Taxpayer granted 60 days to file an omitted original Form 3115

Plain-English summary

The IRS considered a request for more time to file an original Form 3115, which is used to request a change in accounting method. The taxpayer had timely filed a signed duplicate with the IRS National Office and had implemented the accounting change on its return, but the original form was accidentally left off the electronically filed return. The IRS found that the taxpayer acted reasonably and in good faith and that relief would not prejudice the government. It granted 60 calendar days from the letter date to file the original Form 3115. The ruling did not express an opinion on the accounting method itself or other tax consequences.

Ruling snapshot

• Question: Could the taxpayer receive additional time to file the original Form 3115 after it was omitted from the timely filed return?
• Outcome: Approved.
• Key authorities: IRC §§ 446(e), 481(a); §§ 301.9100-1 and 301.9100-3; Rev. Proc. 2008-52; 26 U.S.C. § 6110(k)(3)

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201145014 Third Party Communication: None
Release Date: 11/10/2011 Date of Communication: Not Applicable
Index Number: 9100.00-00
Person To Contact:
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Telephone Number:
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------------------------ Refer Reply To:
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PLR-110409-11
Date:

                                                           August 01, 2011

TY: -------

Legend

Taxpayer: -------------------------------------------------------------------------------

Date 1: ---------------------

Date 2: --------------------------

Firm: ----------------------------------------

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

This is in response to a letter dated March 7, 2011, submitted on behalf of Taxpayer,
requesting an extension of time pursuant to §§ 301.9100-1 and 301.9100-3 of the
Procedure and Administration Regulations to file an original Form 3115, Application for
Change in Accounting Method, as required by section 6.02(3) of Rev. Proc. 2008-52,
2008-2 C.B. 587, for the taxable year ending date 1.

FACTS

On date 2, Taxpayer timely filed a signed duplicate of a Form 3115 with the National
Office pursuant to section 6.02(3) of Rev. Proc. 2008-52, applying for consent to change
its method of accounting for self-insured employee medical benefits, for the year ending
on date 1. Taxpayer had employed Firm to complete its filing for the year ending on
date 1. On date 2, Firm timely filed Taxpayer’s federal income tax return for the taxable
year ending date 1, via electronic filing. The return implemented the change in
Taxpayer’s method of accounting for self-insured employee medical benefits pursuant
to section 19.01 of Rev. Proc. 2008-52, as reflected on the duplicate Form 3115 that
was filed with the National Office on date 2. The day after filing, Firm discovered that

PLR-110409-11 2

the signed original Form 3115 had not been attached to the electronically filed federal
income tax return for the tax year ending date 1.

LAW & 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
provisions of that revenue procedure obtains 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 that revenue procedure 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 return 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 the Form 3115 to the director at the same time it
files a copy of the application with the National Office of the Internal Revenue Service.

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.

In this instance, Taxpayer timely filed the duplicate Form 3115 with the National Office.
Taxpayer implemented the new method of accounting on its tax return for the year of
change. However, in an oversight, the tax professional employed by Taxpayer that was
charged with completing Taxpayer’s application failed to attach the original Form 3115
to Taxpayer’s return as required by section 6.02(3) of Rev. Proc. 2008-52.

PLR-110409-11 3

CONCLUSION

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 Form 3115 in
accordance with section 6.02(3) of Rev. Proc. 2008-52.

Except as specifically ruled 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 the propriety of the method of accounting that was
actually implemented by Taxpayer, the calculation of any adjustment required by
§ 481(a), or whether Taxpayer was otherwise qualified to file the Form 3115 for the
change in method of accounting under Rev. Proc. 2008-52.

The ruling contained in this letter is 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 a ruling, it is subject to verification on examination.

Pursuant to the power of attorney on file with this office, a copy of this letter is being
sent to the taxpayer's authorized representatives.

                                          Sincerely,



                                          TaJuana Nelson Hyde
                                          Assistant Branch Chief, Branch 1
                                          (Income Tax & Accounting)

CC: Industry Director, ------------------------------------------------------------------

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