Change in Accounting Period

Change in Accounting Period

A change from one accounting period to another. Income for the short period created by the change must be annualized to calculate the tax for that period.
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As a general rule, a taxpayer must establish a sufficient business purpose for a change in accounting period, typically under a facts-and-circumstances test.
In the past, those seeking such changes--and in some cases those who wanted to adopt or retain an accounting period -- had to file a formal ruling request with the IRS commissioner using either Form 1128, Application for Change in Accounting Period, or Form 3115, Application for Change in Accounting Method.
If a taxpayer is not eligible for automatic approval for a change in accounting period under Rev.
Previously, filing a request for change in accounting period was required (Regs.
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