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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S corporation's inadvertent termination is excused after three trusts missed ESBT elections, subject to an adjustment payment
A corporation elected to be taxed as an S corporation, the pass-through regime that avoids corporate-level tax. Shares were later acquired by three trusts. A trust can hold S corporation stock only if…
IRS grants relief for an inadvertently terminated QSub election
An S corporation had elected to treat a wholly owned subsidiary as a qualified subchapter S subsidiary (a QSub), which lets the subsidiary be ignored as a separate corporation for tax purposes and fol…
Subsidiary receives late QSub and S corporation election relief
An S corporation acquired all of a subsidiary's stock but failed to timely file the intended qualified subchapter S subsidiary (QSub) election. A trust later acquired the subsidiary, and the subsidiar…
Subsidiary receives relief for mistaken QSub and S corporation election dates
An S corporation acquired all of a subsidiary's stock but failed to timely file the intended qualified subchapter S subsidiary (QSub) election, and the filed form stated the wrong effective date. Afte…
S corporation that lost its status from too much passive income gets inadvertent-termination relief
An S corporation that still had leftover accumulated earnings and profits from its old C corporation days tripped a rule that automatically ends S status: for three straight years, more than 25% of it…
IRS consents to let a trust revoke its electing small business trust (ESBT) election
A trust that owns stock in an S corporation had elected to be treated as an "electing small business trust" (ESBT), one of the trust forms allowed to hold S corporation shares. The trustee later wante…
S corporation gets inadvertent-termination relief after a trust missed its QSST election
An S corporation had a trust as one of its shareholders. While that trust was a grantor trust (treated as owned by one individual), it was an eligible S corporation shareholder. When the trust stopped…
IRS treats an S corporation's election termination as inadvertent after a trust missed its ESBT election, and restores S status
An S corporation is a small business corporation that is taxed by passing income through to its owners, but it can only have certain kinds of shareholders. When a trust buys S corporation stock, the t…
IRS treats an S corporation's election termination as inadvertent after two trusts missed their QSST elections, and restores S status
An S corporation can only have certain types of shareholders. When S corporation stock is held in a trust, one common way for the trust to be a permitted shareholder is for its beneficiary to elect "q…
IRS grants a corporation reasonable-cause relief for a late S corporation election
A corporation meant to be taxed as an S corporation (a pass-through, so the company itself pays no federal income tax) and filed its returns that way from the start, but it never filed the required el…
IRS grants a corporation reasonable-cause relief for a late S corporation election
A corporation intended to be an S corporation (taxed as a pass-through, so the company owes no federal income tax itself) and filed its returns consistently on that basis, but it never filed the requi…
Late S-corporation election excused for reasonable cause under § 1362(b)(5)
A corporation with a single shareholder intended to be taxed as an S corporation from the day it was formed and had been filing its returns that way, but it never timely filed Form 2553, the election …
Late S-corporation election excused for reasonable cause under § 1362(b)(5)
A corporation intended to be taxed as an S corporation from the day it was incorporated but never filed the required election (Form 2553) on time. It asked the IRS for relief under Internal Revenue Co…
IRS consents to an early S-corporation re-election after an ESOP restructuring
When a company's S-corporation election is terminated, tax law normally bars it from electing S status again for five years unless the IRS consents. Here an S corporation accidentally terminated its o…
S-corporation status preserved after trusts missed their ESBT elections
An S corporation can only have certain kinds of shareholders. When a trust becomes a shareholder, it usually must file an "electing small business trust" (ESBT) election to remain a permitted owner; i…
S-corporation status preserved after five trusts missed their ESBT elections
An S corporation may only be owned by certain kinds of shareholders. When a trust receives S-corporation shares, it generally must file an "electing small business trust" (ESBT) election to remain a p…
S-corporation status preserved after three trusts missed their ESBT elections
An S corporation may only be owned by certain kinds of shareholders. When a trust receives S-corporation shares, it generally must file an "electing small business trust" (ESBT) election to remain a p…
S-corporation status preserved after three trusts missed their ESBT elections
An S corporation may only be owned by certain kinds of shareholders. When a trust receives S-corporation shares, it generally must file an "electing small business trust" (ESBT) election to remain a p…
A liquidation provision that created a second class of stock made an S election invalid, but the IRS treats the defect as inadvertent
An S corporation may have only one class of stock, meaning all shares must confer identical rights to distributions and liquidation proceeds. Here an LLC elected to be taxed as an S corporation, but i…
New owners may re-elect S corporation status early, waiving the usual five-year wait after a prior termination
When a corporation's S election is terminated, § 1362(g) normally bars it from electing S status again for five years unless the IRS consents. Here the sole shareholder had voluntarily terminated the …
A voting trust is a permissible S corporation shareholder
An S corporation is limited in who can own its stock; certain trusts qualify, but the wrong kind of shareholder can blow the S election. Here the shares were held by an electing small business trust (…
120-day extension granted to make a late QSub election for a wholly owned subsidiary
An S corporation acquired all the stock of another S corporation and intended to fold it in as a "qualified subchapter S subsidiary" (QSub), which makes the subsidiary disappear for tax purposes so it…
Divorce trust terms preserve S corporation and ESBT status
A divorcing couple proposed moving S corporation stock from one spouse's grantor trust into a single trust that would internally account for equal shares for each spouse. The trust agreement gave the …
Divorce trust preserves S corporation and ESBT status
A divorcing couple planned to transfer S corporation shares from one spouse's grantor trust to a negotiated trust holding equal internal shares for the former spouses. The trust agreement gave the spo…
Divorce trust preserves S corporation and ESBT status
A divorcing couple planned to transfer S corporation shares from one spouse's grantor trust to a negotiated trust holding equal internal shares for the former spouses. The trust agreement gave the spo…
Grants inadvertent S corporation termination relief for late QSST election
An S corporation shareholder died, and the shareholder's estate transferred stock to a trust under the will. The trust was an eligible shareholder for two years and met the substantive requirements fo…
Grants relief for late QSST election that terminated S status
An estate transferred S corporation shares to a trust that could hold them for two years without a special election. The trust continued holding the shares after that period, but its beneficiary did n…
Restores two S elections after trusts missed ESBT filings
Two corporations lost their S corporation status after the owner of a grantor trust died and the trustee did not timely elect electing small business trust status when the post-death eligibility perio…
A newly formed corporation gets to fix a late S election
A corporation's sole owner wanted the company to be taxed as an S corporation from the day it was incorporated, but the company never filed its Form 2553 (the S election) on time. Under § 1362(b)(5), …
S corporation election is restored after an inadvertent termination from excess passive income
A company that had elected to be taxed as an S corporation lost that status by operation of law. Under § 1362(d)(3), an S corporation's election terminates automatically if it has leftover C corporati…
Inadvertent ineligible shareholder did not end S status
An S corporation transferred shares to an ineligible shareholder, which caused its S election to terminate. After discovering the problem, the corporation and its shareholders transferred the shares t…
Missed QSST election received inadvertent S corporation termination relief
An S corporation shareholder transferred stock through trusts after the shareholder's death. A successor trust qualified to elect as a qualified subchapter S trust, but its initial income beneficiary …
Missed ESBT election received inadvertent S corporation termination relief
A trust acquired S corporation stock from an estate and remained an eligible shareholder for two years. The trustee then failed to timely elect electing small business trust status, causing the corpor…
Late QSST election did not end S corporation status
An S corporation shareholder transferred stock to a grantor trust. When the shareholder died, the trust remained an eligible shareholder for two years, but it continued holding the stock after that pe…
Restores S status after three years of passive income
An S corporation had accumulated earnings and profits from its prior C corporation period and received more than 25 percent passive investment income for three consecutive years. Those facts automatic…
S election survived a wrong effective date and unauthorized shares
A corporation timely filed Form 2553 but mistakenly listed an effective date before the corporation was formed. It nevertheless acted as an S corporation from its formation date. The corporation later…
S corporation status preserved after five trusts missed elections
Shareholders transferred S corporation stock to five trusts on three different dates. Three trusts qualified to elect as qualified subchapter S trusts, and two qualified to elect as electing small bus…
S status preserved and late QSub election allowed
An S corporation owned all the stock of a subsidiary and consistently treated it as a qualified subchapter S subsidiary, but failed to file Form 8869. Separately, three trusts holding all of the paren…
S status preserved and late ESBT and QSub elections allowed
An S corporation's election terminated when a trust inherited shares and its trustee failed to make a timely electing small business trust election. The corporation had also consistently treated one w…
S status preserved after trust missed its ESBT election
A grantor trust held stock in an S corporation. After the grantor died, the trustee intended the trust to remain an eligible shareholder but failed to make a timely electing small business trust elect…
S status preserved after trust missed its ESBT election
A grantor trust held stock in an S corporation. After the grantor died, the trustee intended the trust to remain an eligible shareholder but failed to make a timely electing small business trust elect…
S status preserved after trust missed its ESBT election
A grantor trust held stock in an S corporation. After the grantor died, the trustee intended the trust to remain an eligible shareholder but failed to make a timely electing small business trust elect…
S status preserved after three trusts missed QSST elections
Three trusts received shares in an S corporation, but their beneficiaries failed to make timely qualified subchapter S trust elections. The trusts were therefore ineligible shareholders and the corpor…
S status preserved after three trusts missed QSST elections
Three trusts received shares in an S corporation, but their beneficiaries failed to make timely qualified subchapter S trust elections. The trusts were therefore ineligible shareholders and the corpor…
Corporation receives relief for late S election
A corporation intended to be an S corporation from its formation date but inadvertently failed to file Form 2553 on time. Its original shareholder later transferred shares to two trusts whose benefici…
Partnership-style operating agreement caused inadvertent S termination
A limited liability company elected S corporation status but later adopted operating agreements containing partnership-style allocation and liquidation provisions. When a second shareholder acquired a…
Subsidiary receives relief for ineffective QSub election
An S corporation acquired all the stock of another S corporation in a transaction represented as part of an F reorganization. It filed Form 8869 to treat the acquired corporation as a qualified subcha…
Corporation receives relief after trusts fail QSST requirements
Shares of an S corporation passed from two grantor trusts into successor trusts after the original grantors died. One successor trust's beneficiary did not make a qualified subchapter S trust election…
Corporate group receives relief after trusts miss ESBT elections
Two trusts held shares of an S corporation but their trustees failed to make timely electing small business trust elections. The failure affected that corporation and a successor S corporation created…
Missed ESBT election caused an inadvertent S corporation termination
A trust acquired shares of an S corporation from an estate but its trustees did not timely elect treatment as an electing small business trust. That failure terminated the corporation's S election, al…
Late ESBT election received inadvertent-termination relief
A trust acquired shares of an S corporation from an estate but its trustees failed to make a timely electing small business trust election. The missed election terminated the corporation's S status, a…
Partnership-style agreement did not defeat S corporation relief
A limited liability company's operating agreement retained partnership-style capital-account, allocation, and liquidation provisions after the company elected S corporation status. Those binding provi…
Late ESBT election received conditional S corporation relief
A trust acquired S corporation shares from an estate but failed to make a timely electing small business trust election, terminating the corporation's S status. The IRS found the termination inadverte…
IRA ownership caused an inadvertent S corporation termination
An S corporation shareholder transferred company stock to individual retirement accounts, which were not eligible S corporation shareholders. That transfer terminated the company's S election. After d…
Missed QSST election did not end S corporation status
An S corporation's stock was held by a grantor trust whose deemed owner died. The trust remained an eligible shareholder for two years after the death, but then became ineligible because the beneficia…
Preserves S corporation and QSub elections after stock transfer
An S corporation's stock was transferred to a partnership, which was not an eligible S corporation shareholder. The transfer terminated both the corporation's S election and its elections for eight su…
Grants conditional relief for ineffective S corporation and QSub elections
A limited liability company attempted to elect S corporation status while one owner was an ineligible shareholder. Its operating agreement also contained partnership-style provisions that created a po…
Grants relief for an inadvertent S corporation termination
An S corporation's election terminated when a partnership acquired its stock because a partnership is not an eligible S corporation shareholder. The owners had formed the partnership to simplify admin…
Grants relief for an inadvertent S corporation termination
An S corporation's election terminated when a partnership acquired its stock because a partnership is not an eligible S corporation shareholder. The owners had formed the partnership to simplify admin…
Grants relief for an inadvertent S corporation termination
An S corporation's election terminated when a partnership acquired its stock because a partnership is not an eligible S corporation shareholder. The owners had formed the partnership to simplify admin…
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.