Reg. 301.7701-3 Classification of Certain Business Entities

Internal Revenue Service
Number: 202327009
Release Date: 7/7/2023
Index Number: 9100.00-00, 9100.31-00
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Department of the Treasury
Washington, DC 20224
Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:PSI:03
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Date:
April 07, 2023
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Legend
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A =
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B =
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C =
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Country 1 = ---
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Date 4 = ---
Date 5 = ---
Date 6 = ---
Dear ---:
This letter is in response to your request dated September 26, 2022, submitted on behalf of A, B, C, D, E, F and G by their authorized representatives, requesting an extension of time under § 301.9100-3 of the Procedure and Administration Regulations for each of A, B, C, D, E, F and G to file an election under § 301.7701-3 to be classified as a disregarded entity for federal tax purposes.
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# FACTS

The information submitted states that A was formed on Date 1 under the laws of
Country 1; B was formed Date 2 under the laws of Country 1; C, D, and E, were formed on Date 3 under the laws of Country 1; F was formed on Date 4 under the laws of Country 1; and G was formed on Date 5 under the laws of Country 2. A, B, C, D, E, and F represent that as of Date 6, each was a foreign entity eligible to elect to be classified as a disregarded entity for federal tax purposes. G represents that as of Date 5, it was a foreign entity eligible to elect to be classified as a disregarded entity for federal tax purposes. However, A, B, C, D, E, F and G failed to timely file a Form 8832, Entity Classification Election, electing to be classified as a disregarded entity for federal tax purposes for Date 6 and Date 5, respectively.

# 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 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 appropriate service center designated on Form 8832. Under § 301.7701-3(c)(1)(iii), this election will be effective on the date specified by the entity on Form 8832 or on the date filed if no such date is specified.
The date specified on Form 8832 cannot be more than 75 days prior to the date on
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4 which the election is filed and cannot be more than 12 months after the date on which the election is filed.
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 the election. Section 301.9100-2 provides the 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), 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) granting relief will not prejudice the interests of the Government.

# CONCLUSION

Based solely on the facts submitted and the representations made, we conclude that A, B, C, D, E, F and G have satisfied the requirements of §§ 301.9100-1 and 301.9100-3. As a result, A, B, C, D, E, F and G are granted an extension of time of 120 days from the date of this letter to each file Form 8832 with the appropriate service center to elect to be classified as a disregarded entity effective Date 6 and Date 5, respectively. A copy of this letter should be attached to each Form 8832.
This ruling is contingent on A, B, C, D, E, F and G and their respective owner filing, within 120 days of this letter, all required returns for all open years consistent with the requested relief. These returns may include, but are not limited to Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations and Form 8858, Information Return of U.S. Persons With Respect to Disregarded Entities, such that these forms reflect the consequences of the relief granted in this letter. A copy of this letter ruling should be attached to any such returns.
If applicable, A’s, B’s, C’s, D’s, E’s, F’s, and G’s election to be classified as a disregarded entity effective Date 6 and Date 5, respectively, is disregarded for purposes of determining the amounts of all § 965 elements of all United States shareholders of A, B, C, D, E, F and G 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.
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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 and the regulations thereunder. 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.
The rulings contained in this letter are based upon information and representations submitted by the taxpayers 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 request for rulings, it is subject to verification on examination.
These ruling are directed only to the taxpayers requesting it. Section 6110(k)(3) of the Code provides that they may not be used or cited as precedent.
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Pursuant to a power of attorney on file with this office, we are sending a copy of this letter to A’s, B’s, C’s, D’s, E’s, and F’s authorized representatives.
Enclosure:
Sincerely,
Associate Chief Counsel
(Passthroughs & Special Industries)
/s/ Margaret Burow
By:
Margaret Burow
Senior Counsel, Branch 3
Office of the Associate Chief Counsel
(Passthroughs & Special Industries)
Copy for § 6110 purposes
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