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Expeditious approval of accounting period changes.

C corporations that cannot obtain automatic IRS consent to change their tax year may nevertheless be able to obtain expeditious approval for such a change. Rev. Proc. 92-13 (superseding Rev. Proc. 84-34) shortens the waiting period required between tax year changes to six years from 10 and states that tax year changes made by a corporation to enter a consolidated group are not counted for purposes of the six-year waiting period. Rev. Proc. 92-13 also changes the filing date of the required Form 1128, Application to Adopt, Change, or Retain a Tax Year, to the return's extended due date. The procedure is generally effective for all tax year changes when the resulting short period ends after Jan. 20, 1992.

The procedure also expands the list of taxpayers ineligible to use the expedited procedure. Interest-charge domestic international sales corporations (IC-DISCs)and foreign sales corporations (FSCs), S corporations, personal service corporations, minority shareholders in controlled foreign corporations or foreign personal holding companies, certain passive foreign investment companies (PFICs) and certain shareholders of PFICs cannot use the expedited procedure.


Rev. Proc. 92-13 provides an expeditious means for C corporations failing to satisfy the conditions of Regs. Sec. 1,442-1(e)(2) to obtain automatic IRS consent to a tax year change. Corporations not eligible to use either Rev. Proc. 92-13 or Regs. Sec. 1.442-1(c)(2) must obtain prior IRS approval under the "normal" rules of Regs. Sec. 1.442-1.

Rev. Proc. 92-13 applies to a C corporation that has not changed its tax year within the last six calendar years (or fewer if the corporation has been in existence for less than six years) ending with the calendar year that includes the beginning of the short period required to implement the tax year change. In contrast, Regs. Sec. 1.442-1(c)(2) applies if the corporation has not changed its accounting period within the last 10 calendar years ending with the calendar year that includes the beginning of the short period. Availability to consolidated groups

Each member of a consolidated group must be eligible to use Rev. Proc. 92-13 separately. If, however, a member of the group changed its year-end within the six-year period in order to comply with the common tax year requirement of Regs. Sec. 1.1502-76(a)(1) the group may still satisfy the requirements of Rev. Proc. 92-13. A group member is not permitted to change its accounting period independent of the group until the group has received permission to discontinue filing a consolidated return under Regs. Sec. 1.1502-75(c).

Administrative matters

A current Form 1128 must be timely filed with the taxpayer's service center by the extended due date of the short period return.

This revenue procedure is generally effective for all tax year changes for short periods ending after Jan. 20, 1992; however, a taxpayer may elect to apply Rev. Proc. 92-13 if the short period ended before Jan. 21, 1992 and if Form 1128 is filed by the extended due date of the short period tax return.

From Joseph J. Tapajna, CPA, Chicago, Ill., C. Ellen MacNeil, CPA, and Marc D. Levy, CPA, Washington, D.C.
COPYRIGHT 1992 American Institute of CPA's
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Author:Levy, Marc D.
Publication:The Tax Adviser
Date:Nov 1, 1992
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