120 days granted for an LLC to make a late election to be reclassified as a partnership after revoking its S election

Plain-English summary

An LLC had elected to be an S corporation, which under the classification
rules also meant it was treated as a corporation for federal tax purposes.
Later it revoked the S election and wanted to be treated as a partnership
instead, which requires filing Form 8832. The LLC intended to make that
change but never filed an effective Form 8832, even though it and its owners
had treated it as a partnership ever since. It asked the IRS for more time
under Treasury Regulation § 301.9100-3. A wrinkle: normally an entity that
changes its classification by election cannot change again for 60 months,
but the IRS concluded that limit did not apply here because the LLC's
original corporate classification came automatically with its S election on
its formation date, not from a separate change election. Finding the company
acted reasonably and in good faith, the IRS granted 120 days to file the late
Form 8832 to be classified as a partnership. Note that switching from
association to partnership is treated as a deemed liquidation of the
corporation followed by contribution of the assets to a new partnership.

Ruling snapshot

• Question: May an LLC that revoked its S election get an extension of
  time to make a late Form 8832 election to be classified as a partnership,
  and does the 60-month re-election limit bar it?
• Outcome: Approved (60-month limit held inapplicable; 120-day extension
  granted)
• Key authorities: Treas. Reg. § 301.7701-3 (including (c)(1)(iv),
  (c)(1)(v)(C), and (g)); Treas. Reg. §§ 301.9100-1 through 301.9100-3

Full text (IRS public release)

 Internal Revenue Service                                       Department of the Treasury
                                                                Washington, DC 20224

 Number: 202614006                                              Third Party Communication: None
 Release Date: 4/3/2026                                         Date of Communication: Not Applicable
 Index Number: 7701.00-00, 9100.00-00,
               9100.31-00                                       Person To Contact:
                                                                -----------------, ID No. -----------------
 ----------------------------------------------------------     Telephone Number:
 ------------------------------------------------------------   ---------------------
 ---------                                                      Refer Reply To:
 ------------------------------------------------------         CC:PT&E:B03
 ----------------------------------------                       PLR-111225-25
 -----------------------------------                            Date:
                                                                December 30, 2025




LEGEND

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

 State             =     --------

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

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


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

        This letter is in response to a letter dated June 2, 2025, submitted on behalf of X
by its authorized representative, requesting an extension of time under § 301.9100-3 of
the Procedure and Administration Regulations for X to file an election under
§ 301.7701-3 to be classified as a partnership for federal tax purposes.

                                                     FACTS

        According to the information submitted, X was formed as a limited liability
company under the laws of State on Date 1. X elected to be an S corporation effective
Date 1. Under § 301.7701-3(c)(1)(v)(C), X is treated as having made an election to be
classified as an association taxable as a corporation for federal tax purposes effective
purposes effective Date 1. X subsequently revoked its S election effective Date 2. In
connection with the revocation, X represents that it intended to elect to change its
classification to a partnership effective Date 2. However, X failed to file an effective
PLR-111225-25                                  2

Form 8832, Entity Classification Election, electing to be classified as a partnership Date
2. Since Date 2, X and its owners have consistently treated X as a partnership.

                                    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 as provided in §
301.7701-3. 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) provides that except as provided in § 301.7701-3(b)(3),
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, in part, that, except as provided in
§ 301.7701-3(c)(1)(iv) and (v), 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, in part, 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 301.7701-3(c)(1)(iv) provides that if an eligible entity makes an election
under § 301.7701-3(c)(1)(i) to change its classification (other than an election made by
an existing entity to change its classification as of the effective date of § 301.7701-3),
the entity cannot change its classification by election again during the sixty months
succeeding the effective date of the election. However, the Commissioner may permit
the entity to change its classification by election within the sixty months if more than fifty
percent of the ownership interests in the entity as of the effective date of the subsequent
election are owned by persons that did not own any interests in the entity on the filing
date or on the effective date of the entity's prior election. An election by a newly formed
eligible entity that is effective on the date of formation is not considered a change for
purposes of § 301.7701-3(c)(1)(iv).

      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
PLR-111225-25                                  3

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 301.7701-3(g)(1)(ii) provides that if an eligible entity classified as an
association elects under § 301.7701-3(c)(1)(i) to be classified as a partnership, the
following is deemed to occur: The association distributes all of its assets and liabilities to
its shareholders in liquidation of the association, and immediately thereafter, the
shareholders contribute all of the distributed assets and liabilities to a newly formed
partnership.

        Section 301.7701-3(g)(3)(i) provides that an election under § 301.7701-3(c)(1)(i)
that changes the classification of an eligible entity for federal tax purposes is treated as
occurring at the start of the day for which the election is effective. Any transactions that
are deemed to occur under § 301.7701-3(g) as a result of a change in classification are
treated as occurring immediately before the close of the day before the election is
effective.

       Section 301.9100-1(c) provides that Commissioner may grant a reasonable
extension of time under the rules set forth 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 Internal Revenue Code (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.

        Section 301.9100-2 provides the rules governing automatic 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.
PLR-111225-25                                  4

                                      CONCLUSION

       Based solely on the facts submitted and representations made, we conclude that
the sixty-month limitation in § 301.7701-3(c) (1)(iv) does not apply to X's election to
change its classification to a partnership effective Date 2 because X's deemed election
to be classified as an association was effective on X's date of formation. We also
concluded 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 with the appropriate service center to elect to be classified as a partnership
for federal tax purposes effective Date 2. A copy of this letter should be attached to the
Form 8832.

       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.

       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 an 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. 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 X’s authorized representative.


                                       Sincerely,

                                       Associate Chief Counsel
                                       (Passthroughs, Trusts, and Estates)



                                By:    _______________________________
                                       Robert D. Alinsky
                                       Branch Chief, Branch 3
                                       Office of Associate Chief Counsel
                                       (Passthroughs, Trusts, and Estates)
PLR-111225-25                                            5

Enclosure:
Copy of this letter for § 6110 purpose


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