Instructions For Form 1128 (Rev. January 2006)
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8Department of the Treasury
Instructions for Form 1128
Internal Revenue Service
(Rev. January 2006)
Application To Adopt, Change, or Retain a Tax Year
Section references are to the Internal Revenue Code unless otherwise noted.
1128 unless the organization has
What’s New
Exceptions
changed its tax year at any time
Do not file Form 1128 in the following
within a 10-calendar-year period, and
Foreign personal holding companies
circumstances.
the organization has had an annual
(FPHCs) will no longer file Form 1128
filing requirement during that 10-year
after 2005 because the FPHC rules
Corporations
period (see Rev. Proc. 85-58, 1985-2
were repealed by the American Jobs
•
A corporation adopting its first tax
C.B. 740). This exception does not
Creation Act of 2004.
year.
apply to organizations exempt from
•
A corporation required to change
tax under section 521, 526, 527, or
General Instructions
its tax year to file a consolidated
528; organizations described in
return with its new common parent
section 401(a); and organizations
Purpose of Form
(see Regulations sections 1.442-1(c)
involved in a group change in tax
and 1.1502-76(a)).
year for all its subordinate
File Form 1128 to request a change
•
A foreign sales corporation (FSC)
organizations.
in tax year. Partnerships, S
or an interest charge domestic
corporations, or personal service
international sales corporation
Trusts
corporations (PSCs) may be required
(IC-DISC) changing to the tax year of
•
A trust (other than a tax-exempt
to file the form to adopt or retain a
the U.S. shareholder with the highest
certain tax year. For more
trust or a grantor trust under Rev.
percentage of voting power (see
information, see Pub. 538,
Rul. 90-55, 1990-2 C.B. 161) that
section 441(h)). Also see Temporary
adopts the calendar year as required
Accounting Periods and Methods.
Regulations section 1.921-1T(b)(4).
by section 644.
However, a FSC or IC-DISC must file
•
Who Must File
Certain revocable trusts electing to
Form 1128 to change its tax year
be treated as part of an estate.
Generally, all taxpayers must file
concurrently, if a tax year change has
•
An employee plan or trust filing
Form 1128 to adopt, change, or retain
been made by the U.S. shareholder.
Form 5308, Request for Change in
a tax year. However, see Exceptions
Plan/Trust Year, to change its plan or
Partnerships, S
below.
trust year.
Corporations, and Personal
The common parent of a
Service Corporations
consolidated group that files a
When To File
•
consolidated return files one Form
A newly formed partnership
1128 for the consolidated group. In
adopting a required tax year or a
Tax Year Adoption, Change,
addition, the common parent
52-53 week tax year with reference to
or Retention
corporation must (a) indicate that the
such required tax year.
•
•
Form 1128 is for the common parent
A partnership, S corporation, or
To request a ruling to adopt,
corporation and all its subsidiaries
change, or retain a tax year, file Form
PSC terminating its section 444
and (b) answer all relevant questions
election (see Temporary Regulations
1128 by the due date (not including
on the application for each member of
extensions) of the federal income tax
section 1.444-1T(a)(5)).
•
the consolidated group.
return for the first effective year. Do
A newly formed partnership, an
electing S corporation, or a newly
not file earlier than the day following
If a consolidated group filing a
the end of the first effective year. In
formed PSC that elects under section
consolidated return wants to change
the case of a change in tax year, the
444 a tax year other than the required
its tax year by using Rev. Proc.
tax year by filing Form 8716, Election
first effective year is the short period
2002-37, 2002-1 C.B. 1030, every
required to effect the change.
To Have a Tax Year Other Than a
member of the group must meet the
•
To request automatic approval to
Required Tax Year.
revenue procedure requirements.
•
A corporation electing to be treated
change a tax year under Rev. Proc.
If a controlled foreign corporation
2002-37 (Part II, Section A) or Rev.
as an S corporation and filing Form
Proc. 2002-38 (Part II, Section B), file
(CFC) does not have a U.S. trade or
2553, Election by a Small Business
business, then the CFC’s controlling
Corporation.
by the due date of the return
U.S. shareholder(s) must file Form
(including extensions) for the short
Individuals
period required to effect the change.
1128 on behalf of such foreign
•
corporation to change its tax year
Newly married individuals changing to
For an individual filing to change to
(except as provided above with
a calendar year under Rev. Proc.
the tax year of the other spouse in
respect to a controlling U.S.
order to file a joint return (Regulations
2003-62, 2003-32 I.R.B. 299 (Part II,
shareholder that is a member of a
section 1.442-1(d) must be followed).
Section C), Form 1128 must be filed
consolidated group). See Regulations
on or before the due date (including
Exempt Organizations
section 1.964-1(c)(5) for the definition
extensions) for filing the federal
of controlling U.S. shareholders of a
An organization exempt under
income tax return for the short period
CFC.
section 501(a) does not file Form
required to effect the change.
Cat. No. 61752V
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