To make this happen, you need to submit a statement to the IRS as described below. The easiest way to do this is attach it to your return for the year you want the change to take effect. If you want the change to take effect for 2020, attach the statement to the return you file this year for 2020. In that case, you would not report accrued interest for 2020 (or any future year) on the bonds you already hold. If you want to report accrued interest for 2020, but stop doing so in 2021, attach the statement to your 2021 return.
Technically you’re complying with a rule that says you need to obtain permission from the IRS to change how you report interest from these bonds, but taking advantage of a procedure under which the permission is granted automatically. Details are provided in something called Revenue Procedure 2018-31, which is available online but not recommended for light reading, as it deals with many different accounting rules and weighs in at 333 pages. Another technicality: this statement is a substitute for Form 3115, which does not need to be filed (and should not be filed) when this statement is submitted.
When you do this, it will be important to maintain records of the amounts you previously reported as accrued interest on the bonds you already own. That amount will be subtracted from the amount of interest you would otherwise report upon a taxable event. Failure to maintain these records will cause you to pay tax twice on that income.
I believe it is generally possible to attach a statement such as this when filing electronically, but you may wish to confirm that this will be possible if you prefer to avoid filing a paper return.
The statement will read as follows, assuming you want the change to take effect for 2020. Change references to the year if you prefer to have it take effect for 2021.
Statement pursuant to Rev. Proc. 2018-31 accompanying 2020 Form 1040
The designated automatic accounting method change number for this change is 131.
The taxpayer’s name is [your name] and social security number is [your SSN].
The year of change is January 1, 2020 to December 31, 2020.
The Series E, EE or I U.S. savings bonds for which this change in accounting method is requested are:
[list of bonds held as of the beginning of 2020]
The taxpayer will report all interest on any U.S. savings bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest.
The taxpayer will report all interest on the U.S. savings bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of any interest income previously reported in prior taxable years.
[End of statement.]