SECTION 6. TERMS AND

CONDITIONS OF CHANGE

.01 In General. A change in annual accounting period filed under this revenue procedure must be made pursuant to the terms and conditions provided in this revenue procedure.

.02 Short Period Tax Return. The individual must file a federal income tax return for the short period required to effect a change in annual accounting period by the due date of that return, including extensions pursuant to § 1.443–1(a). The individual’s taxable income for the short period must be annualized and the tax must be computed in accordance with the provisions of §§ 443(b) and (c), and §§ 1.443– 1(b) and (c). .03 Record Keeping. The books of the individual (records reflecting income adequately and clearly on the basis of an annual accounting period) must be closed as of the last day of the first effective year.

.04 Subsequent Year Tax Returns. Returns for subsequent taxable years gener

2002–47 I.R.B. 887 November 25, 2002

.02 Transition Rule. If an individual within the scope of this revenue procedure filed an application with the national office and the application is pending with the national office on [INSERT DATE THIS REVENUE PROCEDURE IS RELEASED TO THE TAX SERVICES], the individual may obtain approval under this revenue procedure. However, the national office will process the application in accordance with the authority under which it was filed, unless by the later of [INSERT DATE THAT IS 45 DAYS FROM THE DATE THIS REVENUE PROCEDURE IS RELEASED TO THE TAX SERVICES] or the issuance of the letter ruling granting or denying approval for the change, the individual notifies the national office that the individual wants to use this revenue procedure. If the individual timely notifies the national office that the individual wants to use this revenue procedure, the national office may require the individual to make appropriate modifications to the application to comply with the applicable provisions of this revenue procedure. In addition, any user fee that was submitted with the application will be refunded to the individual.