IRS written determination 201542002

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: 201542002
Release Date: 10/16/2015
Index Number: 9100.00-00, 165.07-00

---------------------------------
--------------------------
------------------------------------
Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
-----------------------, ID No. -------------------
---------------------------------------------------
Telephone Number:
----------------------
Refer Reply To:
CC:ITA:B02
PLR-101752-15
Date:
July 16, 2015
TY: -------
Legend
Taxpayers=------------------------------------
Year 1=-------
Year 2=-------
Year 3=-------
A=---------------------------
B=------------------
C=--------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
D=---------------------
E=-------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------
Dear -------------------------:
This is in response to your letter dated A. In your letter, you requested an extension
of time to make an election pursuant to § 165(i) of the Internal Revenue Code to report
on your Year 1 amended income tax return a disaster loss sustained in Year 2. The
request is based on §§ 301.9100-1 and 301.9100-3 of the Procedure and Administration
Regulations.
FACTS
Taxpayers represent the following facts:
In October 2012, Taxpayers’ home and surrounding property were damaged by
Hurricane Sandy. In October 2012, the President of the United States determined that

PLR-101752-15
2
the area in which Taxpayers’ property is located warranted assistance by the Federal
Government under the Robert T. Stafford Disaster Relief and Emergency Assistance
Act.
Taxpayers consulted with their tax advisor to prepare their tax return for the Year 2
taxable year. On B, Taxpayers filed their federal income tax return for Year 2 after
several discussions with their tax advisor. C. Taxpayers’ tax advisor stated in his
affidavit that he was not aware of the § 165(i) election to deduct a disaster loss in the
immediately preceding year and therefore did not advise them they could file an election
to claim the loss in the Year 1 taxable year.
In D, Taxpayers selected a different tax advisor to prepare and file their federal
income tax return for Year 3. At that time, Taxpayers claimed they had more
information available about the amount of the loss attributable to the Year 2 disaster,
and this was also discussed with the tax advisor. In E. This tax advisor also advised
Taxpayers about the election to claim a disaster loss in the taxable year immediately
preceding the year of the disaster under § 165(i). Prior to their discussions with this tax
advisor,Taxpayers were not aware of the § 165(i) election or the necessity to make the
election by October 15, 2013. Consequently it was determined to request relief to late
file the election, as the filing of a late election is within the discretion of the
Commissioner under §§ 301.9100-1 and 301.9100-3.
LAW
Section 165(a) allows a deduction for any loss sustained during the taxable year and
not compensated for by insurance or otherwise.
Section 165(i)(1) provides that a taxpayer may elect to take into accountany loss
occurring in a disaster area and attributable to a federally declared disaster in the
taxable year immediately preceding the taxable year in which the disaster occurred.
Section 165(i)(2) provides that if an election is made under this subsection, the
casualty resulting in the loss shall be treated for purposes of this title as having occurred
in the taxable year for which the deduction is claimed.
Section 1.165-11(e) of the Income Tax Regulations provides that the election to
claim a deduction with respect to a disaster loss must be made on or before the later of
(1) the due date for filing the income tax return (determined without regard to any
extension of time granted the taxpayer for filing such return) for the taxable year in
which the disaster actually occurred, or (2) the due date for filing the income tax return
(determined with regard to any extension of time granted the taxpayer for filing such
return) for the taxable year immediately preceding the taxable year in which the disaster
actually occurred.
Notice 2013-21, 2013-15 I.R.B. 903, postponed to October 15, 2013, the deadline to
make an election under § 165(i)to deduct in the preceding taxable year losses
attributable to Hurricane Sandy sustained in a federally declared disaster area in

PLR-101752-15
3
Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New
Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, or West
Virginia resulting from Hurricane Sandy.
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. Section 301.9100-1(b) defines a "regulatory
election" as 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.
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 extensions of time for regulatory
elections (other than automatic changes covered under § 301.9100-2) will be granted
when the taxpayer provides evidence (including affidavits described in the regulations)
to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably
and in good faith, and that granting relief will not prejudice the interests of the
Government.
Section 301.9100-3(b)(1)provides that a taxpayer will be deemed to haveacted
reasonably and in good faith if the taxpayer --
(i) requests relief before the failure to make the regulatory election is discovered by
the Service;
(ii) inadvertently failed to make the election because of intervening events beyond
the taxpayer's control;
(iii) failed to make the election because, after exercising reasonable diligence, the
taxpayer was unaware of the necessity for the election;
(iv) reasonably relied on the written advice of the Service; or
(v) reasonably relied on a qualified tax professional, and the tax professional failed
to make, or advise the taxpayer to make the election.
Section 301.9100-3(b)(3)provides that a taxpayer will not be considered to have
acted reasonably and in good faith if the taxpayer --
(i) seeks to alter a return position for which an accuracy-related penalty could be
imposed under section6662at the time the taxpayer requests relief and the new
position requires a regulatory election for which relief is requested
(ii) was informed in all material respects of the required election and related tax
consequences, but chose not to file the election; or

PLR-101752-15
4
(iii) uses hindsight in requesting relief. If specific facts have changed since the due
date for making the election that make the election advantageous to a taxpayer, the
Service will not ordinarily grant relief.
Section 301.9100-3(c)(1)provides that the Commissioner will grant a reasonable
extension of time only when the interests of the Government will not be prejudiced by
the granting of relief. The interests of the Government are prejudiced if granting relief
would result in a taxpayer having a lower tax liability in the aggregate for all taxable
years affected by the election than the taxpayer would have had if the election had been
timely made. The interests of the Government are ordinarily prejudiced if the taxable
year in which the regulatory election should have been made or any taxable years that
would have been affected by the election had it been timely made are closed by the
period of limitations on assessment under section 6501(a)before the taxpayer's receipt
of a ruling granting relief under this section.
ANALYSIS
Taxpayers’ election is a regulatory election, as defined under § 301.9100-1(b),
because the due date of the election is prescribed in theIncome Tax Regulations under
§ 1.165-11(e). The Commissioner has the authority under §§ 301.9100-1 and
301.9100-3 to grant an extension of time to file a late regulatory election.
The information submitted and representations made by Taxpayers and their tax
professionals establish that Taxpayers acted reasonably and in good faith in respect of
this matter. Furthermore, based on the facts of the case provided, granting an
extension will not prejudice the interests of the Government within the meaning of
§ 301.9100-3(c)(1).
RULING
Based upon our analysis of the facts as represented, Taxpayers acted reasonably
and in good faith, and granting relief will not prejudice the interests of the Government.
Therefore, the requirements of §§ 301.9100-1 and 301.9100-3 have been met.
Taxpayers are granted an extension of 45 days from the date of this letter ruling to
permit them to make the election available under § 165(i) with respect to the described
Year 2 disaster loss.
CAVEATS
This rulingis limited to the timing for making the election under § 165(i). 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. No opinion is expressed as to the federal tax treatment of the subject loss
transaction under any other provisions of the Internal Revenue Code and the Treasury
Regulations that may be applicable or under any other general principles of federal
income taxation. This letter ruling is only applicable to matters under our jurisdiction.
See Rev. Proc. 2015-1, 2015-1 I.R.B. 1, 18, Section 1. No opinion is expressed as to
the tax treatment of any conditions existing at the time of, or effects resulting from, the
transaction that are not specifically covered by the above ruling.

PLR-101752-15
5
As a condition of this ruling, Taxpayers agree to amend their tax return for Year 2 to
remove the disaster loss claimed in that year and treat pending return refunds for their
Year 2 tax year consistent with the relief granted in this ruling. If Taxpayers fail to do
so, this ruling is null and void.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) provides
that it may not be used or cited as precedent.
In accordance with the Power of Attorney on file with this office, a copy of this letter
is being sent to your authorized representatives.
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.
The rulings contained in this letter are based upon information and representations
submitted by the Taxpayers and accompanied by a penalty of perjury statement
executed by an appropriate party. While this office has not verified any of the material
submitted in support of the request for rulings, it is subject to verification on
examination.
Enclosed is a copy of this letter ruling showing the deletions proposed to be made in
the letter when it is disclosed under § 6110.
Sincerely,
______________________________
NORMA C. ROTUNNO
Senior Technician Reviewer, Branch 2
Office of the Associate Chief Counsel
(Income Tax & Accounting)
cc: