PLR 1305008: IRS denies late Form 1128 relief filed after 90 days

Plain-English summary

A taxpayer filed Form 1128 late to change its federal tax year from an August 31 year-end to a March 31 year-end. The taxpayer did not request relief under § 301.9100-3 until more than 90 days after the Form 1128 deadline. The taxpayer presented no unusual or compelling circumstances that justified the delay or the requested relief. The IRS concluded that granting relief would prejudice the government and denied the request.

Ruling snapshot

• Question: May the IRS grant relief for a late Form 1128 when the request is made more than 90 days after the due date without unusual or compelling circumstances?
• Outcome: Denied, the request for an extension of time was denied.
• Key authorities: IRC §§ 442, 444, and 6110; Treas. Reg. § 301.9100-3; Rev. Proc. 2006-45

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201305008 Third Party Communication: None
Release Date: 2/1/2013 Date of Communication: Not Applicable
Index Number: 9100.00-00
Person To Contact:
----------------------- ----------------------, ID No. ------------
------------------------------- Telephone Number:
----------------------- --------------------
----------------------- Refer Reply To:
------------------------------- CC:ITA:B05
PLR-141513-12
Date:
October 31, 2012

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

Year: -------

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

This ruling is in reference to the taxpayer’s request that its Form 1128, “Application To
Adopt, Change, or Retain a Tax Year,” be considered timely filed under the authority in
§ 301.9100-3 of the Procedures and Administration Regulations. Taxpayer filed a late
Form 1128 to change its accounting period, for federal income tax purposes, from a
taxable year ending August 31, to a taxable year ending March 31, effective March 31,
Year.

Rev. Proc. 2006-45, 2006-2 C.B. 851, provides procedures for certain corporations to
obtain automatic approval to change their annual accounting period under § 442 of the
Internal Revenue Code and the Income Tax Regulations thereunder. A corporation
complying with all the applicable provisions of this revenue procedure will be deemed to
have obtained the approval of the Commissioner of the Internal Revenue Service to
change its annual accounting period. Section 7.02 of Rev. Proc. 2006-45 provides that
a Form 1128 filed pursuant to the revenue procedure will be considered timely filed for
purposes of § 1.442-1(b)(1) only if it is filed on or before the time (including extensions)
for filing the return for the short period required to effect such change.

The information furnished indicates that the taxpayer did not file its Form 1128 by the
due date of the return for the short period required to effect such change. Furthermore,
the taxpayer did not request an extension of time to file its Form 1128 under
§ 301.9100-3 until more than 90 days after the due date of the Form 1128.

Section 301.9100-3(a) 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 § 301.9100-3. Request for

PLR-141513-12 2

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 interest of the government. Under § 301.9100-3 (c)(3), the
interest of the government are deemed to be prejudiced except in unusual and
compelling circumstances if the late-filed election is an accounting period regulatory
election (other than a § 444 election) and the request for relief is more than 90 days
after the due date of the Form 1128.

In the present case, the taxpayer’s request for relief under § 301.9100-3 was filed more
than 90 days after the due date for the Form 1128. Further, the taxpayer has presented
no unusual and compelling circumstances either for filing the application beyond the
90-day period or for the requested relief. Thus, granting the requested relief would
prejudice the interests of the government and the taxpayer’s request for extensions of
time to file Form 1128 is denied.

Except as expressively provided herein, no opinion is expressed or implied concerning
the tax consequences of any aspect of any item discussed or referenced in this letter.
This ruling is directed only to the taxpayer. Section 6110(k)(3) provides that it may not
be used or cited as precedent.

Enclosed is a copy of the letter ruling showing the deletions proposed to be made in the
letter when it is disclosed under § 6110.

                                      Sincerely yours,



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