identification and valuation methods being changed and the present inventory

identification and valuation methods not being changed.

5a

Inventory Not

Being Changed Inventory Being Changed

Present method Proposed method Present method Identification methods:

FIFO

LIFO*

Valuation methods:

Cost

Cost or market, whichever is lower

Retail cost

Retail, lower of cost or market

Other (attach explanation)

Enter the value at the end of the tax year preceding the year of change

*If LIFO, attach the copy(ies) of Form 970 filed to adopt or expand the use of the method.

6 Attach the computation used to determine the section 481(a) adjustment. If the section 481(a) adjustment is based on more than

one component, show the computation for each component.

Method of Cost Allocation

Complete this part if the requested change involves either

property subject to section 263A or to long-term contracts

subject to section 460. Check ( u ) the appropriate boxes in

Section A to indicate the allocation and capitalization methods to

be used under the present and proposed methods. Check ( u )

the appropriate boxes in Sections B and C showing which costs,

under both the present and proposed methods, are fully

included, to the extent required, in the cost of property

Section A—Allocation and Capitalization Methods (See instructions. )

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Method of allocating indirect costs:

Standard cost

Burden rate (attach explanation)

Other (attach explanation)

Present method Proposed method 1

Part I

Part II

Part III

Specific identification

produced or acquired for resale under section 263A or allocated

to long-term contracts under section 460. If a box is not

checked, it is assumed that those costs are not fully included to

the extent required. If a cost is not fully included, attach an

explanation. Mark “N/A” in a box if those costs are not incurred

by the applicant with respect to its production, resale, or

long-term contract activities.

Specific identification

Continued on next page

b

All

c If “Yes” or “No” to 5a, is the applicant in compliance with section 460?

If “No,” attach an explanation.

Yes No
Form 3115 (Rev. 11-92) Page 6

Section B—Direct and Indirect Costs Required to be Allocated (See Regulations under sections 263A and 451.)

1 Direct material

2 Direct labor

3 Repairs that relate to a production, resale, or long-term contract activity

4 Maintenance

5 Utilities

6 Rent 

7 Indirect labor and production supervisory wages 

8 Indirect materials and supplies

9 Tools and equipment

10 Quality control and inspection

11 Taxes other than state, local, and foreign income taxes

12 Depreciation, amortization, and cost recovery allowance for equipment and facilities placed in service

and not temporarily idle

13 Depletion

14 Administrative costs (not including any costs of selling or any return on capital)

15 Direct or indirect costs of other administrative, service, or support function or department

16 Officers’ compensation (not including selling activities)

17 Insurance

18 Employee benefits

19 Research and experimental expenses attributable to long-term contracts

20 Rework labor, scrap, and spoilage

21 Bidding expenses incurred in the solicitation of particular contracts ultimately awarded to the

applicant

22 Engineering and design costs (not including section 174 research and experimental expenses)

23 Storage and warehousing costs including a portion of allocable general and administrative costs*

24 Purchasing costs including a portion of allocable general and administrative costs

25 Handling, processing, assembly, and repackaging costs including a portion of allocable general and

administrative costs

26 Interest

27 Other costs (Attach a list of such costs.)

* Resalers may distinguish between off-site and on-site storage and do not have to capitalize on-site

storage costs. Check if the applicant is only allocating off-site storage costs ©

Section C—Other Costs (Not required to be allocated)

1 Repairs that do not relate to a production, resale, or long-term contract activity 

2 Research and experimental expenses not included on line 19 above

3 Bidding expenses not included on line 21 above 

4 Marketing, selling, advertising, and distribution expenses

General and administrative costs attributable to the performance of services that do not directly

benefit or are not incurred by reason of a particular production, resale, or long-term contract activity

5

6 Income taxes

7 Cost of strikes

8 Other costs (Attach a list of such costs.)

Method of allocating service costs:

Direct reallocation

Labor-based simplified service cost

Simplified resale service cost

Simplified service cost

Step-allocation

Other (attach explanation)

Method of capitalizing additional section 263A costs (including service costs):

Simplified production

Alternative simplified resale 

U.S. ratio

Simplified resale

Modified resale

Other (attach explanation)

2

3

Section A—Allocation and Capitalization Methods ( Continued)

Present method Proposed method
Form 3115 (Rev. 11-92) Page 7

Name of applicant as shown on page 1 Identifying number

Schedule D—Miscellaneous Changes in Method of Accounting

Change in Reporting Interest on Loans and Other Debt Obligations (See instructions)

1 Change requested for interest on:

Other loans (attach explanation) ©

Installment loans Commercial loans

Other debt obligations (attach explanation) ©

2 Amount of earned or realized interest that has not been reported on the applicant’s return as of the end of the

tax year preceding the year of change $

3 Amount of unearned or unrealized interest that has been reported on the applicant’s return as of the end of

the tax year preceding the year of change $

If applying to change from the sum of the months digits method (rule of 78’s) to the economic accrual of interest method for reporting

interest (discount) under Rev. Rul. 83-84, 1983-1 C.B. 97, see Rev. Proc. 84-30, 1984-1 C.B. 482.

Do the applicant’s installment loans meet the definition of short-term consumer loans as defined in Rev. Proc.

83-40, 1983-1 C.B. 774?

5

6

Method of rebating in event of prepayment of loans ©

8

Does the applicant’s requested method change involve any of the following items? (check appropriate box(es))

Points Service fees Commitment fees

If any box(es) above are checked, attach a description of any interest and/or fees charged.

9

If the “Points” box is checked:

Are the points for the use or forbearance of money (interest)?

10a

If more than one box is checked in Item 6, attach the section 481(a) adjustment for the year of change and for the 3 preceding tax

years attributable to each item checked.

Is the applicant’s requested method change subject to the rules for bonds, debt instruments, and other evidence

of indebtedness under section 1272, 1274, or 1281?

If any of the boxes in question 6 are checked and question 9 is checked “No,” does the proposed method

change comply with Rev. Rul. 70-540, 1970-2 C.B. 101?

b If “Yes,” explain how Rev. Rul. 70-540 applies. ©

Change in Depreciation Under Section 167 (See instructions. )

Applicants requesting approval to change their method of accounting for depreciation under section 167 must complete this section.

This information must be supplied for each account for which a change is requested.

1 Date of acquisition of the property being depreciated ©

2a Is the applicant the original owner or the first user of the property?

b If residential property, did the applicant live in the home before renting it?

3 Is depreciation claimed under Regulations section 1.167(a)-11 (CLADR)?

If “Yes,” the only changes permitted are under Regulations section 1.167(a)-11(c)(1)(iii).

4 Is the property public utility property?

4

Yes No

7

Yes No

Yes No

Yes No

Note: Certain changes in methods of accounting for depreciation may be filed with the service center where the income tax return will

be filed. See Rev. Proc. 74-11, 1974-1 C.B. 420 for the methods covered. For information regarding elections and election revocations

under section 168, see the instructions.

Yes No

Yes No

Yes No

Yes No

Part I

Part II

5 Location of the property (city and state) ©

6 Description of the property ©

7 Cost or other basis of the property and adjustments made to the property (exclude land) $

8 Depreciation claimed in prior tax years (depreciation reserve) $

9 Estimated salvage value $

10 Estimated remaining useful life of the property ©

11 If the declining balance method is requested, show percentage of straight line rate ©

Continued on next page

Are the points deductible by the borrower under section 461(g)(2)?

If the borrower pays the points prior to settlement, are they refundable if the loan is not made?

What type of loan(s) (commercial, residential, home mortgage, etc.) do the points apply?

a

b

c

d

Yes No

Yes No
Form 3115 (Rev. 11-92) Page 8

Part III

Part V

Part IV

Change in Treatment of Property Used in a Trade or Business (See instructions. )

Change in Reporting Advance Payments (See instructions. )

Other Changes in Method of Accounting (See instructions. )

1

a

If the applicant is requesting to defer advance payment for services, complete the following:

Indicate the type of property for which the change in accounting method is requested. For each type of property checked,

provide a complete description and a list of items that is representative of that type of property.

Depreciable asset(s) subject to section 167.

Materials and supplies used in operations and deductible as a deferred expense under Regulations section 1.162-3.

Incidental materials and supplies for which no record of consumption is kept or no physical inventories are taken.

Parts that are repeatedly repaired and reused.

Parts that are repeatedly repaired and reused that qualify as “standby replacement parts” as defined in Rev. Rul. 69-200,

1969-1 C.B. 60.

Parts that qualify as “emergency spare parts” as defined in Rev. Rul. 81-185, 1981-2 C.B. 59.

Other (specify)

Provide a description of the income to be deferred, a sample contract and the applicant’s authority for deferring the income.

b

c

d

Does the service agreement request that all services be performed by the end of the next succeeding tax year?

Is the agreement for contingent services?

If “Yes,” answer the following questions:

(1)

(2)

(3)

Is the service agreement related to merchandise that is sold, leased, installed, or constructed by the applicant?

If “Yes,” does the applicant offer to sell, build, lease, install, or construct without the service agreement?

What method will be used to determine the amount of income earned in a tax year? (Check one)

Statistical basis Straight line ratable basis Other (attach explanation)

2 If the applicant is requesting to defer advance payment for goods, complete the following:

a Describe the advance payments as they occur in the normal course of business.

b Is the deferral in accordance with Regulations section 1.451-5?

3 Is the applicant changing its method for customer deposits?

If “Yes,” answer the following questions:

a Is the applicant a public utility?

b

c

d

Are deposits fully refundable at the request of the customer? (Attach an explanation of the refund policy.)

Is interest paid on the deposits?

Are deposits required only for certain customers?

If “Yes,” explain which customers are required to make deposits.

4 Is the applicant requesting to defer advance payments for prepaid subscription income? (See section 455

and Rev. Proc. 84-76, 1984-2 C.B. 751.)

5 Is the applicant requesting to defer advance payments for membership dues under section 456?

6 If the applicant has advance payments for any other item, complete the following:

a Describe the income

b State the legal basis (statutes, regulations, published rulings, etc.) for requesting approval to change the method of reporting

advance payments. ©

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No