Change method of accounting

If you want to change the method of accounting (for example from the accrual method to the cash method), you must file Form 3115, Application for Change in Accounting Method, during the year for which the change is to be effective. (Instructions on how and where to file this form are included in instructions to the form.)

Some changes are automatic; just by filing you are ensured that your change is recognized. Other changes require the consent of the IRS. Periodically the IRS modifies its list of automatic changes. Speak with your tax or financial advisor to learn more.