Partnership granted 60 more days to file the missing duplicate "Ogden copy" of its accounting-method-change application

Plain-English summary

A partnership wanted to change a depreciation-related accounting method using the IRS's automatic-consent procedures. To do that it files a Form 3115 (Application for Change in Accounting Method) in duplicate: the original goes with its tax return, and a signed copy must be sent separately to the IRS service center in Ogden, Utah. The partnership timely filed the original with its Form 1065 and actually implemented the method change, but the Ogden copy was never sent because the partnership and its accounting firm each assumed the other would file it. When the firm later asked for confirmation, they discovered the miscommunication. The partnership asked the IRS for an extension of time under Treas. Reg. § 301.9100-3. The IRS concluded the partnership acted reasonably and in good faith and that granting relief would not prejudice the government, so it granted a 60-day extension to file the Ogden copy, which will then be treated as timely under Rev. Proc. 2015-13. Importantly, the IRS expressed no opinion on whether the underlying method change itself is proper or whether the depreciation treatment is correct. This is a narrow "9100 relief" ruling fixing a missed procedural filing step, not a blessing of the accounting change.

Ruling snapshot

• Question: May a partnership get a § 301.9100-3 extension to file the required duplicate "Ogden copy" of its Form 3115 that it inadvertently failed to send?
• Outcome: approved (60-day extension to file the Ogden copy, which will then be treated as timely)
• Key authorities: Treas. Reg. §§ 301.9100-1, 301.9100-3; Rev. Proc. 2015-13; Rev. Proc. 2019-43; IRC § 446(e); Treas. Reg. § 1.446-1(e)

Full text (IRS public release)

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Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202231001 Third Party Communication: None
Release Date: 8/5/2022 Date of Communication: Not Applicable
Index Numbers: 9100.00-00, 9100.10-00,
9100.10-01 Person To Contact:
----------------------------ID No. ----------------
---------------------- -----------------
-------------------------- Telephone Number/Fax Number:
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------------------------- Refer Reply To:
--------------------------------- CC:ITA:B7
PLR-100741-22
Date: May 12, 2022

In re: Request for Extension of Time to File a Duplicate Copy of
Form 3115, Application for Change in Accounting Method

                                            LEGEND

Partnership = -------------------------------------------------------------
Firm = ----------------------
Date1 = -----------------------
Date2 = --------------------------
Date3 = --------------------------
Date4 = ---------------------------
Date5 = ---------------------------
Taxable Year = -----------------------------------------------------
Year of Change = ------------------------------------------------------------------------------

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

    This ruling letter responds to a letter dated January 11, 2022, submitted by your

authorized representative on behalf of Partnership. In that letter, In that letter,
Partnership requests the consent of the Commissioner of Internal Revenue
(Commissioner) to grant an extension of time pursuant to § 301.9100-3 of the
Procedure and Administration Regulations to file a duplicate copy of a Form 3115,
Application for Change in Accounting Method, (Ogden copy) with the Ogden, UT office
of the Internal Revenue Service (Service) to change its method of accounting described
below, effective for the Taxable Year, as required under section 6.03(1)(a)(i)(B) of Rev.
Proc. 2015-13, 2015-5 I.R.B. 419, 432. This letter ruling is being issued electronically in
accordance with section 7.02(5) of Rev. Proc. 2022-1, 2022-1 I.R.B. 1, 35. A paper
PLR-100741-22 2

copy will not be mailed.

                                     FACTS

   Partnership represents that the facts are as follows:
   Partnership is a partnership for federal income tax purposes. Partnership files a

Form 1065, U.S. Return of Partnership Income on a calendar year basis. Partnership’s
overall method of accounting is the accrual method. The due date of Partnership’s
Form 1065 (including extensions) for the Taxable Year was Date4.
On Date1, Partnership engaged Firm to compute its U.S. federal tax depreciation
for the Taxable Year using Firm’s depreciation software. As part of the engagement,
Firm also assisted Partnership with the preparation of a Form 3115, Application for
Change in Accounting Method, requesting automatic consent from the Commissioner to
make the method change described in section 6.01 of Rev. Proc. 2019-43, 2019-48
I.R.B. 1107, 1115 (designated automatic change number (DCN 7), for the assets
subject to the Form 3115, effective for the Year of Change (the Form 3115).
On Date3, Firm provided the completed Form 3115 to Partnership. On Date4,
Partnership filed its Form 1065, including the Form 3115. Partnership’s Form 1065 for
the Taxable Year implemented the change in method of accounting described on the
Form 3115. The Ogden copy, however, was not filed, as required under section
6.03(1)(a)(i)(B) of Rev. Proc. 2015-13.
On Date5, Firm requested confirmation from Partnership that both the original
and Ogden copy of the Form 3115 had been timely filed. On Date5, Firm and
Partnership discovered that due to an inadvertent miscommunication between Firm and
Partnership, whereby each thought that the other was going to file the Ogden copy, the
Ogden copy had not been filed.

                             RULING REQUESTED

     Accordingly, Partnership requests an extension of time pursuant to § 301.9100-3

to file the Ogden copy of the original Form 3115, Application for Change in Accounting
Method, to obtain the consent of the Commissioner to make the accounting method
change DCN7 for the assets subject to the Form 3115.

                              LAW AND ANALYSIS

   Rev. Proc. 2015-13 provides the procedures by which a taxpayer may obtain

automatic consent to change certain accounting methods. Section 9 of Rev. Proc.
2015-13 provides that consent of the Commissioner to change its accounting method
under § 446(e) of the Internal Revenue Code and § 1.446-1(e) of the Income Tax
Regulations is granted only if the taxpayer complies with all the applicable provisions of
the revenue procedure and implements the change in method on its federal income tax
PLR-100741-22 3

return for the requested year of change to which the original Form 3115 is attached
pursuant to section 6.03.

   Section 6.03(1)(a)(i) of Rev. Proc. 2015-13 provides that a taxpayer changing an

accounting method pursuant to Rev. Proc. 2015-13 must complete and file a Form 3115
in duplicate. The original Form 3115 must be attached to the taxpayer’s timely filed
(including any extension) original federal income tax return for the year of change, and a
copy (with signature) of the Form 3115 must be filed with the Ogden, UT office of the
Service no earlier than the first day of the year of change and no later than when the
original is filed with the federal income tax return for the year of change.
Sections 301.9100-1 through 301.9100-3 provide the standards the
Commissioner will use to determine whether to grant an extension of time to make an
election. 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 301.9100-1(b) defines a regulatory election as an election whose due

date 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 301.9100-1(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 301.9100-3(a) provides that requests for relief subject to § 301.9100-3
will be granted when the taxpayer provides evidence to establish to the satisfaction of
the Commissioner that the taxpayer acted reasonably and in good faith and that the
granting of relief will not prejudice the interests of the Government.

   Section 301.9100-3(c)(2) imposes special rules for accounting method regulatory

elections. This section provides, in relevant part, that the interests of the Government
are deemed to be prejudiced except in unusual and compelling circumstances when the
accounting method regulatory election for which relief is requested is subject to the
procedure described in § 1.446-1(e)(3)(i) or the relief requires an adjustment under
§ 481(a) (or would require an adjustment under § 481(a) if the taxpayer changed to the
accounting method for which relief is requested in a taxable year subsequent to the
taxable year the election should have been made).

                                  CONCLUSION

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

requirements of § 301.9100-3 have been satisfied in Partnership’s case. Accordingly,
Partnership is granted 60 calendar days from the date of this letter to file the Ogden
copy of the Form 3115 for the Taxable Year. Partnership must attach a copy of this
letter ruling to the Ogden copy. A copy of this letter ruling is enclosed for that purpose.
PLR-100741-22 4

Provided Partnership meets these filing requirements, we will consider the Ogden copy
for the Taxable Year to be timely filed under the procedures of Rev. Proc. 2015-13.
Except as expressly set forth above, we express no opinion concerning the
federal tax consequences of the facts described above under any other provision of the
Code or regulations. Specifically, no opinion is expressed or implied, concerning: (1)
whether the accounting method changes that Partnership has made are eligible to be
made under section 6.01 of Rev. Proc. 2019-43 and Rev. Proc. 2015-13; (2) whether
Partnership otherwise meets the requirements of Rev. Proc. 2015-13 to make its
accounting method changes using the procedures of Rev. Proc. 2015-13; or (3) whether
Partnership’s classification, depreciation method, convention, or recovery period of the
assets subject to Form 3115 are correct.

  This letter ruling is directed only to the taxpayer requesting it. Section 6110(k)(3)

provides that this ruling may not be used or cited as precedent.

  In accordance with the Power of Attorney on file with this office, we are sending a

copy of this letter to Partnership’s authorized representatives. We also are sending a
copy of this letter ruling to the appropriate IRS operating division official.

                                  Sincerely,



                                  ELIZABETH R. BINDER
                                  General Attorney (Tax), Branch 7
                                  Office of Associate Chief Counsel
                                  (Income Tax & Accounting)

Enclosures (2):
copy of this letter
copy for section 6110 purposes

cc:

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