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Department of the Treasury
Instructions for Form 1128 Internal Revenue Service

(Rev. October 2014)
Application To Adopt, Change, or Retain a Tax Year

Section references are to the Internal foreign corporation to change its tax formed PSC that elects under section
Revenue Code unless otherwise noted. year (except as provided above with 444 a tax year other than the required
respect to a controlling domestic tax year by filing Form 8716, Election
General Instructions shareholder that is a member of a To Have a Tax Year Other Than a
consolidated group). See Regulations Required Tax Year.
Future Developments section 1.964-1(c)(5) for the definition A corporation electing to be treated
For the latest information and of controlling domestic shareholders as an S corporation by filing Form
developments related to Form 1128 of a CFC or 10/50 corporation. 2553, Election by a Small Business
and its instructions, such as Corporation, and requesting to
legislation enacted after this form and If Form 1128 is filed on behalf of a change or retain its tax year.
its instructions were published, go to CFC or 10/50 corporation, each
www.irs.gov/form1128. controlling domestic shareholder must Exempt Organizations
attach to its tax return a copy of the An organization exempt under section
Purpose of Form form and all other domestic 501(a) does not file Form 1128 unless
File Form 1128 to request a change in shareholders must be provided a the organization has changed its tax
tax year. Partnerships, S corporations, written notice of the election. See year at any time within a
personal service corporations (PSCs), Regulations section 1.964-1(c)(3) for 10-calendar-year period, and the
or trusts may be required to file Form details. organization has had an annual filing
1128 to adopt or retain a certain tax requirement during that 10-year
year. Exceptions period (see Rev. Proc. 85-58, 1985-2
Do not file Form 1128 in the following C.B. 740). This exception does not
Part II is used for an automatic circumstances. apply to organizations exempt from
approval request. If the applicant does tax under section 521, 526, 527, or
not qualify for automatic approval, Corporations 528; organizations described in
Part III is used for a ruling request. A corporation adopting its first tax section 401(a); and organizations
year. involved in a group change in tax year
Who Must File A corporation required to change its for all its subordinate organizations.
Generally, taxpayers must file Form tax year to file a consolidated return
1128 to adopt, change, or retain a tax with its new common parent (see Individuals
year. However, see Exceptions below. Regulations sections 1.442-1(c) and Newly married individuals changing
The common parent of a 1.1502-76(a)). to the tax year of the other spouse in
consolidated group that files a A foreign sales corporation (FSC) order to file a joint return (Regulations
consolidated return files one Form or an interest charge domestic section 1.442-1(d) must be followed).
1128 for the consolidated group. In international sales corporation An individual who does not have an
addition, the common parent (IC-DISC) changing to the tax year of interest in a pass-through entity
corporation must (a) indicate that the the U.S. shareholder with the highest changing to a calendar year.
Form 1128 is for the common parent percentage of voting power (see Trusts
corporation and all its subsidiaries section 441(h)). Also see Temporary
and (b) answer all relevant questions Regulations section 1.921-1T(b)(4). A trust (other than a tax-exempt
on the application for each member of However, a FSC or IC-DISC must file trust, charitable trust, or a grantor trust
the consolidated group. Form 1128 to change its tax year under Rev. Rul. 90-55, 1990-2 C.B.
concurrently, if a tax year change has 161) that adopts the calendar year as
If a consolidated group filing a been made by the U.S. shareholder. required by section 644.
consolidated return wants to change Certain revocable trusts electing to
its tax year by using Rev. Proc. Partnerships, S Corporations, be treated as part of an estate.
2006-45, 2006-45 I.R.B. 851 at and Personal Service An employee plan or trust filing
www.irs.gov/irb/2006-45_IRB/ Corporations Form 5308, Request for Change in
index.html (or its successor), every A newly formed partnership Plan/Trust Year, to change its plan or
member of the group must meet the adopting a required tax year or a trust year.
revenue procedure requirements. 52-53-week tax year with reference to Estates
If a controlled foreign corporation such required tax year. An estate adopting its first tax year.
(CFC) or 10/50 corporation A partnership, S corporation, or
(noncontrolled section 902 PSC terminating its section 444
corporation) does not have a U.S. election (see Temporary Regulations
trade or business, then the CFC's section 1.444-1T(a)(5)).
controlling domestic shareholder(s) A newly formed partnership, an
must file Form 1128 on behalf of such electing S corporation, or a newly

Oct 27, 2014 Cat. No. 61752V

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When To File                              Applications that are filed more         or the 10/50 corporation. The other 
                                          than 90 days after the due date are      controlling domestic shareholder(s) 
Tax Year Adoption, Change, or             presumed to jeopardize the interests     must attach a copy of the form to its 
Retention                                 of the government, and will be           income tax return for its tax year with 
To request a ruling to adopt,             approved only in unusual and             or within which ends the tax year of 
change, or retain a tax year, file Form   compelling circumstances.                the CFC or 10/50 corporation.
1128 by the due date (not including       Under either circumstance, an 
                                                                                   Note.  If a corporation is required to 
extensions) of the federal income tax     extension request must be filed under 
                                                                                   file Form 1128 with its tax return and 
return for the first effective year. Do   Regulations section 301.9100-3 and 
                                                                                   is a member of an affiliated group of 
not file earlier than the day following   is a ruling request under Rev. Proc. 
                                                                                   corporations filing a consolidated 
the end of the first effective year. In   2014-1, I.R.B. 1 at www.irs.gov/irb/
                                                                                   return, the common parent must file 
the case of a change in tax year, the     2014-1_IRB/ar05.html (updated 
                                                                                   the Form 1128 with the consolidated 
first effective year is the short period  annually), and is subject to public 
                                                                                   return.
required to effect the change.            inspection under section 6110.
To request automatic approval to          See section 7 of Rev. Proc. 2014-1,      Applications prior to an election to 
change a tax year under Rev. Proc.        2014-1 I.R.B. 1 for information on       become an S corporation.              If a 
2006-45 (Form 1128, Part II,              requesting a ruling.                     corporation is requesting to change its 
Section A) or Rev. Proc. 2006-46,                                                  tax year prior to making an election to 
2006-45 I.R.B. 859 at www.irs.gov/irb/    Note.    An extension request under      become an S corporation and the 
2006-45_IRB/index.html (Form 1128,        Rev. Proc. 2014-1 (or its successor)     requested tax year is a permitted tax 
Part II, Section B), file by the due date requires payment of a user fee.          year for S corporations (for example, 
of the return (including extensions) for                                           a calendar tax year), file Form 1128 
the short period required to effect the   Early Applications                       as an attachment to Form 2553. See 
change. A Form 1128 filed by a            Generally, an application to adopt or    Form 1128, Part II, line 2. Do not file 
controlling domestic shareholder (or      change a tax year will not be            Form 1128 with the above address for 
its common parent) on behalf of a         considered if it is submitted before the automatic approval requests. For 
CFC or 10/50 corporation is due no        end of the short period.                 information on where to file Form 
later than the due date (including                                                 2553, see the Instructions for Form 
extensions) of that shareholder's (or     Where To File                            2553.
its common parent's) income tax 
return for its tax year with or within    Part II—Automatic Approval               Part III—Ruling Request
which ends the first effective year of    Request                                  If Part III (ruling request) applies to the 
                                                                                   applicant, file Form 1128 and the 
the CFC or 10/50 corporation.             If Part II (automatic approval request)  appropriate user fee with the IRS 
For an individual filing to change to     applies to the applicant, file Form      National Office. Mail Form 1128 to:
a calendar year under Rev. Proc.          1128 with:
2003-62, 2003-32 I.R.B. 299 at 
                                                                                   Internal Revenue Service
www.irs.gov/irb/2003-32_IRB/              Internal Revenue Service Center          Associate Chief Counsel (Income 
index.html (Form 1128, Part II,           Attention: Entity Control                Tax and Accounting)
Section C), Form 1128 must be filed 
                                                                                   Attention: CC:PA:LPD:DRU
on or before the due date (including      Use the address where the applicant's    P.O. Box 7604
extensions) for filing the federal        income tax return is filed. See the      Ben Franklin Station
income tax return for the short period    instructions for the applicant's income  Washington, DC 20044-7604
required to effect the change.            tax return. The applicant must also 
To change a tax year under Rev.           attach a copy of Form 1128 to the        The IRS will acknowledge receipt 
Proc. 85-58 (Form 1128, Part II,          federal income tax return filed for the  of the application within 45 days. You 
Section D), file by the 15th day of the   short period required to effect the      can inquire about the status of the 
5th calendar month after the end of       change.                                  application by writing to:
the short period.
                                                   Do not file a request for 
Late Applications                                  automatic approval with         Control Clerk, CC:ITA
                                          CAUTION! either address below in Part    Internal Revenue Service
Generally, an application filed after                                              Room 4516
                                          III—Ruling Request. Doing so will 
the appropriate due date stated above                                              1111 Constitution Ave., NW
                                          result in a significant delay in the 
is considered late.                                                                Washington, DC 20224-0002
                                          processing of your request.
However, applications filed within 
90 days after the due date may be         CFCs and 10/50 corporations.         If  The applicant will receive 
considered as timely filed when the       the form is filed on behalf of a CFC or  notification of its approval or denial. If 
applicant establishes that:               10/50 corporation, the controlling       no communication is received from 
                                          domestic shareholder who retains the     the IRS regarding the application 
1. The taxpayer acted reasonably                                                   within 90 days, contact the Control 
                                          jointly executed consent described in 
and in good faith and                                                              Clerk.
                                          Regulations section 1.964-1(c)(3)(ii) 
2. Granting relief will not prejudice     must file Form 1128 with its tax return 
the interests of the government.          for its tax year with or within which 
                                          ends the first effective year of the CFC 

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Exempt organizations requesting a signed by an authorized officer of the
ruling should send Form 1128 and the designated (controlling domestic)
application user fee to: shareholder that retains the jointly
Specific Instructions
executed consent as provided for in
Internal Revenue Service Regulations section 1.964-1(c)(3)(ii).
P.O. Box 12192 A schedule listing the name(s) and Part I–General Information
Covington, KY 41012-0192 identifying number(s) of the controlling All applicants must complete Part I.
domestic shareholder(s) must be Attachments to Form 1128 must show
You can inquire about the status of attached to the application. Also, the the applicant's name, identifying
an application for exempt controlling domestic shareholder(s) number, and the address. Also
organizations by calling must satisfy the requirements of indicate that the statement is an
1-877-829-5500. Regulations section 1.964-1(c)(3). If attachment to Form 1128.
the designated (controlling domestic) Name
Who Must Sign shareholder is a member of a In general, the filer of the form is the
Except as discussed below (regarding consolidated group, then an applicant. If filing a joint return, include
automatic approval requests filed on authorized officer of the common the names of both spouses. If the
behalf of a CFC or 10/50 corporation), parent must sign. Do not sign the applicant is a corporation,
Form 1128 must be signed by the filer copy of Form 1128 filed with the partnership, estate, trust, or
as discussed below. A valid signature income tax return. tax-exempt organization, etc., enter
by the individual or an officer of the Automatic approval request. An the name of the entity or organization.
organization is required on Form automatic ruling request application Filer different from applicant. For
1128. If the form does not have a valid that is filed on behalf of a CFC or members of a consolidated group of
signature, it will not be considered. 10/50 corporation does not have to be corporations and certain foreign
Individuals signed. However, the controlling corporations, Form 1128 may be filed
If filing a joint return, both spouses domestic shareholder completing the on behalf of the applicant. For a
must sign. form must satisfy the requirements of consolidated group of corporations,
Regulations section 1.964-1(c)(3) and enter the name and employer
Partnerships retain the jointly executed consent identification number (EIN) of the
Include the signature, name and title described in Regulations section parent corporation on the first line as
of a general partner on behalf of a 1.964-1(c)(3)(ii). the filer and enter the name(s) and
state law partnership, or a All Other Filers EIN(s) of the member corporations
member-manager on behalf of a applying for a change in accounting
limited liability company. If the filer is a corporation, the
application must include the signature period on the fourth line. For CFCs
Estates of the president, vice president, and 10/50 corporations, enter the
Include the signature, name, and title treasurer, assistant treasurer, or chief name and EIN of the controlling
of the fiduciary or other person legally accounting officer (such as tax officer) domestic shareholder(s) (common
authorized to sign. authorized to sign, and their official parent, if applicable) on the first line
title. Receivers, trustees, or assignees and the name and EIN, if any, of the
Trusts must sign any application they are foreign corporation on the fourth line.
Include the signature, name, and title required to file. For a consolidated If there is more than one filer or
of the fiduciary or other person legally group filing a consolidated return with applicant, attach a statement listing
authorized to sign. its common parent, Form 1128 should each filer's or applicant's name and
be signed by an authorized officer of EIN.
Tax-Exempt Organizations
the common parent corporation. Identifying Number
Include the signature, name, and title
of a principal officer or other person Paid Preparer Individuals enter their social security
authorized to sign. Generally, anyone who is paid to number (SSN). If filing a joint income
prepare Form 1128 must sign it and fill tax return, enter the SSN of both
CFC or 10/50 Corporation spouses. However, if one or both
in the “Paid Preparer Use Only” area.
For a CFC or 10/50 corporation with a The paid preparer must complete the spouses are engaged in a trade or
U.S. trade or business and filing Form required information and sign the business and Form 1128 is filed on
1128 as the applicant, follow the same return in the space provided for the behalf of the business, enter the EIN
rules as other corporations (see All preparer's signature. However, if the instead of the SSNs. All other
Other Filers below). If the form is applicant is requesting automatic applicants enter their EIN.
being filed on behalf of a CFC or approval and a copy of Form 1128 is Except as discussed below
10/50 corporation by its controlling attached to the income tax return, the regarding foreign corporations, if the
domestic shareholder(s), follow the copy of Form 1128 does not have to applicant does not have an EIN or
instructions below for ruling requests be signed. SSN, it must apply for one. An EIN
and automatic approval requests.
may be applied for:
Ruling request. A ruling request Note. Anyone who prepares Form Online—Click on Employer ID
application that is filed on behalf of a 1128 but does not charge a fee Numbers link at www.irs.gov/
CFC or 10/50 corporation must be should not complete the “Paid businesses. The EIN is issued
Preparer's Use Only” section.

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immediately once the application application. For example, an entity www.irs.gov/irb/2007-42_IRB/
information is validated. that is a domestic corporation may index.html,
By mailing or faxing Form SS-4, also be a regulated investment Rev. Proc. 2006-46 (pass-through
Application for Employer Identification company (RIC). That entity would entities),
Number. check both the “Domestic corporation” Rev. Proc. 2003-62 (individuals),
box and the “Other” box, and write,
A limited liability company must Rev. Proc. 76-10, 1976-1 C.B. 548
“RIC under sec. 851” on the dotted
determine which type of federal tax as modified by Rev. Proc. 79-3,
line.
entity it will be (that is, partnership, 1979-1 C.B. 483, and Rev. Proc.
corporation, or disregarded entity) Lines 2a and 2b. If the requested 85-58 (exempt organizations), and
before applying for an EIN (see Form year is a 52-53-week tax year, Rev. Proc. 85-15, 1985-1 C.B. 516
8832, Entity Classification Election, describe the year (for example, last (all filers), to correct the adoption of
for details). Saturday in December or Saturday an improper tax year to a calendar
nearest to December 31). A year by filing an amended return on a
Note. Applicants who are not located 52-53-week tax year must end on the calendar year basis and attaching
within the United States or U.S. date a specified day of the week last Form 1128. If the applicants want to
possessions cannot use the online occurs in a particular month or on the change to a fiscal year, file a Form
application to obtain an EIN. date that day of the week occurs 1128 under the procedures of either
For more information on applying nearest to the last day of a particular Rev. Proc. 2006-45, 2006-46,
for an EIN, see the instructions for calendar month. 2002-39, 2002-1 C.B. 1046 or its
successor.
Form SS-4. A newly formed partnership or PSC
An SSN must be applied for on that wants to adopt a tax year other Note. Applicants requesting an
Form SS-5, Application for a Social than its required tax year must go to automatic approval must complete
Security Card. Form SS-5 can be Part III after completing Part I. Parts I and II only.
obtained at SSA offices or by calling Line 2c. An applicant's first tax year A user fee is not required if
the SSA at 1-800-772-1213. It is also generally starts when business TIP requesting an automatic
available from the SSA website at operations begin. approval under any of the
www.socialsecurity.gov. A corporation's tax year begins at sections of Part II listed below.
If the applicant has not received its the earliest date it first:
EIN or SSN by the time the application Has shareholders, Complete Part II if the applicant can
is due, write “Applied for” in the space Has assets, or use the automatic approval rules
for the identifying number. Begins doing business. under one of the sections listed below
The initial year ends on the day before and the application is filed on time.
Foreign corporations. If the the first day of the new tax year.
applicant is a foreign corporation that Section of Part II of Form 1128 to
If the applicant is changing a tax
is not otherwise required to have or
year, the required short period return Complete
obtain an EIN, enter “Not applicable”
(usually for a period of less than 12
in the space provided for the
months) is for the period that begins Complete
identifying number. If the applicant is:
on the day following the close of the only
Address old tax year and ends on the day A corporation (other than an S Section A
Include the suite, room, or other unit before the first day of the new tax corporation or a PSC)
number after the street address. If the year.
A partnership, S corporation, Section B
Post Office does not deliver mail to For example, in 2014, a PSC, or a trust
the street address and the filer has a corporation, which has a tax year An individual Section C
P.O. box, show the box number ending December 31, requests a new
instead. tax year ending March 31. The A tax-exempt organization Section D
corporation's first effective tax year
If the filer receives its mail in care of
(short year) begins on January 1,
a third party (such as an accountant or
2014, and ends on March 31, 2014. If the applicant does not qualify for
attorney), enter on the street address
automatic approval, a ruling must be
line “C/O” followed by the third party's
name and street address or P.O. box. Part II—Automatic requested. See Part III for more
Approval Request information.
Person To Contact Note. All references to the Revenue If the Service Center denies
The person to contact must be the Procedures listed are to that Revenue approval because Form 1128 was not
person authorized to sign the Form Procedure or its successor. filed on time, the applicant can
1128, or the applicant's authorized Part II is completed by applicants request relief under Regulations
representative. If the person to requesting automatic approval of a section 301.9100-3, discussed earlier
contact is not the filer or the applicant, change in tax year under: under Late Applications. The
attach Form 2848, Power of Attorney Rev. Proc. 2006-45 (corporations) applicant completes Part III, as
and Declaration of Representative. as clarified and modified by Rev. discussed later, and sends Form 1128
Line 1. Check all applicable box(es) Proc. 2007-64, 2007-42 I.R.B. 818 at to the IRS National Office for
to indicate the type of entity filing this consideration.

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Section A—Corporations required to effect the change, and in Line 3. If a corporation's interest in a
(Other than S Corporations or the year following the change. pass-through entity, CFC, FSC, or
Personal Service Corporations) 11. Is a corporation leaving a IC-DISC (related entity) is disregarded
Rev. Proc. 2006-45 provides consolidated group. The corporation under section 4.02(2) or 4.02(3) of
exclusive procedures for a is not allowed to use the automatic Rev. Proc. 2006-45 because the
corporation to obtain automatic approval request procedures during related entity is required to change its
approval to change its annual the consolidated group's tax year in tax year to the corporation's new tax
accounting period under section 442 which the corporation ceased to be a year (or, in the case of a CFC, to a tax
and Regulations section 1.442-1(b). A member of the consolidated group. year beginning one month earlier than
corporation complying with all the See Rev. Proc. 2007-64 for details. the corporation's new tax year), the
applicable provisions of this revenue 12. Has a required tax year (for related entity must change its tax year
procedure will be deemed to have example, a real estate investment concurrently with the corporation's
established a business purpose and trust), unless the corporation is change in tax year, under Rev. Proc.
obtained the approval of the IRS to changing to its required tax year and 2006-45. This related party change is
change its accounting period. See is not described in items (1) through required notwithstanding the testing
Rev. Proc. 2006-45 for more (11), above. date provisions in section 706(b)(4)
information. (A)(ii), section 898(c)(3)(B),
Note. If the corporation is not allowed Temporary Regulations section
Line 1. A corporation is not allowed to use the automatic approval rules 1.921-1T(b)(6), and the special
to use the automatic approval rules because of items (2) or (3), listed provision in section 706(b)(4)(B).
under section 4 of Rev. Proc. 2006-45 above, it can nevertheless
Section B—Partnerships, S
if it: automatically change to a natural
1. Has changed its annual business year that meets the Corporations, Personal Service
accounting period at any time within 25-percent gross receipts test Corporations, and Trusts
the most recent 48-month period described in section 5.04 of Rev. Rev. Proc. 2006-46 provides
ending with the last month of the Proc. 2006-45. exclusive procedures for a
requested tax year. For exceptions, If the answer to the question on partnership, S corporation, PSC, or
see section 4.02(1) of Rev. Proc. Part II, Section A, line 1, is “Yes,” sign trust within its scope to adopt,
2006-45. Form 1128 and see change, or retain its annual
2. Has an interest in a Part II—Automatic Approval Request accounting period under section 442
pass-through entity as of the end of earlier under Where To File. Do not and Regulations section 1.442-1(b).
the short period. For exceptions, see complete Part III. If the corporation is
section 4.02(2) of Rev. Proc. 2006-45. requesting to change to a natural Rev. Proc. 2006-46 generally
3. Is a shareholder of a FSC or business year that satisfies the applies to trusts that are using an
IC-DISC, as of the end of the short 25-percent gross receipts test, also incorrect tax year and want to change
period. For exceptions, see section include its gross receipts for the most to the required calendar tax year.
4.02(3) of Rev. Proc. 2006-45. recent 47 months (or for any However, exceptions apply to trusts
predecessor). exempt from taxation under section
4. Is a FSC or an IC-DISC. 501(a), charitable trusts described in
If the answer to the question on section 4947(a)(1), and grantor trusts
5. Is an S corporation. Part II, Section A, line 1, is “Yes” described in Rev. Rul 90-55.
6. Attempts to make an S because the applicant is a CFC that
corporation election for the tax year wants to make a one-month deferral Line 4. A partnership, S corporation,
immediately following the short election under section 898(c)(2), see PSC, or trust is precluded from using
period, unless the change is to a Rev. Proc. 2007-64 which modifies the automatic approval rules under
permitted S corporation tax year. the terms and conditions for this section 4 of Rev. Proc. 2006-46 if any
7. Is a PSC. election provided in Rev. Proc. of the following apply:
8. Is a CFC. For exceptions, see 2006-45. If a CFC wants to revoke its 1. The entity is under examination,
section 4.02(8) of Rev. Proc. 2006-45. one-month deferral election under unless it obtains consent of the
section 898(c)(2) and change its tax appropriate director as provided in
9. Is a tax-exempt organization, year to the majority U.S. shareholder section 7.03(1) of Rev. Proc. 2006-46.
other than an organization exempt year (as defined in section 898(c)(3)), 2. The entity is before an appeals
from tax under section 521, 526, 527, the CFC's controlling domestic office with respect to any income tax
or 528. shareholders must indicate the issue and its annual accounting
10. Is a cooperative association change in the tax year on the Form period is an issue under consideration
(within the meaning of section 5471, Information Return of U.S. by the appeals office.
1381(a)) with a loss in the short period Persons With Respect To Certain
required to effect the change of Foreign Corporations, filed with 3. The entity is before a Federal
annual accounting period, unless the respect to the CFC's first effective court with respect to any income tax
patrons of the cooperative association year. issue and its annual accounting
period is an issue under consideration
are substantially the same in the year If the answer to the question on by the Federal court.
before the change of annual Part II, Section A, line 1, is “No,” go to
4. On the date the partnership or S
accounting period, in the short period Part III after completing Section A.
corporation would otherwise file its

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application, the partnership's or S the application a separate statement gross receipts test." The applicant
corporation's annual accounting signed by the applicant certifying that, must supply its gross receipts for the
period is an issue under consideration to the best of the applicant's most recent 47 months (or for any
in the examination of a partner's or knowledge, the applicant's annual predecessor) to compute the
shareholder's federal income tax accounting period is not an issue 25-percent gross receipts test.
return or an issue under consideration under consideration by the appeals 1. Prior 3 years gross receipts:
by an area office or by a Federal court office. The applicant must also
a. Gross receipts from sales and
with respect to a partner's or provide a copy of the application to
services for the most recent 12-month
shareholder's federal income tax the appeals officer at the same time it
period that ends with the last month of
return. files the application with the Service
the requested annual accounting
Center. The application must contain
period are totaled and then divided
Note. If any of the above the name and telephone number of
into the amount of gross receipts from
circumstances apply, you may still be the appeals officer.
sales and services for the last 2
eligible under the automatic approval The applicant is before a Federal
months of this 12-month period.
request procedures if you comply with court and the applicant's annual
the procedures explained following accounting period is not an issue b. The same computation as in a,
item 5 below. See section 7.03 of under consideration by the Federal above, is made for the two preceding
Rev. Proc. 2006-46 for more court. The applicant must attach to the 12-month periods ending with the last
information. application a separate statement month of the requested annual
5. The entity has changed its signed by the applicant certifying that, accounting period.
annual accounting period at any time to the best of the applicant's 2. Natural business year:
within the most recent 48-month knowledge, the applicant's annual a. Except as provided in b, below,
period ending with the last month of accounting period is not an issue if each of the three results described
the requested tax year. For this under consideration by the Federal in 1 above equals or exceeds 25
purpose, the following changes are court. The applicant must also provide percent, then the requested annual
not considered prior changes in a copy of the application to the accounting period is deemed to be the
annual accounting period: (a) a government counsel at the same time taxpayer's natural business year.
change to a required tax year or it files the application with the Service
ownership tax year; (b) a change from Center. The application must contain b. The taxpayer must determine
a 52-53 week tax year to a non-52-53 the name and telephone number of whether any annual accounting period
week tax year that ends with the government counsel. other than the requested annual
accounting period also meets the
reference to the same calendar If the answer to the question on 25-percent test described in a, above.
month, and vice versa; or (c) a Part II, Section B, line 4, is “No” If one or more other annual
change in accounting period by an S because the applicant (or a partner or accounting periods produce higher
corporation or PSC, in order to comply shareholder) is under examination averages of the three percentages
with the common tax year and has not obtained the appropriate (rounded to 1/100 of a percent)
requirements of Regulations sections director's consent to the change or described in 1 above than the
1.1502-75(d)(3)(v) and 1.1502-76(a). retention of the applicant's annual requested annual accounting period,
If the answer to the question on accounting period or the applicant is then the requested annual accounting
Part II, Section B, line 4, is “Yes,” and before an appeals office or Federal period will not qualify as the
any of the following situations apply, court and the applicant's annual taxpayer's natural business year.
the applicable additional procedures accounting period is an issue under
described below must be followed. consideration by the appeals office or 3. Special rules:
The applicant is under examination Federal court, do not complete Part III. a. To apply the 25-percent gross
and has obtained the consent of the If the answer to line 4 is “No” solely receipts test for any particular year,
appropriate director to the change or because of a prior change as the taxpayer must compute its gross
retention of the applicant's annual described in item (5) above, go to Part receipts under the method of
accounting used to prepare its federal
accounting period. The applicant must III after completing Section B.
income tax returns for such tax year.
attach to the application a statement If the answer to line 4 is “Yes” (and
from the director consenting to the the answer to line 5, 6, or 7 is also b. If the taxpayer has a
change or retention. The applicant “Yes”), sign Form 1128 and see Part predecessor organization and is
must also provide a copy of the II—Automatic Approval Request continuing the same business as its
application to the director at the same under Where To File, above. Do not predecessor, the taxpayer must use
time it files the application with the complete Part III. If the answer to the gross receipts of its predecessor
Service Center. The application must line 4 is “Yes” (and the answer to for purposes of computing the
contain the name(s) and telephone line 5, 6, or 7 is “No”), go to Part III 25-percent gross receipts test.
number(s) of the examination after completing Section B. c. If the taxpayer (including any
agent(s). predecessor organization) does not
The applicant is before an appeals Line 6. A partnership, S corporation, have a 47-month period of gross
office and the applicant's annual electing S corporation, or PSC receipts (36-month period for the
accounting period is not an issue establishes a "natural business year" requested tax year plus an additional
under consideration by the appeals under Rev. Proc. 2006-46 by 11-month period for comparing the
office. The applicant must attach to satisfying the following "25-percent requested tax year with other potential

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tax years), then it cannot establish a the simplified method of either Rev. Part III—Ruling Request
natural business year under this Proc. 85-58 or Rev. Proc. 76-10. Part III is completed only by applicants
revenue procedure. requesting to adopt, change, or retain
Under Rev. Proc. 85-58, an
d. If the requested tax year is a organization exempt under section a tax year that cannot use the
52-53-week tax year, the calendar 501(a) does not have to file Form automatic procedures listed in Part II.
month ending nearest to the last day 1128 unless the following conditions Also, the applicant must complete
of the 52-53-week tax year is treated described in section 3.03 of Rev. the specific section(s) in Part III that
as the last month of the requested tax Proc. 85-58 apply: applies to that particular applicant.
year for purposes of computing the
25-percent gross receipts test. 1. The organization was required
to file an annual information return or Sections of Part III of Form 1128
Line 7. For an S corporation, an Form 990-T, Exempt Organization to Complete
"ownership tax year" is the tax year Business Income Tax Return, at any
other than a calendar year (if any) time during the last 10 calendar years; If the applicant is: Complete only
that, as of the first day of the first and
A corporation (other than Sections A and
effective year, constitutes the tax year 2. The organization has changed an S corporation, 10/50 B, plus any other
of one or more shareholders its tax year at any time within the last corporation, or CFC) applicable
(including any shareholder that 10 calendar years ending with the section in Part III
concurrently changes to such tax calendar year that includes the An S corporation Sections A and C
year) holding more than 50 percent of beginning of the short period resulting
the corporation's issued and from the change of tax year. A partnership Sections A and D
outstanding shares of stock. For this A CFC or 10/50 Sections A and E
purpose, a shareholder that is An organization described in corporation
tax-exempt under section 501(a) is section 501(c) or (d) is exempt from
disregarded if such shareholder is not tax under section 501(a) unless the
subject to tax on any income exemption is denied under section
Do not file a tax return using
attributable to the S corporation. 502 or 503.
the requested tax year until
Tax-exempt shareholders are not Rev. Proc. 85-58 does not apply to: CAUTION! this application is approved.
disregarded, however, if the S Farmers' cooperatives exempt from
corporation is wholly-owned by such federal income tax under section 521; Rev. Proc. 2002-39 provides the
tax-exempt entities. A shareholder in general procedures for obtaining
Organizations described in sections
an S corporation that wants to approval to adopt, change, or retain a
526, 527, and 528;
concurrently change its tax year must tax year for taxpayers not qualifying
Organizations described in section
follow the instructions generally under the automatic approval rules or
401(a); and
applicable to taxpayers changing their if the application is late.
Organizations requesting a change
tax years contained in Regulations
in a tax year on a group basis.
section 1.442-1(b), Rev. Proc. Section A—General Information
2002-39, or any other applicable A central organization should follow All applicants must complete this
administrative procedure published by Rev. Proc. 76-10 to apply for a group section to request a ruling on an
the IRS. change in tax year for all its adoption of, change to, or retention of
Line 8. Answer “Yes” if the subordinate organizations. a tax year.
partnership is a related entity that Line 1. If the applicant is a
Rev. Proc. 76-10 does not apply to:
must concurrently change its tax year partnership, S corporation, personal
Farmers' cooperatives exempt from
as a term and condition of the service corporation, or trust and any
federal income tax under section 521,
approval of the taxpayer's request to of the following situations apply, the
change its tax year. Certain organizations that have applicable additional procedures
unrelated business taxable income described below must be followed.
Section C—Individuals defined in section 512(a), and The applicant is under examination
Line 9. If the answer to this question Organizations that are private and has obtained the consent of the
is “Yes,” and the restrictions of section foundations defined in section 509(a). appropriate director to the change or
4.02 of Rev. Proc. 2003-62 (or its Line 10. If the answer to this question retention of the applicant's annual
successor) do not apply, sign Form is “Yes,” and the organization is a accounting period. The applicant must
1128 and see Part II—Automatic section 501(a) organization to which attach to the application a statement
Approval Request above under section 3.03 of Rev. Proc. 85-58 from the director consenting to the
Where To File. Do not complete Part applies or a central organization to change or retention of its annual
III. If the answer to this question is which Rev. Proc. 76-10 applies, sign accounting period. The applicant must
“No,” go to Part III. Form 1128 and see Part II—Automatic also provide a copy of the application
Approval Request above under to the director at the same time it files
Section D—Tax-Exempt Where To File. Do not complete Part the application with the IRS National
Organizations III. Office. The application must contain
A tax-exempt organization can If the answer to this question is the name(s) and telephone number(s)
request a change to its tax year under “Yes,” and Rev. Proc. 85-58 and of the examination agent(s).
76-10 do not apply, go to Part III.

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The applicant is before an appeals month of the three immediately III that applies to that particular entity.
office and the applicant's annual preceding tax years. For example, a Passive Foreign
accounting period is not an issue If the applicant is requesting to Investment Company (PFIC)
under consideration by the appeals change to a natural business year that completes Section B and attaches the
office. The applicant must attach to satisfies the 25-percent gross receipts statement required by Section H.
the application a separate statement test described in section 5.03(3) of Complete Sections B and F for a
signed by the appropriate person Rev. Proc. 2002-39, the applicant tax-exempt organization that is a
certifying that, to the best of that must supply its gross receipts for the corporation.
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).
issue under consideration by the from Section B, 10/50 corporations
appeals office. The applicant must Line 14. Applicants filing to request a are also excluded.
also provide a copy of the application letter ruling on a change in tax year
to the appeals officer at the same time under Rev. Proc. 2014-1 (updated Section C—S Corporations
it files the application with the IRS annually) and Rev. Proc. 2002-39 An S corporation must have a
National Office. The application must must pay a user fee. A request for an permitted tax year unless it has
contain the name and telephone exempt organization letter ruling on a elected under section 444 to have a
number of the appeals officer. change in tax year under Rev. Proc. tax year other than the required tax
The applicant is before a Federal 2014-8, 2014-1 I.R.B. 242 at year. A “permitted tax year” is:
court and the applicant's annual www.irs.gov/irb/2014–11_IRB/ 1. A tax year that ends on
accounting period is not an issue ar12.html, also requires payment of a December 31 or
under consideration by the Federal user fee. 2. Any other tax year if the
court. The applicant must attach to the A separate user fee is also required corporation can establish a business
application a separate statement for applicants filing a letter ruling purpose to the satisfaction of the IRS.
signed by the appropriate person request for an extension of time to file
certifying that, to the best of that under Regulations section 301.9100-3 For purposes of 2, above, any
person's knowledge, the entity's (including requests under Rev. Procs. deferral of income to shareholders will
annual accounting period is not an 2006-45, 2006-46, and 2003-62 not be treated as a business purpose.
issue under consideration by the (Form 1128, Part II, Sections A, B, For more information, see Rev. Proc.
Federal court. The applicant must also and C)). 2006-46.
provide a copy of the application to If any shareholder is applying for a
the government counsel at the same Note. The user fees referred to in the corresponding change in tax year,
time it files the application with the above paragraphs are published in that shareholder must file a separate
IRS National Office. The application Rev. Proc. 2014-1 (exempt Form 1128 to get advance approval to
must contain the name and telephone organizations, see Rev. Proc. change its tax year.
number of the government counsel. 2014-8), or an annual update. The
annual updates are published as Section D—Partnerships
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 www.irs.gov/irb. 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
Line 4b. If the applicant requests to attached to Form 1128 at the time the under Who Must File, earlier.
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
5.03(1) and 5.03(2) of Rev. Proc. Section B—Corporations years.
2002-39, it must provide its gross (Other Than S Corporations Line 23. Enter the first date a
receipts from sales or services and and Controlled Foreign business transaction resulted in a tax
approximate inventory costs (where Corporations) consequence, such as receiving
applicable) for each month in the Corporations must complete this income or incurring an expense.
requested short period and for each section and any other section in Part

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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.
However, section 6103 allows or requires the Internal Revenue Service to disclose or give the information shown on
your application to others as described in the Code. For example, we may disclose your tax information to the
Department of Justice to enforce the tax laws, both civil and criminal, and to cities, states, the District of Columbia, U.S.
commonwealths or possessions, and certain foreign governments to carry out their laws. We may also disclose this
information to federal and state agencies to enforce federal nontax criminal laws and to combat terrorism.
Keep this notice with your records. It may help you if we ask you for other information. If you have any questions about
the rules for filing and giving information, call or visit any Internal Revenue Service office.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden
for individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the
estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers
who file this form is shown below.
Preparing
and sending
Learning about the the form to
Recordkeeping law or the form the IRS
Parts I and II 8 hr., 36 min. 5 hr., 51 min. 6 hr., 15 min.
Parts I and III 22 hr., 14 min. 5 hr., 37 min. 7 hr., 26 min.

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 send us comments from www.irs.gov/formspubs/. Or you can send your
comments to Internal Revenue Service, Tax Forms and Publications Division, 1111 Constitution Ave. NW, IR-6526,
Washington, DC 20224. Do not send the tax form to this office. Instead, see Where To File earlier.

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