What This Notice Means
The IRS revoked your Qualified Subchapter S Trust, or QSST, election. A QSST is a type of trust that can hold stock in an S corporation. That election is no longer in effect.
What to Do
- Timely file Form 1041, U.S. Income Tax Return for Estates and Trusts.
- Keep this notice for your records.
- Give a copy to the trust's tax preparer and to the beneficiary.
Tell the S Corporation
An S corporation can only have certain types of shareholders. A QSST election is one way a trust qualifies to hold S stock. If the trust still holds S corporation stock, the corporation needs to know about this revocation right away. The trustee and the corporation should get advice on what it means for the corporation's S election.
If You Didn't Expect This
If no one asked to revoke the election and you don't know why it happened, call the number on your notice. Ask what the revocation was based on and when it took effect.
Keep the Records Together
Store this notice with the original QSST acceptance notice, the trust agreement, and the trust's Form 1041 filings. If the trust's status or the corporation's status is ever questioned, these documents answer the questions.
Trustees have a duty to keep the trust's filings current. File every required Form 1041 on time.
If you received a CP292 notice and the trust holds S corporation stock, call us at (813) 229-7100.