Partnership's late tax-year change request was treated as timely

Plain-English summary

A partnership sought to change from a calendar tax year to a March 31 year-end but did not timely file Form 1128. The IRS found that the partnership acted reasonably and in good faith and that relief would not prejudice the government. It treated the late request as timely filed under Treasury Regulation section 301.9100-3 and forwarded the application to the Ogden Service Center. The ruling did not decide whether the partnership substantively qualified for the requested change under section 442 or Revenue Procedure 2006-46.

Ruling snapshot

• Question: Could the partnership's late Form 1128 be treated as timely filed?
• Outcome: approved, with substantive eligibility left to the Service Center
• Key authorities: IRC § 442; Treas. Reg. §§ 1.442-1(b) and 301.9100-3; Rev. Proc. 2006-46

Full text (IRS public release)

Internal Revenue Service                                       Department of the Treasury
                                                               Washington, DC 20224

Number: 201717006                                              Third Party Communication: None
Release Date: 4/28/2017                                        Date of Communication: Not Applicable
Index Number: 9100.00-00
                                                               Person To Contact:
---------------------------                                    ------------------------, ID No. --------------
------------------------------------------------------------   Telephone Number:

-                                                              ----------------------
-----------------------------------------------                Refer Reply To:
-------------------------------                                CC:ITA:B05
                                                               PLR-124579-16
                                                               Date:
                                                               January 23, 2017


Legend:

Taxpayer            =   -------------------------------------------------------------
Year                =   --------
Month               =   ----------------------
Tax Preparer        =   -------------------
Date 1              =   -----------------

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

This ruling is in reference to the Taxpayer’s request that its Form 1128, “Application To
Adopt, Change, or Retain a Tax Year,” be considered timely filed under the authority in
§ 301.9100-3 of the Income Tax Regulations on Procedures and Administration.
Taxpayer is a partnership that did not timely file a Form 1128 to change its accounting
period, for federal income tax purposes, from a taxable year ending December 31, to a
taxable year ending March 31, effective March 31, Year.

Rev. Proc. 2006-46, 2006-2 C.B. 859, provides the exclusive procedure for certain
partnerships, S corporations, electing S corporations, personal service corporations, or
trusts to obtain automatic approval to change their annual accounting period under §
442 of the Internal Revenue Code and § 1.442-1(b) of the Income Tax Regulations. The
information furnished indicates that the taxpayer did not file its Form 1128 by the due
date of the return for the short period required to effect such change. However, the
taxpayer requested an extension of time to file its Form 1128 under § 301.9100-3 soon
thereafter.

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. Request 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 interest of the government.
PLR-124579-16                                 2




Based on the facts and information submitted and the representations made, we
conclude that Taxpayer has acted reasonably and in good faith, and that the granting of
relief will not prejudice the interest of the government. Accordingly, Taxpayer has
satisfied the requirements of the regulations for the granting of relief and Taxpayer’s late
filed request to change to a taxable year ending March 31, effective March 31, Year, is
considered timely filed.

Because a change in period under Rev. Proc. 2006-46 is under the jurisdiction of the
Director, Internal Revenue Service Center, where the taxpayer’s returns are filed, we
have forwarded the application to the Director, Ogden, Utah Service Center. Any further
communication regarding this matter should be directed to the Service Center.

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 addresses the granting of § 301.9100-3 relief only. We express no opinion
regarding the tax treatment 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, we
express no opinion as to whether the Taxpayer is permitted under the Code and
applicable regulations to change to the tax year requested in the Form 1128, or whether
the change may be effected under Rev. Proc. 2006-46.

A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, taxpayers filing their returns electronically may satisfy this requirement by
attaching a statement to their return that provides the date and control number of the
letter ruling.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) 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.
PLR-124579-16                                  3



In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to your authorized representative.



                                       Sincerely,


                                       William A. Jackson
                                       Branch Chief, Branch 5
                                       Office of Chief Counsel
                                       (Income Tax & Accounting)




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