Rev. Proc. 83-77

SECTION 1. PURPOSE

The purpose of this revenue procedure is to provide procedures whereby taxpayers submitting an application (Form 3115, Application for Change in Accounting Method) under section 1.77-1, 1.381(c)(4)l(d)(2), or 1.381(c)(5)-1(d)(2) of the Income Tax Regulations or submitting a written request to obtain the Commissioner's consent to make an election under section 1.455- 6(b), 1.456-6(b), or 1.461-1(c)(3)(ii) may automatically obtain a 90-day extension of time in which to file such application or request. A taxpayer that complies with this revenue procedure will be deemed to have obtained the automatic extension of 90 days under the provisions of section 1.9100-1(a) as requested in the taxpayer's application or written request.

SEC. 2. BACKGROUND

.01 Section 1.446-1(e) of the regulations provides the general rule for filing an application to obtain the Commissioner's consent to change a method of accounting for federal income tax purposes. The Form 3115 must be filed within 180 days after the beginning of the tax year in which the proposed change is requested to be made. The 180-day period set forth in section 1.446-1 (e)(3)(i) was announced by T.D. 7073, 1970-2 C.B. 98, which amended this section of the regulations to extend the filing period to 180 days rather than the 90-day period previously announced by T.D. 6282, 1951-1 C.B. 215. The Internal Revenue Service made this change to give taxpayers additional time to comply with the requirements of the regulations dealing with a change in method of accounting.

.02 The following regulation sections dealing with a change in method of accounting or the making of an election to use an accounting method contain a 90-day filing period requirement. These regulations sections are as follows:

1. Section 1.77-1 of the regulations, relating to a taxpayer who receives a loan from the Commodity Credit Corporation, provides that the taxpayer may elect to include the amount of the loan in gross income for the taxable year in which the loan is received. Once this election is made the taxpayer must include all subsequent loans from the Commodity Credit Corporation in gross income in the year received, unless the taxpayer secures permission to change to a different method of accounting. Application for permission to change to a different method of accounting is to be filed with the Commissioner within 90 days after the beginning of the taxable year in which the proposed change is requested to be made.

2. Section 1.381(c)(4)-1(d)(2) of the regulations provides that an acquiring corporation may submit an application under section 1.381(c)(4)l(d)(1) for permission to use a method of accounting or request for a determination of the method of accounting to be used with the Commissioner not later than 90 days after the date of distribution or transfer.

3. Section 1.381(c)(5)-1(d)(2) of the regulations provides that an acquiring corporation may submit an application under section 1.381(c)(5)l(d)(1) for a determination of the method of taking inventories to be used or application for permission to use a method of taking inventories with the Commissioner not later than 90 days after the date of distribution or transfer.

4. Section 1.455-6(b) of the regulations provides that a taxpayer may, with the consent of the Commissioner, elect at any time to apply the provisions of section 455 of the Code to any trade or business in which the taxpayer receives prepaid subscription income. The written request for consent to elect is to be filed with the Commissioner within 90 days after the beginning of the taxable year to which the election is to apply.

5. Section 1.456-6(b) of the regulations provides that a taxpayer may elect with the consent of the Commissioner to apply the provisions of section 456 of the Code to any trade or business in which the taxpayer receives prepaid dues income. The written request for consent to elect is to be filed with the Commissioner within 90 days after the beginning of the taxable year to which the election is to apply.

6. Section 1.461-1(c)(3)(ii) of the regulations provides that a taxpayer may elect with the consent of the Commissioner to accrue real property taxes ratably in accordance with section 461(c) of the Code and section 1.461-1(c). The written request for consent to make such an election is to be filed with the Commissioner within 90 days after the beginning of the taxable year to which the election is first applicable.

03. Section 1.9100-1(a) of the regulations provides that the Commissioner may, upon good cause shown, grant a reasonable extension of the time fixed by the regulations for the making of an election. After consideration of each regulation section cited in section 2.02 of this revenue procedure and section 1.446- 1(e)(3)(i), which provides a 180-day period as the general rule for filing an application to obtain consent to change a method of accounting it has been determined that there is good cause to allow the requests for an extension of time to all taxpayers who request permission under this revenue procedure.

SEC. 3. SCOPE

The scope of this revenue procedure is limited to extending the 90 day filing period requirement set forth in sections 1.77-1, 1.381(c)(4)-1(d)(2), 1.381(c)(5)-1(d)(2), 1.455-6(b), 1.4566(b) and 1.461-1(c)(3)(ii) of the regulations.

Under section 1.9100-1(a) of the regulations, the Commissioner has discretionary authority to grant extensions of the time fixed by the regulations for making an election. Therefore, for the purpose of filing the application or written request under sections 1.77-1, 1.381 (c)(4)-1 (d)(2), 1.381(c)(5)- 1(d)(2), 1.455-6(b), 1.456-6(b) and or 1.461-1 (c)(3)(ii) taxpayers are granted an automatic extension of 90 lays. Taxpayer will have a 180-day period to comply with the requirements of the above cited regulations.

SEC. 4. APPLICATION

.01 The applications or written requests to which this revenue procedure applies are to be filed in accordance with the requirements set forth in either section 1.77-1, section 1.381(c)(4)-1(d)(2), section 1.381(c)(5)-1(d)(2), section 1.455- 6(b), section 1.456-6(b) or section 1.461-1(c)(3)(ii), except that the taxpayer is to send the application or written request to the Commissioner of Internal Revenue, Attention CC:C:C:1, 1111 Constitution Avenue, N.W., Washington, D.C. 20224. At the top of the application or written request, the taxpayer should either type or legibly print the following "FILED UNDER Rev. Proc. 8377".

SEC. 5. INQUIRIES

Inquiries in regard to this revenue procedure should refer to its number and be addressed to the Commissioner of Internal Revenue, Attention: CC:C:C:1, 1111 Constitution Avenue, N.W., Washington, D.C. 20224.