IRS written determination 201524007

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 201524007
Release Date: 6/12/2015
Index Number: 7701.00-00, 9100.31-00
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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:01
PLR-133305-14
Date:
March 03, 2015
Legend
X=---------------------------------------------------------------------------------------------
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State=--------
Date 1=----------------
Date 2=---------------------
Date 3=-----------------
Date 4=-----------------
Dear ------------:
This letter responds to a letter dated September 4, 2014, submitted on behalf of
X, requesting a ruling under § 301.7701-3(c)(1)(iv) and § 301.9100-3 of the Procedure
and Administration Regulations. Specifically, your letter requests the Service’s consent
to change X’s classification from an association taxable as a corporation to a
disregarded entity effective Date 4.
FACTS
The information submitted states that on Date 1, X was formed as a limited
liability company under the laws of State. At the time of formation, X was treated as a a
partnership for federal tax purposes. X filed Form 8832, Entity Classification Election,
and Form 2553, Election by a Small Business Corporation to be classified as an S
corporation effective Date 2. On Date 3, a new owner acquired all of the interests in X
terminating X’s S corporation election. X represents that as of Date 3, X had a change
of ownership of more than fifty percent that would satisfy § 301.7701-3(c)(1)(iv). X
intended to be treated as a disregarded entity as of Date 4.

PLR-133305-14
2
LAW AND ANALYSIS
Section 301.7701-3(a) provides thata 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. Elections are necessary only when an
eligible entity does not want to be classified under the default classification or when an
eligible entity chooses to change its classification.
Section 301.7701-3(b)(1) provides that, except as provided in § 301.7701-
3(b)(3), unless the entity elects otherwise, a domestic eligible entity is: (i) a partnership
if it has two or more members; or (ii) disregarded as an entity separate from its owner if
it has a single owner.
Section 301.7701-3(c)(1)(i) provides that, except as provided in § 301.7701-
3(c)(1)(iv) and (v), 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, Entity
Classification Election, with the service center designated on Form 8832.
Section 301.7701-3(c)(1)(iii) provides that an election made under § 301.7701-
3(c)(1)(i) will be effective on the date specified by the entity on Form 8832 or on the
date filed if no such date is specified on the election form. The effective date specified
on Form 8832 cannot be more than 75 days prior to the date on which the election is
filed and cannot be more than 12 months after the date on which the election is filed. If
an election specifies an effective date more than 75 days prior to the date on which the
election is filed, it will be effective 75 days prior to the date it was filed.
Section 301.7701-3(c)(1)(iv) provides that, if an eligible entity makes an election
under § 301.7701-3(c)(1)(i) to change its classification, the entity cannot change its
classification by election again during the sixty months succeeding the effective date of
the election. However, the Commissioner may permit the entity to change its
classification by election within the sixty months if more than fifty percent of the
ownership interests in the entity as of the effective date of the subsequent election are
owned by persons that did not own any interests in the entity on the filing date or on the
effective date of the entity’s prior election.
Section 301.9100-1(c) provides that the Commissioner in exercising the
Commissioner’s discretion may grant a reasonable extension of time under the rules set
forth in §§ 301.9100-2 and 301.9100-3 to make a regulatory election, or a statutory
election (but not more than 6 months except in the case of a taxpayer who is abroad),
under all subtitles of the Code, except subtitles E, G, H, and I. Section 301.9100-1(b)
provides that the term “regulatory election” includes an election whose due date is
prescribed by a regulation published in the Federal Register.

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Section 301.9100-2 provides the standards the Commissioner will use to
determine whether to grant an automatic extension of time for making certain elections.
Section 301.9100-3 provides the guidelines for granting extensions of time for
making elections that do not meetthe requirements of § 301.9100-2. Section 301.9100-
3(a) provides that requests for relief subject to § 301.9100-3 will be granted when the
taxpayer provides the evidence (including affidavits described in § 301.9100-3(e)) to
establish to the satisfactionof the Commissioner that the taxpayer acted reasonably
and in good faith, and the grant of relief will not prejudice the interests of the
Government.
CONCLUSION
Based solely on the information submitted and the representations made, we
consent to X changing its classification for federal tax purposes less than 60 months
after its previous classification change. As a result, X is granted an extension of time of
120 days from the date of this letter to file Form 8832 with the appropriate service
center to elect to be classified as a disregarded entity for federal tax purposes effective
Date 4. A copy of this letter should be attached to the Form 8832.
Except as expressly provided herein, we express or imply no opinion concerning
the tax consequences of any transaction or item discussed or referenced in this letter.
Specifically, we express or imply no opinion regarding whether X is otherwise eligible to
make the election.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the
Code provides that it may not be used or cited as precedent.

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In accordance with a power of attorney on file with this office, we are sending a
copy of this letter to your authorized representatives.
Sincerely,
Associate Chief Counsel
(Passthroughs & Special Industries)
By Faith P. Colson
Faith P. Colson
Senior Counsel, Branch 1
(Passthroughs & Special Industries)
Enclosures (2)
Copy of this Letter
Copy for § 6110 purposes
cc: