PLR 200221040: Taxpayer gets more time to elect FSC treatment

Plain-English summary

A taxpayer missed the deadline to file Form 8279 to elect treatment as a foreign sales corporation (FSC) or small FSC. It sought an extension before the IRS discovered the missed filing. Based on the facts and representations provided, the IRS found that the taxpayer met the requirements for late-election relief under Treasury Regulation § 301.9100-3. It gave the taxpayer 30 days from the ruling date to file the form for the tax year at issue. The IRS did not decide whether the taxpayer was otherwise eligible to make the election.

Ruling snapshot

• Question: May the taxpayer file its FSC election after the prescribed deadline?
• Outcome: Approved a 30-day extension, without deciding underlying eligibility.
• Key authorities: Treas. Reg. §§ 301.9100-1, 301.9100-3, 1.921-1T(b)(1).

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200221040
Washington, DC 20224
Release Date 5/24/2002
Index Number: 9100.18-00
Person to Contact:
927.04-00
Telephone Number:

Refer Reply To:
CC:INTL:PLR-149285-01
Date:
February 27, 2002

LEGEND

Taxpayer
=

Date A
=

Individual A
=

Dear :

This replies to a letter dated September 14, 2001, in which Taxpayer requests an extension of time under Treas. Reg. § 301.9100-3 to file Form 8279, Election To Be Treated as a FSC or as a Small FSC, pursuant to Temp. Treas. Reg.
§ 1.921-1T(b)(1), Q&A 1, effective for the tax year beginning on Date A. Additional information was submitted in a letter dated February 4, 2002. 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 a director and president of Taxpayer. The affidavit of Individual A describes the circumstances surrounding the discovery and failure to file Form 8279. Taxpayer is requesting relief before its failure to file Form 8279 was discovered by the Service.

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

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In re: PLR-149285-01

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, §1.921-1T(b)(1), Q&A 1, fixes the time to elect treatment as a FSC or as a small FSC. Thus, the Commissioner has discretionary authority pursuant to § 301.9100-1(c) to grant Taxpayer an extension of time, provided that Taxpayer acted reasonably and in good faith, and the grant of relief will not prejudice the interests of the Government.

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 Form 8279, Election To Be Treated as a FSC or as a Small FSC, pursuant to Temp. Treas. Reg.§ 1.921-1T(b)(1), Q&A 1, effective for the tax year beginning on Date A.

The granting of an extension of time is not a determination that Taxpayer is otherwise eligible to file Form 8279. § 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.

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 sent to your authorized representatives.

Sincerely,

/s/ Allen Goldstein
Allen Goldstein
Reviewer
Office of the Associate Chief Counsel (International)