PLR 200318062: Late tax year change application treated as timely

Plain-English summary

A taxpayer filed Form 1128 late to request a change from a May 31 tax year end to a June 30 tax year end. The IRS found that an error or misunderstanding caused the delay and that the taxpayer acted reasonably and in good faith. It treated the application as timely under Treas. Reg. § 301.9100-3. The IRS said it would process the application after receiving an additional user fee. This ruling granted only filing relief; it did not decide whether the requested tax year change was permitted.

Ruling snapshot

• Question: May the late Form 1128 application be treated as timely filed?
• Outcome: Approved for filing relief only.
• Key authorities: Treas. Reg. § 301.9100-3; Rev. Proc. 2002-39.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200318062
Washington, DC 20224
Release Date: 5/2/2003
Index Nos.: 9100.09-00
Person to Contact:

Telephone Number:

Refer Reply To:
CC:ITA:4 PLR-166526-02
Date:
January 24, 2003

Dear
:

This is in reference to a Form 1128, Application to Adopt, Change, or Retain a Tax Year, submitted on behalf of the above-named taxpayer (TIN:
), requesting permission to change its accounting period, for federal income tax purposes, from a taxable year ending May 31 to a taxable year ending June 30, effective The taxpayer has requested that the Form 1128 be considered timely filed under the authority contained in § 301.9100-3 of the Procedure and Administration Regulations.

Section 6.02(1) of Rev. Proc. 2002-39, 2002-22 I.R.B. 1046, provides that a taxpayer must file a Form 1128 no earlier than the day following the end of the first effective year and no later than the due date (not including extensions) of the federal income tax return for the first effective tax year. Thus, the taxpayer's Form 1128 requesting a change in accounting period to a tax year ending June 30 was due before The information furnished indicates that the application for the change in accounting period was filed late because of an error or misunderstanding.

Section 301.9100-3(a) provides that requests for extensions of time for regulatory elections that do not meet the requirements of § 301.9100-2 (automatic extensions), such as the situation you present, must be made under the rules of § 301.9100-3. Requests for relief subject to § 301.9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good faith, and that the granting of relief will not prejudice the interests of the government.

Based on the facts and information submitted and the representations made, it is held that the taxpayer has acted reasonably and in good faith, and that the granting of relief will not prejudice the interests of the government. Accordingly, the requirements of the regulations for the granting of relief have been satisfied in this case, and the taxpayer's late filed Form 1128 requesting permission to change to a tax year ending June 30,
effective for the short period of
, is considered timely filed.

Pursuant to Appendix A of Rev. Proc. 2003-1, 2003-1 I.R.B. 1, 60, an additional user fee is required in order to process the Form 1128. The user fee will be requested in a separate correspondence. We will begin processing the taxpayer's application after the 2 PLR-166526-02

user fee is received.

The ruling contained in this letter is based 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 part of an examination process.

This ruling addresses the granting of § 301.9100-3 relief only. No opinion is expressed or implied concerning the tax consequences of any other matter. Specifically, no opinion is expressed as to whether the taxpayer is permitted under the Code and applicable regulations to change to the tax year requested in the subject Form 1128.

Enclosed is a copy of the letter ruling showing the deletions proposed to be made in the letter when it is disclosed under § 6110 of the Internal Revenue Code.

This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3) provides that it may not be used or cited as precedent.

Sincerely,

Robert A. Berkovsky
Branch Chief
Office of Associate Chief Counsel
(Income Tax and Accounting)

Enclosure