PLR 200441008: Extension granted for dual resident loss filings

Plain-English summary

A corporate taxpayer failed to file agreements and annual certifications required under the dual resident corporation regulations. Its tax department had relied on tax professionals who did not ensure those statements were filed. The IRS found that the taxpayer met the standards for discretionary filing relief and gave it 45 days from the letter date to submit the missing materials. The extension did not establish that the taxpayer otherwise qualified to make the filings.

Ruling snapshot

• Question: Could the taxpayer receive more time to file the agreements and annual certifications?
• Outcome: Approved: 45 additional days, without a determination of underlying eligibility.
• Key authorities: Treas. Reg. §§ 1.1503-2(g)(2), 301.9100-1, 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 200441008
Release Date: 10/08/2004
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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CC:INTL:B05 – PLR-112399-03
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Date:
April 06, 2004

TY:----------------

LEGEND

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

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

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

Individual B = ---------------------------

Company 1 = ----------------------------------------

Company 2 = ------------------------------------------------

Dear Individual B:

This replies to a letter dated February 19, 2003, in which Taxpayer requests an extension of time under Treas. Reg. § 301.9100-3 to file an agreement described in Treas. Reg. § 1.1503-2(g)(2)(i) (“2(g)(2)(i) agreement”), and to file the annual certification described in § 1.1503-2(g)(2)(vi)(B) (“2(g)(2)(vi)(B) annual certification”) in accordance with Attachment A, which is attached to and made a part of this ruling letter. 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
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support of the request for a ruling. Verification of the factual information, representations, and other data may be required as part of the audit process. Taxpayer’s Global Tax Department was responsible for the preparation of the income tax return of Taxpayer for the tax year ended on Date A. This preparation included the oversight of both substantive tax issues and compliance requirements for Taxpayer and each of its foreign entities, Company 1 and Company 2.

Individual A had overall responsibility for overseeing the preparation of Taxpayer’s return and its technical accuracy for the tax year ended on Date A. Individual B was the individual that was primarily responsible for the preparation of the consolidated corporation tax return for the tax year ended on Date A.

The affidavits of Individual A and Individual B, and the facts submitted describe the circumstances surrounding the failure to file the 2(g)(2)(i) agreements for the tax year ended on Date A, and the 2(g)(2)(vi)(B) annual certifications for the tax year ended on Date B. The affidavits and the facts show that Taxpayer relied on these tax professionals to advise Taxpayer with respect to filing these statements, but these tax professionals failed to make certain that the statements were 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 Treas. Reg.
§ 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 Treas. Reg. § 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 and annual certification described in Treas. Reg.
§ 1.1503-2(g)(2) are regulatory elections as defined in Treas. Reg. § 301.9100-1(b). Therefore, the Commissioner has discretionary authority under Treas. Reg. § 301.9100- 1(c) to grant Taxpayer an extension of time, provided that Taxpayer satisfies the rules set forth in Treas. Reg. § 301.9100-3(a).
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Based on the facts and information submitted, we conclude that Taxpayer satisfies Treas. Reg. § 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 agreement described in Treas. Reg.
§ 1.1503-2(g)(2)(i), and to file the annual certification described in § 1.1503- 2(g)(2)(vi)(B) in accordance with Attachment A.

The granting of an extension of time is not a determination that Taxpayer is otherwise eligible to file the 2(g)(2)(i) agreements or the 2(g)(2)(iv)(B) annual certifications. Treas. Reg. § 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) annual certifications.

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:

Allen Goldstein
Reviewer

Enclosure
Copy for 6110 purposes
Attachment A

cc:
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ATTACHMENT A

LEGEND

A = Ruling is requested under Treas. Reg. § 1.1502-2(g)(2)(i).

B = Ruling is requested under Treas. Reg. § 1.1503-2(g)(2)(vi)(B).

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