Application To Adopt, Change, or Retain a Tax Year

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 are required to file an application to adopt, change, or retain a tax year. Section 6109 requires that you disclose your taxpayer identification number (SSN or EIN). Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation, and to cities, states, and the District of Columbia for use in administering their tax laws. Failure to provide this information in a timely manner could result in approval of your application being delayed or withheld.

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.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated average times are:

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Internal Revenue Service, Western Area Distribution Center, Rancho Cordova, CA 95743-0001. DO NOT send the tax form to this office. Instead, see Where To File on page 2.

Purpose of Form

File Form 1128 to request a change in tax year. Partnerships, S corporations, or personal service corporations may be required to file the form to adopt or retain a certain tax year. For more information, get Pub. 538, Accounting Periods and Methods.

Who Must File

Generally, the following taxpayers file Form 1128, Individuals, partnerships, estates, tax-exempt organizations.

• Corporations, S corporations, personal service corporations, cooperatives, possession corporations that have a section 936 or section 30A election in effect, controlled foreign corporations, foreign personal holding companies, foreign sales corporations or interest-charge domestic international sales corporations, specified foreign corporations, passive foreign investment companies, other foreign corporations, and homeowners associations to change their tax years.

  In addition, the following taxpayers file Form 1128.

• Partnerships and personal service corporations (PSCs) - To adopt a tax year other than a required tax year.
• Partnerships, S corporations, and PSCs - To retain a tax year other than a required tax year. For example, a corporation that now qualifies as a PSC must file Form 1128 if it wants to retain its current fiscal year.
• All filers - To correct an improper tax year as described in Rev. Proc. 85-15, 1985-1 C.B. 516.
• The common parent of a consolidated group that files a consolidated return files one Form 1128 for the consolidated group. In addition, the common parent corporation must (a) indicate that the Form 1128 is for the common parent corporation and all its subsidiaries, and (b) answer all relevant questions on the application for each member of the consolidated group.

  If a consolidated group filing a consolidated return wants to change its tax year by using Rev. Proc. 2000-11, 2000-3 I.R.B. 309, every member of the group must meet the revenue procedure requirements.

• Filers requesting a 52-53-week tax year - File Form 1128 to get prior approval of a change to or from a 52-53-week tax year to any other tax year, including another 52-53-week year.

  For more information, see Temporary Regulations section 1.441-2T(c)(4), Regulations section 1.1502-76(a)(1), and Pub. 538. However, if the applicant qualifies, these changes may be made under the expeditious approval procedures under Rev. Proc. 2000-11 discussed on page 3.

Who Does Not File

Taxpayers do not file Form 1128 in the following circumstances.

Corporations

• A corporation that meets the terms of Regulations section 1.442-1(c) and files the required statement with its tax return to change its tax year.
• A subsidiary corporation required to change its tax year to file a consolidated return with its common parent (see Regulations sections 1.442-1(d) and 1.1502-76(a)).
• A foreign sales corporation (FSC) or an interest-charge domestic international sales corporation (IC-DISC) changing to the tax year of the U.S. shareholder with the highest percentage of voting power (see section 441(h)).
• A specified foreign corporation (SFC) defined in section 898(b)(1) conforming its first taxable year beginning after July 10, 1989 to the required tax year, including an SFC that is treated as a controlled foreign corporation (CFC) making the 1-month deferral election under section 898(c)(1)(B) as described in Rev. Proc. 90-26, 1990-1 C.B. 512.
• An SFC changing its tax year back to a previous tax year as described in Notice 95-13, 1995-1 C.B. 296.

Partnerships, S Corporations, and Personal Service Corporations

• A corporation electing to be treated as an S corporation and filing Form 2553, Election by a Small Business Corporation.
• A partnership, S corporation, or PSC terminating a section 444 election (see Temporary Regulations section 1.444-1T(a)(5)).
• A partnership, S corporation, or PSC that intends to adopt, change to, or retain a required tax year (usually a calendar year, see Rev. Proc. 87-32, 1987-2 C.B. 396).
• A partnership, S corporation, or PSC that elects a tax year other than the required tax year by filing Form 8716, Election To Have A Tax Year Other Than a Required Tax Year.

52-53-Week Tax Year Taxpayers

A taxpayer, including a partnership, changing to a 52-53-week tax year does not file Form 1128 if the 52-53-week year ends with reference to the same calander month as its previous tax year ended, and the taxpayer keeps its books and computes its income on the new 52-53-week year.

See Regulations section 1.441-2T(c)(2).

Individuals

Newly married individuals changing to the tax year of the other spouse in order to file a joint return (Regulations section 1.442-1(e) must be followed).

Exempt Organizations

An organization exempt under section 501(a) does not file Form 1128 unless the organization has changed its tax year at any time within a 10-calendar-year period, and the organization has had an annual filing requirement during that 10-year period (see Rev. Proc. 85-58, 1985-2 C.B. 740). This exception does not apply to organizations exempt from tax under sections 521, 526, 527, or 528; organizations described in section 401(a); and organizations involved in a group change in tax year for all its subordinate organizations.

Trusts

• A trust (other than a tax-exempt trust or a grantor trust under Rev. Rul. 90-55, 1990-2 C.B. 161) that adopts the calendar year as required by section 645.
• An employee plan or trust filing Form 5308, Request for Change in Plan/Trust Year, to change its plan or trust year.

When To File

Tax Year Change

• To request a ruling to change a tax year, file by the 15th day of the 2nd calendar month after the short period ends. For example, to change to a calendar year, file by the 15th day of February of the next year.
• To change a tax year under Rev. Proc. 2000-11, file by the due date of the return (including extensions) for the short period required by the change.
• To change a tax year under Rev. Proc. 85-58, file by the 15th day of the 5th calendar month after the short period ends.
• For an individual filing to change to a calendar year under Rev. Proc. 66-50, 1966-2 C.B. 1260, as modified by Rev. Proc. 81-40, 1981-2 C.B. 604, file by the last day of January.

Tax Year Adoption

For partnership adoptions, file by the end of the month following the close of the requested tax year.

For other adoptions, file by the due date (not including extensions) for filing the first income tax return for that tax year. See Temporary Regulations section 1.441-1T(b)(2).

Tax Year Retention

To retain a tax year, file by the 75th day of the beginning of the tax year for which the retention applies.

Late Applications

A Form 1128 that is filed after the appropriate due date stated above is considered a late application.

However, applications filed within 90 days after the time required for filing may be considered as timely filed under Regulations section 301.9100-1 when the applicant establishes that:

1. The taxpayer acted reasonably and in good faith, and
2. Granting relief will not prejudice the interests of the Government.

Applications that are filed more than 90 days after the due date of Form 1128 are presumed to jeopardize the interests of the Government, and will be approved only in unusual and compelling circumstances.

An extension request filed under Procedure and Administration Regulations section 301.9100-3 is a ruling request under Rev. Proc. 2000-1, 2000-1 I.R.B. 4 (updated annually), and is subject to public inspection under section 6110. See section 8 of Rev. Proc. 2000-1 for information on requesting a ruling.

Note: An extension request under Rev. Proc. 2000-1 or any annual update of Rev. Proc. 2000-1, requires payment of a user fee.

Early Applications

Generally, an application to adopt or change a tax year will not be considered if it is submitted more than 60 days before the close of the short year.

Where To File

Part II filers. If the applicant completes Part II, (expeditious approval request) file Form 1128 with the Internal Revenue Service Center, Attention: Entity Control where the applicant's income tax return is filed.

Part III filers. If the applicant is filing for a ruling by completing Part III, file Form 1128 and the appropriate user fee with the National Office. Mail Form 1128 to the Associate Chief Counsel (Domestic), or the Associate Chief Counsel (Employee Benefits and Exempt Organizations), at the following address:

Internal Revenue Service,
Attention: CC:DOM:CORP:T,
P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044.

The IRS will acknowledge receipt of the application within 30 days. You can inquire about the status of the application by writing to:

Control Clerk, CC:DOM:IT&A,
Internal Revenue Service,
Room 5508,
1111 Constitution Ave., NW,
Washington, DC 20224.

The applicant will receive notification from the National Office of its approval or denial. If no communication is received from the IRS regarding the application within 90 days, contact the Control Clerk.

Who Must Sign

Form 1128 must be signed by the applicant as discussed below. A valid signature by the individual or an officer of the organization is required on Form 1128. If the form does not have a valid signature, it will not be considered.

• Individuals. If this application is for a husband and wife, enter both names on the line, Applicant's name. Both husband and wife must sign the application on the line, Applicant or signing official's signature.
• Partnerships. Show the partnership name, followed by the signature of one of the partners and the phrase Member of partnership.
• Estates. Show the name of the estate and the signature and title of the fiduciary or other person legally authorized to sign.
• Tax-Exempt Organizations. Show the name of the organization and the signature of a principal officer or other person authorized to sign, followed by his or her title.
• All Other Applicants. The application must show the name of the company and the signature of the president, vice president, treasurer, assistant treasurer, or chief accounting officer (such as tax officer) authorized to sign, and their official title. Receivers, trustees, or assignees must sign any application they are required to file. For a subsidiary corporation filing a consolidated return with its common parent, the form should be signed by an authorized officer of the common parent corporation. For a CFC, the form must be signed by the controlling U.S. shareholder(s).
• Preparer Other Than Applicant.

  Note: The individual preparing the application must also sign it.

  The preparer cannot sign on behalf of the applicant. Unless you are self-employed, show the name of the firm that employs you. If you file on an applicant's behalf, include a power of attorney. Show any specific acts the power of attorney grants, such as representation before the IRS.

What To Complete

• All applicants must complete Part I-General Information. Attachments to Form 1128 must show the applicant's name, identification number, and address. Also indicate that the statement is an attachment to Form 1128.
• Part II-Expeditious Approval Request is completed by applicants requesting expeditious approval of a change in tax year under Rev. Proc. 2000-11, Rev. Proc. 66-50, Rev. Proc. 76-10, 1976-1 C.B. 548, Rev. Proc. 85-58, and applicants requesting expeditious approval of a change or retention under Rev. Proc. 87-32.

  Note: Applicants requesting an expeditious approval, complete Parts I and II only.

• Part III-Ruling Request is completed only by applicants requesting to adopt, change to, or retain a tax year that cannot use the expeditious procedures listed above.

Also, corporations, S corporations, partnerships, controlled foreign corporations, possession corporations, tax-exempt organizations, estates, passive foreign investment companies, personal service corporations, cooperatives, foreign personal holding companies, and other foreign corporations must complete the specific section(s) in Part III that applies to that particular entity.

2001 Instructions Index | 2001 Tax Forms Main | IRS-Forms Main | Home