Late accounting-period application is treated as timely

Plain-English summary

A taxpayer sought to change from a calendar tax year to a tax year ending March 31 under the automatic procedure in Revenue Procedure 2006-46. It missed the deadline for Form 1128 but requested relief shortly afterward. The IRS found that the taxpayer acted reasonably and in good faith and that relief would not prejudice the government. It treated the late Form 1128 as timely filed, provided that the taxpayer filed it with the proper service center within 30 days and followed the ruling's instructions. The IRS did not decide whether the requested year change itself was otherwise permitted.

Ruling snapshot

• Question: May the taxpayer's late Form 1128 requesting an accounting-period change be treated as timely filed?
• Outcome: approved
• Key authorities: Treas. Reg. § 301.9100-3; Rev. Proc. 2006-46

Full text (IRS public release)

Internal Revenue Service                        Department of the Treasury
                                                Washington, DC 20224

Number: 201802011                               Third Party Communication: None
Release Date: 1/12/2018                         Date of Communication: Not Applicable
Index Number: 9100.09-00                        Person To Contact:
                                                ------------------------, ID No. ------------------
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                                                Telephone Number:
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                                                Refer Reply To:
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                                                CC:ITA:B04
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                                                PLR-127991-17
                                                Date: October 5, 2017




TIN = -----------------
Year = -------
Date = ----------------------------


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

This letter ruling is in reference to Taxpayer’s request filed on Date that its Form 1128,
Application to Adopt, Change, or Retain a Tax Year, be considered timely filed under
Rev. Proc. 2006-46, 2006-2 C.B. 859 pursuant to the authority in § 301.9100-3 of the
Regulations on Procedure and Administration. Taxpayer’s Form 1128 is requesting to
change Taxpayer’s 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 provides the exclusive procedure by which taxpayers meeting the
provisions outlined in Section 4, SCOPE, can make an accounting period change
automatically. The application must be filed no later than the due (including extensions)
for filing the return for the short period required by such change.

The information furnished indicates that Taxpayer did not file its Form 1128 by the due
date of the return for the short period required to effect the change. However, Taxpayer
requested an extension of time to file its Form 1128 under § 301.9100-3 shortly the after
the required time.

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.
PLR-127991-17                                 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 interests of the government. Accordingly, Taxpayer has
satisfied the requirements of the regulations for the granting of relief, and Taxpayer's
late filed Form 1128 requesting to change to March 31, effective March 31, Year, is
considered timely filed. 1

To make the change automatically under Rev. Proc. 2006-46, the taxpayer must file
within 30 days of the date of this letter the Form 1128 with the appropriate Service
Center, indicating at the top of page one of the application: "FILED UNDER REV.
PROC. 2006-46" and complete Section A of Part ll of Form 1128 indicating that the
taxpayer does qualify under Rev. Proc. 2006-46 by answering “Yes” to Question 1 of
Section A of Part ll. Taxpayer must attach a copy of this letter to the Form 1128 that is
filed with the appropriate 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 of the instant transaction under the provisions of any other
sections of the Code or 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) 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.


1
 The taxpayer’s application for a change in accounting period will be processed under
Rev. Proc. 2006-46.
PLR-127991-17                               3


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

                                         Sincerely,



                                         Donna Welsh
                                         Senior Technician Reviewer
                                         Office of Associate Chief Counsel
                                         (Income Tax and Accounting)


Enclosures