LLC received 120 days for corporate and S elections

Plain-English summary

A domestic LLC intended to elect association taxable as a corporation status and S corporation treatment effective on the same date, but filed neither Form 8832 nor Form 2553. The IRS concluded that the LLC met the standards for late entity-classification relief and had reasonable cause for the late S election. It granted 120 days to file both forms with the requested effective date and treat the S election as timely. The LLC and its shareholders must also file all required open-year returns consistently within the same period. The ruling does not determine whether the LLC otherwise qualifies as an S corporation and does not grant relief from interest or penalties on late returns.

Ruling snapshot

• Question: May the LLC make late corporate-classification and S corporation elections effective on the intended date?
• Outcome: Approved, with 120 days to file Forms 8832 and 2553 and consistent returns
• Key authorities: IRC §§ 1361, 1362(b)(5); Treas. Reg. §§ 301.7701-3, 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202509006 Third Party Communication: None
Release Date: 2/28/2025 Date of Communication: Not Applicable
Index Numbers: 1362.01-03, 9100.31-00
Person To Contact:
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----------------------------------------- Telephone Number:
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------------------------------------ Refer Reply To:
CC:PSI:B03
PLR-110713-24
Date:
December 03, 2024

                                                  LEGEND

X = -----------------------------
TIN: ----------------

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

State = ---------

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

   This letter responds to a letter dated May 31, 2024, and subsequent

correspondence, submitted on behalf of X by its authorized representative, requesting
that the Service grant to X an extension of time under § 301.9100-3 of the Procedure
and Administration Regulations to file an election under § 301.7701-3 to be classified as
an association taxable as a corporation, and relief to file a late S corporation election
under § 1362(b)(5) of the Internal Revenue Code (“Code”).

                                                  FACTS

    The information submitted states that X was formed as a limited liability company

under the laws of State on Date. X intended to elect to be classified as an association
taxable as a corporation and to elect to be treated as an S corporation for federal tax
purposes, with both elections effective Date. However, X failed to file Form 2553,
Election by a Small Business Corporation, including the deemed election to be
classified as an association taxable as a corporation under § 301.7701-3(c)(1)(v)(C), or
any separate Form 8832, Entity Classification Election, effective Date.
PLR-110713-24 2

                                         LAW

    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 at least two
members can elect to be classified as either an association (and thus a corporation under
§ 301.7701-2(b)) or a partnership. Elections are necessary only when an eligible entity
does not want to be classified under its default classification or when an eligible entity
chooses to change its classification.

     Section 301.7701-3(b)(1) provides that, 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 that an eligible entity may elect to be

classified other than as provided under § 301.7701-3(b) by filing Form 8832 with the
service center designated on Form 8832. Section 301.7701-3(c)(1)(iii) provides that the
election will be effective on the date specified by the entity on Form 8832 or on the date
filed if no such date is specified. The date specified on Form 8832 cannot be more than
75 days before the date on which the election is filed.

   Section 301.7701-3(c)(1)(v)(C) provides that an eligible entity that timely elects to

be an S corporation under § 1362(a)(1) is treated as having made an election under
§ 301.7701-3 to be classified as an association, provided that (as of the effective date of
the election under § 1362(a)(1)) the entity meets all other requirements to qualify as a
small business corporation under § 1361(b). Subject to § 301.7701-3(c)(1)(iv), the
deemed election to be classified as an association will apply as of the effective date of
the S corporation election and will remain in effect until the entity makes a valid election
under § 301.7701-3(c)(1)(i), to be classified as other than an association.

   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
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.

   Sections 301.9100-1 through 301.9100-3 provide the standards the

Commissioner will use to determine whether to grant an extension of time to make the
election. 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.
PLR-110713-24 3

   Section § 301.9100-3(a) provides that a request for relief 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.

  Section 1362(a) provides that a small business corporation may elect to be an S

corporation.

   Section 1362(b)(1) provides that an election under § 1362(a) may be made by a

small business corporation for any taxable year (A) at any time during the preceding taxable
year, or (B) at any time during the taxable year and on or before the 15th day of the third
month of the taxable year.

   Section 1362(b)(3) provides that if (A) a small business corporation makes an

election under § 1362(a) for any taxable year, and (B) such election is made after the
15th day of the third month of the taxable year and on or before the 15th day of the third
month of the following taxable year, then such election is treated as made for the
following taxable year.

    Section 1362(b)(5) provides that if (A) an election under § 1362(a) is made for

any taxable year (determined without regard to § 1362(b)(3)) after the date prescribed
by § 1362(b) for making such election for such taxable year or no such election is made
for any taxable year, and (B) the Secretary determines that there was reasonable cause
for the failure to timely make such election, the Secretary may treat such an election as
timely made for such taxable year (and § 1362(b)(3) shall not apply).

                                    ANALYSIS

    Based solely on the information submitted and the representations made, we

conclude that X has satisfied the requirements of §§ 301.9100-1 and 301.9100-3.
Therefore, 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 must accompany Form 8832.

   In addition, based solely on the facts submitted and the representations made,

we conclude that X has established reasonable cause for failing to make a timely
election to be an S corporation effective Date and is eligible for relief under
§ 1362(b)(5). Accordingly, if X makes an election to be an S corporation by filing a
completed Form 2553 effective Date, with the appropriate service center within 120
days from the date of this letter, then such election shall be treated as timely made. A
copy of this letter must accompany Form 2553.
PLR-110713-24 4

   Finally, this ruling is contingent on X and its shareholders filing within 120 days

from the date of this letter all required returns for all open years consistent with the
requested relief. A copy of this letter much accompany any such returns.

    We express 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 taxpayer is entitled to any relief from any penalty on
the basis that this taxpayer had reasonable cause for failure to file timely any income
tax or information returns.

   Except as expressly provided herein, we express or imply no opinion concerning

the federal tax consequences of the facts of this case under any other provision of the
Code. Specifically, we express or imply no opinion regarding X’s eligibility to be an S
corporation. In addition, § 301.9100-1(a) provides that the granting of an extension of
time for making an election is not a determination that the taxpayer is otherwise eligible
to make the election.

   The rulings contained in this letter are based on information and representations

submitted by the taxpayer 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 requested rulings, it is subject to verification on examination.

  These rulings are directed only to the taxpayer requesting them. Section

6110(k)(3) of the Code provides that they 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 your authorized representative.

                                    Sincerely,

                                    Associate Chief Counsel
                                    (Passthroughs & Special Industries)


                               By: _______________________________
                                   Mary Beth Carchia
                                   Senior Technician Reviewer, Branch 3
                                   Office of the Associate Chief Counsel
                                   (Passthroughs & Special Industries)

Enclosure:
Copy of this letter for § 6110 purposes
PLR-110713-24 5

cc: