Late Form 1128 treated as timely filed

Plain-English summary

The taxpayer filed Form 1128 late when seeking to change from a taxable year ending on the Saturday nearest September 30 to a calendar year. The IRS granted an extension under Treasury Regulation § 301.9100-3 because the taxpayer acted reasonably and in good faith and relief would not prejudice the government. The late Form 1128 was therefore considered timely filed. The ruling did not decide whether the requested accounting-period change was otherwise permitted or qualified under Revenue Procedure 2006-45.

Ruling snapshot

• Request: Treat a late Form 1128 requesting a change to a December 31 taxable year as timely filed
• Outcome: Approved; the late-filed Form 1128 is considered timely filed
• Key authorities: I.R.C. § 442; Treas. Reg. §§ 1.442-1(b)(1), 301.9100-2, 301.9100-3; Rev. Proc. 2006-45

Full text (IRS public release)

Internal Revenue Service                                      Department of the Treasury
                                                              Washington, DC 20224

Number: 201544023                                             Third Party Communication: None
Release Date: 10/30/2015                                      Date of Communication: Not Applicable
Index Number: 9100.00-00
                                                              Person To Contact:
----------------------------                                  ----------------------------, ID No. --------------
--------------------------------------------------            -----------------
-------------------------------------------                   Telephone Number:
-----------------------------                                 ----------------------
-----------------------                                       Refer Reply To:
                                                              CC:ITA:B05
                                                              PLR-121257-15
                                                              Date:
                                                              July 30, 2015


                  TY:-------

Legend

Taxpayer          = ---------------------------------------------------------------------

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

This is in reference to the above taxpayer’s request that its Form 1128, Application To
Adopt, Change, or Retain a Tax Year, be considered timely filed under an exercise of
the Commissioner of the Internal Revenue Service discretionary authority in
§ 301.9100-3 of the Procedures and Administration Regulations. Taxpayer filed a late
Form 1128 to change its taxable year, for federal income tax purposes, from a taxable
year ending on the Saturday nearest to September 30, to a taxable year ending on
December 31, effective December 31, -------.

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. A corporation complying with all the applicable provisions of
this revenue procedure will be deemed to have obtained the approval of the
Commissioner to change its annual accounting period. Section 7.01(2) 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) of the Income Tax Regulations
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 and did not
request an extension of time to file its return. However, the taxpayer filed its Form 1128
under § 301.9100-3 soon thereafter.

PLR-121257-15                                 2

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 the taxpayer has acted reasonably and in good faith, and that the granting
of relief will not prejudice the interest of the government. Accordingly, the taxpayer has
satisfied the requirements of the regulations for the granting of relief, and the taxpayer’s
late-filed Form 1128 requesting to change to a taxable year ending December 31,
effective December 31, -------, 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 taxpayer is permitted
under the Code and applicable regulations to change to the tax year requested in the
Form 1128, or whether the change may be effected under Rev. Proc. 2006-45.

A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, the taxpayer filing its returns electronically may satisfy this requirement by
attaching a statement to its 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
§ 6110.

PLR-121257-15                                  3

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.

In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to your authorized representative.

If there are any questions, please contact the person whose name and phone number
are shown in the heading of this letter.

                                       Sincerely,



                                       Seoyeon Sharon Park
                                       Senior Technician Reviewer, Branch 5
                                       Office of Chief Counsel
                                       (Income Tax & Accounting)

cc: