PLR 200214004: Extra time to file dual consolidated loss certifications

Plain-English summary

A taxpayer missed annual certifications required for several years of a related entity's net operating losses under the dual consolidated loss rules. Its submission described reasonable reliance on a qualified tax professional. The IRS concluded that the taxpayer met the standards for late filing relief and gave it 30 days from the ruling date to file the specified certifications with the relevant tax returns. The extension did not decide whether the taxpayer was otherwise eligible to make those filings. The ruling did not address other tax consequences.

Ruling snapshot

• Question: Could the taxpayer file the required annual loss certifications after their deadlines?
• Outcome: Approved; the specified certifications must be filed within 30 days of the ruling.
• Key authorities: Treas. Reg. §§ 1.1503-2(g)(2)(vi)(B) and 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200214004
Washington, DC 20224
Release Date: 4/5/2002
Index Number: 9100.22-00
Person to Contact:
1503.04-04
Telephone Number:

Refer Reply To:
CC:INTL:PLR-165102-01
Date:
January 3, 2002

LEGEND

Taxpayer
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Entity
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Date A, B, C, D
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Individual A
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CPA Firm
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Dear :

This replies to a letter dated June 13, 2001, submitted on behalf of Taxpayer, requesting that Taxpayer be granted an extension of time under Treas. Reg. § 301.9100-3 to file the annual certification required under § 1.1503-2(g)(2)(vi)(B) with respect to the net operating losses of Entity as follows: (i) with respect to the loss incurred in the tax year ended on Date A, with the tax returns for the tax years ended on Dates B, C and D; (ii) with respect to the loss incurred in the tax year ended on Date B, with the tax returns for the tax years ended on Date C and D; and (iii) with respect to the loss incurred in the tax year ended on Date C, with the tax return for the tax year ended on Date D. 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.

The affidavit of Individual A, the CPA Firm’s tax engagement principal for Taxpayer, and the facts submitted describe the circumstances surrounding the failure to file the annual certifications as required under § 1.1503-2(g)(2) for the tax years ended on Dates B, C, and D, which show that Taxpayer reasonably relied on Individual A as a 2

In re: PLR-165102-01

qualified tax professional.

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.

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, § 1.1503-2(g)(2)(vi)(B) fixes the time to file an annual certification. 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 the annual certification required under § 1.1503-2(g)(2)(vi)(B) with respect to the net operating losses of Entity as follows: (i) with respect to the loss incurred in the tax year ended on Date A, with the tax returns for the tax years ended on Dates B, C and D; (ii) with respect to the loss incurred in the tax year ended on Date B, with the tax returns for the tax years ended on Date C and D; and (iii) with respect to the loss incurred in the tax year ended on Date C, with the tax return for the tax year ended on Date D.

The granting of an extension of time is not a determination that Taxpayer is otherwise eligible to file the annual certifications. § 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 annual certifications.
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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. 3

In re: PLR-165102-01

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

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