Rev. Proc. 76-9

Section 1. Purpose.

.01 The purpose of this Revenue Procedure is to update Rev. Proc. 66-13, 1966-1 C.B. 626, which provides an administrative procedure whereby certain organizations wholly exempt from Federal income tax may expeditiously obtain approval of a change in annual accounting period. Such organizations complying with this Revenue Procedure will be deemed to have obtained the approval of the Commissioner of Internal Revenue for a change in accounting period.

.02 This Revenue Procedure applies to those organizations that would otherwise be required to obtain the consent of the Commissioner to change their accounting periods. It does not apply to organizations that come within the exception contained in section 1.442-1(c) of the Income Tax Regulations for which the prior approval of the Commissioner is not required.

Sec. 2. Background.

Rev. Proc. 66-13 provides that an organization, which is wholly exempt from Federal income tax and wishes to change its accounting period, may file Form 1128, Application for Change in Accounting Period, with the District Director of Internal Revenue for the district in which the organization files its return and, unless a letter is received by the organization denying approval because Form 1128 was not timely filed, it may be assumed the change has been approved.

Sec. 3. Application.

.01 Subject to conditions contained in this section and in section 5 below, any organization wholly exempt from Federal income tax desiring to change its annual accounting period may change its annual accounting period by filing an application on Form 1128 with the District Director for the Key District in which the organizations principal office or place of business is located. However, the organization's exempt status must be the same for the short period for which a return is required to effect a change in accounting period and for the taxable year immediately preceding such short period. The application should refer to this Revenue Procedure.

.02 The application must be filed on or before the 15th day of the second calendar month following the close of the short period for which a return is required to effect the change of accounting period. Unless a letter is received by the organization from the Key District Director denying approval because the Form 1128 is not timely filed, it may be assumed that the change has been approved. The organization must attach a copy of the application to the return filed for the short period.

.03 The procedures described in .01 and .02, above, are also applicable to any exempt organization described in section 511(a) of the Internal Revenue Code of 1954 having unrelated business taxable income, as defined in section 512(a), provided the following conditions are met:

1 the short period required to effect the change of annual accounting period is not a taxable year in which the organization has a net operating loss as defined in section 172;

2 the taxable income of the organization for the short period required to effect the change of annual accounting period is, if placed on an annual basis, 80 percent or more of the taxable income of the organization for the taxable year immediately preceding such short period; and,

3 such organization retains its status as an exempt organization for the short period required to effect the change as well as for the taxable year immediately preceding the short period.

.04 An organization that does not meet all the applicable conditions of this Revenue Procedure will not be deemed to have obtained the prior approval of the Commissioner for the change in accounting period.

.05 If, upon examination of the return, it is found that the organization, because of subsequent adjustments in establishing tax liability, did not in fact meet all of the conditions stated in section 3.03, above, the timely application filed under section 3.01, above, shall be considered as a timely application for permission to change the organization's annual accounting period to the taxable year indicated in the application and should be referred to the Commissioner of Internal Revenue, Washington, D.C. 20224, Att: T:C:C:1:AM&P.

Sec. 4. Exempt Organizations Not Covered By This Procedure.

This Revenue Procedure does not apply to farmers' cooperatives exempt from Federal income tax under section 521 of the Code, organizations having unrelated business taxable income as defined in section 512(a) that do not meet the conditions stated in section 3.03, above, and organizations that are private foundations as defined in section 509(a). Such organizations must file applications on Form 1128 with the Commissioner of Internal Revenue, Washington, D.C. 20224, in accordance with the provisions of section 1.442-1(b)(1) of the regulations.

Sec. 5. Records.

The books of the organization must be closed as of the last day of the new taxable year. Returns for subsequent years must be made on the basis of a full 12 months ending on the last day of the new taxable year.

Sec. 6. Effect On Other Documents.

Rev. Proc. 66-13 is superseded. In any Revenue Procedure or Revenue Ruling in which Rev. Proc. 66-13 is referred to, the reference to this Revenue Procedure should be appropriately substituted therefor. For the administrative procedures to be followed in requesting a change in accounting period of certain exempt organizations on a group basis, see Rev. Proc. 76-10.

Sec. 7. Effective Date.

This Revenue Procedure shall be effective for a change in accounting period where the last day of the short period required to effect the change ends on or after April 30, 1976.

Sec. 8. Inquiries.

Inquiries in regard to this Revenue Procedure should refer to its number and be addressed to the Commissioner of Internal Revenue, Attention: T:C:C:1:AM&P, Washington, D.C. 20224.