IRS grants late-filing relief for an accounting-period change

Plain-English summary

The IRS considered a taxpayer's late Form 1128 requesting a change from a December 31 tax year to a November 30 tax year. The taxpayer requested relief under § 301.9100-3 after missing the filing deadline. The IRS found that the taxpayer acted reasonably and in good faith and that relief would not prejudice the government, so it treated the late Form 1128 as timely filed. The ruling addressed only the requested late-filing relief and expressed no opinion on whether the tax-year change otherwise qualified.

Ruling snapshot

• Question: Could the taxpayer's late Form 1128 be treated as timely filed under § 301.9100-3?
• Outcome: Approved, late filing treated as timely
• Key authorities: Treas. Reg. §§ 1.442-1(b) and 301.9100-3; Rev. Procs. 2002-39 and 2006-45

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201408028 Third Party Communication: None
Release Date: 2/21/2014 Date of Communication: Not Applicable
Index Number: 9100.00-00
Person To Contact:
---------------------- ------------------------, ID No. -------------
---------------------------------------- Telephone Number:
------------------------- ----------------------
---------------------------------------- Refer Reply To:
--------------- CC:ITA:B05
----------------------------- PLR-147168-13

• Date:
  November 20, 2013

Taxpayer: ---------------------------
EIN: -----------------
In re: ------------------------------
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 the accounting period for the above-named taxpayer, for federal
income tax purposes, from a taxable year ending December 31, to a taxable year
ending November 30, effective November 30, Year.

Section 1.442-1(b) of the Income Tax Regulations provides that in order to secure the
Commissioner’s consent to a change in annual accounting period, the taxpayer must
file an application on Form 1128 with the Commissioner within such time and in such
manner as is provided in administrative procedures published by the Commissioner.

Section 6.02(1) of Rev. Proc. 2002-39, 2002-1 C.B. 1046, provides that a taxpayer must
file a Form 1128 no earlier than the day following the end of the first effective year and
no later than the due date (not including extensions) of the federal income tax return for
the first effective year.

Taxpayer did not file its Form 1128 by the due date of the return for the short period (not
including extensions) required to effect such change. However, taxpayer requested an
extension of time to file its Form 1128 under § 301.9100-3 soon thereafter, at the time

PLR-147168-13 2

the taxpayer determined that for the year of change it failed to meet the Scope
provisions of Rev. Proc. 2006-45, 2006-2 C.B. 851.

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
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.

Based on the facts and information submitted and the representations made, we
conclude that Taxpayer has acted reasonably and in good faith, and that the granting
of relief will not prejudice the interest of the government. Accordingly, Taxpayer has
satisfied the requirements of the regulations for the granting of relief, and Taxpayer’s
late filed Form 1128 requesting to change to November 30, effective November 30,
Year, is considered timely filed.

Because a change in period under Rev. Proc. 2006-45 is under the jurisdiction of the
Director, Internal Revenue Service Center, where the taxpayer’s returns are filed we
have forwarded the application to the Director, ------------------Service Center. Any
further communication regarding this matter should be directed to the Service Center.

This ruling is based upon facts and representations submitted by the taxpayer and
accompanied by a penalty of perjury statement executed by an appropriate party. This
office has not verified any of the material submitted in support of the request for a ruling.
However, as part of an examination process, the Service may verify the factual
information, representations, and other data submitted.

This ruling addresses the granting of § 301.9100-3 relief only. We express no opinion
regarding the tax treatment of the instant transaction under the provisions of any other
section of the code or the regulations that may be applicable, or regarding the tax
treatment of any conditions existing at the time of, or effects resulting from, the instant
transaction. Specifically, we express no opinion as to whether the Code and applicable
regulations or Rev. Proc. 2002-39 permits the taxpayer to change to the tax year
requested in the Form 1128.

A copy of this letter ruling must be attached to the taxpayer’s income tax return to which
it is relevant. Alternatively, taxpayers filing their returns electronically may satisfy this
requirement by attaching a statement to their return that provides the date and control
number of the letter ruling.

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

PLR-147168-13 3

§ 6110.

In accordance with the Power of Attorney on file with this office, we are sending a copy
of this letter to your authorized representatives.

                                     Sincerely yours,



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

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