What Is Form 8832? Filing, Effects, and the 60-Month Lock-In

Form 8832 is the IRS Entity Classification Election, the form an eligible business entity files to choose how it will be taxed at the federal level: as a C corporation, a partnership, or an entity disregarded as separate from its owner.¹ The IRS assigns every new entity a default classification, and the form exists for the cases where the default isn’t what the owners want. There’s no filing fee.

When You Actually Need the Form

You only need Form 8832 if you want a tax classification different from the one the IRS would give your entity automatically. Under Treasury Regulation 301.7701-3, a domestic business with two or more owners defaults to a partnership, and a single-owner business defaults to a disregarded entity, meaning the IRS ignores it and taxes its income directly to the owner.²³ An entity keeps that classification indefinitely until it files Form 8832 to elect something else.

Foreign entities work a little differently. A foreign entity with two or more members defaults to a partnership if at least one member has unlimited liability for the entity’s debts, and to a corporation if every member has limited liability. A single-owner foreign entity is disregarded if the owner has unlimited liability and a corporation if the owner’s liability is limited.² Because many foreign structures give all members limited liability, foreign entities often need Form 8832 to escape the corporate default.

Who Can File

Only an “eligible entity” can use Form 8832, meaning a business entity that isn’t already required to be treated as a corporation.² In practice, the most common filer is a domestic LLC. A multi-member LLC that wants corporate tax treatment instead of partnership treatment files this form. A single-member LLC that wants corporate treatment instead of disregarded status does the same.³

Some entities are permanently locked into corporate classification and cannot use Form 8832. These “per se” corporations include any domestic entity organized under a state statute that describes it as incorporated or as a corporation, plus a list of foreign entity types set out in Treasury Regulation 301.7701-2.⁴ If your entity is on that list, there’s no election to make.

Form 8832 Is Not the S Corporation Form

This is where filers most often go wrong. Form 8832 elects classification as a C corporation, partnership, or disregarded entity. It does not elect S corporation status. The S election is a separate filing on Form 2553 under Internal Revenue Code section 1362(a).⁵

If you’re an LLC and you want S corporation treatment, you can often just file Form 2553 by itself, because the IRS treats the S election as implicitly electing corporate classification. If you want C corporation treatment, Form 8832 is the correct form, and Form 2553 has nothing to do with it. Filing the wrong one won’t get you the tax result you’re after.

How to File Form 8832

The form runs two pages and is available on the IRS website. Before you start, gather:

The entity’s legal name and principal business address as they appear on formation documents.
The entity’s Employer Identification Number. If you don’t have one, apply using Form SS-4 or online at irs.gov.⁶
The type of election you’re making, with separate boxes for domestic and foreign entities.⁷
Whether this is the entity’s initial classification or a change from an earlier one.

The form must be signed by each member who owns the entity at filing, or by an officer, manager, or member authorized to make the election under local law or the entity’s organizational documents.⁷ If the election is retroactive, anyone who was an owner between the effective date and the filing date but no longer owns an interest must also sign.

There is no electronic filing option. Entities with a principal business location in the eastern half of the country mail the form to the Cincinnati, OH 45999 service center. Entities in the western states, in U.S. possessions, or abroad mail to Ogden, UT 84201.⁷ After mailing the original, attach a copy to the entity’s federal tax return for the year the election takes effect. The IRS should respond within 60 days; if it doesn’t, contact the service center where you filed.

Reclassifying does not require a new EIN. The entity keeps its existing number.⁸

Effective Date Window

The election’s effective date can be no more than 75 days before the filing date and no more than 12 months after it.⁷ That’s a roughly 14-month window. Most filers pick either the filing date or the start of a tax year. Requesting a date outside the window doesn’t kill the form; the IRS defaults the effective date to the filing date.

What Changing Classification Does to Your Taxes

Reclassifying an entity on paper triggers tax consequences as if actual transactions had taken place. The IRS treats each reclassification as a specific sequence of deemed events under Regulations section 301.7701-3(g), and some of those events can generate real tax bills.

When a partnership elects corporate status, the IRS treats it as if the partnership contributed all its assets and liabilities to a new corporation in exchange for stock, then liquidated and distributed the stock to its partners.⁷ The deemed contribution is usually tax-free under the incorporation rules, though liabilities in excess of asset basis can create gain.

Going the other way is riskier. When a corporation elects to be taxed as a partnership, the IRS treats it as if the corporation liquidated, distributed all its assets and liabilities to shareholders, and the shareholders then contributed everything to a new partnership.⁷ The deemed liquidation is treated as an actual one, so the corporation recognizes gain on appreciated assets and shareholders may recognize gain on the deemed distribution. For an entity with significant built-in gains, that can be an expensive election.

Switches involving disregarded entities work the same way in miniature: a disregarded entity electing corporate status is treated as a contribution of assets for stock; a corporation electing disregarded status is treated as a liquidating distribution to the single owner.⁷ Anyone considering an election that leaves corporate status should work through the numbers before filing.

The 60-Month Lock-In

Once an entity changes its classification through Form 8832, it generally cannot change again for 60 months from the effective date.⁷ Five years is a long commitment, so the election should not be treated as reversible.

Two exceptions apply. An election made by a newly formed entity on the date it forms doesn’t count as a “change” for this rule, so an entity that elects corporate status at formation could switch to partnership status without waiting 60 months.⁹ The IRS may also grant permission through a private letter ruling if more than 50% of the entity’s ownership interests have changed hands since the prior election’s effective date.

Fixing a Late Election

If you missed the effective-date window but meant to file on time, Revenue Procedure 2009-41 offers a route to fix it. The entity can request relief by filing Form 8832 within three years and 75 days of the intended effective date.¹⁰ To qualify, all of the following must be true:

The entity failed to obtain its requested classification solely because Form 8832 wasn’t filed on time.
The entity either hasn’t filed federal returns yet because the due date hasn’t passed, or has timely filed all returns consistent with the intended classification.
The entity has reasonable cause for the late filing.
No more than three years and 75 days have passed since the intended effective date.¹⁰

When claiming the relief, write “Filed Pursuant to Rev. Proc. 2009-41” at the top of Form 8832 and attach a reasonable cause statement along with a signed declaration under penalties of perjury. If returns were filed under the wrong classification or the three-year-and-75-day window has closed, the streamlined relief is off the table, and the entity would have to request a private letter ruling instead.

1
Internal Revenue Service. About Form 8832, Entity Classification Election
2
GovInfo. 26 CFR 301.7701-3 Classification of Certain Business Entities
3
Internal Revenue Service. LLC Filing as a Corporation or Partnership
4
eCFR. 26 CFR 301.7701-2 – Business Entities; Definitions
5
Internal Revenue Service. About Form 2553, Election by a Small Business Corporation
6
Internal Revenue Service. About Form SS-4, Application for Employer Identification Number (EIN)
7
Internal Revenue Service. Form 8832 Entity Classification Election
8
Internal Revenue Service. When to Get a New EIN
9
Internal Revenue Service. Overview of Entity Classification Regulations aka Check-the-Box
10
Internal Revenue Service. Revenue Procedure 2009-41