Late tax-year change application was treated as timely

Plain-English summary

A domestic corporation filed Form 1128 late when seeking to change from a calendar tax year to a tax year ending March 31. It requested discretionary deadline relief soon after missing the due date for the short-period return. The IRS found that the corporation acted reasonably and in good faith and that relief would not prejudice the government. It treated the late Form 1128 as timely filed, but expressed no opinion on whether the requested tax-year change was otherwise permissible.

Ruling snapshot

• Question: Could the corporation's late Form 1128 be treated as timely filed?
• Outcome: Approved as to deadline relief only.
• Key authorities: IRC § 442; Treas. Reg. §§ 1.442-1 and 301.9100-3; Rev. Proc. 2002-39.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 201819009
Third Party Communication: None
Release Date: 5/11/2018
Date of Communication: Not Applicable
Index Number: 9100.00-00, 9100.09-00
Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:ITA:B05
PLR-133730-17
Date:
January 25, 2018

LEGEND:

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

TIN = -----------------

Year = -------

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

This ruling refers to Taxpayer’s request that its Form 1128, Application to Adopt, Change, or Retain a Tax Year, be considered timely filed under the authority found in
§ 301.9100-3 of the Procedure and Administration Regulations. Taxpayer, a domestic corporation, filed a late Form 1128 requesting permission to change its taxable year from a taxable year ending December 31, to a taxable year ending March 31, effective March 31, Year.

Section 1.442-1(a) of the Income Tax Regulations provides, in part, that if a taxpayer wants to change its annual accounting period and use a new taxable year, it must obtain the approval of the Commissioner.

Section 1.442-1(b) provides that in order to secure the Commissioner’s consent to change an annual accounting period, a taxpayer must file an application on Form 1128 with the Commissioner within such time and in such manner as is provided in administrative procedures published by the Commissioner.

PLR-133730-17
2

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 implement such change. However, Taxpayer requested an extension of time to file its Form 1128 under § 301.9100-3 soon thereafter.

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.

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. The Service considers Taxpayer's late-filed Form 1128 requesting permission to change to March 31, effective March 31, Year, timely filed.

This ruling is based upon facts and representations submitted by Taxpayer and accompanied by a penalty of perjury statement executed by appropriate parties. 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 this transaction under the provisions of any other sections of the Code or 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 Code and applicable regulations or Rev. Proc. 2002-39 permit Taxpayer to change to the tax year requested in the subject Form 1128.

PLR-133730-17
3

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.

Under the provisions of a power of attorney currently on file, we are sending a copy of this ruling letter to Taxpayer's authorized representatives.

Sincerely,

Christina M. Glendening
Senior Counsel, Branch 5
Office of Associate Chief Counsel
(Income Tax and Accounting)