Extension of Time for Making Certain Elections

Internal Revenue Service
Number: 202538008
Release Date: 9/19/2025
Index Number: 1400Z.02-00, 9100.00-00
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VIA E-FAX
LEGEND
Department of the Treasury
Washington, DC 20224
Person To Contact:
---, ID No. ---
Telephone Number:
---
Refer Reply To:
CC:ITA:B08
PLR-103880-25
Date:
June 23, 2025
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Taxpayer
Accounting Firm P = ---
Accountant Q = ---
Month 1 = ---
Month 2 = ---
Date 1 = ---
Date 2 = ---
Date 3 = ---
State = ---
Year 1 = ---
Year 2 = ---
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Member A
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Dear ---:
This letter responds to Taxpayer's request for a letter ruling dated Date 3. Specifically,
Taxpayer requests relief under §§ 301.9100-1 and 301.9100-31 for an extension of time to (1) make an election to self-certify as a qualified opportunity fund (QOF), as defined in section 1400Z-2(d), effective as of Month 1, the first month in which Taxpayer intended to be a QOF, and (2) to be treated as a QOF, effective as of Month 1, as provided under section 1400Z-2(d) and section 1.1400Z2(d)-1(a) of the Income Tax regulations.

# FACTS

According to the information and representations provided, Taxpayer, a limited liability company treated as a partnership for Federal income tax purposes, was formed on Month 1 in State. Pursuant to the terms of the Operating Agreement, Taxpayer was formed as a QOF for the primary purpose of investing into, holding, managing, and disposing of, qualified opportunity zone property, and to do anything and all things permitted by section 1400Z-2 and the regulations thereunder necessary or appropriate for this purpose. The operating agreement further states that Taxpayer will self-certify as a QOF by filing Form 8996, Qualified Opportunity Fund, with the Taxpayer’s federal tax return for the taxable year in which the certification is made. Taxpayer represents that it operates on a calendar year tax year and utilizes the cash method of accounting.
Taxpayer indicated, for its Year 1 taxable year, that Taxpayer had five members,
Member A, Member B, Member C, Member D, and Member E, who contributed X, Y, Z,
Y, and Z, respectively, for units in Taxpayer.
1 Unless otherwise specified, all “section” references are to sections of the Internal Revenue Code (Code) and all “§” references to sections of the Treasury Regulations (26 CFR Part 1) or (26 CFR Part 301).
Member B = ---
Member C = ---
Member D = ---
Member E = ---
X = ---
Y = ---
Z = ---
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Taxpayer represents that it intended to elect to be a QOF beginning in Month 1.
Taxpayer engaged Accounting Firm P to prepare Taxpayer’s Federal income tax returns for Year 1. Accountant Q represents that Taxpayer’s Form 1065 was filed on Date 1 for the tax year of Year 1. Accountant Q represents that Taxpayer’s Form 8996 was inadvertently omitted from Taxpayer’s Year 1 Form 1065. Accountant Q represents that the omission was due to staffing turnover at Accounting Firm P and discovered on Month 2. As such, Taxpayer did not timely file its Form 8996 for Year 1. Upon discovery of the omission, Accounting Firm P notified Taxpayer, and advised Taxpayer to seek a ruling.
Taxpayer represents that all its federal income tax returns have been filed consistent with the intended election to self-certify as a QOF and the granting of its requested ruling would not result in Taxpayer having a lower tax liability in the aggregate for Year 1 and all subsequent taxable years affected by the election than if the election had been timely made.

# LAW AND ANALYSIS

Section 1400Z-2(e)(4) of the Internal Revenue Code directs the Secretary to prescribe such regulations as may be necessary to carry out the purposes of section 1400Z-2, including rules for the certification of QOFs. Section 1.1400Z2(d)-1(a)(2)(i) of the Income Tax Regulations 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.
The Instructions to Form 8996 published pursuant to these regulations specify that to self-certify as a QOF, a taxpayer must file Form 8996 with its tax return for the year to which the certification applies by the due date of the tax return (including extensions).
Section 301.9100-3(a) of the Procedure and Administration Regulations 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.
Section 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;
PLR-103880-25 4

(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.
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;

(ii) was fully 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).

# CONCLUSION

The information and representations provided indicates that Taxpayer did not timely file its Form 8996 by the due date of its federal income tax return for Year 1 due to Taxpayer’s reasonable reliance on Accounting Firm P and Accounting Firm P’s failure to file a Form 8996 on behalf of Taxpayer. Based on the facts and information submitted and the representations made, including affidavits and representations under penalties of perjury, we conclude that Taxpayer has acted reasonably and in good faith, and that the granting of relief will not prejudice the interests of the Government. Accordingly, based solely on the facts and information submitted, and the representations made in the ruling request, 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 section 1.1400Z2(d)-1(a)(2)(i). The election must be made on a PLR-103880-25 5 completed Form 8996 attached to the Taxpayer’s amended tax return or administrativeadjustment request (as applicable).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 Internal Revenue Service associate this ruling with the amended Year 1 tax return.

# CAVEATS

The granting of an extension of time in this ruling letter is not a determination that
Taxpayer is otherwise eligible to self-certify as a QOF. See § 301.9100-1(a).
This ruling is based upon facts and representations submitted by the Taxpayer and accompanied by penalty of perjury statements executed by the appropriate parties.
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 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 in Taxpayer are qualifying investments as defined in § 1.1400Z2(a)-1(b)(34) or whether Taxpayer meets the requirements under section 1400Z-2 and the regulations thereunder to be treated as a QOF. In addition, we also express no opinion on whether any interest owned in any entity 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.
A copy of this letter must be attached to any tax return to which it is relevant.
Alternatively, taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter ruling.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) provides that it may not be used or cited as precedent. Enclosed is a copy of the letter ruling showing the deletions proposed to be made when it is disclosed under section 6110.
Pursuant to the Form 2848, Power of Attorney and Declaration of Representative, on file, we are sending a copy of this letter to Taxpayer's authorized representatives.
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Sincerely,
Erika Reigle
Acting Branch Chief, Branch 8
Office of Chief Counsel
(Income Tax & Accounting) cc: ---