IRS revenue procedure provides welcome guidance on check-the-box rules

Abstract

The Internal Revenue Service (IRS) recently issued a new revenue procedure (Revenue Procedure 2010-32) providing welcome guidance with respect to certain erroneous foreign entity check-the-box elections. The IRS issued the revenue procedure to alleviate taxpayer concerns about the validity of elections by foreign entities that incorrectly chose to be classified as partnerships or disregarded entities because of uncertainty regarding the number of owners of the foreign entity on the effective date of the election.