Sec. 9100 relief: new proposed and temporary regulations.

• Author: Pflieger, Deborah J.

In June 1996, the IRS issued proposed and temporary regulations with respect to the standards the Service will use to grant extensions of time for making certain elections. Regs. Sec. 301.9100-1 provides that the IRS, in its discretion, on a showing of good cause, may grant a reasonable extension of the time fixed by regulations or by a revenue ruling, a revenue procedure, a notice or an announcement published in the Internal Revenue Bulletin to make an election under the Code, provided that: * The time for making the election is not expressly prescribed by statute; * The request is filed with the Service within such time as it may consider reasonable under the circumstances, and * It is shown to the IRS's satisfaction that the granting of the extension will not jeopardize the interests of the government.

Rev. Proc. 92-85 revised the standards used by the Service to grant relief under Regs. Sec. 301.9100. The temporary regulations, which were effective June 27, 1996, incorporate and expand the standards set forth in Rev. Proc. 92-85.

Automatic Extensions

As did Rev. Proc. 92-85, the temporary regulations provide an automatic 12-month extension for certain regulatory elections. These include the election to adjust basis on partnership transfer and distributions under Sec. 754; the election to use other than the required tax year under Sec. 444 and the election to use LIFO under Sec. 472. The regulations also include an automatic six-month extension from a returns due date (excluding extensions) to make regulatory or statutory elections whose deadlines are prescribed as the return's due date or its due date including extensions, if the taxpayer timely filed its return for the year the election should have been made.

To take advantage of these automatic extensions, the taxpayer must file an original or amended return for the year the election should have been made, attaching the appropriate form or statement to the return making the election. Across the top of such a return, the taxpayer must write "Filed pursuant to [section] 301.9100-2T."

Other Extensions

Requests for relief that do not qualify for the automatic procedure must be made under Temp. Regs. Sec. 301.9100-3T. Such requests will be granted if the taxpayer provides evidence to establish that it acted reasonably and in good faith and that granting relief will not prejudice the government's interests.

A taxpayer is deemed to have acted reasonably and in good faith if it: - requests...