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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Partnership shareholder caused inadvertent S termination
Two shareholders transferred their S corporation stock to a limited partnership, an ineligible S corporation shareholder. After discovering the resulting termination, the partnership distributed the…
Ineligible entity shareholders caused only an inadvertent S termination
An S corporation’s sole shareholder transferred shares to another S corporation and a partnership, both ineligible S corporation shareholders, which terminated the subsidiary’s S election. After…
Corporation may make a new S election before five years expire
A corporation had voluntarily revoked its S corporation election and later changed its ownership by selling shares to additional eligible S corporation shareholders. It sought permission to make a…
Late ESBT election does not end S corporation status
Shares of an S corporation passed under a shareholder’s will to a trust that was eligible to hold S corporation stock for two years. When that period ended, the trust failed to make a timely…
Parent receives 120 days for two late QSub elections
An S corporation wholly owned two domestic subsidiaries and intended to elect qualified subchapter S subsidiary status for both on the date its own S election became effective. It failed to file…
Missing shareholder consent treated as inadvertent
A corporation timely filed an S-corporation election, but its sole shareholder did not properly consent, making the election ineffective. The corporation and shareholder had consistently treated the…
S corporation receives inadvertent termination relief
An S corporation had accumulated C corporation earnings and profits and received more than 25 percent of its gross receipts from passive investment income for three consecutive years. Those facts…
Corrected unequal distributions preserve S corporation status
An S corporation made disproportionate shareholder distributions during three tax years, potentially creating a prohibited second class of stock. Its governing documents nevertheless gave every…
Invalid S corporation and QSub elections receive inadvertence relief
A corporation's S election was ineffective because one trust did not provide the proper shareholder consents and another trust failed to make an electing small business trust election. Those defects…
S corporation receives 120 days for late QSub election
An S corporation acquired all the stock of another corporation but failed to file Form 8869 on time to elect qualified subchapter S subsidiary status. The IRS found that the parent satisfied the…
Ineligible shareholder transfer receives inadvertent S termination relief
An S corporation's status terminated when a shareholder transferred stock to an ineligible owner. The shareholders did not know the transfer was prohibited or intend to end the S election, and the…
S corporation termination from late ESBT elections was inadvertent
An S corporation transferred shares to eleven trusts for grandchildren, but the trustees did not timely elect to treat the trusts as electing small business trusts. That failure terminated the…
Missing QSST elections caused inadvertent S termination
Four trusts acquired shares of an S corporation, but their beneficiaries failed to timely elect qualified subchapter S trust treatment. That made the trusts ineligible shareholders and terminated…
Missing spousal consents made S election inadvertently ineffective
Three shareholders signed an S corporation election, but their spouses did not sign even though community-property rules required their consent. The corporation and its shareholders consistently…
Inadvertence justified late QSub election
An S corporation formed a wholly owned domestic subsidiary and intended to treat it as a qualified subchapter S subsidiary from its formation date. The parent inadvertently failed to file Form 8869…
Inadvertent S corporation termination and invalid successor election receive relief
An S corporation predecessor temporarily had an ineligible shareholder, terminating its S election. A successor corporation then attempted to elect S status before the predecessor was eligible to…
Ineffective qualified S subsidiary election receives inadvertent relief
An S corporation acquired all the stock of another S corporation and attempted to elect qualified S subsidiary status for the acquired company. The election was ineffective because of an inadvertent…
Ineffective qualified S subsidiary election receives inadvertent relief
An S corporation acquired all the stock of another S corporation and attempted to elect qualified S subsidiary status for the acquired company. The election was ineffective because of an inadvertent…
Missed QSST elections receive inadvertent S corporation termination relief
An S corporation transferred shares to three trusts whose income beneficiaries failed to make timely qualified subchapter S trust elections. Without those elections, the trusts were ineligible S…
Invalid QSST election receives inadvertent S corporation termination relief
An S corporation shareholder placed stock in a revocable trust before death, and part of that stock later passed to another trust. The new trust's beneficiary failed to file a valid qualified…
Partnership-style operating agreement receives inadvertent S election relief
A limited liability company adopted an operating agreement containing partnership-style capital-account, allocation, and liquidation provisions before later electing S corporation status. Because…
Defective trust terms receive inadvertent S corporation termination relief
An individual transferred S corporation stock to a grantor trust that later terminated and divided the stock between two successor trusts. The parties filed QSST elections for those trusts, but the…
Corporation receives 120 days to file a late S election
A corporation intended to be taxed as an S corporation from a specified date but did not timely file the required election. The IRS found reasonable cause for the missed deadline under section…
Missing consents and QSST election receive inadvertent S election relief
A corporation's Form 2553 omitted required consents from an individual shareholder and a trust beneficiary and misstated the number of shares each shareholder owned. The trust beneficiary also…
S corporation receives inadvertent termination relief
An S corporation shareholder transferred stock to a charitable remainder unitrust, which was not an eligible S corporation shareholder. That transfer terminated the corporation's S election, but the…
S corporation receives relief for missed trust elections
An S corporation's stock was transferred to a trust that qualified first as a qualified subchapter S trust and later as an electing small business trust, but the required elections were not filed on…
S corporation receives relief for missed trust elections
An S corporation's stock passed through one trust to another trust that qualified first as a qualified subchapter S trust and later as an electing small business trust, but the required elections…
S corporation receives relief for missed trust elections
S corporation stock was transferred to a trust that qualified first as a qualified subchapter S trust and later as an electing small business trust. The income beneficiary did not timely make the…
S corporation receives trust and QSub election relief
An S corporation shareholder trust missed both a qualified subchapter S trust election and a later electing small business trust election, causing the corporation's S election to terminate. The IRS…
S corporation receives relief for missed trust elections
S corporation stock was transferred to a trust that qualified first as a qualified subchapter S trust and later as an electing small business trust. The income beneficiary did not timely make the…
Invalid S election barred flow-through loss deduction
Chief Counsel concluded that a revenue agent could and should deny a taxpayer's claimed loss deduction on an alternative ground. Because the corporation's S election was invalid, there was no…
Partnership ownership did not permanently end S status
An S corporation shareholder transferred stock to a limited liability company taxed as a partnership, which was not an eligible S corporation shareholder. The error was discovered by new…
Missed ESBT election did not end S corporation status
A grantor trust continued holding S corporation stock after the two-year period following one deemed owner's death. The trust qualified to be an electing small business trust, but its trustee did…
Missed ESBT election did not end S corporation status
A grantor trust continued holding S corporation stock after the two-year period following one deemed owner's death. The trust qualified to be an electing small business trust, but its trustee did…
Defective consents and missed ESBT election did not end S status
A corporation's S election was defective because trustees, instead of the grantors of several trusts, signed the shareholder consents. One trust also continued holding stock after the two-year…
Corporation received late S election relief
A corporation intended to be treated as an S corporation from a specified effective date but did not timely file Form 2553. The IRS found reasonable cause for the missed election under section…
Corporation received late S election relief
A corporation intended to be treated as an S corporation from a specified effective date but did not timely file Form 2553. The IRS found reasonable cause for the missed election under section…
Partnership shareholder caused inadvertent S termination
Two shareholders of an S corporation transferred their stock to a partnership, which was not an eligible S corporation shareholder. The corporation’s S election therefore terminated on the transfer…
Second-class-of-stock terms received inadvertent relief
An S corporation’s governing documents allowed disproportionate shareholder distributions, potentially creating a prohibited second class of stock, and its Form 2553 also listed an incorrect…
Corrected filing preserved an inadvertent S election
A corporation attempted to elect S corporation status effective from its formation date, but its election contained errors that may have made it invalid. The corporation represented that the problem…
Late QSub election received a 120-day extension
An S corporation owned all of a domestic subsidiary and intended to elect qualified subchapter S subsidiary status for it from the parent’s S election date. The parent missed the Form 8869 deadline…
Inadvertently late QSub election received extra time
An S corporation owned all of a domestic subsidiary and intended to elect qualified subchapter S subsidiary status for it from the parent’s S election date. The parent inadvertently failed to file…
Late S corporation election received 120-day relief
A corporation intended to be treated as an S corporation from its incorporation date but did not file the required election on time. The IRS found reasonable cause for the missed deadline under…
Service-intensive rents were not passive investment income
A company planning to elect S corporation status owned and managed commercial real estate. Its officers, employees, and contractors provided daily cleaning and security, maintenance and repairs,…
LLC received relief for late corporate and S elections
A single-member limited liability company intended to be treated first as an association taxable as a corporation and then as an S corporation from the same effective date. It failed to timely file…
Missed QSST elections did not end S corporation status
Shares of an S corporation remained in one trust and later passed through two more trusts for the same beneficiary, but the beneficiary never filed qualified subchapter S trust elections. Each trust…
Untimely QSST elections received inadvertent termination relief
Shares of an S corporation stayed in one trust and later moved through two more trusts for the same beneficiary, but the beneficiary did not file qualified subchapter S trust elections. The…
Corporation receives late S election relief
A corporation intended to be treated as an S corporation from a specified effective date but did not timely file the required election. The IRS found reasonable cause for the late filing and granted…
S corporation receives inadvertent termination relief
An S corporation had accumulated earnings and profits and received more than 25% passive investment income for three consecutive years, terminating its election under section 1362(d)(3). Its return…
Invalid QSub election receives inadvertent relief
An S corporation intended to acquire all shares of a subsidiary and elected qualified subchapter S subsidiary status effective on the acquisition date. The election was invalid because the parent…
Corporation receives late S election relief
A corporation intended to be treated as an S corporation from its incorporation date but did not timely file the election. The IRS found reasonable cause for the late filing and granted relief under…
Partnership shareholder causes inadvertent S termination
Two shareholders transferred their S-corporation stock to a partnership, an ineligible shareholder under section 1361(b)(1)(B), terminating the corporation’s S election. After discovering the error,…
Entity receives late classification and S election relief
A newly formed eligible entity intended to elect corporate classification and S-corporation status from the same effective date but did not timely file either Form 8832 or Form 2553. The IRS found…
S corporation receives inadvertent termination relief for disproportionate distributions
An S corporation made disproportionate distributions to its shareholders because its in-house accountant misunderstood the distribution rules. The corporation later learned that the distributions…
Corporation receives relief for a late S election
A corporation intended to be treated as an S corporation from the date it was incorporated, but its S election was not timely filed. The IRS found reasonable cause for the late filing and granted…
Corporation receives relief for an inadvertently invalid S election
A corporation made an S election that contained errors and may not have been effective. The corporation represented that the possible ineffectiveness was inadvertent, was not motivated by tax…
S corporation receives relief after a trust misses its ESBT election
After a shareholder died, shares of an S corporation passed under the shareholder's will to a trust. The trust could hold the shares for two years without an election, but its trustee failed to…
Disproportionate distributions do not end S status after relief
An S corporation made disproportionate distributions to its shareholders over multiple years, then made corrective distributions to several shareholders. Its articles provided for one class of stock…
Corporation receives relief for a late S election
A corporation intended to be treated as an S corporation but did not file its election on time. The IRS found reasonable cause for the late filing and agreed to recognize S corporation status from…
Entity receives relief for late corporate classification and S elections
An eligible entity intended to elect association status taxable as a corporation and S corporation status from the same effective date. It failed to file both Form 8832 and Form 2553 properly and on…
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.