Renewable facility received more time to elect the investment tax credit

Plain-English summary

A partnership upgraded two electricity-generating units but treated the upgrades as one project in its financial records. Because those records did not show that one unit had already been placed in service, the partnership did not timely elect to claim the IRC § 48 investment tax credit instead of the § 45 production tax credit for that year. The IRS concluded that the partnership met the standards for late-election relief and granted 120 days to make the irrevocable § 48(a)(5) election in compliance with Notice 2009-52. The ruling does not extend the return-filing deadline and does not determine whether the partnership or facility meets the substantive credit requirements or whether the claimed credit amount is correct.

Ruling snapshot

• Question: May the partnership make a late election to claim the investment tax credit instead of the production tax credit for its renewable facility?
• Outcome: Approved, with a 120-day extension
• Key authorities: IRC §§ 45, 48(a)(5); Notice 2009-52; Treas. Reg. §§ 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202511004 Third Party Communication: None
Release Date: 3/14/2025 Date of Communication: Not Applicable
Index Number: 9100.00-00, 48.01-00
Person To Contact:
-------------- ----------------------, ID No. -----------------
---------------------------------------------- Telephone Number:
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---------------------------- Refer Reply To:
------------------------- CC:PSI:B06
PLR-110829-24
Date:
December 18, 2024
Re: Request for extension of time
under §§ 301.9100-1 and 301.9100-3
of the Procedure and Administration
Regulations to file an election pursuant
to § 48(a)(5) of the Internal Revenue
Code

Taxpayer = -------------------------------------------------------------------------
Parent 1 = --------------------------------------------------
Parent 2 = ----------------------------------------------
Holding Company = ----------------------------------------------------------------
Plant = -----------------------------------------------------
Unit 1 = -----------------------------------------------------
Unit 2 = ---------------------------------------------------------
Tax Year A = -------
Tax Year B = -------
Date 1 = ---------------------------
Date 2 = --------------------------
Date 3 = --------------------------
Date 4 = -----------------------

Dear ---------------

This is in response to a letter dated May 24, 2024, submitted on behalf of Taxpayer
requesting extensions of time under §§ 301.9100-1 and 301.9100-3 of the Procedure
and Administration Regulations to make a late election under § 48(a)(5) of the Internal
Revenue Code (Code) to claim the investment tax credit determined under § 48 in lieu
of the production tax credit under § 45 with respect to certain renewable energy facilities
for Tax Year A.
PLR-110829-24 2

                                       FACTS

Taxpayer represents that the facts are as follows.

Taxpayer is a limited liability company that is treated as a partnership for federal income
tax purposes. Taxpayer’s parent companies, Parent 1 and Parent 2, each own a fifty-
percent interest. Parent 1 is Taxpayer’s managing member and is a disregarded entity
that is wholly owned by Holding Company. Taxpayer was created to facilitate an
investment in Plant.

Taxpayer increased Plant’s capacity by upgrading two units used for electricity
generation, Unit 1 and Unit 2. Taxpayer shutdown Unit 2 on Date 1 and placed it back
in service on Date 2, in Tax Year A. Taxpayer shutdown Unit 1 on Date 3 and placed it
back in service on Date 4. Taxpayer’s internal accounting team treated the upgrades to
Unit 1 and Unit 2 as a single project. Accordingly, Taxpayer’s financial records did not
reflect that Unit 2 was in service when Taxpayer prepared its tax return for Tax Year A.
As such, Taxpayer did not make a timely election under § 48(a)(5). After consulting with
its tax advisor, Taxpayer discovered it should have treated Unit 2 as placed in Tax Year
A.

Taxpayer represents that, in requesting an extension of time to make the § 48(a)(5)
election for Tax Year A for Unit 2, it has acted reasonably and in good faith and, further,
there is no prejudice to the interests of the government.

                               LAW AND ANALYSIS

Section 48(a)(5) provides, in part, that a taxpayer may irrevocably elect to claim the
investment tax credit determined under § 48 in lieu of the production tax credit under
§ 45 with respect to certain renewable facilities.

Section 48(a)(5)(A) provides that qualified property that is part of a qualified investment
credit facility shall be treated as energy property for purposes of § 48, and that the
energy percentage with respect to such property shall be 6 percent. Section 48(a)(5)(B)
provides that no credit shall be allowed under § 45 for any taxable year with respect to
any qualified investment credit facility. Section 48(a)(5)(C) provides that taxpayers may
elect to treat a qualified facility, as defined under § 45(d), as a qualified investment
credit facility if it was placed in service after 2008 and the construction of the facility
began before January 1, 2025, and if no credit under § 45 has been allowed.

Notice 2009-52, 2009-25 I.R.B. 1094, provides, in part, that an election to treat a
qualified facility as a qualified investment credit facility and claim the investment tax
credit determined under § 48 in lieu of the production tax credit under § 45 will be
effective if it is made in the manner and time set forth in the notice.
PLR-110829-24 3

Section 2.01 of Notice 2009-52 provides, in part, that to make the election with respect
to a qualified facility, a taxpayer must claim the energy credit with respect to qualified
property that is an integral part of the facility on a completed Form 3468 and file such
form with the taxpayer's income tax return for the year in which the property is placed in
service.

Section 2.03 of Notice 2009-52 provides that the election to claim the investment tax
credit determined under § 48 in lieu of the production tax credit under § 45 must be
made on a timely filed return (including extensions) for the taxable year in which the
facility that is to be treated as a qualified investment credit facility is placed in service.

Section 301.9100-1(a) provides that the regulations under this section and §§ 301.9100-
2 and 301.9100-3 establish the standards the Commissioner will use to determine
whether to grant an extension of time to make a regulatory election. An extension of
time is available for elections that a taxpayer is otherwise eligible to make. However,
the granting of an extension of time is not a determination that the taxpayer is otherwise
eligible to make the election.

Section 301.9100-1(c) provides that the Commissioner may grant a reasonable
extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3 to make a
regulatory election, or a statutory election (but no more than six months except in the
case of taxpayer who is abroad), under all subtitles of the Code, except subtitles E, G,
H, and I.

Section 301.9100-1(b) provides that the term “regulatory election” includes an election
whose due date is prescribed by a notice published in the Internal Revenue Bulletin.

Section 301.9100-2 provides 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).

The § 48(a)(5) election is a regulatory election within the meaning of § 301.9100-1(b)
because the due date for making the election is set forth in Notice 2009-52. The
§ 48(a)(5) election is not expressly excepted from 9100 Relief, and there is no
alternative late election relief procedure provided by a statute, regulation, or other
published guidance.
PLR-110829-24 4

                                  CONCLUSION

Based solely on the information submitted and representations made, we conclude that
the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied. Accordingly,
Taxpayer is granted an extension of time of 120 days from the date of this letter to make
an election under § 48(a)(5) for Year A to elect to claim the investment tax credit
determined under § 48 in lieu of the production tax credit under § 45 with respect to its
renewable facilities. The election under § 48(a)(5) must comply with all the
requirements of Notice 2009-52.

In making the elections, Taxpayer should attach a copy of this letter to the amended
returns for Year A. Alternatively, if Taxpayer files its amended consolidated federal
income tax return electronically, it may satisfy this requirement by attaching a statement
to its amended return that provides the date and control number of the letter ruling.

This letter ruling does not grant an extension of time for filing Taxpayer's federal income
tax return for Tax Year A.

The ruling contained in this letter is based upon information and representations
submitted by the taxpayer and accompanied by a penalty of perjury statement executed
by an appropriate party. While this office has not verified any of the material submitted
in support of the ruling request, it is subject to verification on examination. Except as
specifically set forth above, we express or imply no opinion concerning the federal tax
consequences of the facts described above under any other provision of the Code and
the regulations thereunder. We further express or imply no opinion on whether
Taxpayer satisfies the requirements of § 48(a)(5), or other applicable portions of § 45 or
§ 48 and whether the credit amount claimed is correct.

This letter ruling is directed only to Taxpayer, who is requesting it. Section 6110(k)(3)
provides that it may not be used or cited as precedent.
PLR-110829-24 5

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

                                        Sincerely,

                                        Associate Chief Counsel
                                        (Passthroughs and Special Industries)


                                        John M. Deininger
                                  By:   ________________________________
                                        John M. Deininger
                                        Assistant to the Branch Chief, Branch 6
                                        Office of the Associate Chief Counsel
                                        (Passthroughs & Special Industries)

Enclosure
Copy for § 6110 purposes

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