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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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…
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…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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.…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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…
Invalid EIN excused late taxable REIT subsidiary election
A REIT acquired a subsidiary and intended to elect both corporate classification for the subsidiary and taxable REIT subsidiary status. The forms were timely mailed using an EIN that the sellers had…
Foreign entity received late disregarded-entity election relief
A foreign eligible entity with one owner intended to elect treatment as an entity disregarded from that owner but inadvertently failed to file Form 8832 on time. The IRS concluded that the entity…
Partnership received late section 754 election relief
A partnership timely filed its return for a year in which partnership interests had been transferred but inadvertently omitted a section 754 election. The IRS granted 120 days to file the election…
Estate received late section 1022 carryover-basis election relief
The executor of an estate for a decedent who died in 2010 missed the January 2012 deadline to file Form 8939 and elect the section 1022 carryover-basis regime in place of the reinstated estate tax.…
Interest allowed on non-liable spouse's misapplied remittance
A wife joined her husband in selling property subject to a federal tax lien securing his old joint liabilities with a former spouse. Because an IRS discharge letter overstated the government's…
Agriculture scholarship procedures received approval
A private foundation proposed nonrenewable scholarships for students pursuing post-secondary agriculture-related degree programs in the United States and another country. An independent committee of…
Fraternity housing club lost section 501(c)(7) exemption
The IRS revoked a fraternity housing corporation's section 501(c)(7) social-club exemption because rental of its fraternity house was its only activity and source of income, with no income from…
Charity reclassified as private non-operating foundation
An organization remained exempt under section 501(c)(3), but the IRS changed its foundation classification from a section 509(a)(2) publicly supported organization to a private non-operating…
Farmers market lost section 501(c)(3) exemption
The IRS revoked a farmers-market organization's section 501(c)(3) exemption on both organizational and operational grounds. Its articles lacked the required dissolution clause, and a later amendment…
Marketing consultancy denied section 501(c)(3) status
An organization sought section 501(c)(3) status to provide business-development and marketing consulting, principally for nonprofits and public-works organizations. The IRS found that its services…
Missing organizing provisions caused exemption revocation
An organization received section 501(c)(3) status after attesting on Form 1023-EZ that its organizing document contained the required limits on purpose and disposition of assets at dissolution.…
Commercial medical equipment business lost exemption
A section 501(c)(3) organization operated two off-premises stores that sold and rented durable medical equipment to the general public at competitive commercial prices. Although it offered charity…
Missing organizing documents caused exemption revocation
An organization obtained section 501(c)(3) status through Form 1023-EZ after attesting that its organizing document contained the required limits on purpose and disposition of assets at dissolution.…
GST exemption automatically allocated to indirect skips
A settlor transferred limited partnership interests to three irrevocable trust shares for the settlor's children, and the settlor and spouse elected to split the gifts. Their timely gift tax returns…
FCC spectrum sale qualified as an involuntary conversion
A television broadcaster sold part of a station's spectrum-based content distribution rights during the FCC's spectrum incentive auction. If it had declined to participate, the FCC's repacking…
FCC purchases of station spectrum qualified under section 1033
A media company sold all spectrum-based content distribution rights associated with two television stations to the FCC through its incentive auction. The company believed that if it declined to…
Trust funding stayed incomplete while committee powers avoided transfer tax
A grantor created an irrevocable domestic trust for the grantor and family members, retaining consent, support-limited, and testamentary appointment powers while a family committee held joint…
Retained trust powers kept the transfer incomplete
A grantor created an irrevocable domestic trust for the grantor and family members, retaining consent, support-limited, and testamentary appointment powers while a family committee held joint…
Joint trust powers avoided committee transfer tax
A grantor created an irrevocable domestic trust for the grantor and family members, retaining consent, support-limited, and testamentary appointment powers while a family committee held joint…
Family committee powers did not create taxable gifts
A grantor created an irrevocable domestic trust for the grantor and family members, retaining consent, support-limited, and testamentary appointment powers while a family committee held joint…
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.