IRS written determination 201436002

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: 201436002
Release Date: 9/5/2014
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. ---------------
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Telephone Number:
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Refer Reply To:
CC:INTL:B06
PLR-102565-14
Date:
May 22, 2014
LEGEND
Taxpayer=-----------------------
Accounting Firm=---------------------------------------
Owner 1=-------------
Owner 2=-------------
Owner 3=------------
Owner 4=-------------
Trust=--------------------------
Individual 1=-------------------
Individual 2=--------------------
Individual 3=---------------------
Individual 4=-----------------
Individual 5=--------------------
Year 1=------
Year 2=------
Date 1=------------------------
Date 2=-------------------------
Law Firm=--------------------------------
Dear ----------------:
This responds to a letter dated December 11, 2013, supplemented by a letter dated
March 4, 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

PLR-102565-14
2
of the materials submitted in support of the request for rulings. It is subject to
verification on examination.
FACTS
Taxpayer is a domestic corporation owned directly by Owner 1, Owner 2, Owner 3 and
Owner 4 (the “Owners”). Owner 1 is a sole proprietorship and the remaining Owners
are treated as partnerships for federal income tax purposes. The Owners are in turn
owned directly, or indirectly through entities treated as partnerships for federal income
tax purposes, by Trust, Individual 1, Individual 2, and Individual 3. The Trust is a
revocable trust of Individual 4 and Individual 5, who are also its trustees.
1
Taxpayer
was formed on Date 1 for the sole purpose of qualifying and operating as an interest
charge domestic international sales corporation (“IC-DISC”). Taxpayer operates under
a commission arrangement with the Owners.
In Year 1, Accounting Firm advised Individual 4 of the benefits associated with
operating an IC-DISC. Subsequent to providing that advice, Law Firm assisted in filing
Articles of Incorporation for Taxpayer. Due to a miscommunication, Accounting Firm
believed that Law Firm would file Form 4876-A on Taxpayer’s behalf. However, Law
Firm believed that Accounting Firm would file 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 year were satisfied, Taxpayer began operating as an IC-DISC on Date 1. In
Year 2, Accounting Firm prepared to file Taxpayer’s first federal income tax return using
Form 1120-IC-DISC. Approximately one week prior to filing the Form 1120-IC-DISC,
Accounting Firm discovered that a Form 4876-A had never been filed. Prior to receiving
any notice from the Service that Taxpayer failed to timely elect to be treated as an IC-
DISC, Accounting Firm mailed a completed Form 4876-A to the Service on Date 2. In
order to operate as an IC-DISC beginning on Date 1, Taxpayer requests 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 DISC
2
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.

1
Taxpayer and Owners are owned or controlled directly or indirectly by the same interests within the
meaning of Treas. Reg. § 1.482-1.
2
As used in this letter, the terms “IC-DISC” and “DISC” have the same meaning.

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3
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
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

PLR-102565-14
4
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.
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
cc: