Tonto Inc Has Used a Calendar Year as Its Taxable Year

Tonto Inc. has used a calendar year as its taxable year since its incorporation in 1990. Tonto has an excellent business reason for changing to a fiscal year ending May 31. Which of the following statements is true?

A) Because it has a good business reason, Tonto can change to a fiscal year ending May 31 without IRS permission.
B) If Tonto changes to a fiscal year ending May 31, it must file a short-period return for the seven-month period from June 1 to December 31 of the year of change.
C) If Tonto changes to a fiscal year ending May 31, it must file a short-period return for the five-month period from January 1 to May 31 of the year of change.
D) Statements A.and B.are true.