Expeditious approval of accounting period changes.

• Author: Tapajna, Joseph J.

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.

Eligibility

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...