TAP: Form 3115 and Changing Accounting Method

General Description:

The objective of the Tax Accounting Series is for the participant to acquire a basic understanding as to how the various tax accounting rules apply in determining when an item is taxable or deductible and in what year an item is taxable and deductible. This seminar will also address what to do if the transaction turns out to be different than how it was treated in a prior year.

Learning Objective:

After completing this course the participant will be able to:

• Discuss filing a Form 3115 under Rev. Proc. 2015-13 (cost is $13,225) and Rev. Proc. 2024-23; automatic when file Form 3115 by due date of return, including extensions.
• Explain Rev. Proc. 2002-18 and IRS-initiated changes.
• Explain Rev. Proc. 2002-19 and negative §481 adjustments.
• Define a positive §481 adjustment; include ratably over four years.
• Define a negative §481 adjustment; deduct in year of change.
• Identify the relevance of §446(e), change proper method to proper method.
• Identify the relevance of §446(f), change improper method to proper method.
• Define Category A method; Code, Regs, or Supreme Court (no sign, no Form 8275).
• Define Category B method, any other method change (may sign and no disclosure).
• Determine when the treatment of an item becomes a method of accounting or a treatment of a material item.
• Discuss the duty/obligation of a tax advisor in determining whether a client is using a correct or incorrect method of accounting (§§6662, 6663, 6694, 6701; Form 8275).
• Illustrate use of the uniform capitalization (UNICAP) rules of §263A and define a long-term contract under §460.
• Determine when to file an amended tax return for a year that is open under the statute of limitations and explain the difference between an error/mistake and a method change.
• Discuss the options available to comply with the tangible and disposition regulations as well as §471(c) and §451(c).

Instructors:

Mark A. Vogel is a retired professor and director of the University of Denver Graduate Tax Program, where for 38 years he taught courses in individual, fiduciary, tax accounting, partnership, and corporate taxation. He is the author of Divorce Taxation Guide (John Wiley & Sons) and Individual Taxation (Shepards/McGraw-Hill). He received a J.D. and LL.M. in Taxation from the University of Denver College of Law and an undergraduate accounting degree from the University of Notre Dame. He is also a CPA licensed in Illinois.

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