What This Notice Means

Your business filed Form 8832, Entity Classification Election, to choose how it's taxed. The IRS denied the request. It can't accept the effective date you asked for because you didn't file the form within 75 days of that date. The IRS returns your Form 8832 in a separate letter.

Until this is fixed, your business stays under its prior or default classification. That can change which returns you should be filing.

What to Do

You have two main options:

  • Refile with an allowable date. Complete and timely submit a new Form 8832 for an effective date within 75 days before filing, or a future date. Sign and date it.
  • Request late election relief under Revenue Procedure 2009-41, if you qualify.

Late Election Relief

Relief under Rev. Proc. 2009-41 generally requires all of the following:

  • The entity didn't timely file Form 8832.
  • All affected parties signed a declaration of consistent filing.
  • Either the return for the first year isn't due yet, or all required returns were filed consistently with the election within 6 months of their due dates.
  • The entity has reasonable cause for filing late.
  • Three years and 75 days haven't passed since the requested effective date.
  • The new Form 8832 has "FILED PURSUANT TO REVENUE PROCEDURE 2009-41" written at the top, with the declaration and reasonable cause statement attached.

A foreign entity making an S election at the same time should look at Revenue Procedure 2010-32.

Why It Matters

The three-years-and-75-days limit under Rev. Proc. 2009-41 is firm. After that, relief generally requires a private letter ruling and a user fee. If you need the earlier date, act now. Get advice before refiling, because the effective date drives how past returns should have been filed.

If your business received a CP278 and needs its classification election fixed, call us at (813) 229-7100.