PLR 200409036: Taxpayer receives time to file section 1503 agreement

Plain-English summary

A taxpayer omitted an agreement required under the dual consolidated loss regulations from its consolidated tax return. Its international tax adviser had missed the filing after intervening events prevented a full review of the return materials, and discovered the omission while reviewing the following year's return. The IRS concluded that the taxpayer met the standards for late-election relief. It granted 45 days from the ruling date to file the agreement. The IRS did not decide whether the taxpayer otherwise qualified to file it.

Ruling snapshot

• Question: May the taxpayer file the omitted section 1503 agreement late?
• Outcome: Approved: a 45-day extension was granted.
• 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: 200409036
Release Date: 2/27/04
Index Number: 9100.22-00, 1503.04-04

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Person To Contact:
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-----------------------, ID No. ---------------
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Telephone Number:
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Refer Reply To:
CC:INTL – PLR-162240-02
In re: ---------------------------
Date:
November 26, 2003

LEGEND

Taxpayer = ---------------------------
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Entity = --------------------------

Individual A = ---------------------

CPA Firm = ------------------------

Date A = ----------------------------

Date B = ----------------------------

Date C = ---------------------------

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

This replies to a letter dated October 31, 2002, in which Taxpayer requests an extension of time under Treas. Reg. § 301.9100-3 to file an agreement described in
§ 1.1503-2(g)(2)(i) for the tax year ended on Date A (the 2(g)(2)(i) agreement). 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. 2

In re: PLR-162240-02

CPA Firm has reviewed Taxpayer’s U.S. consolidated federal income tax returns for many years. This review consists of advising Taxpayer with respect to substantive issues that arise and to advising Taxpayer on the compliance requirements for each foreign entity of Taxpayer.

Individual A is an international tax partner with CPA Firm. The affidavit of Individual A and the facts submitted show that Individual A did not have an opportunity to review all the materials with respect to the tax return for the year ended on Date A due to the intervening events on Date B. About a year later, Individual A was conducting the review of the tax return for the year ended on Date C when he discovered that the 2(g)(2(i) agreement had been omitted from the tax return for the year ended on Date A.

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 agreement described in § 1.1503-2(g)(2)(i) 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 information submitted, we conclude that Taxpayer satisfies
§ 301.9100-3(a). Accordingly, Taxpayer is granted an extension of time of 45 days from the date of this ruling letter to file an agreement described in § 1.1503-2(g)(2)(i) for the tax year ended on Date A

The granting of an extension of time is not a determination that Taxpayer is otherwise eligible to file the 2(g)(2)(i) agreement. § 301.9100-1(a). 3

In re: PLR-162240-02

A copy of this ruling letter should be associated with the 2(g)(2)(i) 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.

Pursuant to a power of attorney on file in this office, a copy of this ruling letter is being furnished to Taxpayer.

Sincerely,

Associate Chief Counsel (International)

By: /s/ Allen Goldstein
Allen Goldstein
Reviewer

Enclosure:

Copy for 6110 purposes