Instructions For Form 1128 (Rev. 2014) (Page 8 of 9) in pdf

month of the three immediately

III that applies to that particular entity.

The applicant is before an appeals

preceding tax years.

For example, a Passive Foreign

office and the applicant's annual

Investment Company (PFIC)

accounting period is not an issue

If the applicant is requesting to

completes Section B and attaches the

under consideration by the appeals

change to a natural business year that

statement required by Section H.

office. The applicant must attach to

satisfies the 25-percent gross receipts

Complete Sections B and F for a

the application a separate statement

test described in section 5.03(3) of

tax-exempt organization that is a

signed by the appropriate person

Rev. Proc. 2002-39, the applicant

corporation.

certifying that, to the best of that

must supply its gross receipts for the

person's knowledge, the entity's

most recent 47 months (or for any

Note. In addition to excluding CFC(s)

annual accounting period is not an

predecessor).

from Section B, 10/50 corporations

issue under consideration by the

Line 14. Applicants filing to request a

are also excluded.

appeals office. The applicant must

letter ruling on a change in tax year

also provide a copy of the application

Section C—S Corporations

under Rev. Proc. 2014-1 (updated

to the appeals officer at the same time

An S corporation must have a

annually) and Rev. Proc. 2002-39

it files the application with the IRS

permitted tax year unless it has

must pay a user fee. A request for an

National Office. The application must

elected under section 444 to have a

exempt organization letter ruling on a

contain the name and telephone

tax year other than the required tax

change in tax year under Rev. Proc.

number of the appeals officer.

year. A “permitted tax year” is:

2014-8, 2014-1 I.R.B. 242 at

The applicant is before a Federal

1. A tax year that ends on

court and the applicant's annual

ar12.html, also requires payment of a

December 31 or

accounting period is not an issue

user fee.

under consideration by the Federal

2. Any other tax year if the

A separate user fee is also required

court. The applicant must attach to the

corporation can establish a business

for applicants filing a letter ruling

application a separate statement

purpose to the satisfaction of the IRS.

request for an extension of time to file

signed by the appropriate person

For purposes of 2, above, any

under Regulations section 301.9100-3

certifying that, to the best of that

deferral of income to shareholders will

(including requests under Rev. Procs.

person's knowledge, the entity's

not be treated as a business purpose.

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

annual accounting period is not an

For more information, see Rev. Proc.

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

issue under consideration by the

2006-46.

and C)).

Federal court. The applicant must also

provide a copy of the application to

If any shareholder is applying for a

Note. The user fees referred to in the

the government counsel at the same

corresponding change in tax year,

above paragraphs are published in

time it files the application with the

that shareholder must file a separate

Rev. Proc. 2014-1 (exempt

IRS National Office. The application

Form 1128 to get advance approval to

organizations, see Rev. Proc.

must contain the name and telephone

change its tax year.

2014-8), or an annual update. The

number of the government counsel.

Section D—Partnerships

annual updates are published as

Line 4a. Attach an explanation of the

revenue procedures in the Internal

A partnership must obtain advance

legal basis supporting the requested

Revenue Bulletin. The Internal

approval from the IRS to adopt,

tax year. Include all authority

Revenue Bulletins can be accessed at

change, or retain a tax year unless it is

(statutes, regulations, etc.) supporting

The fees for 2014 are

not required to file Form 1128, or it

the requested year. The applicant is

in Internal Revenue Bulletin 2014-1.

meets one of the automatic approval

encouraged to include all relevant

rules discussed earlier in the

Payment of the user fee (check or

facts and circumstances that may

instructions for Part II, Section B. Also

money order made payable to the

establish a business purpose.

see the exceptions for partnerships

Internal Revenue Service) must be

under Who Must File, earlier.

Line 4b. If the applicant requests to

attached to Form 1128 at the time the

establish a natural business year

form is filed. See Rev. Proc. 2014-1

Partners must also get separate

under the annual business cycle test

for more information.

advance approval to change their tax

or seasonal business test of sections

Section B—Corporations

years.

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

(Other Than S Corporations

Line 23. Enter the first date a

2002-39, it must provide its gross

and Controlled Foreign

business transaction resulted in a tax

receipts from sales or services and

Corporations)

consequence, such as receiving

approximate inventory costs (where

income or incurring an expense.

applicable) for each month in the

Corporations must complete this

requested short period and for each

section and any other section in Part

-8-

Instructions For Form 1128 (Rev. 2014) Page 8

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