IRS Instruction 1128 – Need to change your business or entity’s tax year? The IRS requires Form 1128 (Application to Adopt, Change, or Retain a Tax Year) in most cases. This official guide, based on the current Instructions for Form 1128 (Rev. November 2017) and the latest IRS resources as of February 2026, explains everything step-by-step.
Whether you’re a partnership, S corporation, personal service corporation (PSC), trust, exempt organization, or other entity, filing Form 1128 correctly helps you stay compliant and avoid penalties. Always download the latest form and instructions directly from IRS.gov, as revenue procedures can provide additional automatic approval options.
Download the official documents here:
What Is IRS Form 1128 and When Do You Need It?
Form 1128 lets taxpayers request IRS approval to:
- Adopt a new tax year (e.g., when starting a business)
- Change an existing tax year (e.g., from fiscal to calendar year)
- Retain a current tax year under specific rules
Partnerships, S corporations, personal service corporations, and certain trusts often must file it to adopt or retain a permitted tax year under IRC Section 442 and related regulations.
Key purposes (per IRS instructions):
- Automatic approval requests (Part II)
- Ruling requests when automatic approval doesn’t apply (Part III)
Recent note (2026): No updates to the core Form 1128 instructions since the November 2017 revision. Automatic approval rules still follow Rev. Proc. 2006-45 (corporations), Rev. Proc. 2006-46 (pass-through entities), and others. Exempt organizations reference Rev. Proc. 2020-5 (updated annually) for user fee details.
Who Must File Form 1128?
Generally, any taxpayer wanting to adopt, change, or retain a tax year must file Form 1128. Specific filers include:
- Consolidated groups (common parent files one form for the entire group)
- Controlling domestic shareholders of controlled foreign corporations (CFCs) or 10/50 corporations without U.S. trade or business
- Certain partnerships, S corporations, PSCs, and trusts required to use a specific tax year
The common parent of a consolidated return group must indicate it’s filing for the entire group and answer questions for each member.
When You Do NOT Need to File Form 1128 (Important Exceptions)?
Many situations do not require Form 1128. Do not file if:
Corporations
- Adopting your first tax year
- Changing to file a consolidated return with a new parent
- FSC or IC-DISC aligning with the majority U.S. shareholder’s year (with exceptions)
Partnerships, S Corporations, & PSCs
- Newly formed partnership adopting its required tax year or 52-53-week year
- Terminating a Section 444 election
- Newly formed entities electing a non-required year via Form 8716
- S election via Form 2553 that includes a tax year request
Exempt Organizations (Section 501(a))
- No prior change in the last 10 calendar years (see Rev. Proc. 85-58). Exception does not apply to certain organizations like 401(a) plans or group subordinate changes.
Individuals & Trusts
- Newly married individuals aligning years for joint filing (follow Reg. §1.442-1(d))
- Trusts required to use calendar year under Section 644
- Revocable trusts treated as part of an estate
- Employee plans using Form 5308
Estates
- Adopting the first tax year
Deadlines: When to File Form 1128?
Timing depends on whether you qualify for automatic approval or need a ruling:
| Request Type | Deadline | Notes |
|---|---|---|
| Automatic Approval (Part II) | Due date of short-period return (including extensions) | Rev. Proc. 2006-45/46, 2003-62, etc. |
| Ruling Request (Part III) | Due date (no extensions) of return for first effective year | Do not file before short period ends |
| CFC/10/50 Corporations | Due date (incl. extensions) of controlling shareholder’s return | Special rules apply |
| Late Applications | Within 90 days of due date (with reasonable cause) or later (rare) | Requires §301.9100-3 relief + user fee |
Pro tip: File as early as possible after the short period ends. Early applications are generally not considered.
How to Complete and File Form 1128 (Step-by-Step)?
- Determine Your Part:
- Part I: Basic identification and current/new tax year details.
- Part II: Automatic approval (Sections A–D for different entity types).
- Part III: Detailed ruling request with business purpose explanation.
- Attach Required Documents:
- For automatic approval: Copy with short-period return.
- For rulings: User fee (if applicable) and supporting statements.
- Where to File:
- Automatic Approval (Part II): Mail to the IRS Service Center where you file your income tax return (Attention: Entity Control). Attach copy to your short-period return.
- Ruling Request (Part III): Mail to IRS National Office – Associate Chief Counsel (Income Tax and Accounting), P.O. Box 7604, Ben Franklin Station, Washington, DC 20044-7604.
- Exempt Organizations (rulings): Internal Revenue Service, 1973 N Rulon White Blvd, M/S 6273, Ogden, UT 84201.
CFC special rule: Controlling domestic shareholder files with their return; others attach copies.
Automatic Approval vs. Ruling Requests
Most filers prefer automatic approval under revenue procedures—no user fee required:
- Corporations: Rev. Proc. 2006-45 (as modified)
- Pass-through entities: Rev. Proc. 2006-46
- Individuals: Rev. Proc. 2003-62 (to calendar year)
- Exempt organizations: Rev. Proc. 85-58 (with 10-year rule)
If you don’t qualify, submit a ruling request under Rev. Proc. 2017-1 (or current successor) with a business purpose statement.
User Fees for Form 1128
- Automatic approval (Part II): $0
- Ruling requests (Part III): Required (amounts updated annually in Rev. Proc. 2026-1 or successor; typically $1,500–$10,000+ depending on type and size—check current IRS user fee schedule)
- Exempt organizations: No user fee for accounting period changes (per IRS EO guidance and Rev. Proc. 2020-5 updates)
Payment via check/money order or pay.gov. Extension requests under §301.9100-3 also incur fees.
Special Considerations by Entity Type
- Partnerships & S Corps: Must generally use required tax year (majority partners’ year, etc.) unless approved otherwise.
- Personal Service Corporations: Strict rules under Section 441(i).
- Exempt Organizations: File short-period Form 990/990-EZ with “Change in Accounting Period” noted at top, unless within 10-year rule—then use Form 1128.
- Foreign Entities: Special filing by U.S. shareholders.
Common Mistakes to Avoid
- Filing too early (before short period ends)
- Sending automatic requests to the wrong address
- Forgetting to attach Form 1128 to the short-period return
- Missing user fee for ruling requests
- Not checking current revenue procedures for expanded automatic options
Need Professional Help?
Tax year changes can affect depreciation, credits, and compliance. Consult a tax professional or CPA, especially for ruling requests or complex entities. Power of attorney (Form 2848) may be needed for representatives.
Always verify the latest information on IRS.gov/Form1128, as revenue procedures update annually.
Related IRS Resources:
- Publication 538: Accounting Periods and Methods
- About Form 1128 page
- Tax years overview for small businesses
Filing Form 1128 correctly ensures smooth IRS approval and keeps your entity in full compliance. Bookmark this guide and the official IRS PDFs for quick reference in 2026 and beyond.
This article is for informational purposes only and is not tax or legal advice. Rules are based on official IRS publications current as of February 2026. Consult the IRS or a qualified tax advisor for your specific situation.