Extension granted for nuclear decommissioning fund schedule request

Plain-English summary

A corporation owned an interest in a nuclear power plant and maintained a qualified nuclear decommissioning fund under section 468A. When the Nuclear Regulatory Commission extended the plant's operating license, the corporation did not request a revised schedule of ruling amounts by the required deadline. It requested relief under Treasury Regulations sections 301.9100-1 and 301.9100-3. Based on the facts and representations submitted, the IRS concluded that the requirements for an extension were satisfied. The request would be treated as timely if submitted within 120 days of the letter.

Ruling snapshot

• Question: May the taxpayer receive additional time to request a revised schedule of ruling amounts after a nuclear plant operating-license extension?
• Outcome: Approved
• Key authorities: IRC § 468A; Treas. Reg. §§ 1.468A-3(f)(1)(iv), 301.9100-1, and 301.9100-3

Full text (IRS public release)

Internal Revenue Service                                       Department of the Treasury
                                                               Washington, DC 20224

Number: 202347014                                               Third Party Communication: None
Release Date: 11/24/2023                                        Date of Communication: Not Applicable
Index Number: 9100.00-00
                                                               Person To Contact:
---------------------                                          ------------------------, ID No. ------------------
-----------------------------------------                      ----------------------------------------------------
-------------------------------                                Telephone Number:
---------------------------                                    ---------------------
--------------------------                                     Refer Reply To:
In Re: Request for extension of time under                     CC:PSI:B06
§§ 301.9100-1 and 301.9100-3 of the                            PLR-122916-22
Procedure and Administration Regulations to                    Date:
file an election pursuant to § 468A of the                     August 08, 2023
Internal Revenue Code

LEGEND:

Taxpayer                   =                 ------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------

State                      =                 ------------

Parent                     =                 ----------------------------------------------------

X                          =                 ------

Plant                      =                 ------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------

Date A                     =                 --------------------------

Date B                     =                 -------------------------

Date C                     =                 -------------------------

Date D                     =                 -------------------------

Date E                     =                 ---------------------

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

PLR-122916-22                               2

         This letter responds to a letter dated November 17, 2022, and subsequent
correspondence, submitted on behalf of Taxpayer, requesting an extension of time
under §§ 301.9100-1 and 301.9100-3 of the Procedure and Administration Regulations
to file a request for a revised schedule of ruling amounts for purposes of § 468A of the
Internal Revenue Code and § 1.468A-3(f)(1)(iv).

                                         FACTS

      Taxpayer represents that the facts are as follows:

         Taxpayer is a State corporation and a wholly-owned subsidiary of Parent and is a
member of Parent’s consolidated group for federal income tax purposes. Parent and its
affiliated group of corporations file a consolidated federal income tax return on a
calendar year basis using the accrual method of accounting.

        Taxpayer owns X percent interest in Plant. Taxpayer has established a qualified
Fund with respect to the Plant as allowed by section 468A. The Taxpayer received a
schedule of ruling amounts from the Internal Revenue Service dated Date A. The
numbers in Taxpayer's request for that schedule of ruling amounts were calculated
based on the then-current license expiration date. The license for Plant was originally
set to expire on Date B. On Date C, the Nuclear Regulatory Commission (NRC) granted
Taxpayer a renewed facility operating license, extending the operating license for Plant
to Date D. Taxpayer was required to request a revised schedule of ruling amounts from
the Service by Date E after the license extension was granted by the NRC. Taxpayer
failed to request such schedule of ruling amounts by Date E.

                                RULING REQUESTED

Taxpayer requests an extension of time under §§ 301.9100-1 and 301.9100-3 to allow
Taxpayer to file a revised schedule of ruling amounts for Plant’s nuclear
decommissioning trust qualified fund.

                                       ANALYSIS

        Section 468A provides that a taxpayer may elect to deduct the amount of
payments made to a qualified decommissioning fund. However, former § 468A(b) limits
the amount paid into such fund for any taxable year to the lesser of the amount of
nuclear decommissioning costs allocable to this fund which is included in the taxpayer's
cost of service for ratemaking purposes for the tax year or the ruling amount applicable
to this year.

        Section 468A(d)(1) provides that no deduction shall be allowed for any payment
to a qualified nuclear decommissioning fund unless the taxpayer receives a schedule of
ruling amounts from the Secretary. Section 468A(d)(1) further requires a Taxpayer to

PLR-122916-22                               3

request a revised schedule of ruling amounts upon renewal of a nuclear power plant
operating license.

       Section 1.468A-3(f)(1)(iv) requires that a taxpayer who receives a renewal of an
operating license of a nuclear power plant to which a qualified nuclear decommissioning
fund relates must request a revised schedule of ruling amounts on or before the
deemed payment deadline for the taxable year that includes the date on which the
license was extended. In this case, Taxpayer was required to request the revised
schedule of ruling amounts by Date E.

        Under § 301.9100-1(c), the Commissioner may 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.

       Section 301.9100-1(b) provides the term “regulatory election” includes an
election the due date of which is prescribed by a regulation published in the Federal
Register.

      Sections 301.9100-1 through 301.9100-3 provide the standards used to
determine whether to grant an extension of time to make a regulatory election. Section
301.9100-1(a).

       Section 301.9100-2 allows automatic extensions of time for making certain
elections. Section 301.9100-3 provides rules for requesting extensions of time for
regulatory elections that do not meet the requirements of § 301.9100-2.

       The Commissioner will grant requests for relief under § 301.9100-3 when the
taxpayer provides the evidence (including affidavits described in § 301.9100-3(e)) to
establish to the satisfaction of the Commissioner that the taxpayer acted reasonably
and in good faith, and the grant of relief will not prejudice the interests of the
government. Section 301.9100-3(a).

                                  CONCLUSION

       Based solely on the facts and representations submitted, we conclude that the
requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied. Accordingly,
Taxpayer's request for a revised schedule of ruling amounts based on the license

PLR-122916-22                                      4

extension granted on Date C will be considered timely filed for purposes of § 1.468A-
3(f)(1)(iv) if such request is submitted within 120 days of the date of this letter.

                                               Sincerely,

                                               Associate Chief Counsel
                                               (Passthroughs and Special Industries)

                                                      /s/
                                         By:   _______________________________
                                               Patrick S. Kirwan
                                               Chief, Branch 6
                                               Office of the Associate Chief Counsel
                                               (Passthroughs and Special Industries)

Enclosure
Copy for § 6110 Purposes.

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