IRS grants extra time for opportunity fund self-certification

Plain-English summary

A partnership intended to operate as a qualified opportunity fund and invested
in a company it represented was a qualified opportunity zone business. The
accounting firm expected to prepare the partnership's return ended its
relationship with that company after encountering record and financial
reliability problems. The company did not timely provide the partnership's
Schedule K-1, and the partnership failed to timely file both its return and Form
8996. The IRS found that the failure resulted from events outside the
partnership's control and granted 60 days to file Form 8996 with its return. The
ruling did not extend the deadline for Form 1065 or decide whether the
partnership otherwise qualified as an opportunity fund.

Ruling snapshot

• Question: May the partnership receive extra time to file Form 8996 and self-certify as a qualified opportunity fund after outside events delayed its return?
• Outcome: Approved
• Key authorities: IRC § 1400Z-2(d); Treas. Reg. §§ 1.1400Z2(d)-1(a)(2)(i) and 301.9100-1 through 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202630009
Release Date: 7/24/2026
Index Number: 9100.00-00, 1400Z.02-00

Third Party Communication: None
Date of Communication: Not Applicable

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

--------------------------
----------------------------------
-----------------------------------
----------------------

Refer Reply To:
CC:ITA:B08
PLR-118834-25

Date:
April 24, 2026

LEGEND

Taxpayer = ------------------------------------------------------------
Member 1 = ----------------------
Member 2 = ----------------------
Accounting Firm 1 = ----------------------------------------
Accounting Firm 2 = ----------------------------------
Company = -------------------------------
State = -----------
Amount 1 = ---------------
Amount 2 = ----------
Amount 3 = ----------------
Month 1 = --------------
Date 1 = ------------------------
Date 2 = -------------------
Date 3 = -----------------
Year 1 = ---------------------------

PLR-118834-25
2

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

This letter responds to Taxpayer’s request for a letter ruling dated Date 1. Taxpayer
requests relief under sections 301.9100-1 and 301.9100-3¹ of the Procedure and
Administration Regulations for an extension of time to file a Form 8996, Qualified
Opportunity Fund, to self-certify as a qualified opportunity fund, as defined in section
1400Z-2(d) (QOF), effective as of Month 1, the first month in which Taxpayer intended
to be a QOF.

FACTS

According to the information and representations provided, Taxpayer, a limited liability
company classified as a partnership for federal tax purposes, was formed on Date 2 in
State for the purpose of investing in qualified opportunity zone property within the
meaning of section 1400Z-2(d).

Taxpayer represents that it intended to elect to be a QOF beginning in Month 1. To
ensure Taxpayer would be classified as a partnership and qualify as a QOF, Taxpayer
accepted capital contributions from Member 1 totaling Amount 1 for Year 1. Taxpayer
also accepted capital contributions from Member 2 totaling Amount 2 for Year 1.
Following these contributions, Taxpayer made its own contributions to Company totaling
Amount 3 for Year 1. Taxpayer represents that Company is a qualified opportunity zone
business as defined in section 1400Z-2(d)(3).

Taxpayer approached Accounting Firm 1, who prepared federal and state tax returns for
Company, to discuss preparing Taxpayer’s Year 1 tax returns. Accounting Firm was
aware that Taxpayer was a newly formed QOF and expressed willingness to take
Taxpayer as a client. On Date 3, Member 1 reached out to Accounting Firm to inquire
about forming a relationship, with the intent that Accounting Firm 1 prepare Taxpayer’s
Year 1 tax returns. Accounting Firm advised Member 1 to file an extension and
reconnect at a later date. Subsequently, Accounting Firm attempted to prepare
Company’s tax returns for Year 1 and prior years; however, it ran into issues concerning
records and financial reliability. As a result, Accounting Firm terminated its relationship
with Company, ultimately resulting in Company’s tax return not being timely filed.

Taxpayer represents that the termination of Accounting Firm 1 and Company’s
relationship prevented Taxpayer from engaging Accounting Firm 1 to prepare their Year
1 tax returns. Further, the termination of the relationship prevented Company from
issuing a Year 1 Form K-1 to Taxpayer that would allow for the filing of its Year 1 tax
returns. As a result, Taxpayer erroneously did not timely file their Year 1 tax returns nor
the required Form 8996. Taxpayer and Company later engaged Accounting Firm 2.
Company’s Year 1 tax returns were filed, and a Form K-1 was provided to Taxpayer.
Accounting Firm 2 has prepared Taxpayer’s Year 1 tax returns and Taxpayer submitted

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).

PLR-118834-25
3

this private letter ruling pursuant to §§ 301.9100-1 and 301.9100-3 to request relief to
make a late election to certify as a QOF.

Taxpayer represents that granting relief under § 301.9100-3 will not result in a lower tax
liability for the years affected by the election (taking into account the time value of
money).

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 section 1400Z-2, including rules for the
certification of QOFs. Section 1.1400Z2(d)-1(a)(2)(i) of the 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. The Form 8996 Instructions 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 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) of the regulations 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—

PLR-118834-25
4

       (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) of the regulations 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) of the regulations 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 indicate that Taxpayer did not file its
Form 8996 by the due date of its federal income tax return for Year 1 because Taxpayer
was prevented by events outside its control. Based on the information provided,
including affidavits and representations under penalties of perjury, we conclude that
Taxpayer has acted reasonably and in good faith, and that granting a reasonable
extension of time for Taxpayer to file Form 8996 will not prejudice the interests of the
Government. Accordingly, we grant Taxpayer an extension of 60 days from the date of
this letter ruling to file a Form 8996 to make the election to self-certify as a QOF under
section 1400Z-2(d) and section 1.1400Z2(d)-1(a)(2)(i). The election must be made on a
completed Form 8996 attached to Taxpayer’s Year 1 tax return. This letter ruling grants
an extension of time to file a Form 8996. This letter ruling does not grant an extension
of time to file Taxpayer’s Form 1065.

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.

PLR-118834-25
5

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 Internal
Revenue 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. Taxpayers that have previously filed a return or administrative adjustment
requests attaching Form 8996 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 previous filing(s).

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 § 6110.

Sincerely,

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

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