Late Form 1128 treated as timely filed

Plain-English summary

A corporation filed Form 1128 late when seeking to change its annual accounting period from a June 30 year-end to a March 31 year-end. It missed the due date tied to the short-period return but filed the form soon afterward. The IRS concluded that the corporation acted reasonably and in good faith and that relief would not prejudice the government's interests. Under Treasury Regulation § 301.9100-3, the IRS treated the late Form 1128 as timely filed. The ruling did not decide whether the requested accounting-period change was otherwise permitted.

Ruling snapshot

• Question: Could the corporation's late Form 1128 be treated as timely for its requested accounting-period change?
• Outcome: Approved.
• Key authorities: IRC § 442; Treas. Reg. §§ 1.442-1 and 301.9100-3; Rev. Proc. 2006-45.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 201643004
Third Party Communication: None
Release Date: 10/21/2016
Date of Communication: Not Applicable
Index Number: 9100.00-00
Person To Contact:
-------------------------------
----------------------, ID No. ------------------
--------------------
Telephone Number:
------------------------------------------------- ----------------------
------------------------------------------ Refer Reply To:
-------------------------------------
CC:ITA:4
PLR-103169-16
Date: July 26, 2016

LEGEND:

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

Dear --------------------

This ruling is in reference to Taxpayer’s request that its Form 1128, Application to Adopt, Change, or Retain a Tax Year, be considered timely filed under § 301.9100-3 of the Regulations on Procedures and Administration. Taxpayer filed a late Form 1128 to change its accounting period, for federal income tax purposes, from a taxable year ending June 30, to a taxable year ending March 31, effective March 31, -------.

Rev. Proc. 2006-45, 2006-2 C.B. 851, as modified and clarified by Rev. Proc. 2007-64, 2007-2 C.B. 818, provides procedures for certain corporations to obtain automatic approval to change its 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 of the Internal Revenue Service 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 due date (including extensions) for filing the return for the short period required to effect such change.

The information furnished indicates that 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, Taxpayer filed its Form 1128 soon after that time.

Section 301.9100-3(a) provides that requests for extension of the time for regulatory elections that do not meet the requirements of § 301.9100-2 (automatic extensions) must be made under the rules of § 301.9100-3. Request for relief under § 301.9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted
PLR-103169-16
2

reasonably and in good faith, and that the granting of relief will not prejudice the interests 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 interests of the government. Accordingly, Taxpayer has met the requirements of the regulations for the granting of relief, and Taxpayer’s late-filed Form 1128 requesting to change to a taxable year ending March 31, effective March 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 Taxpayer’s returns are filed, we have forwarded the application to the Director, Ogden, Utah 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 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 on whether 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, a 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.
Sincerely,

J. Peter Baumgarten
Assistant to the Branch Chief, Branch 4
(Income Tax & Accounting)
Office of Chief Counsel