IRS Updates Method Change Procedures For Section 381 Transactions And 179D Deductions

The IRS has released new guidance (Rev. Proc. 2012-39) modifying and clarifying the procedures for accounting method changes involving Section 381(a) transactions, the safe harbor for expenses for repairing or improving electric transmission and distribution property under Rev. Proc. 2011-43, and designers who are allocated a Section 179D deduction for energy-efficient commercial building property.

Rev. Proc. 2012-39 waives the scope limitation in Rev. Proc. 2011-14 that precludes a taxpayer from making an automatic method change for a taxable year in which the taxpayer engages in a Section 381(a) transaction. Rev. Proc. 2012-39 also modifies both Rev. Proc. 2011-14 and Rev. Proc. 97-27 to waive the scope limitation that precludes taxpayers who are under examination from seeking consent to change to an accounting method other than the principal or carryover method.