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Rev. Proc. 92-13.—This revenue

credit purposes, on the basis of the new

501(a) does not have to file Form 1128

tax year.

unless:

procedure, as modified by Rev. Proc.

94-12, and as modified and amplified by

The organization was required to file

4. Taxable income of the corporation

Rev. Proc. 92-13A, applies to a

for the short period must be annualized

an annual information return or Form

corporation that:

(except for a real estate investment trust

990-T, Exempt Organization Business

Income Tax Return, at any time during

1. Cannot meet the rules of

or a regulated investment company) and

Regulations section 1.442-1(c) regarding

the tax must be figured based on

the last 10 calendar years, and

section 443(b) and Regulations section

a tax year change without the IRS’ prior

The organization has changed its tax

approval.

1.443-1(b).

year at any time within the last 10

2. Has not changed its annual tax year

5. If the corporation has a net

calendar years ending with the calendar

operating loss (NOL) in the short period

year that includes the beginning of the

in the last 6 calendar years (or in any of

short period resulting from the change of

the calendar years of existence, if less

required to effect the change, the NOL

than 6 years) ending with the calendar

generally cannot be carried back.

tax year.

year that includes the beginning of the

Instead, it must be deducted ratably

An organization described in section

short period required to effect the tax

over a 6-year period beginning with the

501(c) or (d) is exempt from tax under

first tax year after the short period.

year change, and

section 501(a) unless the exemption is

However, a short period NOL can be

denied under section 502 or 503.

3. Is not any of the following:

carried back or carried forward in

Rev. Proc. 85-58 does not apply to:

a. A member of a partnership,

accordance with section 172(b) if:

Farmers’ cooperatives exempt from

b. A beneficiary of a trust or an estate,

The NOL is $10,000 or less, or

Federal income tax under section 521,

c. A shareholder of an IC-DISC or a

The NOL results from a short period of

Organizations described in sections

FSC, as of the end of the short period,

9 or more months and is less than the

526, 527, and 528,

d. An S corporation (and does not

NOL for a full 12-month period

Organizations described in section

attempt to make an S corporation

beginning with the first day of the short

401(a), and

election for the tax year immediately

period.

following the short period; see Rev.

Organizations requesting a change in

Note: See section 5.02(6) of Rev. Proc.

Proc. 87-32, discussed below),

a tax year on a group basis.

92-13 for more information on

e. A personal service corporation,

A central organization should follow

consolidated NOLs.

Rev. Proc. 76-10 to apply for a group

f. An IC-DISC or FSC,

6. If there is any unused credit for the

change in tax year for all its subordinate

g. A controlled foreign corporation or

short period, the corporation must carry

organizations.

a foreign personal holding company, or

the unused credit(s) forward. Unused

Rev. Proc. 76-10 does not apply to:

a minority shareholder in either of these,

credit(s) from the short period may not

be carried back.

Farmers’ cooperatives exempt from

h. A tax-exempt organization other

Federal income tax under section 521,

than an organization exempt from tax

Rev. Proc. 87-32.—A partnership, S

under section 521, 526, 527, or 528,

corporation, or personal service

Certain organizations that have

corporation may be able to change or

unrelated business taxable income

i. A direct or indirect shareholder of a

retain its tax year by following Rev.

defined in section 512(a), and

passive foreign investment company

Proc. 87-32. Under section 4.01(1) of the

(PFIC) that is a qualified electing fund,

Organizations that are private

procedure, the entity determines its

foundations defined in section 509(a).

j. A PFIC, 10% or more of whose

natural business year. The entity must

stock is owned, directly or indirectly, by

If the applicant can use the

attach to Form 1128 a statement

U.S. persons who have elected to treat

expeditious approval rules under one of

showing the amount of gross receipts

the PFIC as a qualified electing fund,

the revenue procedures listed above,

for the most recent 47 months as

complete Part II of the form and see the

k. A cooperative association with a

required by section 4.03(3) of the

instructions for the signature area on

loss in the short period required to effect

revenue procedure. Sections 4.01(1) and

page 4. Attach a power of attorney, if

the tax year change, and

4.01(2) provide expeditious approval for

applicable. If the service center denies

l. A corporation that has an election in

an S corporation to adopt, change, or

approval because Form 1128 is not filed

effect under section 936.

retain a tax year that coincides with the

on time, the applicant may then want to

tax year used by the shareholders. The

Corporations or consolidated groups

request a ruling by completing Part III,

representation statements (Form 1128,

that qualify and want to change their tax

as discussed on page 4, and sending

Part II, line 2) highlight the requests

year using Rev. Proc. 92-13 must also

Form 1128 to the National Office for

provided for in section 4 of the revenue

comply with the following conditions.

consideration.

procedure.

1. The short period required to effect

Note: Generally, to retain its tax year,

the tax year change must begin with the

Where To File

the entity must have a valid section 444

day following the close of the previous

If the applicant completes Part II, file

election in effect.

tax year and must end with the day

Form 1128 with the Internal Revenue

preceding the first day of the new tax

Rev. Proc. 66-50.—Use this procedure

Service Center where the applicant’s

year.

if the entity is an individual changing

income tax return is filed. A user fee is

from a fiscal year to a calendar year;

2. The corporation must file an income

not required if Form 1128 is filed under

income is received only from wages,

tax return for the short period by the

any of the revenue procedures listed in

salaries, interest, dividends, capital

due date of the return, including

Part II. When Form 1128 is approved,

gains, pensions, annuities, rents, or

extensions.

the applicant will receive notification of

royalties; and all the rules of Rev. Proc.

3. The books of the corporation must

its approval. If no communication is

66-50 are met.

be closed as of the last day of the new

received from the IRS regarding the

Rev. Proc. 85-58 or 76-10.—Use either

tax year. Returns for later tax years must

application for expeditious approval

procedure if the entity is a tax-exempt

be made on the basis of a full 12

within 60 days, contact the service

organization requesting a change under

months (or 52–53 week basis) ending on

center.

the simplified method of Rev. Proc.

the last day of the new tax year. The

85-58 or Rev. Proc. 76-10.

corporation must figure its income and

keep its books and records, including

Under Rev. Proc. 85-58, an

financial reports and statements for

organization exempt under section

Page 3

Instructions For Form 1128 - Application To Adopt, Change, Or Retain A Tax Year - 1996 Page 3

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