9100 relief to file a late election treating a foreign entity as a corporation

Plain-English summary

A business entity can choose how it is taxed by "checking the box" on Form 8832, an election called an entity classification election. An eligible foreign entity can elect to be treated as an association taxable as a corporation for U.S. tax purposes, but the election has to be filed on time. Here, a foreign entity wanted corporate treatment effective a specific date and had already filed all of its federal returns consistent with being a corporation, but it never filed the required Form 8832 by the deadline. It asked the IRS for more time under Treasury Regulation Section 301.9100-3, which lets the Commissioner extend a missed regulatory election when the taxpayer acted reasonably and in good faith and granting relief will not harm the government's interests. The IRS found those standards met and gave the entity 120 days from the date of the letter to file Form 8832 electing corporate treatment as of the requested date. The relief only covers the filing deadline; the IRS did not decide whether the entity is otherwise eligible to make the election.

Ruling snapshot

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

Full text (IRS public release)

 Internal Revenue Service                                    Department of the Treasury
                                                             Washington, DC 20224

 Number: 202505003                                           Third Party Communication: None
 Release Date: 1/31/2025                                     Date of Communication: Not Applicable
 Index Numbers: 7701.00-00, 9100.00-00,                      Person To Contact:
               9100.31-00                                    -----------------, ID No. -----------------
                                                             Telephone Number:
 ---------------------------------------                     --------------------
 ------------------------------------------                  Refer Reply To:
 ------------------------------                              CC:PSI:B03
 ----------------                                            PLR-108679-24
                                                             Date:
 -------------------------------------------                 October 31, 2024
 ------------------------------------




 LEGEND ---------------------------------------------
 -----------------------------------------------
 -----------------------
 X          = --------------------------------------------
 -----------------------------------------------------
               ------------------------

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

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




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

        This letter responds to a letter dated April 16, 2024, submitted on behalf of X by
its authorized representatives, 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

       Based on the material submitted, X is an entity formed under the laws of Country
on Date. X represents that (1) it is a foreign entity eligible to elect to be classified as an
association taxable as a corporation for federal tax purposes effective Date, and (2) all
required federal income tax and information returns consistent with X being classified as
an association taxable as a corporation effective Date have been filed. However, X
PLR-108679-24                                  2

failed to file Form 8832, Entity Classification Election, electing to be classified as an
association taxable as a corporation effective Date.

                                    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 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.

       Section 301.9100-1(c) provides that the Commissioner 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 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) defines a regulatory
election to include an election whose due date is prescribed by a regulation published in
the Federal Register.

      Section 301.9100-2 provides the rules governing automatic extensions of time for
making certain elections.

       Section 301.9100-3 sets forth the standards the Commissioner will use to
PLR-108679-24                                3

determine whether to grant an extension of time for regulatory elections that do not
meet the requirements of § 301.9100-2. Under § 301.9100-3, a request for relief 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 (1) the
taxpayer acted reasonably and in good faith, and (2) 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. As a result, we
grant X an extension of time of 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 as specifically set forth above, we express or imply no opinion concerning
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.

      If applicable, X’s election to be classified as an association taxable as a
corporation effective Date 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) of the Income Tax Regulations.

       This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3)
of the Code provides that it 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 requested ruling, it is subject to verification on examination.
PLR-108679-24                               4

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

cc: