IRS Written Determinations
Free IRS private letter rulings, technical advice memoranda, and Chief Counsel advice with plain-English summaries and the official IRS release on every page.
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LLC received relief for an inadvertent S corporation termination
An LLC elected to be taxed as a corporation and as an S corporation. Its original agreement required distributions in proportion to ownership, but a later amendment directed liquidating distributions …
LLC received 120 days for entity classification and S elections
A domestic LLC's majority and minority owners intended it to be taxed as an S corporation from formation. The company did not timely file either Form 8832 to elect corporate classification or Form 255…
S corporation received 120 days for a late QSub election
An S corporation wholly owned one subsidiary, which in turn wholly owned a second subsidiary. The parent intended to treat the lower-tier subsidiary as a qualified subchapter S subsidiary from the par…
Seven subsidiaries received 120 days for late QSub elections
An S corporation acquired seven wholly owned domestic subsidiaries on several dates and consistently treated each one as a qualified subchapter S subsidiary, but inadvertently failed to file the requi…
Ineligible partnership shareholder caused inadvertent ineffective S election
A corporation's S election was ineffective because one shareholder was a limited partnership and therefore was not an eligible S corporation shareholder. After discovering the problem, the partnership…
Service payment arrangements did not create second stock class
An S corporation and its sole shareholder entered into two successive arrangements with a service provider. The first contemplated a stock sale if specified conditions were met, but no stock was trans…
Late ESBT elections caused an inadvertent S termination
An S corporation shareholder held stock through a revocable grantor trust. At the shareholder's death, the stock passed to two successor trusts that qualified as electing small business trusts, but th…
S corporation received relief for missed QSST elections
An S corporation shareholder placed shares in a grantor trust that was to divide into separate trusts for three beneficiaries after the shareholder's death. The beneficiaries failed to make timely qua…
S corporation gets 120 days to file late QSub election
An S corporation intended to elect qualified subchapter S subsidiary status for a wholly owned domestic subsidiary as of the subsidiary's incorporation date. It failed to file Form 8869 on time becaus…
S corporation receives relief for three missed ESBT elections
After an eligible shareholder died, her S corporation shares passed under her will to three trusts. Those trusts were permitted S corporation shareholders for two years, but their trustees failed to m…
S corporation keeps status after its shareholder became a partnership
An S corporation's shares were held by a disregarded entity owned by an eligible shareholder. When that disregarded entity later became a partnership for federal tax purposes, it became an ineligible …
Inadvertent partnership shareholder does not end S status
An eligible owner held S corporation shares through a disregarded entity. When the disregarded entity converted to partnership status, it became an ineligible shareholder and automatically terminated …
Corrected ineligible shareholder preserves corporation's S election
S corporation shares were held through a disregarded entity owned by an eligible shareholder. The disregarded entity later became a partnership, making it an ineligible shareholder and terminating the…
Missed ESBT elections did not end S corporation status
Two revocable trusts held stock in an S corporation, and each trust continued after its owner died. The trusts remained eligible S corporation shareholders for two years after the deaths, but their tr…
Corporation received 120 days to file its S election
A corporation intended to be treated as an S corporation from a specified effective date but did not timely file the required election. The IRS found reasonable cause for the late filing under section…
Shareholder agreement caused inadvertent S election termination
An S corporation had voting and nonvoting common shares with otherwise identical rights. Its shareholders later entered an agreement that could alter their relative rights to distributable earnings an…
Late ESBT election preserved S corporation and QSub status
A trust acquired shares of one S corporation but its trustee failed to make a timely electing small business trust election, terminating that corporation’s S status. Later, when the corporation became…
Employee-share repurchase terms did not create second stock class
An S corporation's equity compensation plan allowed employees to acquire shares, while restricting transfers and permitting the corporation to repurchase shares after employment ended. The repurchase …
LLC gets relief to make both a late corporate classification election and a late S corporation election
An LLC with more than one owner intended to be taxed as an S corporation. To get there it needed two elections effective on the same date: first, Form 8832 to be treated as a corporation (an associati…
Operating-agreement clause created a second class of stock, but inadvertent-termination relief keeps S status
An LLC elected to be taxed as an S corporation, but its operating agreement contained a liquidation clause that allowed distributions to be made partly by capital-account balances rather than strictly…
S election restored after stock passed to two trusts that were later reformed into QSSTs
An S corporation's shares were transferred to two trusts that, as written, did not qualify as eligible S corporation shareholders, which automatically terminated the company's S election. The intent h…
S election saved after three shareholder trusts failed to make timely ESBT elections
A corporation elected S status, but three trusts that held its stock never filed the Electing Small Business Trust (ESBT) elections they needed to be eligible shareholders. Because those trusts were t…
S corporation status restored after a shareholder trust missed its ESBT election following the owner's death
An S corporation had a shareholder that was a grantor trust, which is a permitted S corporation shareholder while the grantor is alive. When the grantor (the deemed owner) died, the trust stayed eligi…
An S corporation's accidental termination is forgiven after two trusts missed their QSST elections
An S corporation can only have certain kinds of shareholders. A trust generally is not an eligible shareholder unless it fits a permitted category, and one common way is for the trust's income benefic…
An S corporation's accidental termination is forgiven after a trust missed its ESBT election
An S corporation can only have certain kinds of shareholders. A trust is an eligible shareholder only if it fits one of the permitted categories, and one common way is for the trust to elect to be an …
A company's botched S corporation election is treated as valid under the inadvertent-invalidity rule
An S corporation is a business that elects to be taxed by passing its income through to its shareholders instead of paying corporate-level tax, but the election only works if the company meets the S c…
Inadvertent S-corp termination relief where trusts missed their ESBT and QSST elections
An S corporation's stock passed through a chain of trusts after a shareholder died. His grantor trust could stay an eligible S-corporation shareholder for only two years after his death. Before that w…
Inadvertently terminated S corporation elections restored under § 1362(f)
Three related corporations had each elected to be taxed as an S corporation, a pass-through status that avoids corporate-level tax but comes with strict ownership rules. During a restructuring, a newl…
Corrected non-pro-rata allocations received inadvertent S election termination relief
An S corporation amended its operating agreement to permit non-pro-rata allocations, creating a second class of stock and terminating its S election. The corporation later amended the agreement again …
Non-pro-rata operating agreement amendment received S election relief
An S corporation amended its operating agreement to permit non-pro-rata allocations, creating a second class of stock and terminating its S election. The corporation later corrected the operating agre…
Late ESBT election received conditional S corporation relief
A trust acquired shares of an S corporation but did not timely elect to be treated as an electing small business trust. That failure terminated the corporation's S election, although the corporation a…
Corporation could reelect S status before five-year waiting period ended
An S corporation's shares were held by a grantor trust whose grantor died. The corporation's S election later terminated, and the trust proposed to sell all shares to a newly formed employee stock own…
S corporation and QSub receive inadvertent termination relief
An LLC taxed as an S corporation acquired another LLC and elected to treat it as a qualified subchapter S subsidiary. The parent's operating agreement still contained partnership provisions that creat…
Inadvertent S-corporation termination excused where operating agreement created a second class of stock
A company (X) that had been an LLC taxed as a partnership elected to become an S corporation but left its operating agreement unchanged. Earlier distributions to its two owners had thrown their capita…
Missed QSST elections caused an inadvertent S corporation termination
An S corporation's stock was held through two trusts that became divided into separate shares after shareholder deaths. The shares could no longer rely on the temporary rules for post-death trusts, an…
LLC gets late classification and S elections plus inadvertent-termination relief
An LLC intended to be treated as an S corporation from its formation date, but it did not timely file either its entity-classification election or its S corporation election. Its sole shareholder was …
LLC gets late classification and S elections plus inadvertent-termination relief
An LLC intended to be treated as an S corporation from its formation date, but it did not timely file either its entity-classification election or its S corporation election. Its sole shareholder was …
LLC gets late classification and S elections plus inadvertent-termination relief
An LLC intended to be treated as an S corporation from its formation date, but it did not timely file either its entity-classification election or its S corporation election. Its sole shareholder was …
LLC gets late classification and S elections plus inadvertent-termination relief
An LLC intended to be treated as an S corporation from its formation date, but it did not timely file either its entity-classification election or its S corporation election. Its sole shareholder was …
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation termination was inadvertent after stock passed to a partnership
An S corporation's shares were transferred to a partnership, which was not an eligible S corporation shareholder. The corporation discovered that the transfer had terminated its S election and arrange…
S corporation gets 120 extra days to make a late QSub election for its wholly owned subsidiary
An S corporation wholly owns a subsidiary corporation and wanted the subsidiary treated as a "qualified subchapter S subsidiary" (QSub). A QSub election makes the subsidiary invisible for tax purposes…
Entity gets late relief to be taxed as a corporation and to elect S corporation status
An eligible business entity wanted two things effective on the same date: to be classified as an association taxable as a corporation (rather than a partnership or disregarded entity), and to be taxed…
S corporation's inadvertent termination is excused after a trust beneficiary missed the QSST election
A corporation had elected to be taxed as an S corporation, the pass-through regime that avoids corporate-level tax. Its shares were later transferred to a trust. A trust can only hold S corporation st…
S corporation's inadvertent termination is excused after six trust shareholders missed their ESBT elections
A corporation elected to be taxed as an S corporation, the pass-through regime that avoids corporate-level tax. Six trusts were shareholders. A trust can hold S corporation stock only if it fits an al…
What these documents are
- Private letter rulings (PLRs): A taxpayer asked the IRS to rule on a planned transaction before doing it. The ruling shows exactly how the IRS applied the Code to those facts.
- Technical advice memoranda (TAMs): The IRS National Office answering a question raised during an audit or other proceeding.
- Chief Counsel advice (CCAs): IRS lawyers advising their own field staff on how to apply the law.
- Determination letters: Rulings on exempt-organization matters, such as whether an organization qualifies under § 501(c)(3) or a foundation's grant procedures pass § 4945.
- Not precedent, still useful: Under 26 U.S.C. § 6110(k)(3) none of these can be cited as precedent. They remain the best public window into how the IRS actually rules on facts like yours, and practitioners read them for exactly that.