🔄 Rev. Proc. 2025-23 | Effective June 9, 2025
✉️ Issued in: Internal Revenue Bulletin 2025-24
🧾 Applies to: Forms 3115 (Change in Accounting Method)
🗓️ Effective for tax years ending on or after: October 31, 2024
🧩 What’s Changed and Why It Matters
The IRS has streamlined and clarified the list of accounting method changes that can be made automatically — saving time, reducing paperwork, and avoiding costly procedural missteps.
📌 Major Highlights
| 🛠️ Change Type | 📄 What Changed | ✍️ Why It Matters |
| 🗑️ Obsolete Sections Removed | Revoked outdated provisions under Code Secs. 168(j)(8), 168(l)(3)(D), 181(a)(1) | 🧹 Simplifies compliance by eliminating dead law |
| 📝 Clarified 481(a) Adjustments | Clearly applies to “any taxable year” when the election was made | 🧠 Prevents confusion on when adjustments apply |
| 🏗️ Depreciation & Interest Capitalization | Removed outdated waiver references | 💡 Updated to reflect current law and practice |
| 📦 Inventory Valuation Methods | Deleted references to obsolete proposed regs | 📉 Eases implementation of inventory method changes |
| ⚡ Foreign Income Tax + Regulated Utilities (Sec. 118(c)) | Now require non-automatic procedure | 🚫 Can no longer use Form 3115 under automatic rules |
📋 Automatic vs. Non-Automatic Method Changes
| ⚙️ Automatic Method Change | 📝 Non-Automatic Method Change |
| ✅ Fewer procedural hurdles | ⏳ Requires IRS consent |
| ✅ Self-implemented with Form 3115 | 💼 Formal ruling process needed |
| ✅ Often no user fee | 💰 Usually includes user fee |
🗓️ Key Effective Dates & Transition Rules
🔹 Applies to:
- Form 3115s filed on/after June 9, 2025
- For tax years ending on or after October 31, 2024
🔁 Transition Option: Convert to Automatic
If you have a pending non-automatic change request and now qualify for the automatic method:
📣 You can convert!
📝 What to do:
- Notify the IRS National Office
- Deadline: By July 9, 2025
- Clearly state that you wish to convert your Form 3115 to the automatic procedures under Rev. Proc. 2015-13
🔸 Already Filed Before June 9, 2025?
| Scenario | Result |
| ✅ Filed under previous automatic rules | You may continue for that year |
| ❌ Didn’t file before deadline | Must follow non-automatic procedures |
| 📂 Filed duplicates under old rules | You can choose Rev. Proc. 2024-23 or the new 2025-23 rules |
🔸 Already Filed Before June 9, 2025?
🧠 Not all accounting method changes are equal. Some can be done quickly using Form 3115 under the automatic method, while others need special IRS permission.
📣 If your business wants to:
- Change how it values inventory
- Adjust depreciation methods
Correct a past mistake in accounting methods
👉 These changes may now be simpler, faster, and penalty-free — but only if you act within the new rules.
🧾 Related References
- Rev. Proc. 2025-23 – Full Text (irs.gov)
- Rev. Proc. 2015-13 – Original procedure for automatic method changes
- Form 3115 – Application for Change in Accounting Method
