Section 168; MACRS

Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 202623003
Release Date: 6/5/2026
Index Number: 9100.04-00
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Attention: ---
Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
---, ID No. ---
Telephone Number:
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Refer Reply To:
CC:ITA:B05
PLR-114724-25
Date:
March 10, 2026
Legend
Taxpayer = ---
Year 1 = ---

Date 1 = ---
Date 2 = ---

Dear ---:
This ruling responds to Taxpayer’s request dated Date 1, as supplemented, seeking a private letter ruling from the Internal Revenue Service (Service) which would grant relief to make a late election pursuant to §§ 301.9100-1 through 301.9100-3 of the Procedure and Administration Regulations. Specifically, Taxpayer requests an extension of time to file Form 1128, Application to Adopt, Change, or Retain a Tax Year, with the Service to change from a taxable year ending on Date 2 to a taxable year ending on Date 3, effective for Year 1.

# FACTS

Taxpayer is an S corporation formed on Date 4 under the laws of State Z.
Tax Adviser had advised Taxpayer that it was ineligible to change its tax year-end from
Date 2 to a year ending Date 3. However, shortly after the due date for filing Form 1128 for Year 1, Taxpayer received professional advice from a different tax advisor that it qualified to change its taxable year-end from Date 2 to Date 3 under the automatic consent procedures in Rev. Proc. 2006-46, 2006-45 I.R.B. 859, 2006-2 C.B. 859, Section 4.01(2). Due to the advice it had received from Tax Adviser, Taxpayer did not PLR-114724-25 2 timely file Form 1128 with the service center where taxpayer files its federal income tax returns. See section 7.02(1) and (2) of Rev. Proc. 2006-46.
On Date 1, within 10 days of the filing deadline for Year 1, Taxpayer filed this request and included Form 1128, seeking an extension of time pursuant to the Procedure and Administration Regulations to file such form with the Service and use automatic consent procedures to change from a taxable year ending on Date 2 to a taxable year ending on Date 3, effective for Year 1.
The foregoing are the material facts on which this ruling is based.

# LAW AND ANALYSIS

Section 442 provides that if a taxpayer changes its annual accounting period, the new accounting period shall become the taxpayer’s taxable year only if the change is approved by the Secretary.
Section 1.442-1(b) of the Income Tax Regulations along with the instructions to Form
1128 and Rev. Proc. 2006-46, 2006-45 I.R.B. 859, provide generally that to secure the
Commissioner’s consent to a change an accounting period, the taxpayer must file an application on Form 1128 with the Commissioner on or before the due date for filing of the short period return. Section 4.01(2) of Rev. Proc. 2006-46 provides that an S corporation desiring to change to or retain a natural business year that satisfies the 25percent gross receipts test referenced in section 5.07 of such revenue procedure is within the scope of the revenue procedure to secure the Commissioner’s approval.
Sections 301.9100-1 through 301.9100-3 provide the standards that the Commissioner will use to determine whether to grant an extension of time to make a regulatory election. Section 301.9100-3(a) provides that requests for extensions of time for regulatory elections (other than automatic extensions covered in § 301.9100-2) will be granted when the taxpayer provides evidence (including affidavits) to establish that the taxpayer acted reasonably and in good faith and that the grant of relief will not prejudice the interests of the Government.
Under § 301.9100-3(b)(1)(i), a taxpayer is deemed to have acted reasonably and in good faith if the taxpayer requests relief before the failure to make the regulatory election is discovered by the Service. A taxpayer may alternatively demonstrate reasonable actions and good faith if he reasonably relied on a qualified tax professional and the tax professional failed to make, or advise the taxpayer to make, the election. A taxpayer is not considered to have reasonably relied on a tax professional if the taxpayer knew, or should have known, that the professional was not competent to render advice on the regulatory election or was not aware of all relevant facts. See § 301.9100-3(b)(1)(v) and (2) of the Procedure and Administration Regulations.
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In addition, § 301.9100-3(b)(3) provides that a taxpayer is deemed not to have acted reasonably and in good faith if the taxpayer—

(i) seeks to alter a return position for which an accuracy-related penalty has been or could be imposed under section 6662 at the time the taxpayer requests relief, and the new position requires or permits a regulatory election for which relief is requested;

(ii) was informed in all material respects of the required election and related tax consequences but chose not to make the election; or

(iii) uses hindsight in requesting relief. If specific facts have changed since the original deadline that make the election advantageous to a taxpayer, the Service will not ordinarily grant relief.
Section 301.9100-3(c)(1) provides that the Commissioner will grant a reasonable extension of time to make the regulatory election only when the interests of the Government will not be prejudiced by the granting of relief.
Section 301.9100-3(c)(1)(i) provides that the interests of the Government are prejudiced if granting relief would result in a taxpayer having a lower tax liability in the aggregate for all taxable years affected by the election than the taxpayer would have had if the election had been timely made (taking into account the time value of money).
Section 301.9100-3(c)(1)(ii) provides that the interests of the Government are ordinarily prejudiced if the taxable year in which the regulatory election should have been made or any taxable year that would have been affected by the election had it been timely made are closed by the period of limitations on assessment under § 6501(a) before the taxpayer’s receipt of a ruling granting relief under § 301.9100-3.
Section 301.9100-3(c)(3) provides that the interests of the Government are deemed to be prejudiced except in unusual and compelling circumstances if an election is an accounting period regulatory election (other than the election to use other than the required taxable year under section 444) and the request for relief is filed more than 90 days after the due date for filing the Form 1128, Application to Adopt, Change, or Retain a Tax Year (or other required statement).
Based on the facts and information submitted and the representations made, we conclude that Taxpayer acted reasonably and in good faith, and that the granting of relief would not prejudice the interests of the Government. Furthermore, Taxpayer submitted the request for relief within 90 days after the due date for filing the Form
1128. Taxpayer has satisfied the requirements of the regulations for the granting of relief. Accordingly, Taxpayer is granted 60 days from the date of this letter to file its Form 1128 in conformity with the application procedures of Section 7 of Rev. Proc.
2006-46 to be considered timely filed.
PLR-114724-25 4
A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, if Taxpayer files its returns electronically, it may satisfy this requirement by attaching a statement to the return that provides the date and control number of the letter ruling.
This ruling is based upon facts and representations submitted by Taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. This office has not verified any of the material submitted in support of the request for a ruling.
However, as part of an examination process, the Service may verify the factual information, representations, and other data submitted.
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.
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.
In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to your authorized representative.
Sincerely,
Gerald Semasek
Senior Technician Reviewer, Branch 5
Office of Associate Chief Counsel
(Income Tax and Accounting)
CC: ---