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Tax Method Changes

Accounting method changes are the most difficult tax concepts to address for taxpayers and their tax preparers. In order to understand what tax methods are best for a taxpayer, and those that are flatly not correct (IRS calls these “impermissible” methods), one has to understand what a taxpayer is doing wrong and what better tax deferral methods are possible. Even when one understands the method change that needs to take place, the hurdle of properly completing the required IRS forms and attachments is daunting. If those forms and attachments are not properly prepared, submitted in the right time, submitted in the right order, and to the right places, the method change will be deemed invalid. These issues, along with the potential for costs of additional taxes due along with interest and penalties for improper method change filings motivated Eric P. Wallace, LLC to create The extensive items (Word, Excel, fillable pdfs, examples, instructional videos, flowcharts, etc.) in this website assist taxpayers and their CPAs to best understand the who, what, when, where, why and how of tax method changes. Beyond these items, Eric P. Wallace CPA is available to advise and provide behind the scene advise in the form of his Blogs, frequent Qs and As, and personal consulting for non-automatic method changes insights.

The website material includes the following Automatic Method Changes:

  • Depreciation method changes not limited to DCN 7, DCN 107

  • Accrual to Cash, or vice versa method changes DCN 33, 233

  • Prepaid changes (deducting prepaid expenses instead of their deferral) for DCN 106, 161, 220

  • The TCJA method changes of:

    • DCN 233 Change away from Accrual, change to the Cash Method

    • DCN 234 Change away from 263A

    • DCN 235 Change away from Inventory accounting

    • DCN 236 Change away from PCM and 263A for Homebuilders

These above methods include the following files:

  • Explanations

  • Form 3115 fillable templates

  • Form 3115 attachment in Word modifiable file customized to the needs of the particular method change

  • Excel file, when applicable, for data accumulations or needed 3115 disclosure

  • Completed Examples

  • Instructional video

In order to see any of the pages listed above, you must subscribe to the website. Pricing and the different plans can be found under the page, "Plans & Pricing."

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