IRS written determination 201433003

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 201433003
Release Date: 8/15/2014
Index Number: 9100.22-00, 992.02-00
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In Re: ---------------------------
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-102637-14
Date:
May 7, 2014
LEGEN-D
Taxpayer=---------------------------
Law Firm=----------------------------------------------------
Parent=-----------------------------------------
Individual 1=---------------------
Individual 2=-----------------------
Year 1=-------
Year 2=----------
Date 1=--------------------------
Dear ------------:
This responds to a letter dated December 30, 2013, submitted by Law 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 Law 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.
FACTS
Taxpayer is a domestic corporation wholly owned by Parent, an S corporation. Parent
is owned by Individual 1. Individual 2 is Taxpayer’s Secretary and is responsible for
filing returns on behalf of Taxpayer. Taxpayer was formed on Date 1 for the sole
purpose of qualifying and operating as an interest charge domestic international sales

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corporation (“IC-DISC”). Taxpayer operates under a commission arrangement with
Parent.
In Year 1, Law Firm advised Individual 1 of the benefits associated with operating an IC-
DISC. After deciding to form Taxpayer as an IC-DISC, Law Firm advised Individual 1 of
the compliance requirements to qualify Taxpayer as an IC-DISC, including the
requirement to file Form 4876-A.
Due to a miscommunication, Individual 2 believed that Law Firm filed Form 4876-A on
Taxpayer’s behalf. However, Law Firm believed that Taxpayer filed Form 4876-A. As a
result, a Form 4876-A for Taxpayer was not filed.
Believing all the requirements to conduct business and be treated as an IC-DISC for its
first taxable yearwere satisfied, Taxpayer began operating as an IC-DISC on Date 1. In
Year 2, Individual 2 filed Taxpayer’s first federal income tax return using Form 1120-IC-
DISC. Subsequent to filing Taxpayer’s return, Taxpayer received a notice from the
Service that Taxpayer had failed to timely file Form 4876-A.
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 theInternal Revenue Code (the “Code”) provides that an
election by a corporation to be treated as a DISC
1
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.

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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 andrepresentations 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.

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Pursuant to a Power of Attorney on file in this office, copies of this ruling letter are being
furnished to your authorized representatives.
Sincerely,
_____________________________________
Joseph Dewald
Senior Technical Reviewer, Branch 6
Office of Associate Chief Counsel (International)
Enclosures (2)
Copy of this letter
Copy for § 6110 purposes