Extension granted to request revised nuclear decommissioning fund schedules

Plain-English summary

A corporation owned interests in two nuclear power plants and maintained qualified nuclear decommissioning funds under section 468A. After the Nuclear Regulatory Commission extended both plants' operating licenses, the corporation failed to request revised schedules of ruling amounts by the regulatory deadline. It asked for an extension under Treasury Regulations sections 301.9100-1 and 301.9100-3. Based on the submitted facts and representations, the IRS found that the requirements for relief were satisfied. The IRS treated the requests as timely if the corporation submitted them within 120 days of the letter.

Ruling snapshot

• Question: May the taxpayer receive additional time to request revised schedules of ruling amounts after extensions of two nuclear plant operating licenses?
• 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: 202347015                                                  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:
--------------------------                                        CC:PSI:B06
In Re: Request for extension of time under                        PLR-122917-22
§§ 301.9100-1 and 301.9100-3 of the                               Date:
Procedure and Administration Regulations to                       August 08, 2023
file an election pursuant to § 468A of the
Internal Revenue Code

LEGEND:

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

Parent            =                 ----------------------------------------------------
22
X                 =                 --------

Plant 1           =                 ---------------------------------

Plant 2           =                 ----------------------------------------------------

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

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

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

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

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

Date F            =                 ----------------------

State             =                 --------

PLR-122917-22                                2

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

         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 is a 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 a X percent interest in Plant 1 and Plant 2 (collectively referred to
as Plants). Taxpayer has established qualified Funds with respect to the Plants as
allowed by section 468A.

       On Date A, Taxpayer received a revised schedule of ruling amounts from the
Internal Revenue Service for Plants. On Date B, the Nuclear Regulatory Commission
(NRC) granted Taxpayer a renewed facility operating license, extending the operating
license for Plant 1 to Date C. On Date D, the NRC granted Taxpayer a renewed facility
operating license, extending the operating license for Plant 2 to Date E. Taxpayer did
not request a new a revised schedule of ruling amounts from the Service after the NRC
extended the Plants operating licenses by Date F (as required per § 1.468A-3(f)(1)(iv)).

RULING REQUEST:

       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 Plants nuclear
decommissioning trust qualified funds.

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

PLR-122917-22                               3

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
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 F.

        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 301.9100-1(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-122917-22                                       4

extension granted on Date B and Date D 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:     ---------------------------------
        ----------------
        --------------------------------------
        -------------------------------------
        --------------------------