REIT receives 60 days to file a duplicate Form 3115

Plain-English summary

A real estate investment trust sought an automatic accounting-method change for depreciation of certain disposed property. It timely filed its return with the original Form 3115 attached and reflected both the method change and the section 481(a) adjustment on the return. An internal miscommunication among its outside tax firms caused the required duplicate Form 3115 not to be sent to the IRS office. The IRS found that the discretionary relief requirements were satisfied and granted 60 days to file the duplicate with a copy of the ruling. The IRS did not decide whether the method change was eligible, whether the trust otherwise complied with the automatic-change procedures, or whether its asset classification and depreciation choices were correct.

Ruling snapshot

• Question: May the REIT file the required duplicate Form 3115 after timely filing the original with its return?
• Outcome: Approved, with 60 calendar days to file the duplicate
• Key authorities: IRC §§ 446(e), 481(a); Treas. Reg. §§ 1.446-1(e), 301.9100-1, 301.9100-3; Rev. Proc. 2015-13

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202445002 Third Party Communication: None
Release Date: 11/8/2024 Date of Communication: Not Applicable
Index Number: 9100.04-00
Person To Contact:
-------------------------------------------------- -----------------------, ID No. -----------------
---------------------------------------- Telephone Number:
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---------------------------- Refer Reply To:
CC:ITA:B07
PLR-103275-24
Date:
August 12, 2024

Re: Request for Extension of Time to File the Duplicate Form 3115

Legend

Taxpayer = ----------------------------------------
--------------------------
Date1 = ----------------------
Date2 = -----------------------
Taxable Year = ----------------------------------------------------------
Firm1 = -------------
Firm2 = ---------------------------
Firm3 = ----------------------------------

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

   This ruling letter responds to a letter dated February 7, 2024, and subsequent

correspondence submitted by Taxpayer. In that letter, Taxpayer requests the consent
of the Commissioner of Internal Revenue (Commissioner) to grant an extension of time
pursuant to § 301.9100-3 of the Procedure and Administration Regulations to file a
duplicate copy of a Form 3115, Application for Change in Accounting Method (Form
3115), with the appropriate office of the Internal Revenue Service (Service) to change
its method of accounting described below, effective for Taxable Year, as required under
section 6.03(1)(a)(i)(B) of Rev. Proc. 2015-13, 2015-5 I.R.B. 419, 432. This letter ruling
is being issued electronically as permissible under section 7.02(5) of Rev. Proc. 2024-1,
2024-1 I.R.B. 1, 34.

PLR-103275-24 2

                                      FACTS

   Taxpayer represents that the facts are as follows:

   Taxpayer, a Real Estate Investment Trust, files a Form 1120-REIT, U.S. Income

Tax Return for Real Estate Investment Trusts, on a calendar-year basis. Taxpayer’s
overall method of accounting is an accrual method.

   For the taxable year beginning Date1, Taxpayer wanted to change its method of

accounting for depreciation of certain depreciable property that has been disposed of by
Taxpayer. Taxpayer believes that this change in method of accounting could be
implemented under the automatic change procedures of Rev. Proc. 2015-13, requesting
automatic consent from the Commissioner to make the method change described in
section 6.07 of Rev. Proc. 2023-24, 2023-28 I.R.B. 1207, 1228 (designated accounting
change number (DCN 107)). Thus, in accord with the automatic change procedures of
Rev. Proc. 2015-13, Taxpayer completed the original, signed Form 3115, reflecting the
desired accounting method change, and attached this original to Taxpayer’s timely-filed
federal income tax return for Taxable Year. Taxpayer’s federal income tax return for
Taxable Year reflected this accounting method change made by Taxpayer.

    In accord with section 6.03(1)(a)(i)(B) of the automatic change procedures of

Rev. Proc. 2015-13, a signed copy of the original Form 3115 should have been timely
filed with the appropriate office of the Service no earlier than the first day of the
requested year of change and no later than the date the taxpayer files the original Form
3115 with the federal income tax return for the requested year of change.

   Taxpayer’s tax advisors during the Taxable Year include three outside tax

consulting firms: Firm1, Firm2, and Firm3. Firm1 was engaged to prepare and file
Taxpayer’s tax return for Taxable Year. Firm2 was engaged to prepare Taxpayer’s
Form 3115 for the above listed change. Lastly, Firm3 was engaged by Taxpayer as a
tax advisor.

   Taxpayer, with the assistance of Firm1, timely filed its federal income tax return

for Taxable Year, along with the signed original Form 3115 for the above listed change.
The accounting method change and accompanying adjustment under § 481(a) were
reflected on the Taxpayer’s federal income tax return for Taxable Year. However, on
Date2, Firm3 discovered that the duplicate copy of the Form 3115 had not been filed
with the appropriate office of the Service, as required by section 6.03(1)(a)(i)(B) of Rev.
Proc. 2015-13, due to an internal miscommunication by Firm2. Upon this discovery,
Taxpayer submitted this request for an extension of time to file the duplicate copy of
Taxpayer's Form 3115.

PLR-103275-24 3

                             RULING REQUESTED

   Taxpayer is requesting an extension of time under §§ 301.9100-1 and

301.9100-3 to file the duplicate copy of the Form 3115 to obtain the consent of the
Commissioner to make the accounting method change DCN 107 for the assets subject
to the Form 3115.

                             LAW AND ANALYSIS

   Rev. Proc. 2015-13 provides the procedures by which a taxpayer may obtain

automatic consent to change certain accounting methods. Section 9 of Rev. Proc. 2015-
13 provides that consent of the Commissioner to change its accounting method under
§ 446(e) of the Internal Revenue Code and § 1.446-1(e) of the Income Tax Regulations
is granted only if the taxpayer complies with all the applicable provisions of the revenue
procedure and implements the change in method on its federal income tax return for the
requested year of change to which the original Form 3115 is attached pursuant to
section 6.03.

   Section 6.03(1)(a)(i) of Rev. Proc. 2015-13 provides that a taxpayer changing an

accounting method pursuant to Rev. Proc. 2015-13 must complete and file a Form 3115
in duplicate. The original Form 3115 must be attached to the taxpayer's timely filed
(including any extension) original federal income tax return for the year of change, and a
copy (with signature) of the Form 3115 must be filed with the Ogden, UT office of the
Service no earlier than the first day of the year of change and no later than when the
original is filed with the federal income tax return for the year of change.

   Sections 301.9100-1 through 301.9100-3 provide the standards the

Commissioner will use to determine whether to grant an extension of time to make an
election. Section 301.9100-2 provides automatic extensions of time for making certain
elections. Section 301.9100-3 provides extensions of time for making elections that do
not meet the requirements of § 301.9100-2.

   Section 301.9100-1(b) defines a regulatory election as an election whose due

date is prescribed by a regulation published in the Federal Register, or a revenue ruling,
revenue procedure, notice, or announcement published in the Internal Revenue Bulletin.

  Section 301.9100-1(c) provides that the Commissioner has discretion to grant a

reasonable extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3
to make certain regulatory elections.

    Section 301.9100-3(a) provides that requests for relief subject to § 301.9100-3

will be granted when the taxpayer provides evidence to establish to the satisfaction of
the Commissioner that the taxpayer acted reasonably and in good faith and that the
granting of relief will not prejudice the interests of the Government.

PLR-103275-24 4

   Section 301.9100-3(c)(2) imposes special rules for accounting method regulatory

elections. This section provides, in relevant part, that the interests of the Government
are deemed to be prejudiced except in unusual and compelling circumstances when the
accounting method regulatory election for which relief is requested is subject to the
procedure described in § 1.446-1(e)(3)(i) or the relief requires an adjustment under
§ 481(a) (or would require an adjustment under § 481(a) if the taxpayer changed to the
accounting method for which relief is requested in a taxable year subsequent to the
taxable year the election should have been made).

                                  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 is granted 60 calendar days from the date of this letter to file the duplicate
copy of the Form 3115 for the Taxable Year. Taxpayer must attach a copy of this letter
ruling to the duplicate copy. A copy of this letter ruling is enclosed for that purpose.
Provided Taxpayer meets these filing requirements, we will consider the duplicate copy
for the Taxable Year to be timely filed under the procedures of Rev. Proc. 2015-13.

   Except as expressly set forth above, we express no opinion concerning the

federal tax consequences of the facts described above under any other provision of the
Code or regulations. Specifically, no opinion is expressed or implied, concerning: (1)
whether the accounting method change that Taxpayer has made is eligible to be made
under section 6.07 of Rev. Proc. 2023-24 and Rev. Proc. 2015-13; (2) whether
Taxpayer otherwise meets the requirements of Rev. Proc. 2015-13 to make its
accounting method change using the procedures of Rev. Proc. 2015-13; or (3) whether
Taxpayer's classification, depreciation method, convention, or recovery period of the
assets subject to Form 3115 are correct.

  Further, this letter ruling does not grant any extension of time for filing Taxpayer's

Form 1120-REIT for Taxable Year.

  This letter ruling is directed only to the taxpayer requesting it. Section 6110(k)(3)

provides that it may not be used or cited as precedent.

PLR-103275-24 5

    In accordance with the power of attorney, we are sending a copy of this letter

ruling to Taxpayer's authorized representatives. We are also sending a copy of this
letter ruling to the appropriate IRS operating division official.

                                                  Sincerely,

                                                  Deena M. Devereux

                                                  DEENA M. DEVEREUX
                                                  Branch Chief, Branch 7
                                                  Office of Associate Chief Counsel (Income Tax
                                                  and Accounting)

Enclosures (2):

copy of this letter
copy for section 6110 purposes

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

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