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Lines 2a and 2b. A 52-53-week tax year must

c. For pass-through entities not qualifying

Rev. Proc. 2000-11

end on the date a specified day of the week

for the exceptions in either section 4.02(a) or

Generally, this revenue procedure applies to a

last occurs in a particular month or on the date

4.02(b) of Rev. Proc. 2000-11, the

corporation, including a homeowners

that day of the week occurs nearest to the last

pass-through entity in which the corporation

association, requesting consent to change its

day of a particular calendar month. If the

has an interest has been in existence for at

annual accounting period. The common parent

requested year is a 52-53-week tax year,

least 3 tax years and the interest is de minimis.

of a consolidated group may change the

describe the year (e.g., last Saturday in

For this purpose, an interest in a pass-through

group's annual accounting period under this

December or Saturday nearest to December

entity is de minimis only if:

revenue procedure if every member of the

31).

1) For each of the prior 3 tax years of the

consolidated group meets all the requirements

corporation, the amount of income (including

Line 2c. The required short period return must

and complies with all the conditions of this

begin on the day following the close of the old

ordinary income or loss, capital gains or losses,

revenue procedure.

tax year and end on the day before the first day

rents, royalties, interest, or dividends) from

This revenue procedure also applies to a

such pass-through entity is less than or equal

of the new tax year. In its first year, the tax year

corporation (including members of consolidated

to (A) 5 percent of the corporation's gross

generally starts when business operations

groups) that wants to change from a

begin.

receipts (or, in the case of a member of a

52-53-week tax year to a tax year that ends

consolidated group, the consolidated group's

A corporation's tax year begins at the

with reference to the same month, and vice

gross receipts) for those tax years, and (B)

earliest of the following:

versa, and a CFC (as defined in section 957)

$500,000; and

The date it first has shareholders,

that wants to revoke its one-month deferral

2) The amount of income from all such

The date it first has assets, or

election (section 898(c)(1)(B)) and change its

pass-through entities in the aggregate is less

tax year to the tax year of the majority U.S.

The date it first begins doing business. The

than or equal to the amounts described in (A)

shareholder year (as defined in section

initial year ends on the day before the first day

and (B) above. See section 4.04 of Rev. Proc.

898(c)(1)(C))

of the new tax year.

2000-11 for an example of this rule;

This revenue procedure does not apply to

Line 8. Applicants filing Form 1128 to request

3. Is a shareholder of a FSC or IC-DISC,

a corporation that:

an expeditious approval for a change in tax

as of the end of the short period. However, an

year under Rev. Procs. 2000-11, 87-32, 66-50,

1. Has changed its annual accounting

interest in a FSC or IC-DISC is disregarded if

85-58, or 76-10 are not required to pay a user

period at any time within the 6 calendar years

either of the following conditions is met:

fee when Form 1128 is filed on time.

ending with the calendar year that includes the

a. The FSC or IC-DISC in which the

Applicants filing Form 1128 to request a

beginning of the short period required to effect

corporation is the principal shareholder (i.e.,

letter ruling on a change in tax year under Rev.

the change. For this purpose, the following

the shareholder with the highest percentage of

Proc. 2000-1 must pay a $600 user fee. A

changes will not be considered a change in

voting power as defined in section 441(h))

request for an exempt organization letter ruling

annual accounting period:

would be required to change its tax year

on a change in tax year under Rev. Proc.

a. A change in accounting period by a

pursuant to Temporary Regulations section

2000-8, 2000-1 I.R.B. 230, requires payment

subsidiary to its common parent's taxable year

1.921-1T(b)(4) and (b)(6) to the new tax year

of a $140 user fee.

in order to comply with the common tax year

of the corporation. See section 5.08 of Rev.

A separate $700 user fee is also required

requirement of Regulations section

Proc. 2000-11 for a special term and condition

for applicants filing a letter ruling request for

1.1502-76(a)(1). See Regulations section

related to this exception; or

an extension of time to file under Regulations

1.442–1;

b. The new tax year of the corporation

section 301.9100-3 (including requests under

b. Any prior change in accounting period

would result in no change in or less deferral of

Rev. Procs. 2000-11, 87-32, and 66-50).

by a majority-owned, newly acquired subsidiary

income (as determined under the principals of

that wants to change to the tax year of its

Note: The user fees referred to in the above

Temporary Regulation section 1.706-1T (a)(2))

domestic or foreign parent with which it does

paragraphs are published in Rev. Proc. 2000-1

from the FSC or IC-DISC than the present tax

not file consolidated tax returns in order to file

(exempt organizations, see Rev. Proc.

year of the corporation;

consolidated financial statements, provided the

2000-8), or an annual update. These amounts

4. Is a FSC or an IC-DISC. See Temporary

change is made within 12 months of the

are subject to change annually. See Rev. Proc.

Regulations section 1.921-1T(b)(4) for rules

acquisition. For purposes of this subsection,

2000-1 or 2000-8 or annual update for the

regarding automatic changes of the annual

“majority-owned” means ownership that

latest listings of user fees.

accounting period of a FSC or IC-DISC to the

satisfies the test of section 1504(a)(2),

The annual updates are published as

tax year of its principal shareholder;

substituting “more than 50 percent” for “at least

Revenue Procedures in the Internal Revenue

5. Is an S corporation (as defined in

80 percent;”

Bulletin. The Internal Revenue Bulletins can be

Regulations section 1361). See Rev. Proc.

c. A change from a 52-53-week tax year to

found on the IRS web page, ,

87-32 for procedures to follow for certain

a tax year that ends with reference to the same

under the heading “Tax Information for

automatic changes in the annual accounting

month, and vice versa;

Business”.

period of an S corporation;

2. Is a member of a partnership or a

Payment of the user fee (check or money

6. Attempts to make an S corporation

beneficiary of a trust or an estate (collectively

order made payable to the United States

election for the tax year immediately following

referred to as “pass-through entities”) as of the

Treasury) must be sent with Form 1128 at the

the short period, unless the change is to a

end of the short period. However, an interest

time the form is filed. See Rev. Proc. 2000-1

permitted S corporation year. For this purpose,

in a pass-through entity will be disregarded for

for more information.

a “permitted S corporation year” includes a

this purpose if any of the following conditions

calendar year, a tax year permitted under

are met:

Part II–Expeditious

section 444, or an ownership tax year or

a. The partnership in which the corporation

natural business year (as defined in Rev. Proc.

Approval Request

is a majority interest partner (i.e., a partner

87-32, 1987-2 C.B. 396);

having an interest in the partnership's profits

Note: A user fee is not required if Form 1128

7. Is a personal service corporation (as

and capital of more than 50 percent) would be

is filed under any of the revenue procedures

defined in section 441(i)). See Rev. Proc. 87-32

required to change its tax year pursuant to

listed below.

for procedures to follow for certain automatic

section 706(b) to the new tax year of the

Complete Part II if the applicant can use the

changes in the annual accounting period of a

corporation. See section 5.08 of this revenue

expeditious or automatic approval rules under

personal service corporation;

procedure for a special term and condition

one of the revenue procedures listed below and

8. Is a controlled foreign corporation (CFC)

related to this exception;

the application is filed on time.

(as defined in section 957) or a foreign

b. The new tax year of the corporation

If the applicant does not qualify for

personal holding company (FPHC) (as defined

would result in no change in or less deferral (as

expeditious approval, a ruling must be

in section 552);

described in Temporary Regulations section

requested. See Part III for more information.

9. Is a shareholder of a CFC or FPHC.

1.706-1T(a)(2)) from the pass-through entity

If the Service Center denies approval

However, an interest in a CFC or FPHC is

than the present tax year of the corporation. If

because Form 1128 was not filed on time, the

disregarded if the shareholder is the majority

the pass-through entity is a partnership, the

applicant may want to request relief under

U.S. shareholder (i.e., the shareholder that

corporation should compare the existing

Regulations section 301.9100-3, discussed

meets the ownership requirement of section

deferral period (between the partnership's and

earlier under Late Applications on page 2, by

898(b)(2)(A)) and the CFC or FPHC would be

the corporation's current tax years) with the

completing Part III, as discussed on page 4,

required to change its tax year to the new tax

new deferral period (between the tax year of

and sending Form 1128 to the National Office

year of the shareholder. See section 5.08 of

the partnership that would be required under

for consideration.

Rev. Proc. 2000-11 for a special term and

section 706 and the corporation's new tax

condition related to this exception;

year). See section 4.04 of Rev. Proc. 2000–11

10. Is a tax-exempt organization, other than

for an example of this rule; or

an organization exempt from federal income

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Instructions For Form 1128 - Application To Adopt, Change, Or Retain A Tax Year - 2000 Page 3

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