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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Refund lookback example applies to all taxpayers
Chief Counsel confirmed that an Internal Revenue Manual example correctly stated its position on applying the refund limitation in section 6511(b)(2). The approach illustrated in IRM…
Related issue could be disclosed in referred taxpayer case
Chief Counsel saw no disclosure problem with addressing an additional issue involving the same taxpayer in a case already referred to the Department of Justice. The brief advice relied on section…
TEFRA conversion requires notice covering the partnership issues
Chief Counsel advised that partnership items are converted by an authorized person sending a conversion notice to the ultimate individual or corporate taxpayer under section 6231. After conversion,…
Court transfer delay did not support interest abatement
Chief Counsel advised that interest could not be abated under section 6404(e) when a federal court clerk, rather than an IRS employee, delayed transferring restitution payments to the IRS. The delay…
Allowed refund claim cannot be amended after credit carryforward
Chief Counsel advised that a timely protective refund claim may be supplemented or amended only until the IRS takes final action on it. Final action includes both allowance and disallowance. An…
Farmer loan program denied section 501(c)(3) exemption
A proposed nonprofit planned to use public donations and grants to make interest-free loans to farmers or purchase partial or full interests in their farms. Its program was open to any farmer with…
Interest-rate hedging income qualified for partnership income test
A publicly traded partnership used four types of financial transactions to manage interest-rate risk on its fixed-rate and floating-rate debt. It asked whether income from standard interest-rate…
Common parent's officer must sign power of attorney for subsidiary LLC manager
A non-TEFRA LLC partnership had a corporate member-manager that belonged to a consolidated corporate group. The IRS considered who had to sign Form 2848 to authorize representation of the…
Revenue officer may notify an employer that no wages are levy-exempt
An employer challenged an IRS letter stating that none of an employee's wages were exempt from levy because the letter was signed by a GS-12 revenue officer rather than a district director. Chief…
Bank account superpriority turns on actual knowledge and factual tracing
Chief Counsel discussed the section 6323(b)(10) superpriority for certain deposit-secured loans. The advice states that the priority can defeat a filed federal tax lien when the statutory elements…
No direct penalty applies to failure to update EIN information
Chief Counsel addressed the requirement that a person issued an employer identification number provide updated application information when required by forms, instructions, or other guidance. The…
IRS may abate excessive penalties despite a time-barred tax refund
An amended return showed that a taxpayer's true tax liability was lower than the amount originally reported. Although section 6511 barred refunding the tax because the amended return was late, the…
RFRA does not generally bar seizure of church-owned property
Chief Counsel considered whether the Religious Freedom Restoration Act prevents the IRS from seizing property owned by a church. Property not directly used in religious practice, such as residences…
TAS confidentiality discretion does not block litigation disclosure
Chief Counsel advised that the Taxpayer Advocate Service's discretion to protect information under section 7803(c)(4)(A)(iv) does not apply when the IRS must provide information for litigation. TAS…
IRS may conform an inconsistent indirect partner return without an FPAA
An indirect partner reported inconsistently with the partnership's Schedule K-1 without filing Form 8082. Chief Counsel advised that both the partner and the IRS were bound by the partnership return…
Refundable-credit penalty requires deficiency procedures
A taxpayer received a refund based partly on an American Opportunity Credit that the IRS later disallowed because scholarships and grants paid all qualified education expenses. Chief Counsel…
Preparer penalties depend on signing, filing, and understatement
Chief Counsel advised that a willful-or-reckless preparer penalty may apply to an unfiled amended return if the preparer signed it, because a return is deemed prepared when signed. It may also apply…
IRS revokes a foundation after property transfers benefited its trustees
The IRS revoked a private foundation's section 501(c)(3) status after examining two property transfers involving its trustees. The trustees transferred a mortgaged personal residence to the…
Choose between overlapping preparer penalties based on the facts
Chief Counsel advised that the IRS should consider all facts and circumstances when deciding whether the return-preparer penalty under section 6694(b), the aiding-and-abetting penalty under section…
Uncertain deficiency-notice mailing does not itself authorize abatement
Chief Counsel addressed a collection due process case in which an Appeals Officer could not independently verify that a statutory notice of deficiency was properly mailed, and the taxpayer could not…
Assessment period expired 64 days after the waiver
Chief Counsel concluded that the assessment limitations period expired 64 days after the taxpayer executed a valid Form 5564 waiver. Under sections 6213 and 6503, the waiver ended the 90-day…
FUTA interest exception covers quarterly deposits, not the annual balance
Chief Counsel explained how the section 6601(i) interest exception applies to federal unemployment tax. The exception prevents underpayment interest on quarterly FUTA payments required under section…
Settlor may make late prior-month rate elections for two CLATs
A settlor created two charitable lead annuity trusts and valued each charitable annuity using a section 7520 interest rate from one of the two preceding months. The gift tax returns omitted the…
Exempt-status revocation applies only from the proposed-revocation notice
The IRS revoked the section 501(c)(3) status of an organization that financed accelerated payments to claimants, finding nonexempt commercial activity, private benefit, and inurement. The separate…
Homebuyer program denied relief from retroactive revocation
A public charity said in its exemption application that it would provide home-purchase assistance to low- or moderate-income borrowers who demonstrated need. In operation, it ran a nationwide…
NOL carryback refund cannot use foreign-tax-credit deadline
A taxpayer amended a return to deduct foreign taxes instead of claiming a foreign tax credit. The deduction created a net operating loss, which the taxpayer carried back to an earlier year and used…
U.S. territory businesses must file Form 8300 with the IRS
Chief Counsel considered whether people and entities conducting a trade or business in a U.S. territory must file Form 8300 with the IRS when they receive more than $10,000 in cash in a reportable…
Tax matters partner may bind certain small direct partners
Chief Counsel advised that a tax matters partner may bind non-notice partners to a settlement under former section 6224(c)(3). A non-notice partner for this purpose is a direct partner holding less…
Partnership-level loss character controls later passive-loss proceedings
Chief Counsel advised that the amount and character of partnership losses determined on the return or through an FPAA are binding in later partner-level proceedings under section 469. A no-change…
Partnership return information may be disclosed to partners
Chief Counsel advised that partnership return information may be disclosed to any partner under section 6103(e). Once a TEFRA audit begins, partner information may also be disclosed to other…
Entity member, not its manager, may be the tax matters partner
Chief Counsel advised that the member-manager definition for a TEFRA partnership reaches only owners under state law, not owners or managers of an entity member. A direct entity member may be…
Section 882 deduction limit is a partner-level affected item
Chief Counsel advised that the section 882 limitation on deductions is not a partnership item because the partnership does not determine it under subtitle A. It is instead a partner-level affected…
Third-party tax settlements are protected return information
A FOIA requester sought settlement documents involving third parties in related transactions without obtaining those parties' consent. Chief Counsel advised that section 6103, together with FOIA…
Taxpayer may consent to sharing innocent-spouse records with state
Chief Counsel found no evidence of a proper written request from the head of the California Franchise Tax Board under section 6103(d)(2). It advised instead that the taxpayer could consent under…
IRS may abate unpaid tax on newly nontaxable welfare benefits
Chief Counsel advised that the IRS may abate unpaid assessments for years in which legislation deems welfare payments nontaxable. Although taxpayers cannot file formal income-tax abatement claims…
Welfare-payment refund claims depend on filing and payment dates
Chief Counsel analyzed refund claims under legislation enacted September 26, 2014. Claims involving returns filed before September 26, 2011 generally may be denied, subject to extensions, unresolved…
Tribal welfare Act extends claim deadline, not refund lookback
Chief Counsel tentatively concluded that the Tribal General Welfare Exclusion Act applies only to tax years whose section 6511 refund period was still open when the Act was enacted on September 26,…
Valid Form 2848 permits communication with representative
Chief Counsel advised that a Form 2848 meeting the procedural requirements is presumed valid until revoked. A suggestion that the taxpayer may have lacked capacity when signing other documents did…
Financial disability does not toll carryback refund deadline
Chief Counsel advised that section 6511(h)'s financial-disability suspension does not extend the special carryback refund period in section 6511(d)(2). The tolling provision expressly names only the…
Accounting error is not a bad debt for seven-year refund period
Cash-basis partnerships mistakenly included accounts receivable from their accrual-based internal books as taxable income, overstating income and the partners' outside bases. A partner later sought…
Tribal welfare refund extension does not expand payment lookback
Chief Counsel explained how the Tribal General Welfare Exclusion Act of 2014 affected refund and credit claims. Claims that were still timely when the Act was enacted on September 26, 2014, received…
Three-year periods govern assessment and refund of a preparer penalty
IRS examiners asked about the time limits that apply when a return preparer files an amended return containing a meritless refund position. Chief Counsel advised that section 6696(d) gives the IRS…
Insurance-dedicated portfolios may elect partnership status without becoming publicly traded
A business trust maintained 17 separate investment portfolios whose shares supported variable life insurance and annuity contracts. The parent planned for each portfolio to stop being a regulated…
Barter-exchange clearinghouse has no separate broker-reporting duty
A clearinghouse operated a marketplace that let members of separate barter exchanges trade with one another using a common trade-credit currency. The ultimate buyers and sellers were members of…
Generic correspondence is not subject to the section 6702 penalty
Chief Counsel was asked for legal advice about the section 6702 penalty. The response explained that the Code identifies the kinds of documents subject to that penalty. It advised that generic…
IRS has two years to refund an administrative adjustment request
Chief Counsel advised an IRS campus about the time limit for issuing a refund based on an administrative adjustment request. The IRS has two years from the request's filing date to issue the refund…
Refunds follow a two-year period after a partnership case becomes final
Chief Counsel addressed the timing of a court petition involving an administrative adjustment request filed by a partnership. If the petition actually preceded the adjustment request, the court…
Audit results do not change whether TEFRA procedures apply
Chief Counsel advised that TEFRA partnership procedures would still likely govern the audit in question. Whether an audit is subject to TEFRA is determined at the beginning of the examination based…
IRS may obtain a non-liable spouse's credit report in a community property state
Chief Counsel concluded that the IRS generally may obtain a credit report for a non-liable spouse in a community property state when collecting the other spouse's tax debt. The report could qualify…
Parent bankruptcy does not convert a subsidiary's partnership items
Chief Counsel advised that a parent corporation's bankruptcy does not convert the partnership items of a non-bankrupt subsidiary that is itself a partner. The IRS could assess the subsidiary after…
Restitution and civil assessments each require collection due process rights
Chief Counsel considered a tax period with both a court-ordered restitution assessment and a separate assessment from a civil examination. Although the two assessments relate to the same period and…
Delay does not excuse surrender of property subject to levy
Chief Counsel addressed whether a levied party still had to comply after time passed before it identified property reached by the levy. If the party possessed the property, or was obligated with…
Partnership-level examination required for barred-year NOL item
Chief Counsel addressed a partner's net operating loss carryforward that arose from a TEFRA partnership or affected item in an earlier year. Although the assessment limitations period had expired…
Representative may receive information but not attend witness interview
Chief Counsel explained that sections 6103(e)(6) and (e)(7) permit the IRS to disclose a taxpayer's return information to a properly designated legal representative when the disclosure falls within…
Refund result depends on when amended return was filed
Chief Counsel compared payments accompanying amended returns filed before and after the assessment limitations deadline. A payment with a return filed after that deadline is a statutory overpayment…
Prior-year resolution may support TEFRA disclosure
Chief Counsel explained that each tax year is a separate cause of action. When the partners differ, the IRS generally requires a separate final partnership administrative adjustment for each year to…
Authorized corporate officer must sign power of attorney
Chief Counsel agreed that a power of attorney must be executed by someone with authority to legally bind the taxpayer. For a corporation, an authorized officer must sign and certify that authority,…
Authorized corporate officer must sign power of attorney
Chief Counsel agreed that a power of attorney must be executed by someone with authority to legally bind the taxpayer. For a corporation, an authorized officer must sign and certify that authority,…
Preparing a substitute return from IRS records is not an examination
Chief Counsel advised that preparing an IRC § 6020(b) substitute return solely from information returns and other material already held by the IRS did not count as an examination for purposes of IRC…
Appeals cannot allow a refund after the suit period expires
Chief Counsel advised that Appeals could not allow a refund claim after the two-year period for filing a refund suit had expired. A different Chief Counsel Advice cited by the taxpayer did not…
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.