PLR 200112033: Late tax-year change application denied filing relief

Plain-English summary

A taxpayer asked the IRS to treat a late Form 1128 application to change its accounting period as timely. The form had not been filed within 90 days of its deadline. Under Treasury Regulation § 301.9100-3(c)(3), relief requested that late is generally deemed to prejudice the government unless unusual and compelling circumstances exist. The IRS found that the taxpayer had not shown such circumstances and denied the extension. It said the taxpayer could seek a change for a later tax year by filing a timely application.

Ruling snapshot

• Question: Can this Form 1128 receive an extension when it was not filed within 90 days of its deadline?
• Outcome: Denied; unusual and compelling circumstances were not demonstrated.
• Key authorities: IRC § 442; Treas. Reg. §§ 1.442-1(b), 301.9100-3(a), 301.9100-3(c)(3).

Full text (IRS public release)

INTERNAL REVENUE SERVICE

Number: 200112033
Release Date: 3/23/2001
Index Nos.: 9100.09-00

CC:ITA:B9/PLR-120819-00
Dcember 19, 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 taxpayer, requesting permission to change its accounting period, for federal income tax purposes, from a taxable year
ending , to a taxable year ending , effective
. The taxpayer 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 taxpayer's Form 1128 requesting a change in accounting
period to a tax year ending
, was due on or
before
The form was not 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, the taxpayer 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 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.

Section 301.9100-3(c)(3) states, in part, that the interests of the Government are deemed to be prejudiced except in unusual and compelling circumstances if the request for relief is filed more than 90 days after the due date of filing the Form 1128.

Based on the facts and information
submitted and
the representations made, it is held that the taxpayer has not demonstrated unusual and compelling circumstances for filing the application beyond 90 days after its due date, and, therefore,

the granting of relief under § 301.9100-3(a) will prejudice the interests of the government. The taxpayer's request for an extension of time to file the Form 1128 is denied.

We will be happy to consider a request for a change in accounting period for a later tax year upon receipt of a timely filed application.

No opinion is expressed as to the tax treatment of the transaction under the provisions of any other sections of the Code and regulations which may be applicable thereto or the tax treatment of any conditions existing at the time of or effects resulting from the transaction which are not specifically set forth by the above ruling.
This ruling is directed only to the taxpayer who requested it. Section 6110(j)(3) provides that it may not be used or cited as precedent.

Sincerely yours,
Associate Chief Counsel
Income Tax and Accounting
/s/ Heather Maloy