PLR 1330013 grants more time to elect corporate classification

Plain-English summary

The IRS grants a foreign entity 120 additional days to file Form 8832 electing to be treated as an association taxable as a corporation for federal tax purposes. The entity had intended to make that election effective on an earlier date, but the form was not timely filed. The extension is conditioned on filing the required returns or amended returns for all open years consistently with the relief, which may include Forms 5471. The ruling is limited to the specified election and does not address other tax consequences.

Ruling snapshot

• Question: May the foreign entity make a late Form 8832 election for corporate classification?
• Outcome: Approved, a 120-day extension was granted under § 301.9100-3.
• Key authorities: Treas. Reg. §§ 301.7701-3 and 301.9100-3.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201330013 Third Party Communication: None
Release Date: 7/26/2013 Date of Communication: Not Applicable
Index Number: 7701.00-00, 9100.31-00
Person To Contact:
-------------------------- ---------------------------, ID No. --------------
------------------ Telephone Number:
----------------------- ----------------------
-------------- Refer Reply To:
----------------------- CC:PSI:B01
PLR-143927-12
Date:
March 15, 2013

Legend

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

     Y                 =         -----------------

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

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

     Date 1              =      ----------------------------

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

   This letter responds to your letter dated October 1, 2012, submitted on behalf of

X by X’s representative, 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 an association taxable as a corporation for federal tax purposes.

                                                  Facts

   According to the information submitted, X is a wholly owned subsidiary of Y, an

association formed under the laws of State. X was formed under the laws of Country.
X intended to be treated as an association taxable as a corporation for federal tax
purposes effective Date 1. However, Form 8832, Entity Classification Election, was not
timely filed.
PLR-143927-12 2

                                  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. An eligible entity with at least two
members can elect to be classified as either an association taxable as a corporation or
a partnership.

    Section 301.7701-3(b)(2) provides guidance on the classification of a foreign

eligible entity for federal tax purposes. Generally, a foreign eligible entity is treated as
an association taxable as a corporation if all members have limited liability, unless the
entity makes an election to be treated otherwise.

   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.

    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 the
election. Section 301.9100-2 provides the rules governing automatic extensions of time
for making certain elections. Section 301.9100-3 provides the standards the
Commissioner will use to determine whether to grant an extension of time for regulatory
elections that do not meet the requirements of § 301.9100-2. Under § 301.9100-3, a
request for relief will be granted when the taxpayer provides evidence to establish to the
satisfaction of the Commissioner that (1) the taxpayer acted reasonably and in good
faith, and (2) 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 120 days from the date of this letter to file a Form 8832 with the
appropriate service center to elect to be treated as an association taxable as a
corporation for federal tax purposes effective Date 1. A copy of this letter should be
attached to the Form 8832. A copy is enclosed for that purpose.

    This ruling is contingent on the owner of X filing within 120 days of this letter all

required returns or amended returns for all open years consistent with the requested
relief. These returns may include, but are not limited to, Forms 5471, Information Return
of U.S. Persons With Respect to Certain Foreign Corporations. A copy of this letter
should be attached to any such returns.
PLR-143927-12 3

   Except as specifically set forth above, 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(s) 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 X’s authorized representative.

                                    Sincerely,


                                    Joy Spies
                                    Joy Spies
                                    Senior Technician Reviewer, Branch 1
                                    Office of the Associate Chief Counsel
                                    (Passthroughs & Special Industries)

Enclosures (2):
Copy of this letter
Copy for § 6100 purposes

cc: