Late historic-status application treated as timely for rehabilitation credit

Plain-English summary

A taxpayer renovated property in a registered historic district but failed to submit Part 1 of the Historic Preservation Certification Application before placing the property in service. The taxpayer later applied through the state historic preservation office and requested regulatory relief. The IRS found that the requirements for an extension under the section 9100 regulations were satisfied and treated the historic-status application as timely for purposes of the rehabilitation-credit regulation. The ruling did not decide whether the rehabilitation expenditures were qualified or whether the project otherwise met section 47.

Ruling snapshot

• Question: Could the taxpayer's late historic-status certification application be treated as timely for the rehabilitation credit?
• Outcome: Yes, but the IRS gave no opinion on the property's ultimate eligibility for the credit.
• Key authorities: IRC § 47; Treas. Reg. §§ 1.48-12(d)(1) and 301.9100-1 through 301.9100-3.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201924011 Third Party Communication: None
Release Date: 6/14/2019 Date of Communication: Not Applicable
Index Number: 47.00-00, 9100.00-00
Person To Contact:
------------------------------------ -------------------------, ID No. -----------------
---------------------- -----------------------------------------------------
------------------------------------- Telephone Number:
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Refer Reply To:
CC:PSI:B05
PLR-123699-18
Date:
March 01, 2019

Legend:

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

Property = --------------------------------
--------------------------

Year 1 = -------

Date 1 = -------------------

Date 2 = --------------

Date 3 = -------------------

District = ---------------------------------------------------

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

    This letter responds to your letter dated June 20, 2018 and subsequent

correspondence, requesting an extension of time pursuant to § 301.9100-3 of the
Procedure and Administration Regulations to file an application for certification of
historic status with the United States Department of Interior for purposes of claiming the
rehabilitation tax credit under section 47(a)(2) of the Internal Revenue Code.

PLR-123699-18 2

   According to the facts submitted, Taxpayer acquired Property in Year 1.

Property is located in District, which has been certified by the Secretary of the Interior
as a registered historic district. On Date 1, Taxpayer began renovations on Property.
The renovations to Property were completed and the property was placed in service on
Date 2. On Date 3, Taxpayer submitted the Part 1 to the State Historic Preservation
Office and learned that it failed to file Part I of the Historic Preservation Certification
Application with the Department of Interior prior to placing Property in service.
Taxpayer inadvertently failed to file Part 1 of the Historic Preservation Certification
Application with the Department of Interior prior to placing property in service.

LAW AND ANAYLYSIS

    Section 47(a) provides that the rehabilitation credit for any taxable year is the

sum of: (1) 10 percent of the qualified rehabilitation expenditures with respect to any
qualified rehabilitated building other than a certified historic structure, and (2) 20 percent
of the qualified rehabilitation expenditures with respect to any certified historic structure.

     Section 47 was amended by “An Act to provide for reconciliation pursuant to titles

II and V of the concurrent resolution on the budget for fiscal year 2018.” Pub.L. 115-97,
Title I, § 13402(a), (b)(1), Dec. 22, 2017, 131 Stat. 2134 (the Act). However, § 47(a), as
amended by the Act, is not in effect for qualified rehabilitation expenditures paid or
incurred during the years at issue.

    Section 47(c)(3)(A) provides that the term "certified historic structure" means any

building (and its structural components) that is (i) listed on the National Register, or (ii)
is located in a registered historic district and certified by the Secretary of the Interior as
being of historic significance to the district.

    Section 1.48-12(d)(1) provides that a building shall be considered to be a

certified historic structure at the time it is placed in service if the taxpayer reasonably
believes on that date the building will be determined to be a certified historic structure
and has requested on or before that date a determination from the Department of
Interior that such building is a certified historic structure within the meaning of the
historic rehabilitation credit provisions, and the Department of Interior later determines
that the building is a certified historic structure.

    Section 301.9100-1(a) provides that this section and §§ 301.9100-2 and

301.9100-3 establish the standards the Commissioner will use to determine whether to
grant an extension of time to make a regulatory election. An extension of time is
available for elections that a taxpayer is otherwise eligible to make. However, the
granting of an extension of time is not a determination that the taxpayer is otherwise
eligible to make the election.

PLR-123699-18 3

    Section 301.9100-1(b) provides that the term “election” includes an application

for relief in respect of tax and that the term "regulatory election" includes an election
whose due date is prescribed by a regulation published in the Federal Register.

   Section 301.9100-1(c) provides that the Commissioner may grant a reasonable

extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3 to make a
regulatory election, or a statutory election (but no more than six months except in the
case of taxpayer who is abroad), under all subtitles of the Code, except subtitles E, G,
H, and I.

   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.

   Section 301.9100-3 provides that requests for relief subject to this section will be

granted when the taxpayer provides the evidence (including affidavits described in
§ 301.9100-3(e)) to establish to the satisfaction of the Commissioner that the taxpayer
acted reasonably and in good faith, and that the grant of relief will not prejudice the
interests of the Government.

CONCLUSIONS:

    Based solely on the facts and the representations submitted, we conclude that

the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied. Accordingly,
Taxpayer's application will be considered timely filed for purposes of § 1.48-12(d)(1). A
copy of this letter should be sent to the appropriate service center with a request that it
be attached to Taxpayer's amended tax return for the taxable year. A copy is enclosed
for that purpose.

  The rulings contained in this letter are based upon information and

representations submitted by the taxpayer and accompanied by a penalty of perjury
statement executed by an appropriate party. While this office has not verified any of the
material submitted in support of the request for rulings, it 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. In particular, we express no opinion on whether Taxpayer’s
rehabilitation expenditures with respect to Property are qualified rehabilitation
expenditures under § 47 or whether Taxpayer’s rehabilitation of Property otherwise
meets the requirements under § 47.

  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.

PLR-123699-18 4

     A copy of this letter must be attached to any income tax return to which it is

relevant. Alternatively, taxpayers filing their returns electronically may satisfy this
requirement by attaching a statement to their return that provides the date and control
number of the letter ruling. In accordance with a power of attorney on file, a copy of this
letter is being sent to Taxpayer’s authorized representative.

                                                Sincerely,

                                                Associate Chief Counsel
                                                (Passthroughs and Special Industries)


                                      By:       ______________________________
                                                Nicole R. Cimino
                                                Chief, Branch 5
                                                Associate Chief Counsel
                                                (Passthroughs and Special Industries)

Enclosures (2)

Copy of this letter
Copy for section 6110 purposes