In Rev. Proc. 2008-25, the IRS provided a safe harbor method of accounting for accrual-basis taxpayers to use to account for FICA and FUTA taxes. It also established procedures for taxpayers to use to change their method of accounting to this safe harbor method. Under Rev. Proc. 2008-25, taxpayers who use the safe harbor method may deduct FUTA and the employer’s portion of FICA in the same year in which the all-events test has been met for the related compensation and the IRS will not challenge such use. This is true even if the amount of the tax liability is not fixed at the time of accrual of the compensation because, for example, the taxpayer does not know if a particular employee will have reached an applicable payroll tax ceiling when the liability is paid. Examples are provided in Rev. Proc. 2008-25 to further clarify the IRS position. Because the change in accounting method requires the filing of Form 3115, taxpayers are advised to consult their tax advisors for further information.