The IRS Streamlines The Methodology For Small Businesses To Comply With The Tangible Property Regulations

Examining Tax Law

On February 13 of 2015, The Internal Revenue Service (hereinafter the “Service”) streamlined the methodology for small business owners to comply with the Final Treasury Regulations (hereinafter the “regulations”) governing Tangible Property with newly released administrative authority.

Revenue Procedure 2015-20 permits small businesses to change a method of accounting under the regulations on a prospective basis for the first taxable year beginning on or after January 1 of 2014. Moreover, the Service is waiving the arduous requirement to file a Form 3115 entitled “Application for Change in Accounting Method” for small business taxpayers that choose to use this simplified procedure for 2014. Consequently, many small business taxpayers can now waive the filing of Form 3115 and adopt the regulations on a prospective basis. However, as a caveat, the Service indicated that taxpayers will not receive audit protection for prior open statute years.

As set forth under Revenue Procedure 2015-20, the new simplified procedure is generally available to small businesses, including sole proprietors, with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less. For complete details, please consult Revenue Procedure 2015-20 which can be located and referenced at

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Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC a member of The Prager Metis International Group. Peter is a highly distinguished BIG 4 Alumni Tax Practice Leader and has approximately twenty years of progressive public accounting experience developing, managing and leading multi-million dollar tax advisory practices on both a regional and national level.

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