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 receives relief for late corporate and S corporation elections
A limited liability company intended to be classified as a corporation and treated as an S corporation from the same effective date. It failed to file Form 2553, which could have produced a deemed cor…
Successor receives extension for late QSub election
An S corporation intended to elect qualified subchapter S subsidiary status for a wholly owned subsidiary but failed to file Form 8869. A later parent corporation acquired the first S corporation in a…
S corporation received relief for ineligible voting trust
Two electing small business trusts transferred their S corporation shares to a new trust intended to qualify as a voting trust. The new trust did not initially meet the requirements for an eligible S …
Parent received 120 days to correct QSub election filed on wrong form
An S corporation wholly owned a corporate subsidiary and intended to elect qualified subchapter S subsidiary status as of the acquisition date. It mistakenly filed Form 2553 instead of Form 8869, and …
Supplemental ruling extended corrective-return deadline to 240 days
The IRS supplemented and modified a prior private letter ruling concerning S corporation shareholder eligibility, permitted trusts, and inadvertent termination relief. It replaced the prior ruling's l…
Supplemental ruling corrected trust taxpayer identification number
The IRS issued a short supplemental ruling to an earlier private letter ruling concerning inadvertent S corporation termination relief. The supplement changed the taxpayer identification number listed…
Single-member LLC receives relief for a late S election
A single-member limited liability company intended to be taxed as an S corporation from a specified date but did not timely file Form 2553. The IRS found reasonable cause for the missed election and g…
Corporation receives inadvertent-invalid-election relief
A corporation attempted to elect S corporation status while it was wholly owned by a partnership, an ineligible S corporation shareholder, and its shareholders had not consented to the election. The p…
LLC receives relief for late S corporation and QSub elections
An LLC intended to be classified as a corporation and elect S corporation status from a specified date, but it did not timely file Form 2553 or Form 8832. On the same date, it acquired all the stock o…
S corporation receives 120 days to make a late QSub election
An S corporation acquired full ownership of another corporation and intended to treat it as a qualified subchapter S subsidiary from a specified date. It did not timely file Form 8869 to make the QSub…
Parent receives 120 days to elect QSub status after a reorganization
An S corporation became the sole owner of another S corporation through a reorganization and intended the subsidiary to become a qualified subchapter S subsidiary on that date. The parent failed to ti…
Late trust elections receive inadvertent S corporation relief
A corporation intended to elect S corporation status and to treat four subsidiaries as qualified subchapter S subsidiaries. Multiple shareholder trusts qualified to be electing small business trusts, …
Late corporate classification and S elections approved
A limited liability company intended to be classified as a corporation and taxed as an S corporation from its formation date. It did not timely file either Form 8832 or Form 2553. The IRS concluded th…
Inadvertent S corporation termination relief granted
A corporation's S election terminated when two trusts became shareholders without timely electing to be electing small business trusts. Two other trusts later ceased to be grantor trusts and did not t…
Corporation received relief for ineffective S and QSub elections
A corporation's S election was filed for a date before its first taxable year and was therefore ineffective, which also made several qualified subchapter S subsidiary elections ineffective. Separate t…
Corporation received relief after trust missed QSST election
An S corporation had a trust shareholder whose deemed owner died. The trust remained an eligible shareholder for the two-year post-death period, but its income beneficiary did not timely elect qualifi…
Corporation retained S status after trust missed ESBT election
A trust that owned stock in an S corporation ceased qualifying under its prior shareholder status and became eligible to be an electing small business trust, but its trustee failed to make the ESBT el…
Late S corporation election treated as timely
A corporation was eligible to elect S corporation treatment from the date it was incorporated but inadvertently failed to file Form 2553 on time. It nevertheless filed its returns consistently with S …
Ineffective S election treated as valid until QSub reorganization
An LLC's S corporation election was ineffective for two independent reasons: spouses with community-property interests did not provide all required shareholder consents, and the operating agreement in…
Corporation retained S status after a trust missed its ESBT election
An S corporation's stock was held by a grantor trust whose deemed owner died. The trust remained an eligible S corporation shareholder for two years after the death but then missed the deadline to ele…
Corporation retained S status after a trust failed to elect ESBT treatment
An S corporation's shares were transferred to a trust intended to qualify as an electing small business trust. The trust failed to file the ESBT election, making it an ineligible shareholder and techn…
120-day relief for an LLC to make late corporate-classification and S corporation elections
An LLC is not a corporation by default, so to be taxed as an S corporation it must both elect to be classified as a corporation and elect S status. Here an LLC intended to be an S corporation as of a …
Corporation received relief for inadvertent termination of its S election
An S corporation retained accumulated earnings and profits from earlier C corporation years. For three consecutive years, more than 25 percent of its gross receipts came from passive investment income…
Supplemental ruling extended the corrective filing deadline to 60 days
The IRS supplemented and modified an earlier private letter ruling dated October 18, 2024. The public supplemental letter does not restate the facts or describe the underlying relief. It extends the d…
Late S corporation elections and inadvertent termination relief granted
A corporation and its shareholders intended S corporation treatment, but the entity classification and S elections were not filed on time. The corporation also had an ineligible shareholder, which mad…
Late QSub election extension granted
An S corporation acquired all the stock of a subsidiary and intended to treat it as a qualified subchapter S subsidiary, but did not file Form 8869 on time. The parent and subsidiary reported all rele…
Corporation received 120 days to make a late S election
A corporation's sole shareholder intended S corporation treatment from a specified effective date, but the corporation inadvertently failed to file Form 2553 on time. The IRS found reasonable cause fo…
S corporation termination from missed ESBT elections treated as inadvertent
An S corporation transferred shares to two trusts that met the substantive requirements for electing small business trusts, but their trustees failed to file timely ESBT elections. That omission termi…
S corporation termination from missed ESBT elections treated as inadvertent
Two shareholders transferred S corporation stock to trusts that met the substantive requirements for electing small business trusts, but the trustees failed to file timely ESBT elections. That omissio…
Late QSub elections granted for three subsidiaries
An S corporation acquired all the stock of three subsidiaries and intended to treat each as a qualified subchapter S subsidiary from its respective acquisition date. It inadvertently failed to file th…
S corporation termination from missed ESBT election was inadvertent
Two spouses transferred their S corporation stock to a grantor trust. After one spouse died, the trust became a non-grantor trust and its trustees failed to make a timely electing small business trust…
IRA stock transfer caused inadvertent S corporation termination
A bank holding company's S corporation election terminated when some of its stock was transferred to a shareholder's individual retirement account. The IRA was not a permitted S corporation shareholde…
IRS replaces the legend in an earlier S corporation ruling
The IRS issued this letter to modify an earlier private letter ruling dated September 26, 2022. The new letter replaces the earlier ruling's legend, which defines the redacted placeholders for the com…
IRS grants late S corporation and QSub elections
A limited liability company intended to be taxed as an S corporation but inadvertently failed to file Form 2553 on time. Through a reorganization, it also became the sole owner of another limited liab…
S corporation receives relief for a trust's missing ESBT election
A trust owned shares of two S corporations but its trustee failed to make an electing small business trust election when required. Because the trust was therefore an ineligible shareholder, the taxpay…
Missing ESBT election does not defeat intended S corporation status
A trust owned shares of a corporation from the date the corporation intended its S election to begin, but the trustee failed to timely elect electing small business trust status. The omission made the…
Corporation keeps S status after stock transfers to ineligible trusts
An S corporation transferred shares to seven trusts whose beneficiaries timely attempted to elect qualified Subchapter S trust status. The trust terms nevertheless allowed income accumulation and dist…
Corporation kept S status after a trust missed its ESBT election
An irrevocable trust acquired stock in an S corporation and qualified to elect treatment as an electing small business trust, but its trustee did not file the ESBT election on time. The trust therefor…
Corporation kept S status after a trust beneficiary missed the QSST election
A grantor trust held stock in an S corporation until its deemed owner died. The trust could remain an eligible shareholder for two years after the death, but the income beneficiary failed to make a qu…
Ineligible shareholder caused an inadvertent S election termination
An S corporation unknowingly issued shares to an ineligible shareholder, terminating its S election. After counsel identified the problem, the ineligible shareholder distributed the shares to an eligi…
Late ESBT elections caused an inadvertent S corporation termination
After two shareholders died, their S corporation stock passed to two trusts that qualified to elect treatment as electing small business trusts. The trustees did not timely make the ESBT elections, ca…
Second class of stock caused an inadvertent invalid S election
An LLC elected corporate and S corporation treatment, but its operating agreement allowed non-pro rata contributions, special allocations and distributions, and liquidation distributions based on capi…
Partnership ownership caused an inadvertent S election termination
An S corporation’s election terminated when a partnership, an ineligible S corporation shareholder, acquired all of its stock. The partnership later transferred the stock in equal shares to its two in…
Late QSST and ESBT elections caused an inadvertent S termination
An S corporation’s stock was held by a grantor trust that remained an eligible shareholder for two years after its owner died. The stock then passed to a trust that qualified as a QSST, but its benefi…
Late ESBT election caused an inadvertent S termination
An S corporation’s stock was held by a grantor trust that remained an eligible shareholder for two years after its owner died. The stock then passed to a second trust that qualified as an electing sma…
Three late trust elections caused an inadvertent S termination
After an S corporation shareholder died, stock held in the shareholder’s grantor trust passed to three successor trusts. Two qualified to elect treatment as electing small business trusts, and one qua…
Three late QSST elections caused an inadvertent S termination
Three trusts acquired stock in an S corporation and each qualified to elect treatment as a qualified subchapter S trust, but none of their beneficiaries filed the QSST election on time. The trusts wer…
LLC received 120 days for corporate and S elections
A domestic LLC intended to elect association taxable as a corporation status and S corporation treatment effective on the same date, but filed neither Form 8832 nor Form 2553. The IRS concluded that t…
Corporation received inadvertent S election termination relief
An S corporation issued stock to a partnership and another S corporation, neither of which was an eligible S corporation shareholder. More stock later passed to a second S corporation, creating anothe…
S corporation's accidental termination is excused when a trust missed its QSST election
An S corporation is a small business corporation whose income is taxed to its shareholders rather than the company, but it can only have certain kinds of shareholders. A trust can qualify, but only if…
Fleeting stock ownership by ineligible holders under an equity-comp plan does not blow the company's S election
An S corporation can lose its special tax status if it ever has a shareholder who is not allowed to own S corporation stock (for example, another corporation or certain entities). This company runs eq…
Inadvertent-termination relief keeps S corporation status after an ineligible shareholder held the stock
An S corporation gets pass-through tax treatment only if all its shareholders are eligible; most partnerships and LLCs are not eligible shareholders. Here, an S corporation's stock was acquired by an …
Inadvertent-termination relief restoring a corporation's S election after trustees missed the ESBT elections
This letter fixes an accidental loss of S corporation status. An S corporation can only have certain kinds of shareholders; a trust generally has to make an "electing small business trust" (ESBT) elec…
Consent granted to re-elect S corporation status before the five-year waiting period ends
An S corporation passes its income through to its shareholders instead of paying corporate-level tax, but only shareholders who meet strict eligibility rules may own its stock. Here a corporation had …
Consent granted to re-elect S corporation status before the five-year waiting period ends
An S corporation is a small business that passes its income through to its shareholders instead of paying corporate tax, but only shareholders who meet strict eligibility rules can own its stock. Here…
Reasonable cause found for a late S corporation election
A newly incorporated company intended to be taxed as an S corporation (which passes income through to shareholders and avoids corporate-level tax) starting from a specific effective date. To get that …
Defective trusts that ended a company's S corporation status are excused after being fixed
This ruling closely mirrors PLR 202451004 (file reference PLR-105737-24). An S corporation's shareholder and his spouse set up two trusts for his children and transferred company stock into them. The …
Defective trusts that ended a company's S corporation status are excused after being fixed
An S corporation's two shareholders set up trusts for their children and transferred their company stock into them. The trusts were meant to be qualified subchapter S trusts (QSSTs), which are permitt…
A trust holding S corporation stock under a will missed its election deadline, and the IRS restores the company's S status
A shareholder of an S corporation died, and the S corporation stock passed through the shareholder's estate into a trust set up by the will. A trust that receives S corporation stock under a will can …
Late trust election is excused so a family business keeps its S corporation status
A company that had elected to be taxed as an S corporation held some of its stock through a trust. While the trust's creator was alive, the trust counted as a permitted S corporation shareholder becau…
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.