IRS Clarifies Procedure for Obtaining Quick Approval of Change of Accounting Period

Rev. Proc. 92-13A

SECTION 1. PURPOSE

This revenue procedure modifies sections 4.01(11), 4.02, and 5.01, and amplifies section 10, of Rev. Proc. 92-13, 1992-3 I.R.B. 28. The modifications and amplifications in this revenue procedure will be incorporated in Rev. Proc. 92-13 when it is published in the Cumulative Bulletin.

SEC. 2. BACKGROUND

01 Rev. Proc. 92-13 permits certain corporations to obtain expeditious approval when seeking to change their annual accounting periods.

02 Under section 4.01(11) of Rev. Proc. 92-13, approval for the change is based on the fact that the corporation is a shareholder in a passive foreign investment company (PFIC).

03 Under section 4.02 of Rev. Proc. 92-13, the requirement that each member of a consolidated group meet all of the requirements of Rev. Proc. 92-13 is discussed. Additionally, that section provides that a member's change to the taxable year of its common parent under section 1.1502-76(a)(1) of the regulations within the last 6 calendar years will not disqualify a consolidated group from meeting the requirements of the Rev. Proc. 92-13.

04 Under section 5.01 of Rev. Proc. 92-13, approval for the change is granted to any eligible corporation or consolidated group, based on specific circumstances beginning with the short period required to effect the change. When a period change involves a consolidated group, one of the requirements is that a corporation (including each member of a consolidated group) must complete and file a current Form 1128 (Application to Adopt, Change or Retain a Tax Year) in the manner described in section 7 of Rev. Proc. 92-13, and otherwise comply with the provisions of that revenue procedure.

SEC. 3. APPLICATION

01 This revenue procedure modifies Rev. Proc. 92-13 to make it clear that a corporation that is not a shareholder in a PFIC may change its accounting period under that revenue procedure. This revenue procedure also clarifies that the expeditious approval procedures in Rev. Proc. 92-13 for a consolidated group are provided under the authority of section 1.442-1(b) of the regulations. In addition, this revenue procedure permits the common parent of a consolidated group to file one Form 1128 for it and all its subsidiaries to obtain expeditious approval of a change of an annual accounting period. Finally, this revenue procedure distinguishes Rev. Rul. 74-326, 1974-2 C.B. 142, from Rev. Proc. 92-13.

02 Section 4.01(11) of Rev. Proc. 92-13 is restated as follows to provide that Rev. Proc. 92-13 applies to a corporation that:

This revenue procedure has the same effective date as Rev. Proc. 92-13.

SEC. 5. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 92-13 is modified and amplified. Rev. Rul. 74-326 is distinguished.

DRAFTING INFORMATION

The principal author of this revenue procedure is Joseph A. Donnelly of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue procedure, contact Ms. Tajuana Nelson Hyde (202) 566-4120 (not a toll-free call).