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File Form 1128 to request a change in tax year. Partnerships, S corporations, personal service corporations (PSCs), or trusts may be required to file the form to adopt or retain a certain tax year.
Generally, all taxpayers must file Form 1128 to adopt, change, or retain a tax year. However, see Exceptions below.
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. 2006-45, every member of the group must meet the revenue procedure requirements.
If a controlled foreign corporation (CFC) or 10/50 corporation (noncontrolled section 902 corporation) does not have a U.S. trade or business, then the CFC's controlling domestic shareholder(s) must file Form 1128 on behalf of such foreign corporation to change its tax year (except as provided above with respect to a controlling domestic shareholder that is a member of a consolidated group). See Temporary Regulations section 1.964-1T(c)(5) for the definition of controlling domestic shareholders of a CFC or 10/50 corporation.
If Form 1128 is filed on behalf of a CFC or 10/50 corporation, each controlling domestic shareholder must attach to its tax return a copy of the form and all other domestic shareholders must be provided a written notice of the election. See Temporary Regulations section 1.964-1T(c)(3) for details.
Do not file Form 1128 in the following circumstances.
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A corporation adopting its first tax year.
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A corporation required to change its tax year to file a consolidated return with its new common parent (see Regulations sections 1.442-1(c) and 1.1502-76(a)).
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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)). Also see Temporary Regulations section 1.921-1T(b)(4). However, a FSC or IC-DISC must file Form 1128 to change its tax year concurrently, if a tax year change has been made by the U.S. shareholder.
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A newly formed partnership adopting a required tax year or a 52-53 week tax year with reference to such required tax year.
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A partnership, S corporation, or PSC terminating its section 444 election (see Temporary Regulations section 1.444-1T(a)(5)).
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A newly formed partnership, an electing S corporation, or a newly formed PSC that elects under section 444 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.
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A corporation electing to be treated as an S corporation by filing Form 2553, Election by a Small Business Corporation, and requesting to change or retain its tax year.
Newly married individuals changing to the tax year of the other spouse in order to file a joint return (Regulations section 1.442-1(d) must be followed).
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 section 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.
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A trust (other than a tax-exempt trust, charitable trust, or a grantor trust under Rev. Rul. 90-55, 1990-2 C.B. 161) that adopts the calendar year as required by section 644.
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Certain revocable trusts electing to be treated as part of an estate.
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An employee plan or trust filing Form 5308, Request for Change in Plan/Trust Year, to change its plan or trust year.
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To request a ruling to adopt, change, or retain a tax year, file Form 1128 by the due date (not including extensions) of the federal income tax return for the first effective year. Do not file earlier than the day following the end of the first effective year. In the case of a change in tax year, the first effective year is the short period required to effect the change.
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To request automatic approval to change a tax year under Rev. Proc. 2006-45 (Part II, Section A) or Rev. Proc. 2006-46 (Part II, Section B), file by the due date of the return (including extensions) for the short period required to effect the change. A Form 1128 filed by a controlling domestic shareholder (or its common parent) on behalf of a CFC or 10/50 corporation is due no later than the due date (including extensions) of that shareholder's (or its common parent's) income tax return for its tax year with or within which ends the first effective year of the CFC or 10/50 corporation.
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For an individual filing to change to a calendar year under Rev. Proc. 2003-62, 2003-32 I.R.B. 299 (Part II, Section C), Form 1128 must be filed on or before the due date (including extensions) for filing the federal income tax return for the short period required to effect the change.
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To change a tax year under Rev. Proc. 85-58 (Part II, Section D), file by the 15th day of the 5th calendar month after the end of the short period.
Generally, an application filed after the appropriate due date stated above is considered late.
However, applications filed within 90 days after the due date may be considered as timely filed under Regulations section 301.9100-1 when the applicant establishes that:
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The taxpayer acted reasonably and in good faith and
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Granting relief will not prejudice the interests of the government.
Applications that are filed more than 90 days after the due date are presumed to jeopardize the interests of the Government, and will be approved only in unusual and compelling circumstances.
Under either circumstance, an extension request must be filed under Procedure and Administration Regulations section 301.9100-3 and is a ruling request under Rev. Proc. 2007-7, 2007-1 I.R.B. 1 (updated annually), and is subject to public inspection under section 6110. See section 7 of Rev. Proc. 2007-1 for information on requesting a ruling.
Note.
An extension request under Rev. Proc. 2007-1 (or its successor) requires payment of a user fee.
Generally, an application to adopt or change a tax year will not be considered if it is submitted before the end of the short period.
If Part II (automatic approval request) applies to the applicant, file Form 1128 with the Internal Revenue Service Center, Attention: Entity Control, where the applicant's income tax return is filed. The applicant also must attach a copy of Form 1128 to the federal income tax return filed for the short period required to effect the change.
Note.
If a corporation is required to file Form 1128 with its tax return and is a member of an affiliated group of corporations filing a consolidated return, the common parent must file the Form 1128 with the consolidated return.
If Part III (ruling request) applies to the applicant, file Form 1128 and the appropriate user fee with the IRS National Office. Mail Form 1128 to:
Internal Revenue Service
Associate Chief Counsel (Income Tax and Accounting)
Attention: CC:PA:LPD:DRU
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044-7604
The IRS will acknowledge receipt of the application within 45 days. You can inquire about the status of the application by writing to:
Control Clerk, CC:ITA
Internal Revenue Service
Room 4516
1111 Constitution Ave., NW
Washington, DC 20224-0002
The applicant will receive notification of its approval or denial. If no communication is received from the IRS regarding the application within 90 days, contact the Control Clerk.
Exempt organizations requesting a ruling should send Form 1128 and the application user fee to:
Internal Revenue Service
Attention: EO Letter Rulings
P.O. Box 27720
McPherson Station
Washington, DC 20038
You can inquire about the status of an application for exempt organizations by calling 1-877-829-5500.
Except as discussed below (regarding automatic approval requests filed on behalf of a CFC or 10/50 corporation), Form 1128 must be signed by the filer 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.
If this application is for a husband and wife, enter both names on the line “Name of filer.” Both husband and wife must sign the application on the line “Signature and date.”
Show the partnership name, followed by the signature of a general partner on behalf of a state law partnership, or a member-manager on behalf of a limited liability company.
Show the name of the estate and the signature and title of the fiduciary or other person legally authorized to sign.
Show the name of the trust and the signature and title of the fiduciary or other person legally authorized to sign.
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.
For a CFC or 10/50 corporation with a U.S. trade or business and filing Form 1128 as the applicant, follow the same rules as other corporations (see All Other Filers below). If the form is being filed on behalf of a CFC or 10/50 corporation by its controlling domestic shareholder(s), follow the instructions below for ruling requests and automatic approval requests.
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 consolidated group filing a consolidated return with its common parent, the form should be signed by an authorized officer of the common parent corporation.
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