PLR 200744012: Late historic certification request treated as timely

Plain-English summary

A property owner renovated a building in a historic district but sought historic status certification from the Department of the Interior only after placing the property in service. The owner said it had relied on incorrect advice from state officials about the deadline. The IRS granted filing relief and treated the certification request as timely for purposes of the rehabilitation credit regulation. The letter did not independently determine the property's certified status or the amount of any credit.

Ruling snapshot

• Question: Could a late historic status application be treated as timely for the rehabilitation credit?
• Outcome: Yes, for purposes of Treas. Reg. § 1.48-12(d)(1).
• Key authorities: IRC § 47(a)(2); 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: 200744012
Third Party Communication: None
Release Date: 11/2/2007
Date of Communication: Not Applicable
Index Number: 47.00-00, 9100.00-00
Person To Contact:
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--------------------, ID No. -------------
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Telephone Number:
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Refer Reply To:
CC:PSI:5
PLR-115487-07
Date:
August 02, 2007

Legend:

Taxpayer = ----------------------------------------------------
State = -------------------
A = -----------
Property = ---------------------------------------
---------------------------------
---------------------------------
Year 1 = -------
Year 2 = -------
Date 1 = ---------------------------
Date 2 = -------------------
Date 3 = -------------------------
Date 4 = ---------------------------
SB/SE = ---------------------------------------------------

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

This letter responds to a letter submitted by your authorized representative on March 29, 2007, requesting an extension of time pursuant to § 301.9100-3 of the Procedure and Administration Regulations to file an application for certification of historic status with the United States Department of Interior for purposes of claiming the rehabilitation credit under § 47(a)(2) of the Internal Revenue Code.

According to the facts submitted, Taxpayer has owned Property since Year 1.
The Property is located in the A District, a certified historic district.

In Year 2, Taxpayer began extensive exterior renovations to Property. The renovations were completed by Date 1. On Date 2, Taxpayer submitted an application
PLR-115487-07
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for certification of historic status to the Department of the Interior. In a letter dated Date 3, the Department of the Interior, National Park Service, notified Taxpayer that the application had not been filed until after Property had been placed in service. As a result, the rehabilitation credit was not available to Taxpayer.

Taxpayer represents that it failed to file the application with the Department of the Interior prior to placing Property in service, as required by § 1.48-12(d)(1) of the Income Tax Regulations, because Taxpayer relied on the incorrect advice of State officials. As Property was never taken out of service, Taxpayer thought the application did not have to be filed with the Department of the Interior before the rehabilitation was complete.

LAW AND ANAYLYSIS

Section 47(a)(2) provides that the rehabilitation credit for any taxable year includes an amount equal to 20 percent 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 (and its structural components) that (i) is listed on the National Register, or (ii) is 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 Department of the Interior that such building is a certified historic structure within the meaning of the historic rehabilitation credit provisions, and the 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 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
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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 the 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 on Date 4. 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.

In accordance with the power of attorney on file, a copy of this letter is being sent to Taxpayer's authorized representative.

Sincerely,

/s/
William P. O'Shea
Associate Chief Counsel (Passthroughs and Special Industries)

Enclosures (2)

Copy of this letter
Copy for section 6110 purposes