A “Sample Letter to IRS to Change Fiscal Year for Nonprofits” is a document. It’s a request to the IRS. Nonprofits use it to change their financial year. This change can be important for various reasons.
Sometimes, a nonprofit’s current fiscal year doesn’t fit well. Maybe it’s due to fundraising cycles. Perhaps it’s for aligning with a parent organization. Whatever the reason, a formal request is needed.
We’ve got you covered. This article offers sample letters. These samples will help you. You can adapt them to your specific needs. Simplify your writing process with our templates.
Sample Letter To Irs To Change Fiscal Year Non Profit
[Your Name/Organization Name]
[Your Address]
[City, State, ZIP Code]
[Date]
Internal Revenue Service
[IRS Address – Find the specific address for your region online]
[City, State, ZIP Code]
**Subject: Request to Change Fiscal Year – [Your Organization Name]**
EIN: [Your Organization’s Employer Identification Number]
Dear Sir/Madam,
This letter is to formally request a change in the fiscal year for [Your Organization Name], a non-profit organization recognized under section 501(c)(3) of the Internal Revenue Code.
Our current fiscal year ends on [Current Fiscal Year End Date]. We are requesting to change our fiscal year to end on [Proposed Fiscal Year End Date].
The reason for this change is [Clearly and concisely explain the reason for the change. Examples: to better align with grant cycles, to simplify accounting processes, to better match program activities].
We believe this change will [Explain the positive impact of the change. Examples: improve our financial reporting, streamline our operations, better serve our mission].
We understand that this change requires approval from the Internal Revenue Service. We have reviewed IRS Publication 538, *Accounting Periods and Methods*, and believe we meet the requirements for this change.
We kindly request your approval of this change in fiscal year. If you require any further information, please do not hesitate to contact us at [Your Phone Number] or [Your Email Address].
Thank you for your time and consideration.
Sincerely,
[Your Name]
[Your Title]
[Your Organization Name]
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How to Write Letter To IRS To Change Fiscal Year Non Profit
Subject Line: Clarity is Key
Your subject line should be succinct and unambiguous. Think of it as the IRS’s first impression of your request. A vague subject line might lead to delays or misdirection. Start strong!
- Example: Request to Change Fiscal Year – [Organization Name] – EIN: [Your EIN]
- Include the exact phrase “Request to Change Fiscal Year.”
- Always add your organization’s official name and Employer Identification Number (EIN).
Salutation: Formal Courtesies Matter
While you might be tempted to dive right in, a proper salutation sets a respectful tone. This is the IRS, after all, not your pen pal.
- Acceptable: “To Whom It May Concern:” or “Internal Revenue Service:”
- Avoid using specific names, as the letter might be routed to different departments.
- Maintain a professional demeanor; avoid casual greetings.
Introduction: State Your Purpose with Alacrity
Get straight to the point! The IRS processes countless requests; don’t bury the lede. Clearly state your intention to change your fiscal year.
- Begin by stating the organization’s name, EIN, and current fiscal year end.
- Then, explicitly declare your request to change the fiscal year end date.
- Example: “This letter serves as a formal request from [Organization Name], EIN: [Your EIN], to change our fiscal year end from [Current Date] to [Proposed Date].”
Body Paragraph 1: Justification is Paramount
The IRS wants to know why you’re making this change. Provide a cogent and compelling rationale. Demonstrate due diligence!
- Clearly articulate the reasons for the proposed change.
- Acceptable reasons might include: aligning with a parent organization, streamlining accounting processes, or adapting to seasonal fluctuations in revenue.
- Be specific. Avoid generic statements like “for better management.”
- Example: “The proposed change will align our fiscal year with that of our parent organization, [Parent Organization Name], facilitating consolidated financial reporting and improving operational efficiency.”
Body Paragraph 2: Demonstrating Feasibility and Compliance
Assure the IRS that this change won’t disrupt compliance or create undue complexity. Show that you’ve considered the implications.
- Affirm that the change will not affect your organization’s ability to file accurate and timely returns.
- Confirm that you understand the potential impact on your Form 990 filing requirements.
- State that the organization will adhere to all applicable IRS regulations regarding the change.
- Example: “We affirm that this change will not impede our ability to fulfill all necessary reporting obligations and that we will comply fully with IRS guidelines pertaining to fiscal year modifications.”
Concluding Paragraph: Reiterate and Reassure
Restate your request succinctly and offer contact information for any follow-up inquiries. Leave no room for ambiguity.
- Reiterate your request to change the fiscal year one last time.
- Provide a point of contact with their name, title, phone number, and email address.
- Express your willingness to provide further information or documentation if needed.
- Example: “In conclusion, we formally request the approval to change our fiscal year end as described above. Please direct any inquiries to [Contact Name], [Contact Title], at [Phone Number] or [Email Address]. We are prepared to furnish any additional information as required.”
Closing: Professionalism Persists
End with a formal closing that reflects the seriousness of your request. A simple “Sincerely” will often suffice.
- Acceptable Closings: “Sincerely,” “Respectfully,” or “Very truly yours,”
- Follow the closing with your typed name, title, and the organization’s name.
- Ensure the letter is signed by an authorized officer of the organization.
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Frequently Asked Questions: Changing Your Nonprofit’s Fiscal Year with the IRS
Navigating the process of changing your nonprofit’s fiscal year can be complex. This FAQ section provides answers to common questions regarding submitting a request to the IRS.
1. What form do I use to request a change in accounting period?
You must generally file Form 1128, Application to Adopt, Change, or Retain a Tax Year, with the IRS to request a change in your accounting period (fiscal year).
2. Is there a deadline for filing Form 1128?
Yes, the filing deadline generally depends on the type of entity and the change requested. Refer to the instructions for Form 1128 for specific deadlines applicable to nonprofits.
3. What are the common reasons the IRS approves a fiscal year change for nonprofits?
Common reasons include aligning the fiscal year with a parent organization, aligning with grant cycles, or streamlining accounting processes for better financial management.
4. What information should I include in the explanation section of Form 1128?
Provide a clear and concise explanation of the reasons for the requested change, demonstrating how the change will benefit the organization and improve its financial reporting.
5. Where do I send Form 1128 once completed?
The mailing address for Form 1128 varies depending on the filer type. Consult the instructions for Form 1128 to determine the correct address for sending your application.