PLR 200024025: Foreign entity receives more time to file a classification election

Plain-English summary

A foreign eligible entity was classified by default as an association and intended to elect partnership classification effective on a specified date. It missed the deadline to file Form 8832. The IRS found good cause and granted an extension under the section 301.9100 regulations: the entity had 60 days from the letter to file the election and was instructed to attach a copy of the ruling. The letter grants extra filing time but expressly gives no opinion on whether the entity is in fact a partnership for federal tax purposes.

Ruling snapshot

• Question: May the entity file its late Form 8832 classification election within an extended period?
• Outcome: Approved: the filing deadline was extended to 60 days after the letter.
• Key authorities: Treas. Reg. §§ 301.7701-3(b), (c), 301.9100-1, 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Index Number: 9100.31-00
Washington, DC 20224

Person to Contact:
Number: 200024025
Telephone Number:
Release Date: 6/16/2000
Refer Reply To:
CC:DOM:P&SI:3 PLR-114853 -99
Date:
March 15, 2000

LEGEND:

X
=

D1
=

Dear

This letter responds to a letter dated September 3, 1999, written on behalf of X, requesting an extension of time under § 301.9100-3 of the Procedure and Administrative Regulations to file an election under § 301.7701-3(c).

FACTS

According to the information submitted, X is a foreign eligible entity classified as an association under § 301.7701-3(b)(2)(i)(B). X intended to file an election under Form 8832, Entity Classification Election, to change its classification to a partnership effective D1. However, the Form 8832 was not timely filed.

X requests a ruling that it will be recognized as a partnership effective D1.

LAW AND ANALYSIS

Section 301.7701-3(c)(i) provides that an eligible entity may elect to be classified as other than its default classification in § 301.7701-3(b) by filing Form 8832 with the appropriate service center. Section 301.7701-3(b)(2)(i)(B) provides that, unless the entity elects otherwise, a foreign eligible entity is classified as an association if all its members have limited liability.

Under § 301.9100-1(c), the Commissioner may grant a reasonable extension of time to make a regulatory election, or a statutory election (but no more than six months except in the case of a taxpayer who is abroad), under all subtitles of the Code, except subtitles E, G, H, and I.

Section 301.9100-1(b) defines the term "regulatory election" as an election whose due date is prescribed by a regulation published in the Federal Register, or a revenue

PLR-114853-99
2

ruling, revenue procedure, notice, or announcement published in the Internal Revenue Bulletin.

Sections 301.9100-1 through 301.9100-3 provide the standards the Commissioner will use to determine whether to grant an extension of time to make a regulatory election.

Section 301.9100-2 provides automatic extensions of time for making certain elections. Section 301.9100-3 provides extensions of time for making elections that do not meet the requirements of § 301.9100-2.

Requests for relief under § 301.9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good faith, and that granting relief will not prejudice the interests of the Government.

CONCLUSIONS

In the present situation, good cause has been shown and the other requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied. Consequently, X is granted an extension of time for making the § 301.7701-3(c) election until 60 days following the date of this letter. The election should be made by following the procedure set forth in Form 8832. A copy of this letter should be attached to the election. One is enclosed for that purpose.

Except as specifically set forth above, no opinion is expressed or implied as to the federal tax consequences of the transaction described above under any other provision of the Code. Specifically, no opinion is expressed concerning whether X is, in fact, a partnership for federal tax purposes.

This ruling is directed only to the taxpayer on whose behalf it was requested.
Section 6110(k)(3) provides that it may not be used or cited as precedent.

Under a power of attorney on file with this office, a copy of this letter will be sent to X.

Sincerely yours,
PAUL F. KUGLER
Assistant Chief Counsel
(Passthroughs and Special Industries)
Enclosures: 2
Copy of this letter
Copy for § 6110 purposes