Partnership's late Form 1128 is treated as timely filed

Plain-English summary

A partnership sought to adopt an April 30 tax year but did not file Form 1128 by the required deadline. It requested an extension soon after learning that the form was required. The IRS found that the partnership acted reasonably and in good faith and that relief would not prejudice the government. It therefore treated the late Form 1128 as timely filed, subject to payment of an additional user fee. The ruling addressed only the missed deadline and did not decide whether the partnership was otherwise permitted to adopt the requested tax year.

Ruling snapshot

• Question: Could the partnership's late Form 1128 requesting an April 30 tax year be treated as timely filed?
• Outcome: approved
• 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: 201712012 Third Party Communication: None
Release Date: 3/24/2017 Date of Communication: Not Applicable
Index Number: 9100.09-00 Person To Contact:
------------------------, ID No. ------------------
---------------------------- ----------------------------------------------------

                                             Telephone Number:

--------------------------------------- ----------------------

                                             Refer Reply To:

                                             CC:ITA:B04
                                             PLR-133048-16
                                             Date:
                                             December 19, 2016

TIN = -----------------
Year = -------
Date = ------------------------

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

This letter refers to a Form 1128, Application to Adopt, Change, or Retain a Tax Year,
by the taxpayer, a partnership, filed on Date requesting to adopt, for federal income tax
purposes, a taxable year ending April 30, effective April 30, Year. Under the authority
contained in § 301.9100-3 of the Procedure and Administration Regulations, Taxpayer
requests that the Service consider its Form 1128 timely filed.

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.

Taxpayer did not file its Form 1128 by the due date of the return for the short period (not
including extensions) required to effect such change. However, Taxpayer requested an
extension of time to file its Form 1128 under § 301.9100-3 soon after becoming aware
that it was required to file a Form 1128 to adopt its requested tax year end.

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. 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-133048-16 2

Based on the facts and information submitted and the representations made, we
conclude that Taxpayer acted reasonably and in good faith and that the granting of relief
will not prejudice the interests of the government. Accordingly, Taxpayer has satisfied
the requirements of the regulations for the granting of relief, and the Service considers
Taxpayer's late filed Form 1128 requesting permission to change to April 30, effective
April 30, Year, timely filed.

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.

Before processing Taxpayer’s Form 1128, we will request, in a separate
correspondence, the additional user fee required by Appendix A of Rev. Proc. 2016-1,
2016-1 I.R.B. 1. After receiving the user fee, we will begin processing the Taxpayer's
application.

This ruling addresses the granting of § 301.9100-3 relief only. We express no opinion
regarding the tax treatment of the this transaction under the provisions of any other
sections of the Code or regulations that may be applicable thereto, 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 Code and applicable
regulations or Rev. Proc. 2002-39 permit the taxpayer to change to the tax year
requested in the subject Form 1128.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) provides
that it may not be used or cited as precedent.

Under the provisions of a power of attorney currently on file, we are sending a copy of
this ruling letter to the taxpayer’s authorized representative.

                                      Sincerely,



                                      Donna Welsh
                                      Senior Technician Reviewer
                                      Office of Associate Chief Counsel
                                      (Income Tax and Accounting)

Enclosures