26 U.S.C. § 444
Except as otherwise provided in this section, a partnership, S corporation, or personal service corporation may elect to have a taxable year other than the required taxable year.
Except as provided in paragraphs (2) and (3), an election may be made under subsection (a) only if the deferral period of the taxable year elected is not longer than 3 months.
Except as provided in paragraph (3), in the case of an entity changing a taxable year, an election may be made under subsection (a) only if the deferral period of the taxable year elected is not longer than the shorter of-
In the case of an entity's 1st taxable year beginning after December 31, 1986, an entity may elect a taxable year under subsection (a) which is the same as the entity's last taxable year beginning in 1986.
For purposes of this subsection, except as provided in regulations, the term "deferral period" means, with respect to any taxable year of the entity, the months between-
If an entity makes an election under subsection (a), then-
An election under subsection (a) shall be made by the partnership, S corporation, or personal service corporation.
Any election under subsection (a) shall remain in effect until the partnership, S corporation, or personal service corporation changes its taxable year or otherwise terminates such election. Any change to a required taxable year may be made without the consent of the Secretary.
If an election is terminated under subparagraph (A) or paragraph (3)(A), the partnership, S corporation, or personal service corporation may not make another election under subsection (a).
Except as otherwise provided in this paragraph-
Subparagraph (A) shall not apply to any tiered structure which consists only of partnerships or S corporations (or both) all of which have the same taxable year.
For purposes of this section, the term "required taxable year" means the taxable year determined under section 706(b), 1378, or 441(i) without taking into account any taxable year which is allowable by reason of business purposes. Solely for purposes of the preceding sentence, sections 706(b), 1378, and 441(i) shall be treated as in effect for taxable years beginning before January 1, 1987.
For purposes of this section, the term "personal service corporation" has the meaning given to such term by section 441(i)(2).
The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations to prevent the avoidance of subsection (b)(2)(B) or (d)(2)(B) through the change in form of an entity.
26 U.S.C. § 444
EDITORIAL NOTES
AMENDMENTS1988-Subsec. (a). Pub. L. 100-647, §2004(e)(1)(A), substituted "as otherwise provided in this section" for "as provided in subsections (b) and (c)".Subsec. (b)(4). Pub. L. 100-647, §2004(e)(13), inserted "except as provided in regulations," before "the term".Subsec. (d)(2)(A). Pub. L. 100-647, §2004(e)(12), inserted "or otherwise terminates such election" after "its taxable year".Subsec. (d)(2)(B). Pub. L. 100-647, §2004(e)(1)(C), inserted "or paragraph (3)(A)" after "under subparagraph (A)".Subsec. (d)(3). Pub. L. 100-647, §2004(e)(1)(B), amended par. (3) generally. Prior to amendment, par. (3) read as follows: "No election may be made under subsection (a) with respect to an entity which is part of a tiered structure other than a tiered structure comprised of 1 or more partnerships or S corporations all of which have the same taxable year."Subsecs. (f), (g). Pub. L. 100-647, §2004(e)(2)(A), added subsec. (f) and redesignated former subsec. (f) as (g).
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100-647 effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987, Pub. L. 100-203, title X, to which such amendment relates, see section 2004(u) of Pub. L. 100-647, set out as a note under section 56 of this title.
EFFECTIVE DATEPub. L. 100-203, title X, §10206(d), Dec. 22, 1987, 101 Stat. 1330-403, as amended by Pub. L. 100-647, title II, §2004(e)(11), Nov. 10, 1988, 102 Stat. 3602, provided that:"(1) IN GENERAL.-Except as provided in this subsection, the amendments made by this section [enacting this section and sections 280H and 7519 of this title] shall apply to taxable years beginning after December 31, 1986."(2) REQUIRED PAYMENTS.-The amendments made by subsection (b) [enacting section 7519 of this title] shall apply to applicable election years beginning after December 31, 1986. "(3) ELECTIONS.-Any election under section 444 of the Internal Revenue Code of 1986 (as added by subsection (a)) for an entity's 1st taxable year beginning after December 31, 1986, shall not be required to be made before the 90th day after the date of the enactment of this Act [Dec. 22, 1987]. "(4) SPECIAL RULE FOR EXISTING ENTITIES ELECTING S CORPORATION STATUS.-If a C corporation (within the meaning of section 1361(a)(2) of the Internal Revenue Code of 1986) with a taxable year other than the calendar year-"(A) made an election after September 18, 1986, and before January 1, 1988, under section 1362 of such Code to be treated as an S corporation, and"(B) elected to have the calendar year as the taxable year of the S corporation,then section 444(b)(2)(B) of such Code shall be applied by taking into account the deferral period of the last taxable year of the C corporation rather than the deferral period of the taxable year being changed. The preceding sentence shall apply only in the case of an election under section 444 of such Code made for a taxable year beginning before 1989."
- Internal Revenue Code of 1986
- The term "Internal Revenue Code of 1986" means this title, and the term "Internal Revenue Code of 1939" means the Internal Revenue Code enacted February 10, 1939, as amended.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.