9100 relief lets an LLC self-certify late as a qualified opportunity fund (1400Z-2)

Plain-English summary

An LLC taxed as a partnership was set up to be a qualified opportunity fund (QOF), a vehicle that lets investors defer and reduce capital-gains tax by investing in designated low-income "opportunity zones" under IRC § 1400Z-2. To become a QOF, the entity has to "self-certify" by filing Form 8996 with its tax return by the return's due date, including extensions. The LLC's accountant forgot to file for an extension, so when the return and Form 8996 went in, the certification was late. The LLC asked the IRS for relief under Treas. Reg. § 301.9100-3, which forgives a missed regulatory election deadline when the taxpayer acted reasonably and in good faith (here, by reasonably relying on a tax professional who dropped the ball) and relief will not prejudice the government. The IRS agreed, treating the Form 8996 as timely filed so the LLC is a QOF for the year in question. The ruling does not decide whether the fund actually meets the QOF requirements or whether any investment in it qualifies; it only fixes the late filing.

Ruling snapshot

• Question: Should the LLC get an extension of time under Treas. Reg. § 301.9100-3 to file a late Form 8996 self-certifying as a qualified opportunity fund under § 1400Z-2?
• Outcome: Approved (Form 8996 treated as timely filed; QOF election effective for Year 1)
• Key authorities: IRC § 1400Z-2; Treas. Reg. § 1.1400Z2(d)-1(a)(2)(i); Treas. Reg. §§ 301.9100-1 and 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202550012
Release Date: 12/12/2025
Index Number: 1400Z.02-00, 9100.00-00

Person To Contact:
---------------------, ID No. -----------------
Telephone Number:

Refer Reply To:
CC:ITA:B08
PLR-110596-25

Date: September 11, 2025

VIA E-FAX

LEGEND

Taxpayer = ----------------------------------------------------------------------------
Accountant P = -----------------------------
Month 1 = --------------------
Date 1 = ----------------
Date 2 = -------------
State = --------------
Year 1 = -------
Member A = -----------------
Member B = -----------------
Member C = -----------------
X = -----------------
Y = ------------

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

This letter responds to Taxpayer's request for a letter ruling dated Date 1. Specifically, Taxpayer requests relief under §§ 301.9100-1 and 301.9100-3[1] for an extension of time to (1) make an election to self-certify as a qualified opportunity fund (QOF), as defined in section 1400Z-2(d), effective as of Month 1, the first month in which Taxpayer received qualifying equity investments, and (2) to be treated as a QOF, effective as of Month 1.

FACTS

According to the information and representations provided, Taxpayer, a limited liability company treated as a partnership for Federal income tax purposes, was formed on Month 1 in State. Pursuant to the terms of the Operating Agreement, Taxpayer was formed as a QOF for the primary purpose of investing into, holding, managing, and disposing of qualified opportunity zone property. Taxpayer operates on a calendar year tax year and utilizes the cash method of accounting. Taxpayer indicated, for Year 1, that Taxpayer had three members: Member A, Member B, and Member C. Member A and Member B, collectively, contributed X and Member C contributed land worth Y to Taxpayer.

Taxpayer represents that it intended to certify as a QOF in Month 1. Taxpayer engaged Accountant P to prepare Taxpayer's Federal income tax returns for Year 1. However, Accountant P failed to file for an extension of time to file Taxpayer's Federal income tax returns. Taxpayer then filed the Year 1 return and Form 8996 on Date 2. Upon discovery of the failure to file the extension of time, Accountant P notified Taxpayer and advised Taxpayer to seek a ruling.

Taxpayer represents that all its federal income tax returns have been filed consistent with the intended election to self-certify as a QOF and the granting of its requested ruling would not result in Taxpayer having a lower tax liability in the aggregate for Year 1 and all subsequent taxable years affected by the election than if the election had been timely made.

LAW AND ANALYSIS

Section 1400Z-2(e)(4) of the Internal Revenue 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.

[1] Unless otherwise specified, all "section" references are to sections of the Internal Revenue Code (Code) and all "§" references to sections of the Treasury Regulations (26 CFR Part 1) or (26 CFR Part 301).

The Instructions to Form 8996 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).

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 (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 § 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) 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).

CONCLUSION

The information and representations provided indicates that Taxpayer did not timely file its Form 8996 by the due date of its federal income tax return for Year 1 due to Taxpayer's reasonable reliance on Accountant P and Accountant P's failure to timely file a Form 8996 on behalf of Taxpayer. Based on the facts and information submitted and the representations made, including affidavits and representations under penalties of perjury, we conclude that Taxpayer has acted reasonably and in good faith, and that the granting of relief will not prejudice the interests of the Government. Consequently, the Form 8996 attached to Taxpayer's return for Year 1, filed Date 2, is considered timely filed, and Taxpayer has thereby made the election under section 1400Z-2 and section 1.1400Z2(d)-1(a)(2)(i) to self-certify as a QOF for Year 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 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 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.

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 representatives.

Sincerely,

Erika Reigle
Acting Branch Chief, Branch 8
Office of Chief Counsel
(Income Tax & Accounting)

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