SECTION 7. GENERAL

APPLICATION PROCEDURES

.01 Approval . Approval is hereby granted to any partnership, S corporation,

electing S corporation, or PSC within the scope of this revenue procedure to adopt, change, or retain its annual accounting period, provided the taxpayer complies with all the applicable provisions of this revenue procedure. Approval is granted beginning with the first effective year. A partnership, S corporation, electing S corporation, or PSC granted approval under this revenue procedure to adopt, change to, or retain an annual accounting period other than its required year is deemed to have established a business purpose for the adoption, change, or retention to the satisfaction of the Commissioner.

(1) Where to file . A taxpayer within the scope of this revenue procedure that wants to adopt, change, or retain its annual accounting period under this revenue procedure must complete and file an application ( i.e., a current Form 1128 or Form 2553, Election by a Small Business Corporation, in the case of an electing S corporation) with the Director, Internal Revenue Service Center, Attention: ENTITY CONTROL, where the taxpayer files its income tax returns. No copies of Form 1128 (or Form 2553) are required to be sent to the National Office. The taxpayer also must attach a copy of the Form 1128 (or Form 2553) to the federal income tax return filed for the first effective year.

(2) When to file . The Form 1128 must be filed no earlier than the day following the end of the first effective year and no later than the due date (including extensions) for filing the federal income tax return for the first effective year. For electing S corporations, the Form 2553 must be filed when the election to be an S corporation is filed pursuant to § 1362(b) and § 1.1362–6. Generally, such election must be filed at any time during (a) the taxable year that immediately precedes the taxable year for which the election is to be effective, or (b) the taxable year for which the election is to be effective, provided the election is made before the 16th day of the third month of the taxable year.

(3) Label . In order to assist in the processing of the adoption, change, or retention in annual accounting period, taxpayers should write at the top of page 1 of the Form 1128 (Form 2553): “FILED UNDER REV. PROC. 2001–[INSERT NUMBER]”.

.02 Filing Requirements .

(4) Signature requirements . In the case of a partnership, the Form 1128 must be signed on behalf of the partnership by a general partner. In the case of an Limited Liability Company (LLC) that elects to be treated as a partnership, the Form 1128 must be signed by a member-manager who has personal knowledge of the facts. In all other cases, the Form 1128 (Form 2553) must be signed by an authorized corporate officer.

(5) No user fee . No user fee is required for applications filed under this revenue procedure and, except as provided in section 9.01 of this revenue procedure, the receipt of an application filed under this revenue procedure may not be acknowledged.

(6) Additional information . In the case of a taxpayer changing to a natural business year that satisfies the 25-percent gross receipts test described in section 5.04 of this revenue procedure, the taxpayer must supply the gross receipts for the most recent 47 months for itself (or any predecessor) in compliance with the instructions to Form 1128 (or Form 2553). .03 Additional Procedures If Under Ex- amination, Before an Area Office, or Be- fore a Federal Court .

(a) A taxpayer under examination may request approval to change or retain its annual accounting period under this revenue procedure only if the appropriate director consents to the change or retention. The director will consent to the change or retention unless, in the opinion of the director, the taxpayer’s annual accounting period would ordinarily be included as an item of adjustment in the year(s) for which the taxpayer is under examination. For example, the director will consent to a change where the taxpayer is using a clearly permissible annual accounting period. The director also will consent to a change from an impermissible annual accounting period where the period became impermissible ( e.g., due to a change in ownership or a change in the taxpayer’s business) subsequent to the years under examination. The question of whether the taxpayer’s annual accounting period from which the taxpayer is changing is permissible or became impermissible subsequent to the years under examination may be referred to the national

(1) Taxpayers under examination .

June 4, 2001 1320 2001–23 I.R.B.

office as a request for technical advice under the provisions of Rev. Proc. 2001–2, 2001–1 I.R.B. 79 (or any successor). (b) A taxpayer changing or retaining an annual accounting period under this revenue procedure with the consent of the appropriate director must attach to the application a statement from the director consenting to the change or retention. The taxpayer must provide a copy of the application to the director at the same time it files the application with the service center. The application must contain the name(s) and telephone number(s) of the examining officer(s).

(2) Taxpayer before an area office . A taxpayer that is before an area office must attach to the application a separate statement signed by the taxpayer certifying that, to the best of the taxpayer’s knowledge, the taxpayer’s annual accounting period is not an issue under consideration by the area office. The taxpayer must provide a copy of the application to the appeals officer at the same time it files the application with the service center. The application must contain the name and telephone number of the appeals officer.

(3) Taxpayer before a federal court . A taxpayer that is before a federal court must attach to the application a separate statement signed by the taxpayer certifying that, to the best of the taxpayer’s knowledge, the taxpayer’s annual accounting period is not an issue under consideration by the federal court. The taxpayer must provide a copy of the application to the government counsel at the same time it files the application with the service center. The application must contain the name and telephone number of the government counsel.