Entity receives more time to elect corporate classification

Plain-English summary

An eligible entity intended to be treated as an association taxable as a corporation but did not file Form 8832 on time. The IRS concluded that the entity acted reasonably and in good faith and that relief would not prejudice the government. It granted 120 days to file the election with the requested effective date. The entity must also file all required original and amended income tax and information returns consistent with the relief within the same period.

Ruling snapshot

• Question: May the entity make a late election to be classified as an association taxable as a corporation?
• Outcome: Approved, with Form 8832 and consistent returns due within 120 days.
• Key authorities: Treas. Reg. §§ 301.7701-2, 301.7701-3, 301.9100-1, and 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 201516048
Third Party Communication: None
Release Date: 4/17/2015
Date of Communication: Not Applicable
Index Numbers: 7701.00-00, 9100.00-00,
9100.31-00
Person To Contact:
----------------------, ID No. ----------------
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Telephone Number:
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Refer Reply To:
------------------------------------------ CC:PSI:B03 PLR-133217-14
Date:
December 02, 2014

LEGEND

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

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

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

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

This responds to a letter dated September 3, 2014, submitted on behalf of X by X’s authorized representatives, requesting that the Service grant X an extension of time under § 301.9100-3 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 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 up to 12 months after the election filing date.
PLR-133217-14
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 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, we express or imply no opinion 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-133217-14
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In accordance with a power of attorney on file with this office, we are sending a copy of this letter to your authorized representatives.

Sincerely,

Associate Chief Counsel
(Passthroughs & Special Industries)

By: __________ Bradford R. Poston
Senior Counsel, Branch 3
Office of the Associate Chief Counsel
(Passthroughs & Special Industries)

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

cc: