Foreign entities received late disregarded-entity election relief

Plain-English summary

Two foreign eligible entities intended to be treated as disregarded entities from their respective formation dates but did not timely file Form 8832. The IRS found that the entities met the standards for discretionary election relief because they acted reasonably and in good faith and relief would not prejudice the government. It granted each entity 120 days to file Form 8832 making the intended classification election. The relief is conditioned on filing all required income and information returns for open years, including any required Forms 8858, consistently with the retroactive disregarded-entity treatment. If that condition is not met, the ruling is void, and the IRS expressed no view on penalties or on whether the entities otherwise qualified for the elections.

Ruling snapshot

• Question: Could two foreign eligible entities obtain additional time to elect disregarded-entity status from their formation dates?
• Outcome: Approved, subject to filing Forms 8832 and consistent returns within 120 days
• Key authorities: Treas. Reg. §§ 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: 202539005 Third Party Communication: None
Release Date: 9/26/2025 Date of Communication: Not Applicable
Index Number: 7701.00-00, 9100.00-00,
9100.31-00 Person To Contact:
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------------------------- Refer Reply To:
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----------------------------- PLR-101210-25
PLR-101211-25
Date:
June 26, 2025

                                               LEGEND

X = ------------------------------------------------------------------------------------------------
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Y = ------------------------------------------------------------------------------------------------
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Country = ----------

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

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

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

  This letter responds to your request dated January 17, 2025, submitted on behalf

of X and Y by their authorized representatives, requesting an extension of time under
§301.9100-3 of the Procedure and Administration Regulations to file elections under
§ 301.7701-3 to be classified as foreign disregarded entities effective Date 1 and Date
2, respectively.

                                                   FACTS

 According to the information submitted, X was formed under the laws of Country

on Date 1. X represents that it is a foreign eligible entity that may elect to be
disregarded as an entity separate from its owner for federal tax purposes. However, X

PLR-101210-25 2

failed to timely file Form 8832, Entity Classification Election, electing to classify X as a
foreign disregarded entity effective Date 1.

  Y was formed under the laws of Country on Date 2. Y represents that it is a

foreign eligible entity that may elect to be disregarded as an entity separate from its
owner for federal tax purposes. However, Y failed to timely file Form 8832, Entity
Classification Election, electing to classify Y as a foreign disregarded entity effective
Date 2.

                              LAW AND ANALYSIS

   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 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 that an eligible entity may elect to be

classified other than as provided under § 301.7701-3(b) or 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 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 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
Internal Revenue Code except subtitles E, G, H, and I. Section 301.9100-1(b) defines
the term “regulatory election” as an election whose due date is prescribed by a
regulation published in the Federal Register or a revenue ruling, revenue procedure,
notice, or announcement published in the Internal Revenue Bulletin.

PLR-101210-25 3

   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 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.

  Under § 301.9100-3, a request for relief will be granted when the taxpayer

provides evidence to establish to the satisfaction of the Commissioner that (1) the
taxpayer acted reasonably and in good faith, and (2) granting relief will not prejudice the
interests of the government.

                                  CONCLUSION

  Based 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 file

Form 8832 with the appropriate service center to elect under § 301.7701-3 to be
classified as a foreign disregarded entity for federal tax purposes effective Date 1.

   Y is granted an extension of time of 120 days from the date of this letter to file

Form 8832 with the appropriate service center to elect under § 301.7701-3 to be
classified as a foreign disregarded entity for federal tax purposes effective Date 2.

  A copy of this letter should be attached to each Form 8832.

   This ruling is contingent upon X and Y filing, within 120 days from the date of this

letter, all required federal income tax returns and information returns (including
amended returns) for all open years consistent with the relief granted in this letter.
These returns include but are not limited to Forms 8858, Return of U.S. Persons with
Respect to Foreign Disregarded Entities, for all required taxable years consistent with X
and Y having made timely elections effective Date 1 and Date 2, respectively, to be
treated as foreign disregarded entities for U.S. federal income tax purposes. If this
condition is not met, then this ruling is null and void. A copy of this letter should be
attached to any such returns.

  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. Specifically, we express or imply no opinion regarding whether the taxpayer
is otherwise eligible to make the election.

  Further, we express or imply 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

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by this ruling. For example, we express or imply 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 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, a copy of this

letter is being sent to your authorized representatives.

                                      Sincerely,

                                      Jeffrey Erickson
                                      Associate Chief Counsel
                                      (Passthroughs, Trusts, and Estates)




                                 By: ____________________________
                                     Joy C. Spies
                                     Senior Technician Reviewer, Branch 1
                                     Office of Associate Chief Counsel
                                     (Passthroughs, Trusts, and Estates)

Enclosure:

  Copy of this letter for section 6110 purposes

PLR-101210-25 5

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