PLR 200004018: Late accounting period change application treated as timely filed

Plain-English summary

A taxpayer filed Form 1128 to request a change in its tax year after the filing deadline, citing an error or misunderstanding. The form arrived within 90 days of its due date. The IRS found that the taxpayer acted reasonably and in good faith and that relief would not prejudice the government, so it treated the application as timely filed under the § 301.9100-3 regulations. Processing would begin after the taxpayer paid an additional user fee. The IRS did not decide whether the requested accounting period change itself would be allowed.

Ruling snapshot

• Question: Can the late Form 1128 application be treated as timely filed?
• Outcome: Approved: filing deadline relief granted; the accounting period change remained undecided.
• Key authorities: Treas. Reg. §§ 1.442-1(b), 301.9100-3(a).

Full text (IRS public release)

INTERNAL REVENUE SERVICE
Index Nos.: 9100.09-00
Number: 200004018
Release Date: 1/28/2000




                                  PLR-116455-99/CC:DOM:IT&A:B9

Attention:
                                  October 27, 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's Form 1128 requesting a change in accounting
period to a tax year ending         was due on or before
        . The information furnished indicates that the
application for the change in accounting period was filed late
because of an error or misunderstanding. However, the form was
filed within 90 days of the due date.
    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 301.9100-3(a) 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.


    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 for the short period of
    , is considered timely filed.

    Pursuant to Appendix A of Rev. Proc. 99-1, 1999-1 I.R.B. 6,
62, an additional user fee is required in order to process the
Form 1128. The user fee will be requested in a separate
correspondence. We will begin processing the taxpayer’s
application after the user fee is received.

    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.

     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 representative.
    This ruling is directed only to the taxpayer that requested
it. Section 6110(k)(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

Enclosures:
     Copy of this letter
     Copy for § 6110 purposes