Under Private Letter Ruling 202428003, the IRS has allowed late filing of a Qualified Subchapter S Trust (QSST) election, to obtain relief from termination of S corporation status.
The corporation represented that the termination was inadvertent and not for tax avoidance or retroactive tax planning, and at all relevant times the trust met the requirements of a QSST.
Anyone who owns a business that has S-corporation status should usually fund a revocable trust with its shares, but should also make sure the trust contains QSST savings language so that the trust will qualify as a QSST.
