Instructions for Form 1128

Transcription

1 Instructions for Form 1128 (Rev. January 2008) Application To Adopt, Change, or Retain a Tax Year Department of the Treasury Internal Revenue Service Section references are to the Internal Regulations section T(c)(5) A corporation electing to be treated Revenue Code unless otherwise noted. for the definition of controlling as an S corporation by filing Form domestic shareholders of a CFC or 2553, Election by a Small Business 10/50 corporation. Corporation, and requesting to What s New change or retain its tax year. If Form 1128 is filed on behalf of a Trusts. A checkbox was added to CFC or 10/50 corporation, each Individuals Part I, line 1 for trusts. Certain types controlling domestic shareholder Newly married individuals changing to of trusts are now permitted to use the must attach to its tax return a copy of the tax year of the other spouse in automatic approval request the form and all other domestic order to file a joint return (Regulations procedures. Refer to Section B of shareholders must be provided a section (d) must be followed). Part II for the details. written notice of the election. See Temporary Regulations section Exempt Organizations T(c)(3) for details. General Instructions An organization exempt under section 501(a) does not file Form Exceptions 1128 unless the organization has Purpose of Form Do not file Form 1128 in the following changed its tax year at any time File Form 1128 to request a change circumstances. within a 10-calendar-year period, and in tax year. Partnerships, S the organization has had an annual corporations, personal service Corporations filing requirement during that 10-year corporations (PSCs), or trusts may be period (see Rev. Proc , required to file the form to adopt or A corporation adopting its first tax C.B. 740). This exception does not retain a certain tax year. year. apply to organizations exempt from A corporation required to change tax under section 521, 526, 527, or Who Must File its tax year to file a consolidated 528; organizations described in return with its new common parent Generally, all taxpayers must file section 401(a); and organizations (see Regulations sections (c) Form 1128 to adopt, change, or retain involved in a group change in tax and (a)). a tax year. However, see Exceptions year for all its subordinate A foreign sales corporation (FSC) below. organizations. or an interest charge domestic The common parent of a international sales corporation Trusts consolidated group that files a (IC-DISC) changing to the tax year of A trust (other than a tax-exempt consolidated return files one Form the U.S. shareholder with the highest trust, charitable trust, or a grantor 1128 for the consolidated group. In percentage of voting power (see trust under Rev. Rul , addition, the common parent section 441(h)). Also see Temporary C.B. 161) that adopts the calendar corporation must (a) indicate that the Regulations section T(b)(4). year as required by section 644. Form 1128 is for the common parent However, a FSC or IC-DISC must file Certain revocable trusts electing to corporation and all its subsidiaries Form 1128 to change its tax year be treated as part of an estate. and (b) answer all relevant questions concurrently, if a tax year change has An employee plan or trust filing on the application for each member of been made by the U.S. shareholder. Form 5308, Request for Change in the consolidated group. Plan/Trust Year, to change its plan or If a consolidated group filing a Partnerships, S trust year. consolidated return wants to change Corporations, and Personal its tax year by using Rev. Proc. Service Corporations When To File , every member of the group A newly formed partnership must meet the revenue procedure adopting a required tax year or a Tax Year Adoption, Change, requirements week tax year with reference to or Retention If a controlled foreign corporation such required tax year. To request a ruling to adopt, (CFC) or 10/50 corporation A partnership, S corporation, or change, or retain a tax year, file Form (noncontrolled section 902 PSC terminating its section by the due date (not including corporation) does not have a U.S. election (see Temporary Regulations extensions) of the federal income tax trade or business, then the CFC s section T(a)(5)). return for the first effective year. Do controlling domestic shareholder(s) A newly formed partnership, an not file earlier than the day following must file Form 1128 on behalf of such electing S corporation, or a newly the end of the first effective year. In foreign corporation to change its tax formed PSC that elects under section the case of a change in tax year, the year (except as provided above with 444 a tax year other than the required first effective year is the short period respect to a controlling domestic tax year by filing Form 8716, Election required to effect the change. shareholder that is a member of a To Have a Tax Year Other Than a To request automatic approval to consolidated group). See Temporary Required Tax Year. change a tax year under Rev. Proc. Cat. No V

2 (Part II, Section A) or Rev. considered if it is submitted before appropriate user fee with the IRS Proc (Part II, Section B), file the end of the short period. National Office. Mail Form 1128 to: by the due date of the return Internal Revenue Service (including extensions) for the short Where To File Associate Chief Counsel (Income period required to effect the change. Tax and Accounting) A Form 1128 filed by a controlling Part II Automatic Approval Attention: CC:PA:LPD:DRU domestic shareholder (or its common Request P.O. Box 7604 parent) on behalf of a CFC or 10/50 If Part II (automatic approval request) Ben Franklin Station corporation is due no later than the applies to the applicant, file Form Washington, DC due date (including extensions) of that shareholder s (or its common 1128 with the Internal Revenue Service Center, Attention: Entity The IRS will acknowledge receipt parent s) income tax return for its tax Control, where the applicant s income of the application within 45 days. You year with or within which ends the tax return is filed. The applicant also can inquire about the status of the first effective year of the CFC or 10/ must attach a copy of Form 1128 to application by writing to: 50 corporation. For an individual filing to change to the federal income tax return filed for Control Clerk, CC:ITA a calendar year under Rev. Proc. the short period required to effect the Internal Revenue Service , I.R.B. 299 (Part II, change. Room 4516 Section C), Form 1128 must be filed CFCs and 10/50 corporations. If 1111 Constitution Ave., NW on or before the due date (including the form is filed on behalf of a CFC or Washington, DC extensions) for filing the federal 10/50 corporation, the controlling The applicant will receive income tax return for the short period domestic shareholder who retains the notification of its approval or denial. If required to effect the change. jointly executed consent described in no communication is received from To change a tax year under Rev. Temporary Regulations section the IRS regarding the application Proc (Part II, Section D), file T(c)(3)(ii) must file Form 1128 within 90 days, contact the Control by the 15th day of the 5th calendar with its tax return for its tax year with Clerk. month after the end of the short or within which ends the first effective period. year of the CFC or the 10/50 Exempt organizations requesting a corporation. The other controlling ruling should send Form 1128 and Late Applications domestic shareholder(s) must attach the application user fee to: a copy of the form to its income tax Generally, an application filed after Internal Revenue Service return for its tax year with or within the appropriate due date stated Attention: EO Letter Rulings which ends the tax year of the CFC or above is considered late. P.O. Box /50 corporation. However, applications filed within McPherson Station 90 days after the due date may be Note. If a corporation is required to Washington, DC considered as timely filed under file Form 1128 with its tax return and is a member of an affiliated group of You can inquire about the status of Regulations section when corporations filing a consolidated an application for exempt the applicant establishes that: return, the common parent must file organizations by calling 1. The taxpayer acted reasonably the Form 1128 with the consolidated and in good faith and return. 2. Granting relief will not prejudice Applications prior to an election to Who Must Sign the interests of the government. become an S corporation. If a Except as discussed below Applications that are filed more corporation is requesting to change (regarding automatic approval than 90 days after the due date are its tax year prior to making an requests filed on behalf of a CFC or presumed to jeopardize the interests election to become an S corporation 10/50 corporation), Form 1128 must of the Government, and will be and the requested tax year is a be signed by the filer as discussed approved only in unusual and permitted tax year for S corporations below. A valid signature by the compelling circumstances. (for example, a calendar tax year), file individual or an officer of the Form 1128 as an attachment to Form organization is required on Form Under either circumstance, an 2553 to ensure that the S corporation If the form does not have a extension request must be filed under is permitted the tax year requested on valid signature, it will not be Procedure and Administration Form See line 2 of Part II on considered. Regulations section and Form Do not file Form 1128 is a ruling request under Rev. Proc. with the above address for automatic Individuals , I.R.B. 1 (updated approval requests. For information on annually), and is subject to public If this application is for a husband and where to file Form 2553, see the inspection under section See wife, enter both names on the line Instructions for Form section 7 of Rev. Proc for Name of filer. Both husband and information on requesting a ruling. Do not file a request for wife must sign the application on the automatic approval with either line Signature and date. Note. An extension request under! CAUTION Rev. Proc (or its successor) address below. Doing so will result in a significant delay in the Partnerships requires payment of a user fee. processing of your request. Show the partnership name, followed by the signature of a general partner Early Applications Part III Ruling Request on behalf of a state law partnership, Generally, an application to adopt or If Part III (ruling request) applies to or a member-manager on behalf of a change a tax year will not be the applicant, file Form 1128 and the limited liability company. -2-

3 Estates All Other Filers Identifying Number Show the name of the estate and the The application must show the name Individuals enter their social security signature and title of the fiduciary or of the company and the signature of number (SSN). If the application is for other person legally authorized to the president, vice president, a husband and wife who file a joint sign. treasurer, assistant treasurer, or chief return, enter both SSNs. However, if accounting officer (such as tax one or both are engaged in a trade or Trusts officer) authorized to sign, and their business, enter the employer official title. Receivers, trustees, or identification number (EIN) instead of Show the name of the trust and the assignees must sign any application the SSNs. All other applicants enter signature and title of the fiduciary or they are required to file. For a their EIN. other person legally authorized to consolidated group filing a sign. consolidated return with its common Except as discussed below parent, the form should be signed by (regarding foreign corporations), if the Tax-Exempt Organizations an authorized officer of the common applicant does not have an EIN or Show the name of the organization parent corporation. SSN, it must apply for one. An EIN and the signature of a principal officer may be applied for: or other person authorized to sign, Preparer (Other Than Filer/ Online Click on the EIN link at followed by his or her title. Applicant) The EIN is issued immediately once the If the individual preparing Form 1128 application information is validated. CFC or 10/50 Corporation is not the filer or applicant, the By telephone at For a CFC or 10/50 corporation with a preparer also must sign. However, in from 7:00 am to 10:00 pm in the U.S. trade or business and filing Form the case of an automatic approval corporation s local time zone as the applicant, follow the request, the Form 1128 attached to By mailing or faxing Form SS-4, same rules as other corporations (see the income tax return does not need Application for Employer Identification All Other Filers below). If the form is to be signed. Number. being filed on behalf of a CFC or 10/ 50 corporation by its controlling A limited liability company must determine which type of federal tax domestic shareholder(s), follow the Specific Instructions entity it will be (that is, partnership, instructions below for ruling requests and automatic approval requests. corporation, or disregarded entity) Part I General before applying for an EIN (see Form Ruling request. A ruling request 8832, Entity Classification Election, application that is filed on behalf of a Information for details). CFC or 10/50 corporation must be All applicants must complete Part I. Note. The online application process signed by an authorized officer of the Attachments to Form 1128 must is not yet available for the following designated (controlling domestic) show the applicant s name, types of entities: Entities with shareholder that retains the jointly identifying number, and address. Also addresses in foreign countries or executed consent as provided for in indicate that the statement is an Puerto Rico, limited liability company Temporary Regulations section attachment to Form (LLC) without entity type, REMICs, T(c)(3)(ii). A schedule listing Name state and local governments, Federal the name(s) and identifying government/military entities, and number(s) of the controlling domestic If the application is filed for a husband Indian Tribal Government/Enterprise shareholder(s) must be attached to and wife who file a joint income tax entities. Please call the toll-free the application. Also, the controlling return, the names of both should Business and Specialty Tax Line at domestic shareholder(s) must satisfy appear in the heading for assistance in the requirements of Temporary In general, the filer of the form is applying for an EIN. Regulations section T(c)(3). If the applicant. However, for members the designated (controlling domestic) of a consolidated group of An SSN must be applied for on shareholder is a member of a corporations and certain foreign Form SS-5, Application for a Social consolidated group, then an corporations, Form 1128 may be filed Security Card. Form SS-5 can be authorized officer of the common on behalf of the applicant. For a obtained at SSA offices or by calling parent must sign. Do not sign the consolidated group of corporations, the SSA at It is also copy of Form 1128 filed with the enter the name and EIN of the parent available from the SSA website at income tax return. corporation on the first line as the filer and enter the name(s) and EIN(s) of Automatic approval request. An If the applicant has not received its the member corporations applying for automatic ruling request application EIN or SSN by the time the a change in accounting period on the that is filed on behalf of a CFC or 10/ application is due, write Applied for fourth line. For CFCs and 10/50 50 corporation does not have to be in the space for the identifying corporations, enter the name and EIN signed. However, the controlling number. See Pub. 583, Starting a of the controlling domestic domestic shareholder completing the Business and Keeping Records. shareholder(s) (common parent, if form must satisfy the requirements of applicable) on the first line and the Foreign corporations. If the Temporary Regulations section name and EIN, if any, of the foreign applicant is a foreign corporation that T(c)(3) and retain the jointly corporation on the fourth line. If there is not otherwise required to have or executed consent described in is more than one filer or applicant, obtain an EIN, enter Not applicable Temporary Regulations section attach a statement listing each filer s in the space provided for the T(c)(3)(ii). or applicant s name and EIN. identifying number. -3-

4 Address Section A Corporations Part II Automatic Include the suite, room, or other unit (Other than S Corporations number after the street address. If the Approval Request or Personal Service Post Office does not deliver mail to Part II is completed by applicants Corporations) the street address and the filer has a requesting automatic approval of a P.O. box, show the box number Rev. Proc provides change in tax year under: instead. exclusive procedures for certain Rev. Proc (corporations), corporations to obtain automatic If the filer receives its mail in care Rev. Proc (pass-through approval to change their annual of a third party (such as an entities), accounting period under section 442 accountant or attorney), enter on the Rev. Proc (individuals), and Regulations section (b). A street address line C/O followed by corporation complying with all the the third party s name and street Rev. Proc , C.B. 548 applicable provisions of this revenue address or P.O. box. and Rev. Proc (exempt procedure will be deemed to have organizations), and established a business purpose and Person To Contact Rev. Proc , C.B. 516 obtained the approval of the IRS to The person to contact must be the (all filers), to correct the adoption of change its accounting period. See person authorized to sign the Form an improper tax year to a calendar or Rev. Proc for more 1128, or the applicant s authorized fiscal year by (1) filing an amended information. representative. If the person to return on a calendar year basis and Line 1. A corporation is precluded contact is not the filer or the attach Form 1128, or (2) file a Form from using the automatic approval applicant, attach Form 2848, Power 1128 under the procedures of either rules under section 4 of Rev. Proc. of Attorney and Declaration of Rev. Proc , , if it: Representative , or its successor. 1. Has changed its annual Line 1. Check all applicable boxes accounting period at any time within Note. Applicants requesting an to indicate the type of entity filing this the most recent 48-month period automatic approval must complete application. For example, an entity ending with the last month of the Parts I and II only. that is a domestic corporation may requested tax year. For exceptions, also be a regulated investment see section 4.02(1) of Rev. Proc. company (RIC). That entity would A user fee is not required if check both the Domestic TIP requesting an automatic 2. Has an interest in a corporation box and the Other box, approval under any of the pass-through entity as of the end of and write, RIC under sec. 851 on sections of Part II listed below. the short period. For exceptions, see the dotted line. section 4.02(2) of Rev. Proc. Complete Part II if the applicant Lines 2a and 2b. If the requested can use the automatic approval rules 3. Is a shareholder of a FSC or year is a week tax year, under one of the sections listed below IC-DISC, as of the end of the short describe the year (for example, last and the application is filed on time. period. For exceptions, see section Saturday in December or Saturday 4.02(3) of Rev. Proc nearest to December 31). A week tax year must end on the Complete 4. Is a FSC or an IC-DISC. If the applicant is: only date a specified day of the week last 5. Is an S corporation. occurs in a particular month or on the A corporation (other than an Section A 6. Attempts to make an S date that day of the week occurs S corporation or a PSC) corporation election for the tax year nearest to the last day of a particular immediately following the short A partnership, S Section B calendar month. period, unless the change is to a corporation, PSC, or a trust permitted S corporation tax year. A newly formed partnership or An individual Section C 7. Is a PSC. PSC that wants to adopt a tax year 8. Is a CFC. For exceptions, see other than its required tax year must A tax-exempt organization Section D section 4.02(8) of Rev. Proc. go to Part III after completing Part I Line 2c. The required short period 9. Is a tax-exempt organization, return must begin on the day If the applicant does not qualify for other than an organization exempt following the close of the old tax year automatic approval, a ruling must be from tax under section 521, 526, 527, and end on the day before the first requested. See Part III for more or 528. day of the new tax year. An information. 10. Is a cooperative association applicant s first tax year generally (within the meaning of section starts when business operations If the Service Center denies 1381(a)) with a loss in the short begin. approval because Form 1128 was not period required to effect the change filed on time, the applicant can of annual accounting period, unless A corporation s tax year begins at request relief under Regulations the patrons of the cooperative the earliest date it first: section , discussed earlier association are substantially the Has shareholders, under Late Applications on page 2, by same in the year before the change Has assets, or completing Part III, as discussed on of annual accounting period, in the Begins doing business. The initial page 7, and sending Form 1128 to short period required to effect the year ends on the day before the first the IRS National Office for change, and in the year following the day of the new tax year. consideration. change. -4-

5 11. Is a corporation leaving a year concurrently with the partner s or shareholder s federal consolidated group. The corporation corporation s change in tax year, income tax return. is precluded from using the automatic either under Rev. Proc , approval request procedures during , or This related Note. If any of the above the consolidated group s tax year in party change is required circumstances apply, you may still be which the corporation ceased to be a notwithstanding the testing date eligible under the automatic approval member of the consolidated group. provisions in section 706(b)(4)(A)(ii), request procedures if you comply with See Rev. Proc , section 898(c)(3)(B), Temporary the procedures explained following I.R.B. 818 for details. Regulations section T(b)(6), item 5 below. See section 7.03 of 12. Has a required tax year (for and the special provision in section Rev. Proc for more example, a real estate investment 706(b)(4)(B). information. trust), unless the corporation is 5. The entity is requesting a changing to its required tax year and Section B Partnerships, S change to, or retention of, a natural is not described in items (1) through business year as described in section Corporations, Personal (11), above. 4.01(2) of Rev. Proc if the Service Corporations, and entity has changed its annual Note. If the corporation is precluded Trusts accounting period at any time within from using the automatic approval Rev. Proc provides the most recent 48-month period rules because of items (2) or (3), exclusive procedures for a ending with the last month of the listed above, it can nevertheless partnership, S corporation, PSC, or requested tax year. For this purpose, automatically change to a natural trust within its scope to adopt, the following changes are not business year that meets the change, or retain its annual considered prior changes in annual 25-percent gross receipts test accounting period under section 442 accounting period: (a) a change to a described in section 5.04 of Rev. and Regulations section (b). required tax year or ownership tax Proc year; (b) a change from a week The automatic approval request If the answer to question 1 is tax year to a non week tax year procedures apply to trusts, with the Yes, sign Form 1128 and see that ends with reference to the same exception of trusts exempt from Part II Automatic Approval Request calendar month, and vice versa; or (c) taxation under section 501(a), earlier under Where To File. Do not a change in accounting period by an charitable trusts described in section complete Part III. If the corporation is S corporation or PSC, in order to 4947(a)(1), and grantor trusts requesting to change to a natural comply with the common tax year described in Rev. Rul , business year that satisfies the requirements of Regulations sections changing to a calendar year. 25-percent gross receipts test, also (d)(3)(v) and (a). include its gross receipts for the most The rev. proc. only applies to trusts recent 47 months (or for any that are using an incorrect tax year If the answer to question 4 is predecessor). and want to change to the required Yes, and any of the following calendar tax year. situations apply, the applicable If the answer to question 1 is Yes additional procedures described because the applicant is a CFC that Line 4. A partnership, S corporation, below must be followed. wants to make a one-month deferral PSC, or trust is precluded from using The applicant is under examination election under section 898(c)(2), see the automatic approval rules under and has obtained the consent of the Rev. Proc which modifies section 4 of Rev. Proc if any appropriate director to the change or the terms and conditions for this of the following apply: retention of the applicant s annual election provided in Rev. Proc. 1. The entity is under examination, accounting period. The applicant If a CFC wants to revoke its unless it obtains consent of the must attach to the application a one-month deferral election under appropriate director as provided in statement from the director section 898(c)(2) and change its tax section 7.03(1) of Rev. Proc. consenting to the change or retention. year to the majority U.S. shareholder The applicant must also provide a year (as defined in section 898(c)(3)), 2. The entity is before an appeals copy of the application to the director attach a statement providing the office with respect to any income tax at the same time it files the names, addresses, and identifying issue and its annual accounting application with the Service Center. numbers for each U.S. shareholder of period is an issue under The application must contain the the foreign corporation. consideration by the appeals office. name(s) and telephone number(s) of If the answer to question 1 is No, 3. The entity is before a Federal the examination agent(s). go to Part III after completing Section court with respect to any income tax The applicant is before an appeals A. issue and its annual accounting (area) office and the applicant s Line 3. If a corporation s interest in a period is an issue under annual accounting period is not an pass-through entity, CFC, FSC, or consideration by the Federal court. issue under consideration by the IC-DISC (related entity) is 4. On the date the partnership or appeals (area) office. The applicant disregarded under section 4.02(2) or S corporation would otherwise file its must attach to the application a 4.02(3) of Rev. Proc application, the partnership s or S separate statement signed by the because the related entity is required corporation s annual accounting applicant certifying that, to the best of to change its tax year to the period is an issue under the applicant s knowledge, the corporation s new tax year (or, in the consideration in the examination of a applicant s annual accounting period case of a CFC, to a tax year partner s or shareholders s federal is not an issue under consideration by beginning one month earlier than the income tax return or an issue under the appeals (area) office. The corporation s new tax year), the consideration by an area office or by applicant must also provide a copy of related entity must change its tax a Federal court with respect to a the application to the appeals officer -5-

6 at the same time it files the into the amount of gross receipts from (including any shareholder that application with the Service Center. sales and services for the last 2 concurrently changes to such tax The application must contain the months of this 12-month period. year) holding more than 50 percent of name and telephone number of the b. The same computation as in a, the corporation s issued and appeals officer. above is made for the two preceding outstanding shares of stock. For this The applicant is before a Federal 12-month periods ending with the last purpose, a shareholder that is court and the applicant s annual month of the requested annual tax-exempt under section 501(a) is accounting period is not an issue accounting period. disregarded if such shareholder is not under consideration by the Federal 2. Natural business year: subject to tax on any income court. The applicant must attach to a. Except as provided in b, below, attributable to the S corporation. the application a separate statement if each of the three results described Tax-exempt shareholders are not signed by the applicant certifying that, in 1 above equals or exceeds 25 disregarded, however, if the S to the best of the applicant s percent, then the requested annual corporation is wholly-owned by such knowledge, the applicant s annual accounting period is deemed to be tax-exempt entities. A shareholder in accounting period is not an issue the taxpayer s natural business year. an S corporation that wants to under consideration by the Federal b. The taxpayer must determine concurrently change its tax year must court. The applicant must also whether any annual accounting follow the instructions generally provide a copy of the application to period other than the requested applicable to taxpayers changing their the government counsel at the same annual accounting period also meets tax years contained in Regulations time it files the application with the the 25-percent test described in a, section (b), Rev. Proc. Service Center. The application must above. If one or more other annual , or any other applicable contain the name and telephone accounting periods produce higher administrative procedure published number of the government counsel. averages of the three percentages by the IRS. If the answer to question 4 is No (rounded to 1/100 of a percent) Line 8. Answer Yes if the because the applicant (or a partner or described in 1 above than the partnership is a related entity that shareholder) is under examination requested annual accounting period, must concurrently change its tax year and has not obtained the appropriate then the requested annual accounting as a term and condition of the director s consent to the change or period will not qualify as the approval of the taxpayer s request to retention of the applicant s annual taxpayer s natural business year. change its tax year. accounting period or the applicant is 3. Special rules: before an appeals office or Federal a. To apply the 25-percent gross Section C Individuals court and the applicant s annual receipts test for any particular year, accounting period is an issue under the taxpayer must compute its gross Line 9. If the answer to question 9 is consideration by the appeals office or receipts under the method of Yes, and the restrictions of section Federal court, do not complete Part accounting used to prepare its federal 4.02 of Rev. Proc (or its III. income tax returns for such tax year. successor) do not apply, sign Form If the answer to question 4 is No b. If the taxpayer has a 1128 and see Part II Automatic solely because of a prior change as predecessor organization and is Approval Request above under described in item (5) above, go to continuing the same business as its Where To File. Do not complete Part Part III after completing Section B. predecessor, the taxpayer must use III. If the answer to question 9 is the gross receipts of its predecessor No, go to Section A of Part III. If the answer to question 4 is Yes (and the answer to question 5, 6, or 7 for purposes of computing the 25-percent gross receipts test. Section D Tax-Exempt is also Yes ), sign Form 1128 and see Part II Automatic Approval c. If the taxpayer (including any Organizations Request under Where To File, above. predecessor organization) does not A tax-exempt organization can Do not complete Part III. If the answer have a 47-month period of gross request a change to its tax year under to question 4 is Yes (and the receipts (36-month period for the the simplified method of either Rev. answer to question 5, 6, or 7 is No ), requested tax year plus an additional Proc or Rev. Proc go to Part III after completing Section 11-month period for comparing the requested tax year with other Under Rev. Proc , an B. potential tax years), then it cannot organization exempt under section Line 6. A partnership, S corporation, establish a natural business year 501(a) does not have to file Form electing S corporation, or PSC under this revenue procedure unless the following conditions establishes a natural business year d. If the requested tax year is a described in section 3.03 of Rev. under Rev. Proc by week tax year, the calendar Proc apply: satisfying the following 25-percent month ending nearest to the last day 1. The organization was required gross receipts test. The applicant of the week tax year is treated to file an annual information return or must supply its gross receipts for the as the last month of the requested tax Form 990-T, Exempt Organization most recent 47 months (or for any year for purposes of computing the Business Income Tax Return, at any predecessor) to compute the percent gross receipts test. time during the last 10 calendar percent gross receipts test. years, and 1. Prior 3 years gross receipts: Line 7. For an S corporation, an 2. The organization has changed a. Gross receipts from sales and ownership tax year is the tax year its tax year at any time within the last services for the most recent 12-month other than a calendar year (if any) 10 calendar years ending with the period that ends with the last month that, as of the first day of the first calendar year that includes the of the requested annual accounting effective year, constitutes the tax year beginning of the short period resulting period are totaled and then divided of one or more shareholders from the change of tax year. -6-

7 An organization described in Do not file a tax return using issue under consideration by the section 501(c) or (d) is exempt from! the requested tax year until Federal court. The applicant must tax under section 501(a) unless the CAUTION this application is approved. also provide a copy of the application exemption is denied under section to the government counsel at the 502 or 503. Rev. Proc provides the same time it files the application with general procedures for obtaining Rev. Proc does not apply the IRS National Office. The approval to adopt, change, or retain a to: application must contain the name tax year for taxpayers not qualifying Farmers cooperatives exempt from and telephone number of the under the automatic approval rules or federal income tax under section 521, government counsel. if the application is late. Organizations described in Line 4a. Attach an explanation of sections 526, 527, and 528, Section A General the legal basis supporting the Organizations described in section Information requested tax year. Include all 401(a), and authority (statutes, regulations, etc.) All applicants must complete this Organizations requesting a change supporting the requested year. The section to request a ruling on an in a tax year on a group basis. applicant is encouraged to include all adoption of, change to, or retention of A central organization should relevant facts and circumstances that a tax year. follow Rev. Proc to apply for a may establish a business purpose. Line 1. If the applicant is a group change in tax year for all its Line 4b. If the applicant requests to partnership, S corporation, personal subordinate organizations. establish a natural business year service corporation, or trust and any Rev. Proc does not apply under the annual business cycle test of the following situations apply, the to: or seasonal business test of sections applicable additional procedures Farmers cooperatives exempt from 5.03(1) and 5.03(2) of Rev. Proc. described below must be followed. federal income tax under section 521, , it must provide its gross The applicant is under examination Certain organizations that have receipts from sales or services and and has obtained the consent of the unrelated business taxable income approximate inventory costs (where appropriate director to the change or defined in section 512(a), and applicable) for each month in the retention of the applicant s annual Organizations that are private requested short period and for each accounting period. The applicant foundations defined in section 509(a). month of the three immediately must attach to the application a preceding tax years. Line 10. If the answer to question 10 statement from the director is Yes, and the organization is a consenting to the change or retention If the applicant is requesting to section 501(a) organization to which of its annual accounting period. The change to a natural business year section 3.03 of Rev. Proc applicant must also provide a copy of that satisfies the 25-percent gross applies or a central organization to the application to the director at the receipts test described in section which Rev. Proc applies, sign same time it files the application with 5.03(3) of Rev. Proc , the Form 1128 and see Part II the IRS National Office. The applicant must supply its gross Automatic Approval Request above application must contain the name(s) receipts for the most recent 47 under Where To File. Do not and telephone number(s) of the months (or for any predecessor). complete Part III. If the answer to examination agent(s). Line 14. Applicants filing to request question 10 is Yes, and Rev. Procs. The applicant is before an appeals an automatic approval for a change in and do not apply, go to (area) office and the applicant s tax year under Rev. Procs , Part III. annual accounting period is not an , , 85-58, or issue under consideration by the (Part II) are not required to pay a user Part III Ruling Request appeals (area) office. The applicant fee when Form 1128 is filed on time. Part III is completed only by must attach to the application a Applicants filing to request a letter applicants requesting to adopt, separate statement signed by the ruling on a change in tax year under change, or retain a tax year that appropriate person certifying that, to Rev. Proc and Rev. Proc. cannot use the automatic procedures the best of that person s knowledge, must pay a $1,500 user fee. listed in Part II. the entity s annual accounting period A request for an exempt organization is not an issue under consideration by letter ruling on a change in tax year Also, the applicant must complete the appeals (area) office. The under Rev. Proc , the specific section(s) in Part III that applicant must also provide a copy of I.R.B. 230, requires payment of a applies to that particular applicant. the application to the appeals officer $350 user fee. at the same time it files the If the applicant is: Complete only application with the IRS National You can find Rev. Proc. Office. The application must contain TIP and Rev. Proc A corporation (other Sections A and than an S corporation, B, plus any the name and telephone number of on pages 1 and 230, 10/50 corporation, or other applicable the appeals officer. respectively, of Internal Revenue CFC) section in Part The applicant is before a Federal Bulletin at III court and the applicant s annual irs-irbs/irb07-01.pdf. accounting period is not an issue A separate $1,500 user fee is also An S corporation Sections A and under consideration by the Federal required for applicants filing a letter C court. The applicant must attach to ruling request for an extension of time A partnership Sections A and the application a separate statement to file under Regulations section D signed by the appropriate person (including requests under certifying that, to the best of that Rev. Procs , , and A CFC or 10/50 Sections A and corporation E person s knowledge, the entity s (Part II, Sections A, B, and annual accounting period is not an C)). -7-

8 Note. The user fees referred to in For example, a Passive Foreign purpose. For more information, see the above paragraphs are published Investment Company (PFIC) Rev. Proc in Rev. Proc (exempt completes Section B and attaches the If any shareholder is applying for a organizations, see Rev. Proc. statement required by Section H. corresponding change in tax year, ), or an annual update. The Complete Sections B and F for a that shareholder must file a separate annual updates are published as tax-exempt organization that is a Form 1128 to get advance approval revenue procedures in the Internal corporation. to change its tax year. Revenue Bulletin. The Internal Revenue Bulletins can be accessed Note. In addition to excluding CFC s from Section B, 10/50 corporations Section D Partnerships at The fees for 2008 are in Internal Revenue Bulletin are also excluded. A partnership must obtain advance approval from the IRS to adopt, Section C S Corporations change, or retain a tax year unless it Payment of the user fee (check or An S corporation must have a is not required to file Form 1128, or it money order made payable to the permitted tax year unless it has meets one of the automatic approval Internal Revenue Service) must be elected under section 444 to have a rules discussed in Part II, Section B attached to Form 1128 at the time the tax year other than the required tax on page 5. See Exceptions on page form is filed. See Rev. Proc year. A permitted tax year is: 1. for more information. 1. A tax year that ends on Partners must also get separate Section B Corporations December 31 or advance approval to change their tax 2. Any other tax year if the years. (Other Than S Corporations corporation can establish a business and Controlled Foreign Line 23. Enter the first date a purpose to the satisfaction of the IRS. business transaction resulted in a tax Corporations) consequence, such as receiving Corporations must complete this For purposes of 2, above, any income or incurring an expense. section and any other section in Part deferral of income to shareholders III that applies to that particular entity. will not be treated as a business Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. Section 442 says that you must obtain IRS approval if you want to adopt, change, or retain a tax year. To obtain approval, you are required to file an application to adopt, change, or retain a tax year. Section 6109 requires that you disclose your taxpayer identification number (SSN or EIN). Failure to provide this information in a timely manner could result in approval of your application being delayed or withheld. Providing false information could subject you to penalties. Our authority to ask for information is sections 6001, 6011, and 6012(a) and their regulations, which require you to file a return or statement with us for any tax for which you are liable. Your response is mandatory under these sections. Section 6109 requires that you provide your SSN or EIN on what you file. This is so we know who you are, and can process your return and other papers. You must fill in all parts of the form that apply to you. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section However, section 6103 allows or requires the Internal Revenue Service to disclose or give the information shown on your application to others as described in the Code. For example, we may disclose your tax information to the Department of Justice to enforce the tax laws, both civil and criminal, and to cities, states, the District of Columbia, U.S. commonwealths or possessions, and certain foreign governments to carry out their laws. We may also disclose this information to federal and state agencies to enforce federal nontax criminal laws and to combat terrorism. Keep this notice with your records. It may help you if we ask you for other information. If you have any questions about the rules for filing and giving information, call or visit any Internal Revenue Service office. The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for individual taxpayers filing this form is approved under OMB control number and is included in the estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown below. Preparing and sending Learning about the the form to Recordkeeping law or the form the IRS Parts I and II 8 hr., 36 min. 5 hr., 51 min. 6 hr., 15 min. Parts I and III 22 hr., 14 min. 5 hr., 37 min. 7 hr., 26 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Internal Revenue Service, Tax Products Coordinating Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6526, Washington, DC Do not send the tax form to this office. Instead, see Where To File on page