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What is IRS Form 8832?

IRS Form 8832 is a form you use to change the “tax election status” of your business. We’ll tell you everything you need to know about Form 8832, where to get it, how to fill it out, and where to file it.

What is IRS Form 8832 Used For?

Form 8832, the “Entity Classification Election” form provided by the IRS is used to change your “tax classification,” meaning that you will need to report, file, and pay taxes in a different way. There are several reasons you might want to change your classification:

  • If you’re an LLC taxed as an LLC and instead, you want to be taxed as a C Corporation.
  • If you’re an LLC taxed as a C Corporation and you want to revert to being taxed as an LLC.
  • Single-member LLCs or Multi-member LLCs want to change status, for example, to being a sole proprietor or partnership.

There’s also another important function of Form 8832, and that’s if you want to change your tax classification to an S Corporation and you’ve filed Form 2553 late.

When Do I Use IRS Form 8832?

You would use this form under the following circumstances.

  • Your business is already formed as an LLC.
  • You want to change your tax classification from what it is now, either changing to or reverting from C Corporation, Sole Proprietor, or Partnership status.
  • Or: You are making a late election to be filed as an S Corporation and are filing Form 8832 with Form 2553.

Businesses that are not LLCs cannot file Form 8832, they must form as an LLC first.

Where Can I Get IRS Form 8832?

You can get Form 8832 directly from the IRS website. Additionally, your accountant may be able to file Form 8832 on your behalf.

Where Do I Send IRS Form 8832?

Form 8832 can be mailed to the IRS with the address depending on the state your business is located in.

Taxpayers in the following states: Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, West Virginia, Wisconsin.

Should mail the form to:
Department of the Treasury
Internal Revenue Service Center
Kansas City, MO 64999

Taxpayers in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington, Wyoming.

Should mail the form to:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201

When do I File Form 8832 and Form 2553 Together?

There’s another type of tax classification that an LLC can choose: To be taxed as an S Corporation. This can be an excellent option if you want to pay less self-employment / payroll tax, although you will need to pay yourself a “reasonable salary.”

Typically, if you’re an LLC you can choose to be taxed as an S Corporation by completing and filing Form 2553 “Election By a Small Business Corporation” with the IRS. You can fill out the form yourself or have Incfile complete and file it on your behalf.

Form 2553 can normally be filed by itself, but in some circumstances, you will need to file Form 8832 as well. You will file Form 8832 if you are late filing your Form 2553 S Corporation election. Normally, Form 2553 needs to be filed by March 15 of the tax year that you want to be classified as an S Corporation. If you file before this, you only need to file Form 2553.

If you forget, and don’t file from 2553 until after March 15, you will need to file your Form 2553 and Form 8832 together, this is known as “Late Election Relief.” When you file Form 8832 with a later Form 2553, you will need to show “reasonable cause” for why you did not file earlier.

What Are Reasonable Causes For Late Elections?

You will typically have your request for late filing granted if you meet the following criteria:

  • You have filed all of your other tax returns on time.
  • Your corporation meets the requirements to be classified as an S Corporation and intended to file as one.
  • The only reason why your corporation failed to qualify as a corporation is because it failed to file Form 2553 in a timely manner.
  • You have “Reasonable Cause” for not filing on time.

The IRS defines reasonable cause as, “‘exercised ordinary business care and prudence, but was nevertheless unable to comply with a prescribed duty within the prescribed time’ and/or ‘acted in good faith’ or that the taxpayer’s failure to comply ‘was not due to willful neglect.’”

You will need to explain why you are filing late, and the IRS will use the following criteria when deciding whether to grant you a late election:

  • What happened and when did it happen?
  • During the period of time the taxpayer was non-compliant, what facts and circumstances prevented the taxpayer from filing a return, paying a tax, and/or otherwise complying with the law?
  • How did the facts and circumstances result in the taxpayer not complying?
  • How did the taxpayer handle the remainder of his or her affairs during this time?
  • Once the facts and circumstances changed, what attempt did the taxpayer make to comply?

What Information is Required on Form 8832?

The type of information you will need to provide includes:

  • Business name, address, contact information, and tax identification details.
  • The type of tax election you want to make.
  • Your previous tax election status, if any.
  • Ownership information about the business.
  • Your desired tax election status and type of entity.
  • Your election date.
  • Your contact information.
  • Details of the “reasonable cause” that you have.

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