RP-2021-34 & RP-21-35: Automatic consent to change methods of accounting

12 Aug 2021 10:20 AM | Anonymous

Rev. Proc. 2021-34 modifies Rev. Proc. 2019-43, 2019-48 I.R.B. 1107, to provide procedures under § 446 of the Internal Revenue Code (Code) and § 1.446-1(e) of the Income Tax Regulations to obtain automatic consent of the Commissioner to change methods of accounting to comply with final regulations under §§ 1.451-3, 1.451-8, and 1.1275-2(l) and to change methods of accounting for certain inventory costs to comply with §§ 263A, 461, and 471 if made in connection with a change to comply with § 1.451-3 and/or § 1.451-8, as applicable. 

Rev. Proc 2021-34 also modifies Rev. Proc. 2015-13, 2015-5 I.R.B. 419, as clarified and modified by Rev. Proc. 2015-33, 2015-24 I.R.B. 1067, and further modified by Rev. Proc. 2016-1, 2016-1 I.R.B. 1, Rev. Proc. 2017-59, 2017-48 I.R.B. 543, and Rev. Proc. 2021-26, 2021-22 I.R.B. 1163, to provide procedures for a taxpayer to obtain the consent of the Commissioner to change its method of accounting to comply with §§ 1.451-3 and/or 1.451-8, as applicable, by providing rules related to cost offset method changes.

Rev. Proc. 2021-35 modifies Rev. Proc. 2013-26 to reflect changes made to the treatment of certain credit card fees by § 451(b), as amended by section 13221 of the Tax Cuts and Jobs Act, and §§ 1.451-3 and 1.1275-2(l) of the Income Tax Regulations. Rev. Proc. 2013-26, 2013-22 I.R.B. 1160, allows a taxpayer to use a safe harbor method of accounting for original issue discount on a pool of credit card receivables for purposes of § 1272(a)(6) of the Internal Revenue Code—the "proportional method." 

Both Rev. Proc. 2021-34 and Rev. Proc. 2021-35 will be published in Internal Revenue Bulletin 2021-35 on August 30, 2021.


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