Basics of Form 8832

The IRS Form 8832 (Entity Classification Election) allows business entities to change their tax classification for U.S. federal tax purposes.

This video tutorial covers the late election relief procedures available under IRS Revenue Procedure 2009-41. Generally, an entity must file Form 8832 within 75 days of the desired effective date. If the entity files outside the 75-day window, it may be eligible for late election relief under this revenue procedure.

General Filing Deadlines

The domestic or foreign eligible entity must file Form 8832 with the IRS within 75 days of the desired effective date of the election.

For example, suppose Company A LLC was opened as a multi-member LLC on June 1, 2023. As a multi-member LLC, the default tax treatment is a partnership for federal tax purposes.

Company A wants to file an election to be taxable as a corporation. If Company A wants the effective date to be June 1, 2023, it must submit Form 8832 by August 15, 2023 (i.e., within 75 days after June 1st) for the election to be timely.

Late Election Relief Requirements

Late election relief is available under several avenues; however, the procedures under Rev Proc. 2009-41 are some of the most widely used.

An entity must meet the following requirements in order to qualify for relief under this revenue procedure:

  1. The entity’s failure to qualify as the desired entity type was solely because the election was not timely filed;
  2. The entity has not filed a federal tax return for the first year in which the election was intended because the due date has not passed, or the entity has timely filed all tax returns consistent with the requested election;
  3. The entity has reasonable cause for its failure to timely make the entity classification election; and
  4. The entity is filing this election within three years and 75 days from the requested effective date.

Additional details on the Rev Proc 2009-41 can be found by visiting the IRS website and reviewing the Form 8832 Instructions.