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 relief after its operating agreement created a second class of stock
An S corporation can have only one class of stock, meaning all shares must confer identical rights to distributions and liquidation proceeds. Here the company's owners signed an operating agreement wh…
S corporation gets relief after a shareholder's exempt status changed and disqualified it
A company had elected to be taxed as an S corporation. One of its shareholders was a charity described in § 501(c)(3), which the tax law allows to hold S corporation stock. Later the IRS retroactively…
S corporation gets inadvertent-termination relief after eleven trusts missed their ESBT elections
An S corporation's special tax status can terminate automatically if its stock is held by an ineligible shareholder. A trust can hold S corporation stock only if it qualifies as an Electing Small Busi…
S corporation preserved after a trust missed its ESBT election
An S corporation's stock passed through a chain of trusts after its sole shareholder died. While that shareholder was alive, a grantor trust held the shares and qualified as an eligible S corporation …
S corporation preserved after a trust missed its QSST election
An S corporation's stock passed through a chain of trusts after its sole shareholder died. While that shareholder was alive, a grantor trust held the shares and qualified as an eligible S corporation …
S corporation saved after three trusts filed defective QSST elections
An S corporation's shares moved through a series of trusts after its original shareholder died. When that shareholder died, a grantor trust holding the stock stopped qualifying automatically, and the …
S corporation's accidental termination excused after a trust missed its ESBT election deadline
An S corporation had a trust as one of its shareholders. While the trust's original owner was alive, the trust was a grantor trust wholly owned by that person, which made it a permissible S corporatio…
An S corporation gets 120 days to file the late QSub elections it forgot for two subsidiaries
An S corporation owned two lower-tier subsidiaries and intended to treat both as qualified subchapter S subsidiaries (QSubs). A QSub election makes a wholly owned subsidiary invisible for tax purposes…
An S corporation election that failed for a missing ESBT election, a partnership shareholder, and no shareholder consents gets inadvertent-termination relief
A corporation tried to elect S corporation status but the election was invalid from the start for three reasons. Its shares were held by a trust and a partnership, both ineligible S corporation shareh…
Consent to re-elect S corporation status before the five-year waiting period
A corporation's S corporation election ended when its shares were transferred to an ineligible shareholder, which automatically terminated the S election under section 1362(d). Normally, once an S ele…
Inadvertent-termination relief keeps S corporation status after a trust flaw and a missed ESBT election
An S corporation's tax status can end automatically if its stock ends up in the hands of an ineligible shareholder, such as the wrong kind of trust. Here shares were transferred to an irrevocable trus…
IRS grants relief for an S corporation whose S status lapsed when trust shareholders missed their QSST elections
An S corporation can lose its special tax status if an ineligible shareholder holds its stock. Here, four trusts acquired the company's stock and each qualified as a qualified subchapter S trust (QSST…
IRS grants extension and inadvertent-error relief to fix dozens of botched QSub elections after an S corp reorganization
An S corporation reorganized, pulling other S corporations and their many subsidiaries under a new S corporation parent (X). To keep those subsidiaries from being taxed as separate corporations, X nee…
IRS grants an S corporation 120 days to make late QSub elections for three subsidiaries
An S corporation that owns 100% of a subsidiary can elect to treat that subsidiary as a "qualified subchapter S subsidiary" (QSub) under § 1361(b)(3). A QSub is ignored as a separate corporation, so i…
S corporation status saved after an invalid election and transfers to an ineligible shareholder are ruled inadvertent under section 1362(f)
A State LLC elected to be taxed as an S corporation but never obtained all of the shareholder consents required for a valid election, so the election was ineffective from the start. Later, interests i…
S corporation's election preserved after an interest was transferred to an ineligible shareholder, because the termination was inadvertent
An S corporation loses its status if an ineligible shareholder ends up owning stock. Here a company's ownership interests were transferred to a person who was an ineligible shareholder (a nonresident …
S corporation's election treated as continuing after grantor trusts lost shareholder eligibility, because the termination was inadvertent
An S corporation can only have certain kinds of shareholders. A grantor trust qualifies while its deemed owner is alive, and it can stay an eligible shareholder for two years after that owner dies, bu…
IRS grants relief for an inadvertently invalid S corporation election and QSub election
An S corporation can have only one class of stock, meaning all shares must confer identical rights to distributions and liquidation proceeds. An LLC that had elected S corporation status adopted an op…
S corporation election restored after a trust failed to convert to a QSST and the company later merged away
This is a companion ruling on the same fact pattern as its two siblings. A small business corporation taxed as an S corporation had a shareholder die, and his stock passed to a testamentary trust. Tha…
S corporation election restored after a botched QSST conversion, contingent on a late QSST election
A small business corporation taxed as an S corporation ran into the same trap addressed in its companion ruling. When a shareholder died, his stock passed to a testamentary trust, which may hold S cor…
An S corporation's election is restored after a trust failed to convert to a QSST
A small business corporation had elected to be taxed as an S corporation. When a shareholder died, his stock passed into a testamentary trust, which is only allowed to hold S corporation stock for two…
IRS treats an ineffective QSub election as inadvertent and validates it
An S corporation tried to treat a subsidiary as a qualified subchapter S subsidiary (a QSub, which is ignored as a separate corporation for tax purposes), but the election was ineffective because the …
IRS treats an LLC's back-to-back second-class-of-stock terminations as inadvertent
An LLC that had elected to be taxed as an S corporation lost its S status because a series of operating agreements gave its members different rights to distributions and liquidation proceeds, which co…
IRS treats an S corporation's second-class-of-stock termination as inadvertent
An S corporation accidentally blew its S election by creating a second class of stock, then asked the IRS to forgive the slip. To keep S status, a corporation may have only one class of stock, meaning…
IRS grants an S corporation 120 days to make a late QSub election for its wholly owned subsidiary
An S corporation asked the IRS for extra time to elect to treat its wholly owned subsidiary as a qualified subchapter S subsidiary (QSub). A QSub election lets the parent treat the subsidiary as part …
S corporation status restored after trustees missed the ESBT elections following a shareholder's death
An S corporation can only have certain kinds of shareholders. A trust can hold S corporation stock if it makes an "electing small business trust" (ESBT) election; without that election, the trust is a…
S corporation election saved after a trust beneficiary forgot to sign the Form 2553
A corporation had filed a Form 2553 to be taxed as an S corporation, and one of its shareholders was a trust. To keep an S corporation's tax status, a trust shareholder generally has to qualify as a q…
Inadvertent-termination relief for an S corporation after a trust beneficiary missed the QSST election
A small business made an S corporation election, then transferred shares to a trust. The trust could have qualified to hold S corporation stock as a "qualified subchapter S trust" (QSST), but its bene…
Inadvertent-defect relief for an S corporation election that was invalid because the sole shareholder never signed the consent
A limited liability company elected to be taxed as an S corporation, but the election was defective: the company's sole shareholder never signed the consent statement on Form 2553, and an S election i…
Inadvertent-termination relief for an S corporation after a shareholder trust missed its ESBT election following the owner's death
An S corporation had shares held by a grantor trust, which is an allowed S corporation shareholder while the grantor is alive. When the grantor died, the trust could keep holding the stock for only tw…
Inadvertent-termination relief for an S corporation after two successive shareholder trusts each missed the ESBT election
An S corporation had its stock pass through two trusts, and each time the trustee failed to file the election needed to keep the trust an eligible shareholder. When the original shareholder died, the …
Inadvertent-termination relief after an LLC operating agreement's partnership provisions created a second class of stock
An S corporation converted into an LLC but kept being taxed as a corporation, and then adopted an operating agreement written with partnership-style provisions: capital accounts maintained under the s…
An S corporation's accidentally terminated election is restored after three shareholder trusts missed their ESBT elections
An S corporation can only have certain types of shareholders. A trust generally must file an "electing small business trust" (ESBT) election to qualify as an eligible shareholder. Here, stock of the S…
An S corporation's accidentally terminated election is restored after two successive shareholder trusts missed their ESBT elections
An S corporation can only have eligible shareholders. When a shareholder died, his stock passed to a trust, which qualified as an eligible shareholder for two years but then needed to file an "electin…
An S corporation's accidentally terminated election is restored after two successive shareholder trusts missed their ESBT elections
An S corporation can only have eligible shareholders. When a shareholder died, his stock passed to a trust, which qualified as an eligible shareholder for two years but then needed to file an "electin…
An S corporation's election is saved after one shareholder trust was mismanaged and eight others missed their ESBT elections
An S corporation can only have eligible shareholders, and trusts that hold its stock generally must qualify as grantor trusts or file "electing small business trust" (ESBT) elections. Here the company…
Inadvertent invalid S corporation election fixed where the wrong spouse signed the consent
To be an S corporation, a company must file Form 2553 and every shareholder must consent to the election. Here, the company was wholly owned by one spouse (Spouse A), but on the Form 2553 the other sp…
S corporation status restored after trusts missed their ESBT elections
A small business corporation elected S corporation status. Later, two shareholders transferred their shares into two trusts. Those trusts could have qualified to hold S corporation stock as Electing S…
A botched QSub election is treated as inadvertent, so subsidiary status is preserved
An S corporation's sole owner reorganized the business by contributing that company (Sub) to a new holding corporation (X) in a tax-free "F reorganization," so X became the successor S corporation and…
Inadvertent S-corporation termination from partnership-style operating agreements excused under 1362(f)
An S corporation is allowed only one class of stock, meaning all shares must confer identical rights to distributions and liquidation proceeds. Here an LLC that had elected to be taxed as an S corpora…
Late corporate-classification and S corporation elections allowed under 9100 relief
A limited liability company that wants to be taxed as an S corporation has to clear two hurdles: it must be treated as a corporation (which an LLC can achieve by filing Form 8832, or automatically thr…
9100 relief to make a late section 336(e) election and a late S corporation election after a stock sale
When buyers purchased all the stock of an S corporation, the parties intended to make two tax elections but missed the deadlines. The first, a section 336(e) election, lets a "qualified stock disposit…
Inadvertent S corporation termination forgiven where a chain of shareholder trusts missed their QSST and ESBT elections
An S corporation's stock passed through a series of family trusts over many years as owners died and trusts distributed shares to successor trusts. To hold S corporation stock, a trust generally must …
9100 relief to make a late QSub election after the subsidiary was fixed to qualify as a corporation
An S corporation formed a wholly owned LLC subsidiary and tried to elect to treat it as a qualified subchapter S subsidiary (QSub), which lets the parent ignore the subsidiary as a separate entity and…
Inadvertent invalid S election forgiven where a shareholder trust missed its ESBT election
A corporation elected to be taxed as an S corporation, but one of its shareholders was a trust that had to file its own election to be an "electing small business trust" (ESBT) to be an eligible S cor…
IRS treats an S corporation's accidental election termination as inadvertent and restores its status
An S corporation can only have certain kinds of shareholders. One of its shareholders was a grantor trust, which is a permitted shareholder. But the trust was amended, and after that amendment it no l…
IRS grants late S corporation election relief and forgives two inadvertent terminations
A corporation meant to be an S corporation from its first day, but it never filed its Form 2553 election on time. Two other problems also surfaced. First, a shareholder's spouse, a nonresident alien, …
S corporation keeps its status after a trust missed its ESBT election, ruled an inadvertent termination
A company taxed as an S corporation had its shares transferred to two trusts. One trust timely elected to be treated as an Electing Small Business Trust (ESBT), which is a permitted S corporation shar…
S corporation status restored after three trusts flunked the QSST rules, ruled an inadvertent termination
An S corporation had its shares transferred to three trusts, and each trust's beneficiary elected to treat the trust as a qualified subchapter S trust (QSST), a permitted S corporation shareholder. Bu…
S corporation gets 120 days to make a late QSub election for its subsidiary
An S corporation wholly owns a subsidiary and intended to treat it as a qualified subchapter S subsidiary (QSub), which makes the subsidiary disregarded so its income and assets are treated as the par…
S corporation's election, ended when an interest was sold to a partnership, is restored as an inadvertent termination
An LLC that had elected to be taxed as an S corporation had one of its members sell part of its interest to another LLC that is treated as a partnership. A partnership is not an eligible S corporation…
S corporation gets 120 days to make late QSub elections for four subsidiaries
An S corporation wholly owns four subsidiaries and intended to treat each as a qualified subchapter S subsidiary (QSub), which makes the subsidiary disregarded so its income and assets are treated as …
A company that forgot to file its S corporation election on time gets 120 days to fix it
A newly formed corporation intended to be taxed as an S corporation starting on a specific date, but it never filed Form 2553, the form that makes the S election. Without a timely election, the compan…
A company that forgot to file its S corporation election on time gets 120 days to fix it
A newly formed corporation intended to be taxed as an S corporation starting on a specific date, but it never filed Form 2553, the form that makes the S election. Without a timely election, the compan…
An LLC that missed both the forms to be taxed as an S corporation gets 120 days to file each one
A limited liability company wanted to be taxed as an S corporation. To get there an LLC normally needs two elections: Form 8832 to be classified as a corporation (an "association taxable as a corporat…
An S corporation's accidental loss of S status, caused by missed QSST elections after the grantors died, is treated as an inadvertent termination
An S corporation had its stock held in a grantor trust, an eligible S corporation shareholder while the grantors were alive. When the grantors died, the stock passed into separate trusts for individua…
IRS grants inadvertent-termination relief under section 1362(f) where an eligible trust shareholder never filed the ESBT election, ineffective S election restored
A corporation filed Form 2553 to be taxed as an S corporation, and all of its shares were held by a trust. The trust qualified as an electing small business trust (ESBT), one of the few trust types al…
IRS grants inadvertent-termination relief under section 1362(f) where an LLC operating agreement created a second class of stock and ended the company's S election
A corporation that had elected to be an S corporation later converted to a limited liability company and signed an operating agreement. That agreement contained partnership-style allocation and liquid…
S corporation cannot change its tax year merely to accelerate a refund
Chief Counsel considered whether an S corporation could recover an overpaid federal tax deposit sooner by changing its accounting period. Because the corporation already used a December 31 year-end, S…
IRS grants a 9100 extension of time for an S corporation to elect QSub treatment for its subsidiary after it missed filing Form 8869
An S corporation that owned all the stock of a subsidiary intended to treat that subsidiary as a qualified subchapter S subsidiary (QSub), which makes the subsidiary disregarded so its assets and inco…
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.