| Instructions for Form 1128 |
2003 Tax Year |
General Instructions
This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
File Form 1128 to request a change in tax year. Partnerships, S corporations, or personal service corporations (PSCs) may
be required to file the
form to adopt or retain a certain tax year. For more information, see Pub. 538, Accounting Periods and Methods.
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. 2002-37, 2002-1 C.B.
1030, every member of
the group must meet the revenue procedure requirements.
If a controlled foreign corporation (CFC) or a foreign personal holding company (FPHC) does not have a U.S. trade or business,
then the CFC's
controlling U.S. shareholder(s) or the FPHC's U.S. shareholders must file Form 1128 on behalf of such foreign corporation
to change its tax year
(except as provided above with respect to a controlling U.S. shareholder that is a member of a consolidated group). See Regulations
section
1.964-1(c)(5) for the definition of controlling U.S. shareholders of a CFC.
Do not file Form 1128 in the following circumstances.
- A corporation adopting its first tax year.
- 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)).
- 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.
Partnerships, S Corporations, and Personal Service Corporations
- A newly formed partnership adopting a required tax year or a 52-53 week tax year with reference to such required tax year.
- A partnership, S corporation, or PSC terminating its section 444 election (see Temporary Regulations section 1.444-1T(a)(5)).
- 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.
- A corporation electing to be treated as an S corporation and filing Form 2553, Election by a Small Business
Corporation.
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.
- 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.
- Certain revocable trusts electing to be treated as part of an estate.
- An employee plan or trust filing Form 5308, Request for Change in Plan/Trust Year, to change its plan or trust year.
Tax Year Adoption, Change, or Retention
- To request a ruling to adopt, change, or retain a tax year, file 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.
- To request automatic approval to change a tax year under Rev. Proc. 2002-37 (Part II, Section A) or Rev. Proc. 2002-38 (Part
II, Section B),
file by the due date of the return (including extensions) for the first effective year required by the change.
- 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.
- 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
first effective
year ends.
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:
- The taxpayer acted reasonably and in good faith and
- 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. 2003-1, 2003-1 I.R.B. 1 (updated annually), and is subject to public inspection under section 6110.
See section 8 of Rev.
Proc. 2003-1 for information on requesting a ruling.
Note:
An extension request under Rev. Proc. 2003-1 (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 close of the
first effective year.
Part II—Automatic Approval Request
If the applicant completes Part II (automatic approval request), 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. A shareholder filing the form on behalf of an applicant that is a CFC
or FPHC should file the form
with the service center where the shareholder's income tax return is filed.
Applications prior to an election to become an S corporation.
If a corporation is requesting to change its tax year prior to making an election to become an S corporation, it may
be necessary to file Form 1128
with Form 2553 to ensure that the S corporation is permitted the tax year requested on Form 2553. See line 2 of Part II on
Form 1128. Form 1128 must
be filed with Form 2553 instead of the above address for automatic approval requests if:
- The corporation is requesting to change its tax year under the automatic approval request procedures,
- The corporation intends to elect to be an S corporation for the tax year immediately following the short period, and
- The requested tax year is a permitted tax year for S corporations (e.g., a calendar tax year).
Do not file a request for automatic approval with either address below. Doing so will result in a significant delay in the processing
of
your request.
If the applicant completes Part III (ruling request), 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)
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:
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:
Commissioner, Tax Exempt and Government Entities
You can inquire about the status of an application for exempt organizations by calling 202-283-2300.
Except as discussed below (regarding certain foreign corporations), 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.
If this application is for a husband and wife, enter both names on the line “Name of applicant.” Both husband and wife must sign the
application on the line “Applicant or officer's 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 organization and the signature of a principal officer or other person authorized to sign, followed by
his or her title.
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.
An application that is filed on behalf of a CFC must be signed by an authorized officer of each of its controlling U.S. shareholder(s).
An
application that is filed on behalf of a FPHC must be signed by an authorized officer of each of its U.S. shareholder(s).
If any such shareholder is a
member of a consolidated group, then an authorized officer of the common parent must sign. If multiple signatures are required,
the signatures must be
provided on a “SIGNATURE ATTACHMENT” to the form under the “declaration under penalties of perjury” (this is the statement that appears on
Form 1128 immediately above the relevant signature line). Write “see attached” in the signature area of Form 1128.
Preparer Other Than Applicant
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.
Note:
The individual preparing the application must also sign it.
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