IRS written determination 201544011

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: 201544011
Release Date: 10/30/2015
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. ------------------
Telephone Number:
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Refer Reply To:
CC:INTL:B06
PLR-104406-15
Date:
July 31, 2015
LEGEND
Taxpayer=-----------------------
Accounting Firm=-------------------------
Law Firm=-------------------------------------------------
Corporation=-------------------------------------------
Shareholder A=----------------------
Shareholder B=----------------------------------
Shareholder C=---------------------------------
Shareholder D=-----------------------------------
Shareholder E=-------------------------
Shareholder F=------------------------
Husband=---------------------------
Wife=-----------------------------
Individual=------------------------
Year 1=-------
Date 1=---------------------------
Date 2=----------------------
Date 3=----------------------
Dear ----- ---------------:
This responds to a letter dated January 27, 2015, supplemented by a letter dated June
23, 2015, 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-104406-15
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 and 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 Corporation.
Taxpayer is owned by Shareholders A and B. Shareholder A is a limited liability
company and is owned by Shareholders C, D, E, and F. Shareholder C is a trust for the
benefit of Husband and Shareholder D is a trust for the benefit of Wife. Shareholders E
and F are the children of Husband and Wife. Corporation is owned by Shareholders B,
C, and D.
In Year 1, Law Firm and Accounting Firm advised Shareholders B, C, and D of the
benefits associated with operating an IC-DISC. After deciding to form Taxpayer as an
IC-DISC, Corporation retained Law Firm to organize Taxpayer as an IC-DISC and
prepare the required incorporation documents. Individual was Corporation’s CFO and
was responsible for filing returns on behalf of Taxpayer. Taxpayer relied on Accounting
Firm, Law Firm, and Individual to organize and to prepare all documents and filings
needed to establish Taxpayer as an IC-DISC.
Due to a miscommunication, Individual believed that Law Firm or Accounting Firm
would file Form 4876-A on Taxpayer’s behalf. However, Law Firm and Accounting Firm
believed that Individual filed Form 4876-A on behalf of Taxpayer. 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 2.
On Date 3, which was before Taxpayer’s tax return for its first taxable year was due,
Accounting Firm discovered that a Form 4876-A for Taxpayer had not been filed.
Upon discovery of this error, and in order to operate as an IC-DISC beginning on
Date2, Taxpayer requested 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
1
shall be made by such corporation for
a taxable year at any time during the 90-day period immediately preceding the

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

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3
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) 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.
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 shallmake its election within 90 days after the
beginning of that 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 subjectto 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). In addition, we express no opinion as to whether the
commissions (or portions thereof) paid to Taxpayer by Corporation may constitute
taxable gifts. See, e.g., Rev. Rul. 81-54, 1981-1 C.B. 476. Taxpayer should attach a
copy of this ruling letter to its Federal income tax return for the taxable years to which
this letter applies.

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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: