26 USC 1378 - Taxable year of S corporation

(a) General rule
For purposes of this subtitle, the taxable year of an S corporation shall be a permitted year.

(b) Permitted year defined
For purposes of this section, the term permitted year means a taxable year which

(1) is a year ending December 31, or

(2) is any other accounting period for which the corporation establishes a business purpose to the satisfaction of the Secretary.

For purposes of paragraph (2), any deferral of income to shareholders shall not be treated as a business purpose.

26 U.S.C. § 1378 - Taxable year of S corporation