IRS grants 60 days to self-certify as a QOF

Plain-English summary

A limited liability company intended to operate as a qualified opportunity fund and to invest in qualified opportunity zone property. Its preparer mistakenly indicated that the company did not intend to self-certify as a QOF and failed to attach Form 8996 to its partnership return. A later preparer discovered the error while preparing the next year's return, before the IRS contacted the company about it. The IRS found that the company acted reasonably and in good faith and that relief would not prejudice the government. It granted 60 days from the letter date to file Form 8996 with an amended return or administrative adjustment request, as applicable. The ruling did not determine whether the company's investments or its subsidiary otherwise met the QOF or qualified opportunity zone requirements.

Ruling snapshot

• Question: May the taxpayer file Form 8996 late to self-certify as a qualified opportunity fund?
• Outcome: Approved, with 60 days from the letter date to file Form 8996.
• Key authorities: IRC §§ 1400Z-2, 6501, and 6662; 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: 202636005
Third Party Communication: None
Release Date: 9/4/2026
Date of Communication: Not Applicable
Index Number: 9100.00-00, 1400Z.02-00
Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:ITA:B05
PLR-120036-25
Date:
June 08, 2026

Legend

Taxpayer = ----------------------------------------------------------------
Date 1 = ---------------------
Date 2 = --------------------------
Date 3 = --------------------------
Date 4 = -------------------------
Date 5 = ------------------
Month 1 = -----------
Year 1 = -------
Year 2 = -------
State = --------
Chief Financial Officer (CFO) = -------------
Entity 1 = ----------------------------------------------------------------
----
Tax Preparer = --------------------
Accounting Firm 1 = --------------------------
Accounting Firm 2 = ----------------------------------------------------------------
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Tax Managing Director = ----------------

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
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Opportunity Fund (QOF), as defined in § 1400Z-2(d) of the Internal Revenue Code (Code). The election would be effective as of Month 1 Year 1.

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 and uses the cash method as its overall method of accounting.

Taxpayer was formed on Date 2 for the purpose of investing in qualified opportunity zone property as defined in § 1400Z-2(d)(2). A copy of the Taxpayer’s limited liability company agreement reflects that the members of the Taxpayer intended for Taxpayer to qualify as a QOF within the meaning of § 1400Z-2(d)(1).

In tandem with the formation of Taxpayer, on Date 3 Entity 1 was formed for the purpose of serving as a qualified opportunity zone business. Entity 1 was to be fully funded by Taxpayer and operate underneath it.

Consistent with the intended structure, each of Taxpayer’s members filed a Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, with their federal income tax return for Year 1, listing Taxpayer as the QOF to which their deferred gains were contributed.

Tax Preparer of Accounting Firm 1 was engaged to prepare Form 1065, U.S. Return of Partnership Income, for both the Taxpayer and Entity 1 for Year 1 and to provide advice regarding compliance with federal tax filing requirements applicable to entities intended to operate within a qualified opportunity zone structure, including the requirements for certification as a QOF. As part of the engagement, Taxpayer provided Accounting Firm 1 with all relevant information regarding its organizational structure, its intended designation as a QOF, and the related transaction flow, including the formation and purpose of Entity 1 as a qualified opportunity zone business.

Accounting Firm 1 incorrectly prepared Taxpayer’s federal partnership return for Year 1 by marking “No” on Scheduled B (Form 1065), Question 25, noting that Taxpayer did not intend to self-certify as a QOF. Accounting Firm 1 also failed to prepare or attach Form 8996, Qualified Opportunity Fund, to the Taxpayer’s Form 1065 for Year 1.

Accounting Firm 1 also incorrectly prepared Entity 1’s return by marking “Yes” on Scheduled B (Form 1065), Question 25, noting that the Entity 1 intended to self-certify as a QOF and attaching Form 8996 to Entity 1’s Form 1065 for Year 1.
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On Date 4, Tax Managing Director of Accounting Firm 2 was engaged to prepare the Forms 1065 for the Taxpayer and Entity 1 for Year 2. While reviewing the Taxpayer’s Year 1 return in preparation for the Year 2 filing, Tax Managing Director discovered that the filing did not align with the Taxpayer’s intended structure. Specifically, Tax Managing Director identified that Accounting Firm 1 did not file Form 8996 for Taxpayer. Upon discovering the discrepancy, Tax Managing Director advised the Taxpayer regarding the appropriate corrective actions, including the 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 Taxpayer’s Year 1 and rule Taxpayer’s self- certification as a QOF effective as of Month 1 Year 1.

As of the submission of the ruling request on Date 1 and the submission of additional information on Date 5, Taxpayer represents that it has not been contacted or notified by the Service about its failure to make the regulatory election for Year 1. Taxpayer further represents that the granting of relief under § 301.9100-3 will not result in a lower tax liability in the aggregate for the years affected by the election.

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 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 1 return.

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
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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)(1) 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.

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).

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 § 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, as applicable.
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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 also express no opinion on whether any interest in any entity owned 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 further 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.

A copy of this letter must be attached to any income 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.

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,

Alina N. Lewandowski
Assistant to the Branch Chief, Branch 5
(Income Tax & Accounting)

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