Partnership receives 60 days to file late Qualified Opportunity Fund certification

Plain-English summary

A partnership was formed to operate as a Qualified Opportunity Fund and invest in qualified opportunity zone property. Its first accountant timely filed the partnership return but omitted Form 8996, which was needed to self-certify the partnership as a QOF for that year. A replacement accountant discovered the omission. The IRS found that the partnership acted reasonably and in good faith and that relief would not prejudice the government. It granted 60 days to file Form 8996 with an amended return or administrative adjustment request. The IRS did not decide whether the partnership or its investments otherwise satisfy the QOF requirements.

Ruling snapshot

• Question: May the partnership make a late election to self-certify as a Qualified Opportunity Fund?
• Outcome: Approved, with a 60-day extension
• 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: 202548022
Release Date: 11/28/2025
Index Number: 442.00-00, 9100.00-00

Third Party Communication: None
Date of Communication: Not Applicable

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

Telephone Number:

Refer Reply To:
CC:ITA:B04
PLR-107195-25

Date:
July 16, 2025

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LEGEND

Taxpayer = ------------------------------------------------------------------------------
Date 1 = -------------------
Date 2 = ------------------
Date 3 = ---------------------------
Month 1 = ---------------
Year 1 = -------
Year 2 = -------
State Z = ----------
Accountant 1 = --------------------------------------------
Accountant 2 = ----------------------------

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

This letter responds to Taxpayer’s request dated Date 1, requesting a private
letter ruling granting relief to make a late regulatory election pursuant to Treas. Reg. §§
301.9100-1 and 301.9100-3 of the Procedure and Administration Regulations.
Specifically, Taxpayer requests an extension of time to file Form 8996, Qualified
Opportunity Fund, to (1) self-certify Taxpayer as a Qualified Opportunity Fund (QOF)
defined in section 1400Z-2(d) of the Internal Revenue Code (Code); and (2) for
Taxpayer to be treated as a QOF, effective as of Month 1, Year 1, as provided under
Code section 1400Z-2 and Treasury Regulation § 1.1400Z2(d)-1(a).

This letter ruling is being issued electronically in accordance with Rev. Proc.
2025-1, 2025-1 I.R.B. 1. A paper copy will not be mailed to Taxpayer.

FACTS

According to the facts and representations provided, Taxpayer was organized as
a limited liability company under the laws of State Z on Date 2 and is classified as a

PLR-107195-25 2

partnership for federal income tax purposes. As stated in Taxpayer’s operating
agreement, executed on Date 2, Taxpayer was formed for the purpose of being a QOF
and to invest in qualified opportunity zone property as defined in section 1400Z-2(d)(2).
Taxpayer's annual accounting period is the calendar year and uses the cash method of
accounting.

Taxpayer retained Accountant 1 to handle Taxpayer's tax filings, including
preparing and timely filing Taxpayer's Form 1065, U.S. Return of Partnership Income
and extension. For Year 1, Accountant 1 filed Taxpayer’s Form 1065, which was filed
on Date 3, but failed to include a completed Form 8996, Qualified Opportunity Fund to
self-certify as a QOF.

After Taxpayer’s Year 1 Form 1065 was filed, Taxpayer employed Accountant 2
in Year 2 to handle Taxpayer’s tax filings. In reviewing the Year 1 Form 1065,
Accountant 2 discovered that the Form 8996 for Year 1 was not included in the filing.
Taxpayer subsequently filed this request for an extension of time to file the Form 8996
for Year 1 so Taxpayer can be considered a QOF as of Month 1, Year 1.

LAW AND ANALYSIS

Section 1400Z-2(e)(4)(A) directs the Secretary to prescribe regulations for the
certification of QOFs. Treas. Reg. § 1.1400Z2(d)-1(a)(2)(i) provides that the self-
certification of a QOF must be timely filed and effectuated annually 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 with its tax return for the
year to which the certification applies. Form 8996 must be filed by the due date of the
tax return (including extensions). The information provided indicates that Taxpayer’s
inadvertent failure to file a Form 8996 by the due date of its income tax return (including
extensions) was through circumstances beyond Taxpayer’s control.

Because Treas. Reg. § 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 § 301.9100-3(b)(1).

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

PLR-107195-25 3

Treas. Reg. § 301.9100-3(b)(1) provides that a taxpayer is deemed to have acted
reasonably and in good faith if the taxpayer—

(i) Requests relief before the failure to make the regulatory election is
discovered by the Service;
(ii) Failed to make the election because of intervening events beyond the
taxpayer’s control;
(iii) Failed to make the election because, after exercising reasonable diligence,
the taxpayer was unaware of the necessity for the election;
(iv) Reasonably relied on the written advice of the Service; or
(v) Reasonably relied on a qualified tax professional, and the professional failed
to make, or advise the taxpayer to make, the election.

Under Treas. Reg. § 301.9100-3(b)(3), a taxpayer will not be considered to have
acted reasonably and in good faith if the taxpayer—

(i) Seeks to alter a return position for which an accuracy-related penalty could be
imposed under section 6662 at the time the taxpayer requests relief and the
new position requires a regulatory election for which relief is requested;
(ii) Was fully informed of the required election and related tax consequences, but
chose not to file 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.

Treas. Reg. § 301.9100-3(c)(1) provides that the Service will grant a reasonable
extension of time 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).

CONCLUSION

Based solely 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. Accordingly, we
grant Taxpayer an extension of 60 days from the date of this letter ruling to file a Form
8996 to make the election to self-certify as a QOF under section 1400Z-2 and §
1.1400Z2(d)-1(a)(2)(i). The election must be made on a completed Form 8996 attached
to Taxpayer’s amended tax return or to an administrative-adjustment request (as
applicable).

PLR-107195-25 4

CAVEATS

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.

This ruling addresses the granting of Treas. Reg. § 301.9100-3 relief as applied
to the election to self-certify Taxpayer as a QOF by filing Form 8996 for Year 1. Except
as expressly provided herein, no opinion is either expressed or implied concerning the
tax consequences of any aspect of any transaction or item discussed or referenced in
this letter. Specifically, we have no opinion, either express or implied, concerning
whether any investments made into Taxpayer are qualifying investments as defined in
Treas. Reg. § 1.1400Z2(a)-1(b)(34) or whether Taxpayer meets the requirements under
section 1400Z-2 and the regulations thereunder to be a QOF. Further, we also express
no opinion on whether any interest owned in any entity owned by Taxpayer qualifies as
qualified opportunity zone property, as defined in section 1400Z-2(d)(2), or whether
such entity would be treated as a qualified opportunity zone business, as defined in
section 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. We express no opinion as to
whether Taxpayer’s Year 1 federal income tax return is considered timely filed.

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 Form 2848, Power of Attorney and Declaration of
Representative, on file with this office, a copy of this letter is being sent to Taxpayer’s
authorized representative.

Sincerely,

Mon L. Lam
Senior Counsel, Branch 4
Office of Associate Chief Counsel
(Income Tax & Accounting)

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