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The Internal Revenue Service has released Rev. Proc. 2025-23, which updates the list of automatic procedures for taxpayer-initiated requests for changes in methods of accounting.
An “automatic change” is a change in method of accounting for which the taxpayer is eligible under Section 5.01(1) of Rev. Proc. 2015-13 for requesting the IRS commissioner’s consent for the requested year of change.
The 430-plus pages of changes cover: gross income, commodity credit loans, trade or business expenses, bad debts, interest expense and amortizable bond premium, depreciation or amortization, research or experimental expenditures, elective expensing provisions, computer software expenditures, start-up expenditures and organizational fees, capital expenditures, and uniform capitalization methods.
Changes also cover losses, expenses and interest in transactions between related taxpayers; deferred compensation; cash-to-accrual methods of accounting; taxable years of inclusion; discounted obligations; prepaid subscription income; long-term contracts; taxable years incurred; rent; inventories (including LIFO inventories); mark-to-market accounting; bank reserves for bad debts; insurance companies; discounted unpaid losses; and REMICs.
Examples are given for many of the changes.
Rev. Proc. 2025-23 is slated to appear in IRB 2025-24 dated June 9.
