Question

Complete the following statements regarding changes in accounting periods. Enter the percent as a whole number.

An application for permission to change tax years must be made on (form 1065/ form1120/ form 1128) . The application must be filed by the (due date/ due date, including extensions/ end of the new fiscal year) for the short period that results from the change in accounting period. The IRS applies an objective (total expenditure/ gross receipts) test to determine whether the entity has a natural business year. At least _______% of the entity's (total expenditure/ gross receipts) for the 12-month period must be realized in the final two months of the 12-month period for ____________ consecutive years.

Answer 1

Answer : An application for permission to change tax years must be made on form 1128 . The application must be filed by the due date including extensions for the short period that results from the change in accounting period. The IRS applies an objective gross receipts test to determine whether the entity has a natural business year. At least 25% of the entity's gross receipts for the 12-month period must be realized in the final two months of the 12-month period for three consecutive years.