Other

Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 201633007
Release Date: 8/12/2016
Index Number: 9100.22-00, 992.02-00
---
---
---
---
--- ---
Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
---, ID No. ---
---
Telephone Number:
---
Refer Reply To:
CC:INTL:B06
PLR-106539-16
Date:
May 18, 2016
TYE: ---
Legend
Taxpayer = ---
Accounting Firm = ---
Company = ---
Date 1 = ---
Year 1 = ---
Dear ---:
This responds to a letter dated February 16, 2016 submitted by your representatives 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 Year 1, Taxpayer’s first taxable year.
The ruling contained in this letter is 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 materials submitted in support of the request for a ruling. It is subject to verification on examination.
PLR-106539-16 2

# FACTS

Taxpayer is a domestic corporation that is wholly-owned by Company, a domestic partnership owned by U.S. persons. In Year 1, Company decided to establish Taxpayer as an interest charge domestic international sales corporation (“IC-DISC”) and sell food products distributed by Company on a commission basis.
Taxpayer was formed on Date 1 and engaged Accounting Firm to perform all necessary steps and prepare all necessary forms to qualify Taxpayer as an IC-DISC. Accounting Firm prepared and delivered Form 4876-A to Taxpayer to be signed by the President of Company and Taxpayer. However, due to an administrative error, the form was not provided to the President and was misplaced. As a result, the President was unable to sign and file the Form 4876-A within 90 days after Date 1.
After Accounting Firm had prepared the Form 1120 IC-DISC for Year 1 based on the assumption that Form 4876-A had been timely filed, Taxpayer received a notice from the Service indicating that it had no record of the filing. Accounting Firm then informed Taxpayer that the only option was to file a request for relief under Treasury Regulation § 301.9100-1(c).
Taxpayer represents that (1) the extension will not result in Taxpayer having a lower tax liability in the aggregate for all taxable years affected by the election than Taxpayer would have had if the election had been timely made and (2) the taxable years affected by the election are not closed by the period of limitations on assessment under section 6501(a).
As noted above, Taxpayer requested a ruling granting an extension of time to file Form 4876-A for Year 1, its first taxable year.

# LAW AND ANALYSIS

Section 992(b)(1)(A) of the Internal Revenue Code1 provides that an election by a corporation to be treated as a DISC2 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.
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.
1 All section references are to the Internal Revenue Code.
2 As used in this letter, the terms “IC-DISC” and “DISC” have the same meaning.
PLR-106539-16 3
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.
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 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.
In the present situation, the election described in Temp. Treas. Reg. § 1.921-1T(b)(1) 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 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.
PLR-106539-16 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. 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.
In accordance with the Power of Attorney on file with this office, a copy of this ruling letter is being sent to your authorized representative.
Sincerely,
____
Marissa K. Rensen
Senior Counsel, Branch 6
Office of Associate Chief Counsel (International)
Enclosures (2)
Copy of this letter
Copy for § 6110 Purposes