LLC receives 120 days to make a late corporate election

Plain-English summary

A limited liability company intended from its formation date to be classified as an association taxable as a corporation for federal tax purposes. It inadvertently failed to file Form 8832 by the required deadline and requested an extension under the regulatory-election relief rules. Based on the submitted information and representations, the IRS concluded that the company satisfied the applicable standards. It granted 120 days from the ruling date to file Form 8832 with the intended retroactive effective date.

Ruling snapshot

• Question: May the LLC file a late Form 8832 election for corporate tax classification?
• Outcome: Approved. The company received 120 days to file the election.
• Key authorities: Treas. Reg. §§ 301.7701-2, 301.7701-3, and 301.9100-1 through 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201417008 Third Party Communication: None
Release Date: 4/25/2014 Date of Communication: Not Applicable
Index Numbers: 7701.00-00, 9100.00-00,
9100.31-00 Person To Contact:
----------------------, ID No. ------------------
--------------------------------- Telephone Number:
--------------------------------- ----------------------
--------------------- Refer Reply To:
---------------------------------------- CC:PSI:B03
PLR-141113-13
Date:
January 23, 2014

                                              LEGEND

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

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

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

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

   This letter responds to your letter dated September 13, 2013, requesting that X

be granted an extension of time under § 301.9100-3 of the Procedure and
Administration Regulations to elect under § 301.7701-3 to be treated as an association
taxable as a corporation for federal tax purposes.

                                               FACTS

    X was formed as a limited liability company under the laws of State on Date. X

represents that it intended to be classified as an association taxable as a corporation
effective Date. However, X inadvertently failed to timely file a Form 8832, Entity
Classification Election, electing to treat X as an association taxable as a corporation
effective Date.

                                                 LAW

    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 as provided in

PLR-141113-13 2

§ 301.7701-3. An eligible entity with at least two members can elect to be classified as
either an association (and thus a corporation under § 301.7701-2(b)(2)) or a
partnership, and an eligible entity with a single owner can elect to be classified as an
association or to be disregarded as an entity separate from its owner.

    Section 301.7701-3(b)(1)(i) 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.

    Section 301.7701-3(c)(1)(i) provides, in part, that an eligible entity may elect to

be classified other than as provided under § 301.7701-3(b), or to change its
classification, by filing Form 8832 with the service center designated on Form 8832.

    Section 301.7701-3(c)(1)(iii) provides that an election under § 301.7701-3(c)(1)(i)

will be effective on the date specified by the entity on Form 8832 or on the date filed if
no such date is specified on the election form. The effective date specified on Form
8832 can not be more than 75 days prior to the date on which the election is filed and
can not be more than 12 months after the date on which the election is filed. If an
election specifies an effective date more than 75 days prior to the date on which the
election is filed, it will be effective 75 days prior to the date it was 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 (Code) except subtitles E, G, H, and I. Section 301.9100-1(b) defines
the term “regulatory election” as an election whose due date is prescribed by a
regulation published in the Federal Register, or a revenue ruling, revenue procedure,
notice, or announcement published in the Internal Revenue Bulletin.

   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.

   Section 301.9100-3(a) provides that requests for relief under § 301.9100-3 will be

granted when the taxpayer provides the evidence (including affidavits described in
§ 301.9100-3(e)) to establish to the satisfaction of the Commissioner that the taxpayer
acted reasonably and in good faith, and the grant of relief will not prejudice the interests
of the Government.

PLR-141113-13 3

                                  CONCLUSION

    Based solely on the information 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 a Form 8832 with the appropriate service center to elect to be treated as an
association taxable as a corporation effective Date. A copy of this letter should be
attached to the Form 8832.

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

   The ruling contained in this letter is 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 ruling request, it is subject to verification on examination.

                                   Sincerely,

                                   Associate Chief Counsel
                                   (Passthroughs & Special Industries)



                                   By:_______/s/_______________
                                      James A. Quinn
                                      Senior Counsel, Branch 3
                                      Office of the Associate Chief Counsel
                                      (Passthroughs & Special Industries)

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