Election

Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 201502005
Release Date: 1/9/2015
Index Number: 9100.22-00, 992.02-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
---, ID No. ---
Telephone Number:
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Refer Reply To:
CC:INTL:B06
PLR-122903-14
Date:
October 07, 2014
Legend
Taxpayer = ---
Partnership = ---
Accounting Firm = ---
Law Firm = ---
Individual A = ---
Individual B = ---
Individual C = ---
Individual D = ---
Date 1 = ---
Date 2 = ---
Date 3 = ---
Dear ---:
This responds to a letter dated June 3, 2014, submitted by Accounting Firm requesting that the Internal Revenue Service (“Service”) 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 Taxpayer’s first taxable year.
The rulings contained in this letter are based upon information and representations submitted by Taxpayer and Accounting Firm and accompanied by affidavits and penalty of perjury statements executed by appropriate parties. This office has not verified any of the materials submitted in support of the request for rulings. It is subject to verification on examination.
PLR-122903-14 2

# FACTS

Taxpayer is a domestic corporation wholly owned by Partnership. Individuals A, B, C, and D hold equal partnership interests in Partnership. Individual D’s partnership interest is held through a trust. Taxpayer was incorporated on Date 1 for the sole purpose of qualifying and operating as an interest charge domestic international sales corporation (“IC-DISC”).
Shortly before Date 1, Accounting Firm advised Individual A of benefits that an IC-DISC may provide. Partnership engaged Accounting Firm and Law Firm to form Taxpayer as an IC-DISC. Upon formation, Taxpayer operated as an IC-DISC. Due to a misunderstanding between Law Firm and Accounting Firm about who was responsible for filing the Form 4876-A, Taxpayer inadvertently failed to timely file a Form 4876-A.
On Date 2, Accounting Firm filed Taxpayer’s first federal income tax return using Form
1120-IC-DISC. At this time, Accounting Firm and Law Firm discovered that a Form
4876-A had not been filed. A few days later, on Date 3, Accounting Firm filed a Form
4876-A on behalf of Taxpayer.
In order to operate as an IC-DISC beginning on Date 1, Taxpayer requested a ruling granting an extension of time to file Form 4876-A for its first taxable year.

# 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 a DISC1 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) of the Code 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.
Treasury Regulation § 301.9100-1(c) provides, in part, that the Commissioner, in exercising the Commissioner’s discretion, may grant a reasonable extension of time 1 As used in this letter, the terms “IC-DISC” and “DISC” have the same meaning.
PLR-122903-14 3 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.
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 60 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). Taxpayer should attach a copy of this ruling letter to its Federal income tax return for the taxable years to which this letter applies.
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. 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.
PLR-122903-14 4
Pursuant to a Power of Attorney on file in this office, a copy of this ruling letter is being furnished to your authorized representative.
Sincerely,
____
Joseph P. Dewald
Senior Technical Reviewer, Branch 6
Office of Associate Chief Counsel (International)
Enclosures (2)
Copy of this letter
Copy for § 6110 purposes cc: