Late corporate classification election approved

Plain-English summary

A state corporation with an S election converted to a limited liability company and intended to remain classified as a corporation for federal tax purposes. It did not timely file Form 8832 to elect association status effective on the conversion date. The IRS found that the requirements for regulatory election relief were satisfied and granted 120 days to file Form 8832. The relief is conditioned on filing all required original or amended federal tax and information returns for open years consistently with the requested classification. The IRS did not decide whether the entity was otherwise eligible for the election or eligible to be an S corporation.

Ruling snapshot

• Question: May the converted limited liability company make a late election to be classified as an association taxable as a corporation?
• Outcome: Approved, with 120 days to file Form 8832 and all consistent outstanding returns
• 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: 202531006 Third Party Communication: None
Release Date: 8/1/2025 Date of Communication: Not Applicable
Index Number: 7701.01-00; 9100.31-00
Person To Contact:
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--------------------------------- PLR-120215-24

                                                           Date:
                                                           May 02, 2025

LEGEND

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

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

State = ---------

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

   This letter is in response to a letter dated November 4, 2024, and subsequent

correspondence, submitted on behalf of X by X’s authorized representatives, requesting
an extension of time under § 301.9100-3 of the Procedure and Administration
Regulations to file an election under § 301.7701-3 to be treated as an association
taxable as a corporation for federal tax purposes.

                                                 FACTS

   According to the information submitted, X was a State corporation that elected to

an S corporation effective Date 1. On Date 2, X converted to a State limited liability
company. X represents that it intended to elect to be classified as an association
taxable as a corporation for federal tax purposes effective Date 2. However, X failed to
timely file Form 8832, Entity Classification Election, electing to be classified as an
association taxable as a corporation for federal tax purposes effective Date 2.
PLR-120215-24 2

                                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. 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.

   Section 301.7701-3(b)(1)(i) provides that unless a domestic eligible entity elects

otherwise, the entity is a partnership if it has two or more members. Section 301.7701-
3(b)(1)(ii) provides that unless a domestic eligible entity elects otherwise, the entity is
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)(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.

   Section 301.9100-1(c) provides that the Commissioner has discretion to grant a

reasonable extension of time to make a regulatory election 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 that 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.

   Under § 301.9100-3(a) provides that requests for relief 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 (1) the taxpayer acted reasonably
and in good faith, and (2) the granting relief will not prejudice the interests of the
Government.
PLR-120215-24 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 2. A copy of this letter should be attached to the Form 8832.

  This ruling is contingent on X, within 120 days from the date of this letter, filing all

outstanding required federal income tax returns and information returns (including
amended returns) for all open years consistent with the requested relief to the extent
necessary or appropriate. A copy of this letter should be attached to any such returns.

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

the federal tax consequences of any aspect of any transaction or item discussed or
referenced in this letter. 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. Specifically, we express or imply no opinion on
X’s eligibility to be an S corporation.

  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 each 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.

  In accordance with a power of attorney on file with this office, we are sending a

copy of this letter to your authorized representatives.

                                   Sincerely,

                                   Associate Chief Counsel
                                   (Passthroughs, Trusts, and Estates)

                              By: __________________________
                                  Elizabeth V. Zanet
                                  Senior Technician Reviewer, Branch 3
                                  Office of the Associate Chief Counsel
                                  (Passthroughs, Trusts, and Estates)

PLR-120215-24 4

Enclosure:
Copy of this letter for §6110 purposes

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