PLR 200040021: Taxpayer receives extension to file foreign sales corporation election

Plain-English summary

A company missed the deadline to file Form 8279 to elect foreign sales corporation treatment. A director learned of the filing requirement after the deadline, and the company requested relief before the IRS discovered the failure. The IRS found that the company satisfied the standards for a late regulatory election under Treasury Regulation section 301.9100-3. It granted 30 days from the ruling date to file Form 8279 for the stated tax year. The extension did not decide whether the company otherwise qualified to make the election.

Ruling snapshot

• Question: Could the company file Form 8279 after the deadline for a foreign sales corporation election?
• Outcome: Approved; the company received 30 days from the ruling date to file.
• Key authorities: Temp. Treas. Reg. § 1.921-1T(b)(1); Treas. Reg. §§ 301.9100-1, 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Index Number: 9100.18-00
Washington, DC 20224
927.04-00
Number: 200040021
Person to Contact:
Release Date: 10/6/2000
Telephone Number:

Refer Reply To:
CC:INTL:PLR-100547-00
Date:
July 7, 2000

LEGEND

Taxpayer
=

Date A
=

Date B
=

Individual A
=

Dear Sir:

This replies to your letter dated December 24, 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.

Taxpayer should have filed Form 8279 on or before Date B. After Date B, Individual A, a director of Taxpayer, became aware of Taxpayer’s obligation to file Form 8279. Taxpayer is requesting an extension of time to file Form 8279 before its failure to file Form 8279 is discovered by the IRS.

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
§ 301.9100-3.

Treas. Reg. § 301.9100 -1(b) defines a regulatory election as an election whose due 2

In re: PLR-100547-00

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 to file Form 8279 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.

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

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