The IRS apparently figured out that under a literal reading of the new property/capitalization/depreciation regulations, every business would have to submit a Form 3115. The IRS determined that being buried under a tsunami of paper wasn’t a great idea. Today, the IRS announced in Revenue Procedure 2015-20 that a business which has under $10 million of average sales (for the last three years) or less than $10 million of assets (as of the beginning of their 2014 tax year) can use a simplified method for complying with the new property regulations.
I’ve done a quick read of the new Revenue Procedure. What I suspect we will have to do is attach a statement stating that the taxpayer is an eligible taxpayer under Revenue Procedure 2015-20, and has elected to follow this Revenue Procedure to come into compliance with the regulations. This will be far easier and far more palatable to most of my clients.
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Right in Rev. Proc. 2015-20 Section 5.01 it says,
“Accordingly, the taxpayer is permitted to make these changes on its federal tax return for such taxable year without including a separate Form 3115 or separate statement for its applicable trades or businesses.”
Yes, it’s there. When I first wrote about this I had about five minutes to read the RP.