LLC received 120 days to file a retroactive corporate election

Plain-English summary

A wholly owned domestic limited liability company intended to be treated as an association taxable as a corporation from the date it became wholly owned, but inadvertently failed to file Form 8832 on time. The IRS found that the taxpayer satisfied the regulatory-election relief requirements and granted 120 days to file the election, conditioned on the taxpayer and its owner filing all required consistent returns or amended returns within the same period.

Ruling snapshot

• Question: Could the LLC file a late Form 8832 electing corporate classification retroactive to the requested date?
• Outcome: Approved, with a 120-day extension and consistent-return condition.
• 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: 201432010 Third Party Communication: None
Release Date: 8/8/2014 Date of Communication: Not Applicable
Index Numbers: 9100.00-00, 9100.31-00
Person To Contact:
--------------------------------- -------------------------, ID No. ------------
------------------------------- Telephone Number:
-------------------------------------------- --------------------
------------------------- Refer Reply To:
CC:PSI:B03
PLR-145709-13
Date:
May 1, 2014

                                               LEGEND

Taxpayer = -------------------------------------------------------------------------------------------------
-----------------------------------

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

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

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

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

  This letter responds to a letter dated October 18, 2013, and subsequent

correspondence, submitted on behalf of Taxpayer by its authorized 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 treat Taxpayer
as an association taxable as a corporation for federal tax purposes.

                                                FACTS

   Taxpayer is a State limited liability company that became wholly owned by X on

Date 1. Taxpayer represents that Taxpayer is a domestic entity eligible to elect to be
treated as an association taxable as a corporation effective Date 1. However, due to
inadvertence, Taxpayer failed to timely file Form 8832, Entity Classification Election.

                                        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 as provided in § 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)(ii) provides that unless a domestic eligible entity elects

otherwise, the entity is 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 made 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.

   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 (Code), except subtitles E, G, H, and I. Section 301.9100-1(b)
defines a 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.

  Section 301.9100-2 provides the rules governing automatic extensions of time for

making certain elections.

    Section 301.9100-3 provides extensions of time for making regulatory elections

that do not meet the requirements of § 301.9100-2. Section 301.9100-3(a) provides
that requests for relief subject to § 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.

                                   CONCLUSION

  Based solely on the information submitted and the representations made, we

conclude that Taxpayer has satisfied the requirements of §§ 301.9100-1 and 301.9100-

3. As a result, Taxpayer is granted an extension of time of 120 days from the date of
   this letter to file a properly executed Form 8832 with the appropriate service center
   electing to be treated as an association taxable as a corporation effective Date 1. A
   copy of this letter should be attached to the Form 8832.

   This ruling is contingent on Taxpayer and the owner of Taxpayer filing within 120
   days from the date of this letter all required returns (including amended returns)
   consistent with the requested relief granted in this letter. A copy of this letter should be
   attached to any such returns.

   Except as expressly provided herein, we express or imply no opinion concerning
   the federal tax consequences of any aspect of any transaction or item discussed or
   referenced in this letter. In addition, § 301.9100-1(a) provides that the granting of an
   extension of time for making an election is not a determination that the taxpayer is
   otherwise eligible to make the election.

   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.

   Pursuant to a power of attorney on file with this office, we are sending a copy of
   

   this letter to Taxpayer’s authorized representatives.

   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: ___________________________________
                                Stacy L. Short
                                Senior Technician Reviewer, Branch 3
                                Office of the Associate Chief Counsel
                                (Passthroughs & Special Industries)
   

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

cc: