PLR 9947021: Late accounting period change application treated as timely

Plain-English summary

A taxpayer filed Form 1128 to request a change in its accounting period after the filing deadline. The letter says the delay resulted from an error or misunderstanding and that the form was filed within 90 days of its due date. The IRS granted relief under Treas. Reg. § 301.9100-3 because the taxpayer acted reasonably and in good faith and the extension would not prejudice the government. It treated the Form 1128 as timely filed, but said processing would begin after payment of an additional user fee. The IRS expressly left open whether the requested tax year change itself was permitted.

Ruling snapshot

• Question: May a late Form 1128 requesting an accounting period change be treated as timely filed?
• Outcome: Approved: filing deadline relief only; the requested accounting period change remains undecided.
• Key authorities: Treas. Reg. §§ 301.9100-2 and 301.9100-3; Rev. Proc. 99-1, Appendix A.

Full text (IRS public release)

INTERNAL REVENUE SERVICE
Index Nos.: 9100.09-00
Number: 199947021
Release Date: 11/26/1999

CC:DOM:IT&A:09 - PLR-109164-99
Attn:
September 2, 1999
EIN:

Dear

This is in reference to a Form 1128, Application to Adopt, Change, or Retain a Tax Year, submitted on behalf of the above- named taxpayer, requesting permission to change its accounting period, for federal income tax purposes, from a taxable year
ending to a taxable year ending , effective
The taxpayer has requested that the Form 1128 be considered timely filed under the authority contained in §301.9100-3 of the Procedure and Administration Regulations.

The taxpayer’s Form 1128 requesting a change in accounting
period to a tax year ending
was due on or before
Information furnished indicates that due to an error or misunderstanding, the form was not timely filed. However, the form was filed within 90 days of the due date. The taxpayer acted reasonably and in good faith, and granting the extension will not prejudice the interests of the Government.
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.

Based on the facts and information submitted and the representations made, it is held that the taxpayer has acted reasonably and in good faith, and that the granting of relief will not prejudice the interests of the government. Accordingly, the requirements of the regulations for the granting of relief have been satisfied in this case, and taxpayer's late filed Form 1128 requesting permission to change to a tax year ending
, effective for the tax year beginning
is
considered timely filed.

-2-

Pursuant to Appendix A of Rev. Proc. 99-1, 1999-1 I.R.B. 6, 62, an additional user fee is required in order to process the Form 1128. The user fee will be requested in a separate correspondence. We will begin processing the taxpayer’s application after the user fee is received.

The ruling contained in this letter 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. Verification of the factual information, representations, and other data may be required as part of an examination process.
This ruling addresses the granting of § 301.9100-3 relief only. No opinion is expressed regarding the tax treatment of the instant 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, no opinion is expressed as to whether the taxpayer is permitted under the Code and applicable regulations to change to the tax year requested in the subject Form 1128.

In accordance with the provisions of a power of attorney currently on file, we are sending a copy of this letter ruling to the taxpayer's authorized representative.
This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3) of the Internal Revenue Code provides that it may not be used or cited as precedent.

Sincerely yours,

Assistant Chief Counsel
(Income Tax and Accounting)

/s/ Thomas Luxner

By _____
Thomas Luxner
Acting Deputy Assistant Chief Counsel