IRS Form 1128 – Application to Adopt, Change or Retain a Tax Year

IRS Form 1128 – Businesses, partnerships, S corporations, personal service corporations (PSCs), and certain trusts often need IRS approval to adopt, change, or retain a tax year. IRS Form 1128 (Application to Adopt, Change, or Retain a Tax Year) is the official form used for this purpose.

This comprehensive, SEO-optimized guide explains everything based on the latest official IRS resources (Form 1128 Rev. October 2014 and Instructions Rev. November 2017, still current as of February 2026 with no recent developments noted on IRS.gov). It covers who must file, when and how to file, automatic approval vs. ruling requests, and step-by-step instructions. Always download the most current versions directly from IRS.gov, as user fees and minor procedural updates can change annually via revenue procedures.

Download Official IRS Form 1128 PDF: https://www.irs.gov/pub/irs-pdf/f1128.pdf
Instructions PDF: https://www.irs.gov/pub/irs-pdf/i1128.pdf

What Is IRS Form 1128?

Form 1128 is the IRS application taxpayers file to request approval for:

• Adopting a new tax year (e.g., for a new entity).
• Changing an existing tax year (resulting in a short tax period).
• Retaining a tax year that would otherwise need to change.

Purpose (per IRS instructions): Partnerships, S corporations, PSCs, or trusts are often required to use a specific “required tax year” unless they qualify for an exception or obtain approval. The form has three parts:

• Part I: Completed by all applicants (general information).
• Part II: Automatic approval requests (no user fee in most cases).
• Part III: Ruling requests (requires user fee and detailed justification).

The form is 5 pages and must be signed under penalties of perjury.

Who Must File IRS Form 1128?

Generally, any taxpayer needing IRS approval to adopt, change, or retain a tax year files Form 1128. One form covers a consolidated group (filed by the common parent).

Key entities that frequently file:

• Partnerships
• S corporations
• Personal service corporations (PSCs)
• Trusts
• Controlled foreign corporations (CFCs) or 10/50 corporations (filed by controlling domestic shareholders)
• Certain tax-exempt organizations (if they changed years in the last 10 calendar years)

Important Exceptions – Do NOT File Form 1128 If:

• A new corporation adopting its first tax year.
• A corporation changing to file a consolidated return with a new parent.
• Newly formed partnerships/S corps/PSCs adopting their required tax year or 52-53-week year.
• S corp election on Form 2553 that includes a permitted tax year change.
• Newly married individuals changing to spouse’s year for joint filing (follow Reg. §1.442-1(d) instead).
• Estates adopting first tax year.
• Certain trusts required to use calendar year under §644.

Full exceptions are listed in the instructions (pages 2–3).

When to File Form 1128 (Deadlines)?

Timing depends on whether you seek automatic approval or a ruling:

Request Type	Deadline	Notes
Ruling Request (Part III)	Due date (no extensions) of return for the first effective year; not before day after short period ends	First effective year = short period for changes
Automatic Approval (Part II, Rev. Proc. 2006-45/2006-46)	Due date of short-period return including extensions	Attach copy to short-period return
Individuals (to calendar year, Rev. Proc. 2003-62)	Due date (incl. extensions) of short-period return	Part II, Section C
Tax-Exempt Orgs (Rev. Proc. 85-58)	15th day of 5th month after short period ends	Part II, Section D

Late filings: Possible relief within 90 days if reasonable cause shown; otherwise, request extension under Rev. Proc. 2017-1 (or successor) with user fee.

Early filings: Generally not accepted before short period ends.

Automatic Approval (Part II) vs. Ruling Request (Part III)

Part II – Automatic Approval (faster, no user fee):

• Section A: Corporations (other than S corps/PSCs) under Rev. Proc. 2006-45 (or successor).
• Section B: Partnerships, S corps, PSCs, trusts under Rev. Proc. 2006-46 (e.g., required year, natural business year with 25% gross receipts test, ownership year).
• Section C: Individuals changing to calendar year.
• Section D: Tax-exempt organizations.

Must meet specific conditions (e.g., attach 47-month gross receipts for natural business year). Partnerships/PSCs go directly to Part III after Part I if not qualifying for automatic.

Part III – Ruling Request (for non-qualifying cases):

• Requires business purpose justification (e.g., annual business cycle, seasonal, or 25% gross receipts test).
• Detailed financial data, prior changes in last 48 months, deferral calculations, etc.
• User fee required (current amounts in latest Rev. Proc. 2017-1 or annual update – check IRS.gov).

Step-by-Step: How to Complete IRS Form 1128?

1. Part I (All Applicants):
   • Filer/applicant name, EIN/SSN, address, telephone.
   • Type of entity (check all that apply: partnership, S corp, PSC, CFC, etc.).
   • Action requested: Adopt / Change / Retain → Ending date.
   • Short period dates, current accounting method, nature of business.
   • Signature (filer or authorized officer; both spouses for joint returns).
2. Choose Part II or Part III based on eligibility.
3. Part II: Check the revenue procedure and answer yes/no questions for the relevant section. Attach supporting statements (e.g., gross receipts schedule).
4. Part III: Complete Section A (general) + applicable sections. Provide:
   • Prior 48-month change history.
   • Taxable income/loss for 3 prior years + short period.
   • Deferral amount.
   • CFC/PFIC/related entity details if applicable.
   • Power of Attorney (Form 2848) if representative signs.

Attachments often required: Gross receipts statements, explanations, copy of prior rulings, etc.

Where to File Form 1128?

Automatic Approval (Part II):
Internal Revenue Service Center
Attention: Entity Control
(at the address where the applicant’s income tax return is filed)

Attach a copy to the short-period return.

Ruling Request (Part III):
Internal Revenue Service
Associate Chief Counsel (Income Tax and Accounting)
Attention: CC:PA:LPD:DRU
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044-7604

Exempt Organizations: Special Ogden, UT address (see instructions).

S Corp Election Special Rule: File with Form 2553 if changing before S election.

CFCs/10/50 corps: Controlling domestic shareholder files with their return.

User Fees and Costs

• Automatic approval (Part II): Usually $0.
• Ruling requests (Part III): User fee per latest Rev. Proc. (check IRS.gov for current amount; payable by check or pay.gov).
• Late/extension requests: Additional user fee.

Common Scenarios and Tips

• New S Corp: May file Form 1128 with Form 2553 for permitted year.
• Natural Business Year: Use 25% gross receipts test (attach 47-month data).
• Consolidated Groups: One form; every member must qualify.
• Short Period Return: Always required for changes; attach Form 1128 copy.
• Penalties: Filing late or incorrect tax year can trigger examination or penalties.

Pro Tip: Most small businesses qualify for automatic approval under Rev. Proc. 2006-45 or 2006-46. Review the instructions carefully before choosing Part III.

FAQs About IRS Form 1128

Q: Can I change my tax year more than once?
A: Generally limited; prior changes in last 48 months require explanation.

Q: Do individuals need Form 1128 to change to calendar year?
A: Yes, unless newly married (special rule).

Q: Is there e-filing for Form 1128?
A: No – paper filing only (as of 2026).

Q: What if my request is denied?
A: IRS notifies you; you may appeal or file short-period return using original year.

Final Advice

IRS Form 1128 ensures compliance when adopting, changing, or retaining a tax year. For complex situations (CFCs, large deferrals, or ruling requests), consult a CPA or tax attorney. User fees and revenue procedures update annually — always verify at IRS.gov/Form1128.

Official Resources (Trusted & Current):

• About Form 1128: https://www.irs.gov/forms-pubs/about-form-1128
• Tax Years Overview: https://www.irs.gov/businesses/small-businesses-self-employed/tax-years
• Where to File: https://www.irs.gov/filing/where-to-file-your-taxes-for-form-1128

This guide is for informational purposes only and is not tax or legal advice. Tax rules are complex — rely on official IRS publications and professional guidance for your specific situation. Last updated for 2026 using direct IRS sources.