PLR 200842032: A taxpayer receives 30 days to file a late calendar-year election

Plain-English summary

A taxpayer wanted to adopt a December 31 tax year but did not file Form 1128 by the deadline for the required short-period return. It requested a discretionary extension soon after missing the deadline. The IRS found that the taxpayer acted reasonably and in good faith and that granting relief would not prejudice the government's interests. The taxpayer received 30 days from the ruling date to submit the completed Form 1128 with a copy of the ruling attached. The IRS did not decide any other tax consequences of the change.

Ruling snapshot

• Question: May the taxpayer file Form 1128 late to adopt a calendar tax year?
• Outcome: Approved. The completed form must be filed within 30 days.
• Key authorities: Treas. Reg. § 301.9100-3; Rev. Proc. 2002-39, § 6.02(1).

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 200842032
Third Party Communication: None
Release Date: 10/17/2008
Date of Communication: Not Applicable
Person To Contact:
Index Number: 9100.00-00
----------------------, ID No. -------------
Telephone Number:
---------------------
---------------------
--------------------------
Refer Reply To:
--------------------------------------
CC:ITA:B05
-------------------------
PLR-129170-08
-----------------------------------
Date:
July 14, 2008

Taxpayer ------------------------------------------
---------------------------------------
Year: -------

Dear ------------

This ruling is in reference to the taxpayer’s request that its Form 1128, “Application To Adopt, Change, or Retain a Tax Year,” be considered timely filed under the authority in § 301.9100-3 of the Income Tax Regulations on Procedures and Administration. Taxpayer is requesting to adopt a taxable year ending December 31, effective December 31, Year.

Section 6.02(1) of Rev. Proc. 2002-39, 2002-1 C.B. 1046, provides that a taxpayer must file a Form 1128 no earlier than the day following the end of the first effective year and no later than the due date (not including extensions) of the federal income tax return for the first effective tax year.

Taxpayer did not file its Form 1128 by the due date of the return for the short period (not including extensions) required to effect such change. However, taxpayer requested an extension of time to file its Form 1128 under § 301.9100-3 soon thereafter.

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. Request 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 interest of the government.

Based on the facts and information submitted and the representations made, we conclude that Taxpayer has acted reasonably and in good faith, and that the granting of relief will not prejudice the interest of the government. Accordingly, Taxpayer has

PLR-129170-08
2

satisfied the requirements of the regulations for the granting of relief. Taxpayer must file a completed Form 1128 within 30 days from the date of this letter ruling and attach a copy of this letter ruling to the request.

This ruling is based upon facts and representations submitted by the 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 a ruling. However, as part of an examination process, the Service may verify the factual information, representations, and other data submitted.

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 section of the code or the 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.

This ruling is directed only to the taxpayer requesting 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 yours,

George F. Wright
Senior Technician Reviewer, Branch 5
(Income Tax & Accounting)
Office of Chief Counsel