PLR 200047019: Late tax-year change application treated as timely filed

Plain-English summary

Taxpayers filed Form 1128 late after an error or misunderstanding, but within 90 days of its deadline. They asked the IRS to treat their application to change accounting periods as timely under the regulatory relief rules. The IRS found they acted reasonably and in good faith and that relief would not prejudice the government, so it treated the form as timely filed. The letter expressly did not decide whether the requested tax-year change itself was permissible.

Ruling snapshot

• Question: May the late Form 1128 be treated as timely filed?
• Outcome: Approved for filing timeliness only; no ruling on permission to change tax year.
• Key authorities: IRC § 442; Treas. Reg. §§ 1.442-1(b), 301.9100-3(a).

Full text (IRS public release)

INTERNAL REVENUE SERVICE

Number: 200047019
Release Date: 11/24/2000
Index Nos.: 9100.09-00

CC:IT&A:B9 PLR-111711-00

August 25, 2000

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 taxpayers, requesting permission to change their accounting period, for federal income tax purposes, from a taxable year ending , to a taxable year ending ,
effective
. The taxpayers have requested that
the Form 1128 be considered timely filed under the authority contained in §301.9100-3 of the Procedure and Administration Regulations.
The taxpayers' Form 1128 requesting a change in accounting period to a tax year ending December 31 was due on or before . The information furnished indicates that the application for the change in accounting period was filed late because of an error or misunderstanding. However, the form was filed within 90 days of the due date.

Section 1.442-1(b) of the Income Tax Regulations provides that in order to secure the Commissioner's consent to a change in accounting period, taxpayers must file an application on Form 1128 with the Commissioner on or before the 15th day of the second calendar month following the close of the short period.

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 taxpayers provide evidence to establish that the taxpayers 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 taxpayers have acted reasonably and in good faith, and that the granting of relief -2- 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 the taxpayers’ late filed Form 1128 requesting permission to change to a tax year ending
, effective for the short period of
,
to
, is considered timely filed.

The ruling contained in this letter is based upon facts and representations submitted by the taxpayers 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 taxpayers are permitted under the Code and applicable regulations to change to 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 taxpayers' first designated authorized representative, and a copy to the taxpayers' second designated authorized representative. We are also sending a copy of this ruling letter to the taxpayers.

This ruling is directed only to the taxpayers 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,
Associate Chief Counsel
Income Tax and Accounting
/s/ Heather Maloy
Enclosures:
Copy of this letter
Copy for § 6110 purposes