Other

Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 202345009
Release Date: 11/10/2023
Index Number: 9100.22-00, 382.00-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
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ID No. ---
Telephone Number:
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Refer Reply To:
CC:CORP:BO2
PLR-109905-23
Date:
August 16, 2023
Legend
Parent = ---
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Electing Component Member = ---
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Date 1 = ---
Date 2 = ---
Company Official = ---
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Tax Professionals = ---
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Dear ---:
This letter responds to a letter dated May 10, 2023, submitted on behalf of Parent, requesting an extension of time under §301.9100-3 of the Procedure and Administration Regulations to file an election. Parent is requesting an extension of time for Parent and Electing Component Member to file an election to restore all of the value of Electing PLR-109905-23 2 Component Member to Parent under §1.382-8(h) of the Income Tax Regulations (“Election”). The material information submitted is summarized below.
During its taxable year ended Date 1, Parent was the common parent of a consolidated group (the “Parent Group”), a loss group under §1.1502-91(c)(1), and Parent and Electing Component Member were component members of a controlled group of corporations under §1.382-8(e). On Date 2 (during the taxable year ended Date 1), Parent underwent an ownership change within the meaning of section 382(g).
Section 382(a) of the Internal Revenue Code (“Code”) provides that the amount of the taxable income of any new loss corporation for any post-change year which may be offset by pre-change losses shall not exceed the section 382 limitation for such year.
Under section 382(b)(1), the section 382 limitation is determined by multiplying the value of the old loss corporation by the applicable long-term tax-exempt rate.
A special rule designed to prevent “double counting” by controlled groups is set forth in
§1.382-8. Section 1.382-8(c)(1) requires the value of the stock of each component member of the controlled group be reduced by the value of the stock owned by that component member in any other component member. For purposes of applying §1.382-8, a consolidated group, loss group, or loss subgroup, is treated as a single corporation under §1.382-8(f). Component members of a controlled group can elect under §1.382-8(c)(2) to restore some or all of the value to the member whose value is reduced under §1.382-8(c)(1). The election to restore value is made following the procedures set forth in §1.382-8(h).
The Election was required to be filed with Parent’s income tax return and with Electing
Component Member’s income tax return for the taxable year that includes Date 2.
However, for various reasons, Parent and Electing Component Member failed to make the Election in a timely manner. Parent has represented that it is not seeking to alter a return position for which an accuracy-related penalty has been or could have been imposed under section 6662.
Under §301.9100-1(c), the Commissioner has discretion to grant a reasonable extension of time to make a regulatory election, or a statutory election (but no more than six months except in the case of a taxpayer who is abroad), under all subtitles of the Code except subtitles E, G, H, and I.
Sections 301.9100-1 through 301.9100-3 provide the standards the Commissioner will use to determine whether to grant an extension of time to make a regulatory election.
Section 301.9100-1(a). Section 301.9100-2 provides automatic extensions of time for making certain elections. Requests for relief under §301.9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and that granting relief will not prejudice the interests of the government. Section 301.9100-3(a).
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In this case, the time for filing the Election is fixed by the regulations (i.e., §1.382-8(h)).
Therefore, the Commissioner has discretionary authority under §301.9100-3 to grant an extension of time for Parent and Electing Component Member to file the Election, provided Parent and Electing Component Member show they acted reasonably and in good faith, the requirements of §§301.9100-1 and 301.9100-3 are satisfied, and granting relief will not prejudice the interests of the government.
Information, affidavits, and representations submitted by Parent, Company Official, and
Tax Professionals explain the circumstances that resulted in the failure to timely file the

Based on the facts and information submitted, including the affidavits submitted and the representations that have been made, we conclude that Parent and Electing Component Member acted reasonably and in good faith, the requirements of §§301.9100-1 and 301.9100-3 are satisfied, and granting relief will not prejudice the interests of the government. Accordingly, an extension of time is granted under §301.9100-3 until 75 days from the date on this letter for Parent and Electing Component Member to file the Election in accordance with §1.382-8(h).
The above extension of time is conditioned on the relevant taxpayers’ tax liability (if any) being not lower, in the aggregate, for all years to which the Election applies, than it would have been if the Election had been timely made (taking into account the time value of money). No opinion is expressed as to the relevant taxpayers’ tax liability for the years involved. A determination thereof will be made by the Director’s office upon audit of the federal income tax returns involved.
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 particular, we express no opinion with respect to whether an ownership change occurred; whether Parent and Electing Component Member were component members of a controlled group; or the amount of value, if any, that may be restored.
Further, we express no opinion as to the tax effects or consequences of filing the
Election late under the provisions of any other section of the Code or regulations, or as to the tax treatment of any conditions existing at the time of, or effects resulting from, filing the Election late that are not specifically set forth in the above ruling.
For purposes of granting relief under §301.9100-3, we relied on certain statements and representations made by Parent, Company Official, and Tax Professionals under penalties of perjury. However, the Director should verify all essential facts. Moreover, notwithstanding that an extension is granted under §301.9100-3 to file the Election, any penalties and interest that would otherwise be applicable still apply.
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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.
A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date on, and control number (PLR-109905-23) of, the letter ruling.
In accordance with the Power of Attorney on file with this office, copies of this letter are being sent to your authorized representatives.
Sincerely,
Thomas I. Russell
Thomas I. Russell
Chief, Branch 1
Office of Associate Chief Counsel (Corporate) cc: ---
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