What Is IRS Form 3115?
IRS Form 3115, titled Application for Change in Accounting Method, is used to request approval from the Internal Revenue Service (IRS) to change how income or expenses are accounted for on a tax return.
This form applies to both individuals and businesses that want to correct or modify an accounting method to comply with IRS rules.
What Is Form 3115 Used For?
Form 3115 is used to:
- Change how income is recognized or reported
- Change how expenses are deducted or capitalized
- Correct an impermissible accounting method
- Adopt a new accounting method required by tax law or IRS guidance
- Make automatic or non-automatic accounting method changes
The goal of Form 3115 is to ensure that income and expenses are reported consistently and correctly under IRS accounting rules.
When Should You File Form 3115?
You may need to file Form 3115 if:
- You discover that your current accounting method is not IRS-compliant
- The IRS requires a change due to updated regulations or guidance
- You want to voluntarily correct prior reporting errors
- A change in business operations requires a different accounting approach
In many cases, filing Form 3115 allows corrections without reopening prior tax years.
IRS Notices This Form Is Commonly Used With
Form 3115 is often filed in response to IRS communications that question accounting treatment or income reporting, including:
- CP2000 – When income recognition differences trigger a proposed adjustment
- Audit or examination letters involving accounting methods
- Notices assessing additional tax due to accounting inconsistencies
Form 3115 is used to change the accounting method, not to dispute penalties or enforcement actions.
When NOT to Use Form 3115
Do not use Form 3115 if:
- You are correcting a simple math or clerical error
- You need to amend a return for a one-time mistake (use Form 1040-X or amended business returns)
- The issue involves penalties, interest, or fees (Form 843 applies instead)
- You are responding to collection actions like levies or liens
Using Form 3115 incorrectly can delay processing or cause rejection.
What Information Is Required on Form 3115?
Form 3115 generally requires:
- A description of the current accounting method
- A description of the proposed new method
- Identification of whether the change is automatic or non-automatic
- Calculation of any required Section 481(a) adjustment
- Supporting schedules and explanations
The complexity of this form often depends on the nature of the accounting change.
Where and How to File Form 3115
Filing requirements vary depending on the type of change:
- Some changes are filed with the tax return
- Others require a copy to be sent separately to the IRS
- Automatic changes follow specific IRS procedures and guidance
- Non-automatic changes require formal IRS approval
Always follow the current IRS instructions for Form 3115 when filing.
What Happens After You File Form 3115?
After filing:
- The IRS reviews the requested accounting method change
- Automatic changes are generally processed without additional correspondence
- Non-automatic changes may involve IRS follow-up or approval
- Approved changes apply prospectively, with required adjustments handled per IRS rules
Related IRS Forms
Other forms commonly associated with accounting or income adjustments include:
- Form 1040-X – Amended individual return
- Form 1120 / 1065 amendments – Business return corrections
- Form 5471 / 5472 – Information returns affected by accounting changes
Summary
IRS Form 3115 allows taxpayers to change or correct accounting methods to comply with IRS rules. It is a corrective and compliance-focused form used to address income or expense reporting issues without reopening prior tax years in many cases.
Scope Note
This page explains the purpose and general use of IRS Form 3115. It does not provide legal or tax advice.