Form 8996 filed with a late first-year return is treated as timely

Plain-English summary

A partnership was formed to invest in, manage, and dispose of qualified opportunity zone property and began operating as a Qualified Opportunity Fund. It did not engage an accounting firm until 14 days after its first-year filing deadline, and the firm then filed Form 1065 and Form 8996 late. The partnership received a late-filing penalty notice but did not initially understand that the late return could also invalidate its QOF self-certification. After learning of that issue, it requested relief. The IRS concluded that the partnership acted reasonably and in good faith and treated Form 8996 as timely, making the QOF election effective in the intended first month. The ruling does not determine whether the partnership or its investments otherwise satisfy the opportunity-zone rules.

Ruling snapshot

• Question: May Form 8996 filed with the partnership's late first-year return be treated as timely?
• Outcome: Approved
• Key authorities: IRC § 1400Z-2; Treas. Reg. §§ 1.1400Z2(d)-1(a), 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202548002 Third Party Communication: None
Release Date: 11/28/2025 Date of Communication: Not Applicable

Index Number: 9100.00-00, 1400Z.02-00
Person To Contact:
------------------------------------------------ ----------------------, ID No. -----------------
----------------------------------------------------- Telephone Number:
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Refer Reply To:
CC:ITA:B08
PLR-109364-25
Date:
September 03, 2025

LEGEND

Taxpayer = -------------------------------------------------------------------------
-
Accounting Firm = -----------------------
Law Firm = ---------------------
Month 1 = ---------------------
Date 1 = -------------------------
Date 2 = ---------------------
Date 3 = --------------------------
Date 4 = ------------------
State = --------------
Year 1 = -------
Year 2 = -------

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

This letter responds to Taxpayer's request for a letter ruling dated Date 4. Specifically,
Taxpayer requests relief, under §§ 301.9100-1 and 301.9100-31 of the Procedure and
Administration Regulations, for an extension of time to file Form 8996, Qualified
Opportunity Fund, to self-certify as a qualified opportunity fund (QOF), as defined in
section 1400Z-2(d) of the Internal Revenue Code (the Code), effective as of Month 1,
the first month in which Taxpayer intended to be a QOF.

1 Unless otherwise specified, all “section” references are to sections of the Internal Revenue Code

and all “§” references to sections of the Treasury Regulations (26 CFR Part 1) or (26 CFR Part 301).

PLR-109364-25 2

                                     FACTS

According to the information and representations provided, Taxpayer, a limited liability
company (LLC) treated as a partnership for Federal income tax purposes, was formed
on Date 1 in State. Pursuant to the terms of the LLC operating agreement, Taxpayer
was formed for the primary purpose of investing into, holding, managing, and disposing
of qualified opportunity zone property as defined in section 1400-2(d)(2) of the Code.
Soon after its formation in Year 1, Taxpayer began its operations as a QOF.

Taxpayer engaged Accounting Firm on Date 2, fourteen days after the filing deadline for
Year 1. On Date 3, Accounting Firm filed Taxpayer’s Form 1065 for Year 1 and
Taxpayer’s Form 8996. Later that month, Taxpayer received correspondence from the
Internal Revenue Service (the Service) that notified Taxpayer that it was being charged
with a late filing penalty for filing a late Form 1065, U.S. Return of Partnership Income,
for Year 1. At the time, Taxpayer was not aware of the effect that the late filing of the
Year 1 Form 1065 could have on the validity of the Taxpayer’s election to self-certify as
a QOF.

In Year 2 Taxpayer became aware that the late filing of Taxpayer’s Form 8996 could
raise questions as to whether it had adequately self-certified as a QOF. On Date 4, Law
Firm filed this request for a private letter ruling.

Taxpayer represents that the grant of relief will not result in the Taxpayer having a lower
tax liability in the aggregate for all taxable years affected by the election than Taxpayer
would have had if the QOF self-certification had been timely made (taking into account
the time value of money).

                              LAW AND ANALYSIS

Section 1400Z-2(e)(4) of the Code directs the Secretary to prescribe such regulations
as may be necessary to carry out the purposes of section 1400Z-2, including rules for
the certification of QOFs. Section 1.1400Z2(d)-1(a)(2)(i) of the Income Tax Regulations
provides that the self-certification of a QOF must be timely-filed and effectuated
annually in such form and manner as may be prescribed by the Commissioner of
Internal Revenue in the Internal Revenue Service forms or instructions, or in
publications or guidance published in the Internal Revenue Bulletin. The Form 8996
Instructions published pursuant to these regulations specify that to self-certify as a
QOF, a taxpayer must file Form 8996 with its tax return for the year to which the
certification applies by the due date of the tax return (including extensions). Because §
1.1400Z2(d)-1(a)(2)(i) sets forth the manner and timing for an entity to self-certify as a
QOF, these elections are regulatory elections, as defined in § 301.9100-3(b)(1).

Section 301.9100-3(a) of the Procedure and Administration Regulations provides that
requests for extensions of time for regulatory elections (other than automatic extensions
covered in § 301.9100-2) will be granted when the taxpayer provides evidence

PLR-109364-25 3

(including affidavits) to establish that the taxpayer acted reasonably and in good faith
and the grant of relief will not prejudice the interests of the government.

Section 301.9100-3(b)(1) provides that a taxpayer is deemed to have acted reasonably
and in good faith if the taxpayer—

   (i) requests relief before the failure to make the regulatory election is discovered
   by the Service;

   (ii) failed to make the election because of intervening events beyond the
   taxpayer's control;

   (iii) failed to make the election because, after exercising reasonable diligence,
   the taxpayer was unaware of the necessity for the election;

   (iv) reasonably relied on the written advice of the Service; or

   (v) reasonably relied on a qualified tax professional, and the professional failed to
   make, or advise the taxpayer to make, the election.

In addition, § 301.9100-3(b)(3) provides that a taxpayer is deemed not to have acted
reasonably and in good faith if the taxpayer—

   (i) seeks to alter a return position for which an accuracy-related penalty has been
   or could be imposed under section 6662 at the time the taxpayer requests relief,
   and
   the new position requires or permits a regulatory election for which relief is
   requested;

   (ii) was fully informed in all material respects of the required election and related
   tax consequences but chose not to make the election; or

   (iii) uses hindsight in requesting relief (if specific facts have changed since the
   original deadline that make the election advantageous to a taxpayer, the Service
   will not ordinarily grant relief).

Section 301.9100-3(c)(1) provides that the Commissioner will grant a reasonable
extension of time to make the regulatory election only when the interests of the
Government will not be prejudiced by the granting of relief. Section 301.9100-3(c)(1)(i)
of the regulations provides that the interests of the Government are prejudiced if
granting relief would result in a taxpayer having a lower tax liability in the aggregate for
all taxable years affected by the election than the taxpayer would have had if the
election had been timely made (taking into account the time value of money).

PLR-109364-25 4

                                  CONCLUSION

Based on the facts and information submitted and the representations made, we
conclude that Taxpayer has acted reasonably and in good faith, and that the granting of
relief would not prejudice the interests of the government. Accordingly, based solely on
the facts and information submitted, and the representations made in the ruling request,
the Form 8996 attached to Taxpayer’s federal income tax return for Year 1, filed on
Date 3, is considered timely filed for purposes of section 1400Z-2 and § 1.1400Z2(d)-
1(a)(2)(i), and Taxpayer has thereby made the election under section 1400Z-2 and §
1.1400Z2(d)-1(a)(2)(i) to self-certify as a QOF beginning in Month 1. Taxpayer should
submit a copy of this letter ruling to the Service Center where Taxpayer files its returns
along with a cover letter requesting that the Service associate this ruling with the Year 1
tax return.

                                     CAVEATS

The granting of an extension of time in this ruling letter is not a determination that
Taxpayer is otherwise eligible to self-certify as a QOF. See § 301.9100-1(a).

This ruling is based upon facts and representations submitted by the Taxpayer and
accompanied by penalty of perjury statements executed by the appropriate parties.

This office has not verified any of the material submitted in support of the request for a
ruling. However, as part of an examination process, the Service may verify the factual
information, representations, and other data submitted.

Except as expressly provided herein, no opinion is either expressed or implied
concerning the tax consequences of any aspect of any transaction or item discussed or
referenced in this letter. Specifically, we have no opinion, either express or implied,
concerning whether any investments made in Taxpayer are qualifying investments as
defined in § 1.1400Z2(a)-1(b)(34) or whether Taxpayer meets the requirements under
section 1400Z-2 and the regulations thereunder to be treated as a QOF. In addition, we
also express no opinion on whether any interest owned in any entity by Taxpayer
qualifies as qualified opportunity zone property, as defined in section 1400Z-2(d)(2), or
whether such entity would be treated as a qualified opportunity zone business, as
defined in section 1400Z-2(d)(3). We express no opinion regarding the tax treatment of
the instant transaction under the provisions of any other sections of the Internal
Revenue Code or regulations that may be applicable, or regarding the tax treatment of
any conditions existing at the time of, or effects resulting from, the instant transaction.

A copy of this letter must be attached to any tax return to which it is relevant.
Alternatively, taxpayers filing their returns electronically may satisfy this requirement by
attaching a statement to their return that provides the date and control number of the
letter ruling. Taxpayers that have previously filed a return or administrative adjustment
requests attaching Form 8996 should submit a copy of this letter ruling to the Service

PLR-109364-25 5

Center where Taxpayer files its returns along with a cover letter requesting that the
Service associate this ruling with the previous filing(s).

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. Enclosed is a copy of the letter ruling
showing the deletions proposed to be made when it is disclosed under section 6110.

Pursuant to the Form 2848, Power of Attorney and Declaration of Representative, on
file, we are sending a copy of this letter to Taxpayer's authorized representative.

                                                   Sincerely,



                                                   Frank W. Dunham
                                                   Senior Counsel, Branch 8
                                                   Office of Chief Counsel
                                                   (Income Tax & Accounting)

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