Fund receives 60 days to make late QOF self-certification

Plain-English summary

A partnership formed to invest in qualified opportunity zone property intended to self-certify as a qualified opportunity fund, or QOF. Its accounting firm failed to attach Form 8996 to the partnership's timely filed return because of an inadvertent oversight during unusual staff turnover. The omission was discovered during a later internal review before the IRS contacted the partnership about it. The IRS found that the partnership acted reasonably and in good faith and that relief would not prejudice the government. It granted 60 days to file Form 8996 with an amended return or administrative adjustment request, but did not rule that the partnership or its investments otherwise met the QOF requirements.

Ruling snapshot

• Question: Could the partnership make its QOF self-certification election after the original return deadline?
• Outcome: Approved, with 60 days to file Form 8996
• Key authorities: IRC § 1400Z-2; Treas. Reg. §§ 1.1400Z2(d)-1(a)(2)(i), 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202631004 [Third Party Communication:
Release Date: 7/31/2026 Date of Communication: Month DD, YYYY]
Index Number: 9100.00-00, 1400Z.02-00
Person To Contact:
------------------------- ------------------------------------, ID No. ------
------------------------------------------ -----------------
---------------------------------------------------- Telephone Number:
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Refer Reply To:
CC:ITA:B01
PLR-116526-25
Date:
April 20, 2026

Legend

Taxpayer = --------------------------------------------------------------------
Date 1 = ---------------------------
Date 2 = --------------------
Date 3 = --------------------------
Date 4 = -------------------
Date 5 = -----------------
Date 6 = -----------------------
Date 7 = ---------------------
Month 1 = ------
Year 1 = -------
Year 2 = -------
Year 3 = -------
State = -------------
Managing Member = --------------------------
Partner = ------------------------
Tax Manager = ----------------------
Senior Manager = --------------------------
Accounting Firm 1 = ----------------
Corporation 1 = -----------------------------------
X = ---

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

This letter responds to Taxpayer’s request for a ruling dated Date 1. Specifically,
Taxpayer requests relief under §§ 301.9100-1 through 301.9100-3 of the Procedure and
Administration Regulations, granting an extension of time to make an election under
§ 1.1400Z2(d)-1(a)(2)(i) of the Income Tax Regulations to self-certify as a Qualified
Opportunity Fund (QOF), as defined in § 1400Z-2(d) of the Internal Revenue Code

PLR-116526-25 2

(Code). The election would be effective as of Date 2 for Taxpayer’s initial tax year
ending on Date 3.

                                    FACTS

Taxpayer’s submission includes documents and affidavits from individuals with
knowledge of Taxpayer’s affairs and tax matters. Taxpayer represents the facts as
follows:

Taxpayer is a limited liability company formed pursuant to the laws of State. Taxpayer
is treated as a partnership for federal income tax purposes. Taxpayer uses the accrual
method of accounting and reports income on a calendar year basis. Taxpayer is
managed by Managing Member and has X number of non-managing members
(collectively “member-owners”).

Taxpayer was formed in Year 1 for the purpose of investing in a qualified opportunity
zone property as defined in § 1400Z-2(d)(1). A copy of Taxpayer’s limited liability
company agreement reflects that the member-owners of the Taxpayer intended for
Taxpayer to qualify as a qualified opportunity fund, within the meaning of § 1400Z-
2(d)(1) and to meet the Code’s requirements pertaining to qualified opportunity funds by
investing and holding equity interests in one or more qualified opportunity zone
businesses within the meaning of § 1400Z-2(d)(3).

Accounting Firm 1 was engaged to prepare the federal partnership returns for various
entities related to investments in which the member-owners had controlling interests,
including Taxpayer’s Form 1065, U.S. Return of Partnership Income, for Year 2.
Partner, a member of Accounting Firm 1, managed and reviewed the work of the
professionals at Accounting Firm 1 who were responsible for the tax return preparation
services provided to Taxpayer. He was primarily responsible for the work product and
deliverables (relevant returns and forms) that were prepared for Taxpayer by the
professionals from Accounting Firm 1.

During the return preparation, Accounting Firm 1 requested and Taxpayer provided to
Accounting Firm 1 all information relevant to prepare a Form 1065 for Year 2, including
the limited liability company agreement reflecting that Taxpayer was formed for purpose
of investing in qualified opportunity zone property. Members of Accounting Firm 1
internally discussed completing and attaching Form 8996, Qualified Opportunity Fund,
to Taxpayer’s Form 1065 for Year 2 as needed for Taxpayer to elect to self-certify as a
QOF.

Due to inadvertent oversight of personnel from Accounting Firm 1, the firm failed to
prepare and attach Form 8996 to the Taxpayer’s initial Form 1065 for Year 2.
Accounting Firm 1’s oversight was caused by a sudden and unusual turnover in
personnel that included multiple core members of the firm’s tax preparation team,

PLR-116526-25 3

resulting in a strain on resources. Accounting Firm 1 experienced the loss of personnel
at a time relatively close to the due date for filing Taxpayer’s Year 2 Form 1065.

During Month 1, Year 3, while engaging in a comprehensive review of Taxpayer’s return
filing history, Tax Manager, who served as the tax manager of Corporation 1 and
Taxpayer’s new tax manager, discovered that the Form 1065 of the Taxpayer for Year 2
did not include Form 8996. On Date 4, Tax Manager contacted Senior Manager at
Accounting Firm 1 and communicated the discovery. Subsequently, Senior Manager
contacted Partner to discuss the oversight involving Taxpayer’s return and the failure
related to Form 8996. Partner then reviewed Taxpayer’s Year 2 return and confirmed
that it did not include the necessary Form 8996 that would have enabled Taxpayer to
elect to self-certify as a QOF.

In the early part of Date 5, Partner discussed with Tax Manager and Managing Member
the issues affecting the failure to include Form 8996 with Taxpayer’s filed Form 1065 for
Year 2. Partner informed them of the effect the filing issue would have on the ability of
Taxpayer to self-certify as a QOF. Managing Member promptly instructed Accounting
Firm 1 to prepare and file a request for relief under §§ 301.9100-1 and 301.9100-3 of
the Procedure and Administration Regulations.

Taxpayer requests that the Service grant Taxpayer an extension of time to file Form
8996 with its partnership return for tax year ending Date 3 and rule Taxpayer’s self-
certification as a QOF effective as of Date 2.

As of the submission of the ruling request on Date 1 and the submission of additional
information on Date 6 and Date 7, Taxpayer has not been contacted or notified by the
Service about its failure to make the regulatory election for Year 2.

                             LAW AND ANALYSIS

Section 1400Z-2(e)(4)(A) of the Code directs the Secretary to prescribe regulations or
rules for the certification of QOFs. Section 1.1400Z2(d)-1(a)(2) of the Income Tax
Regulations provides the rules for an entity to self-certify as a QOF.
Section 1.1400Z2(d)-1(a)(2)(i) provides that the entity electing to be certified as a QOF
must do so annually and timely 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.

To self-certify as a QOF, a taxpayer must file Form 8996, Qualified Opportunity Fund,
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 a Form 8996 by the due date of its income tax return
due to Accounting Firm 1's failure to prepare Form 8996 and attach it to Taxpayer’s
Year 2 return.

PLR-116526-25 4

Because § 1.1400Z2(d)-1(a)(2)(i) sets forth the manner and timing for an entity to self-
certify as a QOF, these elections are regulatory elections, as defined in § 301.9100-1(b)
of the Procedure and Administration Regulations.

Sections 301.9100-1 through 301.9100-3 provide the standards that 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 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.

Under § 301.9100-3(b) a taxpayer is deemed to have acted reasonably and in good
faith if the taxpayer requests relief before the failure to make the regulatory election is
discovered by the Service, or reasonably relied on a qualified tax professional, and the
tax professional failed to make, or advise the taxpayer to make, the election. However,
a taxpayer is not considered to have reasonably relied on a qualified tax professional if
the taxpayer knew or should have known that the professional was not competent to
render advice on the regulatory election or was not aware of all relevant facts.

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—

  (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 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 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).

PLR-116526-25 5

Section 301.9100-3(c)(1)(ii) provides that the interests of the Government are ordinarily
prejudiced if the taxable year in which the regulatory election should have been made or
any taxable year that would have been affected by the election had it been timely made
are closed by the period of limitations on assessment under § 6501(a) before the
taxpayer's receipt of a ruling granting relief under this section.

Based on the facts and information submitted and the representations made, we
conclude that Taxpayer has acted reasonably and in good faith, and that the granting of
relief would not prejudice the interests of the Government. Accordingly, based solely on
the facts and information submitted, and the representations made in the ruling request,
we grant Taxpayer an extension of 60 days from the date of this letter ruling to file Form
8996 to make the election to self-certify as a QOF under section 1400Z-2 and
§ 1.1400Z2(d)-1(a)(2)(i). The election must be made on a completed Form 8996
attached to Taxpayer’s amended tax return or administrative adjustment request (AAR),
as applicable.

This ruling is based upon facts and representations 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.
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 expressed or implied concerning the
tax consequences of any aspect of any transaction or item discussed or referenced in
this letter. Specifically, we express 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. We express no opinion regarding the
tax treatment of the instant transaction under the provisions of any other sections of the
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.

This ruling is 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,


                                  Gerald Semasek
                                  Senior Technician Reviewer, Branch 5
                                  Office of Associate Chief Counsel
                                  (Income Tax & Accounting)

PLR-116526-25 6

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