How to File an Entity Classification Election

To file an entity classification election, an eligible business completes IRS Form 8832, selects a classification and effective date, gathers the required owner signatures, and mails the form to the Kansas City or Ogden IRS service center that covers its location. The form cannot be filed electronically or by fax, and a copy must be attached to the entity’s federal income tax return for the year the election takes effect.1Internal Revenue Service. Where to File Form 8832

Before you put the form in the mail, three things need to be settled: whether your entity is eligible at all, what classification you’re moving to, and what the switch will cost you in deemed tax consequences and future flexibility.

Confirm Your Entity Is Eligible

Only an “eligible entity” can file Form 8832. That means any business entity the IRS does not automatically classify as a corporation. LLCs, general partnerships, limited partnerships, and certain business trusts generally qualify.

Entities the regulations treat as “per se” corporations do not. If your business was formed by filing articles of incorporation with a state, or it falls into one of the categories listed in the regulations (banks, insurance companies, and others), Form 8832 is not available to you.2eCFR. 26 CFR 301.7701-2 – Business Entities; Definitions

You also need an Employer Identification Number before filing. If the entity doesn’t have one, apply first using Form SS-4 or the IRS online EIN application.3Internal Revenue Service. About Form SS-4, Application for Employer Identification Number (EIN)

Choose the Classification You Want

Your options depend on ownership:

Skip the election, and you get a default. A domestic single-owner LLC is disregarded (its activity lands on the owner’s Schedule C). A domestic multi-owner LLC defaults to partnership status and files Form 1065 with a Schedule K-1 to each owner. If the default already matches what you want, you don’t need to file Form 8832 at all.

Form 8832 itself does not create S corporation status. An entity that wants S treatment first has to be classified as a corporation, then files Form 2553. The IRS also allows an eligible entity to file Form 2553 directly without a separate Form 8832; if the entity qualifies, the S election itself triggers the deemed corporate classification.5Internal Revenue Service. Instructions for Form 2553

One narrow exception on classification: spouses who own an LLC entirely as community property in a community property state can elect to treat it as either a disregarded entity or a partnership under Revenue Procedure 2002-69, regardless of the two-owner default.6Internal Revenue Service. Revenue Procedure 2002-69

Complete Form 8832

The form is available on the IRS website and asks for the entity’s legal name, address, and EIN. In Part I, you check the box for the classification you want and enter the effective date.7Internal Revenue Service. About Form 8832, Entity Classification Election

Picking the Effective Date

The effective date must fall within a strict window: no more than 75 days before the filing date, and no more than 12 months after. Leave the line blank and the election takes effect the day the IRS receives the form. Enter a date outside the window and the IRS won’t reject the form; it adjusts the date automatically to the nearest allowed boundary.8Internal Revenue Service. Form 8832 Entity Classification Election (Rev. September 2002) If timing matters, work backward from the date you want and file inside the 75-day retroactive window.

Signatures and Owner Consent

Form 8832 must be signed by either each member who is an owner at the time the election is filed, or by an officer, manager, or member authorized under the entity’s organizational documents or local law to make the election. The signer represents under penalties of perjury that this authority exists.9Internal Revenue Service. Form 8832 Entity Classification Election

If the election is retroactive, any person who was an owner during the gap between the effective date and the filing date but is no longer an owner must also sign. All owners must consent, and you should keep documentation of that consent in your records even though the IRS does not require you to submit it.

Where to Mail Form 8832

Form 8832 goes to one of two IRS service centers based on the entity’s location. Entities in the eastern states (roughly Connecticut through Wisconsin) mail to the Kansas City, Missouri center. Entities in western states (Alabama through Wyoming), along with foreign entities, mail to the Ogden, Utah center.1Internal Revenue Service. Where to File Form 8832

Then attach a copy of the completed Form 8832 to the entity’s federal income tax return for the tax year in which the election takes effect. Missing this step is a common oversight, so make a note in the file the day you mail the original.

Understand the Tax Consequences Before You File

A classification change is not a paperwork switch. The Treasury Regulations treat it as a series of deemed transactions involving the entity’s assets and liabilities, and some of those transactions produce taxable gain. The direction of the conversion matters:

  • Partnership to corporation: the partnership is deemed to contribute all assets and liabilities to a new corporation for stock, then liquidate by distributing that stock to its partners. Generally tax-free under IRC Section 351 if the former partners collectively control the new corporation immediately after.
  • Disregarded entity to corporation: the owner is deemed to contribute all assets and liabilities to a new corporation for stock. Generally tax-free under Section 351.
  • Corporation to partnership: the corporation is deemed to liquidate, distributing all assets and liabilities to its shareholders, who then contribute everything to a new partnership. The liquidation is a taxable event, and appreciated assets can produce gain at both the corporate and shareholder level.
  • Corporation to disregarded entity: the corporation is deemed to liquidate completely and distribute all assets and liabilities to its single owner. Also a taxable liquidation.

Moving into corporate status is usually tax-free. Moving out of it can trigger a substantial bill. If your entity is currently classified as a corporation and you’re thinking about switching to partnership or disregarded status, run the numbers with a tax advisor before filing. The deemed liquidation alone can outweigh years of expected tax savings.

Employment tax obligations also shift. A disregarded entity with employees is still a separate entity for employment tax purposes and remits payroll taxes under its own EIN.10Internal Revenue Service. LLC Filing as a Corporation or Partnership An LLC that elects corporate treatment follows corporate payroll rules. Confirm your payroll setup matches the new classification before the effective date, not after.

The 60-Month Lock

Once an entity changes classification by election, it generally cannot change again for 60 months from the effective date of that election.9Internal Revenue Service. Form 8832 Entity Classification Election The rule blocks entities from flipping back and forth for short-term tax reasons.

Three exceptions:

  • Newly formed entities. If the prior election was made by a newly formed entity and was effective on its formation date, the 60-month clock does not start. An initial choice at formation doesn’t lock you in.
  • Ownership change. The IRS may allow a new election within the 60-month period if more than half the ownership interests have changed hands since the prior election’s effective date.
  • Private letter ruling. The IRS can grant early permission through a private letter ruling, but these are expensive and discretionary.

If none of the exceptions applies, you are locked in for the full five years. Plan accordingly.

If You Missed the Filing Window

Two revenue procedures let entities file late without a private letter ruling.

Revenue Procedure 2009-41 covers elections filed within 3 years and 75 days of the intended effective date. To qualify, the entity must have filed all federal tax returns consistently with the desired classification for the entire period of the missed election and must show reasonable cause for the delay (not willful neglect). If granted, the IRS treats the election as if it had been timely filed.11Internal Revenue Service. Revenue Procedure 2009-41

Revenue Procedure 2010-32 offers a second path for certain situations beyond the 3-year-and-75-day window, particularly involving foreign entities. Entities seeking late relief under either procedure indicate which one applies in Part II of Form 8832. Anything outside both procedures generally requires a private letter ruling, with significant fees and no guaranteed outcome.