PLR 200830007: Late application to change tax year treated as timely

Plain-English summary

A taxpayer filed Form 1128 late to change its federal tax year from December 31 to March 31. It sought discretionary relief shortly after the filing deadline. The IRS found that the taxpayer acted reasonably and in good faith and that relief would not prejudice the government, so it treated the late form as timely filed. The IRS did not decide whether the taxpayer qualified to make the requested change. Because the form lacked information needed to assess possible automatic approval, the IRS returned it for submission to the appropriate service center within 45 days.

Ruling snapshot

• Question: Could the late Form 1128 be treated as timely filed for a tax year change?
• Outcome: Approved. The IRS granted filing relief but did not decide eligibility for the tax year change.
• Key authorities: Treas. Reg. §§ 301.9100-1, 301.9100-2, 301.9100-3; Rev. Proc. 2006-45.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 200830007
Third Party Communication: None
Release Date: 7/25/2008
Date of Communication: Not Applicable
Index Number: 9100.09-00
Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:ITA:B04
PLR-115067-08
Date:
April 16, 2008

Legend:

Year = -------

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

This letter ruling refers to a request that your Form 1128, Application to Adopt, Change, or Retain a Tax Year, be considered timely filed under the authority in § 301.9100-3 of the Regulations on Procedure and Administration. You filed a late Form 1128 to change your accounting period, for federal income tax purposes, from a taxable year ending December 31, to a taxable year ending March 31, effective March 31, Year.

The information furnished indicates that you did not file your Form 1128 by the due date of the return for the short period required to effect the change. You requested an extension of time to file your Form 1128 under § 301.9100-3 shortly after the required time for filing the return.

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 instant case, 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.

Based on the facts and information submitted and the representations made, we conclude that you have acted reasonably and in good faith, and that the granting of relief will not prejudice the interests of the government. Accordingly, you have satisfied

PLR-115067-08
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the requirements of the regulations for the granting of relief, and your late filed Form 1128 requesting to change to March 31, effective March 31, Year, is considered timely filed. However, the granting of an extension of time is not a determination that the taxpayer is otherwise eligible to make the election. See § 301.9100-1(a).

This ruling addresses the granting of § 301.9100-3 relief only. We express no opinion regarding the tax treatment of the instant transaction under the provisions of any other sections of the Code or regulations that may be applicable, or regarding the tax treatment of any conditions existing at the time of, or effects resulting from, the instant transaction. Specifically, we express no opinion as to whether you are permitted under the Code and applicable regulations to change to the tax year requested in the Form 1128.

Sections A and B of Part II on your Form 1128 were not completed, so it is unclear whether you may qualify for automatic approval under Rev. Proc. 2006-45. If you qualify, a change in accounting period under Rev. Proc. 2006-45 is under the jurisdiction of the Director, Internal Revenue Service Center, where the taxpayer’s returns are filed. Therefore, we are returning your application so that you may forward it along with a copy of this letter to the Director, ---------- Service Center within 45 days of the date of this letter. Any further communication regarding this matter should be directed to the Service Center. We are also including a copy of Rev. Proc. 2006-45 for your reference.

This ruling is based upon facts and representations that you submitted, accompanied by a penalty of perjury statement. This office has not verified any of the material submitted in support of the request for a ruling. However, as part of an examination process, the Service may verify the factual information, representations, and other data submitted.

This ruling is directed only to the taxpayers that requested it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent. Enclosed is a copy of the letter ruling showing the deletions proposed to be made when it is disclosed under
§ 6110.

In accordance with the Power of Attorney on file with this office, we are sending a copy of this letter to your authorized representative.

Sincerely,

Donna Welsh
Senior Technician Reviewer
(Income Tax & Accounting)
Office of Associate Chief Counsel

Enclosures