PLR 200851005: 60 days to file Form 8832 for partnership treatment, granted on a three-sentence record

Plain-English summary

X was formed on D under the laws of State and meant to be treated as a partnership for federal tax purposes from that day. It did not file Form 8832 in time. The Service granted 60 days from the date of the letter to file one, effective D, under section 301.9100-3 of the Procedure and Administration Regulations.

What sets this letter apart in the December 19, 2008 release is how little it contains. The facts run to three sentences: X was formed, X intended partnership treatment, X inadvertently failed to file. No affidavit is described, no adviser is named, and no reason for the failure is given beyond the word inadvertently. The analysis then recites the standard, that relief is granted when the taxpayer establishes it acted reasonably and in good faith and that relief will not prejudice the interests of the government, and the conclusion states that the requirements have been satisfied. The letter never applies the standard to a stated fact. Compare PLR 200851004, released the same day, which spends most of six pages establishing reasonableness and then grants a shorter extension.

Some of the law recited does no work here. The letter quotes section 301.9100-1(c) on the six month cap that applies to statutory elections and section 301.9100-1(b) on what makes an election regulatory, although the election at issue is plainly regulatory. It also sets out the default classification rules of section 301.7701-3(b)(1), which are the rules X was electing out of.

The signature is worth noting. This ruling is signed by Curt G. Wilson as Deputy Associate Chief Counsel (Passthroughs & Special Industries), a level above the branch chiefs and senior counsel who sign most of the letters in this release.

One cataloguing point. The printed header reads "Index Numbers: 7701.00-00; 9100.31-00", but the IRS index row for this document lists only 7701.00-00, under the single subject Definitions. The uilc field here follows the index row, as this corpus does throughout, and the second printed number is recorded in this note instead. PLR 200851002, released the same day, carries 9100.31-00 in its own index row, so the omission looks specific to this document rather than to the classification.

Ruling snapshot

• Question: May X receive an extension of time under section 301.9100-3 to file the Form 8832 electing partnership classification effective D?
• Outcome: Approved. Sixty days from the date of the letter to file a properly executed Form 8832 with the appropriate service center, with a copy of the letter attached to the form.
• Key authorities: Sections 301.7701-3(a), 301.7701-3(b)(1) and 301.7701-3(c); sections 301.9100-1 through 301.9100-3 of the Procedure and Administration Regulations.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 200851005 Third Party Communication: None
Release Date: 12/19/2008 Date of Communication: Not Applicable Person To Contact: Index Numbers: 7701.00-00; 9100.31-00 ----------------, ID No. ------------ Telephone Number:
--------------------
------------------------------- Refer Reply To:
------------------------------------------- CC:PSI:B01
------------------------------ PLR-113370-08
-------------------------- Date:
September 16, 2008

LEGEND

X = -------------------------------------------
--------------------------------------------------

D = ----------------

State = --------

Dear -------------:

This is in response to a letter dated March 17, 2008, submitted 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) to be treated as a partnership for federal tax purposes.

FACTS

According to the information submitted, X was formed on D under the laws of State. X intended to be treated as a partnership for federal tax purposes effective D. However, X inadvertently failed to timely file Form 8832, Entity Classification Election, to be treated as a partnership for federal tax purposes.

LAW AND ANALYSIS

Section 301.7701-3(a) provides that a business entity that is not classified as a corporation under § 301.7701-2(b)(1), (3), (4), (5), (6), (7), or (8) (an eligible entity) can elect its classification for federal tax purposes. Section 301.7701-3(b)(1) provides that, except as provided in § 301.7701-3(b)(3), unless the entity elects otherwise, a domestic eligible entity is (i) a partnership if it has two or more members; or (ii) disregarded as an entity separate from its owner if it has a single owner. An eligible entity with at least two members can elect to be classified as either an association or a partnership.

Section 301.7701-3(c) provides that an entity classification election must be filed on Form 8832 and can be effective up to 75 days prior to the date the form is filed or up to 12 months after the date the form is filed.

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 Internal Revenue Code, except subtitles E, G, H, and I. Section 301.9100-1(b) defines the term "regulatory election" as including an election whose due date is prescribed by a regulation published in the Federal Register.

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

Section 301.9100-2 provides automatic extensions of time for making certain elections. Section 301.9100-3 provides rules for requesting extensions of time for regulatory 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

Based solely on the facts submitted and the representations made, we conclude that the requirements of § 301.9100-3 have been satisfied. As a result, X is granted an extension of time of 60 days from the date of this letter to make an election to be treated as a partnership for federal tax purposes effective D. X should make the election by filing a properly executed Form 8832 with the appropriate service center. A copy of this letter should be attached to the form.

Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter.

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

Sincerely,

Curt G. Wilson

Curt G. Wilson
Deputy Associate Chief Counsel
(Passthroughs & Special Industries)

Enclosures (2)
Copy of this letter
Copy for § 6110 purposes

cc: