IRS Form 8832 - How to File "C" Corporation Entity Classification Election

IRS Form 8832 is filed by a legal entity to change its default tax treatment to alternative tax treatment under U.S. federal tax rules.   

The C corporation election for U.S. LLCs is becoming increasingly popular for LLCs with non-U.S. owners.

A single-member LLC is by default a disregarded entity for federal tax purposes.  Many non-U.S. entrepreneurs create a wholly-owned U.S. LLC to conduct their business.  

They quickly learn that a U.S. LLC that is a disregarded entity is not a U.S. tax resident, which makes it difficult to open bank accounts, merchant accounts, credit card processing accounts, even Amazon FBA accounts.

For a disregarded entity, the non-U.S. owner needs to complete a Form W-8BEN instead of a Form W-9. 

One method for the non-U.S. entrepreneur to change the tax status of the LLC is to file a "C" corporation election.

In this guide, we want to cover the most important aspects of the "C" corporation election and what it means to operate an LLC taxable as a "C" corporation. 

We will cover the following topics within this guide:

1. What is a "C" corporation under federal tax law.

2. What entities are eligible to make the "C" corporation election.

3. What are the ownership restrictions and operating limitations once you make the "C" corporation election. 

4. What are the primary tax advantages and disadvantages of making the "C" corporation election.

5. What are the effects of making the "C" corporation election.

6. How to complete the IRS Form 8832 election form. 

7. How to file Form 8832 pursuant to late election relief procedures.

8. Wait for the IRS confirmation letter that the election was approved. 

9. What are the annual reporting requirements of a "C" corporation

Once you have completed this guide and reviewed the materials, you should have a better understanding of the "C" corporation election and how to file the election with the IRS.

Enjoy!