Five foreign entities received late classification election relief

Plain-English summary

Five foreign eligible entities failed to timely file Forms 8832 for their intended federal tax classifications. One entity sought partnership treatment, while the other four sought disregarded-entity treatment, all effective on the same redacted date. The IRS found that the requirements for regulatory relief were satisfied and gave each entity 120 days to file its election. The entities and their owners must also file all required returns for open years consistently with the relief, including any applicable Forms 5471, 8858, or 8865. Any election that would change a United States shareholder's IRC § 965 elements is disregarded for that limited purpose.

Ruling snapshot

• Question: Could five foreign eligible entities make late elections for partnership or disregarded-entity status?
• Outcome: Approved
• Key authorities: Treas. Reg. §§ 301.7701-2, 301.7701-3, 301.9100-1, and 301.9100-3; Treas. Reg. § 1.965-4(c)(2)

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202528005 Third Party Communication: None
Release Date: 7/11/2025 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:
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                                                           PLR-119156-24
                                                           PLR-103616-25
                                                           PLR-103617-25
                                                           PLR-103618-25
                                                           PLR-103619-25

                                                           Date:
                                                           April 10, 2025



                                              LEGEND

Entity 1 = ---------------------------------------------------------------------
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Entity 2 = ---------------------------------------------------------------------
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Entity 3 = ---------------------------------------------------------------------
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Entity 4 = ---------------------------------------------------------------------
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Entity 5 = ---------------------------------------------------------------------
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Country 1 = ------------------------------------

Country 2 = ---------------------------

Country 3 = --------------

PLR-119156-24; PLR-103616-25; PLR-103617-25; PLR-103618-25; and PLR-103619-
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Date 1 = --------------------------

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

Date 3 = ---------------------

Date 4 = ------------------

Date 5 = --------------------

Date 6 = -------------------

Dear ---------:

This responds to a letter dated September 17, 2024, and subsequent correspondence,
submitted on behalf of Entity 1, Entity 2, Entity 3, Entity 4, and Entity 5 (collectively, “the
Entities”), by the authorized representatives of the Entities, requesting an extension of
time under § 301.9100-3 of the Procedure and Administration Regulations to file entity
classification elections under § 301.7701-3.

                                             FACTS

According to the information submitted, Entity 1 was formed under the laws of Country 1
on Date 1. Entity 2, Entity 3, and Entity 4 were formed under the laws of Country 2 on
Date 2, Date 3, and Date 4, respectively. Entity 5 was formed under the laws of
Country 3 on Date 5 as a wholly owned subsidiary of Entity 4. Entity 1 represents that it
is a foreign entity eligible to elect to be classified as a partnership for federal tax
purposes effective Date 6. Entity 2, Entity 3, Entity 4, and Entity 5 represent that they
are foreign entities eligible to be classified as disregarded entities for federal tax
purposes effective Date 6. However, the Entities failed to timely file Forms 8832, Entity
Classification Election, electing to classify the Entities as partnerships or disregarded
entities, as applicable, effective Date 6.

                                        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) can
elect its classification for federal tax purposes as provided in § 301.7701-3. 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)(2)) 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.

PLR-119156-24; PLR-103616-25; PLR-103617-25; PLR-103618-25; and PLR-103619-
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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, in part, 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, 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)(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. If an
election specifies an effective date more than 75 days prior to the date on which the
election is filed, it will be effective 75 days prior to the date it was filed.

Section 301.9100-1(c) provides that the Commissioner in exercising the
Commissioner's discretion 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 Internal Revenue Code (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 standards the Commissioner will use to determine whether to
grant an automatic extension of time for making certain elections. Section 301.9100-3
provides the guidelines for granting extensions of time for making 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 evidence (including affidavits described in
§ 301.9100-3(e)) to establish to the satisfaction of the Commissioner that the taxpayer
acted reasonably and in good faith, and the grant of relief will not prejudice the interests
of the Government.

PLR-119156-24; PLR-103616-25; PLR-103617-25; PLR-103618-25; and PLR-103619-
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CONCLUSION

Based solely 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, we
grant Entity 1 an extension of time of 120 days from the date of this letter to make an
election to be treated as a partnership for federal tax purposes effective Date 6.
Furthermore, we grant Entity 2, Entity 3, Entity 4, and Entity 5 an extension of time of
120 days from the date of this letter to make elections to be treated as disregarded
entities for federal tax purposes effective Date 6. Each of the Entities must make the
election by filing a properly executed Form 8832 with the appropriate service center. A
copy of this letter should be attached to each Form 8832.

This ruling is contingent on each of the Entities and its owner(s) filing, within 120 days of
the date of this letter, all required federal income tax returns and information returns
(including amended returns) consistent with the requested relief granted in this letter.
These returns may include, but are not limited to, the following forms: (i) Form 5471,
Information Return of U.S. Persons With Respect to Certain Foreign Corporations, (ii)
Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, and
(iii) Form 8858, Information Return of U.S. Persons With Respect to Foreign
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.

If applicable, the elections made by each entity described above are disregarded for
purposes of determining the amounts of all § 965 elements of all United States
shareholders of each entity described above if the election otherwise would change the
amount of any § 965 element of any such United States shareholder. See § 1.965-
4(c)(2).

Except as specifically set forth above, we express or imply no opinion concerning the
federal tax consequences of the facts described above under any other provision of the
Code and regulations thereunder. 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.

In addition, we express no opinion concerning the assessment of any interest, additions
to tax, additional amounts, or penalties for failure to file a timely income 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 on information and representations submitted
by the taxpayer and accompanied by a penalty of perjury statement executed by an

PLR-119156-24; PLR-103616-25; PLR-103617-25; PLR-103618-25; and PLR-103619-
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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 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 the Entities’ authorized representative.

                                           Sincerely,


                                           Jeffrey Erickson
                                           Associate Chief Counsel
                                           (Passthroughs, Trusts, and Estates)



                                     By: _____________________________
                                         Joy Spies
                                         Senior Technician Reviewer, Branch 1
                                         Office of Associate Chief Counsel
                                         (Passthroughs, Trusts, and Estates)

Enclosure
Copy of letter for § 6110 purposes

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