PLR 200534002: Late historic status application treated as timely for rehabilitation credit

Plain-English summary

A property owner renovated a building in a historic district and applied for federal historic status certification only after placing it in service. The owner said it had mistakenly believed the building was already on the National Register and did not need preliminary approval. The National Park Service declined to process the late application. The IRS granted late filing relief, treating the application as timely for the regulatory requirement tied to the rehabilitation credit. The ruling did not decide whether the building would ultimately be certified or whether the credit was otherwise available.

Ruling snapshot

• Question: Could the historic status certification application be treated as timely despite being filed after rehabilitation?
• Outcome: Approved: the application was deemed timely for Treas. Reg. § 1.48-12(d)(1).
• Key authorities: IRC § 47(a)(2), (c)(3)(A); Treas. Reg. §§ 1.48-12(d)(1), 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 200534002
Third Party Communication: None
Release Date: 8/26/2005
Date of Communication: Not Applicable
Index Number: 9100.22-00
Person To Contact:
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Telephone Number:
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Refer Reply To:
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CC:PSI:B06
PLR-102335-05
Date:
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May 17, 2005

Re: Request for Extension of Time to File Application for Certification of Historic Status

Taxpayer = --------------------------------------
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Property = ---------------------------------------------------------------------------------
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State = ---------
A = ------------------
B = -------
C = --------------------
D = ----------------------
E = ---------------------------
F = -------
G = -------
SB/SE Official = Territory Manager, --------------------------

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

This letter responds to a letter submitted ----------------------, requesting an extension of time pursuant to ' 301.9100-3 of the Procedure and Administration Regulations for Taxpayer to file an application for certification of historic status with the United States Department of Interior for purposes of § 47(a)(2) of the Internal Revenue Code.

PLR-102335-05
2

According to the information submitted, Taxpayer is the owner of Property. The Property is located in the A District, a certified historic district. In B, Taxpayer began renovating the Property. Taxpayer finished the rehabilitation and placed the Property in service in C. On D, Taxpayer sent the application for certification of historic status (the “application”) to the State historic preservation officer, who approved that application and forwarded it to the Department of the Interior. On E, the Taxpayer received a letter from the Department of Interior, National Park Service, informing the Taxpayer that it could not process the application because the Taxpayer had not filed the application for certification until after the completion of the work on Property.

Taxpayer represents that it intended to claim the rehabilitation credit for the F taxable year and that it failed to file the application prior to placing the Property in service, as required by ' 1.48-12(d)(1) of the Income Tax Regulations, because it believed that the Property was on the National Register of Historic Places and, as such, the preliminary approval was not required before completion of the rehabilitation of Property. Taxpayer did not learn of the requirement to file the application with the NPS before the Property was placed in service until late in G. Taxpayer’s request for an extension of time under ' 301.9100-3 was not submitted until several days after the extended due date of its return for 2003.

LAW AND ANALYSIS

Section 47(a)(2) provides that the rehabilitation credit for any taxable year includes an amount equal to 20% of the qualified rehabilitation expenditures with respect to any certified historic structure.

Section 47(c)(3)(A) provides that the term "certified historic structure" means any building 1) listed in the National Register of Historic Places, or 2) located in a registered historic district and certified by the Secretary of the Interior as being of historic significance to the district.

Section 1.48-12(d)(1) provides that a building shall be considered to be a certified historic structure at the time it is placed in service if the taxpayer reasonably believes on that date the building will be determined to be a certified historic structure and has requested on or before that date a determination from the U.S. Department of the Interior that such a building is a certified historic structure within the meaning of the historic rehabilitation credit provisions, and the U.S. Department of Interior later determines that the building is a certified historic structure.

Section 301.9100-1(c) provides that the Commissioner may grant a reasonable extension of time under the rules set forth in '' 301.9100-2 and 301.9100-3 to make a regulatory election, or a statutory election (but no more than six months except in the case of a taxpayer who is abroad), under all subtitles of the Code, except subtitles E, G, H, and I.

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Section 301.9100-1(b) provides that the term "election" includes an application for relief in respect of tax.

Sections 301.9100-2 and 301.9100-3 provide the standards the Commissioner will use to determine whether to grant an extension of time to make an election. Section 301.9100-2 provides automatic extensions of time for making certain elections. Section 301.9100-3 provides extensions of time for making elections that do not meet the requirements of ' 301.9100-2. A request for relief under ' 301.9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and that granting relief will not prejudice the interests of the government.

CONCLUSIONS

Based solely on the facts and representations submitted, we conclude that the requirements of '' 301.9100-1 and 301.9100-3 have been satisfied. Accordingly, Taxpayer's application will be considered timely filed for purposes of ' 1.48-12(d)(1). A copy of this letter should be sent to the appropriate service center with a request that it be attached to Taxpayer's amended tax return for the taxable year ending F. A copy is enclosed for that purpose.

Except as specifically set forth above, we express no opinion concerning the federal income tax consequences of the facts described above under any other provisions of the Code.

We are sending a copy of this letter to the SB/SE Official.

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

Sincerely,

Heather C. Maloy

Heather C. Maloy
Associate Chief Counsel
(Passthroughs and Special Industries)

Enclosures (2): copy of this letter copy for section 6110 purposes