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under the annual business cycle test

form is filed. See Rev. Proc. 2003-1

Section A—General

or seasonal business test of sections

for more information.

Information

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

Section B—Corporations

All applicants must complete this

2002-39, it must provide its gross

section to request a ruling on an

(Other Than S Corporations

receipts from sales or services and

adoption, change to, or retention of a

approximate inventory costs (where

and Controlled Foreign

tax year.

applicable) for each month in the

Corporations)

Line 1. If the applicant is:

requested short period and for each

•

Corporations must complete this

Under examination. Attach to the

month of the three immediately

section and any other section in Part

application a statement from the

preceding tax years.

III that applies to that particular entity.

director consenting to the change or

If the applicant is requesting to

For example, a PFIC completes

retention. The applicant must also

change to a natural business year

Section B and attaches the statement

attach to the application a statement

that satisfies the 25-percent gross

required by Section H. Complete

indicating if a copy of the application

receipts test described in section

Sections B and F for a tax-exempt

has been given to the examination

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

organization that is a corporation.

agent as required by section

applicant must supply the gross

6.06(1)(b) of Rev. Proc. 2002-39, as

Section C—S Corporations

receipts for the most recent 47

well as the name and telephone

months for itself (or any

An S corporation must have a

number of the examination agent.

predecessor).

permitted tax year unless it has

•

Before an appeals (area) office.

Line 14. Applicants filing to request

elected under section 444 to have a

Attach to the application a statement

an automatic approval for a change in

tax year other than the required tax

signed by an appropriate person

tax year under Rev. Procs. 2002-37,

year. A “permitted tax year” is:

certifying that, to the best of that

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

1. A tax year that ends on

person’s knowledge, the entity’s

(Part II) are not required to pay a

December 31 or

annual accounting period is not an

user fee when Form 1128 is filed on

2. Any other tax year if the

issue under consideration by the

time.

corporation can establish a business

appeals (area) office. The applicant

Applicants filing to request a letter

purpose to the satisfaction of the IRS.

must also attach to the application a

ruling on a change in tax year under

statement indicating if a copy of the

For purposes of 2, any deferral of

Rev. Proc. 2003-1 and Rev. Proc.

application has been given to the

income to shareholders will not be

2002-39 must pay a $1,000 user fee.

appeals officer as required by section

treated as a business purpose. For

A request for an exempt organization

6.06(2) of Rev. Proc. 2002-39, as well

more information, see Rev. Proc.

letter ruling on a change in tax year

as the name and telephone number

2002-38

under Rev. Proc. 2003-8, 2003-1

of the appeals officer.

If any shareholder is applying for a

•

I.R.B. 236, requires payment of a

Before a Federal court. Attach to

corresponding change in tax year,

$150 user fee.

the application a statement signed by

that shareholder must file a separate

an appropriate person certifying that,

A separate $1,200 user fee is also

Form 1128 to get advance approval

to the best of that person’s

required for applicants filing a letter

to change its tax year.

knowledge, the entity’s annual

ruling request for an extension of time

accounting period is not an issue

to file under Regulations section

Section D—Partnerships

under consideration by the Federal

301.9100-3 (including requests under

A partnership must obtain advance

court. The applicant must also attach

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

approval from the IRS to adopt,

to the application a statement

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

change, or retain a tax year unless it

indicating if a copy of the application

C)).

is not required to file Form 1128, or it

has been given to the government

Note: The user fees referred to in the

meets one of the automatic approval

counsel as required by section

above paragraphs are published in

rules discussed in Part II, Section B

6.06(3) of Rev. Proc. 2002-39, as well

Rev. Proc. 2003-1 (exempt

on page 4. See Exceptions on page

as the name and telephone number

organizations, see Rev. Proc.

of the government counsel.

2003-8), or an annual update. The

Partners must also get separate

Line 4a. Attach an explanation of the

annual updates are published as

advance approval to change their tax

legal basis supporting the requested

revenue procedures in the Internal

years.

tax year. Include all authority

Revenue Bulletin. The Internal

Line 23. Enter the first date a

(statutes, regulations, etc.) supporting

Revenue Bulletins can be accessed

business transaction resulted in a tax

the requested year. The applicant is

on the IRS web site,

consequence, such as receiving

encouraged to include all relevant

Payment of the user fee (check or

income or incurring an expense.

facts and circumstances that may

money order made payable to the

establish a business purpose.

United States Treasury) must be

Line 4b. If the applicant requests to

attached to Form 1128 at the time the

establish a natural business year

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Instructions For Form 1128 - Application To Adopt, Change, Or Retain A Tax Year - 2003 Page 6

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