PLR 200027024: Partnership's late Form 1128 treated as timely

Plain-English summary

A partnership filed Form 1128 late to request a tax year for which prior IRS approval was required. The form was filed within 90 days of its due date, and the partnership attributed the delay to an error or misunderstanding. The IRS found reasonable, good-faith conduct and treated the form as timely filed under the regulatory extension rules. It said processing of the application would begin after an additional user fee was received. The ruling did not decide whether the requested tax year itself would be approved. The letter does not show an issue date.

Ruling snapshot

• Question: Can the partnership's late Form 1128 be treated as timely filed?
• Outcome: Approved as to filing timeliness only; approval of the requested tax year remains open.
• Key authorities: Treas. Reg. §§ 1.706-1(b)(4)(ii) and 301.9100-3

Full text (IRS public release)

INTERNAL REVENUE SERVICE

Number: 200027024
Release Date: 7/7/2000
Index Nos.: 9100.09-00

CC:DOM:IT&A:B9/PLR-105056-00
In re:

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 partnership, requesting permission to adopt an tax year, effective, . The partnership 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 partnership’s Form 1128 to adopt an
accounting period was due
on or before
. The information furnished indicates that the
application was filed late because of an error or misunderstanding. However, the form was filed within 90 days of the due date.

Section 1.706-1(b)(4)(ii) of the Income Tax Regulations provides where a newly formed partnership is required to secure prior approval from the Commissioner for the adoption of a taxable year, the partnership shall file an application on Form 1128 with the Commissioner on or before the last day of the month following the close of the taxable year to be adopted.

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 partnership 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 partnership's late filed Form 1128 requesting permission to adopt an

-2-

tax year, effective
, is considered timely filed.

Pursuant to Appendix A of Rev. Proc. 2000-1, 2000-1 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 partnership’s application after the user fee is received.

The ruling contained in this letter is based upon facts and representations submitted by the partnership 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 partnership is permitted under the Code and applicable regulations to adopt 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 the original of this ruling letter to the partnership’s authorized representative, and a copy to the partnership.

This ruling is directed only to the partnership 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
By William A. Jackson
Acting Deputy Assistant Chief Counsel

Enclosures:
Copy of this letter
Copy for § 6110 purposes