PLR 200210055: Extension to file statement for section 59(e) election

Plain-English summary

A taxpayer sought more time to file the required statement for a § 59(e) election on behalf of an entity. It discovered the missed filing nine days after the deadline and provided affidavits explaining the omission. The IRS found that the taxpayer met the standards for relief from a missed regulatory election deadline. It allowed 30 days from the ruling date to file the statement, but did not decide whether the taxpayer was otherwise eligible to file it.

Ruling snapshot

• Question: Could the taxpayer file the statement for the § 59(e) election late?
• Outcome: Approved: 30 days from the ruling date to file the statement.
• Key authorities: IRC § 59(e); Treas. Reg. §§ 1.964-1(c)(3), 301.9100-1, 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200210055
Washington, DC 20224
Release Date: 3/8/2002
Index Number: 9100.02-03
Person to Contact:
59.05-04
Telephone Number:

Refer Reply To:
CC:INTL:PLR-128542-01
Date:
December 11, 2001

LEGEND

Taxpayer
=

Entity
=

Date A
=

Individuals A, B,
=

CPA Firm
=

Dear :

This replies to a letter dated April 30, 2001, in which Taxpayer requests an extension of time under Treas. Reg. § 301.9100-3 to file a statement provided under § 1.964- 1(c)(3) with respect to an election under I.R.C. § 59(e) on behalf of Entity for the tax year ended 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.

Individual A is the Vice President, Finance, of Taxpayer, and Individual B was a senior manager at CPA Firm during the relevant period which is the subject of this ruling request. Nine days after the due date to file the statement under § 1.964-1(c)(3), it was discovered that the statement had not been filed. The affidavits of Individuals A and B describe the circumstances surrounding the discovery and failure to timely file the statement. The Internal Revenue Service has not discovered Taxpayer’s failure to timely file the statement.

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.

2

In re: PLR-128542-01

Treas. Reg. § 301.9100-1(c) provides that the Commissioner has discretion to grant a taxpayer a reasonable extension of time under the rules set forth in § 301.9100-3 to make a regulatory election under all subtitles of the Internal Revenue Code except subtitles E, G, H, and I.

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, § 1.964-1(c)(3)(ii) fixes the time to file the statement. Therefore, the Commissioner has discretionary authority under § 301.9100–1(c) to grant Taxpayer an extension of time, provided that Taxpayer satisfies the standards set forth in § 301.9100-3(a).

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 a statement provided under § 1.964- 1(c)(3) with respect to an election under I.R.C. § 59(e) on behalf of Entity for the tax year ended on Date A.

The granting of an extension of time to file the statement not a determination that Taxpayer is otherwise eligible to file the statement. § 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.

A copy of this ruling letter should be associated with the statement.

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 furnished to your authorized representatives.

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