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PLRs Provide Extensions to Taxpayers Who Failed to File Form 8996 in Timely Manner

Monday, February 14, 2022 - 11:30AM

The Internal Revenue Service (IRS) released two private letter rulings (PLRs) providing taxpayers with extensions to make a timely election to be a qualified opportunity fund (QOF), finding both acted reasonably and in good faith. PLR 202206015 provides relief for a taxpayer whose advisor failed to attach or include an IRS Form 8996–in which a taxpayer self-certifies as a QOF to be eligible for opportunity zones (OZ) incentive–after previously filing for an automatic extension to do so. The taxpayer discovered the failure while preparing the federal tax return for the following year and requested relief. PLR 202206016 concerns a taxpayer whose advisers mistakenly believed Form 8996 would be filed by others, an oversight that was discovered after the taxpayer’s federal income tax return was filed. In both scenarios, the IRS found that the taxpayer met the standards under Treasury Regulations for acting reasonably and in good faith. The IRS granted 60-day extensions from the ruling dates for the taxpayers to file Form 8996. PLRs are directed only to the taxpayers requesting them and may not be used or cited as a precedent.

Regulations and legislation concerning the OZ incentive will be a focus at the Novogradac 2022 Spring Opportunity Zones Conference, April 21-22 in Long Beach, California.

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