PLR 200032038: Extra time to file a foreign sales corporation election

Plain-English summary

A corporation's employee completed and signed Form 8279 to elect foreign sales corporation treatment but failed to file it. The corporation found the omission about four months after the filing deadline and sought relief before the IRS discovered it. The IRS found that the taxpayer met the standards for a discretionary extension and gave it 30 days from the ruling date to file the form for the specified tax year. The ruling does not decide whether the corporation otherwise qualifies for the election.

Ruling snapshot

• Question: May the corporation file its Form 8279 foreign sales corporation election late?
• Outcome: Approved: a 30 day extension from the date of the ruling letter.
• Key authorities: Temp. Treas. Reg. § 1.921-1T(b)(1), Q&A 1; Treas. Reg. §§ 301.9100-1(c), 301.9100-3(a).

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Index Number: 9100.18-00
Washington, DC 20224
927.04-00
Number: 200032038
Person to Contact:
Release Date: 8/11/2000
Telephone Number:

Refer Reply To:
CC:INTL:PLR-116773-99
Date:
May 18, 2000

LEGEND

Taxpayer
=

Related Corporation =

Date A
=

Date B
=

Dear :

This replies to your letter dated October 13, 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.

A designated employee of Related Corporation was responsible for preparing and filing Form 8279, and was directed to file Form 8279 by Date B. Form 8279 was completed and signed on behalf of Taxpayer and its sole shareholder. About four months after Date B, Taxpayer discovered that the employee failed to file Form 8279 when the employee was no longer employed by the Related Corporation. Taxpayer is requesting relief for an extension of time to file Form 8279 prior to the discovery by the IRS of Taxpayer’s failure to file Form 8279.

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

2

In re: PLR:116773-99

§ 301.9100-3.

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.

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. The granting of an extension of time is not a determination that Taxpayer is otherwise eligible to make the election. § 301.9100-1(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.

Sincerely,

/s/ Allen Goldstein
Reviewer
Office of the Associate Chief Counsel (International)