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 receives more time to elect QSub treatment
An S corporation formed a wholly owned subsidiary and intended to treat it as a qualified subchapter S subsidiary from the formation date. Due to inadvertence, the parent did not file Form 8869 on…
S corporation receives more time to elect QSub treatment
An S corporation formed a wholly owned subsidiary and intended to treat it as a qualified subchapter S subsidiary from the formation date. Due to inadvertence, the parent did not file Form 8869 on…
S corporation receives more time to elect QSub treatment
An S corporation formed a wholly owned subsidiary and intended to treat it as a qualified subchapter S subsidiary from the formation date. Due to inadvertence, the parent did not file Form 8869 on…
S corporation receives more time to elect QSub treatment
An S corporation formed a wholly owned subsidiary and intended to treat it as a qualified subchapter S subsidiary from the formation date. Due to inadvertence, the parent did not file Form 8869 on…
S corporation receives relief for a late QSub election
A corporation already owned a subsidiary when it elected S corporation status and intended QSub treatment for the subsidiary from the same date. Due to inadvertence, it did not file Form 8869 until…
Missing QSST elections receive inadvertent S termination relief
An S corporation transferred shares to two trusts that otherwise met the qualified subchapter S trust requirements. The trusts' sole income beneficiaries did not timely make QSST elections, making…
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…
Missing QSST election after trust succession receives S termination relief
Shares of an S corporation were held in a shareholder's revocable trust during life. At the shareholder's death, the shares passed to another trust that was eligible to elect qualified subchapter S…
Missing successor-trust QSST election receives S termination relief
S corporation shares were held in a qualified subchapter S trust during the income beneficiary's life. After the beneficiary died, the original trust remained a permitted shareholder under the…
Missing ESBT election receives conditional S termination relief
An S corporation shareholder transferred stock to a trust that met the electing small business trust requirements, but the trustee did not timely file an ESBT election. The trust also failed to file…
Inadvertent consent and trust errors do not defeat S corporation status
A corporation's S election and its subsidiary's QSub election were ineffective because the wrong people signed shareholder consents for three trusts. A separate shareholder trust later became…
Separate trust shares qualify for inadvertent S termination relief
An S corporation's shareholder was a grantor trust that became ineligible after the grantor died because the beneficiaries did not timely make QSST elections. The trust divided into two shares, one…
Late ESBT election does not terminate S corporation status
A trust that held S corporation stock ceased to be a grantor trust and became an ineligible shareholder because its trustee did not timely elect electing small business trust status. The corporation…
Late ESBT election does not terminate S corporation status
A trust that held S corporation stock ceased to be a grantor trust and became an ineligible shareholder because its trustee did not timely elect electing small business trust status. The trust also…
LLC receives late corporate classification and S election relief
A limited liability company intended to be taxed as a corporation and as an S corporation from a specified date, but neither Form 8832 nor Form 2553 was timely filed. The company represented that…
Late ESBT elections receive inadvertent S termination relief
Shares of an S corporation passed through related corporate reorganizations and were transferred to two trusts. The trusts otherwise qualified as electing small business trusts, but their trustees…
Passive-income termination receives conditional S corporation relief
An S corporation had accumulated earnings and profits and received more than 25 percent of its gross receipts from passive investment income for three consecutive years. That combination terminated…
Late ESBT election receives conditional S termination relief
An S corporation’s shareholder trust became ineligible after shares passed from a grantor trust to a successor trust and no timely electing small business trust election was filed. The IRS found the…
S corporation receives relief after shares briefly pass to an ineligible owner
An S corporation’s shareholders placed their shares in two revocable trusts, then some shares were transferred to an owner that was not eligible to hold S corporation stock. That transfer terminated…
Late ESBT election preserves a corporation’s S status
A trust purchased stock in an S corporation and was otherwise eligible to be an electing small business trust, but its trustee did not make the required ESBT election. The trust therefore became an…
LLC receives late corporate and S elections
A single-member LLC intended to be treated as an S corporation from a specified date, but timely filed neither Form 8832 nor Form 2553. The LLC represented that it acted reasonably and in good…
Corporation receives relief for missed ESBT election
A shareholder transferred S corporation stock to a trust and later died. The trust continued holding the shares but its trustee did not timely elect electing small business trust status, causing the…
Late S corporation election receives relief
A corporation intended to be treated as an S corporation from a specified effective date but did not file its election on time. The IRS found that the corporation had reasonable cause for the late…
Late S termination-year allocation election allowed
An S corporation revoked its election during a tax year, dividing that year into an S short year and a C short year. It intended to elect under IRC § 1362(e)(3) not to use the default daily pro rata…
Corporation receives relief for an inadvertent invalid S election
A corporation's S election was invalid because shares were transferred to an ineligible shareholder. After discovering the problem, the corporation and its shareholders transferred those shares to…
Stock redemption plan does not create a second class of stock
An S corporation had voting and nonvoting common shares with identical distribution and liquidation rights. It proposed a voluntary annual stock redemption plan designed to keep voting power and…
Late QSST election does not end S corporation status
An S corporation's shares passed to a testamentary trust after a shareholder died. The trust remained an eligible shareholder for two years but continued holding the stock after that period without…
Late ESBT election does not terminate S corporation status
Shares of an S corporation passed to a trust after a shareholder died. The trust remained an eligible testamentary-trust shareholder for two years, then filed a qualified subchapter S trust election…
Multiple unit classes and IRA owners receive S corporation relief
An LLC taxed as an S corporation amended its operating agreement to create preferred and several common-unit classes with different distribution or liquidation rights. It then issued some preferred…
S corporation receives relief for missing trust election
An S corporation shareholder died and the shareholder's estate transferred company stock to a trust under the will. After the trust's two-year period as an eligible shareholder expired, the trustee…
Corporation receives relief for late S election
A corporation intended to be an S corporation from its formation date but did not timely file Form 2553. The IRS found reasonable cause for the missed deadline based on the corporation's facts and…
Ineffective QSub election receives inadvertent-election relief
An S corporation acquired all the shares of another S corporation in a purported reorganization and later elected to treat the subsidiary as a qualified subchapter S subsidiary. The election was…
Corporation gets relief for late S election
A corporation's shareholder intended the company to be an S corporation from its incorporation date, but Form 2553 was not filed on time. The corporation requested late-election relief under IRC §…
S corporation receives relief for an inadvertent termination
An S corporation transferred shares to an ineligible shareholder, causing its S election to terminate. After discovering the problem, the parties returned the shares to the original shareholders and…
Corporation receives relief for inadvertent S election termination
An S corporation transferred shares to two ineligible shareholders, which terminated its S election. The corporation and its shareholders did not know that the recipients were prohibited from…
Corporation receives relief for invalid S election caused by trusts
Two trusts owned shares when a corporation's S election took effect. Their beneficiaries elected qualified subchapter S trust treatment, but the trusts did not meet the QSST requirements. The trusts…
Corporation receives relief for missed ESBT election
An S corporation transferred shares to a trust, but the trustees did not timely elect to treat the trust as an electing small business trust. The trust otherwise met the ESBT requirements, and the…
Corporation receives relief for possible QSST-caused termination
Three trusts became shareholders of an S corporation and their beneficiaries elected qualified subchapter S trust treatment. During due diligence for a later stock sale, a buyer identified a trust…
S corporation receives inadvertent termination relief
An S corporation had accumulated C corporation earnings and profits while passive investment income exceeded 25 percent of gross receipts for three consecutive years. Those facts terminated its S…
Parent receives more time to make QSub election
An S corporation owned all of a domestic subsidiary's stock and intended to treat the subsidiary as a qualified subchapter S subsidiary from a redacted date. It failed to file Form 8869 because of…
Partnership's temporary ownership was inadvertent S termination
An individual intended to buy all shares of an S corporation using financing supplied by a partnership. The partnership inadvertently became the shareholder for a period before transferring the…
Corporation receives late S election relief
A newly formed corporation intended to be treated as an S corporation from its formation date but did not timely file Form 2553. The IRS found reasonable cause for the late election and granted…
Late QSST election preserves S corporation status
An S corporation’s shares were transferred to a trust that was eligible to be a qualified subchapter S trust, but the beneficiary did not timely make the QSST election. The omission terminated the…
S corporation AAA resets to zero after the post-termination period
A corporation had an S period, revoked its election, left some accumulated adjustments account balance undistributed after the post-termination transition period, and later elected S status again.…
Trust-caused S corporation termination treated as inadvertent
An S corporation's sole shareholder transferred all shares to a grantor trust and later died. Two years after the death, the trust ceased to be a permitted S corporation shareholder, which…
Missing ESBT election causes inadvertent S termination
A grantor trust owned stock in an S corporation, but its grantor-trust status later ended. Although the trust was eligible to become an electing small business trust, its trustee did not timely file…
Untimely ESBT election receives inadvertent-termination relief
A trust held shares in an S corporation while it was wholly treated as owned by an individual. When grantor-trust status ended, the trust was eligible to elect small business trust status, but the…
Late QSub election relief granted
An S corporation intended to elect qualified subchapter S subsidiary status for a wholly owned subsidiary but did not file Form 8869 on time. The corporation represented that its returns for all…
S corporation receives late QSub election relief
An S corporation intended to treat a wholly owned subsidiary as a qualified subchapter S subsidiary from a specified date but missed the Form 8869 filing deadline. It represented that all relevant…
Late QSub filing receives 120-day extension
An S corporation failed to timely file Form 8869 for a wholly owned subsidiary it intended to treat as a qualified subchapter S subsidiary. It represented that its tax returns for the relevant years…
Missed QSub election deadline excused
An S corporation intended a wholly owned subsidiary to be a qualified subchapter S subsidiary but failed to timely submit Form 8869. The corporation represented that its returns consistently treated…
QSub election may be filed late
An S corporation intended to elect QSub treatment for its wholly owned subsidiary but did not file Form 8869 by the deadline. It represented that its returns consistently treated the subsidiary as a…
Disproportionate distributions did not end S status
An S corporation made disproportionate distributions to shareholder grantor trusts over several years, then made a corrective distribution that restored cumulative proportionality. The corporation…
Corrected unequal distributions did not terminate S election
An S corporation made disproportionate distributions to two shareholder grantor trusts, then paid a corrective distribution that made cumulative distributions proportional to ownership. Its articles…
Late S corporation election relief granted
A corporation was eligible to elect S corporation status from its formation date but did not timely file Form 2553. It asked the IRS to treat the election as timely under the reasonable-cause rule…
Missing QSST election treated as inadvertent S termination
A trust acquired shares of an S corporation and met the substantive qualified subchapter S trust requirements, but its income beneficiary failed to file the QSST election. The trust therefore was…
Late QSST election preserves continuous S status
A trust became an S corporation shareholder and met the substantive QSST requirements, but its income beneficiary did not timely file the QSST election. That omission made the trust an ineligible…
Inadvertent QSST failure does not interrupt S status
A trust acquired S corporation shares but its income beneficiary failed to file the required QSST election. Although the trust otherwise met the QSST requirements, the missed election made it an…
Missed QSST elections for two trusts receive relief
Two trusts acquired shares of an S corporation and otherwise met the qualified subchapter S trust requirements, but their income beneficiary failed to file QSST elections. The trusts therefore were…
Multiple missed QSST elections receive inadvertent termination relief
An S corporation's shares moved through a series of trusts after the deaths of two grantors. Several successor trusts and separate trust shares otherwise qualified as QSSTs, but their income…
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.