PLR 200316039: Extra time to file dual consolidated loss agreements

Plain-English summary

A corporate group missed the deadline to file agreements required for its foreign branch's dual consolidated losses for two tax periods. It sought relief before the IRS discovered the omission. The IRS found that the group's request met the good faith and government interest standards for an extension under § 301.9100-3. It granted 30 days from the ruling date to file the agreements. The IRS did not decide whether the companies were otherwise eligible to file them or rule on other tax consequences.

Ruling snapshot

• Question: Could the group file the foreign branch dual consolidated loss agreements after their deadline?
• Outcome: Approved: 30 days from the letter date to file the agreements.
• Key authorities: Treas. Reg. §§ 1.1503-2(g)(2)(i), 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200316039
Washington, DC 20224
Release Date: 4/18/2003
Index Number: 9100.22-00
Person to Contact:
1503.04-04
9100.18-00
Telephone Number:

Refer Reply To:
CC:INTL:PLR-151345-02
Date:
January 17, 2003

In re:

LEGEND

Corp A
=

Corp B
=

Corp C
=

Foreign Branch
=

Dates 1, 2
=

Individual A
=

2

In re: PLR-151345-02

Dear
:

This replies to a letter dated August 23, 2002, in which Corp A and Corp B, as successor in interest to Corp C, request an extension of time under Treas. Reg.
§ 301.9100-3 to file the agreements required by § 1.1503-2(g)(2)(i) with respect to the dual consolidated losses of Foreign Branch for the tax periods ended on Dates 1 and 2. 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 senior director of accounting/finance at Corp B, a wholly-owned subsidiary of Corp A. The affidavit of Individual A and the facts submitted describe the circumstances that led to the discovery that the agreements required under §1.1503- 2(g)(2)(i) were not filed, and indicate that relief is being requested before this failure to file the agreements has been discovered by the Service.

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, § 1.1503-2(g)(2)(i) fixes the time to file the agreements. Therefore, the Commissioner has discretionary authority under § 301.9100–1(c) to grant an extension of time to Corp A and Corp B, as successor in interest to Corp C, provided that the standards set forth in § 301.9100-3(a) are satisfied.

3

In re: PLR-151345-02

Based on the facts and circumstances of this case, we conclude that the standards set forth in § 301.9100-3(a) have been satisfied. Accordingly, an extension of time until 30 days from the date of this ruling letter is granted under § 301.9100-1 and § 301-9100-3 to file the agreements required by § 1.1503-2(g)(2)(i) with respect to the dual consolidated losses of Foreign Branch for the tax periods ended on Dates 1 and 2.

As provided in § 301.9100-1(a), the granting of an extension of time is not a determination that Corp A and Corp B, as successor in interest to Corp C, are otherwise eligible to file the agreements.

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 agreements.

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 ruling is being sent to Corp A and to the other representative.

Sincerely,

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