120-day relief for an LLC to make late corporate-classification and S corporation elections

Plain-English summary

An LLC is treated by default as a partnership (if it has multiple owners) or as a disregarded entity (if it has one), so to be taxed as an S corporation it must both elect to be classified as a corporation and elect S status. Here an LLC intended to be an S corporation as of a specific date but never filed either Form 2553 (the S election) or Form 8832 (the entity classification election). It asked the IRS for relief. The IRS granted the LLC 120 days from the date of the letter to file Form 8832 electing to be treated as an association taxable as a corporation under Treas. Reg. § 301.9100-3, and separately found reasonable cause under section 1362(b)(5) to treat a late S corporation election as timely, giving the LLC 120 days to file a completed Form 2553. Both are conditioned on the LLC and its shareholders filing consistent returns for all open years. The IRS expressed no opinion on whether the LLC actually qualifies to be an S corporation.

Ruling snapshot

• Question: Should the LLC get relief to make late elections to be classified as a corporation and taxed as an S corporation?
• Outcome: Approved (120 days for both the Form 8832 and the Form 2553 elections)
• Key authorities: IRC §§ 1362(b)(5), 1361(b); Treas. Reg. §§ 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: 202552019 Third Party Communication: None
Release Date: 12/26/2025 Date of Communication: Not Applicable
Index Number: 1362.01-03, 9100.00-00,
9100.31-00 Person To Contact:
-----------------, ID No. -----------------
---------------------------------- Telephone Number:
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---------------------------- Refer Reply To:
CC:PT&E:B03
PLR-105403-25
Date:
August 12, 2025

LEGEND

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

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

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

State = -------------

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

   This letter responds to a letter dated May 10, 2024, and subsequent

correspondence submitted on behalf of X by its authorized representative, requesting
that the Service grant X an extension of time under § 301.9100-3 of the Procedure and
Administration Regulations to file an election under § 301.7701-3 to be classified as an
association taxable as a corporation, and relief to file a late S corporation election under
§ 1362(b)(5) of the Internal Revenue Code ("Code").

                                              FACTS

   The information submitted states that X was formed as a limited liability company

on Date 1 under the laws of State. X represents that it was eligible and intended to be
treated as an S corporation effective Date 2. However, X failed to timely file Form 2553,
Election by a Small Business Corporation, or any separate Form 8832, Entity
Classification Election, effective Date 2.
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LAW AND ANALYSIS

    Section 301.7701-3(a) provides that a business entity that is not classified as a

corporation under § 301.7701-2(b)(1), (3), (4), (5), (6), (7), (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)) or a partnership. Elections are necessary only when an eligible
entity does not want to be classified under its default classification or when an eligible
entity chooses to change its classification.

  Section 301.7701-3(b)(1) provides that unless the entity elects otherwise, a

domestic eligible entity is: (i) a partnership if it has two or more members; or (ii)
disregarded as an entity separate from its owner if it has a single owner.

    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) by filling Form 8832 with the
appropriate service center. Section 301.7701-3(c)(1)(iii) provides that this election will
be effective on the date specified by the entity on Form 8832 or on the date filed if no
such election is specified. The date specified on Form 8832 cannot be more than 75
days prior to the date on which the election is filed.

   Section 301.7701-3(c)(1)(v)(C) provides that an eligible entity that timely elects to

be an S corporation under § 1362(a)(1) is treated as having made an election under
§ 301.7701-3 to be classified as an association, provided that (as of the effective date of
the election under § 1362(a)(1)) the entity meets all other requirements to qualify as a
small business corporation under § 1361(b). Subject to § 301.7701-3(c)(1)(iv), the
deemed election to be classified as an association will apply as of the effective date of
the S Corporation election and will remain in effect until the entity makes a valid election
under § 301.7701-3(c)(1)(i), to be classified as other than an association.

  Section 1362(a) provides that a small business corporation may elect to be an S

corporation.

   Section 1362(b)(1) provides that an election under § 1362(a) may be made by a

small business corporation for any taxable year at any time during the preceding taxable
year, or at any time during the taxable year and on or before the 15th day of the third
month of the taxable year.

   Section 1362(b)(3) provides that if (A) a small business corporation makes an

election under § 1362(a) for any taxable year, and (B) such election is made after the
15th day of the third month of the taxable year and on or before the 15th day of the third
month of the following taxable year, then such election is treated as made for the
following taxable year.

   Section 1362(b)(5) provides that if (A) an election under § 1362(a) is made for

any taxable year (determined without regard to § 1362(b)(3)) after the date prescribed
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by § 1362(b) for making the election for the taxable year or no election is made for any
taxable year, and (B) the Secretary determines that there was reasonable cause for the
failure to timely make the election, then the Secretary may treat the election as timely
made for the taxable year (and § 1362(b)(3) shall not apply).

   Section 301.9100-1(c) provides that the Commissioner may grant a reasonable

extension of time under the rules set form 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 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 rules governing extensions of time for
making certain elections. Section 301.9100-3 provides the standards the Commissioner
will use to determine whether to grant an extension of time for regulatory 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 the 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 grant of relief will not prejudice
the interests of the Government.

                                  CONCLUSION

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

X has satisfied the requirements of §§ 301.9100-1 and 301.9100-3. As a result, X is
granted an extension of time of 120 days from the date of this letter to file a Form 8832,
Entity Classification Election, with the appropriate service center to elect 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.

   In addition, based solely on the facts submitted and representations made, we

conclude that X has established reasonable cause for failing to make a timely election
to be an S corporation effective Date 2 and is eligible for relief under § 1362(b)(5).
Accordingly, provided that X makes an election to be S corporation by filing a completed
Form 2553 effective Date 2, along with a copy of this letter with the appropriate service
center within 120 days from the date of this letter, such election will be treated as timely
made for Date 2. A copy of this letter must accompany Form 2553.

   These rulings are contingent on X and its shareholders filing within 120 days

from the date of this letter all required returns for all open years consistent with the
requested relief. A copy of this letter must accompany any such returns.
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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 must be affected by these rulings.

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

federal tax consequences of the facts of this case under any other provision of the
Code. Specifically, we express or imply no opinion regarding X's eligibility to be an S
corporation. 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 us otherwise eligible
to make the election.

  The rulings contained in this letter are 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 request for rulings, it is subject to verification on
examination.

   These rulings are 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 the Power of Attorney on file with this office, a copy of this

letter is being sent to your authorized representative.

                                   Sincerely,


                                   Associate Chief Counsel
                                   (Passthroughs, Trusts and Estates)




                                By: __________________________
                                   Robert D. Alinsky
                                   Branch Chief, Branch 3
                                   (Passthroughs, Trusts and Estates)

Enclosure:
Copy of this letter for § 6110 purposes
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