PLR 1336005: IRS grants more time for an entity classification election

Plain-English summary

An entity formed in a state wanted to elect to be treated as an association taxable as a corporation for federal tax purposes. It was eligible to make the election under the entity-classification regulations, but it did not timely file Form 8832. The IRS concluded that the requirements for late-election relief under Treas. Reg. § 301.9100-3 were satisfied. It granted 120 days from the ruling date to make the election effective on the requested date, subject to filing the required consistent returns within that period.

Ruling snapshot

• Question: May the entity make a late election to be classified as an association taxable as a corporation?
• Outcome: Approved, with a 120-day extension from the ruling date.
• Key authorities: Treas. Reg. §§ 301.7701-2, 301.7701-3, and 301.9100-1 through 301.9100-3; IRC § 6110.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201336005 Third Party Communication: None
Release Date: 9/6/2013 Date of Communication: Not Applicable
Index Number: 9100.00-00, 7701.00-00,
9100.31-00 Person To Contact:
-----------------------, ID No. -------------------
---------------------------- ---------------------------------------------------
------------------------------ Telephone Number:
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------------------------------ Refer Reply To:

• CC:PSI:B02
  PLR-112192-13
  Date:
  May 01, 2013

                                             Legend
  

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

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

Date = --------------------

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

   This is in response to a letter dated March 13, 2013 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
treated as an association taxable as a corporation for federal tax purposes.

  According to the information submitted, X was formed in State on Date. X

represents that it is an entity eligible to elect its classification under § 301.7701-3. A
Form 8832, Entity Classification Election was not timely filed for X to elect to be treated
as an association effective on Date.

   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)
can elect its classification for federal tax purposes.

    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.
PLR-112192-13 2

   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.

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

the requirements of § 301.9100-3 have been satisfied. Accordingly, X is granted an
extension of 120 days from the date of this letter to elect to be classified as an
association taxable as a corporation for federal tax purposes, effective Date. The
election should be made by filing Form 8832 with the appropriate service center. A
copy of this letter should be attached to the election.

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

original and amended income tax and information returns consistent with the requested
relief in this letter. A copy of this letter should be attached to any such returns.

   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) of the Internal Revenue 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 will be sent to X's authorized representative.

                                     Sincerely,



                                     Bradford Poston
                                     Senior Counsel, Branch 2
                                     Office of the Associate Chief Counsel
                                     (Passthroughs & Special Industries)

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