PLR 201008020: IRS treats a late historic-status application as timely for rehabilitation credit purposes

Plain-English summary

The IRS considered a taxpayer that rehabilitated a building eligible for possible historic rehabilitation tax credits but did not timely file the required application for historic-status certification. The taxpayer said a consultant failed to file the application and the taxpayer did not file the relevant part of the certification application before placing the property in service. The IRS concluded that the requirements for relief under Treas. Reg. § 301.9100-3 were satisfied and treated the application as timely filed for purposes of Treas. Reg. § 1.48-12(d)(1). The ruling did not address federal income tax consequences under other Code provisions.

Ruling snapshot

• Question: Could the taxpayer's late historic-status application be treated as timely for rehabilitation credit purposes?
• Outcome: Approved
• Key authorities: IRC § 47; Treas. Reg. §§ 1.48-12(d)(1), 301.9100-1, 301.9100-2, and 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 201008020
Third Party Communication: None
Release Date: 2/26/2010
Date of Communication: Not Applicable
Person To Contact:
Index Number: 47.00-00, 9100.00-00
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Telephone Number:
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Refer Reply To:
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CC:PSI:05
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PLR-125066-09
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Date:
November 12, 2009

Legend:

Taxpayer = ------------------------------------------------
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Property = --------------------------------------------------------------------------------------
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Trust = ------------------------------------------------------------------------
Date = ------------------------
Year 1 = -------
Year 2 = -------
Year 3 = -------
District = ----------------------------------------------
Consultant = ------------------

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

This letter responds to your letter dated ---------------------, and subsequent correspondence 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 rehabilitation tax credits under § 47(a)(2) of the Internal Revenue Code.

According to the facts submitted, Taxpayer purchased Property on Date, and subsequently transferred Property to Trust. Property was built in Year 1. Property is located in District that is designated as a registered historic district. Additionally, Property is listed on the National Register of Historic Places.

In Year 2, Taxpayer began rehabilitating and renovating Property. Taxpayer completed the rehabilitation and renovation in Year 3.
PLR-125066-09
2

Taxpayer represents that it retained the services of Consultant to prepare and file the application for certification of historic status of Property with the Department of Interior. However, Consultant failed to file the application with the Department of Interior, and Taxpayer failed to file Part I of the Historic Preservation Certification application with the Department of Interior prior to placing Property in service.

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 is (i) 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 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 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.
PLR-125066-09
3

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. 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 appropriate 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.

Sincerely,

Curt G. Wilson
Associate Chief Counsel
(Passthroughs and Special Industries)

Enclosures (2)

Copy of this letter
Copy for section 6110 purposes

cc: ----------------------------------
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