LLC gets 120 days to file late corporate classification election

Plain-English summary

A domestic limited liability company intended to be classified as an association taxable as a corporation from a redacted effective date. It failed to file Form 8832 on time because of inadvertence but represented that its filings had consistently reflected the intended classification. The IRS found that the company acted reasonably and in good faith and that relief would not prejudice the government. It granted the company 120 days from the ruling date to file the entity-classification election. The company and its owners must also file any required original or amended returns consistent with the election within that period, or the ruling becomes void.

Ruling snapshot

• Question: Could the LLC receive extra time to elect corporate classification on Form 8832?
• Outcome: Approved, with a 120-day filing period and consistent-return conditions
• Key authorities: Treas. Reg. §§ 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: 202323003                                            Third Party Communication: None
 Release Date: 6/9/2023                                       Date of Communication: Not Applicable
 Index Number: 9100.31-00, 7701.00-00
                                                              Person To Contact:
 ------------------------------------------------------       ----------------------, ID No. -----------------
 ---------------------------------------------                Telephone Number:
 -----------------------------                                --------------------
 --------------------------                                   Refer Reply To:
 --------------------------------                             CC:PSI:B01
                                                              PLR-108012-22
                                                              Date:
                                                              March 16, 2023




LEGEND

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

 State = --------

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



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

This letter responds to a letter dated April 16, 2022, 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.

FACTS

Based on the material submitted, X was formed as a limited liability company under the
laws of State on Date. X represents that it intended to be treated as an association
taxable as a corporation for U.S. federal tax purposes effective Date. 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.
PLR-108012-22                                  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 301.9100-1(c) provides that the Commissioner may grant a reasonable
extension of time under the rules set forth in § § 301.9100-2 and 301.9100-3 to make a
regulatory election, or a statutory election (but not more than 6 months except in the
case of a taxpayer who is abroad), under all subtitles of the Code except subtitles E, G,
H, and I. Section 301.9100-1(b) provides that the term “regulatory election” includes an
election whose due date is prescribed by a regulation published in the Federal Register.

Section 301.9100-2 provides the rules governing automatic extensions of time for
making certain elections. Section 301.9100-3 provides the standards the Commissioner
will use to determine whether to grant an extension of time for 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 (1) the taxpayer
acted reasonably and in good faith, and (2) the grant of relief will not prejudice the
interests of the Government.

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. A copy of this letter should be
attached to the Form 8832.
PLR-108012-22                                 3

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. 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.

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. We also express or imply no opinion concerning the assessment of any interest,
additions to tax, additional amounts, or penalties for failure to file a timely tax or
information return with respect to any taxable year that may be affected by this ruling.
For example, we express no opinion as to whether a taxpayer is entitled to relief from
any penalty on the basis that the taxpayer had reasonable cause for failure to file timely
any income tax or information returns.

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 ruling to your authorized representatives.

                                       Sincerely,

                                       Holly Porter
                                       Associate Chief Counsel
                                       (Passthroughs & Special Industries)



                               by:    ______________________________
                                      Joyce C. Spies
                                      Senior Technician Reviewer, Branch 1
                                      (Passthroughs & Special Industries)

Enclosure
      Copy for § 6110 purposes
PLR-108012-22                                            4

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