π Rev. Proc. 2025-23 | Effective June 9, 2025
βοΈ Issued in: Internal Revenue Bulletin 2025-24
π§Ύ Applies to: Forms 3115 (Change in Accounting Method)
ποΈ Effective for tax years ending on or after: October 31, 2024
𧩠What’s Changed and Why It Matters
The IRS has streamlined and clarified the list of accounting method changes that can be made automatically β saving time, reducing paperwork, and avoiding costly procedural missteps.
π Major Highlights
| π οΈ Change Type | π What Changed | βοΈ Why It Matters |
| ποΈ Obsolete Sections Removed | Revoked outdated provisions under Code Secs. 168(j)(8), 168(l)(3)(D), 181(a)(1) | π§Ή Simplifies compliance by eliminating dead law |
| π Clarified 481(a) Adjustments | Clearly applies to βany taxable yearβ when the election was made | π§ Prevents confusion on when adjustments apply |
| ποΈ Depreciation & Interest Capitalization | Removed outdated waiver references | π‘ Updated to reflect current law and practice |
| π¦ Inventory Valuation Methods | Deleted references to obsolete proposed regs | π Eases implementation of inventory method changes |
| β‘ Foreign Income Tax + Regulated Utilities (Sec. 118(c)) | Now require non-automatic procedure | π« Can no longer use Form 3115 under automatic rules |
π Automatic vs. Non-Automatic Method Changes
| βοΈ Automatic Method Change | π Non-Automatic Method Change |
| β Fewer procedural hurdles | β³ Requires IRS consent |
| β Self-implemented with Form 3115 | πΌ Formal ruling process needed |
| β Often no user fee | π° Usually includes user fee |
ποΈ Key Effective Dates & Transition Rules
πΉ Applies to:
- Form 3115s filed on/after June 9, 2025
- For tax years ending on or after October 31, 2024
π Transition Option: Convert to Automatic
If you have a pending non-automatic change request and now qualify for the automatic method:
π£ You can convert!
π 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
πΈ Already Filed Before June 9, 2025?
| Scenario | Result |
| β Filed under previous automatic rules | You may continue for that year |
| β Didnβt file before deadline | Must follow non-automatic procedures |
| π Filed duplicates under old rules | You can choose Rev. Proc. 2024-23 or the new 2025-23 rules |
πΈ Already Filed Before June 9, 2025?
π§ 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.
π£ If your business wants to:
- Change how it values inventory
- Adjust depreciation methods
Correct a past mistake in accounting methods
π These changes may now be simpler, faster, and penalty-free β but only if you act within the new rules.
π§Ύ Related References
- Rev. Proc. 2025-23 β Full Text (irs.gov)
- Rev. Proc. 2015-13 β Original procedure for automatic method changes
- Form 3115 β Application for Change in Accounting Method
