LLC receives 120 days for a late corporate-classification election

Plain-English summary

A limited liability company intended to be classified as an association taxable as a corporation from its requested effective date but failed to timely file Form 8832. Based solely on the submitted facts and representations, the IRS concluded that the company met the requirements for discretionary relief under the Section 301.9100 regulations. It granted 120 days from the letter's date to file Form 8832 with the appropriate service center and attach a copy of the ruling. The extension provides additional time to make the election but does not independently determine that the company is otherwise eligible for corporate classification.

Ruling snapshot

• Question: May an LLC receive additional time to elect association-taxable-as-a-corporation status?
• Outcome: approved; 120-day extension granted
• Key authorities: Treas. Reg. §§ 301.7701-2, 301.7701-3, 301.9100-1, 301.9100-3

Full text (IRS public release)

 Internal Revenue Service                          Department of the Treasury
                                                   Washington, DC 20224

 Number: 202326014                                 Third Party Communication: None
 Release Date: 6/30/2023                           Date of Communication: Not Applicable
 Index Numbers: 7701.00-00, 9100.00-00,
               9100.31-00                          Person To Contact:
                                                   --------------------, ID No. -----------------
 ---------------------                             Telephone Number:
 ---------------------------------------           --------------------
 -----------------------                           Refer Reply To:
 -----------------------------                     CC:PSI:B03
 ----------------------------------                PLR-120468-22
                                                   Date:
                                                   April 5, 2023




 LEGEND

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

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

 Date     = ------------------------




Dear --------------

      This letter responds to a letter dated October 14, 2022, and subsequent
correspondence, submitted on behalf of X by its authorized representative, requesting
an extension of time under § 301.9100-3 of the Procedure and Administration
Regulations for X to file an election under § 301.7701-3 to be classified as an
association taxable as a corporation for federal tax purposes.

                                           FACTS

       The information submitted discloses that X was formed as a limited liability
company under the laws of State on Date. X intended to be classified as an association
taxable as a corporation for federal tax purposes effective Date. However, X failed to
timely file Form 8832, Entity Classification Election, electing to be classified as an
association taxable as a corporation for federal tax purposes effective Date.
PLR-120468-22                                 2




                                  LAW AND ANALYSIS

        Section 301.7701-3(a) provides, in part, 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 at least two members can elect to be classified as
either an association (and thus a corporation under § 301.7701-2(b)(2)) or a
partnership, and an eligible entity with a single owner can elect to be classified as an
association 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, except as provided in
§ 301.7701-3(c)(1)(iv) and (v), 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, in part, 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 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.

       Under § 301.9100-1(c), the Commissioner may grant a reasonable extension of
time to make a regulatory election, or a statutory election (but no more than six months
except in the case of a taxpayer who is abroad), under all subtitles of the Internal
Revenue Code (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 regulatory elections that
do not meet the requirements of § 301.9100-2.

      Section 301.9100-3(a) provides that requests for relief under § 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
PLR-120468-22                                 3

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. Consequently, we
grant X an extension of time of one hundred twenty (120) days from the date of this
letter to file 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. A copy of
this letter should be attached to the Form 8832.

       Except for the specific ruling above, we express or imply no opinion concerning
the federal tax consequences of the facts of this case under any other provision of the
Code. 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.

      This ruling is directed only to the taxpayer requesting it. According to
§ 6110(k)(3) of the Code, this ruling may not be used or cited as precedent.

       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.

        Under a power of attorney on file with this office, we are sending a copy of this
letter to X's authorized representatives.

                                              Sincerely,

                                              Associate Chief Counsel
                                              (Passthroughs & Special Industries)



                                          By:_____________________________
                                             Mary Beth Carchia
                                             Senior Technician Reviewer, Branch 3
                                             Office of Associate Chief Counsel
                                             (Passthroughs & Special Industries)

Enclosure:
       Copy of this letter for § 6110 purposes
PLR-120468-22   4

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