The automatic procedures apply to an entity that is changing to its required tax year or a 52-53-week year ending with reference to the required tax year, or a partnership, S corporation, or PSC that wants to change to a natural business year
by meeting a 25% gross-receipts test set forth in Section 5.07 of Rev.
This plan sought to fill the government's "pressing need" for accountants, to refill depleted professional staffs with "qualified women," and to spread existing audit work more evenly throughout the year by the increased use of interim work and by promoting client implementation of a "natural business year
Instead the profession's experts focused on (1) implementation of a natural business year
, (2) early notification of the auditor's appointment, (3) increased explication of accounting standards, (4) a change in the form of the audit report, and (5) education of the public about what the audit signifies [Anon., 1939a, b, c].
2002-38 and 2002-39 provide these procedures for a partnership or S corp to change its year if its current year no longer qualifies as a natural business year
(or, for certain S corps, an ownership tax year).
 An exception allows changing to a natural business year
where less deferral of income to the owners result!
After six unsuccessful applications, I was appointed to the (now defunct) Natural Business Year
The same is true if the LLC uses a natural business year
a fiscal year that conforms to a natural business year
A natural business year
because it meets a 25% mechanical test;
Owners usually try to end a tax year at the conclusion of a natural business year
. Tax results mirror operating results (which promotes management control and efficiency) and the risk of ending a year at a peak in operations is diminished.
When selecting a tax year, corporations should consider their own natural business year
. Many businesses have a cycle, so certain times of the year are less busy than others.
In Arnold, (14) a corporation elected S status and adopted a January 31 year-end, stating that it was the corporation's natural business year
. Later, the IRS determined the S election was not valid, because the company elected an invalid year-end.