Extension of Time for Making Elections -- Temporary Regulation Section 301.9100-1T

 [4830-01]

 ACTION: Temporary regulations.

 SUMMARY: These amendments to the regulations under 26 CFR part 301 concern the extension of time for making elections or applications for relief when that time is not expressly prescribed by statute. The change permits the Commissioner to grant taxpayers an extension of time for making these elections or applications under any subtitle of the Code other than subtitle E, governing Alcohol, Tobacco, and Certain Other Excise Taxes; subtitle G, governing the Joint Committee on Taxation; subtitle H, governing the Financing of Presidential Elections; and subtitle I, governing the Trust Fund Code.

 DATES: These amendments are effective February 13, 1959.

 FOR FURTHER INFORMATION CONTACT: Barbara B. Walker 202-566-5985 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

BACKGROUND

Section 1.9100-1 of the Income Tax Regulations was originally adopted in 1959, 12 FR 1206 (February 17, 1959), and amended in 1970, 35 FR 17840 (November 20, 1970), under the authority of section 7805(a) of the Internal Revenue Code.

NEED FOR TEMPORARY REGULATIONS

 The provisions contained in this Treasury Decision are needed immediately to provide guidance to the public with respect to extensions of time for making elections or applications for relief. Therefore, it is found impracticable and contrary to the public interest to issue this Treasury Decision with prior notice under section 553(b) of Title 5 of the United States Code.

EXPLANATION OF PROVISIONS

 Under section 1.9100-1(a), the Commissioner, in his discretion, may grant a reasonable extension of time for making an election under subtitle A of the Code when the time for making the election is not expressly prescribed by statute. Since the adoption of this provision in 1959, the number of elections with due dates prescribed by regulations under other subtitles of the Code has increased to over 500. Taxpayers failing to make these elections by their prescribed dates have no avenue for requesting relief. Accordingly, the regulations are amended to permit the Commissioner to grant reasonable extensions of time for making elections with non-statutory due dates under all subtitles of the Code except subtitle E, governing Alcohol, Tobacco, and Certain Other Excise Taxes; subtitle G, governing the Joint Committee on Taxation; subtitle H, governing the Financing of Presidential Elections; and subtitle I, governing the Trust Fund Code. The amendments do not apply to these subtitles because the Service does not have jurisdiction over the provisions of subtitles E, G, H, and I (except for section 5881, under subtitle E, which imposes an excise tax on greenmail but contains no election provision).

 A special transitional rule applies to elections or applications for relief required to be made prior to April 5 1991 for any year as to which the period of limitations has not expired under subtitle B, Estate and Gift taxes; subtitle C, Employment taxes; subtitle D, Miscellaneous Excise taxes; and subtitle F, Procedure and Administration. For these elections or applications, taxpayers must request relief by the later of October 2, 1991 or the date that is one year after the date the election or application was required to be made. Due to the potential for prejudice to the interest of the Government in connection with significant delays in making elections and applications, a taxpayer seeking relief under this special transitional rule must provide clear evidence of intent to make the specific election or application, in addition to satisfying the requirements of Rev. Proc. 79-63, 1979-2 C.B. 578 (other than sec. 4.01(2)), or any successor procedure. Ordinarily, this will require the production of written contemporaneous documents demonstrating the taxpayer's intent to make the specific election or application.

 The specific requirements for obtaining relief under section 1.9100-1 set forth in Rev. Proc. 79-63, 1979-2 C.B. 578 may not be compatible with certain characteristics of some of the elections required to be made under the subtitles added to the Commissioner's discretionary authority by this regulation. Until the issuance of further guidance, the Service will apply Rev. Proc. 79-63 to elections under all the subtitles now included in section 301.9100-1 of the regulations taking into account their special characteristics, if any.

SPECIAL ANALYSES

 It has been determined that these rules are not major rules as defined in Executive Order 12291. Therefore, a Regulatory Impact Analysis is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. Chapter 5) and the Regulatory Flexibility Act (5 U.S.C. Chapter 6) do not apply to these regulations; therefore, a final Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, a copy of these regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

DRAFTING INFORMATION

 The principal author of these regulations is Barbara B. Walker, Office of the Assistant Chief Counsel (Income Tax and Accounting), Internal Revenue Service. However, personnel from other offices of the IRS and Treasury Department participated in their development.

LIST OF SUBJECTS

 26 CFR Part 301

 Administrative practice and procedure, Bankruptcy, Courts, Crime, Disclosure of information, Employment taxes, Estate taxes, Excise taxes, Filing requirements, Gift taxes, Income taxes, Investigations, Law enforcement, Penalties, Pensions, Statistics, Taxes.

ADOPTION OF AMENDMENTS TO THE REGULATIONS

Accordingly, title 26, part 301, of the Code of Federal Regulations is amended as follows.

Paragraph 1. The authority for part 301 continues to read in part:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 301.9100-1T is added to read as follows:

SECTION 301.9100-1T EXTENSION OF TIME FOR MAKING CERTAIN ELECTIONS (temporary).

(a) IN GENERAL. The Commissioner in his discretion may, upon good cause shown, 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 for the making of an election or application for relief in respect of tax under all subtitles of the Internal Revenue Code except subtitles E, G, H, and I, provided --

(1) The time for making such election or application is not expressly prescribed by statute;

(2) Request for the extension is filed with the Commissioner before the time fixed for making such election or application, or within such time thereafter as the Commissioner may consider reasonable under the circumstances; and

(3) It is shown to the satisfaction of the Commissioner that the granting of the extension will not jeopardize the interests of the Government. For purposes of this section, an application for an extension of time for filing a return under section 6081 is not an application for relief in respect of tax.

(b) SPECIAL TRANSITIONAL RULE FOR ELECTIONS UNDER SUBTITLES B, C, D, AND F REQUIRED TO BE MADE PRIOR TO April 5, 1991. Taxpayers may request relief under this paragraph (b) for elections or applications for relief under subtitles B, C, D, and F required to be made prior to April 5, 1991 for any year as to which the period of limitations has not expired. Requests for relief must be filed with the Commissioner by the later of October 2, 1991 or the date that is one year after the date the election or application was required to be made. In addition to satisfying all other requirements for relief, a taxpayer must demonstrate clear evidence of intent to make the specific election or application at the time it was required to be made.

(c) EXCEPTIONS APPLICABLE TO ELECTIONS REQUIRED TO BE MADE PRIOR TO NOVEMBER 20, 1970. Notwithstanding the provisions of paragraph (a) of this section, the time fixed by the regulations in subtitle A shall not be extended in cases of the following types of elections and applications required by such regulations to be made prior to November 20, 1970:

(1) An election required to be made in or with the taxpayer's original income tax return;

(2) An election required to be exercised by the filing of a claim for credit or refund, unless the election is required to be exercised on or before a date which precedes the date of expiration of the period of limitations provided in section 6511;

(3) An election required to be filed in a petition to the Tax Court;

(4) An application for permission to change a previous election;

(5) An application for permission to change an accounting method as described in sections 1.77-1 and 1.446-1;

(6) An application for permission to change an accounting period as described in section 1.442-1; or

(7) An application for permission to change the method of treating bad debts as described in section 1.166-1.