120-day extension for an LLC to file a late Form 8832 electing corporate (association) status

Plain-English summary

A single-member limited liability company wanted to be taxed as an association (that
is, a corporation) for federal tax purposes as of a chosen effective date. Under the
"check-the-box" rules, it makes that choice by filing Form 8832, but the company
failed, through inadvertence, to file the form on time. Because the deadline comes
from a regulation, the IRS can grant a late-election extension under Treasury
Regulation § 301.9100-3 when the taxpayer acted reasonably and in good faith and
relief will not prejudice the government. The company had already been filing
consistently with corporate treatment. The IRS granted 120 days to file Form 8832
electing corporate classification as of the requested date, conditioned on the company
and its owners filing any needed consistent returns within the same period.

Ruling snapshot

• Question: May an eligible entity get a § 301.9100-3 extension to file a late Form 8832 electing association (corporate) status?
• Outcome: Approved (120-day extension)
• Key authorities: Treas. Reg. §§ 301.7701-3, 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202214009 Third Party Communication: None
Release Date: 4/8/2022 Date of Communication: Not Applicable
Index Number: 7701.00-00, 9100.00-00
Person To Contact:

-------------------------------- --------------------------, ID No. --------------
---------------------------------- Telephone Number:
------------------------------------------- --------------------
----------------------- Refer Reply To:
-------------------------- CC:PSI:B01
PLR-116655-21
Date:
January 10, 2022

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

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

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

Date 2 = ----------------------

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

This letter responds to a letter dated June 28, 2021, and subsequent correspondence,
submitted on behalf of X, requesting a ruling under §§ 301.9100-1 and 301.9100-3 of
the Procedure and Administration Regulations that X be granted an extension of time to
file an election to be classified as an association taxable as a corporation under §
301.7701-3(c), effective Date 2.

                                             Facts

Based on the material submitted, X is an entity formed as a limited liability company
under the laws of State on Date 1. X intended to be treated as an association taxable as
a corporation for U.S. federal tax purposes effective Date 2. However, due to
inadvertence, X failed to file a timely Form 8832, Entity Classification Election. X
represents that it has filed consistently with the requested relief since Date 2.
PLR-116655-21 2

                                  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. 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) 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)(iv) provides that if an eligible entity makes an election under
§ 301.7701-3(c)(1)(i) to change its classification (other than an election made by an
existing entity to change its classification as of the effective date of § 301.7701-3), the
entity cannot change its classification by election again during the sixty months
succeeding the effective date of the election. However, the Commissioner may permit
the entity to change its classification by election within the sixty months if more than fifty
percent of the ownership interests in the entity as of the effective date of the subsequent
election are owned by persons that did not own any interests in the entity on the filing
date or on the effective date of the entity's prior election. An election by a newly formed
eligible entity that is effective on the date of formation is not considered a change for
purposes of § 301-7701-3(c)(1)(iv).

                                     Conclusion

Based on the facts 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 Form 8832
with the appropriate service center to elect to be classified as an association taxable as
a corporation for federal tax purposes, effective Date 2. A copy of this letter should be
attached to the Form 8832.

This ruling is contingent on X and its owners filing, within 120 days from the date of this
letter, any required returns (including amended returns) consistent with the requested
relief effective on Date 2. A copy of this letter should be attached to any such returns or
amended returns. If this condition is not met, then this ruling is null and void. A copy of
this letter should be attached to any such returns.
PLR-116655-21 3

Except as expressly set forth above, we express or imply no opinion concerning the
federal tax consequences of the facts discussed above under any other provision of the
Code.

The ruling contained in this letter is based upon information and representations
submitted by X 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.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) provides that
it may not be used or cited as precedent.

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

                                   Sincerely,

                                   Holly Porter
                                   Associate Chief Counsel
                                   (Passthroughs and Special Industries)


                               By: __________/s/_______________
                                   Laura Fields
                                   Chief, Branch 1
                                   Office of the Associate Chief Counsel
                                   (Passthroughs and Special Industries)

Enclosure
Copy for § 6110 purposes

cc: