Today TaxMama hears from Rick in South Carolina with this question. “We have a small business producing conveyor replacement parts. We believe our physical inventory is grossly under valued. How can we re-evaluate this inventory and what permission do we need from the IRS?”
Hi Rick,
Personally, I’ve never done this before. So, if I were you, I’d look for someone who has. In this case, it’s likely to be a CPA, rather than an Enrolled Agent, since this is more of an accounting issue than a tax issue. Visit www.aicpa.org to find a CPA locally.
You would use Form 3115 to request approval https://www.irs.gov/pub/irs-pdf/f3115.pdf .
You can find the instructions here. https://www.irs.gov/pub/irs-pdf/i3115.pdf .
There may be a fee for this from IRS, I am not sure. Who knows, if you read the instructions, perhaps you can figure out how to do this yourself? Good luck!
And remember, you can find answers to all kinds of questions about changing accounting methods and periods and other tax issues, free. Where? Where else? At TaxMama.com.
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- IRS Form 3115 :: Application for Change in Accounting Method
- Instructions for IRS Form 3115 ::
- AICPA :: To find a local CPA
- NAEA :: To find a local Enrolled Agent
- CSEA :: To find an Enrolled Agent in California
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