Supplemental ruling revises the facts of an earlier entity-classification ruling

Plain-English summary

This supplemental private letter ruling modifies the facts section of an earlier ruling and incorporates the rest of that ruling by reference. The revised facts describe a foreign corporation owned by a revocable foreign trust whose settlor and primary beneficiary became a U.S. resident. The trust had been treated as a foreign grantor trust, and the corporation was eligible to elect disregarded-entity treatment. The corporation had inadvertently failed to timely file Form 8832 with its intended effective date. The supplemental letter records representations that the corporation and beneficiary acted reasonably and in good faith and that granting relief would not prejudice the government's interests, but it does not restate the earlier ruling's conclusion.

Ruling snapshot

• Question: What facts replace the facts stated in the earlier entity-classification ruling?
• Outcome: Other (supplemental ruling modifying the prior facts section)
• Key authorities: Treas. Reg. §§ 301.7701-3 and 301.9100-3

Full text (IRS public release)

 Internal Revenue Service                                       Department of the Treasury
                                                                Washington, DC 20224

                                                                Third Party Communication: None
Number: 202109006
                                                                Date of Communication: Not Applicable
Release Date: 3/5/2021
                                                                Person To Contact:
Index Number: 7701.00-00, 9100.00-00,
                                                                ------------------------, ID No. -----------------
             9100.31-00                                         Telephone Number:
                                                                --------------------
 ----------------------                                         Refer Reply To:
 ----------------------------                                   CC:PSI:B03
 --------------------------------------------                   PLR-126857-20
 ----------------------------                                   Date:
                                                                December 10, 2020




                                                      LEGEND

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

A                 =         -----------------------
---------------------------------------------------

Trust             =         ------------------------------------------------
--------------------------------------------------------------------------------

Country           =        ------------------------

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

Year1             =        -------

Year2             =        -------



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

This letter ruling modifies a prior letter ruling (PLR-104581-20) dated August 18, 2020
(“The Prior Letter Ruling”). The entire text of the Prior Letter Ruling is hereby
incorporated by reference, except as modified below, for purposes of this supplemental
letter ruling.

The Facts section of the Prior Letter Ruling is hereby modified to read as follows:
PLR-126857-20                                2


        The information submitted states that X is a private limited corporation formed
under the laws of Country in Year1. X is wholly owned by Trust, a revocable trust
settled under the laws of Country in Year1. Trust was settled by A, and A is the primary
beneficiary of Trust. Trust has been treated as a foreign grantor trust since Year2,
when A became a U.S. resident. X and A represent that X is a foreign entity eligible to
elect to be treated as a disregarded entity. However, X inadvertently failed to timely file
a Form 8832, Entity Classification Election, electing to be treated as disregarded as an
entity separate from its owner effective Date.

       X represents that X and A acted in good faith and reasonably. Further, X and A
represent that the interests of the government will not be prejudiced for all taxable years
affected by the election by granting the relief sought.

      In accordance with the power of attorney on file with this office, we are sending a
copy of this letter to X’s authorized representative.

                                      Sincerely,

                                      Associate Chief Counsel
                                      (Passthroughs & Special Industries


                                   By: __________________________
                                      Richard T. Probst
                                      Senior Technician Reviewer, Branch 3
                                      Office of Associate Chief Counsel
                                      (Passthroughs & Special Industries)

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


cc: