PLR 1039006: IRS granted 60 days to submit a duplicate accounting-method form

Plain-English summary

An S corporation asked for more time to file a signed duplicate copy of Form 3115 with the IRS national office after changing an accounting method for depreciable property of its qualified subchapter S subsidiaries. The taxpayer had timely filed the original form with its federal income tax return but relied on its accounting firm to submit the required copy. The IRS found that the requirements for discretionary relief were satisfied and granted 60 calendar days from the ruling date to file the duplicate. The ruling did not determine whether the taxpayer otherwise qualified to make the accounting-method change.

Ruling snapshot

• Question: Could the taxpayer receive more time to file the signed duplicate Form 3115?
• Outcome: Approved
• Key authorities: IRC § 446(e); Treas. Reg. §§ 301.9100-1 through 301.9100-3; Rev. Proc. 2008-52

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201039006 Third Party Communication: None
Release Date: 10/1/2010 Date of Communication: Not Applicable
Index Number: 9100.00-00
Person To Contact:
-------------------- ---------------------, ID No. -----------------
---------------------------- Telephone Number:
----------------------- ---------------------
----------------------------- Refer Reply To:
------------------------------------- CC:ITA:B07
PLR-104597-10
Date: July 1, 2010

Re: --------------------------------------------------------------------------------------------------------------

Taxpayer = ------------------------------------------------
Subsidiaries = -----------------------------------------------------------------------------------------------

Date A = --------------------------------

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

   This ruling responds to a letter dated December 22, 2009, submitted by Taxpayer

on behalf of Subsidiaries, requesting an extension of time pursuant to §§ 301.9100-1
and 301.9100-3 of the Procedure and Administration Regulations to file a duplicate copy
(with signature) of Form 3115, Application for Change in Accounting Method, with the
Internal Revenue Service (IRS) national office.

FACTS

     Taxpayer represents that the facts are as follows:

   Taxpayer is an S corporation and Subsidiaries are qualified subchapter S

subsidiaries of Taxpayer. Taxpayer timely filed its federal income tax return for the
taxable year ended Date A. Taxpayer attached to the federal income tax return, an
original Form 3115 filed under the automatic procedures of Rev. Proc. 2008-52, 2008-
36 I.R.B. 587, as amplified, clarified, and modified by Rev. Proc. 2009-39, 2009-38
I.R.B. 371. Taxpayer filed Form 3115 to change the method of accounting for certain
depreciable property of Subsidiaries.
PLR-104597-10 2

   Taxpayer relied on its accounting firm to file a copy of the Form 3115 (with

signature) with the IRS national office. Taxpayer discovered, subsequently, that the
copy was not filed with the IRS national office as required by section 6.02(3)(a) of Rev.
Proc. 2008-52.

RULING REQUESTED

   Taxpayer requests an extension of time pursuant to §§ 301.9100-1 and

301.9100-3 of the Procedure and Administration Regulations to file a copy (with
signature) of the Form 3115 at issue with the IRS national office.

LAW AND ANALYSIS

    Rev. Proc. 2008-52 provides the procedures by which a taxpayer may obtain

automatic consent to change certain methods of accounting. A taxpayer complying with
all the applicable provisions of this revenue procedure has obtained the consent of the
Commissioner to change the taxpayer’s method of accounting under § 446(e) of the
Internal Revenue Code and the regulations thereunder.

    Section 6.02(3)(a) of Rev. Proc. 2008-52 provides that a taxpayer changing a

method of accounting pursuant to Rev. Proc. 2008-52 must complete and file a Form
3115 in duplicate. The original must be attached to the taxpayer’s timely filed (including
extensions) original federal income tax return for the year of change, and a copy (with
signature) of the Form 3115 must be filed with the IRS national office no earlier than the
first day of the year of change and no later than when the original is filed with the federal
income tax return for the year of change.

   Under § 301.9100-1(c), the Commissioner has discretion to grant a reasonable

extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3 to make a
regulatory election. Sections 301.9100-1(b) defines a regulatory election as an election
whose due date is prescribed by a regulation published in the Federal Register, or a
revenue ruling, revenue procedure, notice or announcement published in the Internal
Revenue Bulletin.

   Sections 301.9100-1 through 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.

  Section 301.9100-3(a) provides that requests for relief under § 301.9100-3 will be

granted when the taxpayer provides evidence to establish to the satisfaction of the
PLR-104597-10 3

Commissioner that the taxpayer acted reasonably and in good faith, and the grant of
relief will not prejudice the interests of the government.

CONCLUSIONS

   Based solely on the facts and representations submitted, we conclude that the

requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied. Accordingly,
Taxpayer is granted 60 calendar days from the date of this letter to file the required
duplicate copy (with signature) of the Form 3115 at issue with the IRS national office.
Please attach a copy of the ruling to the copy of the Form 3115 when it is filed.

   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. Specifically, no opinion is expressed or implied concerning
whether Taxpayer is qualified to file the Form 3115 for the change in method of
accounting for the treatment of certain depreciable property under Rev. Proc. 2008-52,
or whether Taxpayer otherwise meets the requirements of Rev. Proc. 2008-52.

  In accordance with the power of attorney, we are sending a copy of this letter to

Taxpayer's authorized representative. We are also sending a copy of this letter to the
appropriate Industry Director, LMSB.

  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,




                                             WILLIE ARMSTRONG, JR.
                                             Senior Technical Reviewer, Branch 7
                                             Office of Associate Chief Counsel
                                             (Income Tax and Accounting)

Enclosures (2):
copy of this letter
copy for section 6110 purposes