Question

In: Accounting

Q1.   A business entity generally need IRS approval to change accounting period. What are the provisions...

Q1.   A business entity generally need IRS approval to change accounting period. What are the provisions of getting IRS approval for changing the accounting period? Explain.

PLZ SHORT ANSWER NO HAND WRITING OR PIC

Solutions

Expert Solution

SOLUTION

Introduction

The Internal Revenue Service counts a year as the one it established in the first year of operation.

In order to change the accounting period,

An amended return with a request to change year.

A mere filing an application for extension or apply for a new taxpayer identification number to change your tax year starting and ending dates does not make the changes.

Following process needs to be followed.

1) Fill out form 1128 to request a change in tax year .

2)The IRS requires you ask for a "Ruling Request" on this form as part of its criteria to approve a fiscal year change.

3) Mail your completed form 1128 to the National IRS office at: Internal Revenue Service Associate Chief Counsel, PO Box 7604,Ben Franklin Station, Washington, D.C., 20044-7604. (Ask for a ruling request if you are not eligible for automatic approval. Attach form 1128 to your amended return.)

Auto Automatic Approval.

There are some organizations which need not apply for change in the accounting year.

Provided they satisy the following conditions.

1) . It must not have not changed its accounting period in the previous 48 months.

2) It must have no interest in a pass-through entity, such as an LLC.

3) It must not be a shareholder in a foreign sales corporation or an interest charge domestic international sales corporation.

4) It cannot be a personal service corporation, or be part of a combined federal campaign.

5) The corporation requesting the fiscal year change cannot be part of a consolidated group it is using


Related Solutions

Q1.    A business entity generally need IRS approval to change accounting period. What are the provisions...
Q1.    A business entity generally need IRS approval to change accounting period. What are the provisions of getting IRS approval for changing the accounting period? Explain. Answer: Q2. When determining the Amount of Tax filing status of the tax payer should be determined first to determine tax rates. Required: Determine all Filing status in US income tax and rank tax rates from lowest to highest. Answer: Q3. The following information is available for a married couple filing a joint return,...
Which of the following statements is false? a. The accounting period of a business entity is...
Which of the following statements is false? a. The accounting period of a business entity is usually one year. b. Expenses must be recorded as soon as they are realized or incurred.
Explain each: Change in accounting principle Change in accounting estimate Change in reporting entity Correcting an...
Explain each: Change in accounting principle Change in accounting estimate Change in reporting entity Correcting an accounting error that occurred in a prior period
1. Accounting is subject to the rules of Generally Accepted Accounting Principles (GAAP), which sets provisions...
1. Accounting is subject to the rules of Generally Accepted Accounting Principles (GAAP), which sets provisions for how accounting information is presented. Sometimes, GAAP requires actions that affect reported financial results, think revemue recognition, reserves for doubtful accounts, alternative depreciation methods, accounting for taxes. Do accounting profits provide a good measure of business performance? Why or why not? 2. The goal of financial management is to maximize the wealth of the shareholders. Do you think management should focus more on...
Sometimes a business entity may change its method of accounting for certain items. It may classify...
Sometimes a business entity may change its method of accounting for certain items. It may classify the change as a change in accounting principle, a change in accounting estimate, or a change in reporting entity. The following are three situations faced by Hyde Company relating to accounting changes. Situation I Hyde determined that the depreciable lives of its fixed assets are presently too long to fairly match the cost of the fixed assets with the revenue produced. Hyde decided at...
Judgment Case 20-10. Sometimes a business entity will change its method of accounting for certain items....
Judgment Case 20-10. Sometimes a business entity will change its method of accounting for certain items. The change may be classified as a change in accounting principle, a change in accounting estimate, or a change in reporting entity. Listed below are three independent, unrelated sets of facts relating to accounting changes. Situation I: A company determined that the depreciable lives of its fixe assets are presently too long to fairly match the cost of the fixed assets with the revenue...
The fixed assets of a business are: Generally capital assets throughout their holding period. Generally not...
The fixed assets of a business are: Generally capital assets throughout their holding period. Generally not capital assets. Generally are held for investment. Generally are held for personal use. None of the above.
1. What is an IRS Form 990 for Not-For-Profit Entity?, what is its focus, what are...
1. What is an IRS Form 990 for Not-For-Profit Entity?, what is its focus, what are its major sections and requirements, and what it's intended to do? In details please 2. Who are the Form 990's intended users - who and why is the form intended for? In details please
C 22-10 Researching GAAP AICPA Adapted Sometimes a business entity may change its method of accounting...
C 22-10 Researching GAAP AICPA Adapted Sometimes a business entity may change its method of accounting for certain items. It may classify the change as a change in accounting principle, a change in accounting estimate, or a change in reporting entity. The following are three situations faced by Hyde Company relating to accounting changes. Situation I Hyde determined that the depreciable lives of its fixed assets are presently too long to fairly match the cost of the fixed assets with...
home / study / business / accounting / accounting questions and answers / homework for intra-entity...
home / study / business / accounting / accounting questions and answers / homework for intra-entity transactions. part i paula corporation owns all of the voting common ... Question: Homework for intra-entity transactions. Part I Paula Corporation owns all of the voting common st... Homework for intra-entity transactions. Part I Paula Corporation owns all of the voting common stock of Sally Company. Sally manufactures toys and sells them to Paula. In turn, Paula sells them to customers. Neither of these...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT