PLR 200039018: Extra time to elect association classification

Plain-English summary

A domestic entity classified by default as a partnership intended to elect association status effective on a redacted date, but did not file Form 8832 on time. It requested more time under the regulatory election relief rules. The IRS found the relief requirements satisfied and gave the entity 60 days from the letter date to make the election using Form 8832, with a copy of the ruling attached. The IRS did not determine whether the entity would in fact be an association for federal tax purposes.

Ruling snapshot

• Question: Could the entity receive more time to elect association classification?
• Outcome: Approved; Form 8832 must be submitted within 60 days of the letter.
• Key authorities: Treas. Reg. §§ 301.7701-3(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: 200039018
Telephone Number:
Release Date: 9/29/2000
Refer Reply To:
CC:DOM:P&SI:3 PLR-110603-00
Date:
June 27, 2000

LEGEND:

X
=

D1
=

Dear

This letter responds to a letter dated May 19, 2000, written on behalf of X, requesting an extension of time under § 301.9100-3 of the Procedure and Administration Regulations to file an election under § 301.7701-3(c).

FACTS

According to the information submitted and the representations made, X is a domestic eligible entity classified as a partnership under § 301.7701-3(b)(1)(i). X intended to file an election under Form 8832, Entity Classification Election, to change its classification to an association effective D1. However, the Form 8832 was not timely filed.

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

LAW

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)(1)(i) provides that, unless the entity elects otherwise, a domestic eligible entity is classified as a partnership if it has two or
PLR-110603-00
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more members.

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 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.

CONCLUSION

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, an association for federal tax purposes.

The ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the request for the ruling, it is subject to verification on examination.
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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’s authorized representative.

Sincerely yours,

/s/

PAUL F. KUGLER
Assistant Chief Counsel
(Passthroughs and Special
Industries)

Enclosures: 2
Copy of this letter
Copy for § 6110 purposes