PLR 200304021: More time for real property statements and notices

Plain-English summary

A foreign corporation transferred stock in several domestic subsidiaries to another domestic subsidiary on two dates. Its tax adviser failed to advise it of statements and notices required by the real property interest and withholding regulations. The IRS treated the filings as regulatory elections, concluded that the taxpayer met the section 301.9100 relief standard, and granted 30 days after the ruling letter to satisfy the filing requirements for both transactions. The extension did not decide whether the taxpayer was otherwise eligible to file the statements and notices.

Ruling snapshot

• Question: May the taxpayer file the required statements and notices late for the two stock transfers?
• Outcome: Approved, with a 30-day extension from the ruling letter.
• Key authorities: Treas. Reg. §§ 1.897-2(h), 1.1445-2(c)(3), 301.9100-1, 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200304021
Washington, DC 20224
Release Date: 1/24/03
Index Number: 9100.22-00
Person to Contact:
897.02-00
Telephone Number:

Refer Reply To:
CC:INTL:PLR-156430-01
Date:
October 23, 2002

LEGEND

Taxpayer
=

Sub A
=

Sub B
=

Sub C
=

Sub D
=

Sub E
=

Foreign Country
=

Individual A
=

CPA Firm
=

Date A
=

Date B
=

2
PLR-156430-01

Dear
:

This replies to a letter dated September 6, 2001, in which Taxpayer requests a ruling under Treas. Reg. § 301.9100-3 for an extension of time to satisfy the requirements of
§ 1.897-2(h) and § 1.1445-2(c)(3) with respect to the transactions on Dates A and B, which are described below. The information submitted 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.

Subs A, B, C, D and E are domestic companies owned by Taxpayer, a foreign country corporation. On Date A, Taxpayer transferred all of the shares of Subs B, C and D to Sub A. On Date B, Taxpayer transferred all the shares of Sub E to Sub A.

At the time of the above transactions, Individual A was a partner with CPA Firm and the engagement partner for Taxpayer. The affidavit of Individual A describes the circumstances surrounding his failure to advise Taxpayer of the statements and notices required pursuant to § 1.897-(2)(h) and § 1.1445-2(c)(3) with respect to the transactions on Dates A and B.

Treas. Reg. § 301.9100 -1(b) provides that an election includes an application for relief in respect of tax, and 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.

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PLR-156430-01

In the present situation, the statements and notices fall within the definition of regulatory elections. 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 satisfy the requirements of
§ 1.897-2(h) and § 1.1445-2(c)(3) with respect to the transactions on Dates A and B.

The granting of an extension of time is not a determination that Taxpayer is otherwise eligible to file the statements and notices. § 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 copy of the statements and notices.

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 letter is being sent to Taxpayer.

Sincerely,

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