Foreign entity received 120 days to elect corporate classification

Plain-English summary

A foreign eligible entity intended to be classified as an association taxable as a corporation but did not timely file Form 8832. The IRS concluded that the entity met the standards for late regulatory-election relief and granted 120 days to make the election with the requested retroactive effective date. The relief is conditioned on the entity’s owner filing all required open-year returns consistently within the same 120-day period, potentially including Forms 5471, 8865, and 8858. The ruling does not determine whether the entity is otherwise eligible for the classification and does not grant relief from interest or penalties associated with late tax or information returns.

Ruling snapshot

• Question: May the foreign eligible entity receive additional time to elect treatment as an association taxable as a corporation?
• Outcome: Approved, with a 120-day extension and consistent-return condition
• Key authorities: Treas. Reg. §§ 301.7701-2, 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: 202510010 Third Party Communication: None
Release Date: 3/7/2025 Date of Communication: Not Applicable
Index Number: 7701.00-00, 9100.31-00
Person To Contact:
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• ---

  
  --------------------------------------------- Telephone Number:
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  ------------------------------------------------ Refer Reply To:
  ---------- CC:PSI:01
  ----------------------------------- PLR-113280-24
  Date:
  December 03, 2024

LEGEND

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

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

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

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

   This responds to a letter dated July 25, 2024, submitted on behalf of X by X’s

authorized representative, requesting an extension of time under § 301.9100-3 of the
Procedure and Administration Regulations to file an election under § 301.7701-3(c) to
be treated as an association taxable as a corporation for federal tax purposes.

                                                   FACTS

   According to the information submitted, X was organized under the laws of

Country on Date. X represents that it is a foreign entity eligible to elect to be classified
as an association taxable as a corporation. However, X failed to timely file Form 8832,
Entity Classification Election, electing to be treated as an association taxable as a
corporation for federal tax purposes effective Date.

                                        LAW AND ANALYSIS

   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)
PLR-113280-24 2

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 or a partnership, and 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)(2)(i) provides that, except as provided in § 301.7701-

3(b)(3), unless the entity elects otherwise, a foreign eligible entity is — (A) a partnership
if it has two or more members and at least one member does not have limited liability;
(B) an association if all members have limited liability; or (C) disregarded as an entity
separate from its owner if it has a single owner that does not have limited liability.
Section 301.7701-3(b)(2)(ii) provides that, for purposes of § 301.7701-3(b)(2)(i), a
member of a foreign eligible entity has limited liability if the member has no personal
liability for the debts of or claims against the entity by reason of being a member.

    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), or to change its classification,
by filing Form 8832 with the service center designated on Form 8832.

    Section 301.7701-3(c)(1)(iii) provides that an election made under § 301.7701-

3(c)(1)(i) will be effective on the date specified by the entity on Form 8832 or on the
date filed if no such date is specified on the election form. The effective date specified
on Form 8832 cannot be more than 75 days prior to the date on which the election is
filed and cannot be more than 12 months after the date on which the election is filed.

   Under § 301.9100-1(c), 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, or a revenue ruling, revenue procedure,
notice, or announcement published in the Internal Revenue Bulletin.

   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 an
election. Section 301.9100-2 provides automatic extensions of time for making certain
elections. Section 301.9100-3 provides extensions of time for making elections 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 (including affidavits described in § 301.9100-3(e)) to establish that
the taxpayer acted reasonably and in good faith, and that granting relief will not
prejudice the interests of the government.
PLR-113280-24 3

                                   CONCLUSION

   Based solely on the facts submitted and the representations made, we conclude

that the requirements of § 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 make an election to be
treated as an association taxable as a corporation for federal tax purposes effective
Date. X should make the election by filing a properly executed Form 8832 with the
appropriate service center. A copy of this letter should be attached to the form.

    This ruling is contingent on the owner of X filing within 120 days of this letter all

required returns for all open years consistent with the requested relief. These returns
may include, but are not limited to, the following forms: (i) Forms 5471, Information
Return of U.S. Persons With Respect to Certain Foreign Corporations, (ii) Forms 8865,
Return of U.S. Persons With Respect to Certain Foreign Partnerships, and (iii) Forms
8858, Information Return of U.S. Persons With Respect to Disregarded Entities, such
that these forms reflect the consequences of the relief granted in this letter. A copy of
this letter should be attached to any such returns.

   Except as specifically set forth above, we express no opinion concerning the

federal tax consequences of the facts described above under any other provision of the
Internal Revenue Code. 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.

   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 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 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 ruling request, it is subject to verification on examination.

  This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of

the Code provides that it may not be used or cited as precedent.
PLR-113280-24 4

     In accordance with the Power of Attorney on file with this office, a copy of this

letter is being sent to X’s authorized representative.

                                               Sincerely,

                                               Holly Porter
                                               Associate Chief Counsel
                                               (Passthroughs & Special Industries)




                                         By: _______ /S/_________________
                                             Laura C. Fields
                                             Chief, Branch 1
                                             Office of Associate Chief Counsel
                                             (Passthroughs & Special Industries)

Enclosure:

   Copy of this letter for section 6110 purposes

cc: ----------------
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