PLR 200906035: A trust received consent to revoke its ESBT election

Plain-English summary

A trustee had elected to treat a trust as an electing small business trust from the trust's creation date. The trustee later asked the IRS to consent to revocation of that election from another specified date. Treasury Regulation section 1.1361-1(m)(6) permits an ESBT election to be revoked only with the Commissioner's consent through a letter-ruling request. Based on the submitted facts and representations, the IRS allowed the trust to revoke its election from the requested date.

Ruling snapshot

• Question: Could the trust revoke its electing small business trust election from the requested effective date?
• Outcome: Approved: the IRS consented to the revocation.
• Key authorities: IRC § 1361; Treas. Reg. § 1.1361-1(m)(6).

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 200906035
Third Party Communication: None
Release Date: 2/6/2009
Date of Communication: Not Applicable
Index Number: 1361.03-03
Person To Contact:
------------------------------------------------ ----------------------, ID No. -------------
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Telephone Number:
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Refer Reply To:
CC:PSI:B03
PLR-140013-08
Date: October 31, 2008

LEGEND

Trust = ------------------------------------------------ = -----------------------

D1 = --------------------

D2 = --------------------

Dear -------------:

This letter responds to your letter dated July 15, 2008, submitted on behalf of the Trust, requesting a ruling under § 1361 of the Internal Revenue Code that the Service consent to revoke the Trust’s electing small business trust (ESBT) election.

The information submitted states that the Trust was created on D1. The trustee of the Trust elected to treat the Trust as an ESBT effective D1. The trustee requests that the Service consent to revoke the Trust’s ESBT election as of D2.

Section 1.1361-1(m)(6) of the Income Tax Regulations provides that an ESBT election may be revoked only with the consent of the Commissioner. The application for consent to revoke the election must be submitted to the IRS in the form of a letter ruling request under the appropriate revenue procedure.

Based on the facts submitted and the representations made, we conclude that the Trust may revoke its ESBT election effective D2.

Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter.
PLR-140013-08
2

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent.

The ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the ruling request, it is subject to verification on examination.

Sincerely,

/s/

Tara P. Volungis
Senior Technician Reviewer, Branch 3
Office of Chief Counsel
(Passthroughs & Special Industries)

Enclosures (2)

Copy of this letter
Copy for § 6110 purposes