Form 1128 receives discretionary late-filing relief

Plain-English summary

A taxpayer requested permission to change its annual accounting period but did not file Form 1128 by the deadline for the short tax year. It submitted the application and a request for discretionary relief within 90 days after the deadline. The IRS concluded that the taxpayer acted reasonably and in good faith and that relief would not prejudice the government. It will treat Form 1128 as timely filed and immediately begin processing it because the required separate user fee was paid. The ruling does not decide whether the requested tax-year change is otherwise permitted.

Ruling snapshot

• Question: Should a late Form 1128 be treated as timely when the taxpayer requests relief within 90 days?
• Outcome: Approved for timely-filing treatment only; substantive permission for the tax-year change is not granted
• 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: 202536011                                 Third Party Communication: None
 Release Date: 9/5/2025                            Date of Communication: Not Applicable
 Index Number: 9100.00-00, 442.00-00
                                                   Person To Contact:
                                                   ------------------------, ID No. -----------------
 ------------------------                          Telephone Number:
 ----------------------------------                -------------------
 --------------------------                        Refer Reply To:
 -------------------------------------             CC:ITA:B4
 ----------------------------                      PLR-106149-25
                                                   Date:
                                                   June 05, 2025




Legend:

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

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

This letter refers to a Form 1128, Application to Adopt, Change, or Retain a Tax Year,
filed by Taxpayer on ------------------, Year 1, to change its annual accounting period, for
federal income tax purposes, from a taxable year ending ------------ to a taxable year
ending -----------, effective for the tax year ended -----------, Year 1, under Rev. Proc.
2002-39, 2002-22 I.R.B. 1046. 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.

Rev. Proc. 2002-39, section 6.02(1), 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 the requested change. However, Taxpayer
submitted the request for discretionary administrative relief under § 301.9100-3, as well
as the Form 1128, within 90 days from the due date for filing Form 1128.

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
PLR-106149-25                                 2

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. The requirements of § 301.9100-3
have been satisfied in this case. Accordingly, the Service will consider Taxpayer's Form
1128 requesting permission to change to a tax year ending -----------, effective for
taxable year ended -----------, Year 1, timely filed. Since the separate “user fee” required
to process Taxpayer’s Form 1128 has been paid, we will begin processing Taxpayer’s
application immediately.

This ruling addresses the granting of § 301.9100-3 relief only. We express no opinion
regarding the tax treatment of the instant transaction under the provisions of any other
section of the Code or the 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, this ruling expresses 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 Form 1128.

This ruling is based upon facts and representations submitted by the 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 that requested it. Section 6110(k)(3) of the
Code provides that it may not be used or cited as precedent. Enclosed is a copy of the
letter ruling showing the deletions proposed to be made when it is disclosed under
§ 6110.

In accordance with the Power of Attorney on file with this office, we are sending a copy
of this letter to your authorized representatives.



                                       Sincerely,


                                       Angella L. Warren
                                       Chief, Branch 4
                                       Office of Associate Chief Counsel
                                       (Income Tax & Accounting)
PLR-106149-25                                          3

cc: -------------------------------------------------------------
    ----------------------------------------------------