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Line 1. Check all applicable boxes to

under one of the sections listed below

period. For exceptions, see section

indicate the type of entity filing this

and the application is filed on time.

4.02(3) of Rev. Proc. 2006-45.

application. For example, an entity

4. Is a FSC or an IC-DISC.

that is a domestic corporation may

Complete

5. Is an S corporation.

If the applicant is:

only

also be a regulated investment

6. Attempts to make an S

company (RIC). That entity would

corporation election for the tax year

A corporation (other than an Section A

check both the “Domestic

immediately following the short

S corporation or a PSC)

corporation” box and the “Other” box,

period, unless the change is to a

A partnership, S

Section B

and write, “RIC under sec. 851” on

permitted tax year.

corporation, or a PSC

the dotted line.

7. Is a PSC.

8. Is a CFC. For exceptions, see

Lines 2a and 2b. If the requested

An individual

Section C

section 4.02(8) of Rev. Proc.

year is a 52-53-week tax year,

A tax-exempt organization

Section D

2006-45.

describe the year (for example, last

9. Is a tax-exempt organization,

Saturday in December or Saturday

other than an organization exempt

nearest to December 31). A

If the applicant does not qualify for

from tax under section 521, 526, 527,

52-53-week tax year must end on the

automatic approval, a ruling must be

or 528.

date a specified day of the week last

requested. See Part III for more

10. Is a cooperative association

occurs in a particular month or on the

information.

(within the meaning of section

date that day of the week occurs

1381(a)) with a loss in the short

If the Service Center denies

nearest to the last day of a particular

period required to effect the change

approval because Form 1128 was not

calendar month.

of annual accounting period, unless

filed on time, the applicant can

A newly formed partnership or

the patrons of the cooperative

request relief under Regulations

PSC that wants to adopt a tax year

association are substantially the

section 301.9100-3, discussed earlier

other than its required tax year must

same in the year before the change

under Late Applications on page 2, by

go to Part III after completing Part I.

of annual accounting period, in the

completing Part III, as discussed on

Line 2c. The required short period

short period required to effect the

page 6, and sending Form 1128 to

return must begin on the day

change, and in the year following the

the IRS National Office for

following the close of the old tax year

change.

consideration.

and end on the day before the first

11. Has a required tax year (for

day of the new tax year. An

example, a real estate investment

Section A—Corporations

applicant’s first tax year generally

trust), unless the corporation is

(Other than S Corporations

starts when business operations

changing to its required tax year and

or Personal Service

begin.

is not described in items (1) through

Corporations)

A corporation’s tax year begins at

(10), above.

the earliest date it first:

Rev. Proc. 2006-45 provides

•

Note. If the corporation is precluded

Has shareholders,

exclusive procedures for certain

•

from using the automatic approval

Has assets, or

corporations to obtain automatic

•

rules because of items (2) or (3),

Begins doing business. The initial

approval to change their annual

listed above, it can nevertheless

year ends on the day before the first

accounting period under section 442

automatically change to a natural

day of the new tax year.

and Regulations section 1.442-1(b). A

business year that meets the

corporation complying with all the

Part II—Automatic

25-percent gross receipts test

applicable provisions of this revenue

described in section 5.04 of Rev.

procedure will be deemed to have

Approval Request

Proc. 2006-45.

established a business purpose and

Part II is completed by applicants

obtained the approval of the IRS to

If the answer to question 1 is

requesting automatic approval of a

change its accounting period. See

“Yes,” sign Form 1128 and see

change in tax year under:

Rev. Proc. 2006-45 for more

•

Part II— Automatic Approval Request

Rev. Proc. 2006-45 (corporations),

information.

•

earlier under Where To File. Do not

Rev. Proc. 2006-46 (pass-through

complete Part III. If the corporation is

Line 1. A corporation is precluded

entities),

•

requesting to change to a natural

from using the automatic approval

Rev. Proc. 2003-62 (individuals),

•

business year that satisfies the

rules under section 4 of Rev. Proc.

Rev. Proc. 76-10, 1976-1 C.B. 548

25-percent gross receipts test, also

2006-45 if it:

and Rev. Proc. 85-58 (exempt

include its gross receipts for the most

organizations), and

1. Has changed its annual

•

recent 47 months (or for any

Rev. Proc. 85-15, 1985-1 C.B. 516

accounting period at any time within

predecessor).

(all filers), to correct an improper tax

the most recent 48-month period

year.

ending with the last month of the

If the answer to question 1 is “Yes”

requested tax year. For exceptions,

because the applicant is a CFC that

Note. Applicants requesting an

see section 4.02(1) of Rev. Proc.

wants to revoke its one-month

automatic approval must complete

2006-45.

deferral election under section

Parts I and II only.

2. Has an interest in a

898(c)(2) and change its tax year to

A user fee is not required if

pass-through entity as of the end of

the majority U.S. shareholder year

TIP

requesting an automatic

the short period. For exceptions, see

(as defined in section 898(c)(3)),

approval under any of the

section 4.02(2) of Rev. Proc.

attach a statement providing the

sections of Part II listed below.

2006-45.

names, addresses, and identifying

Complete Part II if the applicant

3. Is a shareholder of a FSC or

numbers for each U.S. shareholder of

can use the automatic approval rules

IC-DISC, as of the end of the short

the foreign corporation.

-4-

Instructions For Form 1128 - Application To Adopt, Change, Or Retain A Tax Year - 2007 Page 4

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