9100 relief to file a late "check-the-box" election classifying a foreign entity as a partnership

Plain-English summary

This letter grants extra time to make a "check-the-box" entity classification election, a companion to another ruling issued the same week. Under the Section 7701 regulations, an eligible business entity elects how it is treated for federal tax purposes by filing Form 8832; a foreign entity with two or more members can elect to be treated as a partnership. Here, a foreign entity was eligible to be a partnership effective a certain date but failed to file Form 8832 on time. Because it represented that it acted reasonably and in good faith and that relief would not prejudice the government, the IRS granted 120 days under Treas. Reg. § 301.9100-3 to file the election, effective the intended date. The relief is contingent on the owners filing all required federal returns and information returns (such as Forms 5471, 8865, and 8858) consistent with the election within 120 days, and granting the extension is not a determination that the entity is actually eligible to make the election.

Ruling snapshot

• Question: May the foreign entity get an extension of time to file a late Form 8832 electing to be treated as a partnership?
• Outcome: approved (120-day extension granted)
• Key authorities: Treas. Reg. §§ 301.9100-1, -3; Treas. Reg. § 301.7701-3

Full text (IRS public release)

 Internal Revenue Service                                    Department of the Treasury
                                                             Washington, DC 20224

 Number: 202503003                                           Third Party Communication: None
 Release Date: 1/17/2025                                     Date of Communication: Not Applicable
 Index Number: 7701.00-00, 9100.31-00
                                                             Person To Contact:
 ------------------------------------------------            -------------------------, ID No. -----------------
 --------------------------------------                      -----------------------------------------------------
 -------------------------------------------                 Telephone Number:
 ------------------------------                              --------------------
 ----------------------------                                Refer Reply To:
 ------------------------------------------------            CC:PSI:B01

                                                             PLR-107146-24

                                                             Date:
                                                             October 16, 2024



                                                    LEGEND

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

 Country       = ---------------------------

 Date 1        = -----------------------


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

This responds to a letter dated April 8, 2024, requesting an extension of time under
§ 301.9100-3 of the Procedure and Administration Regulations to file entity classification
elections under § 301.7701-3.

                                                    FACTS

The information submitted states that X was formed under the laws of Country on Date

1. X represents that it is a foreign entity eligible to elect to be classified as a partnership
for federal tax purposes as of Date 1. However, X failed to timely file Form 8832, Entity
Classification Election, to be treated as a partnership effective Date 1.

X represents that it acted reasonably and in good faith. X also represents that granting
the requested relief will not prejudice the interests of the government.
PLR-107146-24                                  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)(2)(i) provides that, except as provided in § 301.7701-3(b)(3),
unless the entity elects otherwise, a foreign eligible entity is (A) a partnership if it has
two or more members and at least one member does not have limited liability; (B) an
association if all members have limited liability; or (C) disregarded as an entity separate
from its owner if it has a single owner that does not have limited liability.

Section 301.7701-3(b)(2)(ii) provides, in part, that for purposes of § 301.7701-3(b)(2)(i),
a member of a foreign eligible entity has limited liability if the member has no personal
liability for the debts of or claims against the entity by reason of being a member.

Section 301.7701-3(c)(1)(i) provides, in part, that 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 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. If an
election specifies an effective date more than 75 days prior to the date on which the
election is filed, it will be effective 75 days prior to the date it was filed.

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 not more than 6 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 the election.
PLR-107146-24                                3

Section 301.9100-2 provides the standards the Commissioner will use to determine
whether to grant an automatic extension of time for making certain elections.

Section 301.9100-3 provides the guidelines for granting extensions of time for making
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 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 facts submitted and the representations made, we conclude that
the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied. As a result, X
is granted an extension of time of 120 days from the date of this letter to make an
election under § 301.7701-3 to be treated as a partnership for federal tax purposes
effective Date 1. X must make the election by filing a properly executed Form 8832 with
the appropriate service center. A copy of this letter should be attached to the Form
8832.

This ruling is contingent on the owners of X filing, within 120 days of the date of this
letter, all required federal income tax returns and information returns (including
amended returns) consistent with the requested relief granted in this letter. These
returns may include, but are not limited to, the following forms: (i) Form 5471,
Information Return of U.S. Persons With Respect to Certain Foreign Corporations, (ii)
Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, and
(iii) Form 8858, Information Return of U.S. Persons With Respect to Foreign
Disregarded Entities, such that these forms reflect the consequences of the relief
granted in this letter. A copy of this letter should be attached to any such returns.

If applicable, X’s election is disregarded for purposes of determining the amounts of all
§ 965 elements of all United States shareholders of X if the election otherwise would
change the amount of any § 965 element of any such United States shareholder. See
§ 1.965-4(c)(2).

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 provision of the
Code and regulations thereunder. 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.

In addition, we express no opinion concerning the assessment of any interest, additions
to tax, additional amounts, or penalties for failure to file a timely income tax or
information return with respect to any taxable year that may be affected by this ruling.
PLR-107146-24                                 4

For example, we express no opinion as to whether a taxpayer is entitled to relief from
any penalty on the basis that the taxpayer had reasonable cause for failure to file timely
any income tax or information returns.

The ruling contained in this letter is based on 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 to the taxpayer requesting it. Section 6110(k)(3) provides that it
may not be used or cited as precedent.

In accordance with a power of attorney on file with this office, we are sending a copy of
this letter ruling to your authorized representative.


                                       Sincerely,


                                       Holly Porter
                                       Associate Chief Counsel
                                       (Passthroughs & Special Industries)



                                  By: _____________________________
                                      Joy C. Spies
                                      Senior Technician Reviewer, Branch 1
                                      Office of Associate Chief Counsel
                                      (Passthroughs & Special Industries)

Enclosure
      Copy of letter for § 6110 purposes
PLR-107146-24                                5


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