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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Corporation receives inadvertent S election termination relief
Two trusts became shareholders of a parent S corporation after a merger but failed to make new qualified subchapter S trust elections effective on the merger date. That failure terminated the parent c…
Corporation receives inadvertent S election termination relief
An S corporation's trust shareholder was intended to be a qualified subchapter S trust, but the beneficiary did not file a timely QSST election and the trust temporarily failed the current-income-dist…
Late QSST election does not end corporation's S status
A trust became a shareholder of an S corporation and qualified as a qualified subchapter S trust, but its beneficiary did not file the required QSST election on time. That failure made the trust an in…
S status restored after trust election and income failures
An S corporation's stock passed to a trust that was eligible to be a qualified subchapter S trust, but the beneficiary did not timely make the QSST election. The trustee also failed for several years …
S status restored after late ESBT election
An S corporation's shares were held by a qualified subchapter S trust when the trust's income beneficiary died. The trust could remain an eligible shareholder for two years after the death, but its tr…
S status survives a possible second class of stock during entity conversions
An S corporation converted first into a limited partnership that elected corporate tax treatment and then into another corporation. The first conversion may have created a prohibited second class of s…
Corporation receives relief for a late S election
A corporation intended to be taxed 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 and granted rel…
Late QSST election does not end the corporation's S status
After an S corporation shareholder died, the shareholder's stock passed under a will to a trust intended to qualify as a qualified Subchapter S trust. The trust beneficiary did not timely file the QSS…
Trust qualifies as a qualified Subchapter S trust
A trust held stock in an S corporation and sought confirmation that it could be a qualified Subchapter S trust. The trust required all income to be paid at least quarterly to one United States citizen…
Trust qualifies as a qualified Subchapter S trust
A trust held stock in an S corporation and sought confirmation that it could be a qualified Subchapter S trust. The trust required all income to be paid at least quarterly to one United States citizen…
Late trust election does not end S corporation status
An S corporation shareholder was a grantor trust until the grantor died. The trust remained an eligible S corporation shareholder for two years after the death, but its trustee did not timely elect el…
S corporation receives more time to elect QSub status
An S corporation acquired all the stock of another corporation and intended to treat the subsidiary as a qualified subchapter S subsidiary from the acquisition date. It failed to file Form 8869 becaus…
Ineligible shareholders and preferred stock do not end S status
An S corporation transferred stock to a corporate creditor, later created preferred stock with different dividend and liquidation rights, and issued preferred shares to two partnerships. The corporati…
Entity receives late corporate and S corporation elections
An eligible entity intended to be classified as a corporation and elect S corporation status from the same effective date. It failed to timely file both Form 8832 and Form 2553. The IRS found that the…
S corporation receives relief for six late trust elections
After a shareholder died, shares of an S corporation passed to six trusts. The trusts were intended to become qualified subchapter S trusts, but their beneficiaries did not timely file the required QS…
S corporation receives relief for an inadvertent termination
An S corporation transferred all its shares to an entity owned by a married couple as community property. Because that entity was treated as a partnership, it was an ineligible S corporation sharehold…
Corporation receives relief for missing S election consent and QSST election
A corporation intended to elect S corporation status while its shares were held by two trusts. A required shareholder consent may have been missing, and the beneficiary of one trust did not timely ele…
Late QSST election does not end corporation's S status
S corporation stock passed from a grantor retained annuity trust to a successor trust that met the requirements for a qualified subchapter S trust. The successor trust's beneficiary failed to make a t…
Corrected disproportionate distributions do not terminate S election
An S corporation paid state composite and withholding taxes for certain nonresident shareholders but mistakenly reduced all shareholders' cash tax distributions ratably. That error produced disproport…
Repaid disproportionate distributions do not terminate S election
An S corporation made disproportionate distributions to certain shareholders to cover their anticipated taxes on pass-through income. Its governing documents and state law provided identical distribut…
Parent receives 120 days to make late QSub election
An S corporation owned all of a subsidiary and intended to elect qualified subchapter S subsidiary status for it, but failed to timely file Form 8869. The IRS concluded that the requirements for regul…
S corporation survives redemption-price defect
An S corporation issued nonvoting shares under agreements that allowed it to redeem those shares above their current fair market value. Because voting and nonvoting shares may differ only in voting ri…
Excessive compensation does not create second stock class
An S corporation may have paid excessive compensation to a shareholder who worked as an at-will employee without a written compensation agreement. The corporation's governing documents gave every outs…
Inadvertent multiple stock classes do not defeat S election
A corporation's articles and shareholder agreement allowed liquidation proceeds to vary by stock class and by the length of a shareholder's employment. Those binding provisions meant the corporation h…
S corporation receives extension for QSub election
An S corporation owned all the stock of another domestic corporation and intended to treat it as a qualified subchapter S subsidiary from the parent's S-election effective date. Because of inadvertenc…
Late QSST elections receive inadvertent-termination relief
After an S corporation shareholder died, a formerly eligible trust needed a qualified subchapter S trust election to remain an eligible shareholder. The beneficiary failed to timely elect QSST treatme…
Untimely QSST elections receive inadvertent-termination relief
After an S corporation shareholder died, a trust's temporary eligibility expired and the beneficiary failed to timely elect qualified subchapter S trust treatment. A second trust later received some s…
Corporation receives late S election relief
A corporation's owners believed an S election had been filed before the intended effective date, but the IRS had no record of a timely Form 2553. The IRS found reasonable cause for the failure and gra…
Late ESBT election receives inadvertent-termination relief
After an S corporation shareholder died, the shareholder's grantor trust eventually ceased to be an eligible shareholder because the trustee did not timely elect electing small business trust treatmen…
Two late ESBT elections receive inadvertent-termination relief
An S corporation shareholder transferred shares to two trusts that were eligible to elect electing small business trust treatment, but neither trustee made the election. Both trusts became ineligible …
Second stock class defect does not invalidate S status
A corporation's original operating agreement created a second class of stock, making its S corporation election invalid. After discovering the problem, the corporation adopted a new agreement that rem…
Corrected transfers do not end S corporation status
An S corporation made transfers to shareholders and shareholder-owned entities that its adviser believed might be disproportionate distributions violating the one-class-of-stock rule. The corporation'…
Late trust elections do not end S corporation status
Stock in an S corporation was transferred to seven trusts, but the beneficiaries or their guardians did not timely elect qualified subchapter S trust status. The trusts therefore became ineligible sha…
Missing ESBT and QSST elections do not end S corporation status
A corporation’s S election was ineffective because one shareholder trust did not timely elect electing small business trust status. A second shareholder trust later failed to make a qualified subchapt…
Late QSST election receives inadvertent S termination relief
After the owner of a grantor trust died, the trust continued holding S corporation shares for a beneficiary but did not timely elect qualified subchapter S trust status. That failure terminated the co…
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.