Perhaps I misinterpreted, your original facts. You stated that "I just tried to recharacterize and was told it was too late." I assumed that you were "told" by the IRS. If yes, then under Treas. Reg. 301.9100-3(b)(1)(i), you would be presumed to have not acted in good faith, and you would be denied the recharacterization.
Also, the Private Letter
Ruling, offered by my colleague does not disclose the entire list of issues that must be satisfied in order to obtain relief under the regulatory section. In particular, Subsection (c)(1)(i) provides that the IRS will not grant relief if it would "...result in a taxpayer having a lower tax liability in the aggregate for all taxable years affected by the election than the taxpayer would have had if the election had been timely made (taking into account the time value of money)." What is interesting about this is that the Private Letter Ruling appears to ignore this "prejudice factor" entirely. This could be due to the revenue officer's inadvertence, or it could indicate a liberal interpretation of the regulation
on the part of the IRS in favor of granting relief wherever the opportunity exists.
Given all of the above, and assuming that I misunderstood your original facts, you may actually be able to obtain relief under Section 301.9001-3 -- but, only if you can very carefully maneuver all of the obstacles provided for by the regulation. So, I echo my colleague's suggestion that you consult with a competent tax professional in carefully
drafting your request for relief.
Hope this helps.
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