Instructions For Form 1128 (Rev. January 2006) (Page 7 of 8) in pdf

issue under consideration by the

A request for an exempt organization

For example, a PFIC completes

Federal court. The applicant must

letter ruling on a change in tax year

Section B and attaches the statement

also provide a copy of the application

under Rev. Proc. 2005-8, 2005-1

required by Section H. Complete

to the government counsel at the

I.R.B. 243, requires payment of a

Sections B and F for a tax-exempt

same time it files the application with

$155 user fee.

organization that is a corporation.

the IRS National Office. The

You can find Rev. Proc.

Section C—S Corporations

application must contain the name

TIP

2005-1 and Rev. Proc. 2005-8

An S corporation must have a

and telephone number of the

on pages 1 and 243,

permitted tax year unless it has

government counsel.

respectively, of Internal Revenue

elected under section 444 to have a

Line 4a. Attach an explanation of the

Bulletin 2005-1 at

tax year other than the required tax

legal basis supporting the requested

irs-irbs/irb05-01.pdf.

year. A “permitted tax year” is:

tax year. Include all authority

A separate $1,500 user fee is also

1. A tax year that ends on

(statutes, regulations, etc.) supporting

required for applicants filing a letter

December 31 or

the requested year. The applicant is

ruling request for an extension of time

2. Any other tax year if the

encouraged to include all relevant

to file under Regulations section

corporation can establish a business

facts and circumstances that may

301.9100-3 (including requests under

purpose to the satisfaction of the IRS.

establish a business purpose.

Rev. Procs. 2002-37, 2002-38, and

Line 4b. If the applicant requests to

2003-62 (Part II, Sections A, B, and

For purposes of 2, above, any

establish a natural business year

C)).

deferral of income to shareholders

under the annual business cycle test

will not be treated as a business

Note. The user fees referred to in the

or seasonal business test of sections

purpose. For more information, see

above paragraphs are published in

5.03(1) and 5.03(2) of Rev. Proc.

Rev. Proc. 2002-38.

Rev. Proc. 2005-1 (exempt

2002-39, it must provide its gross

organizations, see Rev. Proc.

If any shareholder is applying for a

receipts from sales or services and

2005-8), or an annual update. The

corresponding change in tax year,

approximate inventory costs (where

annual updates are published as

that shareholder must file a separate

applicable) for each month in the

revenue procedures in the Internal

Form 1128 to get advance approval

requested short period and for each

Revenue Bulletin. The Internal

to change its tax year.

month of the three immediately

Revenue Bulletins can be accessed

preceding tax years.

Section D—Partnerships

at The fees for 2006

If the applicant is requesting to

are in Internal Revenue Bulletin

A partnership must obtain advance

change to a natural business year

2006-1.

approval from the IRS to adopt,

that satisfies the 25-percent gross

change, or retain a tax year unless it

Payment of the user fee (check or

receipts test described in section

is not required to file Form 1128, or it

money order made payable to the

5.03(3) of Rev. Proc. 2002-39, the

meets one of the automatic approval

Internal Revenue Service) must be

applicant must supply its gross

rules discussed in Part II, Section B

attached to Form 1128 at the time the

receipts for the most recent 47

on page 4. See Exceptions on page

form is filed. See Rev. Proc. 2005-1

months (or for any predecessor).

for more information.

Line 14. Applicants filing to request

Partners must also get separate

an automatic approval for a change in

Section B—Corporations

advance approval to change their tax

tax year under Rev. Procs. 2002-37,

(Other Than S Corporations

years.

2002-38, 2003-62, 85-58, or 76-10

and Controlled Foreign

Line 23. Enter the first date a

(Part II) are not required to pay a user

business transaction resulted in a tax

Corporations)

fee when Form 1128 is filed on time.

consequence, such as receiving

Corporations must complete this

Applicants filing to request a letter

income or incurring an expense.

section and any other section in Part

ruling on a change in tax year under

III that applies to that particular entity.

Rev. Proc. 2005-1 and Rev. Proc.

2002-39 must pay a $1,500 user fee.

-7-

Instructions For Form 1128 (Rev. January 2006) Page 7

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