PLR 200445018: Late accounting year change application treated as timely

Plain-English summary

A taxpayer filed Form 1128 late to request a change from a December 31 to a November 30 tax year. The letter says the late filing resulted from an error or misunderstanding. The IRS found that the taxpayer acted reasonably and in good faith and that relief would not prejudice the government. It treated the late Form 1128 as timely filed under Treasury Regulation section 301.9100-3. The ruling did not expressly grant permission for the requested accounting period change.

Ruling snapshot

• Question: Could the late Form 1128 seeking a November 30 tax year be treated as timely filed?
• Outcome: Approved as to filing timeliness.
• Key authorities: Treas. Reg. § 301.9100-3; Rev. Proc. 2002-39.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 200445018
[Third Party Communication:
Release Date: 11/5/04
Date of Communication: Month DD, YYYY]
Index Number: 9100.09-00
Person To Contact:
------------------------------
--------------, ID No. -------------
-------------
Telephone Number:
--------------------------------
---------------------
-------------------
Refer Reply To:
-----------------------
CC:ITA:B04
------------------------------------
PLR-133195-04
Date:
July 15, 2004
TIN: ----------------
-

-
Taxpayer = ------------------------------------------------------------
Year 1 = -------
Year 2 = -------

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

This is in reference to a Form 1128, Application to Adopt, Change, or Retain a Tax Year, submitted on behalf of the taxpayer, requesting permission to change its accounting period, for federal income tax purposes, from a taxable year ending December 31, to a taxable year ending November 30, effective November 30, Year 1.
The taxpayer has requested that the Form 1128 be considered timely filed under the authority contained in § 301.9100 3 of the Procedure and Administration Regulations.

The taxpayer's Form 1128 requesting a change in accounting period to a tax year ending November 30 was due before March 15, ------. The information furnished indicates that the application for the change in accounting period was filed late because of an error or misunderstanding.

Section 6.02(1) of Rev. Proc. 2002-39, 2002-1 C.B. 1046, provides that a taxpayer must file a Form 1128 no earlier than the day following the end of the first effective year and no later than the due date (not including extensions) of the federal income tax return for the first effective tax year.

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

PLR-133195-04
2

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 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 change to a tax year ending November 30, effective for the short period of November 30, Year 1, is considered timely filed.

Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter.

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

In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to your authorized representative.

A copy of this letter must be attached to any income tax return to which it is relevant.

The rulings contained in this letter are 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.

Sincerely,

Robert A. Berkovsky
Branch Chief, Branch 4
(Income Tax & Accounting)

cc: ------------------------