Consolidated group received 30 days to file a required copy of its accounting method change form

Plain-English summary

A corporation and its eight subsidiaries timely attached an original Form 3115 to their consolidated return to request an automatic depreciation method change. They failed to send the required copy to the Ogden, Utah service center because their accountant had not told them about that separate filing step. After the accountant discovered the omission, the corporation promptly requested relief. Based on the submitted facts and representations, the IRS found that the regulatory-election relief requirements were satisfied and granted 30 days to file the copy. The IRS did not decide whether the group qualified for the accounting method change or had changed to an appropriate method.

Ruling snapshot

• Question: Could the consolidated group receive more time to file the service-center copy of Form 3115 required for its automatic accounting method change?
• Outcome: Approved. The IRS granted 30 days from the ruling date to file the required copy.
• Key authorities: IRC §§ 168 and 446(e); Treas. Reg. §§ 301.9100-1 through 301.9100-3; Rev. Proc. 2011-14

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 201426023
Third Party Communication: None
Release Date: 6/27/2014
Date of Communication: Not Applicable
Index Number: 9100.10-01
Person To Contact:
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CC:ITA:6
PLR-150876-13
Date:
March 18, 2014

Re: Request for Extension of Time to File Odgen, Utah Service Center Copy of Form 3115, Application for Change in Method of Accounting.

Legend

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PLR-150876-13
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Preparer = ---------------------------

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Date 1 = ---------------------

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Date 2 = --------------------------

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Date 3 = ---------------------------

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

This letter is in reply to a private letter ruling request dated December 10, 2013, filed by Taxpayer on behalf of itself and its eight subsidiaries, B, C, D, E, F, G, H, J requesting an extension of time under § 301.9100-1(c) of the Procedure and Administration Regulations to file a copy of a Form 3115, Application for Change in Accounting Method, for the taxable year beginning Date 1 and ending on Date 2, with the Ogden, Utah service center as required by section 6.02(3) of Rev. Proc. 2011-14, 2011-1 I.R.B. 330. Taxpayer and its subsidiaries requested an accounting method change of depreciation under § 168 of the Internal Revenue Code. Taxpayer’s private letter ruling request was made in accordance with § 301.9100-3.

FACTS

On Date 3, Taxpayer timely filed its consolidated federal income original tax return for the taxable year ending Date 2, along with the original of the Form 3115. However, Taxpayer did not file a copy of the Form 3115 with the Ogden, Utah service center as required by Rev. Proc. 2011-14, because Preparer (Taxpayer’s accountant) did not inform Taxpayer, either orally or in writing, of the requirement to do so. Taxpayer’s consolidated tax return reflected this change in accounting method.

Preparer later discovered that the copy of the Form 3115 was not filed with the Odgen, Utah service center and informed Taxpayer. Taxpayer promptly filed this request for an extension of time to file a copy of the Form 3115 with the Odgen, Utah service center.

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 satisfying all applicable requirements of this revenue procedure is deemed to have obtained the

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consent of the Commissioner to change its method of accounting under § 446(e) and the associated Income Tax Regulations.

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 two separate steps. Step one requires the taxpayer to attach the original Form 3115 to the taxpayer’s timely filed original federal income tax return for the year of change. Step two requires the taxpayer to file a signed copy of the Form 3115 to either the national office or Odgen, Utah service center no earlier than the first day of the year of change, and no later than the date the original Form 3115 is filed with the taxpayer’s federal income tax return for the year of change.

Section 301.9100-1(c) provides that 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 certain regulatory elections. Section 301.9100-1(b) defines a regulatory election as an election whose due date is prescribed by a regulation published in the Federal Register, or a revenue ruling, revenue procedure, notice, or announcement published in the Internal Revenue Bulletin.

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.

Requests for relief under § 301.9100-3 will be granted when a taxpayer provides evidence to establish to the satisfaction of the Commissioner (1) that the taxpayer acted reasonably and in good faith, and (2) that granting relief will not prejudice the interests of the Government. See § 301.9100-3(a).

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, we hereby grant an extension of time for Taxpayer to file the necessary copy of the Form 3115 with the Odgen, Utah service center. This extension shall be for a period of 30 days from the date of this ruling. Please attach a copy of this ruling to the Form 3115.

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

Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter. Specifically, we express no opinion as to whether Taxpayer qualifies to make its change in accounting method under the provisions of Rev. Proc. 2011-14. Nor do we express any opinion as to whether Taxpayer has changed to an appropriate method of accounting.

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This ruling is directed only to Taxpayer, who requested it. Section 6110(k)(3) provides that it may not be used or cited as precedent.

In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to Taxpayer’s authorized representatives.

Sincerely,

ROY HIRSCHHORN
Chief, Branch 6
Office of Associate Chief Counsel
(Income Tax & Accounting)