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.