Instructions For Form 1128 - Application To Adopt, Change, Or Retain A Tax Year (Page 8 of 9) in pdf

person's knowledge, the entity's

Rev. Proc. 2002-39, the applicant

Investment Company (PFIC)

annual accounting period is not an

must supply its gross receipts for the

completes Section B and attaches the

issue under consideration by the

most recent 47 months (or for any

statement required by Section H.

appeals office. The applicant must

predecessor).

Complete Sections B and F for a

also provide a copy of the application

tax-exempt organization that is a

Line 14. Applicants filing to request a

to the appeals officer at the same time

corporation.

letter ruling on a change in tax year

it files the application with the IRS

under Rev. Proc. 2017-1 or its

Note. In addition to excluding CFC(s)

National Office. The application must

successor (updated annually) and

from Section B, 10/50 corporations

contain the name and telephone

Rev. Proc. 2002-39 must pay a user

are also excluded.

number of the appeals officer.

fee. A request for an exempt

The applicant is before a federal

Section C—S Corporations

organization letter ruling on a change

court and the applicant's annual

in tax year under Rev. Proc. 2017-5,

An S corporation must have a

accounting period is not an issue

2017-1 I.R.B. 230 at

permitted tax year unless it has

under consideration by the federal

2017-01_IRB/ar03.html, also requires

elected under section 444 to have a

court. The applicant must attach to the

payment of a user fee.

tax year other than the required tax

application a separate statement

year. A “permitted tax year” is:

A separate user fee is also required

signed by the appropriate person

for applicants filing a letter ruling

1. A tax year that ends on

certifying that, to the best of that

request for an extension of time to file

December 31, or

person's knowledge, the entity's

under Regulations section 301.9100-3

annual accounting period is not an

2. Any other tax year if the

(including requests under Rev. Procs.

issue under consideration by the

corporation can establish a business

2006-45, 2006-46, and 2003-62

federal court. The applicant must also

purpose to the satisfaction of the IRS.

(Form 1128, Part II, Sections A, B,

provide a copy of the application to

For purposes of 2, above, any

and C)).

the government counsel at the same

deferral of income to shareholders will

time it files the application with the

Note. The user fees referred to in the

not be treated as a business purpose.

IRS National Office. The application

above paragraphs are published in

For more information, see Rev. Proc.

must contain the name and telephone

Rev. Proc. 2017-1 (exempt

2006-46 and Rev. Proc. 2002–39.

number of the government counsel.

organizations, see Rev. Proc.

If any shareholder is applying for a

Line 4a. Attach an explanation of the

2017-4), or an annual update. The

corresponding change in tax year,

legal basis supporting the requested

annual updates are published as

that shareholder must file a separate

tax year. Include all authority

revenue procedures in the Internal

Form 1128 to get advance approval to

(statutes, regulations, etc.) supporting

Revenue Bulletin. The Internal

change its tax year.

the requested year. The applicant is

Revenue Bulletins can be accessed at

encouraged to include all relevant

The fees for 2017 are

Section D—Partnerships

facts and circumstances that may

in Internal Revenue Bulletin 2017-1.

A partnership must obtain advance

establish a business purpose.

Payment of the user fee (check or

approval from the IRS to adopt,

money order made payable to the

Line 4b. If the applicant requests to

change, or retain a tax year unless it is

Internal Revenue Service) must be

establish a natural business year

not required to file Form 1128, or it

attached to Form 1128 at the time the

under the annual business cycle test

meets one of the automatic approval

form is filed. Payment may also be

or seasonal business test of sections

rules discussed earlier in the

made through See

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

instructions for Part II, Section B. Also

Rev. Proc. 2017-1 (or any successor)

2002-39, it must provide its gross

see the exceptions for partnerships

for more information.

receipts from sales or services and

under

Who Must

File, earlier.

approximate inventory costs (where

Section B—Corporations

Partners must also get separate

applicable) for each month in the

(Other Than S Corporations

advance approval to change their tax

requested short period and for each

and Controlled Foreign

years.

month of the three immediately

Corporations)

preceding tax years.

Line 23. Enter the first date a

business transaction resulted in a tax

Corporations must complete this

If the applicant is requesting to

consequence, such as receiving

section and any other section in Part

change to a natural business year that

income or incurring an expense.

III that applies to that particular entity.

satisfies the 25-percent gross receipts

For example, a Passive Foreign

test described in section 5.03(3) of

Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal

Revenue laws of the United States. Section 442 says that you must obtain IRS approval if you want to adopt, change, or

retain a tax year. To obtain approval, you must file an application to adopt, change, or retain a tax year. Sections 6001,

6011, 6012(a), and 6109 and their regulations require you to provide the requested information. Failure to provide this

information in a timely manner could delay processing or could result in denial of your application. Providing false

information could subject you to penalties.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act

unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be

retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax

returns and return information are confidential, as required by section 6103.

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Instructions For Form 1128 - Application To Adopt, Change, Or Retain A Tax Year Page 8

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