Discussion Archives:Form 1128 - 90 Day Question

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Advanced Tax Questions --> Form 1128 - 90 Day Question


Discussion Forum Index --> Tax Questions --> Form 1128 - 90 Day Question

Wfm (talk|edits) said:

11 September 2010
I have acquired a C Corporation client that filed a short period return for their most current year tax return. However, they did not file a Form 1128 with the tax return. The company received an IRS notice asking why the short period return was filed because a Form 1128 was not filed. If the company had filed the form with the return they would have met the automatic approval requirements. The company has been in business for more than 20 years and never changed its year end. The new period is only changing its year end by two months.

After reviewing the Form 1128 instructions, I did notice that the company is still within the 90 day safe harbor period offered by the regulations for an entity that meets the automatic approval tests. However I was a little confused by the wording of the Form 1128 instructions.

The instructions seem to say that the taxpayer should submit the Form 1128 within the 90 day window and explain why it should be accepted late. But the instructions also discuss completing Part Three of the form if the form is denied because it is late. So here are my questions based on my confusion:


1. Does the taxpayer complete Form 1128 Part One and Two and submit the Form 1128 to see if it is approved/denied and then resubmit with Part three if it is denied?

2. If Part Three should be included in the initial application then is it required to have a business reason for the change (i.e. meeting all of the Part III tests line 4a, 6 etc.) or is completing the Part III section just for information. In other words, has the taxpayer lost the ease of meeting the automatic approval tests and added the burden of meeting the Part III tests.

3. Should the user fee be summitted under options 1 or 2 or both of them?

I tried calling the practioner hotline but they had no idea on the answer or any phone number of someone to contact. Therefore, any help would be sincerely appreciated.

Wkstaxprep (talk|edits) said:

24 January 2013
What was the result here? I have a similar situation, any help would be greatly appreciated?
Personal tools