Rev. Proc. 69-29

Section 1. Purpose.

The purpose of this Revenue Procedure is to amplify Revenue Procedure 67-40, C.B. 1967-2, 674, by extending its application to certain changes in method of accounting for depreciation that have not been covered by that Revenue Procedure. These additional changes in method of accounting are limited to changes from item accounts to any type of multiple asset accounts described in section 1.167(a)-7 of the Income Tax Regulations, or from multiple asset accounts to item accounts.

Sec. 2. Background.

.01 Revenue Procedure 67-40 provides an administrative procedure whereby taxpayers may expeditiously obtain consent to change their methods of accounting for depreciation to certain other methods for Federal income tax purposes. Taxpayers complying with the provisions of Revenue Procedure 67-40 are deemed to have obtained the consent of the Commissioner of Internal Revenue to change their method of depreciation accounting.

.02 A change in item accounting for specific assets to multiple asset accounting for the same assets or vice versa is a change in method of accounting for depreciation requiring the consent of the Commissioner. See section 446 of the Internal Revenue Code of 1954 and the regulations thereunder.

.03 The annual regrouping of a taxpayer's assets solely for purposes of facilitating the comparison of the class lives with the guideline lives and applying the reserve ratio test under Revenue Procedure 62-21, C.B. 1962-2, 418, is not a change in method of accounting. (See answer to question 15 in Revenue Procedure 62-21.) However, the consolidation of a taxpayer's assets on a permanent basis into accounts corresponding to guideline classes to compute the amount of allowable depreciation, the class life, and the rate of growth under Revenue Procedure 62-21 is a change in method requiring the consent of the Commissioner.

Sec. 3. Change in Method Covered by This Revenue Procedure.

.01 Section 4.01 of Revenue Procedure 67-40 sets out in subsections (a) through (i) those changes in methods covered by the procedures contained in that document for expeditiously accomplishing a change in method of accounting by filing an application on Form 3115, Application for Change in Accounting Method, with the District Director of Internal Revenue who has jurisdiction over the taxpayer's return containing such change.

.02 The provisions of Revenue Procedure 67-40 are hereby extended to any change in method of accounting for assets from item accounts to multiple asset accounts or from multiple asset accounts to item accounts.

.03 Any such change in method of accounting for depreciable assets is subject to all the provisions of Revenue Procedure 67-40.

Sec. 4. Effective Date.

This Revenue Procedure is effective for taxable years beginning on or after December 15, 1969, the date of its publication in the Internal Revenue Bulletin.

Sec. 5. Effect on Other Documents.

Revenue Procedure 67-40 is amplified.