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Форма 1128 Інструкції

Інструкція по формуванню 1128, застосування для прийняття, зміни або збереження податкового року

Відень 2017

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  • Форма 1128 - Заява на прийом, зміну або збереження податкового року
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Department of the Treasury  
Internal Revenue Service  
Instructions for Form 1128  
(Rev. November 2017)  
(Use with the October 2014 revision of Form 1128)  
Application To Adopt, Change, or Retain a Tax Year  
Section references are to the Internal  
Revenue Code unless otherwise noted.  
trade or business, then the CFC's  
controlling domestic shareholder(s)  
must file Form 1128 on behalf of such  
foreign corporation to change its tax  
year (except as provided above with  
respect to a controlling domestic  
shareholder that is a member of a  
A partnership, S corporation, or  
PSC terminating its section 444  
election (see Temporary Regulations  
section 1.444-1T(a)(5)).  
General Instructions  
A newly formed partnership, an  
electing S corporation, or a newly  
formed PSC that elects under section  
Future Developments  
For the latest information and  
developments related to Form 1128  
and its instructions, such as  
consolidated group). See Regulations 444 a tax year other than the required  
section 1.964-1(c)(5) for the definition  
of controlling domestic shareholders  
of a CFC or 10/50 corporation.  
tax year by filing Form 8716, Election  
To Have a Tax Year Other Than a  
Required Tax Year.  
legislation enacted after this form and  
its instructions were published, go to  
A corporation electing to be treated  
as an S corporation by filing Form  
2553, Election by a Small Business  
Corporation, and requesting to  
change or retain its tax year.  
If Form 1128 is filed on behalf of a  
CFC or 10/50 corporation, each  
controlling domestic shareholder must  
attach to its tax return a copy of the  
form and all other domestic  
Purpose of Form  
File Form 1128 to request a change in  
tax year. Partnerships, S corporations,  
personal service corporations (PSCs),  
or trusts may be required to file Form  
1128 to adopt or retain a certain tax  
year.  
shareholders must be provided a  
written notice of the election. See  
Regulations section 1.964-1(c)(3) for  
details.  
Exempt Organizations  
An organization exempt under section  
501(a) does not file Form 1128 unless  
the organization has changed its tax  
year at any time within a  
Part II is used for an automatic  
approval request. If the applicant does  
not qualify for automatic approval,  
Part III is used for a ruling request.  
Exceptions  
10-calendar-year period, and the  
organization has had an annual filing  
requirement during that 10-year  
period (see Rev. Proc. 85-58, 1985-2  
C.B. 740). This exception does not  
apply to organizations exempt from  
tax under section 521, 526, 527, or  
528; organizations described in  
section 401(a); and organizations  
involved in a group change in tax year  
for all its subordinate organizations.  
Do not file Form 1128 in the following  
circumstances.  
Corporations  
A corporation adopting its first tax  
year.  
Who Must File  
Generally, taxpayers must file Form  
1128 to adopt, change, or retain a tax  
year. However, see Exceptions, later.  
A corporation required to change its  
tax year to file a consolidated return  
with its new common parent (see  
Regulations sections 1.442-1(c) and  
1.1502-76(a)).  
The common parent of a  
consolidated group that files a  
consolidated return files one Form  
1128 for the consolidated group. In  
addition, the common parent  
Individuals  
A foreign sales corporation (FSC)  
or an interest charge domestic  
international sales corporation  
(IC-DISC) changing to the tax year of  
the U.S. shareholder with the highest  
percentage of voting power (see  
section 441(h)). Also see Temporary  
Regulations section 1.921-1T(b)(4).  
However, a FSC or IC-DISC must file  
Form 1128 to change its tax year  
concurrently, if a tax year change has  
been made by the U.S. shareholder.  
Newly married individuals changing to  
the tax year of the other spouse in  
order to file a joint return do not file  
Form 1128. Regulations section  
1.442-1(d) must be followed.  
corporation must (a) indicate that the  
Form 1128 is for the common parent  
corporation and all its subsidiaries  
and (b) answer all relevant questions  
on the application for each member of  
the consolidated group.  
Trusts  
A trust (other than a tax-exempt  
trust, charitable trust, or a grantor trust  
under Rev. Rul. 90-55, 1990-2 C.B.  
161) that adopts the calendar year as  
required by section 644.  
If a consolidated group filing a  
consolidated return wants to change  
its tax year by using Rev. Proc.  
2006-45, 2006-45 I.R.B. 851 at  
index.html (or its successor), every  
member of the group must meet the  
revenue procedure requirements.  
Partnerships, S Corporations,  
and Personal Service  
Corporations  
A newly formed partnership  
adopting a required tax year or a  
52-53-week tax year with reference to  
such required tax year.  
Certain revocable trusts electing to  
be treated as part of an estate.  
An employee plan or trust filing  
Form 5308, Request for Change in  
Plan/Trust Year, to change its plan or  
trust year.  
If a controlled foreign corporation  
(CFC) or 10/50 corporation  
(noncontrolled section 902  
corporation) does not have a U.S.  
Oct 24, 2017  
Cat. No. 61752V  
   
2. Granting relief will not prejudice  
the interests of the government.  
must file Form 1128 with its tax return  
for its tax year with or within which  
ends the first effective year of the CFC  
or the 10/50 corporation. The other  
controlling domestic shareholder(s)  
must attach a copy of the form to its  
income tax return for its tax year with  
or within which ends the tax year of  
the CFC or 10/50 corporation.  
Estates  
An estate adopting its first tax year.  
Applications that are filed more  
than 90 days after the due date are  
presumed to jeopardize the interests  
of the government, and will be  
approved only in unusual and  
compelling circumstances.  
When To File  
Tax Year Adoption, Change, or  
Retention  
To request a ruling to adopt,  
change, or retain a tax year, file Form  
1128 by the due date (not including  
extensions) of the federal income tax  
return for the first effective year. Do  
not file earlier than the day following  
the end of the first effective year. In  
the case of a change in tax year, the  
first effective year is the short period  
required to effect the change.  
Under either circumstance, an  
extension request must be filed under  
Regulations section 301.9100-3 and  
is a ruling request under Rev. Proc.  
2017-1, I.R.B. 1 at www.irs.gov/irb/  
annually). The extension is also  
subject to public inspection under  
section 6110.  
Note. If a corporation is required to  
file Form 1128 with its tax return and  
is a member of an affiliated group of  
corporations filing a consolidated  
return, the common parent must file  
the Form 1128 with the consolidated  
return.  
Applications prior to an election to  
become an S corporation. If a  
corporation is requesting to change its  
tax year prior to making an election to  
become an S corporation and the  
requested tax year is a permitted tax  
year for S corporations (for example,  
a calendar tax year), file Form 1128  
as an attachment to Form 2553. See  
Form 1128, Part II, line 2. Do not file  
Form 1128 with the above address for  
automatic approval requests. For  
information on where to file Form  
2553, see the Instructions for Form  
2553.  
To request automatic approval to  
change a tax year under Rev. Proc.  
2006-45 (Form 1128, Part II,  
See section 7 of Rev. Proc. 2017-1  
for information on requesting a ruling.  
Section A) or Rev. Proc. 2006-46,  
2006-45 I.R.B. 859 at www.irs.gov/irb/  
Part II, Section B), file by the due date  
of the return (including extensions) for  
the short period required to effect the  
change. A Form 1128 filed by a  
controlling domestic shareholder (or  
its common parent) on behalf of a  
CFC or 10/50 corporation is due no  
later than the due date (including  
extensions) of that shareholder's (or  
its common parent's) income tax  
return for its tax year with or within  
which ends the first effective year of  
the CFC or 10/50 corporation.  
Note. An extension request under  
Rev. Proc. 2017-1 (or its successor)  
requires payment of a user fee.  
Early Applications  
Generally, an application to adopt or  
change a tax year will not be  
considered if it is submitted before the  
end of the short period.  
Where To File  
Part II—Automatic Approval  
Request  
If Part II (automatic approval request)  
applies to the applicant, file Form  
1128 with:  
Part III—Ruling Request  
If Part III (ruling request) applies to the  
applicant, file Form 1128 and the  
appropriate user fee with the IRS  
National Office. Mail Form 1128 to:  
For an individual filing to change to  
a calendar year under Rev. Proc.  
2003-62, 2003-32 I.R.B. 299 at  
Internal Revenue Service  
Associate Chief Counsel (Income  
Tax and Accounting)  
Internal Revenue Service Center  
Attention: Entity Control  
index.html (Form 1128, Part II,  
Section C), Form 1128 must be filed  
on or before the due date (including  
extensions) for filing the federal  
income tax return for the short period  
required to effect the change.  
Attention: CC:PA:LPD:DRU  
P.O. Box 7604  
Use the address where the applicant's  
income tax return is filed. See the  
instructions for the applicant's income  
tax return. The applicant must also  
attach a copy of Form 1128 to the  
federal income tax return filed for the  
short period required to effect the  
change.  
Ben Franklin Station  
Washington, DC 20044-7604  
To change a tax year under Rev.  
Proc. 85-58 (Form 1128, Part II,  
Section D), file by the 15th day of the  
5th calendar month after the end of  
the short period.  
The IRS will acknowledge receipt  
of the application within 45 days. You  
can inquire about the status of the  
application by writing to:  
Do not file a request for  
Control Clerk, CC:ITA  
Internal Revenue Service  
Room 4516  
automatic approval with either  
!
Late Applications  
CAUTION  
address below in Part  
Generally, an application filed after  
the appropriate due date stated above  
is considered late.  
III—Ruling Request. Doing so will  
result in a significant delay in the  
processing of your request.  
1111 Constitution Ave., NW  
Washington, DC 20224-0002  
However, applications filed within  
90 days after the due date may be  
considered as timely filed when the  
applicant establishes that:  
The applicant will receive  
notification of its approval or denial. If  
no communication is received from  
the IRS regarding the application  
within 90 days, contact the Control  
Clerk.  
CFCs and 10/50 corporations. If  
the form is filed on behalf of a CFC or  
10/50 corporation, the controlling  
domestic shareholder who retains the  
jointly executed consent described in  
Regulations section 1.964-1(c)(3)(ii)  
1. The taxpayer acted reasonably  
and in good faith, and  
-2-  
   
Exempt organizations requesting a  
ruling should send Form 1128 and  
any applicable user fee to:  
CFC or 10/50 corporation must be  
signed by an authorized officer of the  
designated (controlling domestic)  
shareholder that retains the jointly  
executed consent as provided for in  
Regulations section 1.964-1(c)(3)(ii).  
A schedule listing the name(s) and  
identifying number(s) of the controlling  
domestic shareholder(s) must be  
attached to the application. Also, the  
controlling domestic shareholder(s)  
must satisfy the requirements of  
Regulations section 1.964-1(c)(3). If  
the designated (controlling domestic)  
shareholder is a member of a  
should not complete the “Paid  
Preparer's Use Only” section.  
Specific Instructions  
Internal Revenue Service  
1973 N Rulon White Blvd  
M/S 6273  
Part I—General  
Information  
Ogden, Utah 84201  
All applicants must complete Part I.  
Attachments to Form 1128 must show  
the applicant's name, identifying  
number, and the address. Also  
indicate that the statement is an  
attachment to Form 1128.  
You can inquire about the status of  
an application for exempt  
organizations by calling  
877-829-5500.  
Who Must Sign  
Name  
consolidated group, then an  
Except as discussed below (regarding  
automatic approval requests filed on  
behalf of a CFC or 10/50 corporation),  
Form 1128 must be signed by the filer  
as discussed below. A valid signature  
by the individual or an officer of the  
organization is required on Form  
In general, the filer of the form is the  
applicant. If filing a joint return, include  
the names of both spouses. If the  
applicant is a corporation,  
authorized officer of the common  
parent must sign. Do not sign the  
copy of Form 1128 filed with the  
income tax return.  
partnership, estate, trust, or  
Automatic approval request. An  
automatic ruling request application  
that is filed on behalf of a CFC or  
10/50 corporation does not have to be  
signed. However, the controlling  
domestic shareholder completing the  
form must satisfy the requirements of  
Regulations section 1.964-1(c)(3) and  
retain the jointly executed consent  
described in Regulations section  
1.964-1(c)(3)(ii).  
tax-exempt organization, etc., enter  
the name of the entity or organization.  
1128. If the form does not have a valid  
signature, it will not be considered.  
Filer different from applicant. For  
members of a consolidated group of  
corporations and certain foreign  
corporations, Form 1128 may be filed  
on behalf of the applicant. For a  
consolidated group of corporations,  
enter the name and employer  
Individuals  
If filing a joint return, both spouses  
must sign.  
Partnerships  
Include the signature, name and title  
of a general partner on behalf of a  
state law partnership, or a  
identification number (EIN) of the  
parent corporation on the first line as  
the filer and enter the name(s) and  
EIN(s) of the member corporations  
applying for a change in accounting  
period on the fourth line. For CFCs  
and 10/50 corporations, enter the  
name and EIN of the controlling  
domestic shareholder(s) (common  
parent, if applicable) on the first line  
and the name and EIN, if any, of the  
foreign corporation on the fourth line.  
If there is more than one filer or  
applicant, attach a statement listing  
each filer's or applicant's name and  
EIN.  
All Other Filers  
member-manager on behalf of a  
limited liability company.  
If the filer is a corporation, the  
application must include the signature  
of the president, vice president,  
Estates  
treasurer, assistant treasurer, or chief  
accounting officer (such as tax officer)  
authorized to sign, and their official  
title. Receivers, trustees, or assignees  
must sign any application they are  
required to file. For a consolidated  
group filing a consolidated return with  
its common parent, Form 1128 should  
be signed by an authorized officer of  
the common parent corporation.  
Include the signature, name, and title  
of the fiduciary or other person legally  
authorized to sign.  
Trusts  
Include the signature, name, and title  
of the fiduciary or other person legally  
authorized to sign.  
Tax-Exempt Organizations  
Include the signature, name, and title  
of a principal officer or other person  
legally authorized to sign.  
Identifying Number  
Paid Preparer  
Individuals enter their social security  
number (SSN). If filing a joint income  
tax return, enter the SSN of both  
spouses. However, if one or both  
spouses are engaged in a trade or  
business and Form 1128 is filed on  
behalf of the business, enter the EIN  
instead of the SSNs. All other  
Generally, anyone who is paid to  
prepare Form 1128 must sign it and fill  
in the “Paid Preparer Use Only” area.  
The paid preparer must complete the  
required information and sign the  
return in the space provided for the  
preparer's signature. However, if the  
applicant is requesting automatic  
approval and a copy of Form 1128 is  
attached to the income tax return, the  
copy of Form 1128 does not have to  
be signed.  
CFC or 10/50 Corporation  
For a CFC or 10/50 corporation with a  
U.S. trade or business and filing Form  
1128 as the applicant, follow the same  
rules as other corporations (see All  
Other Filers, later). If the form is being  
filed on behalf of a CFC or 10/50  
corporation by its controlling domestic  
shareholder(s), follow the instructions  
below for ruling requests and  
applicants enter their EIN.  
You can apply for an EIN online  
(only for applicants in the United  
States or U.S. possessions), by  
telephone (only for applicants outside  
of the United States or U.S.  
automatic approval requests.  
Note. Anyone who prepares Form  
Ruling request. A ruling request  
1128 but does not charge a fee  
application that is filed on behalf of a  
possessions), or by fax or by mail  
-3-  
 
using Form SS-4, Application for  
nearest to December 31). A  
calendar year basis and attaching  
Form 1128. If the applicants want to  
change to a fiscal year, file a Form  
1128 under the procedures of either  
Rev. Proc. 2006-45, 2006-46,  
2002-39, 2002-1 C.B. 1046 or any  
successor.  
Employer Identification, depending on 52-53-week tax year must end on the  
how soon you need to use the EIN.  
Use only one method for each entity  
so you don't receive more than one  
date a specified day of the week last  
occurs in a particular month or on the  
date that day of the week occurs  
EIN for an entity. For more information nearest to the last day of a particular  
on applying for an EIN, see the  
Instructions for Form SS-4.  
calendar month.  
A newly formed partnership or PSC  
that wants to adopt a tax year other  
than its required tax year must go to  
Part III after completing Part I.  
Line 2c. An applicant's first tax year  
generally starts when business  
operations begin.  
Note. Applicants requesting an  
automatic approval must complete  
Parts I and II only.  
An SSN must be applied for on  
Form SS-5, Application for a Social  
Security Card. Form SS-5 can be  
obtained at SSA offices or by calling  
the SSA at 1-800-772-1213 (TTY 1–  
800–325–0778). It is also available  
from the SSA website at SSA.gov.  
A user fee is not required if  
requesting an automatic  
approval under any of the  
TIP  
sections of Part II listed below.  
A corporation's tax year begins at  
the earliest date it first:  
If the applicant has not received its  
EIN or SSN by the time the application  
is due, write “Applied for” in the space  
for the identifying number.  
Complete Part II if the applicant can  
use the automatic approval rules  
under one of the sections listed below  
and the application is filed on time.  
Has shareholders,  
Has assets, or  
Begins doing business.  
The initial year ends on the day before  
the first day of the new tax year.  
Foreign corporations. If the  
applicant is a foreign corporation that  
is not otherwise required to have or  
obtain an EIN, enter “Not applicable”  
in the space provided for the  
identifying number.  
Section of Part II of Form 1128 To  
Complete  
If the applicant is changing a tax  
year, the required short period return  
(usually for a period of less than 12  
months) is for the period that begins  
on the day following the close of the  
old tax year and ends on the day  
before the first day of the new tax  
year.  
Complete  
If the applicant is:  
only:  
A corporation (other than an S Section A  
corporation or a PSC)  
Address  
Include the suite, room, or other unit  
number after the street address. If the  
Post Office does not deliver mail to  
the street address and the filer has a  
P.O. box, show the box number  
instead.  
A partnership, S corporation,  
PSC, or a trust  
Section B  
For example, in 2017, a  
An individual  
Section C  
Section D  
corporation, which has a tax year  
ending December 31, requests a new  
tax year ending March 31. The  
corporation's first effective tax year  
(short year) begins on January 1,  
2017, and ends on March 31, 2017.  
A tax-exempt organization  
If the filer receives its mail in care of  
a third party (such as an accountant or  
attorney), enter on the street address  
line “C/O” followed by the third party's  
name and street address or P.O. box.  
If the applicant does not qualify for  
automatic approval, a ruling must be  
requested. See Part III for more  
information.  
Part II—Automatic  
Approval Request  
Person To Contact  
If the Service Center denies  
approval because Form 1128 was not  
filed on time, the applicant can  
request relief under Regulations  
section 301.9100-3, discussed earlier  
under Late Applications. The  
applicant completes Part III, as  
discussed later, and sends Form 1128  
to the IRS National Office for  
consideration.  
Note. All references to the Revenue  
Procedures listed are to that Revenue  
Procedure or its successor.  
The person to contact must be the  
person authorized to sign the Form  
1128, or the applicant's authorized  
representative. If the person to  
Part II is completed by applicants  
requesting automatic approval of a  
change in tax year under:  
contact is not the filer or the applicant,  
attach Form 2848, Power of Attorney  
and Declaration of Representative.  
Rev. Proc. 2006-45 (corporations)  
as clarified and modified by Rev.  
Proc. 2007-64, 2007-42 I.R.B. 818 at  
Line 1. Check all applicable box(es)  
to indicate the type of entity filing this  
application. For example, an entity  
that is a domestic corporation may  
also be a regulated investment  
company (RIC). That entity would  
check both the “Domestic corporation”  
box and the “Other” box, and write,  
“RIC under sec. 851” on the dotted  
line.  
Section A—Corporations  
Rev. Proc. 2006-46 (pass-through  
entities),  
(Other Than S Corporations or  
Personal Service Corporations)  
Rev. Proc. 2003-62 (individuals),  
Rev. Proc. 76-10, 1976-1 C.B. 548  
as modified by Rev. Proc. 79-3,  
1979-1 C.B. 483, and Rev. Proc.  
85-58 (exempt organizations), and  
Rev. Proc. 85-15, 1985-1 C.B. 516  
(all filers), to correct the adoption of  
an improper tax year to a calendar  
year by filing an amended return on a  
Rev. Proc. 2006-45 provides  
exclusive procedures for a  
corporation to obtain automatic  
approval to change its annual  
accounting period under section 442  
and Regulations section 1.442-1(b). A  
corporation complying with all the  
applicable provisions of this revenue  
procedure will be deemed to have  
Lines 2a and 2b. If the requested  
year is a 52-53-week tax year,  
describe the year (for example, last  
Saturday in December or Saturday  
-4-  
established a business purpose and  
obtained the approval of the IRS to  
change its accounting period. See  
Rev. Proc. 2006-45 for more  
information.  
Line 1. A corporation is not allowed  
to use the automatic approval rules  
under section 4 of Rev. Proc. 2006-45  
if it:  
1. Has changed its annual  
accounting period at any time within  
the most recent 48-month period  
ending with the last month of the  
requested tax year. For exceptions,  
see section 4.02(1) of Rev. Proc.  
2006-45.  
changing to its required tax year and  
is not described in items (1) through  
(11), above.  
2006-45. This related party change is  
required notwithstanding the testing  
date provisions in section 706(b)(4)  
(A)(ii), section 898(c)(3)(B),  
Note. If the corporation is not allowed  
to use the automatic approval rules  
because of items (1), (2), or (3), listed  
above, it can nevertheless  
Temporary Regulations section  
1.921-1T(b)(6), and the special  
provision in section 706(b)(4)(B).  
Section B—Partnerships, S  
Corporations, Personal Service  
Corporations, and Trusts  
automatically change to a natural  
business year that meets the  
25-percent gross receipts test  
described in section 5.04 of Rev.  
Proc. 2006-45.  
Rev. Proc. 2006-46 provides  
exclusive procedures for a  
If the answer to the question on  
Part II, Section A, line 1, is “Yes,” sign  
Form 1128 and see  
partnership, S corporation, PSC, or  
trust within its scope to adopt,  
change, or retain its annual  
Part II—Automatic Approval Request  
earlier under Where To File. Do not  
complete Part III. If the corporation is  
requesting to change to a natural  
business year that satisfies the  
25-percent gross receipts test, also  
include its gross receipts for the most  
recent 47 months (or for any  
accounting period under section 442  
and Regulations section 1.442-1(b).  
2. Has an interest in a  
pass-through entity as of the end of  
the short period. For exceptions, see  
section 4.02(2) of Rev. Proc. 2006-45.  
Rev. Proc. 2006-46 generally  
applies to trusts that are using an  
incorrect tax year and want to change  
to the required calendar tax year.  
However, exceptions apply to trusts  
exempt from taxation under section  
501(a), charitable trusts described in  
section 4947(a)(1), and grantor trusts  
described in Rev. Rul 90-55.  
Line 4. A partnership, S corporation,  
PSC, or trust is precluded from using  
the automatic approval rules under  
section 4 of Rev. Proc. 2006-46 if any  
of the following apply:  
1. The entity is under examination,  
unless it complies with the procedures  
provided in section 7.03(1) of Rev.  
Proc. 2006-46.  
2. The entity is before an appeals  
office with respect to any income tax  
issue and its annual accounting  
period is an issue under consideration  
by the appeals office.  
3. Is a shareholder of a FSC or  
IC-DISC, as of the end of the short  
period. For exceptions, see section  
4.02(3) of Rev. Proc. 2006-45.  
predecessor).  
If the answer to the question on  
Part II, Section A, line 1, is “Yes”  
because the applicant is a CFC that  
wants to make a one-month deferral  
election under section 898(c)(2), see  
Rev. Proc. 2007-64 which modifies  
the terms and conditions for this  
election provided in Rev. Proc.  
2006-45. If a CFC wants to revoke its  
one-month deferral election under  
section 898(c)(2) and change its tax  
year to the majority U.S. shareholder  
year (as defined in section 898(c)(3)),  
the CFC's controlling domestic  
shareholders must indicate the  
change in the tax year on the Form  
5471, Information Return of U.S.  
Persons With Respect To Certain  
Foreign Corporations, filed with  
respect to the CFC's first effective  
year.  
If the answer to the question on  
Part II, Section A, line 1, is “No,” go to  
Part III.  
Line 3. If a corporation's interest in a  
pass-through entity, CFC, FSC, or  
IC-DISC (related entity) is disregarded  
under section 4.02(2) or 4.02(3) of  
Rev. Proc. 2006-45 because the  
4. Is a FSC or an IC-DISC.  
5. Is an S corporation.  
6. Attempts to make an S  
corporation election for the tax year  
immediately following the short  
period, unless the change is to a  
permitted S corporation tax year.  
7. Is a PSC.  
8. Is a CFC. For exceptions, see  
section 4.02(8) of Rev. Proc. 2006-45.  
9. Is a tax-exempt organization,  
other than an organization exempt  
from tax under section 521, 526, 527,  
or 528.  
10. Is a cooperative association  
(within the meaning of section  
3. The entity is before a federal  
court with respect to any income tax  
issue and its annual accounting  
period is an issue under consideration  
by the federal court.  
1381(a)) with a loss in the short period  
required to effect the change of  
annual accounting period, unless the  
patrons of the cooperative association  
are substantially the same in the year  
before the change of annual  
4. On the date the partnership or S  
corporation would otherwise file its  
application, the partnership's or S  
corporation's annual accounting  
period is an issue under consideration  
in the examination of a partner's or  
shareholder's federal income tax  
return or an issue under consideration  
by an area office or by a federal court  
with respect to a partner's or  
accounting period, in the short period  
required to effect the change, and in  
the year following the change.  
11. Is a corporation leaving a  
consolidated group. The corporation  
is not allowed to use the automatic  
approval request procedures during  
the consolidated group's tax year in  
which the corporation ceased to be a  
member of the consolidated group.  
See Rev. Proc. 2007-64 for details.  
related entity is required to change its  
tax year to the corporation's new tax  
year (or, in the case of a CFC, to a tax  
year beginning one month earlier than  
the corporation's new tax year), the  
related entity must change its tax year  
concurrently with the corporation's  
change in tax year, under Rev. Proc.  
shareholder's federal income tax  
return.  
12. Has a required tax year (for  
example, a real estate investment  
trust), unless the corporation is  
Note. If any of the above  
circumstances apply, you may still be  
eligible under the automatic approval  
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request procedures if you comply with  
the procedures explained following  
item 5 below. See section 7.03 of  
Rev. Proc. 2006-46 for more  
information.  
The applicant is before a federal  
court and the applicant's annual  
accounting period is not an issue  
under consideration by the federal  
b. The same computation as in a,  
above, is made for the two preceding  
12-month periods ending with the last  
month of the requested annual  
court. The applicant must attach to the accounting period.  
application a separate statement  
signed by the applicant certifying that,  
to the best of the applicant's  
5. The entity has changed its  
annual accounting period at any time  
within the most recent 48-month  
period ending with the last month of  
the requested tax year. For this  
purpose, the following changes are  
not considered prior changes in  
annual accounting period: (a) a  
change to a required tax year or  
ownership tax year; (b) a change from  
a 52-53-week tax year to a  
2. Natural business year:  
a. Except as provided in b, below,  
if each of the three results described  
in 1 above equals or exceeds 25  
percent, then the requested annual  
accounting period is deemed to be the  
taxpayer's natural business year.  
knowledge, the applicant's annual  
accounting period is not an issue  
under consideration by the federal  
court. The applicant must also provide  
a copy of the application to the  
b. The taxpayer must determine  
whether any annual accounting period  
other than the requested annual  
accounting period also meets the  
25-percent test described in a, above.  
If one or more other annual  
government counsel at the same time  
it files the application with the Service  
Center. The application must contain  
the name and telephone number of  
the government counsel.  
non-52-53-week tax year that ends  
with reference to the same calendar  
month, and vice versa; or (c) a  
change in accounting period by an S  
If the answer to the question on  
accounting periods produce higher  
averages of the three percentages  
(rounded to 1/100 of a percent)  
described in 1 above than the  
Part II, Section B, line 4, is “No”  
corporation or PSC, in order to comply because the applicant (or a partner or  
with the common tax year  
shareholder) is under examination  
and has not obtained the appropriate  
director's consent to the change or  
retention of the applicant's annual  
accounting period or the applicant is  
before an appeals office or federal  
court and the applicant's annual  
requirements of Regulations sections  
1.1502-75(d)(3)(v) and 1.1502-76(a).  
requested annual accounting period,  
then the requested annual accounting  
period will not qualify as the  
If the answer to the question on  
Part II, Section B, line 4, is “Yes,” and  
any of the following situations apply,  
the applicable additional procedures  
described below must be followed.  
The applicant is under examination  
and has obtained the consent of the  
appropriate director to the change or  
retention of the applicant's annual  
accounting period. The applicant must  
attach to the application a statement  
from the director consenting to the  
change or retention. The applicant  
must also provide a copy of the  
application to the director at the same  
time it files the application with the  
Service Center. The application must  
contain the name(s) and telephone  
number(s) of the examination  
taxpayer's natural business year.  
3. Special rules:  
accounting period is an issue under  
consideration by the appeals office or  
federal court, do not complete Part III.  
a. To apply the 25-percent gross  
receipts test for any particular year,  
the taxpayer must compute its gross  
receipts under the method of  
If the answer to line 4 is “No” solely  
accounting used to prepare its federal  
income tax returns for such tax year.  
because of a prior change as  
described in item (5) above, go to Part  
III after completing Section B.  
b. If the taxpayer has a  
predecessor organization and is  
continuing the same business as its  
predecessor, the taxpayer must use  
the gross receipts of its predecessor  
for purposes of computing the  
25-percent gross receipts test.  
If the answer to line 4 is “Yes” (and  
the answer to line 5, 6, or 7 is also  
“Yes”), sign Form 1128 and see Part  
II—Automatic Approval Request  
under Where To File, earlier. Do not  
complete Part III. If the answer to  
line 4 is “Yes” (and the answer to  
line 5, 6, or 7 is “No”), go to Part III.  
c. If the taxpayer (including any  
predecessor organization) does not  
have a 47-month period of gross  
receipts (36-month period for the  
requested tax year plus an additional  
11-month period for comparing the  
requested tax year with other potential  
tax years), then it cannot establish a  
natural business year under this  
revenue procedure.  
d. If the requested tax year is a  
52-53-week tax year, the calendar  
month ending nearest to the last day  
of the 52-53-week tax year is treated  
as the last month of the requested tax  
year for purposes of computing the  
25-percent gross receipts test.  
agent(s).  
Line 6. A partnership, S corporation,  
electing S corporation, or PSC  
establishes a "natural business year"  
under Rev. Proc. 2006-46 by  
The applicant is before an appeals  
office and the applicant's annual  
accounting period is not an issue  
under consideration by the appeals  
office. The applicant must attach to  
the application a separate statement  
signed by the applicant certifying that,  
to the best of the applicant's  
satisfying the following "25-percent  
gross receipts test." The applicant  
must supply its gross receipts for the  
most recent 47 months (or for any  
predecessor) to compute the  
knowledge, the applicant's annual  
accounting period is not an issue  
under consideration by the appeals  
office. The applicant must also  
25-percent gross receipts test.  
1. Prior 3 years gross receipts:  
a. Gross receipts from sales and  
services for the most recent 12-month  
period that ends with the last month of  
the requested annual accounting  
period are totaled and then divided  
into the amount of gross receipts from  
sales and services for the last 2  
provide a copy of the application to  
the appeals officer at the same time it  
files the application with the Service  
Center. The application must contain  
the name and telephone number of  
the appeals officer.  
Line 7. For an S corporation, an  
"ownership tax year" is the tax year  
other than a calendar year (if any)  
months of this 12-month period.  
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that, as of the first day of the first  
2. The organization has changed  
Sections of Part III of Form 1128  
to Complete  
effective year, constitutes the tax year its tax year at any time within the last  
of one or more shareholders  
10 calendar years ending with the  
calendar year that includes the  
beginning of the short period resulting  
from the change of tax year.  
(including any shareholder that  
concurrently changes to such tax  
year) holding more than 50 percent of  
the corporation's issued and  
If the applicant is:  
Complete only:  
A corporation (other than Sections A and  
an S corporation, 10/50  
corporation, or CFC)  
B, plus any other  
applicable  
section in Part III  
An organization described in  
section 501(c) or (d) is exempt from  
tax under section 501(a) unless the  
exemption is denied under section  
502 or 503.  
outstanding shares of stock. For this  
purpose, a shareholder that is  
tax-exempt under section 501(a) is  
disregarded if such shareholder is not  
subject to tax on any income  
An S corporation  
A partnership  
An Estate  
Sections A and C  
Sections A and D  
Sections A and G  
Section A  
attributable to the S corporation.  
Tax-exempt shareholders are not  
disregarded, however, if the S  
corporation is wholly owned by such  
tax-exempt entities. A shareholder in  
an S corporation that wants to  
concurrently change its tax year must  
follow the instructions generally  
applicable to taxpayers changing their  
tax years contained in Regulations  
section 1.442-1(b), Rev. Proc.  
2002-39, or any other applicable  
administrative procedure published by  
the IRS.  
Rev. Proc. 85-58 does not apply to:  
Farmers' cooperatives exempt from  
federal income tax under section 521;  
Organizations described in sections  
526, 527, and 528;  
An individual  
A CFC or 10/50  
corporation  
Sections A and E  
Organizations described in section  
401(a); and  
Do not file a tax return using  
the requested tax year until  
this application is approved.  
Organizations requesting a change  
in a tax year on a group basis.  
!
CAUTION  
A central organization should follow  
Rev. Proc. 76-10 to apply for a group  
change in tax year for all its  
Rev. Proc. 2002-39 provides the  
general procedures for obtaining  
approval to adopt, change, or retain a  
tax year for taxpayers not qualifying  
under the automatic approval rules or  
if the application is late.  
subordinate organizations.  
Rev. Proc. 76-10 does not apply to:  
Farmers' cooperatives exempt from  
federal income tax under section 521,  
Certain organizations that have  
Line 8. Answer “Yes” if the  
partnership is a related entity that  
must concurrently change its tax year  
as a term and condition of the  
approval of the taxpayer's request to  
change its tax year.  
Section A—General Information  
unrelated business taxable income  
defined in section 512(a), and  
All applicants must complete this  
section to request a ruling on an  
adoption of, change to, or retention of  
a tax year.  
Organizations that are private  
Section C—Individuals  
foundations defined in section 509(a).  
Line 9. If the answer to this question  
is “Yes,” and the restrictions of section  
4.02 of Rev. Proc. 2003-62 (or its  
successor) do not apply, sign Form  
1128 and see Part II—Automatic  
Approval Request earlier under  
Where To File. Do not complete Part  
III. If the answer to this question is  
“No,” go to Part III.  
Line 10. If the answer to this question  
is “Yes,” and the organization is a  
section 501(a) organization to which  
section 3.03 of Rev. Proc. 85-58  
applies or a central organization to  
which Rev. Proc. 76-10 applies, sign  
Form 1128 and see Part II—Automatic  
Approval Request earlier under  
Where To File. Do not complete Part  
III.  
Line 1. If the applicant is a  
partnership, S corporation, personal  
service corporation, or trust and any  
of the following situations apply, the  
applicable additional procedures  
described below must be followed.  
The applicant is under examination  
and has obtained the consent of the  
appropriate director to the change or  
retention of the applicant's annual  
accounting period. The applicant must  
attach to the application a statement  
from the director consenting to the  
change or retention of its annual  
accounting period. The applicant must  
also provide a copy of the application  
to the director at the same time it files  
the application with the IRS National  
Office. The application must contain  
the name(s) and telephone number(s)  
of the examination agent(s).  
Section D—Tax-Exempt  
Organizations  
If the answer to this question is  
“Yes,” and Rev. Proc. 85-58 and  
76-10 do not apply, go to Part III.  
A tax-exempt organization can  
request a change to its tax year under  
the simplified method of either Rev.  
Proc. 85-58 or Rev. Proc. 76-10.  
Part III—Ruling Request  
Part III is completed only by applicants  
requesting to adopt, change, or retain  
a tax year that cannot use the  
Under Rev. Proc. 85-58, an  
organization exempt under section  
501(a) does not have to file Form  
1128 unless the following conditions  
described in section 3.03 of Rev.  
Proc. 85-58 apply.  
1. The organization was required  
to file an annual information return or  
Form 990-T, Exempt Organization  
Business Income Tax Return, at any  
time during the last 10 calendar years;  
and  
automatic procedures listed in Part II.  
Also, the applicant must complete  
the specific section(s) in Part III that  
applies to that particular applicant.  
The applicant is before an appeals  
office and the applicant's annual  
accounting period is not an issue  
under consideration by the appeals  
office. The applicant must attach to  
the application a separate statement  
signed by the appropriate person  
certifying that, to the best of that  
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person's knowledge, the entity's  
annual accounting period is not an  
issue under consideration by the  
appeals office. The applicant must  
also provide a copy of the application  
to the appeals officer at the same time  
it files the application with the IRS  
National Office. The application must  
contain the name and telephone  
number of the appeals officer.  
Rev. Proc. 2002-39, the applicant  
must supply its gross receipts for the  
most recent 47 months (or for any  
predecessor).  
Investment Company (PFIC)  
completes Section B and attaches the  
statement required by Section H.  
Complete Sections B and F for a  
tax-exempt organization that is a  
corporation.  
Line 14. Applicants filing to request a  
letter ruling on a change in tax year  
under Rev. Proc. 2017-1 or its  
Note. In addition to excluding CFC(s)  
from Section B, 10/50 corporations  
are also excluded.  
successor (updated annually) and  
Rev. Proc. 2002-39 must pay a user  
fee. A request for an exempt  
The applicant is before a federal  
court and the applicant's annual  
accounting period is not an issue  
under consideration by the federal  
court. The applicant must attach to the  
application a separate statement  
signed by the appropriate person  
certifying that, to the best of that  
person's knowledge, the entity's  
annual accounting period is not an  
issue under consideration by the  
federal court. The applicant must also  
provide a copy of the application to  
the government counsel at the same  
time it files the application with the  
IRS National Office. The application  
must contain the name and telephone  
number of the government counsel.  
Section C—S Corporations  
organization letter ruling on a change  
in tax year under Rev. Proc. 2017-5,  
2017-1 I.R.B. 230 at www.irs.gov/irb/  
2017-01_IRB/ar03.html, also requires  
payment of a user fee.  
An S corporation must have a  
permitted tax year unless it has  
elected under section 444 to have a  
tax year other than the required tax  
year. A “permitted tax year” is:  
A separate user fee is also required  
for applicants filing a letter ruling  
request for an extension of time to file  
under Regulations section 301.9100-3  
(including requests under Rev. Procs.  
2006-45, 2006-46, and 2003-62  
(Form 1128, Part II, Sections A, B,  
and C)).  
1. A tax year that ends on  
December 31, or  
2. Any other tax year if the  
corporation can establish a business  
purpose to the satisfaction of the IRS.  
For purposes of 2, above, any  
deferral of income to shareholders will  
not be treated as a business purpose.  
For more information, see Rev. Proc.  
2006-46 and Rev. Proc. 2002–39.  
Note. The user fees referred to in the  
above paragraphs are published in  
Rev. Proc. 2017-1 (exempt  
organizations, see Rev. Proc.  
If any shareholder is applying for a  
corresponding change in tax year,  
that shareholder must file a separate  
Form 1128 to get advance approval to  
change its tax year.  
Line 4a. Attach an explanation of the  
legal basis supporting the requested  
tax year. Include all authority  
2017-4), or an annual update. The  
annual updates are published as  
revenue procedures in the Internal  
Revenue Bulletin. The Internal  
(statutes, regulations, etc.) supporting  
the requested year. The applicant is  
encouraged to include all relevant  
facts and circumstances that may  
establish a business purpose.  
Revenue Bulletins can be accessed at  
www.irs.gov/irb. The fees for 2017 are  
in Internal Revenue Bulletin 2017-1.  
Section D—Partnerships  
A partnership must obtain advance  
approval from the IRS to adopt,  
change, or retain a tax year unless it is  
not required to file Form 1128, or it  
meets one of the automatic approval  
rules discussed earlier in the  
Payment of the user fee (check or  
money order made payable to the  
Internal Revenue Service) must be  
attached to Form 1128 at the time the  
form is filed. Payment may also be  
made through www.pay.gov. See  
Rev. Proc. 2017-1 (or any successor)  
for more information.  
Line 4b. If the applicant requests to  
establish a natural business year  
under the annual business cycle test  
or seasonal business test of sections  
5.03(1) and 5.03(2) of Rev. Proc.  
2002-39, it must provide its gross  
receipts from sales or services and  
approximate inventory costs (where  
applicable) for each month in the  
requested short period and for each  
month of the three immediately  
preceding tax years.  
instructions for Part II, Section B. Also  
see the exceptions for partnerships  
under Who Must File, earlier.  
Section B—Corporations  
(Other Than S Corporations  
and Controlled Foreign  
Corporations)  
Corporations must complete this  
section and any other section in Part  
III that applies to that particular entity.  
For example, a Passive Foreign  
Partners must also get separate  
advance approval to change their tax  
years.  
Line 23. Enter the first date a  
business transaction resulted in a tax  
consequence, such as receiving  
income or incurring an expense.  
If the applicant is requesting to  
change to a natural business year that  
satisfies the 25-percent gross receipts  
test described in section 5.03(3) of  
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 must file an application to adopt, change, or retain a tax year. Sections 6001,  
6011, 6012(a), and 6109 and their regulations require you to provide the requested information. Failure to provide this  
information in a timely manner could delay processing or could result in denial of your application. Providing false  
information could subject you to penalties.  
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 6103.  
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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 1545-0074 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  
the form to  
the IRS  
Learning about the  
law or the form  
Recordkeeping  
8 hr., 36 min.  
Parts I and II  
Parts I and III  
5 hr., 51 min.  
5 hr., 37 min.  
6 hr., 15 min.  
7 hr., 26 min.  
22 hr., 14 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 send us comments through IRS.gov/FormComments. Or you can write to  
Internal Revenue Service, Tax Forms and Publications Division, 1111 Constitution Ave. NW, IR-6526, Washington, DC  
20224. Do not send the tax form to this office. Instead, see Where To File, earlier.  
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