Late accounting-period application treated as timely

Plain-English summary

A taxpayer filed Form 1128 late when seeking to adopt a calendar tax year. The delay resulted from an oversight or misunderstanding by the taxpayer's tax professional. The IRS found that the taxpayer acted reasonably and in good faith and that relief would not prejudice the government. It therefore treated the late application as timely filed. The ruling did not decide whether the requested accounting-period change would ultimately be permitted, and the application remained subject to the normal processing procedures.

Ruling snapshot

• Question: May the taxpayer's late Form 1128 be treated as timely filed?
• Outcome: Approved, the application was treated as timely
• Key authorities: Treas. Reg. § 301.9100-3; Rev. Proc. 2002-39

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201535005 Third Party Communication: None
Release Date: 8/28/2015 Date of Communication: Not Applicable
Index Number: 9100.09-00
Person To Contact:
----------------------------- -------------------, ID No. ----------------
----------------------------------- Telephone Number/Fax Number:
---------------------------------------------------------- -------------------- ---------------------
---------------------------------- Refer Reply To:
------------------------------------------- CC:ITA:B04
PLR-116113-15
Date:
TIN: --------------- May 26, 2015

Legend:
Year 1 = ------
Year 2 = ------

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

This is in reference to a Form 1128, Application to Adopt, Change, or Retain a Tax
Year, that the taxpayer filed requesting to adopt a taxable year ending December 31,
effective December 31, Year 1. The taxpayer has requested that the Form 1128 be
considered timely filed under the authority contained in § 301.9100 3 of the Regulations
on Procedure and Administration.

The taxpayer's Form 1128 requesting a change in accounting period to a tax year
ending December 31 was due before March 15, Year 2. The information furnished
indicates that the application for the change in accounting period was filed late because
of an oversight or misunderstanding on the part of the taxpayer’s tax professional.

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 tax year.

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 situation you present, must be made under the rules of § 301.9100-3.
Requests 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 interests of the government.
PLR-116113-15 2

Based on the facts and information submitted and the representations made, we
conclude that the taxpayer has acted reasonably and in good faith, and that the granting
of relief will not prejudice the interests of the government. Accordingly, the
requirements of the regulations for the granting of relief have been satisfied in this case,
and the taxpayer's late filed Form 1128 requesting permission to change to a tax year
ending December 31, effective for the short period of December 31, Year 1, is
considered timely filed.

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 the taxpayer is permitted
under the Code and applicable regulations to change to the tax year requested in the
Form 1128. The Form 1128 will be processed under the procedures of Rev. Proc.
2002-39.

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.

A copy of this letter must be attached to any 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.

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

                                   Sincerely,



                                   Donna J. Welsh
                                   Senior Technician Reviewer, Branch 4
                                   Office of Associate Chief Counsel
                                   (Income Tax & Accounting)