Late duplicate Form 3115 filing received an extension

Plain-English summary

A taxpayer timely filed its original income tax return with Form 3115 for an automatic accounting method change, but did not send the required duplicate Form 3115 to the designated IRS office. The taxpayer said its return preparer had not told it about the duplicate-filing requirement and requested relief promptly after discovering the omission. The IRS concluded that the taxpayer met the standards in Treasury Regulations §§ 301.9100-1 and 301.9100-3. It granted 60 days from the ruling date to file the required copy. The IRS did not decide whether the taxpayer qualified for the method change or had adopted an appropriate accounting method.

Ruling snapshot

• Question: Could the taxpayer receive additional time to submit the required duplicate copy of Form 3115?
• Outcome: Approved.
• Key authorities: IRC § 446(e); Treas. Reg. §§ 301.9100-1 and 301.9100-3; Rev. Proc. 2015-13.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 201643006
Third Party Communication: None
Release Date: 10/21/2016
Date of Communication: Not Applicable
Index Number: 9100.00-00
Person To Contact:
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Telephone Number/Fax Number:
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Refer Reply To:
CC:ITA:B3
PLR-104406-16
Date:
June 28, 2016

Re: --------------------------------------------------------------------------------------------------------------
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Legend

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

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 January 26, 2016, filed by Taxpayer 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 ending on Date 2, with the IRS in Ogden, Utah as required by section 6.03(1)(a)(i)(B) of Rev. Proc. 2015-13, 2015-5 I.R.B. 419. Taxpayer’s private letter ruling request was made in accordance with § 301.9100-3.

FACTS

On Date 3, Taxpayer timely filed its federal income original tax return for the taxable year beginning on Date 1 and ending Date 2, along with the original of the Form 3115 for an automatic accounting method change for certain intangibles. However, Taxpayer did not file a copy of the Form 3115 with the IRS in Ogden, Utah as required
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by Rev. Proc. 2015-13, because Preparer did not inform Taxpayer of the requirement to do so. Taxpayer’s tax return reflected this change in accounting method.

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

LAW AND ANALYSIS

Rev. Proc. 2015-13 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 consent of the Commissioner to change its method of accounting under § 446(e) and the associated Income Tax Regulations.

Section 6.03(1)(a)(i) of Rev. Proc. 2015-13 provides that a taxpayer changing a method of accounting pursuant to Rev. Proc. 2015-13 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 the IRS in Odgen, Utah 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 with a due date that 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).

Section § 301.9100-3(b)(1) states in part that a taxpayer will be deemed to have acted reasonably and in good faith if the taxpayer reasonably relied on a qualified tax professional and the tax professional failed to make or advise the taxpayer to make the election.
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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 IRS in Odgen, Utah. This extension shall be for a period of 60 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. 2015-14, 2015-5 I.R.B. 450. Nor do we express any opinion as to whether Taxpayer has changed to an appropriate method of accounting.

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,

ROBERT CASEY
Senior Technician Reviewer, Branch 3
Office of the Associate Chief Counsel
(Income Tax and Accounting)

Enclosure:
Copy for section 6110 purposes