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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Reasonable cause found for a late S corporation election
A newly incorporated company intended to be taxed as an S corporation (which passes income through to shareholders and avoids corporate-level tax) starting from a specific effective date. To get…
Defective trusts that ended a company's S corporation status are excused after being fixed
This ruling closely mirrors PLR 202451004 (file reference PLR-105737-24). An S corporation's shareholder and his spouse set up two trusts for his children and transferred company stock into them.…
Defective trusts that ended a company's S corporation status are excused after being fixed
An S corporation's two shareholders set up trusts for their children and transferred their company stock into them. The trusts were meant to be qualified subchapter S trusts (QSSTs), which are…
A trust holding S corporation stock under a will missed its election deadline, and the IRS restores the company's S status
A shareholder of an S corporation died, and the S corporation stock passed through the shareholder's estate into a trust set up by the will. A trust that receives S corporation stock under a will…
Late trust election is excused so a family business keeps its S corporation status
A company that had elected to be taxed as an S corporation held some of its stock through a trust. While the trust's creator was alive, the trust counted as a permitted S corporation shareholder…
Late QSST election received inadvertent S termination relief
An S corporation shareholder held stock through a grantor trust. After the deemed owner's death, the trust remained an eligible S corporation shareholder for two years, but its beneficiary did not…
Missing ESBT election caused an inadvertent S corporation termination
An individual held S corporation stock through an eligible trust and later died. After the original trust elected to be included in the estate, it distributed the S corporation stock to a second…
Corporation keeps S status after trusts miss ESBT elections
Two trusts acquired shares of a newly formed corporation but their trustees failed to make timely electing small business trust elections. That failure made the corporation's S election ineffective…
S corporation receives relief for two missed ESBT elections
Three shareholder trusts initially qualified to hold S corporation stock under the grantor-trust rules. After their terms changed, all three were eligible to become electing small business trusts,…
S corporation receives 120 days to make a late QSub election
An S corporation indirectly owned all of a subsidiary corporation through a disregarded limited liability company. It intended the subsidiary to be a qualified subchapter S subsidiary, but the…
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 specified date, but the company failed to file Form 2553 on time. The corporation requested relief under the…
Corporation keeps S status after a trust misses its QSST election
A grantor trust held shares in an S corporation and later became a complex trust. The trust represented that it qualified as a qualified subchapter S trust at that point, but its beneficiary did not…
Business keeps S status despite second-class-of-stock problems
A state-law limited partnership elected corporate and S corporation tax treatment, but its partnership agreement contained provisions that created a second class of stock for federal tax purposes.…
S corporation receives 120 days to file a late QSub election
An S corporation acquired all the stock of another domestic corporation and intended the acquired company to be a qualified subchapter S subsidiary from the acquisition date. It inadvertently failed…
S corporation status preserved after two trusts missed QSST elections
Two grantor trusts held stock in an S corporation when their grantor died. The trusts remained eligible S corporation shareholders for two years after the death, but continued holding the stock…
Supplemental ruling preserves S status after six trusts missed ESBT elections
This supplemental ruling modifies an earlier private letter ruling about a corporation's S election. Six shareholder trusts were eligible to be electing small business trusts, but their trustees did…
S status preserved after two trusts missed QSST elections
Two grantor trusts held stock in an S corporation when their grantor died. The trusts remained eligible S corporation shareholders for the two-year period after the owner's death, but they continued…
S corporation receives inadvertent termination relief after entity conversions
An S corporation converted to a state limited partnership while electing to remain classified as a corporation for federal tax purposes, a change that may have created a prohibited second class of…
Successor receives early S corporation and QSub election consent after ESOP acquisition
A parent corporation owned all of a subsidiary that had previously elected S corporation status, later became a qualified subchapter S subsidiary, and then lost its QSub status. The parent…
Inadvertent S corporation termination relief granted
An S corporation shareholder transferred shares to a trust instrument that created a separate trust to hold S corporation stock. The separate trust qualified to make a qualified subchapter S trust…
Late qualified subchapter S subsidiary election allowed
A corporation hired a tax adviser to obtain S corporation status for itself and qualified subchapter S subsidiary status for its wholly owned subsidiary. Acting on incorrect advice, the corporation…
IRS grants relief to make a late corporate-classification election and a late S corporation election for an LLC
An LLC formed under state law intended to be taxed as an S corporation starting on a specific date. For an LLC to be an S corporation, it must do two things: first elect to be treated as a…
Inadvertent invalid S corporation election fixed by late ESBT elections
A corporation elected to be taxed as an S corporation, but two trusts that owned some of its shares never filed the required "electing small business trust" (ESBT) elections on time. Without those…
S corporation election restored after a grantor trust missed its ESBT election
A corporation was taxed as an S corporation, and one of its shareholders was a grantor trust treated as owned by an individual, which is a permitted S corporation shareholder. When that individual…
S corporation election restored after a grantor trust missed its ESBT election
A corporation was taxed as an S corporation, and one of its shareholders was a grantor trust treated as owned by an individual, which is a permitted S corporation shareholder. When that individual…
S corporation election restored after a grantor trust missed its ESBT election
A corporation was taxed as an S corporation, and one of its shareholders was a grantor trust treated as owned by an individual, which is a permitted S corporation shareholder. When that individual…
S corporation election restored after a grantor trust missed its ESBT election
A corporation was taxed as an S corporation, and one of its shareholders was a grantor trust treated as owned by an individual, which is a permitted S corporation shareholder. When that individual…
S corporation election restored after a grantor trust missed its ESBT election
A corporation was taxed as an S corporation, and one of its shareholders was a grantor trust treated as owned by an individual, which is a permitted S corporation shareholder. When that individual…
S corporation election restored after a trust missed its QSST election
A corporation was taxed as an S corporation, and its shares were held by a revocable living trust treated as owned by a married couple, which is a permitted S corporation shareholder. When one…
S corporation election restored after successive missed QSST and ESBT elections
A corporation's S election was held through a revocable living trust treated as owned by a married couple, which is a permitted S corporation shareholder. When one spouse died, the trust split, and…
S corporation election restored after successive missed QSST and ESBT elections
A corporation's S election was held through a revocable living trust treated as owned by a married couple, which is a permitted S corporation shareholder. When one spouse died, the trust split, and…
S corporation election restored after successive missed QSST and ESBT elections
A corporation's S election was held through a revocable living trust treated as owned by a married couple, which is a permitted S corporation shareholder. When one spouse died, the trust split, and…
Late corporate classification and S corporation elections allowed
A limited liability company intended from a specified date to be classified as a corporation and taxed as an S corporation. It failed to file either Form 2553, which could have supplied a deemed…
Late QSub elections allowed for three subsidiaries
An S corporation owned all the stock of three subsidiaries and intended to treat each as a qualified subchapter S subsidiary from the same effective date as its S election. Through inadvertence, it…
Late S corporation and section 336(e) elections allowed
Multiple purchasers acquired all the stock of a target, and the parties intended to treat the stock sale as an asset sale under section 336(e). They also intended for the target to have S…
Late entity classification and S corporation elections allowed
A limited liability company intended from its formation date to be classified as a corporation and taxed as an S corporation. It inadvertently failed to properly and timely file Form 2553. The IRS…
Late corporate classification and S elections allowed
A limited liability company intended to be classified as a corporation and treated as an S corporation from a specified date. It failed to file Form 2553, which could have supplied a deemed…
Inadvertently ineffective QSub election relieved
An S corporation acquired all the stock of another S corporation in a transaction represented to be an F reorganization. The acquired corporation later converted to a limited liability company, but…
Late S corporation election treated as timely
A corporation intended to be treated as an S corporation but inadvertently failed to file Form 2553 by the statutory deadline. The IRS found reasonable cause for the late election under section…
Late QSub election allowed
An S corporation acquired all the stock of a subsidiary and intended qualified subchapter S subsidiary treatment from the acquisition date. It inadvertently failed to file Form 8869. The IRS found…
Missed ESBT elections treated as inadvertent termination
After a shareholder died, several grantor trusts holding S corporation stock became nongrantor trusts or transferred stock to new trusts. Trustees failed to make timely electing small business trust…
Seven corporations received inadvertent S election relief for missed ESBT and QSST elections
Seven related corporations requested relief after several trusts failed to make timely electing small business trust (ESBT) and qualified subchapter S trust (QSST) elections. The missed elections…
Corporation received inadvertent S termination relief for a missed QSST election
An S corporation's sole shareholder transferred its shares to a grantor trust and later died. The trust remained an eligible S corporation shareholder for two years after the death, but no qualified…
S corporation election saved after four trusts missed their QSST elections
An S corporation's shares passed, after the original shareholder died, from a grantor trust into four new trusts. Each of those trusts could have qualified to hold S corporation stock as a Qualified…
S corporation keeps its status despite a nonresident-alien shareholder that made the election invalid
A small corporation elected to be taxed as an S corporation, but the election was never valid because one of its two shareholders was a nonresident alien. Under Code § 1361, an S corporation cannot…
LLC gets late relief to be treated as a corporation and as an S corporation
A single-member LLC intended to be taxed as a corporation and then elected as an S corporation, both effective the same date. To do that it needed to file the entity-classification election and the…
S corporation keeps its status after three successor trusts miss their ESBT elections
An S corporation's stock was held through a grantor trust set up by a shareholder. When that shareholder died, the trust stopped being a grantor trust but remained an eligible S corporation…
S corporation keeps its status after a shareholder trust misses its QSST election
An S corporation's stock was transferred to a trust. For the trust to be an eligible S corporation shareholder, the beneficiary had to file a qualified subchapter S trust (QSST) election, but that…
S corporation keeps its status after a shareholder trust misses its ESBT election
An S corporation had its stock held by a grantor trust. When the trust agreement was changed so the trust stopped being a grantor trust, the trust needed to elect to be an electing small business…
Inadvertent S-corporation termination relief after trust beneficiaries missed their QSST elections
An S corporation can lose its tax status if the wrong kind of shareholder holds its stock. A trust can hold S-corporation stock only if it fits an allowed category, and one common route is for the…
Inadvertent S-corporation termination relief after trusts missed their ESBT elections
An S corporation's tax status can be lost if the wrong kind of shareholder ends up holding stock. Here, one of the company's shares was held by a trust that counted as an eligible shareholder only…
S corporation received more time for two QSub elections
An S corporation wholly owned two subsidiaries and intended to elect qualified subchapter S subsidiary status for both. Because of inadvertence, it did not timely file Form 8869 for either…
LLC received inadvertent invalid S election relief
An LLC elected corporate status and then S corporation status, but provisions in its operating agreement inadvertently created a second class of stock. The company also made disproportionate…
Corporation received relief for a missed QSST election
An S corporation shareholder's grantor trust transferred stock after the grantor died to another trust that represented it met the requirements for a qualified subchapter S trust. The new trust's…
Corporation gets 120 days to file its late S corporation election
A corporation and its sole shareholder intended the company to be an S corporation from its formation date, but the company inadvertently failed to file Form 2553 on time. The corporation asked the…
Corporation gets 120 days to file its late S corporation election
A corporation and its sole shareholder intended the company to be an S corporation from its formation date, but the company inadvertently failed to file Form 2553 on time. The corporation asked the…
Corporation gets 120 days to file its late S corporation election
A corporation and its sole shareholder intended the company to be an S corporation from its formation date, but the company inadvertently failed to file Form 2553 on time. The corporation asked the…
Corporation gets 120 days to file its late S corporation election
A corporation and its sole shareholder intended the company to be an S corporation from its formation date, but the company inadvertently failed to file Form 2553 on time. The corporation asked the…
Corporation gets 120 days to file its late S corporation election
A corporation and its sole shareholder intended the company to be an S corporation from its formation date, but the company inadvertently failed to file Form 2553 on time. The corporation asked the…
S corporation relief granted after election was signed before incorporation
A corporation's sole original shareholder signed Form 2553 before the corporation was legally incorporated, making its intended S corporation election ineffective. The corporation nevertheless filed…
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.