Following yesterday's release of highly-anticipated proposed IRC Section 451 regulations, the IRS released Revenue Procedure 2019-37 today. The Revenue Procedure modifies multiple sections of Revenue Procedure 2018-31 to provide updated guidance for complying with IRC Section 451 and its proposed regulations.

The guidance is generally effective for tax years beginning after December 31, 2017 (i.e., affecting current filings for 2018 tax years). For specified credit card fees, the guidance is effective for tax years beginning after December 31, 2018.

Highlights of Revenue Procedure 2019-37 include the following:

• A new automatic method change and amendments to existing automatic method changes provide further adoption guidance for taxpayers that are filing method changes to comply with IRC Section 451 or wish to adopt the recently released IRC Section 451 proposed regulations.
• Taxpayers have the option of implementing certain changes on a cut-off basis. This may simplify implementation of new methods required to comply with IRC Section 451.
• Extension of audit protection for taxpayers under examination provides welcome relief for the large number of taxpayers (according to government estimates) required to file one or more method changes to comply with IRC Section 451.

A Tax Alert on the scope and impact of Revenue Procedure 2019-37 is forthcoming.