PLR 1328021: IRS grants extra time to elect corporate classification for an LLC

Plain-English summary

The IRS granted a single-member LLC an extension of time to file Form 8832 and elect to be classified as an association taxable as a corporation. The LLC represented that it had always intended to make the election but failed to file the form timely. The IRS granted 120 days from the date of the letter to file Form 8832 with the appropriate service center and attach a copy of the ruling.

Ruling snapshot

• Question: Could the LLC receive more time to make its entity-classification election?
• Outcome: Approved, subject to filing Form 8832 within 120 days.
• Key authorities: IRC § 7701; Treas. Reg. §§ 301.7701-3, 301.9100-1 through 301.9100-3.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201328021 Third Party Communication: None
Release Date: 7/12/2013 Date of Communication: Not Applicable
Index Number: 9100.31-00
Person To Contact:
---------------------------- -----------------------, ID No. -------------------
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----------------------- Telephone Number:
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Refer Reply To:
CC:PSI:02
PLR-144466-12
Date:
April 04, 2013

                                                 LEGEND

                --------------------------------------------------

X =
-----------------------------
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Y =
------------------
Date 1 = ---------------------------

State = --------------

Country = -------------------------

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

   This letter responds to a letter dated October 12, 2012, and subsequent

correspondence, submitted on behalf of X by X’s authorized representative, requesting
that the Service grant X an extension of time under § 301.9100-1(c) of the Procedure
and Administration Regulations to elect to be classified as an association taxable as a
corporation for federal tax purposes.

                                                 FACTS

   According to the information submitted, X is a single member limited liability

company wholly owned by Y, a registered company organized under the laws of
Country. Y organized X under the laws of State on Date 1. X represents that it always
intended to elect to be classified as a corporation effective Date 1; however, X failed to
timely file Form 8832, Entity Classification Election.
PLR-144466-12 2

                                 LAW & ANALYSIS

   Section 301.7701-3(a) provides in part 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)
may elect its classification for federal tax purposes. An eligible entity with a single
owner may elect to be classified as an association taxable as a corporation or
disregarded as an entity separate from its owner.

    Section 301.7701-3(c)(1)(iii) provides that an entity classification election must be

filed on Form 8832 and can be effective up to 75 days prior to the election filing date or
more than 12 months after the election filing date.

   Section 301.9100-1(c) provides that 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 by which the

Commissioner will determine whether to grant an extension of time to make an election.
Section 301.9100-2 provides the rules governing automatic extensions of time for
making certain elections. Section 301.9100-3 describes the conditions under which the
Commissioner will grant requests for relief 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 (1) the taxpayer acted reasonably and in
good faith, and (2) granting relief will not prejudice the interests of the government.

                                   CONCLUSION

   Based on the facts submitted and the representations made, we conclude that

the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied. As a result, X
is granted an extension of time of 120 days from the date of this letter to file Form 8832
with the appropriate service center to elect to be classified as a corporation for federal
tax purposes effective Date 1. A copy of this letter should be attached to Form 8832
and is enclosed for that purpose.

   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.
PLR-144466-12 3

  This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of

the Code provides that it may not be used or cited as precedent.

     In accordance with the Power of Attorney on file with this office, a copy of this

letter is being sent to your authorized representative.

  The rulings contained in this letter are 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 rulings, it is subject to verification on
examination.

                                    Sincerely,



                                    Charlotte Chyr
                                    Senior Technician Reviewer, Branch 2
                                    (Passthroughs & Special Industries)

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

cc: