Corporation receives 90 days to file a missing IC-DISC election

Plain-English summary

A corporation was formed to operate as an interest charge domestic international sales corporation, or IC-DISC, for exports of machine components made by its parent. Its accounting firm prepared Form 4876-A, and the taxpayer signed it and believed it mailed the election, but it kept no proof of mailing. The IRS later rejected the corporation's Form 1120-IC-DISC because no approved election was on file. The taxpayer promptly resubmitted forms, contacted the IRS, and requested a ruling after learning that proof of timely filing was unavailable. The IRS found that the § 301.9100-3 relief requirements were met and granted 90 days to file Form 4876-A, which would be treated as timely for the corporation's first tax year. The ruling did not decide whether the corporation otherwise qualified for IC-DISC status or benefits.

Ruling snapshot

• Question: May a corporation receive extra time to file an IC-DISC election it believed had been mailed but could not prove was filed?
• Outcome: Approved, with 90 days to file Form 4876-A.
• Key authorities: IRC § 992(b); Treas. Reg. §§ 1.992-2(a)(2)(i), 301.9100-1, 301.9100-3.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202517016 Third Party Communication: None
Release Date: 4/25/2025 Date of Communication: Not Applicable
Index Number: 9100.22-00, 992.02-00
Person To Contact:
--------------------------- ------------------, ID No. -----------------
------------- Telephone Number:
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------------------------------ Refer Reply To:
---------------------------------------- CC:INTL:B06
PLR-119291-24
Date:
January 22, 2025

Legend

Taxpayer = -----------------------------
IC-DISC 1 = ------------------------
Accounting Firm = ------------------
Date 1 = --------------------------
Date 2 = -------------------------
Date 3 = -------------------------
Date 4 = ---------------------
Date 5 = ----------------
Date 6 = ---------------------------
Date 7 = -------------------------
Date 8 = -----------------------
Date 9 = ------------------
Date 10 = ----------------------
Company A = ----------------------------------
Year 1 = --------
Year 2 = -------

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

This responds to a letter dated October 14, 2024, supplemented with a letter dated
December 12, 2024, submitted by your representatives requesting that the Internal
Revenue Service (“IRS”) grant Taxpayer an extension of time under Treas. Reg. §§
301.9100-1 and 301.9100-3 to file Form 4876-A (“Election To Be Treated as an Interest
Charge DISC”) for Year 1.
PLR-119291-24 2

The ruling contained in this letter is based upon information and representations
submitted by Taxpayer and Accounting Firm, accompanied by affidavits and penalty of
perjury statements executed by appropriate parties. This office has not verified any of
the material submitted in support of the request for a ruling. It is subject to verification
on examination.

                                              FACTS

Taxpayer was incorporated on Date 1 to operate as an interest charge domestic
international sales corporation (“IC-DISC”), in connection with the export of machine
components manufactured by Company A. Taxpayer is a domestic corporation wholly
owned by Company A, an S Corporation. IC-DISC 1, to which this ruling is not directed,
is another entity associated with parties related to Taxpayer. IC-DISC 1’s exporting
does not overlap with Taxpayer’s.

On Date 2, Accounting Firm, under Taxpayer’s instructions, prepared Forms 4876-A for
Taxpayer and IC-DISC 1 and emailed them to Taxpayer with instructions for signature
and for filing with the IRS. Accounting Firm instructed Taxpayer to file the Forms 4876-A
by Date 4. On Date 3, Taxpayer emailed scans of the signed Forms 4876-A to
Accounting Firm stating that the Forms 4876-A would be mailed on the same day. The
Forms were signed by Taxpayer, dated Date 2. Taxpayer assumed that it had mailed
the Forms 4876-A for itself and IC-DISC 1, and that it had completed all the
requirements necessary to operate and to be treated as an IC-DISC for its first taxable
year. Taxpayer received notice from the IRS that it did not have a Form 4876-A for
Taxpayer. Taxpayer does not know if the Form 4876-A was mailed together with IC-
DISC 1’s Form 4876-A because Taxpayer did not save the mailing receipts and has no
proof of mailing.1

Taxpayer began operating as an IC-DISC on Date 1. Believing that it had met the
requirements to operate as an IC-DISC, Taxpayer submitted an initial return, a Form
1120-IC-DISC, Interest Charge Domestic International Sales Corporation Return,
signed on Date 5, with the IRS. Taxpayer assumed that it had met all the requirements
to operate as an IC-DISC, but it did not qualify as an IC-DISC for federal income tax
purposes because it had failed to make the election timely, i.e., Taxpayer failed to file
the election within 90 days after the beginning of Year 1. Taxpayer did not realize it
failed to make the election until it received a notice from the IRS issued on Date 6
(several months after the close of Year 1), indicating that the Form 1120-IC-DISC could
not be processed, because the IRS did not have an approved Form 4876-A on record
for Taxpayer.

On receiving the IRS notification, Taxpayer immediately took steps to remedy the
situation. Taxpayer resubmitted the Forms 4876-A and 1120-IC-DISC to the IRS on

1 Proof of delivery, such as a Post Office return receipt, can also be helpful in addressing a missing-

submission situation.
PLR-119291-24 3

Date 7. Taxpayer also sent faxes to the IRS Non-Master File Unit on Date 8 and Date 9.
Accounting Firm was ultimately instructed by the IRS that without proof of timely filing, a
private letter ruling would be required to make the IC-DISC election. Taxpayer
attempted to file a Form 1120-IC-DISC for Year 2 but received a Letter 599C from the
IRS dated Date 10, stating the return could not be processed. Accounting Firm then
(less than two years after the close of Year 1) filed the present request on behalf of
Taxpayer for a ruling to allow Taxpayer to make a late election to be treated as an IC-
DISC beginning on Date 1.

                               LAW AND ANALYSIS

Section 992(b)(1)(A) provides that an election by a corporation to be treated as an IC-
DISC shall be made by such corporation for a taxable year at any time during the 90
day period immediately preceding the beginning of the taxable year, except that the
Secretary may give his consent to the making of an election at such other times as he
may designate.

Section 992(b)(1)(B) provides that the election shall be made in the manner as the
Secretary shall prescribe and shall be valid only if all persons who are shareholders in
such corporation on such first day of the first taxable year for which such election is
effective consent to such election.

Treas. Reg. § 1.992-2(a)(2)(i) provides, in part, that a corporation making an election to
be treated as an IC-DISC for its first taxable year must make its election within 90 days
after the beginning of such taxable year. See also Treas. Reg. § 1.921-1T(b)(1).

Treas. Reg. § 301.9100-1(c) provides, in part, that the Commissioner, in exercising the
Commissioner’s discretion, may grant a reasonable extension of time under the rules
set forth in Treas. Reg. §§ 301.9100-2 and 301.9100-3 to make a regulatory election
under all subtitles of the Internal Revenue Code (the “Code”) except subtitles E, G, H,
and I.

Treas. Reg. § 301.9100-1(b) provides that a regulatory election is 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. For this purpose, an election includes an application for relief in respect of tax.

Treas. Reg. § 301.9100-3(a) provides that requests for extensions of time for regulatory
elections that do not meet the requirements of Treas. Reg. § 301.9100-2 (automatic
extensions) must be made under the rules of Treas. Reg. § 301.9100-3. Requests for
relief subject to Treas. Reg. § 301.9100-3 will be granted when the taxpayer provides
the evidence (including affidavits described in Treas. Reg. § 301.9100-3(e)) to establish
to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good
faith, and that the grant of relief will not prejudice the interests of the Government.
PLR-119291-24 4

The election described in Treas. Reg. § 1.992-2(a)(2)(i) is a regulatory election as
defined in Treas. Reg. § 301.9100-1(b). Therefore, the Commissioner has discretionary
authority under Treas. Reg. § 301.9100-1(c) to grant Taxpayer an extension of time,
provided that Taxpayer satisfies the standards for relief set forth in Treas. Reg.
§ 301.9100-3.

Based on the facts and representations submitted with Taxpayer’s ruling request, we
conclude that Taxpayer satisfies Treas. Reg. § 301.9100-3(a). Accordingly, Taxpayer is
granted an extension of time of 90 days from the date of this ruling letter to file Form
4876-A. Such filing will be considered a timely election to be treated as an
IC-DISC for Taxpayer’s first taxable year.

The granting of an extension in this ruling letter is not a determination that Taxpayer is
otherwise eligible to make the election or to claim IC-DISC status or benefits. See
Treas. Reg. § 301.9100-1(a). Except as expressly provided herein, no opinion is
expressed or implied concerning the tax consequences of any aspect of any transaction
or item discussed or referenced in this letter. For example, no opinion is expressed
regarding the consequences to any person under section 996(g).

In accordance with section 996(g), Taxpayer should not accept any income tax treaty
claims of reduced withholding under section 1441 or 1442 with respect to distributions
(deemed or otherwise) of accumulated DISC income.

Taxpayer should attach a copy of this ruling letter to its Form 4876-A and Federal
income tax return for the taxable years to which this letter applies. 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.

                                  Sincerely,



                                  Anand Desai
                                  Senior Counsel, Branch 6
                                  (International)

Enclosures (2)
Copy of this letter
Copy for § 6110 purposes
PLR-119291-24 5

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