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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Condominium association denied social-club exemption
A seven-unit condominium association sought exemption as a social club under section 501(c)(7). Membership automatically followed ownership of a unit, and member dues paid for lawn care, snow removal,…
Member hardship-benefit association denied charitable exemption
An association collected annual dues and automatically paid fixed benefits to members or their immediate families after specified events, including a death, an immigration arrest, a prolonged illness,…
Charitable carryover adjustment uses annual NOL absorption and current contributions first
A corporation had multiple years of net operating loss carryovers and charitable contribution carryovers available in a year when one charitable carryover was about to expire. Chief Counsel advised th…
Farm-credit patronage dividends excluded from REIT income tests
A limited liability company planning to elect REIT status borrowed from a regulated farm cooperative to acquire timberlands. As an equity holder and borrower, it was entitled to patronage dividends ba…
Seven subsidiaries received 120 days for late QSub elections
An S corporation acquired seven wholly owned domestic subsidiaries on several dates and consistently treated each one as a qualified subchapter S subsidiary, but inadvertently failed to file the requi…
LLC received 120 days for late corporate classification election
After a sequence of acquisitions, name changes, a merger, conversion into a single-member LLC, ownership transfers, and an upstream liquidation, the taxpayer intended to be classified as an associatio…
Estate received 120 days for late 65-day distribution election
An estate made a distribution during the first 65 days of a fiscal year and intended under section 663(b) to treat it as paid or credited on the last day of the preceding fiscal year. The election was…
QDOT received 120 days to report surviving spouse's citizenship
A noncitizen surviving spouse established a qualified domestic trust and later became a United States citizen after continuously residing in the country. No principal distributions were made before ci…
Affordable-housing LLC received extensions for two related elections
A single-member LLC wholly owned by a section 501(c)(3) organization served as general partner of a low-income housing partnership. Its partnership agreement required it both to elect out of tax-exemp…
Four operating units conducted active businesses for section 6166
A decedent's revocable trust held a large interest in a closely held corporation with six operating units. The estate asked whether four units' activities rose to the level of carrying on a trade or b…
Nuclear decommissioning fund transfer received tax-neutral treatment
A utility holding company agreed to sell a nuclear generating unit and transfer its qualified and nonqualified decommissioning fund assets to a buyer that planned an accelerated decommissioning method…
Charitable lead trust termination caused no gain or loss
A charitable lead annuity trust paid an annuity to a charitable foundation and originally provided for the remainder to revert to the settlor or the settlor's assigns. The settlor assigned the remaind…
Pro rata division of grandfathered trust was tax neutral
An irrevocable pre-September 25, 1985 trust for a son and his issue proposed dividing pro rata into five equal subtrusts, one for each child and that child's issue, because the children had different …
Terminally ill donor's disclaimed life estates valued with special factor
An income beneficiary disclaimed life estates in three trusts while in hospice care with a medical prognosis of at least a 50-percent probability of death within one year. She died five days later, an…
Pension plan received waiver of 100-percent funding excise tax
A company requested waiver of the 100-percent excise tax on a pension plan's uncorrected minimum required contribution. It furnished evidence that imposing the tax would cause substantial business har…
Parties received 45 days to complete late section 336(e) election
An individual purchased all shares of an S corporation, and the parties intended to elect under section 336(e) to treat the qualified stock disposition as an asset disposition. The election failed bec…
Six pension plans received substitute mortality table approval
An employer requested substitute mortality tables for six pension plans covering male and female union and nonunion participants, including disabled participants. The IRS approved the four combined po…
Four pension plans received annuitant mortality table approval
An employer requested substitute mortality tables for the combined male and female annuitant populations, including disabled participants, of four pension plans. The IRS approved the tables for ten pl…
Two pension plans received substitute mortality table approval
An employer requested substitute mortality tables for two pension plans' combined annuitant and nonannuitant populations, excluding disabled participants. The IRS approved the tables for ten plan year…
Fraternity-house landlord lost social-club exemption
A corporation owned and maintained fraternity housing but was not itself a fraternity or sorority. Its income came from investment returns and rent paid by undergraduate occupants associated with two …
Business-member organization denied charitable exemption
An organization sought recognition as a section 501(c)(3) charity for programs serving minority-owned and women-owned businesses. It offered workshops and entrepreneurship education, but it also provi…
Increased start-up expense deduction applied only in 2010
Chief Counsel advised that the temporarily increased deduction and phaseout amounts in section 195(b)(3) applied only to the taxable year beginning in 2010. The email cited the statutory language and …
Refund barred after deadline to sue on disallowed claim
Chief Counsel advised that a refund was barred when the taxpayer did not sue within two years after the IRS issued a notice disallowing the refund claim. Assuming no waiver or extension applied, secti…
IRS may levy accumulated funds in a 401(k)
Chief Counsel advised that the IRS is not limited to levying retirement-plan distributions as they are paid. The IRS may also levy the accumulated funds in a 401(k) when it follows the procedures and …
SS-8 unit should normally process Forms 1099-K
Chief Counsel agreed that the IRS SS-8 unit should follow its normal processing rules when it receives Forms 1099-K while making employment-status determinations. The short email did not describe the …
Foreign shareholder's agency refusal triggers section 6038C rules
Chief Counsel considered a transaction between a foreign corporation conducting a U.S. trade or business and its related foreign shareholder. It advised that if the shareholder does not authorize the …
Insurer may revoke its section 831(b) election
A nonlife insurance company had elected under section 831(b) to be taxed only on its taxable investment income. Its business later grew until its premium revenue exceeded the statutory limit for that …
Spouses receive 120 days to opt out of automatic GST allocation
A husband created an irrevocable trust with three separate trusts for the couple's children and transferred cash to them. The spouses elected to split the gifts on timely Forms 709, but their accounta…
Spouses receive 120 days to opt out of automatic GST allocation
A husband created an irrevocable trust with three separate trusts for the couple's children and transferred cash to them. The spouses elected to split the gifts on timely Forms 709, but their accounta…
Estate receives 120 days for missed GST allocations
A decedent's will made direct cash skips to grandchildren and divided the residue into two trusts for the decedent's sons, both with generation-skipping transfer potential. The estate's attorney revie…
IRS retroactively revoked late section 754 election relief
The IRS had previously given a taxpayer 120 days to make a late section 754 election. That relief was based on a representation that no affected return was under examination, before Appeals, or before…
Entity may elect corporate status within 60-month limit
An eligible entity had elected to be treated as a disregarded entity and later experienced a change in ownership of more than 50 percent. It wanted to elect association status taxable as a corporation…
Cash-balance amendment preserves cooperative plan's CSEC status
A tax-exempt association sponsored a multiple-employer defined benefit plan maintained primarily by rural cooperatives and treated as a CSEC plan. It proposed adding a cash-balance formula that adopti…
Estate may divide IRA into inherited IRAs for two children
A decedent named the estate as beneficiary of an IRA, while the estate passed through a trust in equal shares to two children. The estate wanted to divide the IRA in kind through trustee-to-trustee tr…
Corporation receives 60 days for success-fee safe harbor election
A corporation paid success-based adviser fees in connection with the sale of all its stock. Its accounting firm's analysis team received an acquisition-cost list that omitted the fees, while an update…
Oil and gas management fee is qualifying partnership income
A publicly traded partnership indirectly owned an operating partnership engaged in oil and gas exploration, development, and production. The operating partnership had no employees or contractors of it…
Corporation receives 60 days to attach success-fee election
A corporation paid success-based fees in a stock reorganization and reported 70 percent as deductible and 30 percent as capitalized under the Revenue Procedure 2011-29 safe harbor. The corporation and…
Settlement debt write-offs require Forms 1099-C
A financial entity settled class-action claims alleging that defective presale notices made borrowers' remaining deficiency balances unenforceable under certain state laws. The entity agreed to write …
Extended bankruptcy trust remains a liquidating trust
A Chapter 11 reorganization created a trust to liquidate assets and distribute proceeds to beneficiaries. The trust limited its activities, investments, retained cash, and distributions to what was re…
Partnership-interest sales between spouses' grantor trusts are tax-free
Each spouse had created a grantor trust that was disregarded as a separate taxpayer. One spouse and that spouse's trust proposed selling limited partnership interests to the other spouse's trust. Beca…
Bankruptcy-split companies may reconsolidate before 61 months
A corporate group emerged from Chapter 11 through transactions that divided its assets and liabilities between two independent companies. The separation produced a large capital loss that had not been…
VEBA surplus may fund current employee medical benefits
An employer maintained two voluntary employees' beneficiary association trusts holding assets for retiree medical benefits, one for non-bargaining employees and one for bargaining employees. Both trus…
Two pension plans may use substitute annuitant mortality tables
A taxpayer requested substitute mortality tables for two pension plans treated as a combined group. The IRS approved plan-specific tables for male and female annuitants other than disabled participant…
Four union pension plans may use substitute mortality tables
A taxpayer requested substitute mortality tables for four union pension plans aggregated as one included group. The IRS approved tables for male and female annuitants and nonannuitants, excluding disa…
Two pension plans may use substitute annuitant mortality tables
A taxpayer requested substitute mortality tables for two pension plans treated as a combined group. The IRS approved plan-specific tables for male and female annuitants other than disabled participant…
Scholarship for economically challenged graduates received approval
A private foundation proposed a scholarship for graduates of a specified school program who had overcome economic challenges and been accepted by a highly ranked out-of-state university. The award cou…
Employee-children scholarship procedures received approval
A private foundation proposed one-year, nonrenewable scholarships for children of employees of a related private company. An independent third-party administrator would publicize and administer the pr…
Regional artist grant procedures received approval
A private foundation proposed grants for adult artists living and working in a specified city region. The program supported projects in media, performing, literary, and visual arts and evaluated artis…
Grassroots social-change grant procedures received approval
A private foundation proposed grants to people from low-income communities for grassroots projects addressing housing, transportation, cooperative businesses, youth leadership, community organizing, a…
Foundation lost exemption for commercial management activities
A private foundation had been formed to assist underprivileged children but also managed commercial and residential rentals and an automobile repair shop. The examination report said the foundation pe…
Homeowners association loses section 501(c)(4) exemption
The IRS revoked a homeowners association's section 501(c)(4) exemption for a self-declared tax year. The association repeatedly failed to answer IRS requests for records about its receipts, spending, …
Health-services ministry loses exemption for commercial activity and private inurement
The IRS revoked the section 501(c)(3) exemption of an organization that presented its health-services practice as a church ministry. The organization charged for services, received payments through in…
Estate must use death-date values when they produce lower tax
An estate elected alternate valuation believing that the alternate-date values would reduce both the gross estate and the combined estate and generation-skipping transfer taxes. Examination adjustment…
Valueless tax lien may be discharged in short sale
Chief Counsel advised that the IRS may discharge real property from a federal tax lien when the government's interest has no value, including a short sale where a senior creditor permits payments to j…
Tribal Social Security election affects FICA status only
Chief Counsel considered whether a tribe's decision to enter a Social Security Act section 218A agreement for tribal council members changed their worker classification for other tax purposes. The adv…
Worker may reelect foreign earned income exclusion early
A worker had elected the section 911 foreign earned income and housing cost exclusions and later revoked them. Before the normal five-year waiting period ended, the worker took a position with a new e…
Ineligible partnership shareholder caused inadvertent ineffective S election
A corporation's S election was ineffective because one shareholder was a limited partnership and therefore was not an eligible S corporation shareholder. After discovering the problem, the partnership…
Service payment arrangements did not create second stock class
An S corporation and its sole shareholder entered into two successive arrangements with a service provider. The first contemplated a stock sale if specified conditions were met, but no stock was trans…
Ownership change permitted early entity reclassification
A single-owner limited liability company had elected corporate classification and then sought to become a disregarded entity within the normally applicable 60-month waiting period. More than half of i…
Ownership change permitted early partnership classification
A limited liability company had elected corporate classification and then sought to become a partnership within the normally applicable 60-month waiting period. More than half of its ownership had cha…
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.