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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IRS grants late QSub election relief
An S corporation acquired all the stock of a subsidiary and intended to treat it as a qualified subchapter S subsidiary, or QSub, from the acquisition date. It failed to file Form 8869 on time…
IRS grants late QSub election relief
An S corporation acquired all the stock of a subsidiary and intended to treat it as a qualified subchapter S subsidiary, or QSub, from the acquisition date. It failed to file Form 8869 on time…
IRS grants late QSub election relief
An S corporation acquired all the stock of a subsidiary and intended to treat it as a qualified subchapter S subsidiary, or QSub, from the acquisition date. It failed to file Form 8869 on time…
IRS grants late QSub election relief
An S corporation acquired all the stock of a subsidiary and intended to treat it as a qualified subchapter S subsidiary, or QSub, from the acquisition date. It failed to file Form 8869 on time…
IRS excuses an S corporation's ineligible partnership shareholder
An S corporation sold an ownership interest to an LLC that was treated as a partnership for federal tax purposes. Because a partnership cannot be an S corporation shareholder, the sale terminated…
Missing ESBT elections caused an inadvertent S corporation termination
An S corporation transferred shares to four trusts that qualified to be electing small business trusts, but their trustees did not file the required ESBT elections. The trusts therefore became…
Partnership-style agreement caused inadvertent S termination
A limited liability company elected S corporation status but later adopted an operating agreement containing extensive partnership-style provisions. The agreement created capital and…
Partnership shareholder made S election inadvertently ineffective
A corporation intended to elect S status while a limited liability company taxed as a partnership owned some of its stock. Because a partnership cannot be an S corporation shareholder, the election…
S corporation status restored after six trusts missed ESBT elections
An S corporation had a shareholder trust that was later administered as six separate trusts, each with its own tax identification number and fiduciary return. The corporation represented that all…
IRS grants S corporation and QSub election relief
A corporation intended to be an S corporation and to treat its wholly owned subsidiary as a qualified subchapter S subsidiary. It failed to file the QSub election, and three shareholder trusts…
LLC receives late corporate classification and S election relief
A single-member limited liability company intended from its formation date to be classified as an association taxable as a corporation and to elect S corporation status. It failed to timely file…
Inadvertently ineffective QSub election receives relief
After an asserted Section 368(a)(1)(F) reorganization, a subsidiary merged into a limited liability company treated as disregarded for federal tax purposes. The parent later tried to make a…
Missed ESBT elections receive inadvertent-termination relief
After an S corporation shareholder died, shares passed through several trusts. Four successor trusts qualified as electing small business trusts, but their trustees did not timely file ESBT…
Missed ESBT elections receive S corporation and QSub relief
After an S corporation shareholder died, stock passed to several trusts that qualified as electing small business trusts, but the trustees failed to file timely ESBT elections. Those failures…
Partnership-style operating agreement receives S corporation relief
A limited liability company's operating agreement used partnership provisions that gave members liquidation rights based on capital account balances instead of membership interests. Those provisions…
S corporation keeps its status after fixing second-class-of-stock provisions
A limited liability company had elected S corporation status and later issued restricted membership units to two service providers. When those units vested, partnership-style provisions in the…
Late QSST election receives inadvertent S corporation termination relief
An S corporation shareholder sold some shares to a trust that represented it met the qualified subchapter S trust (QSST) requirements. The trust's sole income beneficiary failed to timely make the…
Missed ESBT election receives inadvertent S corporation termination relief
A trust acquired stock in an S corporation and represented that it qualified as an electing small business trust (ESBT). The trustee failed to file the ESBT election, causing the corporation's S…
LLC receives 120 days to file its late S corporation election
A state-law limited liability company had elected to be classified as an association taxable as a corporation. It also intended to elect S corporation status from a later date but failed to properly…
S corporation receives relief after a partnership temporarily held its shares
An S corporation sold some of its ownership units to a limited liability company taxed as a partnership. Because a partnership is not an eligible S corporation shareholder, the sale terminated the…
Company receives S corporation relief after fixing its liquidation provisions
A company intended to elect S corporation status, but its operating agreement required liquidating distributions according to positive capital-account balances rather than ownership percentages.…
Four missed ESBT elections receive inadvertent S corporation relief
Two shareholders transferred S corporation shares to four trusts whose trustees failed to make timely electing small business trust (ESBT) elections. The missed elections caused the corporation's S…
Missed QSST elections and a later partnership transfer receive S corporation relief
An S corporation shareholder transferred shares to two trusts that represented they qualified as qualified subchapter S trusts, but their beneficiaries did not timely file QSST elections. The trusts…
IRS grants relief for ineffective S election and inadvertent termination
A corporation's S election was ineffective because spouses with community-property interests did not consent and an ineligible trust owned stock on the election date. The corporation later issued…
IRS grants relief for an inadvertent S corporation termination
An S corporation made annual nonresident state income tax payments for certain shareholders in amounts that were disproportionate to their ownership interests. The corporation represented that those…
IRS validates an S election made with an ineligible shareholder
A corporation elected S status while one shareholder was an entity that could not hold S corporation stock, making the election ineffective. The corporation and its shareholders did not know of the…
IRS grants relief for an inadvertent S corporation termination
An S corporation had a shareholder that was a limited liability company owned through trusts created by a married couple in a community-property state. After interests in the LLC were sold to…
IRS grants relief for an inadvertent S corporation termination
An S corporation had a shareholder that was a limited liability company owned through trusts created by a married couple in a community-property state. After interests in the LLC were sold to…
IRS grants relief for an inadvertent S corporation termination
An S corporation had a shareholder that was a limited liability company owned through trusts created by a married couple in a community-property state. After interests in the LLC were sold to…
IRS grants relief for an inadvertent S corporation termination
An S corporation had a shareholder that was a limited liability company owned through trusts created by a married couple in a community-property state. After interests in the LLC were sold to…
IRS grants relief for an inadvertent S corporation termination
An S corporation had a shareholder that was a limited liability company owned through trusts created by a married couple in a community-property state. After interests in the LLC were sold to…
IRS grants relief for an inadvertent S corporation termination
An S corporation had a shareholder that was a limited liability company owned through trusts created by a married couple in a community-property state. After interests in the LLC were sold to…
IRS grants relief for an inadvertent S corporation termination
An S corporation had a shareholder that was a limited liability company owned through trusts created by a married couple in a community-property state. After interests in the LLC were sold to…
IRS grants inadvertent S corporation termination relief
An S corporation owned two qualified subchapter S subsidiaries, and its shares were held by a grantor trust. When one deemed owner died, part of the trust remained an eligible shareholder for two…
IRS grants relief for an ineffective S corporation election caused by operating agreement provisions
A limited liability company elected S corporation status, but provisions in its operating agreement caused it to be treated as having more than one class of stock. That meant the company did not…
IRS preserves S corporation status after trusts made invalid QSST elections
A company elected S corporation status while two shareholder trusts attempted to elect qualified subchapter S trust status. The trusts were not eligible to be QSSTs, which made the company's S…
Inadvertent S-corp termination excused where an LLC operating agreement created a second class of stock
An LLC that had elected to be taxed as an S corporation later signed an operating agreement containing partnership-style allocation and liquidation provisions. Those provisions tied distributions…
IRS grants relief for late entity-classification and S corporation elections
An eligible entity intended to be classified as a corporation and taxed as an S corporation from the same effective date, but it did not timely file either Form 8832 or Form 2553. It asked for an…
IRS grants reasonable-cause relief for a company that filed as an S corporation for years but never actually filed the S election
To be taxed as an S corporation, a company must file Form 2553 within a set window. Here an LLC's members decided to be taxed as an S corporation and relied on their tax adviser to file the…
IRS grants reasonable-cause relief for a corporation that missed its S election deadline
A corporation that wants to be taxed as an S corporation must file Form 2553 within a set window (generally by the 15th day of the third month of the target year). Here the company's sole…
Inadvertent-invalidity relief for an S election spoiled by operating-agreement terms that created a second class of stock
A limited liability company elected to be taxed as an S corporation. To be an S corporation, a company can have only one class of stock, meaning all owners must have identical rights to…
Corporation receives S status relief after four trusts missed ESBT elections
A parent S corporation created a wholly owned subsidiary and elected qualified subchapter S subsidiary status for it. Four trusts later acquired parent stock but did not timely make electing small…
S corporation receives relief after five trusts missed QSST elections
Five trusts acquired shares of an S corporation and met the substantive requirements for qualified subchapter S trusts. Their respective income beneficiaries did not timely make the required QSST…
S corporation receives relief after a trust missed its ESBT election
An S corporation's shares were held by a grantor trust. After the deemed owner died, the trust remained an eligible S corporation shareholder for two years, but its trustee failed to elect electing…
S corporation receives relief after two trusts missed ESBT elections
Two grantor trusts held stock in an S corporation. After their deemed owner died, each trust remained an eligible S corporation shareholder for two years, but their trustees failed to elect electing…
S corporation receives relief after two trusts failed to elect ESBT status
Two grantor trusts held stock in an S corporation. After their deemed owner died, each trust remained an eligible S corporation shareholder for two years, but their trustees failed to elect electing…
LLC receives 120 days to file a late S corporation election
An LLC timely elected to be taxed as a corporation and intended to be an S corporation from the same effective date. It failed, however, to properly and timely file Form 2553. The LLC and its sole…
S corporation status restored after a trustee missed the ESBT election
A company had validly elected to be taxed as an S corporation. Later, a trust acquired some of its stock. A trust can hold S corporation stock only if it qualifies as an electing small business…
LLC receives inadvertent S corporation relief after operating agreements created multiple stock classes
An LLC intended to be an S corporation, but its operating agreement required capital-account-based liquidating distributions and special allocations that created more than one class of stock. Later…
LLC receives inadvertent S corporation relief for partnership-style operating provisions
A husband and wife elected to treat their LLC as a corporation and then as an S corporation. The LLC's operating agreement still contained partnership-style allocation and liquidation provisions…
IRS grants conditional relief for an ineffective and terminated S corporation election
A business elected S corporation status while organized as a limited partnership, creating a possible violation of the one-class-of-stock rule. Even if the election was initially valid, it later…
IRS grants an S corporation extra time to elect QSub treatment for its subsidiary (late Form 8869 relief)
An S corporation can elect to treat a wholly owned subsidiary as a "qualified subchapter S subsidiary" (QSub), which makes the subsidiary invisible for tax purposes so its assets and income are…
IRS grants inadvertent S corporation termination relief after a partnership bought shares
An S corporation's election terminated when a partnership, which was not an eligible S corporation shareholder, acquired some of its shares. After discovering the problem, the corporation and its…
IRS restores S status after a beneficiary missed a QSST election
An S corporation's shares were held by a grantor trust whose deemed owner died. The trust remained an eligible shareholder temporarily, then transferred the shares to a second trust that met the…
IRS validates S status after an IRA improperly held corporate shares
A shareholder used IRA funds to acquire a corporation's shares, but the IRA trustee bought and held the stock directly instead of distributing funds to the individual. The corporation's later S…
An S corporation remains valid after beneficiaries missed three QSST elections
Three shareholders originally placed their S corporation shares in grantor trusts. When one shareholder died, that shareholder's trust divided into three trusts intended to qualify as qualified…
S corporation status continues after an inadvertent partnership ownership period
An S corporation sold part of its ownership to a limited liability company taxed as a partnership. Because a partnership is not an eligible S corporation shareholder, the transfer terminated the…
Partnership-style operating agreements caused an inadvertent S corporation termination
An LLC elected S corporation treatment but later adopted two successive operating agreements containing partnership-style capital-account, allocation, distribution, and liquidation provisions. Those…
Late ESBT election receives inadvertent S corporation termination relief
A trust acquired shares of an S corporation but its trustee did not timely elect electing small business trust status. Without that election the trust was an ineligible shareholder, terminating the…
Invalid S corporation and QSub elections receive inadvertent-election relief
A business trust intended to elect corporate and S corporation status and to elect three subsidiaries as qualified subchapter S subsidiaries. The forms were invalid because their signature dates…
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.