PLR 200003050: Late tax year change application treated as timely filed

Plain-English summary

A taxpayer filed its federal income tax return on time but missed the deadline for Form 1128, its application to change its tax year. The IRS found that the taxpayer acted reasonably and in good faith and that an extension would not prejudice the government. It granted relief under Treasury Regulation § 301.9100-3 and directed the service center to treat the Form 1128 as timely filed. The IRS expressly did not decide whether the requested tax year change itself was permitted.

Ruling snapshot

• Question: Could the late Form 1128 be treated as timely filed?
• Outcome: Approved: the filing received an extension, with no ruling on the requested tax year change.
• Key authorities: IRC § 442; Treas. Reg. §§ 1.442-1(b), 301.9100-3; Rev. Proc. 92-13.

Full text (IRS public release)

INTERNAL REVENUE SERVICE                         200003050
Index Nos.: 9100.09-00

[illegible] PLR-111158-99

Attn:                                      October 20, 1999

EIN:
Dear

This is in reference to a Form 1128, Application to Adopt,
Change, or Retain a Tax Year, submitted on behalf of the above-
named taxpayer, requesting permission to change its accounting
period, for federal income tax purposes, from a taxable year
ending          to a taxable year ending          , effective
         . The taxpayer has requested that the Form 1128 be
considered timely filed under the authority contained in §
301.9100-3 of the Procedure and Administration Regulations.

The taxpayer timely filed its federal income tax return.
However, the information furnished indicates that due to an error
or misunderstanding, the Form 1128 was not timely filed.

Section 1.442-1(b) of the Income Tax Regulations provides
that in order to secure the Commissioner's consent to a change in
accounting period, the taxpayer must file an application on Form
1128 with the Commissioner on or before the 15th day of the
second calendar month following the close of the short period.
Section 7.02 of Rev. Proc. 92-13, 1992-1 C.B. 665 states, in
part, that a Form 1128 filed pursuant to this revenue procedure
will be considered timely filed for purposes of § 1.442-1(b)(1)
if and only if, it is filed on or before the time (including
extensions) for filing the return for the short period required
by such change.

Section 301.9100-3(a) of the regulations provides that
requests for extensions of time for regulatory elections that do
not meet the requirements of § 301.9100-2 (automatic extensions),
such as the instant case, must be made under the rules of
§ 301.9100-3. Requests for relief subject to § 301.9100-3 will
be granted when the taxpayer provides evidence to establish that
the taxpayer acted reasonably and in good faith, and that the
granting of relief will not prejudice the interests of the
government.

-2-                                      200003050

Based on the facts and information submitted and the
representations made, it is held that the taxpayer has acted
reasonably and in good faith, and that the granting of relief
will not prejudice the interests of the government. Accordingly,
the requirements of the regulations for the granting of relief
have been satisfied in this case, and taxpayer's late filed Form
1128 requesting permission to change to a tax year ending
effective          , is considered timely filed.

The ruling contained in this letter is based upon facts and
representations submitted by the taxpayer and accompanied by a
penalty of perjury statement executed by an appropriate party.
This office has not verified any of the material submitted in
support of the request for a ruling. Verification of the factual
information, representations, and other data may be required as
part of an examination process.

This ruling addresses the granting of § 301.9100-3 relief
only. No opinion is expressed regarding the tax treatment of the
instant transaction under the provisions of any other sections of
the Code or regulations that may be applicable thereto, or
regarding the tax treatment of any conditions existing at the
time of, or effects resulting from, the instant transaction.
Specifically, no opinion is expressed as to whether the taxpayer
is permitted under the Code and applicable regulations to change
to the tax year requested in the subject Form 1128.

A copy of this letter ruling and taxpayer's Form 1128 are
being forwarded to the service center where the taxpayer files
its federal income tax returns with instructions that the Form
1128 be considered timely filed, and processed in accordance with
established procedures under Rev. Proc. 92-13.

In accordance with the provisions of a power of attorney
currently on file, we are sending a copy of this letter ruling to
the taxpayer's authorized representatives.

This ruling is directed only to the taxpayer that requested
it. Section 6110(j)(3) of the Internal Revenue Code provides
that it may not be used or cited as precedent.

Sincerely yours,

Assistant Chief Counsel
(Income Tax and Accounting)

/s/ Richard L. Carlisle

By
Richard L. Carlisle
Acting Deputy Assistant Chief Counsel