PLR 200120017: Late tax year change application treated as timely filed

Plain-English summary

Taxpayers filed Form 1128 to request a change in their tax year, but an error or misunderstanding caused them to miss the filing deadline. They filed within 90 days of that deadline. The IRS found that they acted reasonably and in good faith and that relief would not prejudice the government. It treated the application as timely filed under the regulatory extension rules. The letter did not decide whether the taxpayers were eligible to make the requested tax year change.

Ruling snapshot

• Question: Could the late Form 1128 application be treated as timely filed?
• Outcome: Approved as to filing time only
• Key authorities: Treas. Reg. §§ 1.442-1(b), 301.9100-2, and 301.9100-3

Full text (IRS public release)

INTERNAL REVENUE SERVICE

Number: 200120017
Release Date: 5/18/2001
Index Nos.: 9100.09-00

CC:ITA:B9 - PLR-128159-00

Attn: February 15, 2001

EIN:

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 June
. 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 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, 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.

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 will not prejudice the interests of the government. Accordingly,

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the requirements of the regulations for the granting of relief have been satisfied in this case, and the late filed Form 1128 requesting permission to change to a tax year ending , effective for the short period of , 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 a copy of this letter ruling to the taxpayers’ authorized representative.
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 C. Maloy
Enclosures:
Copy of this letter
Copy for § 6110 purposes