PLR 1120016: IRS grants relief for a late Form 1128

Plain-English summary

The IRS ruled that a taxpayer's late-filed Form 1128 application to change its annual accounting period would be treated as timely filed. The taxpayer intended to make the change on time but missed the deadline because of an error or misunderstanding, and the IRS found that the taxpayer acted reasonably and in good faith without prejudicing the government. The relief was granted under Treas. Reg. § 301.9100-3 and was limited to the Form 1128 filing and the represented facts.

Ruling snapshot

• Question: May the taxpayer's late Form 1128 application to change its tax year be treated as timely filed?
• Outcome: Approved.
• Key authorities: IRC § 442; Treas. Reg. §§ 301.9100-2 and 301.9100-3; Rev. Proc. 2006-45.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201120016 Third Party Communication: None
Release Date: 5/20/2011 Date of Communication: Not Applicable
Person To Contact:
Index Number: 9100.09-00 ----------------, ID No. ------------
Telephone Number:
---------------------
--------------------------------------------------- Refer Reply To:
----------------------------------------- CC:ITA:B05
-------------------- PLR-147524-10
------------------- Date:
--------------------------- February 11, 2011

Legend:

Taxpayer -------------------------------------------------------

Year 1: -----------
Year 2: -----------
Date 1: ------------------
Date 2: ----------
Date 3: --------------

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

    This is in reference to a Form 1128, Application to Adopt, Change or Retain a

Tax Year, submitted on behalf of the above-named taxpayer, requesting permission to
change its accounting period, for federal income tax purposes, from a taxable year
ending Date 1, to a taxable year ending Date 2, effective Date 2, Year 1. The taxpayer
has requested that the Form 1128 be considered timely filed under the authority
contained in 301.9100-3 of the Procedure and Administration Regulations.

     The taxpayer’s Form 1128, requesting a change in annual accounting period to a

tax year ending Date 2, was due on or before Date 3, Year 2, but was not timely filed.
The information furnished indicates that the taxpayer intended to make the change in a
timely manner, but that due to an error or misunderstanding, the form was not timely
filed. The error was not due to any lack of due diligence or prompt action on the part of
the taxpayer.

    Section 301.9100-03(a) of the regulations 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
PLR-147524-10 2

§ 301.9100-3. Requests 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 interests of the government.

    Based on the facts and information submitted and the representations made, it is

held that the taxpayer has acted reasonably and in good faith, and that the granting of
relief will not prejudice the interests of the government. Accordingly, the requirements
of the regulations for the granting of relief have been satisfied in this case, and the
taxpayer’s late-filed Form 1128 requesting permission to change to a tax year ending
Date 2, effective for the tax year ending Date 2, Year 1, will be considered timely filed.

   A copy of this letter ruling, taxpayer’s Form 1128, and other relevant documents

are being forwarded to the service center where the taxpayer files its federal income tax
returns, with instructions that the Form 1128 be considered timely filed, and processed
in accordance with established procedures under Rev. Proc. 2006-45.

    The ruling contained in this letter is based upon facts and representations

furnished by the taxpayer and is limited to the filing of Form 1128. Except as
specifically addressed herein, no opinion is expressed as to whether the taxpayer
qualified for the automatic consent procedure or regarding the tax treatment of the
subject transaction under the provisions of any other section of the Internal Revenue
Code or Income Tax Regulations that may be applicable thereto. This office has not
verified any of the materials submitted in support of the requested ruling; verification of
factual information, representations, and other data is within the examination jurisdiction
of the taxpayer’s IRS Industry Director.

  Copies of this letter ruling are being provided to the taxpayer’s authorized

representative.

    This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3)

of the Internal Revenue Code provides that it may not be used or cited as precedent.

                                   Sincerely Yours,

                                   /s/ William A. Jackson

                                   William A. Jackson
                                   Chief, Branch 5
                                   Office of Associate Chief Counsel
                                   (Income Tax & Accounting)

Enclosures:
Copy for section 6110 purposes
Copy of this letter ruling