Private Letter Ruling
202609013
Released February 27, 2026
Approved
Late election allowed to apportion a consolidated § 382 limitation to departing members
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)
Plain-English summary
When companies that had losses leave a consolidated group, the group's parent can elect under Treas. Reg. § 1.1502-95(c) to hand off part of the group's § 382 limitation (the annual cap on using pre-ownership-change losses) to those departing members, so the departing companies can keep using their share of the losses. That election has to be attached to specific tax returns on time. Here the parent's successor and the departing companies missed the deadline. They asked the IRS for more time. The IRS granted an extension under Treas. Reg. § 301.9100-3, finding the parties acted reasonably and in good faith (they came forward before the IRS discovered the miss) and that relief would not prejudice the government. The parties have 75 days to file the election by amending the appropriate returns. Relief is conditioned on the deal not lowering their overall tax bill compared with a timely election, and penalties and interest, if any, still apply.
Ruling snapshot
- Question: May the parties get more time to file a late § 1.1502-95(c) election apportioning a consolidated § 382 limitation to former members?
- Outcome: approved (75-day extension to file the election)
- Key authorities: Treas. Reg. § 1.1502-95(c), (f); IRC § 382; Treas. Reg. §§ 301.9100-1 through 301.9100-3
Full text (IRS public release)
Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 202609013 Third Party Communication: None
Release Date: 2/27/2026 Date of Communication: Not Applicable
Index Number: 1502.98-05, 9100.22-00
Person To Contact:
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PLR-111479-25
Date:
December 02, 2025
LEGEND
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Former Parent = ---------------------------------------------------------------------------------
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Corp1 = ----------------------------------------
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Former Members = --------------------
PLR-111479-25 2
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Successors = -------------------------------------------------------------
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Date1 = -----------------------
Company Official = --------------------------------
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Tax Professional = ------------------------------------
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PLR-111479-25 3
Dear -------------------:
This letter responds to a letter dated June 5, 2025, submitted on behalf of Taxpayer (the
successor within the meaning of section 381(a)(1) of Former Parent), Corp1, and the
successors to Former Members (Successors) (sometimes hereinafter, collectively, the
“Parties”), requesting an extension of time under §301.9100-3 of the Procedure and
Administration Regulations to file an election. The Parties are requesting an extension
of time to file an election under §1.1502-95(c) of the Income Tax Regulations to
apportion all or any part of a consolidated section 382 limitation to Corp1 and Former
Members (the “Election”). The material information submitted for consideration is
summarized below.
Former Parent was the common parent of a consolidated group that included Corp1 and
Former Members (“the Former Parent Group”). As a result of a transaction on Date 1,
Corp1 and Former Members ceased to be members of the Former Parent Group. At
that time, the Former Parent Group had a consolidated section 382 limitation.
Under §1.1502-95(c), the common parent of a consolidated group may elect to
apportion all or any part of a consolidated section 382 limitation to a former member (or
loss subgroup) as well as all or any part of the loss group’s net unrealized built-in gain
to a former member (or loss subgroup). The election is made pursuant to §1.1502-
95(f). Section 1.1502-95(f)(3) provides, in general, that the election statement under
§1.1502-95(f)(1)(i) must be filed by the common parent on or with its income tax return
for the taxable year in which the former member (or new loss subgroup) ceases to be a
member, and an identical statement must be included on or with the first return of the
former member (or the first return in which the former member, or the members of a
new loss subgroup, join) that is filed after the close of the consolidated return year of the
group of which the former member (or the members of a new loss subgroup) ceases to
be a member.
For various reasons, the Election was not made in a timely manner. The Parties have
represented that they are not seeking to alter a return position for which an accuracy-
related penalty has been or could have been imposed under section 6662.
Under §301.9100-1(c), the Commissioner has discretion to grant a reasonable
extension of time to make a regulatory election, or a statutory election (but no more than
six months except in the case of a taxpayer who is abroad), under all subtitles of the
Code except subtitles E, G, H, and I.
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 a regulatory election.
Section 301.9100-1(a). Section 301.9100-2 provides automatic extensions of time for
making certain elections. Requests for relief under §301.9100-3 will be granted when
the taxpayer provides evidence to establish to the satisfaction of the Commissioner that
PLR-111479-25 4
the taxpayer acted reasonably and in good faith, and that granting relief will not
prejudice the interests of the government. Section 301.9100-3(a).
In this case, the time for filing the Election is fixed by regulations (i.e., §1.1502-95(f)(3)).
Therefore, the Commissioner has discretionary authority under §301.9100-3 to grant an
extension of time to file the Election, provided the Parties show that their actions were
reasonable and in good faith, the requirements of §§301.9100-1 and 301.9100-3 are
satisfied, and that granting relief will not prejudice the interests of the government.
Information, affidavits, and representations submitted by the Parties, Company Official
and Tax Professional explain the circumstances that resulted in the failure to timely file
the Election. The submission establishes that the request for relief was filed before the
failure to make the Election was discovered by the Internal Revenue Service. See
§301.9100-3(b)(1)(i).
Based on the facts and information submitted, including the representations made, we
conclude that the Parties have shown they acted reasonably and in good faith, the
requirements of §§301.9100-1 and 301.9100-3 are satisfied, and granting relief will not
prejudice the interests of the government. Accordingly, an extension of time is granted
under §301.9100-3, until 75 days from the date on this letter, for the Election to be filed.
Following the requirements of §1.1502-95(f), the appropriate returns should be
amended to attach the Election. A copy of this letter must be attached to the returns.
Alternatively, the requirement of attaching a copy of this letter to the returns may be
satisfied by attaching a statement to the returns that provides the date on, and control
number (PLR-111479-25) of, this letter ruling.
The above extension of time is conditioned on the taxpayers’ tax liability (if any) not
being lower, in the aggregate, for all years to which the Election applies, than it would
have been if the Election had been timely made (taking into account the time value of
money). No opinion is expressed as to the taxpayers’ tax liability for the years involved.
A determination thereof will be made upon audit of the federal income tax returns
involved.
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 addition, we express no opinion as to the tax effects or consequences of
filing the Election late under the provisions of any other section of the Code or
regulations, or as to the tax treatment of any conditions existing at the time of, or effects
resulting from, filing the Election late that are not specifically set forth in the above
ruling.
For purposes of granting relief under §301.9100-3, we relied on certain statements and
representations made by the Parties, Company Official, and Tax Professional under
penalties of perjury. However, the Director should verify all essential facts. In addition,
PLR-111479-25 5
notwithstanding that an extension is granted under §301.9100-3 to file the Election,
penalties and interest that would otherwise be applicable, if any, continue to apply.
This ruling is directed only to the taxpayers requesting it. Section 6110(k)(3) of the
Code provides that it may not be used or cited as precedent.
In accordance with the Power of Attorney on file with this office, copies of this letter are
being sent to your authorized representatives.
Sincerely,
______________________________
Thomas I. Russell
Senior Technician Reviewer, Branch 4
Office of Associate Chief Counsel (Corporate)
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