Late entity classification election relief (Form 8832 and Rev. Proc. 2009-41)

The normal timing rules

A domestic eligible entity that files nothing is a partnership if it has two or more members and disregarded if it has one (Treas. Reg. 301.7701-3(b)(1)). Form 8832 is only needed to elect out of that default or to change a prior classification. Under 301.7701-3(c)(1)(iii), the election is effective on the date entered on line 8, or on the filing date if none is entered, but it cannot be more than 75 days before or more than 12 months after the filing date. A date outside that range is moved to the nearest permitted date.

IRM 3.13.2.27.3 points out a difference from Form 2553 that surprises clients: “effective dates on Forms 8832 cannot be moved to the next tax year. The effective date will be 75 days prior to the earliest IRS received date.” So a late Form 8832 is not rejected; it simply takes effect 75 days before it arrived, which may be the middle of a tax year. The campus suppresses the standard notice and sends a letter saying relief under a revenue procedure or a letter ruling is needed to get the requested date.

Which relief procedure applies

IRM 3.13.2.27.6 keeps the first two lanes separate: “Revenue Procedure 2013-30 cannot be used for stand-alone Forms 8832.” Rev. Proc. 2009-41 itself says that for entities that meet its requirements it “is the exclusive means for obtaining relief for a late entity classification election,” replacing the letter ruling process.

Rev. Proc. 2009-41 requirements

Section 4.01 requires all four of the following:

1. Late filing was the only problem. The entity failed to get its requested classification as of formation (or when its classification became relevant), or failed to get its requested change, solely because Form 8832 was not timely filed.
2. Consistent returns. Either the first return under the intended classification is not yet due, or the entity timely filed all required federal tax and information returns consistent with the requested classification for every year, with no inconsistent returns filed by or for the entity. If the entity has no filing requirement, each affected person must meet this test.
3. Reasonable cause for not filing on time.
4. Timing. 3 years and 75 days from the requested effective date have not passed.

“Timely” is relaxed for this purpose. An entity and an affected person “will be treated as having timely filed a required tax or information return if the return is filed within 6 months after its due date” (Section 4.01(2)(b)), excluding extensions. For a change in classification, consistent filing includes reporting the deemed transactions under 301.7701-3(g), such as the deemed liquidation when an association elects partnership status.

An affected person is anyone who would have had to attach a copy of the Form 8832 to their own return under 301.7701-3(c)(1)(ii) for the year that includes the effective date, or for a later year had the election first taken effect then. In practice these are the owners of an entity that does not file its own return. An indirect owner is not an affected person if an entity between it and the eligible entity would attach the copy.

Completing and filing Form 8832

The current Form 8832 (Rev. December 2013) builds the procedure into the form. Check the box at the top for “Late classification relief sought under Revenue Procedure 2009-41,” complete Part I as for any election, and complete Part II. Line 11 is the reasonable cause explanation. The Part II declaration states that the signers have personal knowledge of the facts and that “the elements required for relief in Section 4.01 of Revenue Procedure 2009-41 have been satisfied.”

Part II must be signed by an authorized representative of the entity and by each affected person. Section 4.02 of the revenue procedure adds: “The individual or individuals who sign must have personal knowledge of the facts and circumstances related to the election.” Part I is signed by each owner at the time of filing or by an authorized officer, manager or member, and when the election is retroactive, every person who was an owner between the effective date and the filing date and is no longer an owner must also sign (Form 8832 instructions). The revenue procedure's instruction to write “Filed Pursuant to Rev. Proc. 2009-41” at the top was a stopgap until the form included Part II; the 2013 form has the checkbox.

Where to file. The Form 8832 PDF carries a notice that the mailing addresses changed after the instructions were printed and that filers should rely on the update. Under that update, entities in Connecticut, Delaware, the District of Columbia, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, West Virginia and Wisconsin file at Kansas City, MO 64999. Entities in the other listed states, including Texas, Florida and California, file at Ogden, UT 84201, and entities in a foreign country or U.S. possession file at Ogden, UT 84201-0023. IRM 3.13.2.27 adds that foreign entity elections are processed only in Ogden.

A copy of Form 8832 also goes with the entity's federal return for the year of the election, or with each direct or indirect owner's return if the entity has none. Rev. Proc. 2009-41 says the copy attached to a return does not need the legend or the Part II attachments, and the instructions say not to sign the copy. Per the instructions, “Failure to attach a copy of Form 8832 will not invalidate an otherwise valid election, but penalties may be assessed against persons who are required to, but do not, attach Form 8832.”

How the campus processes it

IRM 3.13.2.27.6 gives BMF Entity a short checklist for Rev. Proc. 2009-41 requests: confirm no approved election (TC 076) is already posted; for an initial election, confirm no annual return has posted; confirm the declaration of consistent filing, the reasonable cause statement and the penalties of perjury statement are attached and signed by all affected parties; then input TC 076, let the CP 277 approval notice generate, and send Letter 3576C to the representative of record. For a relief request covering a year other than the initial year, the IRM tells examiners not to verify the timeliness of returns, because those returns usually went unpostable and had their document locator numbers cancelled.

Completeness rules in IRM 3.13.2.27.4 are strict: a valid EIN, a valid signature, line 1, the applicable entries on lines 2 through 10, and line 4 if the entity has one owner. “An EIN will never be assigned from Form 8832.” Missing items are returned with Letter 3574C or 3575C and a 30-day response window. If the reply comes back within 30 days the campus uses the original received date.

If the requested date is more than 3 years and 75 days before the earliest IRS received date, the campus makes the election effective 75 days before receipt and sends a letter saying a letter ruling is needed. Under the instructions, a determination normally arrives within 60 days; if not, follow up at 1-800-829-0115 or by letter. Acceptable proof that Form 8832 was filed includes a timely postmarked certified or registered mail receipt, a form with an accepted stamp or IRS received date stamp, or an IRS acceptance letter.

The 60-month rule and other limits

Once an entity elects to change its classification, it generally cannot change again by election for 60 months after the effective date. The instructions for lines 2a and 2b note two exceptions: the IRS may permit an earlier change by letter ruling if more than 50% of the ownership interests are held by persons who owned no interest on the effective date or filing date of the prior election, and the 60-month limit does not apply when the prior election was made by a newly formed entity effective on its formation date. Late relief does not override these limits; Section 4.01(1)(b) of Rev. Proc. 2009-41 is expressly subject to the limitations of 301.7701-3(c)(1)(iv).

Corporations formed under a state corporation statute are not eligible entities and cannot use Form 8832 at all, and sole proprietors and banks are listed as ineligible filers in IRM 3.13.2.27.7.

Letter ruling under section 301.9100-3

An entity outside Rev. Proc. 2009-41 can still ask the national office for an extension of time under Treas. Reg. 301.9100-3, because an entity classification election is a regulatory election. Rev. Proc. 2026-1, section 5.03(5), requires the ruling request to include the Section 4.04 representation from Rev. Proc. 2009-41 (that all required returns were filed within 6 months of their due dates as if the election had been in effect, and none were filed inconsistently) or an explanation of why it cannot be made. Section 5.03(6) confirms that entities meeting Section 4.01 use the revenue procedure instead and that “Requests for such relief are not subject to user fees.”

For a ruling, the 2026 user fee for a section 301.9100-3 request is $14,500, reduced to $3,450 or $9,775 for requesters under the gross income thresholds in Rev. Proc. 2026-1, Appendix A. For multiple entities with a common parent or sponsor asking for the same extension, Rev. Proc. 2026-1 provides a reduced fee for each additional entity and a single ruling letter. The standards the national office applies are on the section 9100 relief page.

Questions practitioners ask