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 may revoke its election out of bonus depreciation for five-year property
An S corporation had historically elected not to claim additional first-year depreciation on five-year property because it expected depreciation recapture when disposing of the property. Its tax advis…
Rural telephone cooperative's stock-sale gain is patronage-sourced income
A taxable rural telephone cooperative had helped form telecommunications companies to obtain lower-cost network resources and better service for its members. Those companies were later combined, and t…
Corporate group receives 60 days to file safe-harbor elections for two acquisition fees
A consolidated corporate group paid success-based advisory fees in two acquisitions, one treated as an asset acquisition through a section 338(h)(10) election and one structured as an asset sale. The …
Annuity-paid investment advisory fees are not distributions to contract owners
A life insurance company planned to offer nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating the contracts' cash value. With the owner…
Annuity-paid investment advisory fees are contract expenses, not owner distributions
A life insurance company planned to offer nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating the contracts' cash value. With the owner…
Direct payment of annuity investment-advice fees is not an owner distribution
A life insurance company planned to offer nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating the contracts' cash value. With the owner…
Advisory fees paid from fixed annuities are expenses rather than owner distributions
A life insurance company planned to offer two nonvariable, nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating the contracts' cash valu…
Annuity contract may pay qualifying advisory fees without making an owner distribution
A life insurance company planned to offer nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating the contracts' cash value. With the owner…
Contract-only annuity advice fees are not taxable distributions to owners
A life insurance company planned to offer nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating the contracts' cash value. With the owner…
Annuity-funded investment advice does not create a distribution to the owner
A life insurance company planned to offer nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating the contracts' cash value. With the owner…
Direct annuity payment of qualifying advice fees is not taxable to the owner
A life insurance company planned to offer nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating the contracts' cash value. With the owner…
Qualifying investment-advice fees paid from annuities are contract expenses
A life insurance company planned to offer nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating the contracts' cash value. With the owner…
IRS revoked charity that facilitated donor-controlled LLC contribution schemes
A tax-exempt organization operated donor-advised funds and routinely accepted noncash interests in limited liability companies. The IRS found that the donors retained voting and management control, co…
Software licensing organization denied section 501(c)(3) status
An organization owned proprietary training materials and application software intended to help communities and institutions conduct structured discussions. It planned to provide a noncommercial online…
Member-owned cultural facility denied section 501(c)(3) status
A member-owned corporation sought section 501(c)(3) status for a building used for cultural events, meetings, rentals, and a separately operated for-profit bar. Its members each held an ownership shar…
Angel investor group denied section 501(c)(6) business-league status
An organization held monthly meetings where early-stage companies pitched investment opportunities to accredited members. It screened deals, coordinated due diligence, supported negotiations, and expe…
Charity lost its exemption after refusing to provide examination records
A section 501(c)(3) organization repeatedly refused to provide financial and activity information requested during an IRS examination. Its chief executive first said the initial request had not arrive…
Hospital charity lost exemption after selling its operations to for-profit buyers
A tax-exempt hospital organization stopped operating the hospital after the city that owned the facilities sold the hospital business and leased the facilities to for-profit buyers. The hospital busin…
Marina slip and storage rents qualified as REIT rents from real property
A real estate investment trust planned to lease boat slips and shore-based storage spaces at a redeveloped marina. The IRS treated the boat slips as water space above land and the storage spaces as sp…
Fund could revoke its section 4982 distribution-period election
A regulated investment company had elected to use its calendar tax year instead of the one-year period ending October 31 when calculating certain amounts for the section 4982 excise tax. The fund foun…
Export commission corporation received extra time to elect IC-DISC status
A domestic corporation was formed to receive commissions connected with another company's software exports and intended to operate as an interest charge domestic international sales corporation, or IC…
Taxpayer received extra time to opt out of automatic GST exemption allocations
A taxpayer made gifts over several years to three irrevocable trusts with generation-skipping transfer potential. He did not intend to allocate GST exemption to those gifts, but his accountant failed …
LLC received inadvertent S corporation election relief after fixing its operating agreement
A limited liability company elected S corporation status, but its operating agreement contained partnership provisions that created more than one class of stock. The members later amended the agreemen…
Homeowners could combine section 121 exclusion with section 1031 deferral after a fire
A married couple lived in a home as their principal residence, later moved out, and rented or offered the property for rent. A fire destroyed the dwelling, and the couple received insurance proceeds b…
LLC received 120 days to make a late partnership classification election
A limited liability company intended to be treated as a partnership for federal tax purposes from a specified date. It did not file Form 8832, the entity classification election, on time. The IRS conc…
Corporation received relief for a late S corporation election
A corporation intended to be an S corporation from its formation date and filed returns consistently with that treatment. Its Form 2553 election, however, was not filed on time. The IRS concluded that…
Surviving spouse could roll over an IRA allocated through a community-property trust
A married couple's revocable trust was the beneficiary of the deceased spouse's IRA, which was community property. After the death, the surviving spouse became sole trustee and could allocate trust as…
Domestic and international business separations qualified as tax-free D reorganizations
A worldwide corporate group proposed a multi-step restructuring to separate two active businesses. The plan included a domestic contribution of assets to a newly classified corporation followed by a s…
Consolidated group received extra time for a general asset account election
A consolidated group acquired a subsidiary's real property through contribution and liquidation steps during the tax year. The group's return included a general asset account election for the predeces…
Employer-related scholarship procedures received advance approval
A private foundation proposed scholarships for dependent children of an employer's full-time employees. An independent committee would select recipients using academic performance, activities, goals, …
Technical education scholarship procedures received advance approval
A private foundation proposed scholarships for low-income high school graduates pursuing two-year technical degrees or certifications at local community colleges. Applicants had to meet citizenship or…
Dissolved charity lost exemption after ignoring requests for records
State records showed that a section 501(c)(3) organization had been involuntarily dissolved. The IRS asked for descriptions of its activities, financial statements, minutes, publications, final return…
Social club lost exemption because restaurant rent exceeded the nonmember-income limit
A self-declared section 501(c)(7) social club provided members a place to socialize, play games, watch television, and hold holiday parties. It also continuously rented ground-floor space to an unrela…
Educators' club denied exemption because public banquet receipts were substantial
An association of women educators sought renewed section 501(c)(7) status after its prior group exemption was automatically revoked for three years of missed filings. Its main described activity was a…
IRS revoked charity that did not produce records for its audit
A section 501(c)(3) organization was selected for an audit of its operations and Form 990-N filing. The IRS sent repeated information requests and delinquency notices to the organization and its direc…
Charity lost exemption after failing to respond to repeated examination requests
A recently recognized section 501(c)(3) organization did not respond to repeated IRS efforts to examine its Form 990-N filing period. The IRS mailed several information requests and delinquency notice…
Group ruling holder lost exemption after withholding audit records
A section 501(c)(3) organization holding a group exemption was selected for an audit of its activities and Form 990-N period. The IRS sent certified requests to the organization and related individual…
Solar farm in a U.S. possession qualifies for domestic-owner depreciation exception
A taxpayer planned to build a solar farm in a U.S. possession through a local disregarded entity. Before the farm entered service, the taxpayer would become a domestic partnership owned entirely by U.…
Charity's inherited IRA transfer remains an IRA and is not taxable
A charitable organization was the named beneficiary of a deceased person's IRA. The custodian required the charity to open a new inherited IRA so the original account's assets could move there by a di…
Late S corporation election allowed with a 120-day filing condition
A corporation intended to be treated as an S corporation beginning on a redacted effective date, but it did not timely file the required election. The IRS found reasonable cause for the late filing un…
S corporation termination from missed ESBT election treated as inadvertent
A trust acquired shares of an S corporation but its trustees did not timely elect for the trust to be treated as an electing small business trust. That failure made the trust an ineligible shareholder…
Partnership received 120 days to make a late section 754 election
A limited liability company taxed as a partnership timely filed its return but inadvertently omitted a valid section 754 election. It represented that it acted reasonably and in good faith and that la…
Parties received 45 days to file a late section 336(e) election statement
A partnership purchased all the stock of an S corporation, which later converted into a disregarded limited liability company. The parties signed a timely binding agreement to make a section 336(e) el…
Missed ESBT and eight QSub elections received corrective relief
A trust held shares when a corporation intended to begin S corporation treatment, but the trustee did not timely elect electing small business trust status. That omission made the corporation's S elec…
Estate received 120 days to make a late portability election
An estate was not otherwise required to file an estate tax return because the decedent's gross estate and adjusted taxable gifts were below the filing threshold. The estate nevertheless needed to file…
Corporation received 60 days to make a late IC-DISC election
A domestic corporation was formed to operate as an interest charge domestic international sales corporation. Its shareholder hired a law firm to handle the formation, but the firm failed to file Form …
Estate received 120 days to file a late portability election
An estate represented that it was below the section 6018 filing threshold and therefore was not otherwise required to file an estate tax return. It still needed Form 706 to elect portability of the de…
Foreign parent's receipt of controlled subsidiary stock qualified as a tax-free distribution
A foreign parent owned a U.S. holding company whose group conducted two separate businesses. To separate the second business, the U.S. company proposed distributing all stock of the subsidiary conduct…
Estate received 120 days to make a late QTIP election for marital trust
A decedent's trust divided into a marital trust for the surviving spouse and a family trust for the children. The spouse was entitled to all marital-trust income, could receive principal for specified…
County deferred compensation plan qualifies under section 457(b)
A county adopted a nonqualified deferred compensation plan and related trust for its employees and beneficiaries. The plan limited deferrals, allowed the statutory catch-up contributions, restricted d…
Partnership received 120 days for a late section 754 election after a partner's death
A married couple held separate interests in a limited partnership formed in a community-property state and later transferred those interests to a revocable trust. When one spouse died, that spouse's c…
Erroneous QTIP election voided and late reverse QTIP relief granted
A decedent's trust divided into Trust A and Trust B, both of which provided income and possible principal for the surviving spouse. Trust B also required recurring payments from corpus to the decedent…
Estate received 120 days to make a late portability election
An estate represented that the decedent's gross estate and adjusted taxable gifts were below the threshold requiring an estate tax return. The estate still needed a timely Form 706 to elect portabilit…
Multi-member LLC received 120 days to file a late corporate classification election
A limited liability company with 22 members intended to be classified as an association taxable as a corporation from its formation date. It missed the deadline for filing Form 8832, but neither the c…
Reporting errors did not elect an asset sale out of the installment method
An S corporation sold all its assets for a closing payment and 12 later quarterly installments, but the buyer defaulted after closing. The corporation's return preparer did not correctly report the in…
Two foreign LLCs received 120 days for late partnership elections
Two foreign limited liability companies intended to be classified as partnerships from their respective formation dates but did not timely file Forms 8832. Because all members of a foreign eligible en…
Late S corporation election allowed with a 120-day filing condition
A corporation intended to be treated as an S corporation from a redacted effective date but did not timely file the election. The IRS found reasonable cause for the late filing under section 1362(b)(5…
Public share repurchases tested pro rata under section 355(e)
A publicly traded company had been separated from a corporate group through distributions intended to qualify under section 355. After major shareholders sold their positions, the company authorized o…
Foundation's music education grant procedures approved
A private foundation proposed grants for children ages 4 through 17 to study music, take theory classes or lessons, and obtain appropriate instruments. Applicants would submit financial and educationa…
Foundation's four-year scholarships for local students approved
A private foundation proposed renewable scholarships for financially needy high school seniors from three counties who planned to attend public universities in their state. Eligible applicants also ha…
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.