PLR 1341025: IRS grants late entity-classification election relief

Plain-English summary

The IRS granted an entity 120 days to make a late election to be treated as an association taxable as a corporation for federal tax purposes. The entity was eligible to elect its classification but did not timely file Form 8832. The IRS found that the requirements for relief under section 301.9100-3 were satisfied. The relief was conditioned on filing the required original and amended returns within 120 days.

Ruling snapshot

• Question: Could the entity make a late election to be classified as an association taxable as a corporation?
• Outcome: Approved
• Key authorities: IRC §§ 7701 and 6110(k)(3); 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: 201341025 Third Party Communication: None
Release Date: 10/11/2013 Date of Communication: Not Applicable
Index Number: 9100.00-00, 7701.00-00,
9100.31-00 Person To Contact:
----------------------, ID No. ------------------
---------------------------------------------------- Telephone Number:
------------------------------------ ---------------------
-------------------------------------------- Refer Reply To:
-------------------------------- CC:PSI:B02
PLR-117128-13
Date:
June 04, 2013

                                                   Legend

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

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

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

Date 2 = ----------------------

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

   This is in response to a letter dated April 4, 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 in Date 1. X

represents that it is an entity eligible to elect its classification under § 301.7701-3. X
intended to elect to be treated as an association effective as of Date 2 but did not timely
file Form 8832, Entity Classification Election.

   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-117128-13 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 2. 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.
PLR-117128-13 3

    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,

                                     Associate Chief Counsel
                                     (Passthroughs & Special Industries)

                                By: _______________________________
                                   Melissa Liquerman
                                   Branch Chief, Branch 2
                                   Office of the Associate Chief Counsel
                                   (Passthroughs & Special Industries)