IRS Revokes Extension to Adjust Basis of Partnership Property

Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact: * * *, ID No. * * *
Telephone Number: * * *

Index Numbers: 754.00-00, 9100.15-00, 7805.00-00, 7805.04-01, 7805.05-00
Release Date: 7/5/2019

Date: March 13, 2019

Refer Reply To: CC:PSI:B01 - PLR-132965-18

LEGEND:

X = * * *
Year 1 = * * *
Date = * * *

Dear * * *:

This letter revokes PLR 201641001 (PLR-100339-16), issued to X on July 1, 2016, in response to a request from your authorized representative dated December 14, 2015.

In PLR-100339-16, the Internal Revenue Service (the “Service”) concluded that the requirements of §§ 301.9100-1 and 301.9100-3 of the Procedure and Administration Regulations had been satisfied and granted X an extension of time of one hundred twenty (120) days from the date of PLR 20164100 to make a § 754 election for Year 1.

The private letter ruling's conclusions were based on information and representations submitted by your authorized representative. Since issuing the private letter ruling, the Service has determined that there was a misstatement or omission of controlling facts and that the facts provided to the Service were materially different from the controlling facts on which the private letter ruling was based. Specifically, you represented in your ruling request that “No return of the Taxpayer . . . who would be affected by the requested letter ruling is under examination, before Appeals, or before a Federal Court.” We have learned that your return for Year 1 was, in fact, under examination, before Appeals, or before a Federal Court at the time your ruling request was filed, and that a decision was entered to settle that case in the Tax Court on Date. The Service is therefore retroactively revoking PLR 201641001, and is not exercising its discretionary authority to limit the retroactive effect of this revocation. See Section 11.05(1) of Rev. Proc. 2019-1, I.R.B. 1, 62.

Section 11.04 of Rev. Proc. 2019-1, I.R.B. 1, 62, provides, in relevant part, that where a letter ruling is revoked or modified by a letter to the taxpayer, the letter will state whether the revocation or modification is retroactive. Section 11.04 further provides that if a letter ruling is revoked or modified, the revocation or modification applies to all years open under the period of limitation unless the Service uses its discretionary authority under § 7805(b) of the Internal Revenue Code (the “Code”) to limit the retroactive effect of the revocation or modification.

Section 11.05 of Rev. Proc. 2019-1, I.R.B. 1, 62, provides that an Associate Office will revoke a letter ruling and apply the revocation retroactively to the taxpayer for whom the private letter ruling was issued if there has been a misstatement or omission of controlling facts or the facts at the time of the transaction are materially different from the facts on which the letter was based.

Section 7805(b)(8) of the Code provides that the Secretary may prescribe the extent, if any, to which any ruling (including any judicial decision or any administrative determination other than by regulation) relating to the internal revenue laws shall be applied without retroactive effect.

X may file a new request for a private letter ruling in the future. Such a future request will be considered separate from the revoked request. As such, any new request must independently comply with the normal requirements for a private letter ruling.

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.

Pursuant to the Power of Attorney on file with this office, a copy of this letter is being sent to your authorized representative. We are also sending a copy of this letter to the appropriate operating division.

Sincerely,

By: Joy C. Spies
Senior Technician Reviewer, Branch 1
Office of the Associate Chief Counsel
(Passthroughs & Special Industries)

Enclosures (2)
Copy of this letter
Copy for § 6110 purposes

cc:
* * *