An LLC receives extensions for corporate classification, S corporation, and QSub elections

Plain-English summary

An LLC intended to elect association status and S corporation treatment from its formation date but inadvertently missed the filing deadline. After a reorganization made it the sole owner of two existing S corporations, it also missed the deadline to elect qualified subchapter S subsidiary treatment for those companies. The IRS found reasonable cause for the late S corporation election and found that the regulatory standards for the other late elections were satisfied. It gave the parent LLC 120 days to file Form 8832, Form 2553, and Forms 8869 with the requested effective dates. The relief is contingent on the LLC and its owners timely filing all required returns consistently with the ruling, and the IRS did not decide whether the entities otherwise qualify for S corporation or QSub status.

Ruling snapshot

• Question: May the LLC make late entity-classification, S corporation, and QSub elections with their intended effective dates?
• Outcome: Approved. The LLC has 120 days to file the required election forms and any necessary consistent returns.
• Key authorities: IRC §§ 1361(b)(3), 1362(b)(5); Treas. Reg. §§ 1.1361-3(a), 301.7701-3, 301.9100-1, and 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202638001
Third Party Communication: None
Release Date: 9/18/2026
Date of Communication: Not Applicable
Index Number: 9100.31-00, 9100.00-00,
1362.00-00, 1362.01-00,
Person To Contact:
1362.01-03
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Telephone Number:
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------------------------------------------------------------ Refer Reply To:
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CC:PT&E:B03
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PLR-120481-25
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PLR-105144-26
PLR-105145-26
Date:
June 17, 2026

Legend

X = -----------------
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Y = ----------------------
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Z = ----------------------
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Date 1 = -----------------------

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

Date 3 = ---------------------------

Date 4 = -----------------

Date 5 = ----------------------

Date 6 = ------------------

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

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

This letter responds to a letter dated December 16, 2025, and subsequent correspondence, submitted on behalf of X, requesting rulings under § 1362(b)(5) of the Internal Revenue Code (Code) and § 301.9100-3 of the Procedure and Administration Regulations.

FACTS

Y was formed as a limited liability company organized under the laws of State on Date 1, and elected to be an S corporation on Date 2. Z was formed as a limited liability company organized under the laws of State on Date 3, and elected to be an S corporation on Date 5. X was formed as a limited liability company organized under the laws of State on Date 4. X intended to elect to be classified as an association taxable as a corporation and to elect to be treated as an S corporation for federal tax purposes effective Date 4. However, X inadvertently failed to timely file the Form 2553, Election by a Small Corporation, including a deemed election to be classified as an association taxable as a corporation.

Through a reorganization X became the sole owner of Y and Z on Date 6. X intended to treat Y and Z as qualified subchapter S subsidiaries (QSubs) under § 1361(b)(3) effective Date 6. However, X inadvertently failed to timely file a Form 8869, Qualified Subchapter S Subsidiary Election, for both Y and Z, effective Date 6.

LAW AND ANALYSIS

Section 1361(a)(1) provides that the term “S corporation” means, with respect to any taxable year, a small business corporation for which an election under § 1361(a) is in effect for such year.

Section 1361(b)(1) provides that the term “small business corporation” means a domestic corporation which is not an ineligible corporation which does not (A) have more than 100 shareholders, (B) have as a shareholder a person (other than an estate, a trust described in § 1361(c)(2), or an organization described in § 1361(c)(6)) who is not an individual, (C) have a nonresident alien as a shareholder, and (D) have more than one class of stock.

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) such election is made after the 15th day of the third month of the taxable year and on or before the 15th day of the

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third month of the following taxable year, then such election is 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 such election for such taxable year or no such election is made for any taxable year, and (B) the Secretary determines that there was reasonable cause for the failure to timely make such election, the Secretary may treat such an election as timely made for such taxable year (and § 1362(b)(3) shall not apply).

Section 1361(b)(3)(A) provides that, except as provided in regulations prescribed by the Secretary, for purposes of the Code (i) a corporation which is a QSub shall not be treated as a separate corporation, and (ii) all assets, liabilities, and items of income, deduction, and credit of a QSub shall be treated as assets, liabilities, and such items (as the case may be) of the S corporation.

Section 1361(b)(3)(B) defines a QSub as a domestic corporation which is not an ineligible corporation (as defined in § 1361(b)(2)), if (i) 100 percent of the stock of the corporation is held by the S corporation, and (ii) the S corporation elects to treat the corporation as a QSub.

Section 1.1361-3(a) of the Income Tax Regulations prescribes the time and manner for making a QSub election. Section 1.1361-3(a)(4) provides that a QSub election cannot be effective more than two months and 15 days prior to the date of filing. The proper form for making a QSub election is Form 8869, Qualified Subchapter S Subsidiary Election.

Section 1.1361-3(a)(6) provides that an extension of time to make a QSub election may be available under §§ 301.9100-1 and 301.9100-3.

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. 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)) or a partnership. Elections are necessary only when an eligible entity chooses to be classified initially as other than the default classification or when an eligible entity chooses to change its classification.

Section 301.7701-3(b)(1) provides that, 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 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

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under § 301.7701-3(b) by filing Form 8832, Entity Classification Election, with the service center designated on Form 8832.

Section 301.7701-3(c)(1)(iii) provides 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 before the date on which the election is 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 in exercising the Commissioner’s discretion 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 no 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 the election. 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 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 information submitted and the representations made, we conclude that X has satisfied the requirements of §§ 301.9100-1 and 301.9100-3. Therefore, X is granted 120 days from the date of this letter to file Form 8832 with the appropriate service center and elect to be classified as an association taxable as a

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corporation for federal tax purposes, effective Date 4. A copy of this letter should be attached to the Form 8832.

Based solely on the information submitted and the representations made, we conclude that X has satisfied the requirements of § 1362(b)(5). Therefore, X is granted 120 days from the date of this letter to file Form2553 with the appropriate service center and elect to be treated as an S corporation for federal tax purposes, effective Date 4. A copy of this letter should be attached to the Form 2553.

Based solely on the information submitted and the representations made, we conclude that X has satisfied the requirements of §§ 301.9100-1 and 301.9100-3 with respect to Y and Z. Additionally, X is granted 120 days from the date of this letter to file Forms 8869 with the appropriate service center and elect to treat Y and Z as QSubs for federal tax purposes, effective Date 6. A copy of this letter should be attached to the Forms 8869.

This ruling is contingent on X and its owners filing, within 120 days from the date of this letter to the extent necessary or appropriate, all required federal income tax returns and information returns (including amended returns) consistent with the requested relief granted in this letter.

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 provisions of the Code. Specifically, we express or imply no opinion regarding X’s, Y’s and Z’s eligibility to be S corporations or Y’s and Z’s eligibility to be QSubs.

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 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 letter to your authorized representatives.

PLR-120481-25, 105144-26, 105145-26
6

Sincerely,

Associate Chief Counsel
(Passthroughs, Trusts, and Estates)

By: _______ Richard T. Probst
Senior Technician Reviewer, Branch 3
Office of the Associate Chief Counsel
(Passthroughs, Trusts, and Estates)

Enclosure
Copy for § 6110 purposes

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