IRS written determination 201440019

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: 201440019
Release Date: 10/3/2014
Index Number: 9100.22-00, 992.02-00
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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-151454-13
Date:
June 26, 2014
Legend
Taxpayer = ---------------------------------------
Shareholder = -----------------------
Accountant = -----------------------
Attorney = ---------------
Date 1 = -----------------------
Date 2 = ---------------------------
Date 3 = ---------------------------
Dear --------------:
This replies to your representative’s letter dated December 19, 2013, by which
you request on behalf of Taxpayer an extension of time under Treas. Reg. § 301.9100-
3(a) to file a Form 4876-A (“Election to be Treated as an Interest Charge DISC”)
effective as of Date 1.
The rulings contained in this letter are based upon information and
representations submitted by the 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 rulings. Verification of the information,
representations, and other data may be required as part of the audit process.

PLR-151454-13
2
Facts
Taxpayer is a domestic corporation wholly owned by Shareholder. Shareholder
is an individual engaged in a production activity as a sole proprietor. Shareholder is not
personally sophisticated in Federal income tax matters. Accountant is a certified public
accountant and has provided Federal tax advice to individuals and businesses,
including Shareholder, for many years. Attorney has practiced for many years and
represents many clients in Taxpayer’s industry.
Shortly before Date 1, Accountant advised Shareholder of benefits that an
interest charge domestic international salescorporation (IC-DISC) may provide.
Relying on Accountant’s advice, Shareholder retained Attorney to form Taxpayer and to
prepare the legal documents, but not the Federal tax filings, pertaining to its intended
qualification and operation as an IC-DISC. Taxpayer was incorporated on Date 1.
Accountant, having knowledge of these circumstances, agreed with Shareholder
to take responsibility for Taxpayer’s tax filings, including filing of Form 4876-A to qualify
Taxpayer as an IC-DISC as of its incorporation. Taxpayer proceeded to operate as an
IC-DISC, and Taxpayer did not take any position inconsistent with IC-DISC status.
The next year, on Date 2, Accountant discovered that he had inadvertently failed
to file Form 4876-A. Over the course of the next few days, Accountant notified
Shareholder of the failure to file the election and, on Date 3, assisted Shareholder and
Taxpayer in engaging the representative who then submitted the ruling request that is
the subject of this letter.
Law and Analysis
Section 992(b)(1)(A) provides that an election by a corporation to be treated as a
DISC 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) 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.
Temp. Treas. Reg. § 1.921-1T(b)(1) provides, in part, that a corporation electing
IC-DISC status must file Form 4876-A andthat a corporation electing to be treated as a
IC-DISC for its first taxable year shall make its election within 90 days after the
beginning of that year.

PLR-151454-13
3
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 forthin 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 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 of time to make the election is not a determination
that Taxpayer is otherwise eligible to make the election or to claim DISC status or
benefits. Taxpayer should attach a copy of this letter ruling to its Federal income tax
returns 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.

PLR-151454-13
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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,
_________________________
Christopher J. Bello
Chief, Branch 6
Office of Associate Chief Counsel
(International)
cc: