IRS modifies accounting method change procedures — section 381(a) transactions; electric transmission company repairs; section 179D 

September 4: The IRS today released an advance copy of Rev. Proc. 2012-39 [PDF 59 KB], which modifies the automatic change procedures of Rev. Proc. 2011-14:

  • Rev. Proc. 2012-39 waives the scope limitation that otherwise precludes taxpayers from making an automatic accounting method change for a tax year in which the taxpayer engages in a section 381(a) transaction. It thus permits taxpayers to make otherwise qualifying automatic accounting method changes in the year of the section 381(a) transaction; it also waives the scope limitations in Rev. Procs. 97-27 and 2011- 14 that precludes taxpayers that are under IRS examination from seeking consent to change to an accounting method other than the principal or carryover method.
  • Rev. Proc. 2012-39 waives the scope limitation that otherwise precludes taxpayers from making an automatic accounting method change for a tax year in which the taxpayer engages in a section 381(a) transaction. It thus permits taxpayers to make otherwise qualifying automatic accounting method changes in the year of the section 381(a) transaction; it also waives the scope limitation in Rev. Procs. 97-27 and 2011-14 that precludes taxpayers that are under IRS examination from seeking consent to change to an accounting method other than the principal or carryover method.
  • Rev. Proc. 2012-39 also clarifies that designers may not use the automatic method change procedures for section 179D deductions (for the installation of energy efficient commercial building property) that are allocated to them. Instead, designers are instructed to amend returns for the year of the deduction.

Rev. Proc. 2012-39 is generally effective for Forms 3115 filed on or after September 4, 2012.


A taxpayer that, on or after August 31, 2011, engaged in a section 381(a) transaction within the proposed year of change may now choose to apply the waiver of scope limitations concerning section 381(a) transactions to a non-automatic Form 3115 pending as of September 4, 2012.


Rev. Proc. 2012-39 will appear in a future edition of the Internal Revenue Bulletin.



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