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Department of the Treasury

Instructions for Form 1128

Internal Revenue Service

(Rev. September 2003)

Application To Adopt, Change, or Retain a Tax Year

Section references are to the Internal Revenue Code unless otherwise noted.

CFC’s controlling U.S. shareholder(s)

2553, Election by a Small Business

Changes To Note

or the FPHC’s U.S. shareholders

Corporation.

•

must file Form 1128 on behalf of such

Partnerships must now file Form

Individuals

foreign corporation to change its tax

1128 to change to a required tax

Newly married individuals changing to

year (except as provided above with

year.

•

the tax year of the other spouse in

respect to a controlling U.S.

A taxpayer that wants to change

order to file a joint return (Regulations

shareholder that is a member of a

from a 52-53-week tax year that

section 1.442-1(d) must be followed).

consolidated group). See Regulations

references a particular month to a

section 1.964-1(c)(5) for the definition

non-52-53-week tax year that ends

Exempt Organizations

of controlling U.S. shareholders of a

on the last day of that month, or vice

An organization exempt under

CFC.

versa, must file Form 1128.

section 501(a) does not file Form

Note: If the applicant qualifies, the

1128 unless the organization has

Exceptions

above changes must be made using

changed its tax year at any time

Do not file Form 1128 in the following

the automatic approval procedures.

within a 10-calendar-year period, and

circumstances.

See the instructions for Part II on

the organization has had an annual

page 3 for details.

filing requirement during that 10-year

Corporations

period (see Rev. Proc. 85-58, 1985-2

•

A corporation adopting its first tax

General Instructions

C.B. 740). This exception does not

year.

apply to organizations exempt from

•

A corporation required to change

tax under section 521, 526, 527, or

Purpose of Form

its tax year to file a consolidated

528; organizations described in

return with its new common parent

File Form 1128 to request a change

section 401(a); and organizations

(see Regulations sections 1.442-1(c)

in tax year. Partnerships, S

involved in a group change in tax

and 1.1502-76(a)).

corporations, or personal service

year for all its subordinate

•

A foreign sales corporation (FSC)

corporations (PSCs) may be required

organizations.

or an interest charge domestic

to file the form to adopt or retain a

Trusts

international sales corporation

certain tax year. For more

•

(IC-DISC) changing to the tax year of

A trust (other than a tax-exempt

information, see Pub. 538,

the U.S. shareholder with the highest

trust or a grantor trust under Rev.

Accounting Periods and Methods.

percentage of voting power (see

Rul. 90-55, 1990-2 C.B. 161) that

Who Must File

section 441(h)). Also see Temporary

adopts the calendar year as required

Regulations section 1.921-1T(b)(4).

by section 645.

Generally, all taxpayers must file

•

However, a FSC or IC-DISC must file

Certain revocable trusts electing to

Form 1128 to adopt, change, or retain

Form 1128 to change its tax year

be treated as part of an estate.

a tax year. However, see Exceptions

•

concurrently, if a tax year change has

An employee plan or trust filing

below.

been made by the U.S. shareholder.

Form 5308, Request for Change in

The common parent of a

Plan/Trust Year, to change its plan or

Partnerships, S

consolidated group that files a

trust year.

consolidated return files one Form

Corporations, and Personal

1128 for the consolidated group. In

When To File

Service Corporations

addition, the common parent

•

A newly formed partnership

corporation must (a) indicate that the

Tax Year Adoption, Change,

adopting a required tax year or a

Form 1128 is for the common parent

or Retention

52-53 week tax year with reference to

corporation and all its subsidiaries

•

such required tax year.

To request a ruling to adopt,

and (b) answer all relevant questions

•

A partnership, S corporation, or

change, or retain a tax year, file by

on the application for each member of

PSC terminating its section 444

the due date (not including

the consolidated group.

election (see Temporary Regulations

extensions) of the Federal income tax

If a consolidated group filing a

section 1.444-1T(a)(5)).

return for the first effective year. Do

consolidated return wants to change

•

A newly formed partnership, an

not file earlier than the day following

its tax year by using Rev. Proc.

electing S corporation, or a newly

the end of the first effective year.

2002-37, 2002-1 C.B. 1030, every

•

formed PSC that elects under section

To request automatic approval to

member of the group must meet the

444 a tax year other than the required

change a tax year under Rev. Proc.

revenue procedure requirements.

tax year by filing Form 8716, Election

2002-37 (Part II, Section A) or Rev.

If a controlled foreign corporation

To Have a Tax Year Other Than a

Proc. 2002-38 (Part II, Section B), file

(CFC) or a foreign personal holding

Required Tax Year.

by the due date of the return

•

company (FPHC) does not have a

A corporation electing to be treated

(including extensions) for the first

U.S. trade or business, then the

as an S corporation and filing Form

effective year required by the change.

Cat. No. 61752V

Instructions For Form 1128 - Application To Adopt, Change, Or Retain A Tax Year - 2003

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