PLR 200935012: Additional time granted to file an election after a missed deadline

Plain-English summary

A parent company asked the IRS to modify an earlier ruling that gave it more time to file an election concerning a loss on subsidiary stock. The company missed a condition requiring the election to be filed within 60 days because it reasonably relied on a qualified tax professional. The IRS found that the company acted reasonably and in good faith, and that additional time would not prejudice the government. The condition will be treated as satisfied if the election is filed within 60 days after this ruling.

Ruling snapshot

• Question: Can the parent company receive additional time to satisfy the filing condition in the prior ruling?
• Outcome: Approved
• Key authorities: IRC § 1.337(d)-2T(c)(3); Treas. Reg. §§ 301.9100-1 through 301.9100-3; IRC § 6110(k)(3)

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 200935012
Third Party Communication: None
Release Date: 8/28/2009
Date of Communication: Not Applicable
Person To Contact:
Index Number: 337.16-02, 9100.29-00
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Telephone Number:
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Refer Reply To:
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PLR-118546-09
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Date:
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June 1, 2009
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Legend

Parent = ----------------------------
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Additional Tax Professional = -----------------------
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Additional Company Official = ---------------------
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Dear ------------------:

This is in response to your letter dated April 3, 2009, requesting a modification to a ruling letter dated October 16, 2008, our control number PLR-133290-08, PLR 200905021, issued to Parent (the “Prior Letter Ruling”).
The legend, facts, representations, and caveats appearing in the Prior Letter Ruling are hereby incorporated by reference for purposes of this letter. The Prior Letter Ruling granted an extension of time under §§ 301.9100-1 through 301.9100-3 of the Procedure and Administration Regulations for Parent to file a “§ 1.337(d)-2T(c) statement” under § 1.337(d)-2T(c)(3) of the Income Tax Regulations (the “Election”) to recognize some or all of a loss upon the disposition of stock of a subsidiary. Additional information was submitted in a letter dated May 26, 2009.

PLR-118546-09
2

The granting of an extension in the Prior Letter Ruling was conditioned, in part, on the filing of the Election, within 60 days from the date on the Prior Letter Ruling (“the Condition”). However, for various reasons, Parent failed to satisfy the Condition. Information and affidavits submitted by Additional Tax Professional and Additional Company Official explain the circumstances that resulted in the failure of Parent to satisfy the Condition. The information establishes that Parent reasonably relied on a qualified tax professional who failed to satisfy, or advise Parent to satisfy, the Condition. See § 301.9100-3(b)(i)(v).

Based on the facts and information submitted, including the affidavits submitted and representations that have been made, we conclude that Parent has shown that it acted reasonably and in good faith in failing to satisfy the Condition, that the requirements of
§§ 301.9100-1 and 301.9100-3 are satisfied, and that granting additional time to satisfy the Condition will not prejudice the interests of the government. Accordingly, the Condition will be deemed satisfied if the Election is filed within 60 days of the date on this letter.

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.

A copy of this letter and the Prior Letter Ruling must be attached to any income tax return to which it is relevant. Alternatively, taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of this letter and the Prior Letter Ruling.

Pursuant to a power of attorney on file with this office, a copy of this letter is being sent to your authorized representative.

Sincerely,

Ken Cohen
Senior Technician Reviewer, Branch 3
Office of Associate Chief Counsel (Corporate)

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