Rev. Rul. 65-260

The Internal Revenue Service has been asked whether the `3-year period' referred to in sections 931(a) and 921(1) of the Internal Revenue Code of 1954, means a period of 3 taxable years or a period of 36 months. The issue may arise in those situations where the `3-year period' may encompass less than 36 months, for example, by reason of a change in accounting period resulting in a short taxable year. In such a situation, if the `3-year period' is held to mean 3 taxable years, the period can encompass a time interval of less than the usual 3-year period of 36 months.

Held , the `3-year period' referred to in sections 931(a) and 921(1) of the Code means a period of 36 months immediately preceding the close of the taxable year.