Date: February 28, 2025

The IRS has granted an extension of time for a foreign entity to elect partnership classification for U.S. federal tax purposes under Treas. Reg. §301.9100-3. The entity initially failed to file Form 8832, Entity Classification Election, in a timely manner, but it consistently filed tax reports as a partnership.

Background & IRS Ruling

Formation & Initial Classification

• X was formed under foreign laws and was eligible to elect partnership classification under §301.7701-3.
• X did not file Form 8832 but filed tax returns consistent with partnership treatment from the intended election date.

Late Election Relief Under Treasury Regulation §301.9100

Treas. Reg. §301.9100-1 & §301.9100-3 allow the IRS to grant extensions for late elections if:

• The taxpayer acted in good faith and reasonably attempted compliance.
• The extension does not prejudice government interests.

Action Required for Affected Entities

• Form 8832 is to be filed within 120 days, and a copy of the IRS ruling is to be attached.
• All required federal tax filings (including Forms 8865) must reflect the partnership classification.

Important Insights

Timely filing of Form 8832 is critical for electing entity classification.

• Taxpayers who miss deadlines may seek relief under §301.9100 but must demonstrate good faith and compliance with tax filings.
• The IRS ruling does not provide relief from penalties or interest for late filings.

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