Corporation received 90 days to make late IC-DISC election

Plain-English summary

A corporation was formed to operate as an interest charge domestic international sales corporation. Its accounting firm prepared Form 4876-A and emailed it to the taxpayer, but an oversight left the form unfiled. The firm then filed Form 1120-IC-DISC believing the election had been made, and the omission was discovered when the IRS could not process the return. Because the taxpayer reasonably relied on its tax professional, the IRS granted 90 days to file Form 4876-A effective for the corporation's first taxable year. The ruling did not determine whether it otherwise qualified for IC-DISC status or benefits.

Ruling snapshot

• Question: Could a corporation receive additional time to elect IC-DISC status after its accounting firm failed to file Form 4876-A?
• Outcome: Relief approved, with 90 days to file the election
• Key authorities: IRC § 992(b); Temp. Treas. Reg. § 1.921-1T; Treas. Reg. §§ 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202538005 Third Party Communication: None
Release Date: 9/19/2025 Date of Communication: Not Applicable
Index Number: 9100.00-00, 992.02-00
Person To Contact:
-------------- ------------------------------, ID No. ------------

------------------------- Telephone Number:

Refer Reply To:
CC:INTL:B06
In Re: --------------------- PLR-101603-25
Date:
June 26, 2025

TY: -------

Legend

Taxpayer = ---------------------
Accounting Firm = -----------------------------------------
CEO = --------------
Date 1 = ----------------------
Date 2 = ---------------------------
Date 3 = -----------------------
Date 4 = -------------------------
Month 1 = -----------------
Year 1 = -------

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

This responds to correspondences dated December 23, 2024 and February 20, 2025,
submitted by Taxpayer 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,
Taxpayer’s first taxable year.

PLR-101603-25 2

FACTS

Taxpayer was incorporated on Date 1 to serve as an interest charge domestic
international sales corporation (“IC-DISC”). Taxpayer is a domestic corporation wholly
owned by CEO.

In Month 1, CEO requested Accounting Firm’s assistance with the IC-DISC election
process. After preparing a Form 4876-A for Taxpayer, on Date 2 Accounting Firm
emailed the Form 4876-A to Taxpayer. Due to an inadvertent oversight by Accounting
Firm, Taxpayer failed to file Form 4876-A.

Taxpayer began operating as an IC-DISC on Date 1. Believing that CEO had filed the
Form 4876-A and that Taxpayer had met the requirements to operate as an IC-DISC,
Accounting Firm submitted an initial return, a Form 1120-IC-DISC (“Interest Charge
Domestic International Sales Corporation Return”), signed on Date 2, 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. Taxpayer did not realize it failed to make the election until it
received a notice from the IRS issued on Date 3, 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. In response, on Date 4 Accounting Firm reached out to Taxpayer
to ask if the prepared Form 4876-A had been filed.

Taxpayer submitted this request for relief under Treas. Reg. §§ 301.9100-1 and
301.9100-3 for an extension of time to file Form 4876-A to take effect for the tax year
beginning Date 1.

LAW AND ANALYSIS

Section 992(b)(1)(A) of the Internal Revenue Code (the “Code”) 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 such election shall be made in such 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.

Temporary Treasury Regulation § 1.921-1T(b)(1) provides, in part, that a corporation
electing IC-DISC status must file Form 4876-A and that a corporation electing to be
treated as an IC-DISC for its first taxable year shall make its election within 90 days
after the beginning of that year.

PLR-101603-25 3

Treasury Regulation § 301.9100-1(c) gives the Commissioner discretion to 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 Code except subtitles
E, G, H, and I.

Treasury Regulation § 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.

Treasury Regulation § 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.

Treasury Regulation § 301.9100-3(b)(1)(v) provides that a taxpayer is generally deemed
to have acted reasonably and in good faith if the taxpayer reasonably relied on a
qualified tax professional and the tax professional failed to make, or advise the taxpayer
to make, the election.

CONCLUSION

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 treated as 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 sections 1441 and 1442 with respect to
distributions (deemed or otherwise) of accumulated DISC income.

PLR-101603-25 4

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.

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.

The rulings contained in this letter are based upon information and representations
submitted by Taxpayer and 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 rulings. It is subject to verification upon
examination.

Sincerely,

Brad McCormack
Senior Technical Reviewer, Branch 6
Office of Associate Chief Counsel (International)

Enclosures (2)
Copy of this letter
Copies for § 6110 purposes

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

-----------------------------------------------------

----------------------

-------------------------------------------