PLR 200729020: Historic building certification request treated as timely

Plain-English summary

An owner placed a rehabilitated building in service before applying to the Department of the Interior to certify its historic status. The National Park Service initially refused to process the late application, although it later approved the rehabilitation work. The owner said it had relied on professionals to file the required forms and learned of the advance filing rule only later. The IRS granted an extension under the regulatory relief rules, so the certification application would be treated as timely for the historic rehabilitation credit regulation. The ruling did not decide whether the owner placed the property in service or qualified for the credit.

Ruling snapshot

• Question: Can the owner's late historic status certification application be treated as timely for the rehabilitation credit rules?
• Outcome: Approved: the application is treated as timely under the specified regulation.
• Key authorities: IRC § 47(a)(2), (c)(3)(A); Treas. Reg. §§ 1.48-12(d)(1), 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 200729020
Third Party Communication: None
Release Date: 7/20/2007
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:
CC:PSI:B06
PLR-142154-06
Date:
April 9, 2007

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 = ----------------------------------------------------

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

This letter responds to a letter submitted August 28, 2006, 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.
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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 acquired the Property and placed the Property in service. The Property had been rehabilitated by the prior owner but had not been placed in service. No rehabilitation tax credits were taken by the prior owner. On C, Taxpayer sent the application for certification of historic status (the “application”) to the Department of the Interior. By letter dated D, the Department of Interior, National Park Service (NPS), informed the Taxpayer that it would not process the application because the Taxpayer had not filed the application for certification until after the Property had been placed in service and the rehabilitation tax credit was unavailable to the Taxpayer as a result. Principle members of Taxpayer never received this letter because they resided outside of the United States at that time. Representatives of Taxpayer did not act on this letter or forward it to the members of Taxpayer.

Taxpayer contacted the NPS in E, and requested that NPS process its application for approval of the rehabilitation work performed. NPS approved the rehabilitation by letter dated F. Taxpayer represents that it intended to claim the rehabilitation credit for the work performed and that it relied on qualified professionals to timely file the appropriate forms to ensure the availability of the credit. 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.

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
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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.

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. More specifically, this letter does not constitute a ruling on whether the Property was placed in service by the Taxpayer or whether the prior owner claimed the rehabilitation tax credit with respect to the Property.

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

William P. O’Shea
Associate Chief Counsel
(Passthroughs and Special Industries)

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