Port Corporation wants to change its tax year from a calendar year to a fiscal year ending June 30. Port is a C corporation owned by 100 shareholders, none of whom own more than 5% of the stock. Can Port change its tax year? If so, how can it accomplish the change?

A. Yes, Port may change its annual accounting period. All corporations desiring a change in accounting period must file a Form 1128 for approval from the IRS.

B. Yes, Port may change its annual accounting period. It may do so without prior approval if it meets certain conditions, including, but not limited to, the following: it may not have changed its accounting period within the previous 48 months, it must close its books on the last day of the short-period and subsequently compute its income and keep its books using the new tax year, and it must file full 12-month returns for subsequent years ending on the new year-end. If Port does not meet these requirements, it can request approval for a change in accounting period by filing a Form 1128.

C. No, Port may not change its tax year because it has 100 or more shareholders.

D. Yes, Port may change its annual accounting period by filing a Form 1128, but only if it meets certain conditions, including the following: the change in accounting period does not cause a substantial distortion of income, and the corporation is not an S corporation, personal service corporation, tax-exempt organization, or other specialized corporation.