Extensions Granted to Elect Association Status

Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact: * * *, ID No. * * *
Telephone Number: * * *

Index Number: 7701.00-00, 9100.31-00
Release Date: 8/23/2019

Date: May 16, 2019

Refer Reply To: CC:PSI:B03 - PLR-132385-18, PLR-132386-18,
PLR-132387-18, PLR-132388-18, PLR-132389-18, PLR-132390-18

LEGEND:

X1 = * * *
X2 = * * *
X3 = * * *
X4 = * * *
X5 = * * *
X6 = * * *
Y = * * *
Z = * * *
Trust1 = * * *
Trust2 = * * *
Trust3 = * * *
State = * * *
Date1 = * * *
Date2 = * * *
Date3 = * * *
Date4 = * * *
Date5 = * * *
Date6 = * * *
N1 = * * *

Dear * * *:

This responds to a letter dated October 19, 2018, and subsequent correspondence submitted on behalf of Y and X1, X2, X3, X4, X5, and X6, requesting that the Service grant X1, X2, X3, X4, X5, and X6 an extension of time under § 301.9100-3 of the Procedure and Administration Regulations to each file an entity classification election to be treated as an association taxable as a corporation for Federal tax purposes.

The information submitted states that X1, X2, X3, X4, X5, and X6 were each formed under the laws of State on Date1, Date2, Date3, Date4, Date5 and Date6, respectively. X1 and X2 are each a series of Trust1; X3, X4, and X5 are each a series of Trust2; and X6 is a series of Trust3. Trust1, Trust2, and Trust3 are business trusts formed under the laws of State and issue transferable units of beneficial interest in different series of portfolio. Y is an asset management company which serves as the investment advisor, investment manager, and fund administrator for X1, X2, X3, X4, X5, and X6. Y is a wholly-owned subsidiary of Z. According to the submission, each of X1, X2, X3, X4, X5, and X6 has issued transferable units of beneficial interest to at least N1 owners.

The information submitted further states that X1, X2, X3, X4, X5, and X6 each filed an election to be treated as a Regulated Investment Company (“RIC”) in accordance with § 1.851-2(a), by computing taxable income as a RIC in its return for the first taxable year for which the election is applicable, and in all subsequent years. X1, X2, X3, X4, X5, and X6 have filed all tax returns for each tax year since their respective dates of formation on Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies. X1, X2, X3, X4, X5, and X6 always intended to be treated as corporations for Federal tax purposes, and have always operated as if they were corporations and, more specifically, as RICs. However, X1, X2, X3, X4, X5, and X6 each failed to timely file an entity classification election to be treated as an association taxable as a corporation for Federal tax purposes.

Section 301.7701-2(a) generally provides that a business entity is any entity recognized for federal tax purposes that is not properly classified as a trust under §301.7701-4 or otherwise subject to special treatment under the Internal Revenue Code.

Section 301.7701-3(a) provides that an eligible entity with at least two members may elect to be classified as either an association (and thus a corporation under § 301.7701-2(b)(2)) or as a partnership, and 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(a) further provides that so long as a business entity is not classified as a corporation under § 301.7701-2(b)(1), (3), (4), (5), (6), (7) or (8) (an eligible entity), it may elect its classification for federal tax purposes.

Section 301.7701-3(c) provides that an entity classification election must be filed on Form 8832 and can be effective up to seventy-five (75) days prior to the date the form is filed or up to twelve (12) months after the date on which the form is filed.

Section 301.9100-1(c) provides that the Commissioner may grant a reasonable extension of time to make a regulatory election, or a statutory election (but no more than 6 months except in the case of a taxpayer who is abroad), under all subtitles of the Internal Revenue Code except subtitles E, G, H, and I. Section 301.9100-1(b) defines the term “regulatory election” as an election whose due date is prescribed by a regulation published in the Federal Register or a revenue ruling, revenue procedure, notice, or announcement published in the Internal Revenue Bulletin.

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 request for relief will be granted when the taxpayer provides evidence 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.

Based solely on the information submitted and the representations made, we conclude that the requirements of § 301.9100-3 have been satisfied. As a result, X1, X2, X3, X4, X5, and X6 are each granted an extension of time of 120 days from the date of this letter to file a Form 8832 with the appropriate service center to elect to be treated as an association taxable as a corporation effective on Date1, Date2, Date3, Date4, Date5 and Date6, respectively. A copy of this letter should be attached to each Form 8832.

Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter. Specifically, no opinion is expressed or implied regarding the eligibility of X1, X2, X3, X4, X5, and X6 to be a RIC or the validity of their RIC elections.

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 a ruling, it is subject to verification on examination.

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.

Pursuant to powers of attorney on file with this office, we are sending copies of this letter to the authorized representatives of X1, X2, X3, X4, X5, X6 and Y.

Sincerely,

Associate Chief Counsel
(Passthroughs & Special Industries)

By: Richard T. Probst
Senior Technician Reviewer, Branch 3
Office of Associate Chief Counsel
(Passthroughs & Special Industries)

Enclosures (2)
Copy of this letter
Copy for § 6110 purposes