IRS grants an LLC late relief to be taxed as a corporation and elect S-corp status

Plain-English summary

A single-owner limited liability company meant to be treated as a corporation and to elect S corporation status (which lets income pass through to the owner without a separate corporate-level tax) effective as of a specific date. To do that it needed to file Form 2553, which also counts as a deemed election to be treated as a corporation under Treas. Reg. § 301.7701-3(c)(1)(v)(C). The company never filed Form 2553 or a separate Form 8832 on time. It asked the IRS for two forms of relief: an extension under the "9100 relief" rules (Treas. Reg. § 301.9100-3) to elect corporate classification, and late S-election relief under IRC § 1362(b)(5), which the IRS grants when there was reasonable cause for missing the deadline. The IRS granted both. The company has 120 days from the date of the letter to file Form 8832 (electing to be taxed as a corporation) and Form 2553 (electing S status); if it does, the S election is treated as timely. The IRS did not rule on whether the company otherwise qualifies as an S corporation.

Ruling snapshot

• Question: Should the LLC get an extension to elect corporate classification and late relief to elect S corporation status effective as of the intended date?
• Outcome: Approved (120 days to file Form 8832 and Form 2553; S election treated as timely).
• Key authorities: IRC § 1362(b)(5); Treas. Reg. § 301.7701-3(c)(1)(v)(C); Treas. Reg. §§ 301.9100-1 through 301.9100-3; IRC § 1361(b).

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202625015
Release Date: 6/18/2026
Index Numbers: 1362.01-03, 9100.31-00

Third Party Communication: None
Date of Communication: Not Applicable

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

Refer Reply To:
CC:PT&E:B03
PLR-116236-25
Date:
March 24, 2026

LEGEND

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

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

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

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

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

   This letter responds to a letter dated August 25, 2025, and subsequent correspondence, submitted on behalf of X, requesting an extension of time under § 301.9100-3 of the Procedure and Administration Regulations to file an election under § 301.7701-3(c) to be classified as an association taxable as a corporation for federal tax purposes, 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 State limited liability company on Date 1. X represents that it intended to be classified as an association taxable as a corporation and to elect to be an S corporation for federal tax purposes effective Date 2. However, X failed to timely file Form 2553, Election by a Small Business Corporation, including the deemed election to be classified as an association taxable as a corporation under §301.7701-3(c)(1)(v)(C), or any separate Form 8832, Entity Classification Election, effective Date 2.

                                LAW AND ANALYSIS

  Section 1362(a)(1) provides that a small business corporation may elect, in accordance with the provisions of § 1362, 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 (A) at any time during the preceding taxable year, or (B) 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) the 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 the election shall be 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 by § 1362(b) for making the election for the taxable year or no § 1362(a) 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 301.7701-3(a) provides that a business entity that is not classified as a corporation under § 301.7701-2(b)(1), (3), (4), (5), (6), (7), or (8) (an eligible entity) can elect its classification for federal tax purposes as provided in § 301.7701-3. An eligible entity with a single owner can elect to be classified as an association (and thus a corporation under § 301.7701-2(b)(2)) 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 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 that an election 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. If an election specifies an effective date more than 75 days prior to the date on which the election is filed, it will be effective 75 days prior to the date it was 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 301.9100-1(c) provides that the Commissioner may grant a reasonable extension of time 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 an election. Section 301.9100-2 provides automatic extensions of time for making certain elections. Section 301.9100-3 provides extensions of time for making 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 the taxpayer acted reasonably and in good faith, and 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 with the appropriate service center to elect to be classified as an association taxable as a corporation for federal tax purposes effective Date 2. A copy of this letter should be attached to 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. Accordingly, we conclude that X is eligible for relief under § 1362(b)(5). As a result, if X makes an election to be an S corporation effective Date 2 by filing a completed Form 2553 with the appropriate service center within 120 days from the date of this letter, then such election will be treated as timely made. A copy of this letter should be attached to Form 2553.

   Except as specifically set forth above, we express or imply no opinion concerning the federal tax consequences of the facts described above under any other provision of the Code and regulations thereunder. Specifically, we express or imply no opinion concerning whether X otherwise qualifies as an S corporation for federal tax purposes. 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.

   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 this ruling. For example, we express no opinion as to whether a taxpayer is entitled to relief from any penalty on the basis that the taxpayer had reasonable cause for failure to file timely any income tax or information returns.

   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 who requested 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, we are sending a copy of this ruling to X's authorized representative.

                                          Sincerely,

                                          Associate Chief Counsel
                                          (Passthroughs, Trusts, and Estates)



                                      By: _____________________________
                                         Elizabeth V. Zanet
                                         Senior Technician Reviewer, Branch 3
                                         Office of Associate Chief Counsel
                                         (Passthroughs, Trusts, and Estates)

Enclosure:
Copy of this letter for § 6110 purposes

cc: -----------------------
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