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Notice 2001-35
This notice provides a proposed revenue procedure that, when finalized, will provide the procedures under (section) 442 of the Internal Revenue Code, and the regulations thereunder, for certain partnerships, S corporations, electing S corporations, and personal service corporations (PSCs) to obtain automatic approval of the Commissioner to adopt, change, or retain their annual accounting periods.
This proposed revenue procedure is being issued concurrently with new proposed regulations under (section) 441, 442, 706, and 1378, and a proposed revenue procedure (Notice 2001-34, 2001-23 LR.B. 1302) providing the procedures for any taxpayer outside the scope of the automatic approval revenue procedures to establish a business purpose and request the prior approval of the Commissioner to adopt, change, or retain an annual accounting period. References in this proposed revenue procedure to the regulations under (section) 441, 442, 706, and 1378 are to the new proposed regulations, and references to "Rev. Proc. 2001-XX" are to the proposed prior approval revenue procedure. All three documents are intended to be finalized concurrently.
The proposed revenue procedure modifies, amplifies, and supersedes Rev. Proc. 87-32, 1987-2 C.B. 396. In general, the proposed revenue procedure provides additional circumstances under which the Internal Revenue Service will grant automatic approval for an adoption, change, or retention in annual accounting period based on requests that the Service has granted under its current ruling practice. In addition, the proposed revenue procedure provides audit protection to taxpayers adopting, changing, or retaining an annual accounting period under the revenue procedure. In conjunction with the provision of audit protection, taxpayers under examination that do not obtain consent of the appropriate director are not within the scope of the proposed revenue procedure.
The Service welcomes comments on the proposed revenue procedure provided in this notice. Comments should be submitted by September 11, 2001, either to:
Internal Revenue Service
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Attn: CC:PA:T:CRU (ITA)
Room 5228
or electronically via:
Notice. [email protected]. gov (the Service comments e-mail address).
Rev. Proc. 2001-XX
CONTENTS
SECTION 1. PURPOSE
SECTION 2. BACKGROUND
.01 Taxable Year Defined
(1) In general
(2) Annual accounting period
(3) Required taxable year
.02 Adoption of a Taxable Year
.03 Change in Taxable Year
(1) In general
(2) Annualization of short period return
(3)...