Thanks @Rick19744 , @DianeW777. I went through the 3115 instructions as well as the RP 2015-13.
They are elaborating more on the positive 481(a) adjustment and giving option to do a 1 year or 4 year approach. However for a negative 481(1) adjustment, I only saw on line on RP 2015-13 which mentions 1 year selection (see below excerpt).
(1) In general. Except as otherwise provided in this revenue procedure, the List of Automatic Changes (in the case of an automatic change), a letter ruling to the taxpayer (in the case of a non-automatic change), or other guidance published in the IRB, the § 481(a) adjustment period is one taxable year (year of change) for a negative § 481(a) adjustment and four taxable years (year of change and next three taxable years) for a positive § 481(a) adjustment.
This makes sense as it was also confirmed by @Rick19744 in earlier post. Now the confusion that second part of Question 28 is really applicable for positive 481(a) adjustments, (see excerpt below from RP 2015-13).
(3) Shortened adjustment periods. The four-year § 481(a) adjustment period provided in SECTION 7.03(1) for a positive § 481(a) adjustment does not apply in the following situations:
(a) Cooperatives. For a cooperative within the meaning of § 1381(a), the § 481(a) adjustment period for a positive § 481(a) adjustment generally is one taxable year (year of change). See Rev. Rul. 79–45, 1979–1 C.B. 284.
(b) Taxpayers under examination with positive § 481(a) adjustments. The § 481(a) adjustment period is two taxable years (year of change and next taxable year) for a positive § 481(a) adjustment for a change in method of accounting requested when a taxpayer is under examination, unless SECTION 8.02(1)(a) (change filed in a three-month window), 8.02(1)(b) (change filed in a 120-day window), 8.02(1)(c) (present method not before the director) or 8.02(1)(d) (new member of a consolidated group in CAP) applies.
(c) De minimis election. A taxpayer may elect a one-year § 481(a) adjustment period (year of change) for a positive § 481(a) adjustment that is less than $50,000. To make this election, the taxpayer must complete the appropriate line on the Form 3115 and take the entire § 481(a) adjustment into account in the year of change when it implements the change in method of accounting.
(d) Eligible acquisition transaction election.
....... (truncated for the sake of brevity. There were more details on procedure for positive 481(a) adjustments which is not my scenario)
Since my 481(a) adjustment is negative, this is not my scenario. Do people with negative 481(a) adjustment just leave part 2 of Question 28 blank?
