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 forgiven under section 1362(f) after ineligible LLC shareholders bought in
A company that had elected to be taxed as an S corporation accidentally lost that status when three limited liability companies (one taxed as a partnership, two owned by corporations) bought shares. A…
S corporation's inadvertent termination forgiven where a trust shareholder missed its ESBT election
A company taxed as an S corporation had a shareholder that was a trust. The trust started out as a grantor trust (treated as owned by an individual, which is an eligible S corporation shareholder), bu…
Inadvertent S-corp termination relief after trust missed its ESBT election
A corporation was taxed as an S corporation, which passes its income through to shareholders instead of paying corporate tax. S corporations can only have certain kinds of shareholders. When the compa…
Inadvertent S-corp termination relief after trust missed its ESBT election
A corporation was taxed as an S corporation, which passes its income through to shareholders instead of paying corporate-level tax. S corporations may only have certain kinds of shareholders. When the…
Inadvertent invalid S election relief where an IRA held the stock
A company elected to be taxed as an S corporation, which passes income through to its shareholders. S corporations may only have eligible shareholders. From the very start, though, some of the company…
Late corporate-classification and S-corporation elections allowed for an LLC
A limited liability company wanted to be taxed as an S corporation. To get there, an LLC normally has to take two steps: first elect (on Form 8832) to be treated as a corporation, then elect S-corpora…
Inadvertent S-corp termination relief after a trust missed its QSST election following the owner's death
A corporation was taxed as an S corporation, which passes income through to eligible shareholders. One shareholder held his stock through a grantor trust (treated as owned by him for tax purposes, so …
Inadvertent S-corp termination relief after a trust missed its QSST election following the owner's death
A corporation was taxed as an S corporation, which passes income through to eligible shareholders. One shareholder held his stock through a grantor trust (treated as owned by him, so it was a permitte…
S corporation keeps its status after stock went to an ineligible shareholder
An S corporation can only have certain kinds of shareholders. Here, the sole shareholder transferred some shares to another party that did not qualify as an eligible S-corporation shareholder, which a…
S corporation keeps its status after shares briefly passed through a partnership
An S corporation can only be owned by eligible shareholders, and a partnership is not one of them. Here, shares of the S corporation were sold to an LLC that is treated as a partnership for tax purpos…
Missed trust elections did not end the corporation's S status
Five trusts acquired shares of an S corporation. The beneficiaries of three trusts failed to make timely qualified subchapter S trust elections, making the corporation's original S election ineffectiv…
Partnership-style operating agreement does not end S status
An S corporation's operating agreement contained partnership provisions that allowed liquidation distributions based on members' capital interests or section 704 capital accounts. Those terms failed t…
Late QSST election preserves S corporation status
An S corporation issued shares to a trust that qualified to be a qualified subchapter S trust, but the trust beneficiary did not timely make the QSST election. The trust and beneficiary nevertheless f…
Missed ESBT election does not end S corporation status
After a shareholder died, S corporation shares passed under the shareholder's will to a trust that could hold the stock for two years without a special election. The trust was eligible to be an electi…
Missed QSST election does not end S corporation status
Shares of an S corporation were transferred to a trust that was eligible to be a qualified subchapter S trust, but the trust beneficiaries did not timely make the required QSST election. That omission…
Invalid S corporation and QSub elections treated as effective
A limited liability company elected S corporation status, but its operating agreement allowed disproportionate liquidation distributions and therefore created a prohibited second class of stock. After…
S corporation status restored after stock was transferred to an IRA
A company taxed as an S corporation transferred some of its shares into an individual retirement account (IRA) set up for one person. An IRA is not an allowed S corporation shareholder, so the transfe…
S corporation election restored after two trusts missed their ESBT elections
An S corporation asked the IRS to forgive an accidental loss of its S status. Two of its shareholders were trusts. One trust had been a qualified subchapter S trust (QSST); after its income beneficiar…
Inadvertent S corporation termination relief where an LLC operating agreement created a second class of stock
An LLC that had elected to be taxed as an S corporation ran into a common trap: to stay an S corporation, a company can have only one class of stock, meaning all owners must have identical rights to d…
S corporation status preserved after three trusts missed their ESBT elections
An S corporation passes income through to its shareholders untaxed at the corporate level, but only eligible owners may hold the stock. A trust can qualify only if its trustee timely files an Electing…
S corporation status preserved after an invalid election by an ineligible shareholder and a later missed trust election
This is a companion ruling to a same-day request (its file reference PLR-111038-22 sits next to PLR-111031-22) with the same fact pattern. An S corporation passes its income through to shareholders un…
S corporation status saved after an invalid election by an ineligible shareholder and a later missed trust election
An S corporation is a small business that passes its income through to shareholders instead of paying corporate tax, but only certain owners are allowed to hold the stock. This company had two problem…
S election that was invalid from the start (and later at risk) restored as inadvertent
A company's S corporation election was defective from day one, and the IRS forgave the defect. When the company first elected S status, its shares were owned by an ineligible shareholder, and no eligi…
S corporation status preserved after a trust shareholder missed its ESBT election
An S corporation's tax status accidentally lapsed and the IRS restored it. An S corporation can only have certain kinds of shareholders. A trust may hold S corporation stock if it elects to be an Elec…
The IRS grants inadvertent-termination relief after a grantor trust shareholder became ineligible when its owner died without a timely QSST election
An S corporation had a trust as one of its shareholders. That worked fine while the trust was a "grantor trust," meaning it was treated for tax purposes as owned by one living individual, which is an …
The IRS grants inadvertent-termination relief so an LLC keeps its S corporation status despite operating-agreement language creating a second class of stock
A limited liability company that had elected to be taxed as an S corporation accidentally broke one of the S corporation rules. To stay an S corporation, a company can have only one class of stock, me…
IRS forgives a botched S corporation election as inadvertent
A corporation elected to be taxed as an S corporation, but the election was ineffective because it did not collect all the required shareholder consents. The corporation had also acquired three subsid…
Late QSST election did not end the corporation's S status
An individual placed S corporation shares in a revocable grantor trust and later died. The trust remained an eligible S corporation shareholder for two years after the owner's death, but its sole inco…
Partnership-style operating terms did not end intended S corporation treatment
A limited liability company elected S corporation status while its operating agreement still contained partnership-style allocation and distribution provisions. Those binding terms created more than o…
Corrected ruling preserved S status after a trust became ineligible
This letter modified and superseded PLR 202218004 to correct facts about a reorganization and the period covered by inadvertent-termination relief. After a shareholder died, S corporation stock passed…
An S corporation received 120 days to make a late QSub election
An S corporation owned all stock of a domestic subsidiary and intended to treat it as a qualified subchapter S subsidiary from a specified date. Through inadvertence, the parent failed to file Form 88…
An S corporation received late QSub election relief
An S corporation owned all outstanding stock of a domestic subsidiary and intended to treat it as a qualified subchapter S subsidiary from a specified date. The parent inadvertently failed to file For…
S corporation kept its status after fixing a second class of stock
An S corporation issued stock to a second shareholder, and the shareholders signed an agreement that allowed unequal rights to distributions and liquidation proceeds. That binding agreement created a …
S corporation received relief after a trust missed its ESBT election
An S corporation's ownership interests were transferred to a trust whose trustees did not timely elect to treat it as an electing small business trust (ESBT). Because a trust must qualify as an eligib…
S corporation received 120 days to file a late QSub election
An S corporation acquired all the stock of a subsidiary and intended to treat it as a qualified subchapter S subsidiary (QSub) from the acquisition date. It did not timely file Form 8869 to make the e…
S corporation received relief after two trusts used late ESBT dates
Shares of an S corporation were transferred to two trusts that were eligible to become electing small business trusts (ESBTs). Their trustees filed ESBT elections with an effective date later than the…
S corporation received relief after four trusts missed ESBT elections
An S corporation shareholder transferred stock to a grantor trust. When the shareholder died, the trust remained an eligible S corporation shareholder for two years, but its trustee failed to make an …
S corporation received 120 days to file a late QSub election
An S corporation intended to treat a wholly owned subsidiary as a qualified subchapter S subsidiary (QSub) but did not timely file Form 8869. It asked for an extension under Treasury Regulation § 301.…
LLC kept S corporation status despite agreements creating a second stock class
A limited liability company elected S corporation treatment while operating agreements gave its owners different rights to regular and liquidating distributions. The agreements required capital accoun…
Corporation received 120 days to file a late S election
A corporation's two shareholders intended for the company to be an S corporation from its incorporation date, but the company inadvertently failed to timely file Form 2553. The IRS found reasonable ca…
LLC received 120 days for late corporate-classification and S elections
A domestic limited liability company intended to be taxed as an S corporation from its formation date but did not properly and timely file Form 2553. Because an LLC must first be treated as a corporat…
Corporation keeps S status after beneficiary missed QSST election
Shares of an S corporation were transferred to a trust that met the substantive requirements for a qualified subchapter S trust, but the income beneficiary failed to make the required QSST election. T…
Corporation keeps S status after correcting unequal stock rights
An S corporation’s operating agreements required member capital accounts and tied liquidation distributions partly to those balances. Those provisions created nonidentical distribution and liquidation…
Corporation receives relief for a late S election
A corporation’s shareholders intended it to be an S corporation from its formation date, but the company inadvertently failed to file Form 2553 on time. The IRS found reasonable cause for the late ele…
S corporation status restored after stock accidentally went to an ineligible IRA shareholder
An S corporation is a small business corporation that passes its income through to its shareholders, but only certain shareholders are allowed; an individual retirement account (IRA) is not an eligibl…
A company that repeatedly blew its S corporation status through partnership conversions and missed trust elections gets inadvertent-termination relief under section 1362(f)
An S corporation gets pass-through tax treatment only if it stays a "small business corporation," which among other things means it can have just one class of stock and only eligible shareholders (cer…
S corporation received inadvertent-termination relief after trust transfers
Two shareholders transferred S corporation stock to trusts that were mistakenly treated as grantor trusts. Because the trusts did not qualify as eligible S corporation shareholders, the transfers term…
S corporation with trust shareholders gets to fix mistaken ESBT elections, make late QSST elections, and keep its S status after an inadvertent termination
An S corporation was owned through trusts that were split into separate shares for individual family beneficiaries. To keep S-corporation eligibility, each separate trust share needed to be a permissi…
S-corporation's inadvertent termination (shares held by non-qualifying trusts) is forgiven
An S corporation can only have certain kinds of shareholders. A trust generally qualifies only if it is a "grantor trust" treated as owned by an individual. Here two shareholders each set up a trust f…
S-corporation's inadvertent termination (shares held by non-qualifying trusts) is forgiven
An S corporation can only have certain kinds of shareholders. A trust generally qualifies only if it is a "grantor trust" treated as owned by an individual. Here two shareholders each set up a trust f…
S-corporation's inadvertent termination (shares held by non-qualifying trusts) is forgiven
An S corporation can only have certain kinds of shareholders. A trust generally qualifies only if it is a "grantor trust" treated as owned by an individual. Here two shareholders each set up a trust f…
Corporation's late S-election treated as timely for reasonable cause
A corporation wanted to be taxed as an S corporation from a specific date but never filed a proper election (Form 2553) on time. Its sole shareholder had, however, filed personal returns for every yea…
Reasonable cause found to treat a late S corporation election as timely on the intended date
A corporation's two shareholders intended it to be taxed as an S corporation starting from a specific date, but the company missed the deadline to file Form 2553 and mistakenly filed a regular C corpo…
LLC granted extensions to elect corporate (association) status and late S corporation status
An LLC intended, from its formation date, both to be treated as a corporation (an "association taxable as a corporation") and to be taxed as an S corporation, but it never filed the required Form 2553…
Consent granted to reelect S corporation status before the five-year waiting period, and to treat it as timely
When a corporation's S election is terminated, section 1362(g) generally bars it from electing S status again for five years unless the IRS consents. Here a company's S election ended when its sole sh…
Inadvertent S corporation termination relief after a trust shareholder became ineligible
A company taxed as an S corporation can lose that status if it ends up with a shareholder that is not allowed to own S corporation stock. Here, some of the company's shares were held by a trust. While…
S corporation keeps its status after an operating agreement accidentally created a second class of stock
An S corporation is allowed only one class of stock, meaning all shares must confer identical rights to distributions and liquidation proceeds. Here a corporation adopted an operating agreement whose …
S corporation keeps its status after several trusts accidentally became ineligible shareholders
An S corporation can only be owned by certain kinds of shareholders, and some trusts qualify only if the beneficiary files a timely "QSST" election. Here a corporation's S election was accidentally te…
IRS grants an LLC late-election relief to be taxed as a corporation and then as an S corporation
A single-owner limited liability company (LLC) wanted to be taxed as an S corporation. That takes two steps: first the LLC must elect to be treated as a corporation (an association) by filing Form 883…
An S corporation's accidental election termination is treated as inadvertent, so S status continues if the trust beneficiary makes a late QSST election
An S corporation had a trust among its shareholders. While the trust's grantor was alive, the trust counted as a grantor trust owned by him, which is a permitted S corporation shareholder. When the gr…
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.