@Darek opening up a return for audit is not the same as an extension. its purpose is to see that the tax laws were complied with and if not, changes are made. since evidently no MTM election was made with the original return the tax laws were complied with if MTM reporting was not used. as a matter of fact, the MTM is made with the current return to take effect in the next tax year. there may be cases of the IRS allowing a late election - still effective for the following year - but those would almost certainly be where the taxpayer used a professional to prepare their return, the taxpayer requested the pro file a MTM election, but the pro blew it. so auditing year xxxx+1 won't change the fact that the election needed to be made with a timely file return for the year xxxx.
