Copy of Form 3115 to IRS National Office under automatic procedure provides audit protection.

Normally, when a taxpayer desires to change its accounting method, audit protection for the past use of the accounting method is given once Form 3115, Application for Change in Accounting Method, has been filed. The Service has issued automatic procedures for certain method changes that require the original Form 3115 to be filed with the tax return for the year of change and a copy to be filed with the IRS National Office no later than the date for filing the original form; see, e.g., Rev. Procs. 92-74 and 92-75 for changing from the cash to the accrual method of accounting. While the taxpayer is waiting for the year to end and the tax return to be filed, the taxpayer: may be exposed to audit adjustments on its present accounting method.

Unofficial and informal discussions with IRS National Office personnel indicate that audit protection can be obtained by filing the IRS National Office copy of Form 3115 in advance of the original Form 3115 attached to the tax return, even though the tax return is filed later. It is recommended that taxpayers include a cover letter with the Form 3115 copy, indicating that it is being filed with the understanding that audit protection applies from the date of filing with the IRS National Office.