Introduction to Tax From 8832

Tax Form 8832 Part II – Late Election Relief

Complete Part II only if the entity is requesting late election relief under Rev. Proc. 2009-41.An eligible entity may be eligible for late election relief under Rev. Proc. 2009-41, 2009-39 I.R.B. 439, if each of the following requirements is met.

  1. The entity failed to obtain its requested classification as of the date of its formation (or upon the entity’s classification becoming relevant) or failed to obtain its requested change in classification solely because Form 8832 was not filed timely.
  2. Either:
    1. The entity has not filed a federal tax or information return for the first year in which the election was intended because the due date has not passed for that year’s federal tax or information return; or
    2. The entity has timely filed all required federal tax returns and information returns (or if not timely, within 6 months after its due date, excluding extensions) consistent with its requested classification for all of the years the entity intended the requested election to be effective and no inconsistent tax or information returns have been filed by or with respect to the entity during any of the tax years. If the eligible entity is not required to file a federal tax return or information return, each affected person who is required to file a federal tax return or information return must have timely filed all such returns (or if not timely, within 6 months after its due date, excluding extensions) consistent with the entity’s requested classification for all of the years the entity intended the requested election to be effective and no inconsistent tax or information returns have been filed during any of the tax years.
  3. The entity has reasonable cause for its failure to timely make the entity classification election.
  4. Three years and 75 days from the requested effective date of the eligible entity’s classification election have not passed.

Affected person

An affected person is either:

  • with respect to the effective date of the eligible entity’s classification election, a person who would have been required to attach a copy of the Form 8832 for the eligible entity to its federal tax or information return for the tax year of the person which includes that date; or
  • with respect to any subsequent date after the entity’s requested effective date of the classification election, a person who would have been required to attach a copy of the Form 8832 for the eligible entity to its federal tax or information return for the person’s tax year that includes that subsequent date had the election first become effective on that subsequent date.

For details on the requirement to attach a copy of Form 8832, see Rev. Proc. 2009-41 and the instructions under Where To File.

To obtain relief, file Form 8832 with the applicable IRS service center listed in Where To File, earlier, within 3 years and 75 days from the requested effective date of the eligible entity’s classification election.

If Rev. Proc. 2009-41 does not apply, an entity may seek relief for a late entity election by requesting a private letter ruling and paying a user fee in accordance with Rev. Proc. 2011-1, 2011-1 I.R.B. 1 (or its successor).

Line 11. Explain the reason for the failure to file a timely entity classification election.

Signatures. Part II of Form 8832 must be signed by an authorized representative of the eligible entity and each affected person. See Affected Persons, earlier. The individual or individuals who sign the declaration must have personal knowledge of the facts and circumstances related to the election.

Foreign Entities Classified as Corporations for Federal Tax Purposes:

  • American Samoa—Corporation
  • Argentina—Sociedad Anonima
  • Australia—Public Limited Company
  • Austria—Aktiengesellschaft
  • Barbados—Limited Company
  • Belgium—Societe Anonyme
  • Belize—Public Limited Company
  • Bolivia—Sociedad Anonima
  • Brazil—Sociedade Anonima
  • Bulgaria—Aktsionerno Druzhestvo
  • Canada—Corporation and Company
  • Chile—Sociedad Anonima
  • People’s Republic of China—Gufen Youxian Gongsi
  • Republic of China (Taiwan) —Ku-fen Yu-hsien Kung-szu
  • Colombia—Sociedad Anonima
  • Costa Rica—Sociedad Anonima
  • Cyprus—Public Limited Company
  • Czech Republic—Akciova Spolecnost
  • Denmark—Aktieselskab
  • Ecuador—Sociedad Anonima or Compania Anonima
  • Egypt—Sharikat Al-Mossahamah
  • El Salvador—Sociedad Anonima
  • Estonia—Aktsiaselts
  • European Economic Area/European Union —Societas Europaea
  • Finland—Julkinen Osakeyhtio/Publikt Aktiebolag
  • France—Societe Anonyme Germany—Aktiengesellschaft
  • Greece—Anonymos
  • Etairia Guam—Corporation
  • Guatemala—Sociedad Anonima
  • Guyana—Public Limited Company
  • Honduras—Sociedad Anonima
  • Hong Kong—Public Limited Company
  • Hungary—Reszvenytarsasag
  • Iceland—Hlutafelag
  • India—Public Limited Company
  • Indonesia—Perseroan Terbuka
  • Ireland—Public Limited Company
  • Israel—Public Limited Company
  • Italy—Societa per Azioni
  • Jamaica—Public Limited Company
  • Japan—Kabushiki Kaisha
  • Kazakstan—Ashyk Aktsionerlik Kogham
  • Republic of Korea—Chusik Hoesa
  • Latvia—Akciju Sabiedriba
  • Liberia—Corporation
  • Liechtenstein—Aktiengesellschaft
  • Lithuania—Akcine Bendroves
  • Luxembourg—Societe Anonyme
  • Malaysia—Berhad
  • Malta—Public Limited Company
  • Mexico—Sociedad Anonima
  • Morocco—Societe Anonyme
  • Netherlands—Naamloze Vennootschap
  • New Zealand—Limited Company
  • Nicaragua—Compania Anonima
  • Nigeria—Public Limited Company
  • Northern Mariana Islands—Corporation
  • Norway—Allment Aksjeselskap
  • Pakistan—Public Limited Company
  • Panama—Sociedad Anonima
  • Paraguay—Sociedad Anonima
  • Peru—Sociedad Anonima
  • Philippines—Stock Corporation
  • Poland—Spolka Akcyjna
  • Portugal—Sociedade Anonima
  • Puerto Rico—Corporation
  • Romania—Societe pe Actiuni
  • Russia—Otkrytoye Aktsionernoy Obshchestvo
  • Saudi Arabia—Sharikat Al-Mossahamah
  • Singapore—Public Limited Company
  • Slovak Republic—Akciova Spolocnost
  • Slovenia—Delniska Druzba
  • South Africa—Public Limited Company
  • Spain—Sociedad Anonima
  • Surinam—Naamloze Vennootschap
  • Sweden—Publika Aktiebolag
  • Switzerland— Aktiengesellschaft
  • Thailand—Borisat Chamkad (Mahachon)
  • Trinidad and Tobago—Limited Company
  • Tunisia—Societe Anonyme
  • Turkey—Anonim Sirket
  • Ukraine—Aktsionerne Tovaristvo Vidkritogo Tipu
  • United Kingdom—Public Limited Company
  • United States Virgin Islands—Corporation
  • Uruguay—Sociedad Anonima
  • Venezuela—Sociedad Anonima or Compania Anonima

See Regulations section 301.7701-2(b)(8) for any exceptions and inclusions to items on this list and for any revisions made to this list since these instructions were printed.

This post is an excerpt from the IRS’s fact sheet on IRS Form 8832.

This post is also part of a series of posts on Tax Form 8832.

Q & A with Our Attorney

What would the IRS consider reasonable cause for the late election? Some examples?

I am a CPA. I am late in filing form 8832 for a client, but believe I satisfy all the requirements for relief but need more understanding of the “reasonable cause” requirement. Could you provide me examples of reasonable cause that the IRS would accept in this instance.

Answer:

The IRS is fairly strict with late elections. Mistakes by the taxpayer are generally not sufficient. “Reasonable cause” might include the following:

  • Postal Error. Form 8823 was timely mailed, but it was destroyed in the mail and returned to the taxpayer a month later. The taxpayer sent it in again, but this time, it was late.
  • Professional Error. The taxpayer asked a lawyer or CPA to timely submit Form 8823. Solely due to the CPA or lawyer’s delay, the form was filed late.

 

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