PLR 1246025: IRS grants more time to request a revised nuclear decommissioning schedule

Plain-English summary

The IRS granted a nuclear-power taxpayer 120 days to request a revised schedule of ruling amounts for a qualified nuclear decommissioning fund under IRC § 468A. The taxpayer had received an NRC extension of the plant's operating license but did not request a revised schedule by the applicable deadline. The IRS found that the taxpayer acted reasonably and in good faith and that granting relief would not prejudice the government. The request would be treated as timely if submitted within 120 days of the ruling letter.

Ruling snapshot

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

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201246025 Third Party Communication: None
Release Date: 11/16/2012 Date of Communication: Not Applicable
Person To Contact:
Index Number: 9100.22-00 -----------------------, ID No. -----------------
Telephone Number:
---------------------
------------------------ Refer Reply To:
----------------------------------------- CC:PSI:B06
----------------------------------- PLR-127907-12
------------------------ Date:
-------------------------- August 15, 2012

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

Taxpayer = ------------------------------------
-----------------------
Plant = ------------------------------------------------------------------------
Location = -----------------------------------
X = ------
Date A = -------------------
Date B = ----------------------
Date C = -------------------
Date D = ---------------------------
Date E = ----------------------
Director = ---------------------------------------------------------------------------------
-----------------------------------------------------------------------------------

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

    This letter responds to a letter submitted June 15, 2012, 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-3(f)(1)(iv).

Taxpayer has represented the facts as follows: Taxpayer is primarily engaged in the
generation, transmission, and distribution of electric energy. Taxpayer owns an X
percent interest in the Plant. Taxpayer has established a qualified fund with respect to
PLR-127907-12 2

the Plant as allowed by section 468A. The Taxpayer received a schedule of ruling
amounts from the Internal Revenue Service dated Date A. The numbers in Taxpayer’s
request for that schedule of ruling amounts were calculated based on the then-current
license expiration date. 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 a revised
schedule of ruling amounts from the Service 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-3(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.

    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
PLR-127907-12 3

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 yours,


                                             PETER C. FRIEDMAN
                                             Senior Technician Reviewer, Branch 6
                                             Office of the Associate Chief Counsel
                                             (Passthroughs and Special Industries)

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

cc: