PLR 200336027: Late dual consolidated loss elections receive filing relief

Plain-English summary

A taxpayer discovered that elections and agreements for dual consolidated losses of several foreign branches had not been filed for years listed in an attached schedule. Affidavits described reliance on qualified tax professionals and the later discovery of the omissions. The IRS found that the taxpayer met the requirements for discretionary relief under Treasury Regulation § 301.9100-3. It granted 30 days from the letter date to file the specified elections and agreements under Regulation § 1.1503-2(g)(2)(i). The ruling does not decide whether the taxpayer otherwise qualifies to make them.

Ruling snapshot

• Question: May the taxpayer file late dual consolidated loss elections and agreements for the scheduled branches and years?
• Outcome: Approved: a 30-day extension was granted, without deciding substantive eligibility.
• 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
Washington, DC 20224
Number: 200336027
Release Date: 9/5/2003
Index Number: 9100.22-00, 1503.04-04

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Person To Contact:
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Telephone Number:
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Refer Reply To:
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CC: INTL:PLR-131644-02
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Date:
June 02, 2003

LEGEND

Taxpayer = ----------------------------------------------------------------------------------
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Individuals A, B = ----------------------------------------------------------------------------------
and C
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CPA Firm = ----------------------------------------
Year A = -------

Dear ----------------:

This replies to a letter dated June 6, 2002, in which Taxpayer requests an extension of time under Treas. Reg. § 301.9100-3 to file the election and agreement described in
§1503-2(g)(2)(i) in accordance with Schedule A, which is attached and made a part of this ruling letter. Additional information was submitted in a letter dated May 12, 2003. 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.

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In re: PLR:131644-02

During the tax years at issue as described in Schedule A, Individual A was an officer of Taxpayer and Individual B was a manager in Taxpayer’s tax department. Individual C is a partner in CPA Firm. The affidavits of Individuals A, B and C and the facts submitted describe the circumstances surrounding the discovery of and the reasons for Taxpayer’s failure to file the elections and agreements. In addition, the affidavits and facts show that Taxpayer relied upon its qualified tax professionals to prepare the tax returns for the tax years at issue and to file all appropriate elections and agreements relating to them. Subsequently, in Year A, Taxpayer engaged the services of CPA Firm. Upon reviewing the tax returns for the tax years at issue, Individual C discovered that the necessary elections and agreements listed on Schedule A were not filed.

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 election and agreement are regulatory elections 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 information submitted, 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 the election and agreement described in
§1503-2(g)(2)(i) in accordance with Schedule A.

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In re: PLR:131644-02

The granting of an extension of time is not a determination that Taxpayer is otherwise eligible to file the elections and agreements. § 301.9100-1(a).

A copy of this ruling letter should be associated with the elections and 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.

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 furnished to your authorized representative.

Sincerely,

Associate Chief Counsel (International)

By: /s/ Allen Goldstein
Allen Goldstein
Reviewer

Enclosures:

Schedule A
Copy for 6110 purposes

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In re: PLR:131644-02

SCHEDULE A

An extension of time is requested to file the election and agreement described in
§ 1.1503-2(g)(2)(i) with respect to the dual consolidated losses of each branch listed below that were incurred in the tax year indicated. NAME OF BRANCH 1997 1998 1999
Hong Kong -0- Requested Requested
Singapore Requested Requested Requested
Brussels Requested -0- -0- London -0- -0- Requested