PLR 1126014: Consolidated group received more time to file a signed Form 3115

Plain-English summary

A parent corporation asked for more time to attach a signed original Form 3115 to a timely filed federal income tax return for members of its consolidated group. The group had filed duplicate copies with the IRS, but the signed original was not attached to the electronically filed return after an accounting-method change for repair and maintenance costs. The IRS concluded that the requirements for relief under Treas. Reg. §§ 301.9100-1 and 301.9100-3 were met. It granted 60 calendar days from the letter date to file the signed original Form 3115. The ruling did not decide whether the taxpayer qualified for the accounting-method change or whether the change met the requirements of Rev. Proc. 2008-52.

Ruling snapshot

• Question: Could the consolidated group receive more time to file the signed original Form 3115?
• Outcome: Approved, with a 60-day extension.
• Key authorities: Treas. Reg. §§ 301.9100-1 and 301.9100-3; Rev. Proc. 2008-52.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201126014 Third Party Communication: None
Release Date: 7/1/2011 Date of Communication: Not Applicable
Person To Contact:
Index Number: 9100.00-00 ----------------, ID No. -------------
Telephone Number:
---------------------
-------------------- Refer Reply To:
-------------------------- CC:ITA:B03
------------------- PLR-140993-10
------------------------------------ Date:
------------------------------------ March 28, 2011

               TY: -------

Legend

Subsidiaries = -------------------------------------------------------

Taxpayer = ---------------------------------------------

Date 1 = --------------------------

Date 2 = ----------------------

Date 3 = -----------------

Date 4 = ----------------------------

Date 5 = ------------------

Year A = -----------------

Year B = -----------------

Dear ------------------:
PLR-140993-10 2

This letter responds to a letter dated ---------------------------, submitted by Taxpayer on
behalf of Subsidiaries requesting an extension of time under § 301.9100-3 of the
Procedure and Administration Regulations to file Form 3115, Application for Change in
Accounting Method.
FACTS
Taxpayer is the parent corporation of a consolidated group of corporations that includes
Subsidiaries. On Date 1, Taxpayer filed a signed duplicate copy of a Form 3115 with
the IRS National Office, changing Subsidiaries’ method of accounting for repair and
maintenance costs pursuant to the automatic consent procedures under section 6.02(3)
of Rev. Proc. 2008-52, 2008-36 I.R.B. 587, for the taxable year ending Date 2.
At the time the duplicate Form 3115 was filed with the IRS National Office, the
information needed to compute the section 481(a) adjustment was not available. Thus,
the Form 3115 filed with the IRS National Office on Date 1 contained a statement that
the section 481(a) adjustment was to be determined. Taxpayer subsequently computed
the section 481(a) adjustment and on Date 3, Taxpayer timely filed an update duplicate
copy of the Form 3115 with the IRS National Office that included the required section
481(a) adjustment.
Taxpayer’s Year A and Year B federal income tax returns were under examination at
the time the Form 3115 was filed with the IRS National Office. Taxpayer obtained the
director’s consent to filing the Form 3115 in accordance with section 6.03(4) of Rev.
Proc. 2008-52 on Date 4. A copy of the Form 3115 was also provided to the examining
agent when Taxpayer filed the duplicate copy with the IRS National Office on Date 1.
On Date 3, Taxpayer filed an additional signed copy of the Form 3115 with the IRS’
Ogden, UT office as required by Appendix section 3.06(3) of Rev. Proc. 2008-52.
On Date 5, Taxpayer timely filed its federal income tax return for the taxable year
ending Date 2, via electronic filing. The return implemented the change in Taxpayer’s
method of accounting for repair and maintenance costs as reflected on the Form 3115.
Taxpayer relied on one of their employed tax professionals to attach the original Form
3115 to the timely filed federal tax return to complete the filing under the procedures of
Rev. Proc. 2008-52. However, Taxpayer later discovered that the signed original of
Form 3115 was not attached to the timely electronically filed federal income tax return.
RULING REQUESTED
Accordingly, Taxpayer requests that the Service grant an extension of time to file the
signed original Form 3115 in accordance with Rev. Proc. 2008-52, and that the Form
3115 be considered timely-filed under the authority contained in §§ 301.9100-1 and
301.9100-3 of the Procedure and Administration Regulations.
LAW AND ANALYSIS
Rev. Proc. 2008-52, 2008-2 C.B. 587 (as amplified, clarified and modified by Rev. Proc.
2009-39, 2009-2 C.B. 371) provides the procedures by which a taxpayer may obtain
PLR-140993-10 3

automatic consent to change certain methods of accounting described in the Appendix
thereto.
Section 6.02(3) of Rev. Proc. 2008-52 requires a taxpayer making a change under the
automatic consent procedures to complete and file an application 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.
Section 6.03(4)(b) of Rev. Proc. 2008-52 provides, in part, that a taxpayer under
examination must provide a copy of Form 3115 to the director at the time it files a copy
of the application with the IRS National Office.
Appendix section 3.06(3) of Rev. Proc. 2008-52 requires that a taxpayer changing its
method of accounting under section 3.06 must send a copy of its completed Form 3115
to the IRS in Ogden, UT.
Under § 301.9100-1, 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 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
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 the representations submitted, we conclude that the
requirements of §§ 301.9100-1 and 301.9100-3 have been met. Accordingly, Taxpayer
is granted 60 calendar days from the date of this letter to file the original of the Form
3115 (with signature) in accordance with Rev. Proc. 2008-52.
Except as specifically ruled upon above, no opinion is expressed or implied concerning
the federal income tax consequences of the facts described above. Specifically, no
opinion is expressed or implied concerning (i) whether Taxpayer is qualified to file the
Form 3115 for the change in method of accounting for repair and maintenance costs
under Rev. Proc. 2008-52; or (ii) whether the change in method of accounting that is the
subject of such Form 3115 qualifies under section 6.02(3) of Rev. Proc. 2008-52.
PLR-140993-10 4

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.

The rulings contained in this letter are based upon information and representations
submitted by the taxpayer and accompanied by a penalty of perjury statement executed
by an appropriate party. While this office has not verified any of the material submitted
in support of the request for rulings, it is subject to verification on examination.

In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to your authorized representatives.

                                   Sincerely,



                                   Christopher F. Kane
                                   Branch Chief, Branch 3
                                   (Income Tax & Accounting)

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