IRS PLR: Success-Based Fees Safe Harbor Election Extension Granted (IRC §263)

Dec. 3, 2021, 5:00 AM

A holding company in the wake of an acquisition received extra time to elect a safe harbor for success-based fees paid to a service provider that helped realize the transaction, pursuant to Section 4.01 of Revenue Procedure 2011-29, the IRS ruled. According to the representation, an adviser on whom Taxpayer relied didn’t advise about the safe harbor, so Taxpayer capitalized the fees on its return and didn’t include an election statement. Taxpayer’s amended return must include the statement and indicate the success-based fee amounts that are deducted and capitalized, the IRS stated. [PLR 202148001]

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