PLR 200441020: Late foreign earned income election relief denied

Plain-English summary

A taxpayer who had lived and worked abroad requested more time to elect the foreign earned income exclusion for an earlier year. He filed his return late and provided no documentation or affidavit explaining the delay. The IRS denied the extension because he had not shown that he acted reasonably and in good faith, as the regulatory relief standard requires. The ruling addresses the late election request, not the amount of foreign income itself.

Ruling snapshot

• Question: Could the taxpayer receive an extension to elect the foreign earned income exclusion?
• Outcome: Denied: the taxpayer did not establish reasonable and good faith conduct.
• Key authorities: IRC § 911; Treas. Reg. §§ 301.9100-1, 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 200441020
Third Party Communication: None
Release Date: 10/8/04
Date of Communication: Not Applicable
Index Number: 911.11-03
Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:INTL:B02
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PLR-150496-02
Date:
June 15, 2004

DO:----------------------TY: -------

LEGEND
Taxpayer = ---------------------------
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Year X = -------
Year Y = -------

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

This is in response to a letter dated June 27, 2002, requesting that Taxpayer be granted an extension of time under Treas. Reg. § 301-9100-3 to elect the foreign earned income exclusion under section 911 of the Internal Revenue Code (“Code”) for Year X.

The ruling contained in this letter is based upon information and representations submitted by the Taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the request for rulings, it is subject to verification on examination.

Taxpayer has lived and worked abroad for most of his adult life. However, Taxpayer failed to timely file his federal income tax return for Year X and did not file that return until Year Y. Further, Taxpayer has not provided any documentation nor affidavit explaining his failure to timely file.

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
PLR-150496-02
2

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 section 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 section 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.

Based on the facts and circumstances of this case, we conclude that Taxpayer does not satisfy Treas. Reg. § 301.9100-3(a). Accordingly, Taxpayer’s request for an extension of time under Treas. Reg. § 301-9100-3 to elect the foreign earned income exclusion under section 911 of the Code for Year X is denied.

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

Sincerely,

Allen Goldstein
Reviewer
Office of the Associate Chief
Counsel (International)