SECTION 2. BACKGROUND

Rev. Proc. 2002–37 provides the exclusive procedures for certain corporations within its scope to obtain automatic approval to change their annual accounting periods under § 442 of the Internal Revenue Code and § 1.442–1(b) of the Income Tax Regulations.

Rev. Proc. 2002–38 provides the exclusive procedures for certain partnerships, S corporations, electing S corporations, and PSCs to obtain automatic approval to adopt, change, or retain their annual accounting periods under § 442 and § 1.442–1(b).

Rev. Proc. 2002–39 provides the general procedures for taxpayers not within the scope of either Rev. Proc. 2002–37 or Rev. Proc. 2002–38 to establish a business purpose and obtain the prior approval of the Commissioner to adopt, change, or retain an annual accounting period.

Questions have arisen as to the scope and intent of certain provisions of these revenue procedures. Additionally, the Service and Treasury Department have determined that it is in the best interest of sound tax administration that the application of the ownership tax year rule found in section 5.06 of Rev. Proc. 2002–38 be delayed.