Late-filed partnership return's QOF certification is treated as timely

Plain-English summary

A newly formed partnership intended to invest in an opportunity-zone business and operate as a Qualified Opportunity Fund. Its tax preparer planned to request an automatic filing extension, then filed the first short-year return with Form 8996 believing the extension had been obtained. The preparer later learned that an administrative error had prevented the extension request, making the return and QOF certification late. The IRS concluded that the partnership acted reasonably and in good faith and that relief would not prejudice the government. It treated the filed Form 8996 as timely, making the partnership's QOF self-certification effective for its initial year. The ruling does not decide whether the partnership or its investments otherwise meet the opportunity-zone requirements.

Ruling snapshot

• Question: May Form 8996 attached to the partnership's late-filed initial return be treated as timely?
• Outcome: Approved
• Key authorities: IRC § 1400Z-2; Treas. Reg. §§ 1.1400Z2(d)-1(a), 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202548020
Release Date: 11/28/2025
Index Number: 9100.00-00, 1400Z.02-00

Third Party Communication: None
Date of Communication: Not Applicable

Person To Contact:
--------------------------, ID No. ----------------

Telephone Number:

Refer Reply To:
CC:ITA:B05
PLR-103559-25

Date:
July 16, 2025

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Legend:

Taxpayer = ---------------------------------------------------------------
Date 1 = -----------------------
Date 2 = -------------------------
Date 3 = --------------------------
Date 4 = --------------------------
Date 5 = ---------------------------
Date 6 = ---------------------------
Manager = -------------------------------
Individual A = -------------------
Year 1 = -------
State = -------------
Accounting Firm = -----------------------------
Tax Preparer = --------------------
Operating Agreement = -------------------------------------------------------------------------
----
Attorney = -----------------

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

This letter responds to Taxpayer’s request for a ruling dated Date 1. Specifically,
Taxpayer requests relief under §§ 301.9100-1 through 301.9100-3 of the Procedure and
Administration Regulations, granting an extension of time to make an election under §
1.1400Z2(d)-1(a)(2)(i) of the Income Tax Regulations to self-certify as a Qualified

PLR-103559-25 2

Opportunity Fund (QOF), as defined in § 1400Z-2(d) of the Internal Revenue Code
(Code). The election would be effective for Taxpayer’s initial tax year, a short year
which began on Date 2 and ended on Date 4.

FACTS

Taxpayer represents the facts as follows:

Taxpayer is a limited liability company organized under the laws of State on Date 2.
Taxpayer is treated as a partnership for Federal income tax purposes. Taxpayer uses
the cash method of accounting and the calendar year as its taxable year. Taxpayer’s
initial tax year, a short year, was from Date 2 through Date 4. Taxpayer is managed by
Manager, a limited liability company which, in turn, is managed by Individual A.

The copy of Taxpayer’s Operating Agreement reflects that Taxpayer was formed for the
purpose of investing in a qualified opportunity zone business and operating as a QOF
as defined in § 1400Z-2(d)(1). On Date 3, Individual A emailed Tax Preparer, at
Accounting Firm, with Taxpayer’s EIN intending to engage Accounting Firm to prepare
and timely file the Taxpayer’s Year 1 partnership tax return and all related forms and
elections to self-certify Taxpayer as a QOF. The Date 3 email included “EIN for
Taxpayer” in the subject line and was also sent to Attorney, who drafted Taxpayer’s
Operating Agreement. Individual A, on behalf of Manager, sent Tax Preparer
subsequent emails containing attachments of relevant formation documents including
Taxpayer’s Operating Agreement. Taxpayer and its affiliated entities had previously
engaged Accounting Firm to provide services including the preparation of their income
returns.

Tax Preparer intended to request an automatic extension of time to file Taxpayer’s
partnership return for Year 1 and related documents. Unaware that the request for an
automatic extension of time had not been filed, Tax Preparer prepared and
electronically filed Taxpayer’s Year 1 return with its Form 8996, Qualified Opportunity
Fund, on Date 5, believing that the return had been filed timely.

On Date 6, Taxpayer received a notice from the Internal Revenue Service (Service)
notifying Taxpayer of its failure to timely file its partnership return. Tax Preparer
subsequently determined that he had failed to request an automatic extension of time to
file the partnership return due to administrative error, and initiated steps to file for this
ruling request.

Taxpayer requests that the Service rule that the Form 8996 included with Taxpayer’s
late-filed partnership return for Year 1 be deemed timely and consequently, Taxpayer’s
self-certification as a QOF be effective as of the month Taxpayer was formed.

PLR-103559-25 3

LAW AND ANALYSIS

Section 1400Z-2(e)(4)(A) of the Code directs the Secretary to prescribe regulations or
rules for the certification of QOFs. Section 1.1400Z2(d)-1(a)(2) of the Income Tax
Regulations provides the rules for an entity to self-certify as a QOF. Section
1.1400Z2(d)-1(a)(2)(i) provides that the entity electing to be certified as a QOF must do
so annually on a timely filed return in such form and manner as may be prescribed by
the Commissioner of Internal Revenue in the Internal Revenue Service forms or
instructions, or in publications or guidance published in the Internal Revenue Bulletin.

To self-certify as a QOF, a taxpayer must file Form 8996, Qualified Opportunity Fund,
with its tax return for the year to which the certification applies. The Form 8996 must be
filed by the due date of the tax return (including extensions). The information provided
indicates that Taxpayer did not file its Form 8996 by the due date of its income tax
return due to the Tax Preparer's failure to timely file Taxpayer’s Year 1 return.

Because § 1.1400Z2(d)-1(a)(2)(i) sets forth the manner and timing for an entity to self-
certify as a QOF, these elections are regulatory elections, as defined in § 301.9100-1(b)
of the Procedure and Administration Regulations.

Sections 301.9100-1 through 301.9100-3 provide the standards that the Commissioner
will use to determine whether to grant an extension of time to make a regulatory
election. Section 301.9100-3(a) provides that requests for extensions of time for
regulatory elections (other than automatic extensions covered in § 301.9100-2) will be
granted when the taxpayer provides evidence (including affidavits) to establish that the
taxpayer acted reasonably and in good faith and the grant of relief will not prejudice the
interests of the Government.

Under § 301.9100-3(b) a taxpayer is deemed to have acted reasonably and in good
faith if the taxpayer requests relief before the failure to make the regulatory election is
discovered by the Service, or reasonably relied on a qualified tax professional, and the
tax professional failed to make, or advise the taxpayer to make, the election. However,
a taxpayer is not considered to have reasonably relied on a qualified tax professional if
the taxpayer knew or should have known that the professional was not competent to
render advice on the regulatory election or was not aware of all relevant facts.

In addition, § 301.9100-3(b)(3) provides that a taxpayer is deemed not to have acted
reasonably and in good faith if the taxpayer—

   (i) seeks to alter a return position for which an accuracy-related penalty has been
   or could be imposed under § 6662 at the time the taxpayer requests relief, and
   the new position requires or permits a regulatory election for which relief is
   requested;

PLR-103559-25 4

   (ii) was informed in all material respects of the required election and related tax
   consequences but chose not to make the election; or

   (iii) uses hindsight in requesting relief. If specific facts have changed since the
   original deadline that make the election advantageous to a taxpayer, the Service
   will not ordinarily grant relief.

Section 301.9100-3(c)(1) provides that the Commissioner will grant a reasonable
extension of time to make the regulatory election only when the interests of the
Government will not be prejudiced by the granting of relief.

Section 301.9100-3(c)(1)(i) provides that the interests of the Government are prejudiced
if granting relief would result in a taxpayer having a lower tax liability in the aggregate
for all taxable years affected by the election than the taxpayer would have had if the
election had been timely made (taking into account the time value of money).

Section 301.9100-3(c)(1)(ii) provides that the interests of the government are ordinarily
prejudiced if the taxable year in which the regulatory election should have been made or
any taxable year that would have been affected by the election had it been timely made
are closed by the period of limitations on assessment under § 6501(a) before the
taxpayer's receipt of a ruling granting relief under this section.

Based on the facts and information submitted and the representations made, we
conclude that Taxpayer has acted reasonably and in good faith, and that the granting of
relief would not prejudice the interests of the government. Consequently, the Form
8996 attached to Taxpayer’s return for Year 1, filed Date 5, is considered timely filed,
and Taxpayer has thereby made the election under § 1400Z-2 and § 1.1400Z2(d)-
1(a)(2)(i) to self-certify as a QOF for Year 1. Taxpayer should submit a copy of this
letter ruling to the Service Center where Taxpayer files its returns along with a cover
letter requesting that the Service associate this ruling with the Year 1 return.

This ruling is based upon facts and representations submitted by Taxpayer and
accompanied by a penalty of perjury statement executed by an appropriate party. This
office has not verified any of the material submitted in support of the request for a ruling.
However, as part of an examination process, the Service may verify the factual
information, representations, and other data submitted.

Except as expressly provided herein, no opinion is expressed or implied concerning the
tax consequences of any aspect of any transaction or item discussed or referenced in
this letter. Specifically, we express no opinion, either express or implied, concerning
whether any investments made into Taxpayer are qualifying investments as defined in

PLR-103559-25 5

§ 1.1400Z2(a)–1(b)(34) or whether Taxpayer meets the requirements under § 1400Z-
2 and the regulations thereunder to be a QOF.

Further, we express no opinion on whether any interest owned in any entity by
Taxpayer qualifies as qualified opportunity zone property, as defined in § 1400Z-2(d)(2),
or whether such entity would be treated as a qualified opportunity zone business, as
defined in § 1400Z-2(d)(3). We express no opinion regarding the tax treatment of the
instant transaction under the provisions of any other sections of the Code or regulations
that may be applicable, or regarding the tax treatment of any conditions existing at the
time of, or effects resulting from, the instant transaction.

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 faxed to your authorized representative.

Sincerely,

Gerald Semasek
Senior Technician Reviewer, Branch 5
Office of Associate Chief Counsel
(Income Tax & Accounting)

cc: --------------------