PLR 200304028: Taxpayer receives more time to request a closing agreement

Plain-English summary

Three related corporations asked for extra time to request a closing agreement under Rev. Proc. 2002-42 after missing the applicable deadline. The taxpayer represented that it relied on an employee and other tax professionals to make the request timely. The IRS concluded that the request was a regulatory election and that the taxpayer acted reasonably and in good faith without prejudicing the government. It granted an extension until 30 days after the ruling letter. The extension did not decide whether the taxpayer was otherwise eligible for a closing agreement.

Ruling snapshot

• Question: May the taxpayer submit its closing agreement request after the deadline?
• Outcome: Approved, with a 30-day extension from the ruling letter.
• Key authorities: Treas. Reg. §§ 301.9100-1, 301.9100-3; Rev. Proc. 2002-42.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200304028
Washington, DC 20224
Release Date: 01/24/2003
Index Number: 9100.22-00
Person to Contact:
1503.04-04
Telephone Number:

Refer Reply To:
CC:INTL:PLR-140766-02
Date:
October 30, 2002

LEGEND

Corp A
=

Corp B
=

Corp C
=

Individual A
=

Dear :

This replies to your letter dated July 16, 2002, requesting that Corp A, B and C (hereinafter collectively referred to as “Taxpayer”) be granted an extension of time under Treas. Reg. § 301.9100-3 to submit a request to enter into a closing agreement pursuant to Rev. Proc. 2002-42. 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 an employee of Corp A. The affidavit of Individual A and the facts submitted describe the circumstances surrounding the discovery that Taxpayer failed to request to enter into a closing agreement in a timely manner pursuant to section 3.02 of Rev. Proc. 2000-42. The affidavit and facts indicate that Taxpayer relied upon Individual A and other tax professionals of Taxpayer to comply with the requirements of Rev. Proc. 2000-42 in a timely manner.

2

In re: PLR-140766-02

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.

In the present situation, the request to enter into a closing agreement is a regulatory election as defined in § 301.9100-1(b). Therefore, the Commissioner has discretionary authority under § 301.9100-1(c) to grant Taxpayer an extension of time, provided that Taxpayer satisfies the rules 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 submit a request to enter into a closing agreement pursuant to Rev. Proc. 2002-42.

The granting of an extension of time is not a determination that Taxpayer is otherwise eligible to submit a request to enter into a closing agreement. § 301.9100-1(a).

No opinion is expressed as to the application of any other section of the regulations or Code to the facts presented.

A copy of this ruling letter should be associated with the request to enter into a closing agreement.

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.

3

In re: PLR-140766-02

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)