PLR 200010042: IRS extends deadline for foreign sales corporation election

Plain-English summary

A taxpayer requested more time to file Form 8279 to elect treatment as a foreign sales corporation. A manager at its accounting firm believed the form had been sent to the taxpayer's parent for signature, but the filing had not been completed by the deadline. The IRS concluded that the taxpayer met the regulatory standards for relief and granted 30 days from the ruling letter to file Form 8279 effective for the requested tax year. The letter does not rule on any other tax consequences of the election.

Ruling snapshot

• Question: Could the taxpayer file its foreign sales corporation election after the regulatory deadline?
• Outcome: Approved, with a 30-day filing extension.
• Key authorities: Treas. Reg. §§ 301.9100-1, 301.9100-3, 1.921-1T(b)(1).

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Index Number: 9100.18-00
Washington, DC 20224
927.04-00
Number: 200010042
Person to Contact:
Release Date: 3/10/2000
Telephone Number:

Refer Reply To:
CC:INTL:PLR:112516-99
Date:

In re: December 14, 1999

LEGEND

Taxpayer
=

CPA Firm
=

Individual A =

Date A
=

Date B
=

Dear :

This replies to a letter dated July 14, 1999, in which Taxpayer requests an extension of time under Treas. Reg. § 301.9100-3 to file Form 8279, Election To Be Treated as a FSC or as a Small FSC, pursuant to Temp. Treas. Reg. § 1.921-1T(b)(1), Q&A 1, effective for the tax year beginning on Date A. The information submitted for consideration is substantially as set forth below.

The ruling contained in this letter is predicated 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 a part of the audit process.

Individual A is a senior manager with CPA Firm. One of his duties was to ensure that an election to treat Taxpayer as a FSC was timely filed on or before Date B with the IRS. For various reasons, Individual A believed that Form 8279 had been forwarded to the parent of Taxpayer for signature. It was discovered after Date B that Form 8379 had not been filed. Taxpayer’s failure to timely file Form 8279 has not been discovered by the IRS.

2

In re: PLR:112516-99

Treas. Reg. § 301.9100-1(c) provides that the Commissioner in exercising the Commissioner’s discretion may grant a reasonable extension of time under the rules set forth in § 301.9100-3 to make a regulatory election under all subtitles of the Internal Revenue Code except subtitles E, G, H, and I.

Treas. Reg. § 301-9100-3 provides rules for extensions of time for making regulatory elections when the deadline for making the election is other than a due date prescribed by statute. A regulatory election means an election whose due date is prescribed by a regulation, a revenue ruling, revenue procedure, notice, or announcement. § 301.9100-1(b).

Treas. Reg. § 301.9100-3(a) provides that requests for relief subject to this section will be granted when the taxpayer provides the evidence (including affidavits described in
§ 301.9100-3(e)) to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and the grant of relief will not prejudice the interests of the Government.

In the present situation, §1.921-1T(b)(1), Q&A 1, fixes the time to elect treatment as an FSC or small FSC. Thus, the Commissioner has discretionary authority pursuant to
§ 301.9100-1(c) to grant Taxpayer an extension of time, provided that Taxpayer acted reasonably and in good faith, and the grant of relief will not prejudice the interests of the Government.

Based on the facts and circumstances of this case, we conclude that Taxpayer satisfies § 301.9100-3(a). Accordingly, Taxpayer is granted an extension of time until 30 days from the date of this ruling letter to file Form 8279 effective for the tax year beginning on Date A.

This ruling is directed only to the taxpayer who requested it. I.R.C. § 6110(k)(3) provides that it may not be used or cited as precedent.

No ruling has been requested, and none is expressed, as to the application of any other section of the Code or regulations to the facts presented.

Pursuant to a power of attorney on file in this office, a copy of this letter is being sent to the Taxpayer and the other authorized representative.

Sincerely,
Allen Goldstein, Reviewer
Office of the Associate Chief Counsel (International)