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. ----------------
------------------------------------ Telephone Number:
-------------------------------------------- --------------------
-------------------- 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 3

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: