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.
No determinations match these filters
Try fewer or different words, check the spelling, or clear the filters to browse everything.
Two trust eligibility failures treated as inadvertent S terminations
An S corporation's shares remained in a former grantor trust for more than two years after the grantor's death, making that trust an ineligible shareholder and terminating the S election. The…
Active rental services kept real estate income from being passive investment income
A corporation planning to elect S corporation status had accumulated earnings and profits and earned rent through real estate held directly and through limited liability companies. It and its…
Corporation kept S status after a trust missed its ESBT election
After a shareholder died, the shareholder's estate transferred S corporation stock to a trust under the will. The trust could hold the shares temporarily but failed to make a timely electing small…
S corporation receives 120 days for late QSub election
An S corporation formed a wholly owned domestic subsidiary and intended to treat it as a qualified subchapter S subsidiary, or QSub, from the subsidiary's formation date. The parent inadvertently…
Missed QSST election did not end S corporation status
An S corporation shareholder transferred stock to a grantor trust and later died. The trust remained an eligible shareholder for two years after the deemed owner's death, but it kept the stock…
Six missed QSST elections did not end S status
Four testamentary trusts became ineligible S corporation shareholders when their two-year eligibility period expired, and two additional trusts later received S corporation stock. All six trusts…
LLC received late corporate and S elections
A single-member limited liability company intended to be classified as a corporation and taxed as an S corporation from the same effective date. It inadvertently failed to file both Form 8832 and…
Corporation receives 120 days to file a late S election
A corporation's sole shareholder intended the company to be an S corporation from a redacted effective date, but the company did not timely file Form 2553. The IRS found reasonable cause for the…
Missed ESBT elections do not invalidate corporation's S status
Two trusts held shares when a corporation's S election became effective, but their trustee did not timely file electing small business trust elections. The corporation and trusts consistently filed…
Corporation receives 120 days to file a late S election
A corporation's shareholder intended the company to be an S corporation from a redacted effective date, but the S election was not timely filed. The IRS found reasonable cause for the missed…
Temporary partnership owner causes only inadvertent S termination
An S corporation was owned through a disregarded limited liability company. The individual owner transferred part of the LLC to a grantor trust, then died, causing the trust to lose grantor-trust…
Invalid QSST consent and possible ineligible owners receive inadvertent relief
A corporation attempted to elect S status while one shareholder was a trust intended to be a qualified subchapter S trust. The trustee signed both the QSST election and the corporation's Form 2553…
S corporation receives 120 days to make a late QSub election
An S corporation intended to treat its wholly owned subsidiary as a qualified subchapter S subsidiary but did not timely file Form 8869. The corporation represented that it had consistently filed…
Missed ESBT election causes only inadvertent S termination
An S corporation's stock was held by a grantor trust whose deemed owner died. The trust remained an eligible shareholder for two years after the death, but it continued holding the stock after that…
Corporation receives late S election and three late QSub elections
A corporation intended to elect S status and to treat three wholly owned subsidiaries as qualified subchapter S subsidiaries from their respective formation dates. None of the required elections was…
S corporation receives relief for an ineligible shareholder
Three individuals held an S corporation through separate single-member LLCs that were disregarded for federal tax purposes. On professional advice, one owner elected to treat his LLC as an S…
Serviced medical-office rents are not passive investment income
A corporation with accumulated earnings and profits planned to elect S corporation status and operated a commercial property leased as medical offices and related facilities. It actively negotiated…
Corporation receives relief for an inadvertent S election termination
An S corporation's shares were transferred to a trust whose trustee inadvertently failed to make an electing small business trust election. Because the trust was not then an eligible S corporation…
Subsidiary receives relief for an ineffective QSub election
An S corporation acquired all the stock of another S corporation in a transaction represented to be an IRC § 368(a)(1)(F) reorganization. The acquired corporation later converted to a limited…
Corporation receives relief for a late S election
A corporation was eligible to elect S corporation treatment from its intended effective date but did not timely file Form 2553. The IRS concluded that the corporation had reasonable cause for…
Corporation receives relief after trust misses QSST election
An estate transferred S corporation shares under a will to a trust that was temporarily eligible to hold the shares for two years. The trust met the substantive requirements of a qualified…
Corporation receives conditional relief after three trusts miss ESBT elections
Three grantor trusts holding S corporation shares became complex trusts but their trustees did not timely elect electing small business trust status, terminating the corporation's S election. After…
Farm lease receipts are not passive investment income for S corporation purposes
An S corporation that owned farmland received income under both a sharecropping arrangement and a rental lease. The corporation shared specified farming costs and crop risks under the sharecropping…
Partnership interest recapitalization avoids S corporation built-in gains tax
An S corporation owned all preferred interests in a limited liability company taxed as a partnership and proposed converting them into common interests. It represented that the exchanged interests…
Parent and subsidiaries receive coordinated late S corporation and QSub election relief
A multi-owner limited liability company acquired one S corporation and later received all shares of another, unintentionally terminating or preventing the subsidiaries' S treatment because the…
Corporation preserves S status after trust beneficiaries miss QSST elections
A trust held all shares of a corporation from the date the corporation elected S status, but the trust's beneficiaries never filed qualified subchapter S trust elections. The trust had separate…
S corporation receives 120 days for four late QSub elections
An S corporation acquired all ownership interests in four subsidiaries and intended to elect QSub status for each from the acquisition date. It inadvertently missed the Forms 8869 deadline and later…
Corporation receives late S election relief
A corporation intended to be an S corporation from its formation date but failed to timely file Form 2553. The corporation and its sole shareholder had consistently filed their federal tax returns…
Corporation gets relief for a late S election
A corporation intended to be treated as an S corporation beginning on a redacted date but did not timely file the required election. The IRS found that the corporation had reasonable cause for the…
Corporation receives relief for an inadvertent S election termination
A grantor trust held shares in an S corporation, but its owner died and the trust did not timely elect treatment as an electing small business trust. Because the trust then became an ineligible…
Corporation receives relief for an inadvertent S election termination
A grantor trust held shares in an S corporation, but its owner died and the trust did not timely elect treatment as an electing small business trust. Because the trust then became an ineligible…
Corporation receives relief for a late S election
A corporation intended to be treated as an S corporation from a specified date but did not timely file the required election. The IRS found reasonable cause for the late filing under section…
Corporation receives relief for a late S election
A corporation intended to be treated as an S corporation from a specified date but did not timely file the required election. The IRS found reasonable cause for the late filing under section…
Corporation keeps S status after correcting a second class of stock
A corporation amended its articles to create voting common stock and nonvoting stock entitled to a preferred dividend. That preference created a prohibited second class of stock, so the…
Corporation retains S status after trust misses ESBT election
An estate transferred shares of an S corporation to a trust that could hold the shares for two years without making a special election. The trust failed to elect electing small business trust status…
Corporation retains S status after missing trust consents and distribution failures
An S corporation's election was invalid because the income beneficiaries of 21 qualified subchapter S trusts did not sign the shareholder consents. One of those trusts also failed in two years to…
Corporation retains S status after beneficiary misses QSST election
Shares of an S corporation were held in a grantor trust owned by a married couple. When one spouse died, the trust divided and part of the stock passed to a new trust that qualified to elect as a…
Corporation receives relief for late S election
A corporation's sole shareholder intended the company to be an S corporation from a specified effective date, but Form 2553 was not filed on time. The corporation requested late-election relief…
S corporation receives relief for missing trust election and consents
A corporation's S election was ineffective because a trust beneficiary did not make a qualified subchapter S trust election and two shareholders did not properly consent. The corporation and its…
Corporation retains S status after stock sale to ineligible shareholder
An S corporation's election terminated when another S corporation, which was not an eligible shareholder, acquired some of its stock. After discovering the problem, the original shareholder trusts…
Corporation receives late S election and inadvertent termination relief
A corporation intended to elect S status but did not know whether the service center received its Form 2553. Later, an unrelated S corporation acquired some of its shares, which would have…
Missing trust elections do not end corporation's S status
Shares of an S corporation were transferred at different times to three trusts that were represented to qualify as qualified subchapter S trusts. The income beneficiaries did not timely file the…
Corporation preserves S status after missed trust elections
Three trusts acquired S corporation shares but their beneficiaries did not file qualified subchapter S trust elections, and a fourth trust did not file its electing small business trust election.…
S corporation status continues after stock briefly passed to a partnership
An S corporation's sole shareholder transferred all of its stock to a partnership, which is not an eligible S corporation shareholder. The transfer terminated the corporation's S election. After…
S corporation status continues after stock briefly passed to a partnership
An S corporation's sole shareholder transferred all of its stock to a partnership, which is not an eligible S corporation shareholder. The transfer terminated the corporation's S election. After…
S corporation status continues after stock briefly passed to a partnership
An S corporation's sole shareholder transferred all of its stock to a partnership, which is not an eligible S corporation shareholder. The transfer terminated the corporation's S election. After…
S corporation receives 120 days to make a late QSub election
An S corporation owned all the stock of a domestic subsidiary and intended to treat it as a qualified subchapter S subsidiary from the acquisition date. The parent failed to file Form 8869 because…
Corporation receives inadvertent S election termination relief
An S corporation's stock was transferred to two trusts that qualified in substance as electing small business trusts, but the trustees did not make the required ESBT elections. The trusts were…
LLC stock ownership receives inadvertent S termination relief
An S corporation transferred shares to two LLCs taxed as partnerships, even though partnerships cannot be S corporation shareholders. The transfers terminated the corporation's S election. After…
Late QSST election receives limited S termination relief
An S corporation shareholder's stock passed from one trust to a second trust that could qualify as a qualified Subchapter S trust. The beneficiary did not timely file the QSST election, causing the…
Partnership shareholder receives inadvertent S termination relief
Shares of an S corporation were transferred to a partnership, which was not an eligible S corporation shareholder. When the corporation discovered that the transfer had terminated its S election,…
Passive income termination receives S corporation relief
An S corporation had accumulated earnings and profits and received passive investment income exceeding 25 percent of gross receipts for three consecutive tax years. Those facts terminated its S…
Trust decanting cures an inadvertent S termination
A shareholder transferred S corporation stock to a nongrantor complex trust that was not an eligible S corporation shareholder. Neither the shareholder nor the corporation understood that the…
Late QSST elections and unequal distributions receive S relief
After a shareholder died, S corporation shares passed from a formerly grantor trust to two trusts intended to qualify as qualified Subchapter S trusts. The beneficiary did not timely make QSST…
Pro rata trust division preserves tax treatment and S eligibility
An irrevocable grantor trust holding S corporation stock and other assets proposed moving the non-S stock assets, pro rata, into eight separate family trusts while retaining the S corporation…
Two trusts receive late QSST election relief
After a shareholder died, S corporation stock moved from a grantor trust into two successor trusts. The successor trusts were eligible S corporation shareholders for two years after the death, but…
LLC shareholder problem is cured with retroactive trust elections
An S corporation sold shares to an LLC taxed as a partnership, which was an ineligible shareholder even though its partners were two trusts. After the corporation discovered the termination, the LLC…
Missed ESBT and QSST elections do not end S corporation status
Six trusts eligible for electing small business trust treatment and two trusts eligible for qualified subchapter S trust treatment received shares of an S corporation, but the required elections…
Late S election and two-class-stock defect receive relief
A corporation intended its S corporation election to begin on an earlier date than the effective date accepted by the IRS. It also had two classes of stock when the election was made, which made the…
Corporation receives 120 days to make an S termination-year election
A corporation's S election terminated during a tax year, dividing that year into an S short year and a C short year. The corporation intended to elect under section 1362(e)(3) to allocate tax items…
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.