Ezel / IRS Rulings / 200914027

CCA 200914027: Counsel tentatively treated an ESBT beneficiary as the taxable partner

Number
200914027
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Extension by Agreement
Topics
Procedure, penalties, and administration
Code sections
§ 6229
Ruling dated
September 9, 2008
Publicly released
April 3, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel addressed a limitations-period issue involving an electing small business trust that owned an S corporation, which in turn was a partner in a TEFRA partnership. The writer tentatively understood all partnership income to flow through the S corporation and trust to the trust beneficiary. On that understanding, only the beneficiary, not the trust, would be taxable on the partnership items. The writer expressly disclaimed expertise in electing small business trusts and recommended confirming that conclusion with other Counsel personnel. The email also advised that the taxpayer's current address could be used.

Ruling snapshot

  • Question: Was the electing small business trust or its beneficiary taxable on partnership items passing through an S corporation owned by the trust?
  • Outcome: Advice given: tentatively, only the beneficiary was taxable, but the writer recommended confirmation by an ESBT expert.
  • Key authorities: IRC § 6229.

Full text (IRS public release)

ID: CCA-310156-09 Number: 200914027
Release Date: 4/3/2009
Office: --------------
UILC: 6229.02-00

From: -------------------
Sent: Tue 9/9/2008 4:26 PM
To: ------------------------------
Cc: ---------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Subject: RE: TEFRA

I think that status as an electing small business trust means that all income flows through to the beneficiary of the trust from the S corporation (that the trust owns) which is a partner in the TEFRA partnership. That means that only the beneficiary and not the trust would be taxable on the items from the partnership. ----------------------------------------------------------------------------------------------------------------------
--------------------I am not an expert on electing small business trusts, however, so you may want to first confirm my understanding of electing small business trust with ----- or ------------- ( I am including ------------
---------------- [-----] and ------------------------[-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

You can use the taxpayer's current address.

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