PLR 200745017: Extra time granted for real property status notices

Plain-English summary

A domestic corporation distributed property to its foreign parent. Neither company timely filed the statements and notices needed to establish that the corporation was not a U.S. real property holding corporation and that withholding was unnecessary. The IRS found that they met the standards for discretionary relief and gave them 60 days from the ruling date to submit the filings. The extension did not decide whether they otherwise qualified for the claimed treatment.

Ruling snapshot

• Question: Could the companies file the real property status statements and notices late?
• Outcome: Yes, within 60 days of the ruling letter.
• Key authorities: IRC §§ 897, 1445; Treas. Reg. §§ 1.897-2(g), 1.897-2(h)(2), 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 200745017
Third Party Communication: None
Release Date: 11/9/2007
Date of Communication: Not Applicable

Person To Contact:
Index Number: 897.00-00, 1445.02-08,
-----------------------, ID No. -------------
9100.00-00, 9100.22-00
Telephone Number:
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Refer Reply To:
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PLR-131631-07
------------------------------------------------ Date:
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August 14, 2007

Taxpayer -------------------------------------------------------------------------------------------------
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Parent = -------------------------------------------------------------------------------------------------
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Date 1 = -------------------------

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

This replies to a letter dated June 26, 2007, in which Taxpayer requests an extension of time under Treas. Reg. § 9100-3 to satisfy the statement and notice requirements of Treas. Reg. §§ 1.897-2(g) and 1.897-2(h)(2). The information submitted for consideration is substantially as set forth below.

The rulings contained in this letter are based upon information and representations submitted by Taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. This office has not verified any of the material submitted in support of the request for ruling. Verification of the factual information, representations, and other data may be required as a part of the audit process.

Taxpayer is a domestic corporation with multiple classes of stock. Parent is a foreign corporation that owns certain classes of Taxpayer stock. On Date 1, Taxpayer distributed property to Parent. Neither Taxpayer nor Parent timely filed the statements and notices required under Treas. Reg. §§ 1.897-2(g) and 1.897-2(h)(2) to establish that Taxpayer was not a U.S. real property holding corporation and that withholding under section 1445 was not required.
PLR-131631-07
2

Treas. Reg. § 301.9100-1(c) provides that the Commissioner has discretion to grant a reasonable extension of time under the rules set forth in § 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. § 301.9100-1(b) defines a regulatory election as an election whose due date is prescribed by a regulation, revenue ruling, revenue procedure, notice, or announcement. An election includes an application for relief in respect of tax.

Treas. Reg. § 301.9100-3(a) provides that requests for relief subject to this section will be granted when the taxpayer provides evidence (including affidavits described in § 301.9100-3(e)) to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and that the grant of relief will not prejudice the interests of the government.

Based on the facts and circumstances of this case, we conclude that the standards of
§301.9100-3(a) have been satisfied. Accordingly, Taxpayer and Parent are granted an extension of time until 60 days from the date of this ruling letter to satisfy the statement and notice requirements of Treas. Reg. §§ 1.897-2(g) and 1.897-2(h)(2) with respect to the distribution that occurred on Date 1.

The granting of an extension of time is not a determination that Taxpayer and Parent are otherwise eligible to comply with the requirements of Treas. Reg. §§ 1.897-2(g) and 1.897-2(h)(2). Treas. Reg. § 301.9100-1(a). No opinion is expressed as to the application of any other section of the Code or regulations to the facts presented.

A copy of this ruling should be attached with the statements and the notices mailed to the IRS.

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

Pursuant to the power of attorney on file in this office, a copy of this letter is being sent to your authorized representatives.

Sincerely

_______
Charles P. Besecky
Branch Chief
Associate Chief Counsel
(International, Branch 4)

cc: