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Extension Granted to Elect Homeowners Association Status

DEC. 23, 2020

LTR 202112001

DATED DEC. 23, 2020
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2021-12791
  • Tax Analysts Electronic Citation
    2021 TNTF 59-32
    2021 EOR 5-23
  • Magazine Citation
    The Exempt Organization Tax Review, May. 2021, p. 403
    87 Exempt Org. Tax Rev. 403 (2021)
Citations: LTR 202112001

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

Index Number: 528.00-00, 9100.34-00
Release Date: 3/26/2021

Date: December 23, 2020

Refer Reply To: CC:PSI:B05 - PLR-114349-20

In Re: * * *

LEGEND:

Taxpayer = * * *
a = * * *
b = * * *

Dear * * *:

This letter responds to Taxpayer's letter dated June 16, 2020, and subsequent correspondence, requesting an extension of time under § 301.9100-3 of the Procedure and Administration Regulations to make an election to be treated as a homeowners association under § 528 of the Internal Revenue Code for its taxable years a through b.

FACTS

The information submitted and the representations made are as follows: Taxpayer is a homeowners association. Taxpayer inadvertently failed to file its Forms 1120-H for taxable years a through b.

LAW AND ANALYSIS

Section 528 generally provides that homeowners associations meeting the requirements of § 528(c) may be treated as tax-exempt organizations, but only to the extent of their exempt function income.

Section 528(c)(1) provides, in part, that the term "homeowners association" means an organization that elects (at such time and in such manner as the Secretary by regulations prescribes) to have § 528 apply for the taxable year.

Section 1.528-8(a) provides, in part, that a separate election to be treated as a homeowners association under § 528 must be made for each taxable year. This election must be made by filing a properly completed Form 1120-H (or such other form as the Secretary may prescribe).

Section 1.528-8(b) provides that for taxable years ending after December 30, 1976, the election must be made not later than the time, including extensions, for filing an income tax return for the year in which the election is to apply.

Section 301.9100-1(c) provides that the Commissioner may grant a reasonable extension of time to make a regulatory election, or a statutory election (but not more than six months except in the case of a taxpayer who is abroad), under all subtitles of the Internal Revenue Code, except subtitles E, G, H, and I. Section 301.9100-1(b) provides that the term “regulatory election” includes an election whose due date is prescribed by a regulation published in the Federal Register.

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 the election. Section 301.9100-2 provides the rules governing automatic extensions of time for making certain elections. Section 301.9100-3 provides the standards the Commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of § 301.9100-2.

Requests for relief under § 301.9100-3 will be granted when the taxpayer provides the evidence (including affidavits described in § 301.9100-3(e)) 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.

CONCLUSION

Based solely on the facts and representations submitted with Taxpayer's request, we have determined that the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied with respect to taxable years a through b. Therefore, an extension of time is granted, until 120 days from the date of this ruling, for making the elections required on Forms 1120-H for Taxpayer to be treated as a homeowners association under § 528 with respect to its taxable years a through b.

We note, however, that the burden is upon Taxpayer to produce, upon request, any records necessary to establish to the satisfaction of the Internal Revenue Service that Taxpayer meets all the requirements of § 528(c)(1).

Except as expressly ruled 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 or under any other provisions of the Code. Specifically, we express no opinion concerning the assessment of interest, additions to tax, additional amounts, or penalties for failure to file an income tax return with respect to any year. In addition, we express or imply no opinion on whether Taxpayer qualifies as a homeowners association under § 528(c).

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.

A copy of this letter should be attached to Taxpayer's Form 1120-H for each year covered by this letter.

The rulings contained in this letter are based upon information and representations submitted by Taxpayer 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.

Sincerely,

Associate Chief Counsel
(Passthroughs & Special Industries)

By: NICOLE R. CIMINO
Branch Chief, Branch 5
Office of Associate Chief Counsel
(Passthroughs & Special Industries)

Enclosures (2):
Copy of this letter
Copy for section 6110 purposes

cc:
* * *

DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2021-12791
  • Tax Analysts Electronic Citation
    2021 TNTF 59-32
    2021 EOR 5-23
  • Magazine Citation
    The Exempt Organization Tax Review, May. 2021, p. 403
    87 Exempt Org. Tax Rev. 403 (2021)
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