Opinion ID: 502693
Heading Depth: 2
Heading Rank: 1

Heading: IRS Power To Grant Retroactive Extensions

Text: 22 If it were true that the IRS had no power to grant an extension of time to file a return unless the request for extension was made before the time to file had expired, we would agree with the government that as a matter of law there could have been no timely filing of Eastman's return, and summary judgment would have been proper. However, we find the government's premise untenable for several reasons. 23 First, the language of the regulation relied on does not deal with IRS authority. Treas.Reg. Sec. 1.6081-1(b) provides, in pertinent part, that 24 [a] taxpayer desiring an extension of the time for filing a return, statement, or other document shall submit an application therefor on or before the due date of such return, statement, or other document. 25 While the regulation sets a deadline for the filing of an extension request, the command is directed to the taxpayer. The regulation does not on its face impose any limitation on the IRS's power to grant relief from that deadline. 26 Second, and more importantly, even if the regulation purported to deny the IRS the power to grant retroactive relief, we would disagree that it could properly have that effect, for Sec. 6081(a) of the Code provides that the IRS 27 may grant a reasonable extension of time for filing any return, declaration, statement, or other document required by this title or by regulations. Except in the case of taxpayers who are abroad, no such extension shall be for more than 6 months. 28 26 U.S.C. Sec. 6081(a). Except for the stated six-month provision, this Code section gives the IRS wide discretion, neither placing any other temporal limitation on the granting of an extension for the filing of a return nor making the power to grant such an extension dependent on when the request was made. Further, it authorizes the IRS to grant such an extension to file a document that is required by IRS regulations. Given this power to extend with respect to a document whose filing the regulations require categorically, it would be illogical to believe that the IRS has any less power to extend with respect to a document that the taxpayer is required to file only if he wants something. Hence, we conclude that the IRS had the power to grant an extension not only of the deadline the Code set for the filing of the return but also of the deadline the IRS had, by regulation, set for the taxpayer's request for extension. The IRS could perhaps choose uniformly to deny every belated request for an extension; but such a choice would at best be an exercise of its discretion, not an obligation imposed upon it by the Code nor a power limitation it could lawfully impose upon itself in light of the Code. 29 Finally, it does not appear that the IRS has in fact uniformly denied belated requests for extensions. Eastman has submitted, as an example, the text of an IRS response to another taxpayer's Request for Ruling where the request was made some six weeks after that taxpayer's return was due and five weeks after it was filed. The taxpayer stated that, because of a mailroom snafu, its income tax return was not timely filed as required by Section 6081 of the Code. The IRS issued a Private Letter Ruling in which it granted an extension of time ... in which to file [the] federal income tax return. Though such a ruling is not precedent requiring the IRS to grant an extension in another case, it is nonetheless evidence that the IRS does not unwaveringly consider itself powerless to grant an extension of time to file an income tax return where the request for extension has been made after the time to file has passed. 30 For the above reasons, we reject the government's contention that the IRS did not have the power to grant Eastman's late request for an extension.