two short year 1120

A new client with 1120 has original year ending 01/31. Former accountant filed a short year return for him from 02/01 to 11/30 without any 1128 filed. The reason for this was due to change of ownership on the c corp on 11/30. The year end still remains 01/31. I thought 1120 short year return can be only filed for initial or final business or change of accounting year per www.law.cornell.edu/cfr/text/26/1.443-1. Does change of ownership count too? Thank you.

Is there a consolidated return somewhere in the picture?

Was the change of ownership a sale of stock?

Tax year for a c-Corp shouldn’t close unless it left a consolidated group, or a new tax year was elected. Or the taxpayer hasn’t given all the facts.

No consolidation. Yes, stock sales. How is consolidation changing narrative?

If the acquirer includes the target in a consolidated return, target adopts (changes to) consolidated fiscal year.

ic, i am pretty sure it is not consolidation, I don't why they filed this way. I am getting a POA to call IRS to find out if they have processed this filing without 1128, should get more information soon.

we called IRS cpa hotline, the agent said it is okey to file two shortly due to change of ownership on 1120, fyi.

Did he tell you more than that or was that his edict?

Doesn’t seem right to me, unless there are other facts that were not included above. The person answering the phone at the IRS is likely not an “agent”, and certainly their advice or recommendations are not binding on either the IRS or the taxpayer if they offer incorrect or incomplete advice.

i did not make the call, my staff did. Basically, we laid out the fact as above. The hotline agent said it is okey. I never heard this before. I am still looking at other sources to confirm this.

Don't think you'll find those other sources.