Change of Fiscal Year

[Edsel]

A C corp has a fiscal year end of April 30th.

There were dramatic things that happened in May.  Is there a way to change the fiscal year?

I'm thinking of filing a "short year" for the  period May 1 - May 31 in 2019, paying the penalty, and then reporting for Jun 1 19 to May 31 20.  Can this be done?

[DANRVAN]

Off the top of my head I will say that you need to prove there is a business purpose for change, other than to save a bunch of taxes.

Also the short year has to be annualized.

Have you tried researching this procedure?  There are special forms to file and possible user fee.

[Max W]

Changing the fiscal year requires filing form 1128.  You might want to check into that and see what they ask for.  If you are on a fiscal year, the only time you could change to a short year is if you are going to a calendar year.   There is also a 48 month look back period for making a second change.

[Edsel]

16 hours ago, Max W said:

If you are on a fiscal year, the only time you could change to a short year is if you are going to a calendar year.

Hi Max - is the requirement above true for a C Corp?  No annualization of rates since they are all the same.  This is not a second change, and there is not 48 months worth of history.

Thanks for responding, Edsel

[Edsel]

18 hours ago, DANRVAN said:

Have you tried researching this procedure?  There are special forms to file and possible user fee.

Yes I always do some research before asking questions before wasting other people's time.  Problem is, the research ends up with perplexing and language difficult to understand.  For example, on this topic I have researched the instructions for Form 1172.

 

[DANRVAN]

2 hours ago, Edsel said:

I have researched the instructions for Form 1172.

 

As Max pointed out the form is 1128.  In your case you will complete the section asking for a ruling request.   You must also attache a statement explaining the legal basis for the change in fiscal year.  The form also refers to the user fee.

Your research should have taken you to RP 2009-39 which emphasizes the need for a business purpose; and the reality that permission  is granted  "only in rare and unusual circumstances."  

[DANRVAN]

37 minutes ago, DANRVAN said:

RP 2009-39

That should have read 2002-39.

[Edsel]

Dan, thanks for the correction, and your usual assistance.  Edsel