Section 9100 Relief

What happens if you miss the mark to market ("MTM") election date? Is there a remedy for missing the election?

The short answer, like most other answers, is "Maybe ... but not likely."

I have a discussion of this in greater detail on this website, but this will get you started on your contemplation of seeking 9100 Relief.

The guidance presented here comes from the Treasury Regulations Section 301-9100-3. The main criteria for prevailing in a 9100 Relief request is the following (not an exclusive list):

• You initiate the relief request before IRS discovery of the missed election

• You exercised reasonable due diligence or there were events beyond the taxpayer's control at the time of the election

• You reasonably relied on a competent tax professional who was aware of all the facts

• The interests of the government are not prejudiced by granting relief

In my experience, the most important are the last two, reliance on a competent tax professional and the governments interest.

There is another administrative hurdle to clear ... the drafters of Rev Proc 99-17 (the Revenue Procedure that provides the mechanics of how to elect and manage your MTM election) did not envision Sec 9100 relief to be a remedy for a missed Sec 475(f) election.

If you did not know that a MTM election was available and made no inquiries and prepared the tax return yourself, that probably will not fly.

If you missed the election date, continued to trade and sustained further losses, you will probably not prevail since by granting relief, the government reduces the tax they can legitimately collect, because YOU missed the election.

Again, with reference to this website, read the facts in the Vines vs Commissioner case and if your facts mirror those in Vines, or come close, you may have a chance at relief, but since the MTM election is a non-automatic election, you must request relief under a Private Letter Ruling ("PLR") which can, and probably will, exceed $10,000 in IRS user fees and tax professional fees of a CPA and tax attorney.

If you believe your facts indicate the possibility of prevailing, you can send me an email regarding your facts. I will tell you up front if I believe you have a chance and if so how much it will cost.