IRS written determination 201532007

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: 201532007
Release Date: 8/7/2015
Index Numbers: 9100.10-00, 9100.10-01
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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:ITA:6
PLR-109900-15
Date:
May 05, 2015
LEGEND
Taxpayer:---------------------------------
EIN: ----------------
CPA:----------------------
Date A:-----------------------
Date B:-----------------------
Items:-------------------------------
Parts:-------------------------------
Markets:-------------------------------------
Dear --------------:
This ruling responds to a recent letter that was submitted by Taxpayer’s
representative, CPA. CPA has requested that the Commissioner of Internal Revenue
give Taxpayer an extension of time pursuant to §§301.9100-1 and 301.9100-3 of the
Procedure and Administration Regulations to file the original of a Form 3115,
Application for Change in Accounting Method. Taxpayer should havefiled this Form
3115 pursuant to section 6.02(3)(a)(i) of Rev. Proc. 2011-14, 2011-4 I.R.B. 330, 346, on
or before Date A.
FACTS
Taxpayer designs, manufactures, market, and sells custom and standard Items
that include Parts for various Markets. Taxpayer’s activities are subject to the cost
capitalization rules of §263A of the Internal Revenue Code.
For the tax year of Date B, Taxpayer decided to change its method of identifying
and allocating costs to inventory pursuant to §263A. Taxpayer also decided that its

PLR-109900-15
2
desired accounting method change could be implemented pursuant to the
administrative rules of Rev. Proc. 2011-14.
Taxpayer prepared the necessary computations to implement its desired change
in accounting method and also prepared a draft Form 3115. Taxpayer hired CPA to
prepare and sign its federal income tax return for the tax year beginning Date B. In
connection with its duties, Taxpayer expected CPA to review its computations for
implementing the accounting method change under §263A and the draft Form 3115. In
completing its duties, CPA timely filed the required copy of the Form 3115 with the
appropriate office of the Internal Revenue Service prior to the extended due date of the
relevant tax return, Date A. See, section 6.02(3)(a)(ii) of Rev. Proc. 2011-14. CPA also
reflected the desired accounting method change in Taxpayer’s federal income tax return
for the tax year beginning Date B and attached the original of the required Form 3115 to
that return. However, unexplainably, CPA failed to file either the federal income tax
return or the Form 3115 on or before Date A. Less than a week later, CPA discovered
its error, informed Taxpayer of its failure to file Taxpayer’s return timely, and did file the
return with the original of the required Form 3115 attached. Subsequently, CPA
submitted this request for an extension of time to file the original of Taxpayer’s Form
3115.
RULING REQUESTED
Taxpayer requests an extension of time pursuant to §§301.9100-1 and
301.9100-3 to file the original of the Form 3115 that is required by Rev. Proc. 2011-14
for it to obtain the Commissioner’s permission to change its method of identifying and
allocating costs to inventory pursuant to §263A for the tax year beginning Date B.
LAW AND ANALYSIS
Rev. Proc. 2011-14 provides the procedures by which a taxpayer may obtain
automatic consent to change certain accounting methods. A taxpayer complying with
all the applicable provisions of this revenue procedure has obtained the consent of the
Commissioner to change its accounting method under § 446(e) and the Income Tax
Regulations thereunder.
Section 6.02(3)(a) of Rev. Proc. 2011-14 provides that a taxpayer changing an
accounting method pursuant to Rev. Proc. 2011-14 must complete and file a Form 3115
in duplicate. The original must be attached to the taxpayer’s timely filed (including any
extensions) original federal income tax return for the year of change, and a copy (with
signature) of the Form 3115 must be filed with the appropriate office of the Service no
earlier than the first day of the year of change and no later than when the original is filed
with the federal income tax return for the year of change.

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Section 301.9100-1(c) provides that the Commissioner has discretion to grant a
reasonable extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3
to make certain regulatory elections.
Sections 301.9100-1 through 301.9100-3 provide the standards the
Commissioner will use to determine whether to grant an extension of time to make an
election. Section 301.9100-2 provides automatic extensions of time for making certain
elections. Section 301.9100-3 provides extensions of time for making elections that do
not meet the requirements of § 301.9100-2.
Section 301.9100-3(a) provides that requests for relief subject to § 301.9100-3
will be granted when the taxpayer provides evidence to establish to the satisfaction of
the Commissioner that the taxpayer acted reasonably and in good faith and that the
granting of relief will not prejudice the interests of the Government.
Section 301.9100-3(c)(2) imposes special rules for accounting method regulatory
elections. This section provides, in relevant part, that the interests of the Government
are deemed to be prejudiced except in unusual and compelling circumstances when the
accounting method regulatory election for which relief is requested is subject to the
procedure described in § 1.446-1(e)(3)(i) or the relief requires an adjustment under
§ 481(a) (or would require an adjustment under § 481(a) if the taxpayer changed to the
accounting method for which relief is requested in a taxable year subsequent to the
taxable year the election should have been made).
CONCLUSION
Based solely on the facts and representations submitted, thisoffice concludes
that the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied in
Taxpayer’s case. Accordingly, Taxpayer is granted 60 calendar days from the date of
this letter to file the required original of the Form 3115 changing Taxpayer’s method of
identifying and allocating costs to inventory pursuant to §263A for the tax year
beginning Date B with an amended federal income tax return for that year. Please
attach a copy of this letter ruling to the amended return.
Except as expressly set forth above, this office expresses no opinion concerning
the tax consequences of the facts described above under any other provision of the
Code or regulations. Specifically, we have no opinion, either expressed or implied,
concerning whether (1)the accounting method change Taxpayer has made is eligible to
be made under Rev. Proc. 2011-14 or (2) Taxpayer otherwise meets the requirements
of Rev. Proc. 2011-14 to make its accounting method change using Rev. Proc. 2011-14.
Further, no opinion is expressed regarding the correctness of Taxpayer’s capitalization
of cost method. Lastly, we emphasize that this letter ruling does not grant any
extension of time for the filing of Taxpayer’s federal income tax return for the tax year

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4
beginning Date B. Taxpayer is subject to any appropriate penalty and interest resulting
from its failure to have its tax return filed timely.
The ruling contained in this letter ruling is based upon facts and representations
submitted by CPA on behalf of itself and Taxpayer,with accompanying penalty of
perjury statements executed by appropriate parties. While this office has not verified
any of the material submitted in support of this request for an extension of time to file
the required Form 3115, all material is subject to verification on examination.
This ruling is directed only to Taxpayer. Section 6110(k)(3) provides that it may
not be used or cited as precedent.
In accordance with the power of attorney, we are sending copies of this letter
ruling to each of Taxpayer’s authorized representatives.
Sincerely,
Roy Hirschhorn
Chief, Branch 6
Office of Associate Chief Counsel
(Income Tax & Accounting)