Question: CLS, Inc., a service corporation formed on May 1, 2021, hires you to do their accounting and tax work. In a meeting, you discover the company’s Form SS-4, Application for Employer Identification Number (EIN), was approved with a fiscal year-end of April 30, 2022.
Chris, the sole shareholder of CLS, Inc., did not realize the year-end was approved this way. Can this be changed to a calendar year-end?
Answer: Chris need not worry about changing his tax year from a fiscal to calendar year-end. Under Reg. §1.441-1(c)(1), the adoption of a tax year is not made with Form SS-4. The new corporation will adopt its tax year by filing its first federal income tax return. The date used on that return will determine its year-end for all future filings, unless the entity has another required year under the tax code.
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Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.