PLR 200019039: Late agreement and certifications allowed for consolidated group losses

Plain-English summary

A consolidated group's return included losses generated by a member, but its adviser inadvertently missed the election and filings required by Treas. Reg. § 1.1503-2(g). The parent asked for more time to file the agreement and certifications. The IRS found that the parent met the standards for discretionary relief under the § 301.9100 regulations. It granted 30 days from the ruling date to file the documents for the tax year at issue. The IRS did not rule on other tax consequences.

Ruling snapshot

• Question: May the group file the agreement and certifications required by § 1.1503-2(g)(2) after the deadline?
• Outcome: Approved: 30 additional days to file.
• Key authorities: Treas. Reg. §§ 1.1503-2(g)(2), 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Index Number: 9100.22-00 Washington, DC 20224
1503.04-04
Number: 200019039
Person to Contact:
Release Date: 5/12/2000
Telephone Number:

Refer Reply To:
CC:INTL:PLR-112688-99
Date:
February 17, 2000

LEGEND
Taxpayer
=

Entity
=

Date A
=

Individual A
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CPA Firm
=

Dear:

This replies to a letter dated July 21, 1999, in which Taxpayer requests an extension of time under Treas. Reg. § 301.9100-3 to file the agreement and certifications required under § 1.1503-2(g)(2) for the tax year ended 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.

Taxpayer is the common parent of a U.S. affiliated group that filed a consolidated federal income tax return for the tax year ended on Date A. Entity is a member of the consolidated group and generated losses during the tax year ended on Date A, which were included in the consolidated federal income tax return of Taxpayer.

Individual A is a partner with CPA Firm and is the engagement partner for the preparation of Taxpayer’s consolidated federal income tax return. For various reasons, Individual A inadvertently failed to elect and failed to advise Taxpayer to elect relief in accordance with § 1.1503-2(g). The IRS has not discovered Taxpayer’s failure to timely file the required agreement and certifications.

2

PLR: 112688-99

Treas. Reg. § 301.9100-1(c) provides that the Commissioner has discretion to grant a reasonable extension of time under the standards 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 -1(b) defines a regulatory election as an election whose due date is prescribed by a regulation, a revenue ruling, revenue procedure, notice, or announcement.

Treas. Reg. § 301-9100-3 provides standards for extensions of time for making regulatory elections when the deadline for making the election is other than a due date prescribed by statute.

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, § 1.1503-2(g)(2) fixes the time to file the agreement and certifications. Therefore, the Commissioner has discretionary authority under
§ 301.9100–1(c) to grant Taxpayer an extension of time, provided that Taxpayer satisfies the standards set forth in § 301.9100-3(a).

Based on the facts and circumstances of this case, we conclude that Taxpayer satisfies the standards of § 301.9100-3. Accordingly, Taxpayer is granted an extension of time until 30 days from the date of this ruling letter to file the agreement and certifications required under §1.1503-2(g)(2) for the tax year ended on Date A.

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.

A copy of this ruling letter should be associated with the agreement and certifications.

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.

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

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