On February 28, 2025, the IRS issued Private Letter Ruling (PLR-113646-24) granting 9100 relief to a U.S. consolidated group that missed the deadline to file a CFC group election under the final §163(j) regulations for two consecutive tax years.

Facts

The Taxpayer, an affiliated group filing a consolidated U.S. federal income tax return, intended to make a CFC group election under §1.163(j)-7 but mistakenly applied outdated regulations:

• Year 1: Applied the 2020 Proposed Regulations without filing the required election statement.
• Year 2: Applied the 2018 Proposed Regulations, meeting outdated requirements but failing to file the correct statement again.

The oversight was identified in Month 1, after which the Taxpayer sought guidance from its advisors and promptly requested 9100 relief. The Taxpayer represented that:

• The IRS had not identified the missed election before the request.
• Granting relief would not reduce total tax liability.
• The omission was unintentional, and no hindsight was used.
• The statute of limitations remains open for all affected years.

Law and Analysis

Section 163(j) limits business interest deductions and requires a timely CFC group election to be filed with the federal return. Under Treas. Reg. §301.9100-1 and §301.9100-3, the IRS may grant an extension if the taxpayer:

• Acted reasonably and in good faith.
• Did not use hindsight or seek a lower tax liability.

Since the Taxpayer met these conditions, the IRS granted relief, allowing additional time to perfect the election for both years.

Conclusion

The IRS provided the Taxpayer 120 days from the ruling date to make the CFC group election for Year 1 and Year 2, conditional on filing all required (and amended) returns within that period. The ruling applies only to the timeliness of the election, is based on the Taxpayer’s representations, and cannot be cited as precedent.

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