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 received 120 days to file late S election
A corporation's four shareholders intended S corporation treatment from a specified effective date, but the corporation inadvertently failed to timely file Form 2553. Based solely on the submitted fac…
Corporation received relief for an inadvertent S election termination
Two trusts acquired stock in an S corporation but their trustee failed to make timely electing small business trust elections. Because the trusts were then ineligible shareholders, the corporation's S…
Missed ESBT elections caused an inadvertent S corporation termination
Shares of an S corporation were held through two trusts after an individual shareholder died. The trusts met the requirements for electing small business trusts, but their trustees did not timely make…
Missed QSST election did not end S corporation status
An S corporation shareholder's stock passed from a grantor trust to a successor trust after the grantor's death. The successor trust qualified to be a qualified subchapter S trust, but its sole benefi…
Missed QSST election was treated as an inadvertent S-election failure
Shares passed from a deceased shareholder to a trust before a corporation's S election became effective. The trust qualified as a qualified subchapter S trust, but its beneficiary did not timely make …
S corporation received more time for a QSub election
An S corporation formed a wholly owned domestic subsidiary and intended to treat it as a qualified subchapter S subsidiary from formation. The parent inadvertently failed to file the QSub election on …
Parent received 120 days to file a QSub election
An S corporation wholly owned a domestic subsidiary and intended QSub treatment from the same date as the parent's S election. The parent inadvertently failed to file the subsidiary election on time, …
Late S corporation and two QSub elections received relief
A corporation intended S corporation status from its formation date but did not timely file Form 2553. It also wholly owned two corporations intended to be QSubs from the same date but did not file th…
Missed QSST election received inadvertent termination relief
A trust acquired shares in an S corporation and met the substantive requirements for qualified subchapter S trust status, but no timely QSST election was made. The trust therefore became an ineligible…
Late ESBT election did not end the corporation's S status
A trust eligible to be an electing small business trust acquired all shares of an S corporation, but its trustees did not timely file the ESBT election, technically terminating the corporation's S ele…
Missing elections for nine trusts caused only an inadvertent S termination
After a shareholder died, an original trust covered by a Section 645 election transferred its S-corporation shares to nine successor trusts. Eight were intended to be qualified subchapter S trusts and…
S corporation received relief for QSST distribution failures
Two trusts holding stock in an S corporation converted from electing small business trusts to qualified subchapter S trusts. Their trustees later failed to distribute all trust income currently, which…
S election restored after two missed ESBT elections
An S corporation transferred ownership interests to two trusts, but their trustees did not timely elect to treat the trusts as electing small business trusts. Those failures caused the corporation's S…
S election restored after inherited shares entered two trusts
Two trusts acquired shares in an S corporation under a will, but their trustees did not timely elect to treat them as electing small business trusts. The missed elections caused the corporation's S el…
Missed QSST election did not end the corporation's S status
An S corporation's shares were held by a grantor trust that later stopped qualifying as an eligible S corporation shareholder. The shares were transferred to another trust that could qualify as a qual…
Corporation received 120 days to file its late S election
A corporation's sole shareholder intended the company to be an S corporation from its formation date, but the company inadvertently failed to file Form 2553 on time. The IRS concluded that the company…
Late ESBT election did not end S corporation status
A grantor trust held stock in an S corporation and remained an eligible shareholder for two years after the grantor's death. When that period ended, the trust met the substantive requirements for an e…
Subsidiary received QSub relief after the parent corrected incomplete ownership
An S corporation elected to treat a subsidiary as a qualified subchapter S subsidiary, but the election was ineffective because the parent did not own all of the subsidiary's stock. After discovering …
Late S corporation election was treated as timely
A corporation intended to be treated as an S corporation from a specified date but did not timely file Form 2553. The IRS found reasonable cause for the late election and granted relief under section …
Late trust elections did not end S corporation status
An S corporation's shareholder died, and shares passed under the will to three trusts. Two trusts made qualified subchapter S trust elections even though they did not meet the QSST requirements, then …
Late ESBT election did not end S corporation status
Shares of an S corporation passed under a shareholder's will to a trust for one income beneficiary, who elected qualified subchapter S trust treatment. When the beneficiary died, the trust stopped qua…
S corporation received relief for a trust's late ESBT election
An S corporation shareholder left stock to a trust for a sole income beneficiary, who elected qualified subchapter S trust treatment. When that beneficiary died, the trust ceased to be a QSST but coul…
Partnership ownership caused an inadvertent S corporation termination
An S corporation's shares were acquired by a limited liability company classified as a partnership for federal tax purposes. Because a partnership is not an eligible S corporation shareholder, the acq…
Corporation received 120 days to file a late S election
A corporation's shareholders intended the company to be an S corporation from a specified effective date, but the company inadvertently failed to file Form 2553 on time. Section 1362(b)(5) allows the …
Inadvertent S corporation election defects excused
A limited liability company elected S corporation status, but its election was ineffective from the start for two reasons. A corporate owner was treated as holding an interest on the effective date, a…
Inadvertent S corporation termination excused after ownership change
An S corporation's shares were held through a disregarded limited liability company owned by two grantor trusts. When the grantor died, the limited liability company became a partnership and therefore…
S corporation status preserved after missed trust elections
Several trusts received interests in an S corporation, but their beneficiaries did not timely make qualified subchapter S trust elections and the original trust documents did not meet the QSST require…
Late S corporation year-splitting election allowed
Two shareholders transferred a substantial portion of an S corporation's stock to two trusts during the corporation's tax year. The corporation intended to elect under Treas. Reg. § 1.1368-1(g)(2) to …
Missed trust election does not invalidate S status
A trust owned stock in a corporation when the corporation's S election became effective, but the trust beneficiary did not file the required qualified subchapter S trust election. The trust was theref…
S status restored after testamentary trust deadline
An estate transferred S corporation shares to a trust under a will. The trust could remain an eligible S corporation shareholder for two years after the transfer, and it otherwise met the requirements…
S status restored after second stock class
An S corporation's operating agreement gave shareholders different rights to distributions and liquidation proceeds by allocating amounts through capital accounts before using ownership percentages. T…
S status preserved after shareholder becomes nonresident
Shares in an S corporation were transferred to a resident alien who later changed residence and became a nonresident alien. Because an S corporation cannot have a nonresident alien shareholder, the ch…
Successor corporation may make early S corporation election
A corporation became the successor to a limited liability company whose S corporation election terminated when the company became a disregarded subsidiary. The successor corporation's shareholders lat…
Corporation receives inadvertent S election termination relief
An S corporation transferred shares to an individual who was a resident alien at the time. The shareholder later became a nonresident alien, making the shareholder ineligible and terminating the corpo…
S corporation status preserved after a trust failed QSST requirements
An S corporation shareholder transferred stock to a grantor trust and later died. After the two-year period in which the trust remained an eligible shareholder following the owner's death, the benefic…
Missed trust elections did not end S corporation status
An S corporation had two trust shareholders whose required elections were not timely filed. One trust remained a shareholder after its two-year post-death eligibility period ended, but its beneficiary…
Trust split caused an inadvertent S corporation termination
An S corporation shareholder was a qualified subchapter S trust whose income beneficiary died. Until the trust formally divided, it maintained three separate shares for three successor beneficiaries, …
Trust split caused an inadvertent S corporation termination
An S corporation shareholder was a qualified subchapter S trust whose income beneficiary died. Until the trust formally divided, it maintained three separate shares for three successor beneficiaries, …
Missed trust election caused an inadvertent S corporation termination
An estate transferred S corporation stock to a trust under a will. The trust was an eligible shareholder for two years after the transfer, and it met the requirements for electing small business trust…
S corporation received relief for a late QSST election
An S corporation lost its status after a grantor trust shareholder's deemed owner died and the trust's income beneficiary failed to make a timely qualified subchapter S trust election. The trust becam…
IRS treats an S corporation's election as continuing despite two missed trust elections
An S corporation accidentally lost its S status because two trusts that came to hold its stock never filed the elections needed to be eligible shareholders. After a shareholder died, his shares went i…
The S portion of an ESBT may carry a net operating loss that passed through from its S corporation into another year
An electing small business trust (ESBT) is a special kind of trust allowed to own S corporation stock. For tax purposes it is split in two: the "S portion," which holds the S corporation stock and is …
IRS grants a single-member LLC late corporate-classification and late S corporation elections
A single-owner LLC wanted to be taxed as an S corporation but failed to file either required election on time: Form 8832 (to be treated as a corporation) and Form 2553 (to elect S status). It asked th…
IRS grants a single-member LLC late corporate-classification and late S corporation elections
A single-owner LLC intended to be taxed as an S corporation but failed to file either required election on time: Form 8832 (to be treated as a corporation) and Form 2553 (to elect S status). It asked …
IRS lets a single-member LLC file both a late corporate-classification election and a late S corporation election
A single-owner LLC wanted to be taxed as an S corporation, which requires two elections: first electing to be treated as a corporation (Form 8832), then electing S corporation status (Form 2553). The …
New owner gets IRS consent to re-elect S corporation status inside the usual 5-year waiting period
A corporation had been an S corporation, but its S election terminated. Under section 1362(g), once an S election is terminated, the corporation normally cannot elect S status again for five years unl…
S corporation status restored after four trusts forgot to file their ESBT elections
A company had elected to be taxed as an S corporation, a pass-through structure that limits who may own the stock. Four trusts later acquired shares. Each trust could have qualified as an eligible own…
LLC receives relief for late corporate-classification and S corporation elections
An LLC intended to be classified as an association taxable as a corporation and to elect S corporation status from the same effective date, but it filed neither Form 8832 nor Form 2553. Based on the s…
Missing ESBT elections do not invalidate S corporation status
A corporation filed an S corporation election while five trusts held its stock. The trusts qualified in substance as electing small business trusts, but their trustees did not timely file the required…
Entity receives late corporate and S corporation election relief
A domestic multi-member eligible entity intended to be treated as an S corporation from the date it was formed. It did not timely file either Form 8832 to elect association status or Form 2553 to elec…
IRS grants 120 extra days to make a late QSub election for a subsidiary the taxpayer forgot to elect
An S corporation (X) acquired a chain of companies. One of them (Sub 1) was itself an S corporation that owned a lower-tier company (Sub 2) treated as a qualified subchapter S subsidiary, or QSub. Whe…
S-corporation status restored after two trusts missed their ESBT elections
A company (X) had elected to be taxed as an S corporation, which limits who can own its stock. Over time, two trusts came to hold X shares. Each trust qualified as an eligible S-corporation shareholde…
IRS grants 120 extra days to make a late QSub election for a wholly-owned subsidiary
An S corporation (X) owned all of the stock of a subsidiary (Sub) and meant to elect to treat Sub as a qualified subchapter S subsidiary, or QSub, as soon as X became an S corporation. A QSub is not t…
S corporation receives relief for late ESBT elections
Two trusts acquired shares in an S corporation but their trustees did not timely elect electing small business trust status, causing the corporation's S election to terminate. The corporation represen…
Missed QSST election does not terminate S corporation status
A trust acquired shares of an S corporation and met the substantive requirements for a qualified subchapter S trust, but its beneficiary failed to make the QSST election on time. Without that election…
IRS forgives a botched S corporation election where trusts consented wrong and missed an ESBT election
A company elected to be taxed as an S corporation, which requires that every shareholder be an eligible type of owner and that all shareholders properly consent. Two of its shareholders were grantor t…
IRS forgives an inadvertent S corporation termination after a conversion put shares in an ineligible partnership
A company was formed as a corporation and elected S corporation status. Later it converted from a state corporation into a state limited partnership and elected (on Form 8832) to still be taxed as a c…
IRS forgives an inadvertent S corporation termination after a conversion put shares in an ineligible partnership
A company was formed as a corporation and elected S corporation status. Later it converted from a state corporation into a state limited partnership and elected (on Form 8832) to still be taxed as a c…
S election with missing shareholder consents and a second class of stock gets inadvertent-termination relief
An LLC (called X) elected to be taxed as an S corporation, but its election was defective from the start because it never collected all the shareholder consents that Form 2553 requires. On top of that…
IRS forgives an S corporation's accidental termination after shares went to an ineligible shareholder
An S corporation gets pass-through tax treatment only if it stays within strict eligibility limits, including a rule that every shareholder must be an eligible type (generally an individual, an estate…
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.