Relief accepting a late Form 8996 to self-certify as a qualified opportunity fund

Plain-English summary

A qualified opportunity fund (QOF) is an investment vehicle that lets investors defer and reduce tax on capital gains they roll into designated low-income "opportunity zones" under § 1400Z-2. To be a QOF, an entity must self-certify each year by filing Form 8996 with its timely tax return. Here an LLC was formed to operate as a QOF, but it did not file Form 8996 for its second year because its accountant (Firm C) wrongly told the members the entity had no filing requirement since it had no activity to report. After a new firm caught the problem, the LLC filed a late Form 8996 and asked the IRS for relief under the § 301.9100-3 rules. The IRS found the taxpayer acted reasonably and in good faith (it reasonably relied on a tax professional who failed to advise it to make the election) and that relief would not prejudice the government, so it treated the late Form 8996 as timely filed. The ruling only grants that relief; it does not decide whether the entity actually qualifies as a QOF or whether any investments qualify.

Ruling snapshot

• Question: May the LLC get § 301.9100-3 relief so its late-filed Form 8996 self-certifying as a QOF is treated as timely?
• Outcome: Approved (late Form 8996 for Year 2 treated as timely filed).
• Key authorities: IRC § 1400Z-2(d), (e)(4); Treas. Reg. § 1.1400Z2(d)-1(a)(2); Treas. Reg. § 301.9100-1 through -3 (including -3(b)(1)(v)).

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202607006 Third Party Communication: None
Release Date: 2/13/2026 Date of Communication: Not Applicable
Index Number: 9100.00-00, 1400Z.02-00
Person To Contact:
[Redacted], ID No. [Redacted]
Telephone Number/Fax Number:
[Redacted]
Refer Reply To:
CC:ITA:B04
PLR-110144-25
Date:
November 18, 2025

                                                LEGEND

Taxpayer = [Redacted]

State = [Redacted]

Member A = [Redacted]

Member B = [Redacted]

Manager = [Redacted]

Firm C = [Redacted]

Firm D = [Redacted]

Firm E = [Redacted]

Date 1 = [Redacted]

Date 2 = [Redacted]

Date 3 = [Redacted]

Date 4 = [Redacted]

Date 5 = [Redacted]

Date 6 = [Redacted]

Year 1 = [Redacted]

Year 2 = [Redacted]

Year 3 = [Redacted]

Month 1 = [Redacted]

Month 2 = [Redacted]

Dear [Redacted]:

This letter responds to Taxpayer's request, dated Date 6, for a private letter ruling pursuant to §§ 301.9100-1 and 301.9100-3 of the Treasury Regulations.1 Specifically, Taxpayer requests an extension of time to make a regulatory election to (1) self-certify as a qualified opportunity fund (QOF) as defined in § 1400Z-2(d) of the Internal Revenue Code; and (2) be treated as a QOF, effective as of the month Taxpayer was formed, as provided under § 1400Z-2 and § 1.1400Z2(d)-1(a)(2).

This letter ruling is being issued electronically in accordance with Rev. Proc. 2025-1, 2025-1 I.R.B. 1. A paper copy will not be mailed to Taxpayer.

1 Unless otherwise specified, all "section" or "§" references are to sections of the Internal Revenue Code of 1986, as amended, Title 26 U.S.C., or the Treasury Regulations, Title 26 C.F.R. pt. 1 (Income Tax), or Title 26 C.F.R. pt. 301 (Procedure and Administration).

                                     FACTS

Taxpayer has represented that the facts are as follows: Member A had capital gains in Year 1. On or about Date 1, Member A engaged the services of Firm C to prepare and file the Year 1 Form 1040, U.S. Individual Income Tax Return, for Member A and Member B (collectively, Members). Firm C also was to prepare Members' Year 1 Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, to be filed with Members' Year 1 income tax return. Before the due date for filing Members' Year 1 income tax return, Firm C filed Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.

On Date 2, Taxpayer was organized as a limited liability company under the laws of State. As set forth in its certificate of formation and its operating agreement, Taxpayer was organized as a QOF for the purpose of investing in qualified opportunity zone property. Firm C filed Members' Year 1 Form 1040, together with the Year 1 Form 8997, on Date 3.

In late Year 2, Member A, Firm C and Firm E had conversations regarding Taxpayer's tax filing requirements for Year 2. Firm C advised Member A that Taxpayer had no tax filing requirements because Taxpayer had no record activity to report. Member A did not engage Firm C to file income tax returns for Members or Taxpayer for Year 2.

On or about Date 4, Members received correspondence from the Internal Revenue Service (Service) indicating that more information was needed in connection with the Year 1 Form 8997. Member A communicated this information to Firm C and believed that the issue was resolved by Firm C and that all missing information was provided to the Service.

Firm D was engaged in Month 1 of Year 3 to file various income tax returns for Members and Taxpayer. During the process of preparing the income tax returns, conversations with Member A revealed that Taxpayer did not timely file its Year 2 income tax return. In Month 2 of Year 3, Member A contacted Firm E to discuss the appropriate course of action, and Firm E advised that Taxpayer request an extension of time to certify as a QOF. Firm D filed Taxpayer's Year 2 return, together with Form 8996, Qualified Opportunity Fund, on Date 5.

                              LAW AND ANALYSIS

Section 1400Z-2(e)(4) directs the Secretary to prescribe such regulations as may be necessary to carry out the purposes of § 1400Z-2, including rules for the certification of QOFs. Section 1.1400Z2(d)-1(a)(2)(i) 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 (Commissioner) in the forms or instructions, or in publications or guidance of the Service published in the Internal Revenue Bulletin.

To self-certify as a QOF, a taxpayer must file Form 8996 with its tax return for the year to which the certification applies. The Form 8996 must be filed by the due date of the tax return (including extensions). The information provided indicates that Taxpayer did not file its Form 8996 by the due date of its income tax return because Taxpayer relied on Firm C's advice that an income tax return was not required for Year 2.

Section 301.9100-1(b) defines the term "regulatory election" as including any election whose due date is prescribed by a regulation published in the Federal Register. Inasmuch as § 1.1400Z2(d)-1(a)(2)(i) sets forth the manner and timing for electing to be a QOF and to self-certify as a QOF, these elections are regulatory elections.

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 a regulatory election. Section 301.9100-3(a) provides that requests for extensions of time for regulatory elections (other than automatic changes 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 granting 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.

Section 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 will be 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

Based solely on the information submitted and the representations made, 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. Taxpayer has satisfied the requirements of the regulations for the granting of relief, and Taxpayer's late-filed Form 8996 for Year 2 is considered timely filed.

                                     CAVEATS

This ruling is based upon the representations made and information submitted by Taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. This office has not verified any of the material submitted in support of the request for a ruling. As part of an examination process, the Service may verify the information, representations and other data submitted.

This ruling addresses the granting of relief under § 301.9100-3 as applied to the election to self-certify Taxpayer as a QOF by filing Form 8996 for Year 2. Specifically, we have no opinion, either express or implied, concerning whether any investments made into Taxpayer are qualifying investments as defined in § 1.1400Z2(a)-1(b)(34) or whether Taxpayer meets the requirements under § 1400Z-2 and the regulations thereunder to be a QOF. In addition, we express no opinion on whether any interest owned in any entity by Taxpayer qualifies as qualified opportunity zone property, as defined in § 1400Z-2(d)(2), or whether such entity would be treated as a qualified opportunity zone business, as defined in § 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 Treasury 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.

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.

In accordance with the power of attorney on file with this office, a copy of this letter is being sent to your authorized representatives.

                                               Sincerely,




                                               Stephen J. Toomey
                                               Senior Counsel, Branch 4
                                               Office of Associate Chief Counsel
                                               (Income Tax & Accounting)

cc: [Redacted]