Rev. Proc. 66-50

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to provide an administrative procedure whereby individuals filing Federal income tax returns on a fiscal year basis may expeditiously obtain approval of a change in annual accounting period to a calendar year basis. Individuals complying with the provisions hereof will be deemed to have obtained the approval of the Commissioner of Internal Revenue for a change in accounting period.

SEC. 2. BACKGROUND.

Under existing procedure, an individual desiring to change his annual accounting period is required under the provisions of section 1.442-1(b)(1) of the Income Tax Regulations to file an application on Form 1128, Application for Change in Accounting Period, with the Commissioner of Internal Revenue on or before the last day of the month following the close of the short period for which a return is required to effect the change of accounting period.

SEC. 3. APPLICATION.

Subject to the conditions and limitations contained in this section and in section 5 below, an individual (or individuals in the case of a husband and wife filing jointly) whose income is derived solely from one or more of the sources listed in section 4 below, and who desires to change his annual accounting period from a fiscal year basis to a calendar year basis, may do so by filing an application on Form 1128 with the District Director of Internal Revenue for the district in which he files his return. If the application is made on behalf of a husband and wife who file a joint return, the names of both should appear in the block provided therefor on page 1 of the Form and both should sign. Reference to this Revenue Procedure should be made a part of the application. The application shall be filed on or before the last day of January 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 individual(s) from the District Director denying approval because the Form 1128 is not timely filed, it may be assumed that the change has been approved. A copy of the application must be attached to the return filed for the short period.

SEC. 4. INDIVIDUALS COVERED BY THIS PROCEDURE.

This Revenue Procedure applies to individuals whose income is derived solely from one or more of the following sources: Wages, salaries, interest, dividends, capital gains, pensions and annuities, or rents and royalties.

SEC. 5. INDIVIDUALS NOT COVERED BY THIS PROCEDURE.

This Revenue Procedure does not apply to individuals whose income is derived as a result of being (i) a member of a partnership, syndicate, pool, joint venture, etc.; (ii) a beneficiary of a trust or an estate; (iii) a shareholder in an electing small business corporation as defined in section 1371(b) of the Code; or (iv) a sole proprietor operating a trade or business. Such individuals shall file applications on Form 1128 with the Commissioner in accordance with section 1.442-1(b)(1) of the regulations.

SEC. 6. RECORDS.

The books of the individual (records reflecting income adequately and clearly on the basis of an annual accounting period) must be closed as of the last day of the short period establishing the new taxable year. Returns for subsequent taxable years must be made on the basis of a full 12 months ending on the last day of the new taxable year.

SEC. 7. EFFECTIVE DATE.

This Revenue Procedure shall be effective for changes in annual accounting period where the first day of the short period required to effect the change begins on or after February 1, 1966.

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:I:C:1:AM&P, Washington, D.C. 20224.