IRS written determination 201436041

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: 201436041
Release Date: 9/5/2014
Index Number: 9100.22-00, 992.02-00
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In re: -----------------------------------------------------
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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-149180-13
Date:
May 29, 2014
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LEGEND
Taxpayer = ------------------------------------------------------------------------------
Accounting Firm =-----------------------
Individual 1 =------------------------
Individual 2 =-----------------
Company 1 =-----------------------------------
Company 2 = ---------------------
Law Firm = ------------------------------
Year 1 =------
Year 2 =------
Year 3 =------
Date 1 =------------------
Date 2 = -------------------------
Date 3 =---------------------------
Dear ------------:
This responds to a letter dated November 12, 2013, supplemented by a letter dated
May 22, 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
penalties of perjury statements executed by appropriate parties. This office has not

PLR-149180-13
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verified any of the materials submitted in support of the request for rulings. It is subject
to verification on examination.
FACTS
Taxpayer and Company 1 are domestic corporations wholly owned by Individual 1 and
Individual 2. The ownership percentages of Individual 1 and Individual 2 in Taxpayer
are the same as those of Individual 1 and Individual 2 in Company 1. Taxpayer was
formed 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 Company 1.
In Year 1, Accounting Firm and Company 1 discussed the benefits of forming an IC-
DISC. Pursuant to these discussions, Company 1 asked Accounting Firm to arrange for
the formation and qualification of Taxpayer as an IC-DISC. Accounting Firm in turn
engaged Company 2 and Law Firm to incorporate Taxpayer and prepare other relevant
documents. Taxpayer was incorporated on Date 1. Accounting Firm prepared a Form
4876-A and mailed it to Taxpayer on Date 2 with instructions on how to file the form.
Accounting Firm did not discuss with Taxpayer or describe in the instructions the due
date for filing Form 4876-A. According to Taxpayer’s records, the election was signed
and mailed on Date 3 (i.e., during the first 90 days of its first taxable year and
approximately ten days prior to the end of that 90-day period). Thus, Taxpayer
suggests that its election must have been received by the IRS before the end of the 90-
day period and, in the alternative, asserts that its advisors never told Taxpayer about
the deadline for filing the DISC election.
Believing all the requirements to conduct business and be treated as an IC-DISC for its
first taxable year were satisfied, Taxpayer began acting as an IC-DISC as of its date of
formation. In Year 2, Taxpayer filed Form 1120-IC-DISC for Taxpayer’s first taxable
year. In Year 3, Taxpayer filed Form 1120-IC-DISC for Taxpayer’s second taxable year.
After filing the Form 1120-IC-DISC for Taxpayer’s second taxable year, Taxpayer
received correspondence from the Service that Taxpayer’s Form 4876-A was received
after the due date for the election.
Taxpayer has requested a ruling that grants an extension of time of 60 days from the
date of the ruling letter to file Form 4876-A and that such filing will be treated as a timely
election to be treated as an IC-DISC for Taxpayer’s first taxable year.
LAW AND ANALYSIS
Section 992(b)(1)(A) 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

1
As used in this letter, the terms “IC-DISC” and “DISC” have the same meaning.

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3
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.
Temp. Treas. Reg. § 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 ofthat year.
Treas. Reg. § 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.
Treas. Reg. § 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.
Treas. Reg. § 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
Form4876-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-149180-13
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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. 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.
Pursuant to a Power of Attorney on file in this office, copies of this ruling letter are being
furnished to your authorized representatives.
Sincerely,
_____________________________________
Christopher J. Bello
Chief, Branch 6
Office of Associate Chief Counsel (International)
Enclosures (2)
Copy of this letter
Copy for § 6110 purposes
cc: