Reg. § 1.466-3 Manner of and time for making election under section 466.
(a) In general Section provides a special method of accounting for accrual basis taxpayers who issue qualified discount coupons (as defined in section ). In order to use the special method under section , a taxpayer must make an election with respect to the trade or business in connection with which the qualified discount coupons are issued. If a taxpayer issues qualified discount coupons in connection with more than one trade or business, the taxpayer may use the special method of accounting under section only with respect to the qualified discount coupons issued in connection with a trade or business for which an election is made. The election must be made in the manner prescribed in this section. The election does not require the prior consent of the Internal Revenue Service. An election under section is effective for the taxable year for which it is made and for all subsequent taxable years, unless the taxpayer secures the prior consent of the Internal Revenue Service to revoke such election.
(b) Manner of and time for making election
(1) General rule Except as provided in of this section, an election is made under section and this section by filing a statement of election containing the information described in of this section with the taxpayer's income tax return for the taxpayer's first taxable year for which the election is made. The election must be made not later than the time prescribed by law (including extensions thereof) for filing the income tax return for the first taxable year for which the election is made. Thus, the election may not be made for a taxable year by filing an amended income tax return after the time prescribed (including extensions) for filing the original return for such year.
(2) Transitional rule If the last day of the time prescribed by law (including extensions thereof) for filing a taxpayer's income tax return for the taxpayer's first taxable year ending after December 31, 1978, falls before December 3, 1979, and the taxpayer does not make an election under section with respect to such taxable year in the manner prescribed by of this section, an election is made under section and this section with respect to such taxable year if—
(i) Within the time prescribed by law (including extensions thereof) for filing the taxpayer's income tax return for such taxable year, the taxpayer has made a reasonable effort to notify the Commissioner of the taxpayer's intent to make an election under section with respect to such taxable year, and
(ii) Before January 2, 1980, the taxpayer files a statement of election
containing the information described in of this section to be associated with the taxpayer's income tax return for such taxable year.
For purposes of of this section, a reasonable effort to notify the Commissioner of an intent to make an election under section with respect to a taxable year includes the timely filing of an income tax return for such taxable year if the taxable income reported on the return reflects a deduction for the redemption costs of qualified discount coupons as determined under section .
(c) Required information The statement of election required by of this section must indicate that the taxpayer (identified by name, address, and taxpayer identification number) is making an election under section and must set forth the following information:
(1) A description of each trade or business for which the election is made;
(2) The first taxable year for which the election is made;
(3) The redemption period (as defined in section ) for each trade or business for which the election is made;
(4) If the taxpayer is required to establish a suspense account under section for a trade or business for which the election is made, the initial opening balance of such account (as defined in section ) for each such trade or business; and
(5) In the case of an election under section that results in a net increase in taxable income under section , the amount of such net increase.
The statement of election should be made on a Form 3115, which need contain no information other than that required by this paragraph or .
[T.D. 8022, 50 FR 18477, May 1, 1985]