Form 3115 and Accounting Method Changes
Form 3115 is how a taxpayer asks to change an accounting method, including how property is depreciated. Many depreciation changes qualify for automatic consent under the current list. The form instructions in force are the December 2022 revision. A current-year study usually does not need the form.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Changing how an asset is classified or depreciated, after the method has been adopted, is generally an accounting method change.
- Automatic changes are listed in Rev. Proc. 2025-23, as modified by Rev. Proc. 2025-28 and Rev. Proc. 2026-32.
- The current Form 3115 instructions are the December 2022 revision.
- A negative §481(a) adjustment is generally taken in the year of change; a positive adjustment is generally spread over four years.
- A current-year study of property not yet returned usually does not need Form 3115.
Form 3115, Application for Change in Accounting Method, is used for both automatic and non-automatic changes. For depreciation, a method is generally adopted once an impermissible treatment has been used on two consecutively filed returns. Changing it after that requires IRS consent.
The IRS publishes a list of changes that receive automatic consent. As of October 16, 2026, that list is Rev. Proc. 2025-23, modified by Rev. Proc. 2025-28 and Rev. Proc. 2026-32. Rev. Proc. 2026-32 applies to Forms 3115 filed after September 4, 2026.
Rev. Proc. 2015-13 is the general procedure for both automatic and non-automatic consent. It sets filing mechanics and the default §481(a) adjustment periods. The automatic-change list sits on top of that procedure and names the changes that do not need advance consent.
Cost segregation look-backs are the usual reason this form appears in this library. Reclassifying a building already on the books is the IRS position described in Publication 5653 as a method change. The guide is not the filing authority; the revenue procedures are.
Educational information, not tax advice. Eligibility, designated change number, and whether a user fee applies are decisions for the taxpayer’s CPA.
The form is a procedure, not a classification. A complete study still has to stand on the records, the inspection, and the legal tests. Filing Form 3115 does not make a weak allocation stronger. It is how a supported reclassification of property already on the books is put on the year-of-change return.
Designated change numbers
Each automatic change has a designated change number (DCN) entered on the form. Depreciation-related examples include DCN 7 (impermissible to permissible method of depreciation), DCN 184 and following for tangible property regulation changes, and DCN 244 for qualified improvement property placed in service after 2017. Your CPA chooses the right DCN for the facts.
Other DCNs that often appear near cost segregation, as read from Rev. Proc. 2025-23, include DCN 8 (permissible to permissible), DCN 205 (disposition of a building or structural component), DCN 206 (dispositions of other tangible assets), and DCN 245 (certain late elections or revocations under §168). DCN 7 is the usual look-back path when prior returns used an impermissible building-only method. Your CPA still reads the eligibility conditions for that section before using the number.
Those numbers are tied to the section numbering of the current list. A successor revenue procedure can renumber them. Confirm the list on irs.gov before filing.
How filing works
For an automatic change, the form is generally attached to the timely filed return (including extensions) for the year of change, and a signed copy is sent to the IRS as the instructions direct. Non-automatic changes require filing during the year of change and a user fee.
The Form 3115 instructions current revision is December 2022. The “About Form 3115” page was reviewed in the research register as of March 30, 2026. Use the official instructions for mailing addresses and duplicate-copy rules.
Rev. Proc. 2026-32 includes a transition rule for certain duplicate copies filed on or before November 15, 2026. That is a filing-detail item, not a classification rule.
Why it matters for cost segregation
A look-back study is usually implemented this way, with the catch-up depreciation taken as a §481(a) adjustment. A study for a property placed in service in the current year normally does not need Form 3115, because the classification is used on the first return.
If only one return has used the old treatment, the method may not yet be adopted. In that narrower case an amended return can be the tool. The two-return adoption rule is why CPAs count prior filings before choosing a path.
Bonus depreciation on a look-back still follows the original acquisition and placed-in-service dates. Filing Form 3115 in 2026 does not move a 2022 asset onto the post-January 19, 2025 100% rate.
The adjustment period
Rev. Proc. 2015-13 generally takes a negative §481(a) adjustment in one year and a positive adjustment over four years, ratably, unless other guidance provides otherwise.
Section 481 exists to prevent amounts from being duplicated or omitted when a method changes. The catch-up is the mechanism that keeps the new method from skipping or repeating years already filed. Your CPA computes the number from the old and new depreciation schedules, not from a marketing percentage.
What this page does not do
It does not complete Form 3115, choose a DCN, or conclude that a particular study qualifies for automatic consent. Eligibility conditions in each section of Rev. Proc. 2025-23 were not fully reviewed in the research session.
Publication 5653 cannot be cited as the consent authority. It is an examiner guide and says so.
Sources
- 1
- 2
- 3
- 4
- 5
- 6IRS Publication 5653 — Cost Segregation Audit Techniques Guide (rev. 2-2025)(opens in a new tab)
Written for IRS examiners. The guide states it is not an official pronouncement of law and cannot be cited as authority. It predates the July 2025 law.