PLR 200429003: Late accounting period application treated as timely

Plain-English summary

A taxpayer filed Form 1128 shortly after the deadline to request a tax year ending April 30. The late filing resulted from an error or misunderstanding. The IRS granted relief under the § 301.9100 regulations and treated the application as timely because the taxpayer acted reasonably and in good faith and relief would not prejudice the government. The ruling addresses filing time only. It expressly leaves open whether the taxpayer may adopt the requested tax year.

Ruling snapshot

• Question: Could the late Form 1128 be treated as timely filed?
• Outcome: Approved for filing time; substantive permission to adopt the tax year was not decided.
• Key authorities: Treas. Reg. §§ 1.442-1(b), 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 200429003
Release Date: 7/16/04
Index Number: 9100.09-00

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Person To Contact:
--------------------------------------------- -------------------------, ID No. ------------- Telephone Number:
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Refer Reply To:
CC:ITA:05 – PLR-116115-04
Date:
EIN: ----------------
April 01, 2004
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Dear -----------------:

This letter is in reference to a Form 1128, Application to Adopt, Change, or Retain a Tax Year, submitted on behalf of the above-named taxpayer, for permission to adopt an accounting period, for federal income tax purposes, ending April 30, effective April 30, 2003. The taxpayer has requested that the Form 1128 be considered timely filed under the authority contained in section 301.9100-3 of the Procedure and Administration Regulations.

The taxpayer’s Form 1128 requesting to adopt an accounting period to a tax year ending April 30, -------, was due on or before July 15, -------, but was not timely filed; however, the form was filed shortly thereafter. The information furnished indicates that the late filing was due to an error or misunderstanding.

Section 1.442-1(b) of the Income Tax Regulations provides that in order to secure the Commissioner's consent to adopt an accounting period, the taxpayer must file an application on Form 1128 with the Commissioner on or before (a) the 15th day of the second calendar month following the close of the short period or (b), if Rev. Proc. 2002-39, 2002-1 C.B.1046, is applicable, no later than the due date (not including extensions) for filing the return for the short period required to effect such change.

Section 301.9100-3(a) provides that requests for extensions of time for regulatory elections that do not meet the requirements of section 301.9100-2 (automatic extensions), such as the instant case, must be made under the rules of section 301.9100-3. Requests for relief subject to section 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

PLR-116115-04
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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 adopt a tax year ending April 30, effective April 30, -------, is considered timely filed.

The ruling contained in this letter is based upon facts and representations submitted by the taxpayers 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 section 301.9100-3 relief only. No opinion is expressed regarding the tax treatment of the instant transaction under the provisions of any other sections of the Code or regulations that may be applicable thereto, or regarding the tax treatment of any conditions existing at the time of, or effects resulting from, the instant transaction. Specifically, no opinion is expressed as to whether the taxpayer is permitted under the Code and applicable regulations to adopt the tax year requested in the subject Form 1128.

In accordance with the provisions of a power of attorney currently on file, we are sending a copy of this letter ruling to the taxpayer’s authorized representative.

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

Sincerely,

WILLIAM A. JACKSON
Chief, Branch 5
Office of Associate Chief Counsel
(Income Tax & Accounting)

Enclosures:
Copy of this letter
Copy for section 6110 purposes