Category: Accounting Periods & Methods
Subject: Change of Taxable Year
Title: Taxpayer with an NOL but Subject to AMT: Effect on Automatic
Permission to Change
IRC Sections: 442
Filename: 1280.html
Date Produced: 10/95 Copyright 1998, The Tax Resource Group. All rights reserved.
Telephone 800-578-3498. Internet: www.taxresourcegroup.com Background
The taxpayer (TP) wishes to change its taxable year. TP has suffered
a net operating loss for regular tax purposes; however, TP has
been subject to AMT for the past few years. The provisions which
allow an automatic permission to change accounting periods (Regulation
1.442-1) exclude taxpayers who have net operating losses from
those eligible for the automatic change privilege. Issue
Does the fact that TP has been subject to AMT change the result? Answer
AMT appears to change nothing; however, the question is moot. Discussion
Rev. Proc. 92-13, 1992-1 C.B. 665 provides a streamlined procedure
whereby certain corporations, even those with a net operating
loss in the short period required by the desired change in accounting
period, can obtain consent to change the taxable year. If TP is
eligible under this procedure, it is necessary to file Form 1128
on or before the due date of the tax return (including extensions)
for the short period required by the change. I assume that is
still possible at this point. TP must be willing to agree that
any net operating loss in the short period will not be carried
back and will be spread over six tax years. Based on our telephone conversation, TP appears to qualify
for the streamlined procedure set forth in Rev. Proc. 92-13; however,
the list of qualifying requirements set forth in Section 4 of
the Rev. Proc. is extensive. I have attached the full text of
the Rev. Proc. I urge you to review the whole document carefully
paying particularly close attention to Section 4. The Rev. Proc.
provides detailed guidance on how, when, and where to file Form
1128 to effect the change in accounting period for TP. | 
