Instructions For Form 1128 (Rev. January 2006) Page 4
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8Complete
6. Attempts to make an S
If the answer to question 1 is “No,”
If the applicant is:
only
corporation election for the tax year
go to Part III after completing Section
immediately following the short
A.
A corporation (other than
Section A
period, unless the change is to a
an S corporation or a PSC)
Line 3. If a corporation’s interest in a
permitted tax year.
pass-through entity, CFC, FSC, or
A partnership, S
Section B
7. Is a PSC.
IC-DISC (related entity) is
corporation, or a PSC
8. Is a CFC. For exceptions, see
disregarded under section 4.02(2) or
sections 4.01(4) and 4.02(8) of Rev.
An individual
Section C
4.02(3) of Rev. Proc. 2002-37
Proc. 2002-37.
because the related entity is required
A tax-exempt organization.
Section D
9. Is a tax-exempt organization,
to change its tax year to the
other than an organization exempt
corporation’s new tax year (or, in the
If the applicant does not qualify for
from tax under section 521, 526, 527,
case of a CFC, to a tax year
automatic approval, a ruling must be
or 528.
beginning one month earlier than the
requested. See Part III for more
corporation’s new tax year), the
10. Has in effect a possessions
information.
related entity must change its tax
corporation election under section
year concurrently with the
936.
If the Service Center denies
corporation’s change in tax year,
approval because Form 1128 was not
11. Is a cooperative association
either under Rev. Proc. 2002-37,
filed on time, the applicant can
(within the meaning of section
2002-38, or 2002-39. This related
request relief under Regulations
1381(a)) with a loss in the short
party change is required
section 301.9100-3, discussed earlier
period required to effect the change
notwithstanding the testing date
under Late Applications on page 2, by
of annual accounting period, unless
provisions in section 706(b)(4)(A)(ii),
completing Part III, as discussed on
the patrons of the cooperative
section 898(c)(3)(B), Temporary
page 6, and sending Form 1128 to
association are substantially the
Regulations section 1.921-1T(b)(6),
the IRS National Office for
same in the year before the change
and the special provision in section
consideration.
of annual accounting period, in the
706(b)(4)(B).
short period required to effect the
Section A—Corporations
change, and in the year following the
Section B—Partnerships, S
(Other than S Corporations
change.
Corporations, and Personal
or Personal Service
12. Has a required tax year (for
Service Corporations
example, a real estate investment
Corporations)
trust), unless the corporation is
Rev. Proc. 2002-38 provides
Rev. Proc. 2002-37 provides
changing to its required tax year and
exclusive procedures for a
exclusive procedures for certain
is not described in items (1) through
partnership, S corporation, or PSC
corporations to obtain automatic
(11), above.
within its scope to adopt, change, or
approval to change their annual
retain its annual accounting period
accounting period under section 442
Note. If the corporation is precluded
under section 442 and Regulations
and Regulations section 1.442-1(b). A
from using the automatic approval
section 1.442-1(b).
corporation complying with all the
rules because of items (2) or (3),
applicable provisions of this revenue
Line 4. A partnership, S corporation,
listed above, it can nevertheless
procedure will be deemed to have
or PSC is precluded from using the
automatically change to a natural
established a business purpose and
automatic approval rules under
business year that meets the
obtained the approval of the IRS to
section 4 of Rev. Proc. 2002-38 if any
25-percent gross receipts test
change its accounting period. See
of the following apply:
described in section 5.06 of Rev.
Rev. Proc. 2002-37 for more
Proc. 2002-37.
1. The entity is under examination,
information.
unless it obtains consent of the
If the answer to question 1 is
Line 1. A corporation is precluded
appropriate director as provided in
“Yes,” sign Form 1128 and see
from using the automatic approval
section 7.03(1) of Rev. Proc.
Part II —Automatic Approval Request
rules under section 4 of Rev. Proc.
2002-38.
earlier under Where To File. Do not
2002-37 if it:
2. The entity is before an appeals
complete Part III. If the corporation is
1. Has changed its annual
office with respect to any income tax
requesting to change to a natural
accounting period at any time within
issue and its annual accounting
business year that satisfies the
the most recent 48-month period
period is an issue under
25-percent gross receipts test, also
ending with the last month of the
consideration by the appeals office.
include its gross receipts for the most
requested tax year. For exceptions,
3. The entity is before a Federal
recent 47 months (or for any
see section 4.02(1) of Rev. Proc.
court with respect to any income tax
predecessor).
2002-37.
issue and its annual accounting
2. Has an interest in a
If the answer to question 1 is “Yes”
period is an issue under
pass-through entity as of the end of
because the applicant is a CFC that
consideration by the Federal court.
the short period. For exceptions, see
wants to revoke its one-month
4. On the date the partnership or
section 4.02(2) of Rev. Proc.
deferral election under section
S corporation would otherwise file its
2002-37.
898(c)(2) and change its tax year to
application, the partnership’s or S
3. Is a shareholder of a FSC or
the majority U.S. shareholder year
corporation’s annual accounting
IC-DISC, as of the end of the short
(as defined in section 898(c)(3),
period is an issue under
period. For exceptions, see section
attach a statement providing the
consideration in the examination of a
4.02(3) of Rev. Proc. 2002-37.
names, addresses, and identifying
partner’s or shareholders’s Federal
4. Is a FSC or an IC-DISC.
numbers for each U.S. shareholder of
income tax return or an issue under
5. Is an S corporation.
the foreign corporation.
consideration by an area office or by
-4-
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