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 election reinstated after missed ESBT elections
The IRS ruled that a corporation's S corporation election terminated when trustees failed to timely file elections for six trusts to be treated as Electing Small Business Trusts. The IRS found that…
S corporation election treated as effective after an inadvertent filing defect
The IRS ruled that a limited liability company’s S corporation election was ineffective because its Form 2553 was incomplete. The company represented that the defect was inadvertent, was not…
S corporation status restored after consent, stock-class, and distribution defects
The IRS ruled that an LLC’s S corporation election was ineffective because a required spousal consent was missing and provisions in its operating agreement created a second class of stock. The IRS…
S election restored after missed QSST election
An S corporation requested relief after stock was transferred to a trust whose beneficiary did not timely make a Qualified Subchapter S Trust election. The IRS concluded that the corporation's S…
S corporation termination from a missed ESBT election is treated as inadvertent
A trust became a shareholder of an S corporation, but its trustees failed to make a timely electing small business trust election. That made the trust an ineligible shareholder and automatically…
S corporation receives extra time for QSub election
An S corporation acquired all of a subsidiary and intended to treat it as a qualified subchapter S subsidiary, or QSub, as of the acquisition date. It failed to file Form 8869 on time and requested…
S corporation split-off qualifies as tax-free reorganization
A closely held S corporation proposed dividing its business between its shareholders through a corporate split-off. It would form a qualified subchapter S subsidiary, transfer selected business…
IRS grants late corporate classification and S elections
A limited liability company intended from a specified date to be classified as a corporation and taxed as an S corporation, but it did not file Form 8832 or Form 2553. The company and its owners…
Inadvertent-termination relief restores an LLC's S corporation status after a second class of stock
An LLC that had elected to be taxed as an S corporation accidentally lost that status. An S corporation is allowed only one class of stock, which means every owner must have identical rights to…
Inadvertent-termination relief for S corporations after trusts missed their ESBT elections
Two related corporations were taxed as S corporations, which are limited to certain kinds of shareholders. When two shareholders died, their estates transferred the stock to trusts under their…
120-day relief to file a late S corporation election under § 1362(b)(5)
A corporation intended to be taxed as an S corporation starting the day it was formed, but it inadvertently missed the deadline to file Form 2553, the S corporation election form. It asked the IRS…
IRS grants § 1362(f) relief for an inadvertently invalid QSub election
A company (X) owns a subsidiary (Sub) that it wanted to treat as a qualified subchapter S subsidiary, or QSub, which is a wholly owned S corporation subsidiary that is ignored as a separate entity…
IRS grants § 1362(b)(5) relief for a late S corporation election
A limited liability company wanted to be taxed as an S corporation. It filed Form 8832 on time to be classified as an association taxable as a corporation, but missed the deadline to file Form 2553,…
IRS grants § 1362(f) relief for an inadvertent S corporation termination caused by a second class of stock
An LLC taxed as an S corporation adopted an operating agreement that accidentally created a second class of stock, which S corporations are not allowed to have. The agreement tied members'…
IRS grants § 9100 extension for late QSub elections and § 1362(f) relief for a defective one
An S corporation (X) owns four subsidiaries it wanted to treat as qualified subchapter S subsidiaries (QSubs), which are wholly owned subsidiaries ignored as separate entities and folded into the…
IRS grants § 9100 extension for six late QSub elections and § 1362(f) relief for four defective ones
An S corporation (X) owns ten subsidiaries it wanted to treat as qualified subchapter S subsidiaries (QSubs), which are wholly owned subsidiaries ignored as separate entities and folded into the…
Inadvertent S corporation termination relief under § 1362(f) (missed ESBT election)
A corporation ("X") elected to be taxed as an S corporation, a pass-through structure with strict rules about who may own the stock. All of X's stock was held by a trust. A trust can be an eligible…
IRS grants an LLC late relief to be taxed as a corporation and elect S-corp status
A single-owner limited liability company meant to be treated as a corporation and to elect S corporation status (which lets income pass through to the owner without a separate corporate-level tax)…
Inadvertent-ineffectiveness relief for a bad S-corp and QSub election
An LLC that had elected to be taxed as an S corporation discovered, while preparing to be sold, that its election was never valid. Its operating agreement and profits-interest awards gave it more…
120-day extension to make a late QSub election for a subsidiary
An S corporation owns a subsidiary and meant to elect to treat that subsidiary as a qualified subchapter S subsidiary (QSub), which makes the subsidiary invisible for tax purposes and folds its…
Late relief for an LLC to elect corporate classification and S-corp status (§ 1362(b)(5), § 301.7701-3)
An LLC wanted to be taxed as an S corporation. Because an LLC is not a corporation by default, it first has to elect to be treated as one (the "check-the-box" election), then elect S status. The…
9100 extension to make a late QSub election for a subsidiary (1361(b)(3))
An S corporation (X) owns 100 percent of another corporation (Sub) and wanted to treat Sub as a "qualified subchapter S subsidiary," or QSub. A QSub is ignored as a separate corporation, so its…
Late S-corporation election and late QSub election relief
An LLC wanted to be taxed as an S corporation, and it wanted a subsidiary LLC treated as a qualified subchapter S subsidiary (a "QSub," a wholly-owned corporation folded into the parent's tax…
Late S corporation election allowed for reasonable cause under 1362(b)(5)
A corporation intended to be taxed as an S corporation (where profits and losses pass through to the shareholders instead of being taxed at the corporate level) starting from a specific date. To…
Inadvertent S corporation termination excused after a trust missed its ESBT election
An S corporation's stock was transferred from one trust to a second trust. To stay an eligible S corporation shareholder, the second trust had to file an "electing small business trust" (ESBT)…
IRS consents to an early re-election of S corporation status after a change of ownership
A corporation had been an S corporation, but its S election terminated. Normally, once an S election ends, the company cannot elect S status again for five years unless the IRS consents. After the…
Inadvertent S-corp termination relief for a missed QSST election and two missed ESBT elections
An S corporation can only have certain kinds of shareholders. If ineligible shares end up in a trust that has not made the right election, the company's S election silently terminates, which can be…
Inadvertent S-corp termination relief for a trust that missed its ESBT election after receiving shares
An S corporation loses its special tax status the moment an ineligible shareholder holds its stock. Here the company's stock moved from one trust ("Trust 1"), which was a valid electing small…
Inadvertent S-corp termination relief after three trusts missed their QSST elections
An S corporation's stock passed into a series of trusts. One shareholder put his shares into a grantor trust, which was an eligible S-corporation shareholder while he was alive and for two years…
Inadvertent S-corp termination relief after a trust missed its QSST election
An S corporation's stock passed through a chain of family trusts after two deaths. When the stock landed in one trust, the income beneficiary failed to file the election needed to make it a…
Inadvertent S-corp termination relief after a trust missed its QSST election
An S corporation's stock moved through a series of family trusts after two deaths. When the stock reached one trust, its income beneficiary failed to file the election needed to make it a Qualified…
LLC granted late relief to elect corporate status and be treated as an S corporation
An LLC wanted to be taxed as an S corporation, but it never filed the two elections that requires. An LLC first has to elect to be treated as a corporation (Form 8832), and then elect S corporation…
LLC granted late relief to elect corporate status and be treated as an S corporation
An LLC intended to be taxed as an S corporation from a specific date but never filed the required elections. An LLC first has to be treated as a corporation (Form 8832) and then elect S corporation…
120 days granted for an S corporation to make a late QSub election for a subsidiary
An S corporation that wholly owns another corporation can elect to treat that subsidiary as a "qualified subchapter S subsidiary" (QSub), which makes the subsidiary disappear for tax purposes so its…
120 days granted to a corporation to make a late S corporation election for reasonable cause
A corporation that wants to be taxed as an S corporation (income passing through to shareholders rather than being taxed at the corporate level) must file Form 2553 by a deadline tied to the start…
Inadvertent-termination relief where an S corporation's status lapsed because a trust shareholder missed its QSST election
An S corporation can only have certain kinds of shareholders. A trust can qualify while it is treated as owned by a living individual, and it stays eligible for two years after that owner dies;…
An S corporation's rental income from actively managed real estate is not passive investment income
An S corporation that carries over accumulated earnings and profits from a prior C corporation life can lose its S status (and owe a special tax) if more than 25% of its gross receipts are "passive…
Transitory, insignificant momentary ownership of S-corp stock by an ineligible shareholder under the equity-compensation regulations does not terminate the S elections
An S corporation loses its S status if it ever has an ineligible shareholder, such as a partnership. Here, two S corporations (Y and Z) ran equity compensation plans that let employees of a related…
Inadvertent S-corp termination relief under 1362(f) after five trust shareholders missed their QSST elections
An S corporation can only have certain kinds of shareholders. A trust generally qualifies only if its beneficiary makes a "qualified subchapter S trust" (QSST) election on time. Here, five trusts…
Inadvertent S-corp terminations excused after trusts missed QSST and ESBT elections
An S corporation can only have certain kinds of shareholders. When a shareholder dies and stock passes to a trust, the trust can hold it for a two-year grace period, but to keep it longer the trust…
Inadvertent S-corp termination excused after a trust missed its ESBT election
An S corporation can only have certain kinds of shareholders. A trust can qualify if it makes an electing small business trust (ESBT) election, filed by the trustee. Here all the shares of an S…
Late S-corp election relief plus 9100 extension for a PLLC's corporate-classification election
A professional LLC intended to be taxed as an S corporation from the day it was formed. To get there, an LLC normally must both elect to be classified as a corporation (via Form 8832) and elect…
Late S-corp election relief plus 9100 extension for an LLC's corporate-classification election
A state LLC intended to be taxed as an S corporation from a certain date. To get there, an LLC normally must both elect to be classified as a corporation (via Form 8832) and elect S-corporation…
Inadvertent-termination relief for two S corporations after a trust missed its QSST election
Two S corporations (X and Y) had a shareholder, A, who died. Under A's will, the shares passed to a trust. A trust can hold S-corporation stock only in limited ways; one path is for the trust's…
Triple S-corp relief for an LLC (late classification, late S election, and second-class-of-stock termination)
An LLC intended to be taxed as an S corporation from the day it was formed and had always filed that way, but it hit three separate problems. First, it never filed the forms to be classified as a…
9100-3 relief granting 120 days to file a late QSub election so a subsidiary is treated as a qualified subchapter S subsidiary retroactively
An S corporation ("X") owns all of the stock of another corporation ("Y") and wanted Y to be a qualified subchapter S subsidiary (QSub), a subsidiary that is ignored as a separate corporation and…
Inadvertent termination of an S election relieved after trusts failed to make ESBT elections
A corporation had elected to be an S corporation, which passes income through to shareholders instead of paying corporate-level tax. S corporations can only have certain kinds of shareholders. Here,…
Inadvertent S corporation termination excused after trust beneficiaries missed their QSST elections
An S corporation can only have certain kinds of shareholders; a trust generally qualifies only if the beneficiary files a Qualified Subchapter S Trust (QSST) election on time. Here five trusts…
120-day relief for an LLC to make late corporate-classification and S corporation elections
An LLC is treated by default as a partnership (if it has multiple owners) or as a disregarded entity (if it has one), so to be taxed as an S corporation it must both elect to be classified as a…
Inadvertently invalid S-corporation election excused after an ineligible LLC held shares
A corporation elected to be taxed as an S corporation, but the election was invalid from the start because one of its shareholders was an LLC taxed as a partnership. S corporations may only have…
Inadvertent invalid QSub election excused, subsidiary treated as a QSub under section 1362(f)
An S corporation acquired another S corporation as a wholly owned subsidiary and elected to treat that subsidiary as a qualified subchapter S subsidiary (a QSub), which lets the parent treat the…
An S corporation's status terminated when trusts holding its shares missed their QSST elections, but the lapse was inadvertent and S status is restored
An S corporation can only have certain kinds of shareholders. A trust generally does not qualify unless its beneficiary files a "Qualified Subchapter S Trust" (QSST) election, which treats the…
An LLC's S election was invalid because its operating agreement created a second class of stock, but the defect was inadvertent, so S status is preserved
An LLC that had been taxed as a partnership elected to become an S corporation. To qualify as an S corporation, a company can have only "one class of stock," meaning all owners get identical rights…
IRS grants an S corporation a 120-day extension to file a late QSub election for its wholly owned subsidiary
An S corporation owned all of the stock of a subsidiary and wanted that subsidiary treated as a "qualified subchapter S subsidiary" (QSub), meaning the subsidiary is ignored for tax purposes and its…
IRS grants a corporation reasonable-cause relief to file a late S corporation election
A small business corporation must file Form 2553 on time to be taxed as an S corporation. Here the company intended to be an S corporation as of a specific date but inadvertently failed to file the…
When two shareholder trusts stopped being grantor trusts and missed their QSST elections, the S corporation's termination was inadvertent and its status is restored
An S corporation can only have certain kinds of shareholders. A trust qualifies if it is a grantor trust (treated as owned by an individual) or if its beneficiary files a "Qualified Subchapter S…
An S corporation's election terminated when the trustee of a shareholder trust missed the ESBT election, but the lapse was inadvertent and S status is restored
An S corporation can only have certain kinds of shareholders. A trust can qualify if it makes an "Electing Small Business Trust" (ESBT) election, but that election must be filed on time by the…
Inadvertent S-corp termination relief after subtrust beneficiaries missed their QSST elections (1362(f))
An S corporation's stock was held in a trust that was treated as owned by one individual, which made it an eligible S corporation shareholder. That trust later split into six subtrusts, and the…
Inadvertent trust election defects did not end S corporation status
An S corporation’s stock passed through a family trust and later to four related trusts after the original income beneficiary died. The trustees tried to elect electing small business trust status,…
S corporation receives 120 days to file a late QSub election
An S corporation acquired all the stock of another domestic corporation and intended to treat the acquired company as a qualified subchapter S subsidiary effective on the acquisition date. It failed…
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.