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Note. If the corporation is precluded

entity has changed its annual

Section B—Partnerships, S

accounting period at any time within

from using the automatic approval

Corporations, Personal

the most recent 48-month period

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

Service Corporations, and

ending with the last month of the

listed above, it can nevertheless

Trusts

requested tax year. For this purpose,

automatically change to a natural

the following changes are not

Rev. Proc. 2006-46 provides

business year that meets the

considered prior changes in annual

exclusive procedures for a

25-percent gross receipts test

accounting period: (a) a change to a

partnership, S corporation, PSC, or

described in section 5.04 of Rev.

required tax year or ownership tax

trust within its scope to adopt,

Proc. 2006-45.

year; (b) a change from a 52-53 week

change, or retain its annual

tax year to a non-52-53 week tax year

accounting period under section 442

If the answer to question 1 is

that ends with reference to the same

and Regulations section 1.442-1(b).

“Yes,” sign Form 1128 and see

calendar month, and vice versa; or (c)

The automatic approval request

Part II—Automatic Approval Request

a change in accounting period by an

procedures apply to trusts, with the

earlier under Where To File. Do not

S corporation or PSC, in order to

exception of trusts exempt from

comply with the common tax year

complete Part III. If the corporation is

taxation under section 501(a),

requirements of Regulations sections

requesting to change to a natural

charitable trusts described in section

1.1502-75(d)(3)(v) and 1.1502-76(a).

business year that satisfies the

4947(a)(1), and grantor trusts

25-percent gross receipts test, also

described in Rev. Rul. 90-55,

If the answer to question 4 is

include its gross receipts for the most

changing to a calendar year.

“Yes,” and any of the following

recent 47 months (or for any

Rev. Proc. 2006-46 only applies to

situations apply, the applicable

predecessor).

trusts that are using an incorrect tax

additional procedures described

year and want to change to the

below must be followed.

If the answer to question 1 is “Yes”

•

required calendar tax year.

The applicant is under examination

because the applicant is a CFC that

and has obtained the consent of the

Line 4. A partnership, S corporation,

wants to make a one-month deferral

appropriate director to the change or

PSC, or trust is precluded from using

election under section 898(c)(2), see

retention of the applicant’s annual

the automatic approval rules under

Rev. Proc. 2007-64 which modifies

accounting period. The applicant

section 4 of Rev. Proc. 2006-46 if any

the terms and conditions for this

must attach to the application a

of the following apply:

election provided in Rev. Proc.

statement from the director

1. The entity is under examination,

2006-45. If a CFC wants to revoke its

consenting to the change or retention.

unless it obtains consent of the

The applicant must also provide a

one-month deferral election under

appropriate director as provided in

copy of the application to the director

section 898(c)(2) and change its tax

section 7.03(1) of Rev. Proc.

at the same time it files the

year to the majority U.S. shareholder

2006-46.

application with the Service Center.

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

2. The entity is before an appeals

The application must contain the

attach a statement providing the

office with respect to any income tax

name(s) and telephone number(s) of

names, addresses, and identifying

issue and its annual accounting

the examination agent(s).

numbers for each U.S. shareholder of

period is an issue under

•

The applicant is before an appeals

the foreign corporation.

consideration by the appeals office.

(area) office and the applicant’s

3. The entity is before a Federal

annual accounting period is not an

court with respect to any income tax

If the answer to question 1 is “No,”

issue under consideration by the

issue and its annual accounting

go to Part III after completing Section

appeals (area) office. The applicant

period is an issue under

must attach to the application a

consideration by the Federal court.

separate statement signed by the

4. On the date the partnership or

Line 3. If a corporation’s interest in a

applicant certifying that, to the best of

S corporation would otherwise file its

pass-through entity, CFC, FSC, or

the applicant’s knowledge, the

application, the partnership’s or S

IC-DISC (related entity) is

applicant’s annual accounting period

corporation’s annual accounting

is not an issue under consideration by

disregarded under section 4.02(2) or

period is an issue under

the appeals (area) office. The

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

consideration in the examination of a

applicant must also provide a copy of

because the related entity is required

partner’s or shareholders’s federal

the application to the appeals officer

to change its tax year to the

income tax return or an issue under

at the same time it files the

corporation’s new tax year (or, in the

consideration by an area office or by

application with the Service Center.

case of a CFC, to a tax year

a Federal court with respect to a

The application must contain the

beginning one month earlier than the

partner’s or shareholder’s federal

name and telephone number of the

corporation’s new tax year), the

income tax return.

appeals officer.

related entity must change its tax

•

Note. If any of the above

The applicant is before a Federal

year concurrently with the

circumstances apply, you may still be

court and the applicant’s annual

corporation’s change in tax year,

eligible under the automatic approval

accounting period is not an issue

either under Rev. Proc. 2006-45,

request procedures if you comply with

under consideration by the Federal

2006-46, or 2002-39. This related

the procedures explained following

court. The applicant must attach to

party change is required

item 5 below. See section 7.03 of

the application a separate statement

notwithstanding the testing date

Rev. Proc. 2006-46 for more

signed by the applicant certifying that,

provisions in section 706(b)(4)(A)(ii),

information.

to the best of the applicant’s

section 898(c)(3)(B), Temporary

5. The entity is requesting a

knowledge, the applicant’s annual

Regulations section 1.921-1T(b)(6),

change to, or retention of, a natural

accounting period is not an issue

and the special provision in section

business year as described in section

under consideration by the Federal

706(b)(4)(B).

4.01(2) of Rev. Proc. 2006-46 if the

court. The applicant must also

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Instructions For Form 1128 - Application To Adopt, Change, Or Retain A Tax Year - 2011 Page 5

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