PLR 201117019: IRS allows more time to request revised nuclear decommissioning fund ruling amounts

Plain-English summary

The taxpayer owned an interest in a nuclear power plant and had received a schedule of ruling amounts for its qualified decommissioning fund. After the Nuclear Regulatory Commission extended the plant's operating license, the taxpayer did not timely request a revised schedule. The IRS concluded that the requirements for relief under §§ 301.9100-1 and 301.9100-3 were satisfied. The request will be treated as timely if submitted within 120 days after the letter date. The ruling matters because § 468A generally requires a revised schedule request after a nuclear plant license renewal.

Ruling snapshot

• Question: May the taxpayer receive an extension of time to request a revised schedule of § 468A ruling amounts after its nuclear plant license was extended?
• Outcome: Approved
• Key authorities: IRC § 468A; Treas. Reg. §§ 301.9100-1 and 301.9100-3; § 1.468A-3T(f)(1)(iv)

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 201117019
Third Party Communication: None
Release Date: 4/29/2011
Date of Communication: Not Applicable
Person To Contact:
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Telephone Number:
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Refer Reply To:
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PLR-137130-10
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Date:
January 20, 2011

Re: Request for Extension of Time to File Request for Revised Schedule of Ruling Amounts Under 468A and § 1.468A-3T(f)(1)(iv) of the Temporary Income Tax Regulations1

Taxpayer = -------------------------------------------------
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Plant = ------------------------------------------------
Location = ---------------------------------------
X = --------
Date A = ------------------
Date B = -----------------------
Date C = --------------------------
Date D = -----------------------
Date E = ---------------------
Year X = -------
License = -----------------------------------------
Director = ---------------------------------------------------------------------------------
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Dear ---------------:

1
The temporary regulations were removed (and final regulations were added) by TD 9512, 75 Fed. Reg. 80697 (December 23, 2010). However, the temporary regulations were in effect at the relevant times for purpose of this request and so are cited herein.

PLR-137130-10
2

This letter responds to a letter submitted September 9, 2010, requesting an extension of time pursuant to § 301.9100-3 of the Procedure and Administration Regulations for Taxpayer to file a request for a revised schedule of ruling amounts for purposes of § 468A of the Internal Revenue Code and § 1.468A-3T(f)(1)(iv).

Taxpayer has represented the facts as follows: Taxpayer is the owner of Plant. Taxpayer is primarily engaged in the generation, transmission, and distribution of electric energy. Taxpayer operates and owns an X percent interest in the Plant. Taxpayer has established a qualified fund with respect to the Unit as allowed by section 468A. The Taxpayer received from the Internal Revenue Service a schedule of ruling amounts dated Date A. The numbers in Taxpayer’s request for that schedule of ruling amounts were calculated based on a license extension that had been applied for but not yet received. The license for Plant was originally set to expire on Date B. On Date C, the Nuclear Regulatory Commission (NRC) granted Taxpayer License, extending the operating license for Plant to Date D. Taxpayer did not request from the Service a revised schedule of ruling amounts after the license extension was granted by the NRC.

Section 468A provides that a taxpayer may elect to deduct the amount of payments made to a qualified decommissioning fund. However, former § 468A(b) limits the amount paid into such fund for any taxable year to the lesser of the amount of nuclear decommissioning costs allocable to this fund which is included in the taxpayer's cost of service for ratemaking purposes for the tax year or the ruling amount applicable to this year.

Section 468A(d)(1) provides that no deduction shall be allowed for any payment to a qualified nuclear decommissioning fund unless the taxpayer receives a schedule of ruling amounts from the Secretary. Section 468A(d)(1) further requires a Taxpayer to request a revised schedule of ruling amounts upon renewal of a nuclear power plant operating license.

Section 1.468A-3T(f)(1)(iv) requires that a taxpayer who receives a renewal of an operating license of a nuclear power plant to which a qualified nuclear decommissioning fund relates must request a revised schedule of ruling amounts on or before the deemed payment deadline for the taxable year that includes the date on which the license was extended. In this case, Taxpayer was required to request the revised schedule of ruling amounts by Date E.

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 a taxpayer who is abroad), under all subtitles of the Code, except subtitles E, G, H, and I.

PLR-137130-10
3

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.

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's request for a revised schedule of ruling amounts based on the license extension granted on Date C will be considered timely filed for purposes of § 1.468A- 3(f)(1)(iv) if such request is submitted within 120 days of the date of this letter.

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 Director.

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 Wilson
Associate Chief Counsel
(Passthroughs and Special Industries)

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