SECTION 1. PURPOSE

The Treasury Department and the Internal Revenue Service (IRS) have become aware that taxpayers are concerned about the validity of elections made by certain foreign eligible entities under § 301.7701–3(c) of the Procedure and Administration Regulations to be classified for federal tax purposes as a partnership or disregarded as an entity separate from its owner (a disregarded entity). The Treasury Department and IRS understand that these concerns arise due to uncertainty regarding the number of owners for federal tax purposes of the foreign eligible entity on the effective date of the election. To alleviate

2010–36 I.R.B. 320 September 7, 2010

existing relevant entity, would be or was an association taxable as a corporation;

(4) As permitted under §301.7701–3(c), the business entity filed an otherwise valid Form 8832 electing to be treated for federal tax purposes,

(a) As a partnership based on the reasonable assumption that it had two or more owners as of the effective date of the election; or

(b) As a disregarded entity based on the reasonable assumption that it had a single owner as of the effective date of the election;

(5) For federal tax purposes, either:

(a) The business entity and its actual and purported owners (or owner) have treated the entity consistently with the election on the otherwise valid Form 8832 on all filed information and tax returns; or

(b) No information or tax returns have been required to be filed since the effective date for the election made on the otherwise valid Form 8832; and

(6) The period of limitations on assessments (as established under section 6501(a) of the Code) has not ended for any taxable year of the business entity or its actual and purported owners (or owner) affected by the election made on the otherwise valid Form 8832.

.03 Entities That Fail to Qualify for Re- lief Under This Revenue Procedure .

A business entity that does not qualify for relief under this revenue procedure may request relief through the letter ruling process in accordance with Rev. Proc. 2010–1, 2010–1 I.R.B. 1 (or its successor).