PLR 200216014: Late annual certifications for foreign branch losses allowed

Plain-English summary

A corporation missed the deadline for annual certifications concerning its foreign branch losses. It asked for more time to file them with its consolidated tax return. The IRS found that the corporation had reasonably relied on a qualified tax professional and met the good faith standard for discretionary relief. It granted a 30-day extension to file the certifications under Treas. Reg. §§ 301.9100-3 and 1.1503-2(g)(2)(vi)(B). The extension did not decide whether the corporation was otherwise eligible to file them.

Ruling snapshot

• Question: May the corporation file required foreign branch loss certifications after the deadline?
• Outcome: Approved: a 30-day extension was granted
• Key authorities: Treas. Reg. §§ 1.1503-2(g)(2)(vi)(B), 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200216014
Washington, DC 20224
Release Date: 4/19/2002
Index Number: 9100.22-00
Person to Contact:
1503.04-04
Telephone Number:

Refer Reply To:
CC:INTL:PLR-164881-01
Date:
January 17, 2002

LEGEND

Taxpayer
=

Foreign Branch
=

Date A, B, C, D ,E, F =

Date G
=

Individual A
=

Dear

This replies to your letter dated October 5, 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 certifications required under § 1.1503-2(g)(2)(vi)(B) with respect to the losses of Foreign Branch for the tax years ended on Dates A through F, which should have been included with the consolidated income return of Taxpayer for the short tax period ending on Date G. 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 Manager, International Taxes, 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)(vi)(B) with respect to the losses of Foreign Branch for the tax years ended on Dates A through F, and show that Taxpayer reasonably relied on Individual A as a qualified tax professional.

Treas. Reg. § 301.9100 -1(b) defines a regulatory election as an election whose due

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In re: PLR-164881-01

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 certifications required under
§ 1.1503-2(g)(2)(vi)(B) with respect to the losses of Foreign Branch for the tax years ended on Dates A through F, which should have been included with the consolidated income return of Taxpayer for the short tax period ending on Date G.

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.
.
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 representative.

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