Corporation receives 45 days to file a late tax-year change request

Plain-English summary

A domestic accrual-method corporation sought to change its annual accounting period by filing Form 1128. An administrative error caused it to miss the form's deadline, but the corporation mailed the form with its ruling request, and the request arrived less than 90 days after the deadline. The IRS concluded that the corporation acted reasonably and in good faith and that relief would not prejudice the government. It granted 45 days to file Form 1128 under Revenue Procedure 2002-39 with a copy of the ruling attached. The taxpayer also must pay the applicable user fee. The IRS did not decide whether the corporation otherwise qualified to change to the requested tax year.

Ruling snapshot

• Question: May the corporation receive extra time to file Form 1128 after an administrative error caused it to miss the deadline?
• Outcome: Approved, with 45 days to file under Rev. Proc. 2002-39.
• Key authorities: Treas. Reg. §§ 301.9100-1 through 301.9100-3; Rev. Proc. 2002-39; Rev. Proc. 2025-1.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202517014 Third Party Communication: None
Release Date: 4/25/2025 Date of Communication: Not Applicable
Index Number: 9100.00-00
Person To Contact:
---------------------. ---------------------, ID No. -----------------
----------------------- Telephone Number:
---------------------------------------- --------------------
------------------------ Refer Reply To:
CC:ITA:B08
PLR-115955-24
Date:
January 21, 2025

                                                 LEGEND

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

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

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

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

Date 4 = ----------------------

Current Year End = ---------------
Proposed Year End = ------------------

Initial Year End = ------------------

Year 1 = --------------------------

Year 2 = -----------------------

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

   This ruling responds to Taxpayer’s request for a letter ruling dated Date 1.

Specifically, Taxpayer requests relief under sections 301.9100-1 and 301.9100-3 of the
Procedure and Administration Regulations for an extension of time to file a Form 1128,
Application to Adopt, Change, or Retain a Tax Year. Taxpayer is requesting to change
PLR-115955-24 2

its accounting period for federal income tax purposes from a taxable year ending
Current Year End to a taxable year ending Proposed Year End, effective Year 1.

                                        FACTS

    According to the affidavits and information provided to us, Taxpayer has

represented that the facts are as follows. Taxpayer is a domestic corporation and uses
the accrual method of accounting. Taxpayer filed its first Form 1120 with a tax year
ending Initial Year End for the tax year beginning Date 2 (date of incorporation) through
Date 3. On Date 4, Taxpayer changed its annual accounting period to Current Year
End, with Year 2 as the first effective year. Taxpayer then sought to change its annual
accounting period to Proposed Year End, effective with the short period ending Year 1,
by filing a Form 1128.

   Taxpayer, due to an administrative error, failed to file the Form 1128 by the due

date (not including extensions) of the tax return for the first effective year. Once the
error was discovered, Taxpayer mailed the Form 1128, alongside this request, and it
was received prior to 90 days after the required due date.

                                 LAW AND ANALYSIS

    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.

    Sections 301.9100-1 through 301.9100-3 provide the standards that the

Commissioner will use to determine whether to grant an extension of time to make a
regulatory election. Section 301.9100-3(a) provides that requests for extensions of time
for regulatory elections (other than automatic extensions covered in section 301.9100-2)
will be granted when the taxpayer provides evidence (including affidavits) to establish
that the taxpayer acted reasonably and in good faith and the grant of relief will not
prejudice the interests of the government.

    Section 301.9100-3(c)(3) provides that the interests of the government are

deemed to be prejudiced except in unusual and compelling circumstances if an election
is an accounting period regulatory election (other than the election to use the required
taxable year under section 444) and the request for relief is filed more than 90 days
after the due date for filing the Form 1128.

    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
PLR-115955-24 3

the requirements of the regulations for the granting of relief. Taxpayer's Form 1128
requesting permission to change to a taxable year ending Proposed Year End, effective
Year 1, must be filed under the provisions of Rev. Proc. 2002-39 within 45 days of this
letter. A copy of this letter must be attached to Taxpayer's Form 1128.

  Please note that a user fee is required for an application filed under Rev. Proc.

2002-39. The user fee is outlined in Rev. Proc. 2025-1, 2024-1 I.R.B. 1.

   This ruling addresses the granting of § 301.9100-3 relief only. We express no

opinion regarding the tax treatment of 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 based upon facts and representations submitted by Taxpayer and

accompanied by a penalty of perjury statement executed by an appropriate party. 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 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.

     In accordance with the Powers of Attorney on file with this office, a copy of this

letter is being sent to your authorized representatives.

                                       Sincerely,



                                       Erika Reigle
                                       Senior Technician Reviewer, Branch 8
                                       Office of Associate Chief Counsel
                                       (Income Tax & Accounting)

Cc: ---------------