IRS written determination 201520001

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: 201520001
Release Date: 5/15/2015
Index Number: 1502.76-00
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In Re:
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
------------------------, ID No. ----------------
Telephone Number:
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Refer Reply To:
CC:CORP:B01
PLR-126286-14
Date:
December 22, 2014
LEGEND:
Parent=--------------------------------------
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Sub 1=-----------------------------------
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Business A =-------------------------------------------------
Country X=----------
Dear -------------------------:
This letter responds to your request for a ruling, dated July 3, 2014, in which the
advance consent of the Commissioner is requested for the continued filing of a
consolidated return by Parent and its subsidiaries, although Sub 1 will use a different
taxable year than the other members of the consolidated group. Additional information
was supplied in letters dated October 16, November 4, and December 5, 2014. The
information submitted is summarized below.
Summary of Facts
Parent is the common parent of a consolidated group (Group) engaged in
Business A. Parent uses a 52-53 week year ending on the last Saturday in December.
Sub 1, a member of Group, presently uses the same taxable year as Parent. Sub 1
wholly owns foreign subsidiaries in Country X that are controlled foreign corporations
(CFCs) as defined in section 957(a) of the Internal Revenue Code (Code).

PLR-126286-14
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The CFCs owned by Sub 1 are partners in Country X partnerships. Under
Country X law, these partnerships cannot have a calendar year that exceeds 12
months. This restriction makes the partnerships unable to have a 52-53 week taxable
year. Under recent changes in Country X law, the CFCs as partners are required to
make burdensome computations if they wish to havea 52-53 week taxable year. As a
result, the CFCs have changed to a calendar year. To avoid difficult computations due
to the difference between the CFCs calendar years and Sub 1’s 52-53 week year, Sub 1
wants to change Sub 1’s taxable year to a calendar year.
Representations
Parent has submitted the following representations:
(a)The tax years of all members of Group will end within the same 7-day
period.
(b)The use of a 52-53 week taxable year will clearly reflect the consolidated
income of Group. The members of Group using a 52-53 week taxable year will
determine depreciation, amortization, state and local franchise and property taxes,
vacation pay accruals, and items of a similar nature as though their taxable year
consisted of 12 calendar months, in accordance with the principles of Treas. Reg.
§ 1.441-2(d).
(c)Any deferred intercompany transaction between members of Group will be
accounted for in the same consolidated return year even though the use of a 52-53
week taxable year by certain members may cause a transaction to occur on a day
falling in different consolidated return years of the members involved. In such a case,
the taxable year of the selling member will be used to determine the consolidated return
year in which a transaction has occurred. See Rev. Rul. 72-184, 1972-1 C.B. 289.
(d)If deferred gain must be restored under the rules of § 1.1502-13, the
consolidated return year of the member causing the restoration will control. If, because
of the selling member’s method of accounting, the deferred gain or loss would not
otherwise be recognized until a later taxable year, the selling member nevertheless will
take into account the gain or loss in the consolidated return year of the member causing
such restoration. See Rev. Rul. 72-184.
(e) If consent is granted for Sub 1 to change its annual accounting period to a
calendar year end, then the CFCs will adopt the taxable year that results in the least
deferral of income to all U.S. shareholders, as defined in Prop. Reg. § 1.898-3(a)(4)(i)
and illustrated in Example 2 of Prop. Reg. § 1.898-3(a)(4)(iii).

PLR-126286-14
3
Ruling
Based solely on the information submitted, and provided that the affiliation
requirement s of section 1504 of the Code are met, consent is granted under §1.1502-
76 of the regulations for Sub 1 to file a consolidated return with Parent using a calendar
year.
Caveats
We express no opinion as to the tax effects or consequences of Sub 1’s taxable
year under any other provisions of the Code or regulations, or as to the tax treatment of
any conditions existing at the time of, or effects resulting from, Sub 1’s taxable year that
are not specifically set forth in the above ruling.
Procedural Statements
This ruling is directed only to the taxpayers requestingit. Section 6110(k)(3) of
the Code provides that it may not be used or cited as precedent.
A copy of this letter must be attached to any income tax return to which it is
relevant. Alternatively, taxpayers filing their returns electronically may satisfy this
requirement by attaching a statement to their return that provides the date and control
number of the letter ruling.
In accordance with the power of attorney on file with this office, a copy of this
letter is being sent to two of your authorizedrepresentatives.
Sincerely,
_Isaac W. Zimbalist_____
Isaac W. Zimbalist
Senior Technician Reviewer, Branch 1
Office of Associate Chief Counsel
(Corporate)
cc: