PLR 201351011: taxpayer gets extra time to file Forms 3115

Plain-English summary

A taxpayer timely filed its federal return and duplicate Forms 3115 to change its depreciation accounting method, but an accounting firm accidentally failed to attach the original Forms 3115 to the electronically filed return. The IRS concluded that the taxpayer met the standards for relief under the regulatory-election rules. It granted 60 calendar days from the ruling date to file the signed original forms with an amended return. The ruling did not decide whether the taxpayer otherwise qualified for the accounting-method change.

Ruling snapshot

• Question: May a taxpayer receive more time to file original Forms 3115 after they were omitted from an electronic return?
• Outcome: Approved
• Key authorities: IRC § 446(e); Rev. Proc. 2011-14; Treas. Reg. §§ 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 201351011
Third Party Communication: None
Release Date: 12/20/2013
Date of Communication: Not Applicable
Index Number: 9100.10-01
Person To Contact:
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Refer Reply To:
CC:ITA:B07
PLR-119937-13
Date:
September 10, 2013

Re: Request for Extension of Time to file Form 3115, Application for Change in Accounting Method

Taxpayer = ----------------------------------------------------------------------- Date1 = ----------------------

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

This ruling responds to a letter dated April 18, 2013, submitted by Taxpayer, requesting an extension of time pursuant to § 301.9100-3 of the Procedure and Administration Regulations to file original Forms 3115, Application for Change in Accounting Method, to change Taxpayer’s method of accounting for depreciation for the taxable year ending Date1.

FACTS

Taxpayer represents that the facts are as follows:

Taxpayer timely filed its federal income tax return for the taxable year ending Date1 through an electronic filing. Taxpayer timely filed the signed duplicate copies of the Forms 3115 to change Taxpayer’s method of accounting for depreciation for the taxable year ending Date1 under section 6.01 of the Appendix of Rev. Proc. 2011-14, 2011-4 I.R.B. 330, with the Internal Revenue Service (IRS) office in Ogden, Utah. Taxpayer's federal income tax return for the taxable year ending Date1 reflected a change in Taxpayer’s method of accounting for depreciation under section 6.01 of the Appendix of Rev. Proc. 2011-14, as reflected on the duplicate filings of the copies of the Forms 3115. However, Taxpayer inadvertently failed to attach the original Forms 3115 to its electronically filed federal income tax return for the taxable year ending Date1.
PLR-119937-13
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Taxpayer engaged an accounting firm to prepare and electronically file Taxpayer’s federal income tax return and the Forms 3115 for the taxable year ending Date1. After timely filing such federal income tax return and the signed duplicate copies of such Forms 3115, Taxpayer and the accounting firm discovered that the accounting firm had inadvertently not attached the required original Forms 3115 to the federal income tax return when such federal income tax return was electronically filed.

RULING REQUESTED

Taxpayer requests an extension of time pursuant to § 301.9100-3 of the Procedure and Administration Regulations to file the original Forms 3115 to change Taxpayer’s method of accounting for depreciation under section 6.01 of the Appendix of Rev. Proc. 2011-14, 2011-4 I.R.B. 330, for the taxable year ending Date1.

LAW AND ANALYSIS

Rev. Proc. 2011-14 provides the procedures by which a taxpayer may obtain automatic consent to change certain methods of accounting. A taxpayer complying with all the applicable provisions of this revenue procedure has obtained the consent of the Commissioner of Internal Revenue to change the taxpayer’s method of accounting under § 446(e) of the Internal Revenue Code and the Income Tax regulations thereunder.

Section 6.02(3)(a) of Rev. Proc. 2011-14 provides that a taxpayer changing a method of accounting pursuant to Rev. Proc. 2011-14 must complete and file a Form 3115 in duplicate. Section 6.02(3)(a)(i) of Rev. Proc. 2011-14 provides that the original must be attached to the taxpayer’s timely filed (including extensions) original federal income tax return implementing the change in method of accounting for the year of change.

Under § 301.9100-(c)(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 the grant of relief will not prejudice the interests of the government.
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CONCLUSIONS

Based solely on the facts and representations submitted, we conclude that the requirements of § 301.9100-3(a) have been satisfied. Accordingly, Taxpayer is granted 60 calendar days from the date of this letter to file the original Forms 3115 (with signature) to change Taxpayer’s method of accounting for depreciation under section 6.01 of the Appendix of Rev. Proc. 2011-14, 2011-4 I.R.B. 330, for the taxable year ending Date1, with an amended federal income tax return for the taxable year ending Date1.

Except as specifically set forth above, no opinion is expressed or implied concerning the federal income tax consequences of the facts described above under any other provisions of the Code. Specifically, no opinion is expressed or implied concerning (i) whether Taxpayer is qualified to file the original Forms 3115 for the change in method of accounting for depreciation under Rev. Proc. 2011-14; (ii) whether each item of property that is the subject of such Forms 3115 meets the requirements of section 6.01 of the Appendix of Rev. Proc. 2011-14; (iii) whether the change in method of accounting that is the subject of such Forms 3115 qualify under section 6.01 of the Appendix of Rev. Proc. 2011-14; or (iv) the propriety of Taxpayer’s present and proposed methods of accounting for depreciation for each item of property that is the subject of such Forms 3115.

In accordance with the power of attorney, we are sending copies of this letter to Taxpayer’s authorized representatives. We are also sending a copy of this letter to the appropriate Industry Director, Large Business & International Division (LB&I).

The ruling contained in this letter is based upon information and representations submitted by Taxpayer and accompanied by a penalty of perjury statement. While this office has not verified any of the material submitted in support for a ruling, it is subject to verification on examination.
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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,

WILLIE E. ARMSTRONG JR.

WILLIE E. ARMSTRONG JR.
Senior Technician Reviewer, Branch 7
Office of Associate Chief Counsel
(Income Tax and Accounting)

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