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Nonprofit Law/Verify process for small nonprofit to change fiscal year


QUESTION: I helped start a nonprofit in 2006, and in 2009, we were granted 501 (c)(3) status.  We have always used the calendar year as our tax year, but because our budget is essentially determined in May after our fundraising and our annual event, I would like to suggest to the board that we change our tax year to something like July 1 to June 30.  We have never changed our tax year before, and we have always had revenue of under $50,000 per year. We have filed a form 990-N annually since being granted our 501 (c) (3) status.

I have been told that, to change our fiscal year,  we would write a letter to the IRS, including our official name and EIN and stating that we would like to change our tax year to whatever dates we decide.  I understand that the letter would need to be signed by an officer and mailed to this address:

EO Entity, Mail Stop 6273
Ogden, UT  84201

I cannot find this all in one spot in any IRS publication. Is this correct so far, and if so, do you know where I can find it in writing to show it to the board? (I did find something in an IRS manual about "Request to Change Filing Requirement," but I have no idea if that is relevant to changing fiscal year; I also don't know what the reference to 990-01 filing requirement represents.)

I understand that we would not have to file a Form 1128.  Is that correct?  Where is that stated specifically in an IRS publication?

Here's the real puzzler:  I have been told that we would not have to file a short report, but I cannot find anything that says nonprofits filing a 990-N and changing their fiscal year do not need to file a short report.

Would we have to file a short report if we changed our fiscal year?  If not, can you direct me to an IRS publication that clearly states that fact?

I have spent many hours researching this and would appreciate any help you can give me!

ANSWER: is the form 1128 for "Changing a
Tax Year" and is the instructions for that

Starting on the right column of page 6 of those instruction we see
---Start of Excerpt--
Section D-Tax-Exempt
Under Rev. Proc. 85-58, an
organization exempt under section
501(a) does not have to file Form
1128 unless the following conditions
described in section 3.03 of Rev.
Proc. 85-58 apply:

1. The organization was required
to file an annual information return [Form 990 or 990-EZ] or
Form 990-T, Exempt Organization
Business Income Tax Return, at any
time during the last 10 calendar
years, and

2. The organization has changed
its tax year at any time within the last
10 calendar years ending with the
calendar year that includes the
beginning of the short period resulting
from the change of tax year.
---End of Excerpt--

The fee is $1500 if 1128 is filed as mentioned at the top of page
2 of:

From what you wrote, you would not be required, upon changing your fiscal year, to file that form. The Form 990-N is not a report, as the word "report" is used. In any case, it is not possible to file more than one Form 990-N in a calendar year, which you can confirm by going online at the IRS site for that at and try it.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.    

[an error occurred while processing this directive]---------- FOLLOW-UP ----------

QUESTION: My first question was about where in IRS publication it states that a small 501 (c)(3) can write a letter to the Ogden, Utah, address I gave and simply request its fiscal year be changed to a specified date.  I cannot find this information in writing anywhere on the IRS website.  Do you know where I might find it?  

Will we receive a letter from the IRS with a decision, or will they simply change our fiscal year?  

I understand that we do not need to file a Form 1128 since gross receipts are under $50,000. I want to be prepared in case the board asks me about changing fiscal year once we have receipts over $50,000. The website you gave me came up with 2006 costs, so I checked for more recent pricing.  The user fee schedule at shows the cost would be $2750.  However, I went to the instructions for Form 1128 (Rev. December 2011), and on page 4, a Tip in the second column says "A user fee is not required if requesting an automatic approval under any section of Part II listed below. The list that follows says  tax-exempt organizations need to complete Section D." Does his sentence mean that larger nonprofits filing to change their fiscal year do not have to pay a fee to submit Form 1128? Do they get an automatic approval?

Thanks for your help!

In your first question you wrote, "I have been told that, to change our fiscal year,  we would write a letter to the IRS".  I do not know where you can find that.  I am sorry that I did not answer that part of your question earlier.

The Instructions for Form 1128 which I directed to you earlier does have in the right column of  page 4, "A corporation is precluded from using the automatic approval rules under section 4 of Rev. Proc. 2006-45 if it:... 9. Is a tax-exempt organization, other than an organization exempt
from tax under section 521, 526, 527, or 528."

When the IRS writes about filing requirements, like the part you cited in the Manual about change of filing requirements, that has nothing to do with a change of fiscal year.

Earlier I wrote that you are not required to file Form 1128. The applicable regulation, that is 26 C.F.R. § 1.442-1 which is available at
and we see in subsection(b), "In order to secure the approval of the Commissioner to adopt, change, or retain an annual accounting period, a taxpayer must file an application, generally on Form 1128, “Application To Adopt, Change, or Retain a Tax Year,” with the Commissioner within such time and in such manner as is provided in administrative procedures published by the Commissioner."  The word "generally" is not helpful, but an officer of your organization should call the IRS Exempt Organizations unit in Cincinnati at 1-877-829-5500 between 8 am an 5 pm your local time and hit "2" about 10 seconds after they ask, in Spanish, whether you want a
Spanish speaking agent (unless you want to speak to them in Spanish. Then they will give a recording, lasting about 30 concerning organizations that may have lost their exempt status.  Then hit "4" a couple of seconds after that.  Then you wait for an agent and explain the
situation. There is no charge for that. They will either give you a fax number to mail in your request or ask you to mail it in.  I don't know if they will send you a letter with any acknowledgement, but you can ask the agent when you are on the phone.  Make sure you explain that you are not filing Form 1128 nor Form 990.

I don't see how you got the filing fee for the Form 1128 was $2750 as I see on the page you referred me to "Accounting period changes (Form 1128)       $350"
Right below that we see "No user fee is charged if the procedure described in Rev. Proc. 85-58, 1985-2 C.B. 740, is used by timely filing the appropriate information return." That Rev. Proc. 85-58 only states that an exempt organization may change its fiscal year by putting the information in its annual information return "Annual information returns, Forms 990, 990-PF, and 990-BL".

Therefore, you can advise the Board that you can use that procedure if and when your organization files Form 990.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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