Still working with a troublesome client whose previous preparer failed to account for a major equipment purchase in 2019. I had hopes that Rev Proc 2020-50, section 5 would apply. After several requests, I obtained a 2848 in order to verify that the 2019 return was filed timely. It was not.
Does anyone see any way that this Rev Proc can work? The plan reading of 5.01(1)(b) requires that the in service year return had to be filed on time for there to be a late election out of bonus.
Sadly, my client appears to be screwed, which will be expensive for them.
Section 5
01 Scope.
(1) This section 5 applies to a taxpayer within the scope of section 3 of this revenue procedure that:
(a) placed in service depreciable property during its 2017, 2018, 2019, or 2020 taxable year, or planted or grafted the specified plant during its 2017, 2018, 2019, or 2020 taxable year to which the late § 168(k)(5) election applies, as applicable;
(b) timely filed its Federal income tax return or Form 1065 for the placed-in-service year of such depreciable property or the planting year of such specified plant, and such return was filed before November 17, 2020;
(c) applies the Final Regulations, the 2019 final regulations, or both the 2019 final regulations and the 2019 proposed regulations for the placed-in-service year of such depreciable property or the planting year of such specified plant;
(d) wants to (i) make a § 168(k)(5) election for the planting year of such specified plant or make a § 168(k)(7) election for the placed-in-service year of the class of such depreciable property, or (ii) make a component election, designated transaction election, or proposed component election for the placed-in-service year of such depreciable property or the planting year of such specified plant and such election(s) is permitted for the placed-in-service year of such depreciable property or the planting year of such specified plant under the specific regulation in section 5.01(1)(c) of this revenue procedure that is applied by the taxpayer for that placed-in-service year or planting year; and
(e) did not (i) previously revoke such election(s) in accordance with section 6.02 of this revenue procedure, (ii) previously revoke such election(s) after November 16, 2020, in accordance with section 5 of Rev. Proc. 2020-25, or (iii) previously revoke such election(s) after November 16, 2020, in accordance with section 4.03 or 5.04 of Rev. Proc. 2019-33, as applicable.