Elections made for the year 2012
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If you are a trader…
The IRS has established rules and proposed temporary rules which generally provide retroactive "audit protection" as well as prospective/retroactive subsequent "ruling protection" -- and then on November 13, 2007 issued a proposal to change the processes (Notice 2007-88) which cover the election of the Mark-to-Market method of accounting for the year 2011.
Generally an individual trader must have made the automatically approved election in writing between January 1, 2012 and April 17, 2012. The written document must have been filed (we suggest traders use certified mail with return-receipt-requested) with the IRS office where the trader normally mails his or her tax filings (attached to form 1040, 4868, 1040X etc.). Special, more liberal rules allowed certain individuals and entities such as S-corporations, Trading Partnerships and Limited Liability Companies to elect Mark-to-Market under less restrictive procedures.
At that time the written election document was not available as an IRS "form" but rather you, your tax preparer or attorney must have used a free-form format. This must have indicated: 1) an appropriate description of the election, 2) the first year that you used Mark-to-Market and 3) the specific trade or business (i.e. Schedule C) for which the election is being made.
When you change
your method of accounting for gains and losses to the
Mark-to-Market method you must also complete an
"Application for Change in Accounting Method"
3115. The properly completed form is then sent
concurrently to both the IRS office where you normally
mail your tax returns (along with form 1040) and to the national office of the
IRS. The form must be filed between the dates January 1, 2013 and October 15,
2013 (we suggest that you
use certified mail with return-receipt-requested).
IRS is also clarifying (or maybe muddying the waters depending on how one looks at it) recent court decisions that challenge the concept that a request filed after the ninth month of the requested year of change (and before the next year begins) as being applicable to the succeeding year. In other words, there will be no late filing extensions allowable under Sec 301.9100 or otherwise.
August 27, 2011
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