(1) If a taxpayer wishes to change its election prior to the end of the three-year period, permission must first be received from the department. The department shall impose reasonable conditions necessary to insure that the requested change will not result in an avoidance of tax and that income for the period prior to the change has been properly reported. In the year of the change, the department may, for the purposes provided for in law, require the inclusion of gross income or the exclusion of deductions either of which occurred because of a water's-edge filing for that period.