The Internal Revenue Service (hereinafter the “Service”) recently issued IRS Notice 2017-6 in connection to Tangible Property Regulations Compliance (hereinafter “TPR Compliance” or “Regulations”) that extended a specific eligibility provision for taxpayers making an automatic change of accounting method providing an opportunity to continue to take advantage of the Regulations on their 2016 tax returns.

As it should be duly recalled before IRS Notice 2017-6 was issued, the requirements set forth under Rev. Proc. 2015-13 prevented taxpayers from making an automatic change in accounting method for the same item more than once within a five year period. Under IRS Notice 2017-6, the five year rule will not apply to changes made for the tax years beginning before January 1, 2017 thereby allowing taxpayers who are still making modifications to still be in compliance with the Regulations without requiring consent from the Service.

For the complete scope and application of IRS Notice 2017-6, please consult www.irs.gov/pub/irs-drop/n-17-06.pdf

For the complete scope and application of Rev. Proc. 2015-13, please consult www.irs.gov/pub/irs-drop/rp-15-13.pdf

Please contact Peter J. Scalise to schedule a complimentary consultation to discuss the scope and application of this newly issued administrative authority and its effect on your 2016 tax returns at pscalise@pragermetis.com or (212) 835-2211.