PLR 200438022: Late dual consolidated loss filings receive 45 day extension

Plain-English summary

A taxpayer sought extra time to file election agreements for dual consolidated losses in two tax years and an annual certification for one entity's earlier loss. A partner at the accounting firm that reviewed the returns had failed to make or recommend those filings. Based on the submitted facts, the IRS found that the taxpayer met the regulatory requirements for relief. It gave 45 days from the letter date to file the specified agreements and certification. The ruling did not decide whether the taxpayer was otherwise eligible to file them.

Ruling snapshot

• Question: May the taxpayer file the specified dual consolidated loss election agreements and certification late?
• Outcome: Approved: a 45 day extension for the identified filings.
• Key authorities: Treas. Reg. §§ 1.1503-2(g)(2)(i), 1.1503-2(g)(2)(vi)(B), 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 200438022
Release Date: 9/17/04
Index Number: 9100.22-00, 1503.04-04

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Person To Contact:
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Refer Reply To:
-------------------------------------------------- CC:INTL:B03 – PLR-115998-03 Date:
May 25, 2004

LEGEND

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

Entity B = --------------------

Entity C = ---------------------

Entity D = -------------------

Entity E = ---------------

Entity F = --------------------------

Entity G = --------------------------

Entity H = ------------------

Entity I = --------------------------

Entity J = ----------------------

Entity K = ----------------------

Entity L = -----------------------------

Entity M = ---------------------

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In re: PLR-115998-03

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

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

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

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

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

Dear --------------

This replies to a letter dated January 31, 2003, in which Taxpayer requests an extension of time under Treas. Reg. §301.9100-3 to file an election agreement described in §1.1503-2(g)(2)(i) (the 2(g)(2)(i) election agreement) for the tax year ended on Date A with respect to the dual consolidated losses of Entities A through J (inclusive), a 2(g)(2)(i) election agreement for the tax year ended on Date B with respect to the dual consolidated losses of Entities B through M (inclusive), and an annual certification statement described in §1.1503-2(g)(2)(vi)(B) (2(g)(2)(vi)(B) certification) for the tax year ended on Date B with respect to the dual consolidated loss of Entity B incurred in the tax year ended on Date A. 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.

CPA Firm reviewed Taxpayer’s U.S. consolidated federal income tax returns for tax years ending on Date A and Date B. Individual A is a certified public accountant with over fourteen years of tax experience and a tax partner with CPA Firm. Individual A reviewed Taxpayer’s federal income tax returns for the tax years ending on Date A and Date B. The affidavit of Individual A and the facts submitted show that Individual A failed to make, or advise Taxpayer to make, the election agreements and certification. The omission of the 2(g)(2)(i) election agreements and the 2(g)(2)(vi)(B) certification was first discovered on or about Date C.

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

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In re: PLR-115998-03

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 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 the election agreement described in §1.1503-2(g)(2)(i) for the tax year ended on Date A with respect to the dual consolidated losses of Entities A through J (inclusive), the election agreement described in §1.1503-2(g)(2)(i) for the tax year ended on Date B with respect to the dual consolidated losses of Entities B through M (inclusive), and the annual certification statement described in §1.1503- 2(g)(2)(vi)(B) for the tax year ended on Date B with respect to the dual consolidated loss of Entity B incurred in 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) election agreements and the 2(g)(2)(vi)(B) certification.
§301.9100-1(a).

A copy of this ruling letter should be associated with the 2(g)(2)(i) agreements and the 2(g)(2)(vi)(B) certification.

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.

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In re: PLR-115998-03

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

Sincerely,

Associate Chief Counsel (International)

By: /s/ Allen Goldstein
Allen Goldstein
Reviewer

Enclosure:

Copy for 6110 purposes