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    Memo for CFO Indicating Outcome of Tax Changes

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    JIM currently uses the calendar year as its financial and tax annual accounting period. Because of the seasonality of sales, management wants to change to a fiscal year beginning April 1st through March 31st. You have been asked to review the tax law criteria for making this change.

    Write a memo to your CFO:
    - indicating the outcome of such a change on current taxes, and
    - outlining the requirements for making this change.

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    https://brainmass.com/business/accounting/memo-for-cfo-indicating-outcome-of-tax-changes-525212

    Solution Preview

    Basically, certain requirements have to be met. We will assume that this company is a C corporation (a closely held corp.) requesting the change. There are two different directions that this can take. If the change to a fiscal year is being requested in the current year and not for the next year, the company has to file an amended tax return after the fiscal year change is approved. This would amend the current year's tax return and change the tax due/payable to the corporation based on the calendar year being changed to a fiscal year in the current year. In this case, the company would file form 1128 to request the change. After it is approved, the ...

    Solution Summary

    This solution discusses a memo to the CEO explaining the outcome of the changes on current taxes and the requirements for making the change indicated. Includes 3 references.

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