PLR 200416001: Extension for historic building certification application

Plain-English summary

A property owner rehabilitated a building in a historic district for use as a restaurant and intended to claim the historic rehabilitation credit. It filed the certification application after placing the building in service, unaware that part of the application was due by that date. The IRS found that the requirements for filing extension relief were met and treated the application as timely for the credit's certification rule. The ruling did not decide whether the property otherwise qualified for the credit.

Ruling snapshot

• Question: Could the late historic status application be treated as timely filed?
• Outcome: Approved for the filing deadline.
• Key authorities: IRC § 47(a)(2); Treas. Reg. §§ 1.48-12(d)(1), 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 200416001
Release Date: 4/16/04
Index Number: 9100.00-00

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Person To Contact:
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Telephone Number:
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Refer Reply To:
In Re: CC:PSI:6 – PLR-143633-03
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Date:
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December 18, 2003
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Re: Request for Extension of Time to File Application for Certification of Historic Status

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Official

Dear --------------------:
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This letter responds to your letter submitted July 23, 2003, requesting an extension of time pursuant to ' 301.9100-3 of the Procedure and Administration Regulations for Taxpayer to file an application for certification of historic status with the United States Department of Interior.

Taxpayer is the owner of Property. Taxpayer leases Property to a restaurant.

Taxpayer, an N, purchased and began renovating the Property in Q. At that time, Taxpayer worked closely with the R and the U to ensure that the rehabilitation complied with historical structure standards.

Taxpayer states that the Property’s rehabilitation was an instrumental part of the V historical district. In support, Taxpayer notes that: (1) the U required Taxpayer to obtain an Historic District permit for the project; and (2) on W, as part of its X, the R awarded Taxpayer’s rehabilitation project an Y. Furthermore, Taxpayer exercised care in maintaining the Property’s historical integrity, even firing the original architect for the rehabilitation project because the architect’s designs did not conform to the wall retention and other requirements contained in section 47 of the Internal Revenue Code.

Taxpayer completed the rehabilitation and placed the Property in service in Z.
Taxpayer filed parts 1 and 2 of the application for certification of historic status (the "application") with the Department of Interior, National Park Service ("NPS") in A. At that time, Taxpayer was unaware of the requirement to file part 1 of the application prior to placing the Property in service, as required by ' 1.48-12(d)(1) of the Income Tax Regulations. However, Taxpayer believed that the Property qualified as a certified historic structure based on its location and its importance to the V historic district.

Taxpayer filed the application with the NPS on B. On C, the NPS notified Taxpayer that it was forwarding the application to the SHPO. On G, the NPS acknowledged receipt of the Taxpayer's application and advised Taxpayer of the filing requirement.

Taxpayer intended to claim historic rehabilitation credit attributable to the rehabilitation for the taxable year ended I. However, as previously discussed, Taxpayer did not learn of the requirement to file the application with the NPS before the Property was placed in service until G.

The due date for Taxpayer’s H federal income tax return, with extensions, was J.
Taxpayer submitted the request for an extension of time under ' 301.9100-3 on July 23, 2003.
On L, Taxpayer filed an amended federal income tax return to claim the historic rehabilitation credit for the taxable year ended I.
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LAW AND ANALYSIS

Section 47(a)(2) provides that the rehabilitation credit for any taxable year includes an amount equal to 20 percent of the qualified rehabilitation expenditures with respect to any certified historic structure.

Section 47(c)(3)(A) provides that the term "certified historic structure" means any building 1) listed in the National Register of Historic Places, or 2) located in a registered historic district and certified by the Secretary of the Interior as being of historic significance to the district.

Section 1.48-12(d)(1) of the regulations provides that a building shall be considered to be a certified historic structure at the time it is placed in service if the taxpayer reasonably believes on that date the building will be determined to be a certified historic structure and has requested on or before that date a determination from the U.S. Department of the Interior that such a building is a certified historic structure within the meaning of the historic rehabilitation credit provisions, and the U.S. Department of Interior later determines that the building is a certified historic structure.

Section 301.9100-1(c) provides that the Commissioner may grant a reasonable extension of time under the rules set forth in '' 301.9100-2 and 301.9100-3 to make a regulatory election, or a statutory election (but no more than six months except in the case of a taxpayer who is abroad), under all subtitles of the Code, except subtitles E, G, H, and I.

Section 301.9100-1(b) provides that the term "election" includes an application for relief in respect of tax.

Sections 301.9100-2 and 301.9100-3 provide the standards the Commissioner will use to determine whether to grant an extension of time to make an election. Section 301.9100-2 provides automatic extensions of time for making certain elections. Section 301.9100-3 provides extensions of time for making elections that do not meet the requirements of ' 301.9100-2. A request for relief under ' 301.9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and that granting relief will not prejudice the interests of the government.

CONCLUSIONS

Based solely on the facts and representations submitted, we conclude that the requirements of '' 301.9100-1 and 301.9100-3 have been satisfied. Accordingly, Taxpayer's application will be considered timely filed for purposes of ' 1.48-12(d)(1). A 4

copy of this letter should be sent to the appropriate service center with a request that it be attached to Taxpayer's amended I tax return. A copy is enclosed for that purpose.

Except as specifically set forth above, we express no opinion concerning the federal income tax consequences of the facts described above under any other provisions of the Code.

In accordance with the power of attorney, we are sending a copy of this letter to Taxpayer=s authorized representative. We are also sending a copy of this letter to the SB/SE Official.

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

Sincerely,

(signed) Heather C. Maloy

Heather C. Maloy
Associate Chief Counsel
(Passthroughs and Special Industries)

Enclosures (2): copy of this letter copy for section 6110 purposes