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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Bankruptcy liquidating trust keeps its trust status even after its term is extended again
A trust was created out of a company's Chapter 11 bankruptcy reorganization plan to liquidate the debtor's assets and pay creditors. The Bankruptcy Court had already extended the trust's wind-down…
Where to look in the IRM before filing a lien on an additional assessment
This is a one-paragraph internal email from the Office of Chief Counsel answering a colleague's question about filing Notices of Federal Tax Lien (NFTLs) when the government makes an additional…
Whether a taxpayer can designate how payments are applied when seeking a certificate of discharge
This Chief Counsel email discusses whether a taxpayer can control (designate) how payments are applied when the taxpayer is seeking a certificate of discharge of a federal tax lien under section…
One-line approval that a proposed disclosure is permissible under § 6103(h)(1)
This is an extremely brief Chief Counsel email. In a single sentence, the author approves a proposed course of action as permissible under section 6103(h)(1), the provision that allows returns and…
Disclosures involving the Taxpayer Advocate should be coordinated by counsel under § 6103(h)(2)
In this brief Chief Counsel email, the author sees no disclosure problem with a proposed arrangement involving the Taxpayer Advocate. The reasoning is that the Taxpayer Advocate office (TAO) is part…
When the statute of limitations runs on the § 6707A reportable-transaction penalty
This Chief Counsel email explains when the IRS must assess the section 6707A penalty for failing to disclose a reportable transaction. The general rule: when disclosure is required with a return…
Transmittal email forwarding a CCA memo on SECA loss limitations for a general partner
This is a short transmittal email forwarding a separate Chief Counsel Advice memorandum. The email explains that the attached CCA memo, based on the offices' earlier discussions and a general fact…
How CPEOs must report payments to self-employed individuals, including partners
This Chief Counsel Advice clarifies, in response to practitioner questions about the preamble to the proposed Certified Professional Employer Organization (CPEO) regulations, how a CPEO must treat…
Information gathered from a foreign financial institution can be a taxpayer's return information
This short Chief Counsel email answers whether information the IRS obtained from a foreign financial institution (FFI) is protected as a taxpayer's "return information" under section 6103. The…
Brief email confirming a Tax Court signature-block point
This is a brief, informal Chief Counsel email that is part of an exchange about recent amendments to the United States Tax Court's Rules of Practice and Procedure. In a one-line reply, the author…
Effective dates of the Tax Court's passport-case rules and amended signature-block rule
This very short Chief Counsel Advice is an email answering a question about two recent changes to the United States Tax Court's Rules of Practice and Procedure. First, it notes that the new Title…
Family-member 2% S-corp shareholders can still take the § 162(l) health insurance deduction
This Chief Counsel Advice addresses the self-employed health insurance deduction for a family member who is treated as a 2-percent shareholder of an S corporation only because of family attribution.…
Dormant charity loses 501(c)(3) status for showing no activity and keeping no records
The IRS revoked the 501(c)(3) exemption of an essentially dormant charity that could not show it was doing anything. To keep exemption, an organization must pass the operational test, engaging…
Wellness-practitioner cooperative denied 501(c)(3) status for serving members' private interests
The IRS denied 501(c)(3) exemption to an organization that ran a shared-facility cooperative for wellness practitioners, artists, and educators, concluding it operated mainly for the private benefit…
Retirement-community residents' association loses 501(c)(3) status for serving residents' private interests
The IRS revoked the 501(c)(3) exemption of a residents' association at a retirement community because its activities primarily served the private interests of the residents rather than the public.…
Foundation's educational grant procedures for charter-school graduates approved under 4945(g)(3)
A private foundation received advance IRS approval of its educational grant procedures under Code Section 4945(g)(3), a companion to the scholarship rule that keeps a foundation's grants to…
Foundation's memorial scholarship procedures for relatives of insurance agents approved under 4945(g)
A private foundation received advance IRS approval of its scholarship grant procedures under Code Section 4945(g), which spares the foundation the Section 4945 excise tax that otherwise applies to…
Foundation's robotics/STEM scholarship procedures approved under 4945(g)
A private foundation got advance IRS approval of the procedures it uses to award scholarships, which keeps the grants from being "taxable expenditures" that would trigger the Section 4945 excise…
Foundation's primary-care provider scholarship procedures approved under 4945(g)
A private foundation received advance IRS approval of its scholarship grant procedures under Code Section 4945(g), which lets a foundation avoid the Section 4945 excise tax on grants to individuals…
Foundation's scholarship procedures for students of a particular descent approved under 4945(g)
A private foundation asked the IRS to approve, in advance, the procedures it uses to award scholarships, and the IRS said yes. Private foundations owe an excise tax under Code Section 4945 on…
"Pay-what-you-want" café foundation loses 501(c)(3) status as a substantial commercial business
The IRS revoked a foundation's 501(c)(3) exemption because its main activity was running "pay-what-you-want" cafés that looked and operated like ordinary restaurants rather than a charity. To be…
Rural golf club loses 501(c)(7) exemption because most of its money came from the public
A social club exempt under section 501(c)(7), a small rural nine-hole golf club with a bar, restaurant, and gaming (pull-tab) operation, lost its exemption because it took in too much money from…
Charity set up to fundraise for one named accident victim is denied 501(c)(3) status
The IRS refused to recognize an organization as tax-exempt under section 501(c)(3) because it existed only to raise money for a single, named individual and his family. To qualify, an organization…
Social club loses 501(c)(7) exemption for renting its hall to the public past the 15% limit
A social club exempt under section 501(c)(7), a heritage/fellowship club that owned an event hall, lost its exemption because too much of its money came from renting that hall to the general public.…
Cancer charity loses 501(c)(3) status for running as a family business and inflating gift-in-kind reporting
The IRS revoked the tax-exempt status of a charity that had been recognized under section 501(c)(3) to give financial aid to needy cancer patients. To keep exemption, an organization must be…
An S corporation's accidental termination is forgiven after two trusts missed their QSST elections
An S corporation can only have certain kinds of shareholders. A trust generally is not an eligible shareholder unless it fits a permitted category, and one common way is for the trust's income…
An LLC gets extra time to elect to be taxed as a corporation
The "check-the-box" rules under Treasury Regulation section 301.7701-3 let an eligible business entity, such as a limited liability company (LLC), choose how it is taxed for U.S. purposes by filing…
An LLC gets extra time to elect to be taxed as a corporation
The "check-the-box" rules under Treasury Regulation section 301.7701-3 let an eligible business entity, such as a limited liability company (LLC), choose how it is taxed for U.S. purposes by filing…
Letting employees borrow to buy shares does not disqualify an employee stock purchase plan
An employee stock purchase plan (ESPP) that qualifies under section 423 gives employees favorable tax treatment: no income at the time they buy discounted employer stock, with tax deferred until…
An investor who did not know his foreign company was a PFIC gets to make a late QEF election
A passive foreign investment company (PFIC) is a foreign corporation with mostly passive income or assets, and U.S. investors in a PFIC face harsh default tax treatment unless they elect to treat it…
IRS denies 501(c)(3) status to a scholarship-and-columbarium conduit that mainly benefits a related for-profit
To be tax-exempt under section 501(c)(3), an organization must be operated exclusively for charitable or educational purposes and must serve public rather than private interests; even one…
A structure designed to move CFC cash to the U.S. parent without a section 956 inclusion still triggers one
When a U.S. company owns a controlled foreign corporation (CFC), section 956 generally forces the U.S. shareholder to pick up income (via section 951(a)(1)(B)) when the CFC invests its earnings in…
A bond issuer gets more time to fix which affordability test applies to a tax-exempt rental project
Interest on state and local bonds is generally tax-exempt, and one qualifying use is financing a "qualified residential rental project" under section 142(d). To qualify, the project must meet one of…
A foreign entity gets extra time to elect to be taxed as a partnership
The "check-the-box" rules under Treasury Regulation section 301.7701-3 let an eligible business entity choose how it is taxed for U.S. purposes by filing Form 8832: an eligible entity with at least…
Buyers of an S corporation get more time to make a section 336(e) election
A section 336(e) election lets certain sales of a corporation's stock be treated for tax purposes as if the corporation had sold its assets, which can give the buyers a stepped-up basis in those…
A partnership gets more time to make the deemed-sale election on contributing appreciated property to a REIT
When appreciated property owned (directly or through a partnership) by a C corporation becomes property of a real estate investment trust (REIT), the tax rules under Treasury Regulation section…
A partnership gets more time to make the deemed-sale election on contributing appreciated property to a REIT
When appreciated property owned (directly or through a partnership) by a C corporation becomes property of a real estate investment trust (REIT), the tax rules under Treasury Regulation section…
A consolidated group gets more time to make a section 336(e) election on a stock sale
A section 336(e) election lets certain sales of a corporation's stock be treated for tax purposes as if the corporation had sold its assets, which can give the buyer a stepped-up basis in those…
An S corporation's accidental termination is forgiven after a trust missed its ESBT election
An S corporation can only have certain kinds of shareholders. A trust is an eligible shareholder only if it fits one of the permitted categories, and one common way is for the trust to elect to be…
A partnership gets more time to make the deemed-sale election on contributing appreciated property to a REIT
When appreciated property owned (directly or through a partnership) by a C corporation becomes property of a real estate investment trust (REIT), the tax rules under Treasury Regulation section…
A partnership gets more time to make the deemed-sale election on contributing appreciated property to a REIT
When appreciated property owned (directly or through a partnership) by a C corporation becomes property of a real estate investment trust (REIT), the tax rules under Treasury Regulation section…
A partnership gets more time to make the deemed-sale election on contributing appreciated property to a REIT
When appreciated property owned (directly or through a partnership) by a C corporation becomes property of a real estate investment trust (REIT), the tax rules under Treasury Regulation section…
A partnership gets more time to make the deemed-sale election on contributing appreciated property to a REIT
When appreciated property owned (directly or through a partnership) by a C corporation becomes property of a real estate investment trust (REIT), the tax rules under Treasury Regulation section…
A foreign entity gets extra time to elect to be taxed as a corporation
The "check-the-box" rules under Treasury Regulation section 301.7701-3 let an eligible business entity choose how it is taxed for U.S. purposes by filing Form 8832 (an entity can elect to be treated…
A foreign entity gets extra time to elect to be taxed as a corporation
The "check-the-box" rules under Treasury Regulation section 301.7701-3 let an eligible business entity choose how it is taxed for U.S. purposes by filing Form 8832: a foreign entity whose members…
A utility gets an approved schedule of deduction amounts and a revised ruling amount for its nuclear decommissioning fund
Under section 468A, an electric utility that owns a nuclear power plant can take current tax deductions for money it sets aside in a qualified fund to pay for eventually decommissioning (safely…
A utility gets an approved schedule of deduction amounts and a revised ruling amount for its nuclear decommissioning fund
Under section 468A, an electric utility that owns a nuclear power plant can take current tax deductions for money it sets aside in a qualified fund to pay for eventually decommissioning (safely…
A company's botched S corporation election is treated as valid under the inadvertent-invalidity rule
An S corporation is a business that elects to be taxed by passing its income through to its shareholders instead of paying corporate-level tax, but the election only works if the company meets the S…
A tax-free spin-off paired with a merger of the spun-off business into an unrelated public company
A publicly traded parent company wanted to separate one of its two businesses and combine that business with an unrelated public company. To do it tax-free, the parent used a spin-off under section…
Extra time granted for a captive insurer to make the section 831(b) small-company election
A small non-life insurance company can elect under section 831(b) to be taxed only on its investment income rather than on its underwriting income, a popular structure for "captive" insurers owned…
A county's development incentive payment counts as qualifying REIT income
A real estate investment trust (REIT) gets its favorable tax treatment only if almost all of its income is passive real estate income: at least 95% and 75% of gross income must come from rents and…
A utility that abandoned a half-built nuclear project gets a section 165 abandonment loss
A regulated electric utility set out to build new nuclear generating units at one of its plants, co-owned with an unrelated joint owner. The project ran years behind schedule and far over budget,…
Assets absorbed in a merger qualify as an "unusual grant," protecting public-charity status
A public charity keeps its "publicly supported" status only if it passes a math test: enough of its money must come from the general public rather than from a few large donors. A single huge gift…
501(c)(3) exemption revoked back to day one because the articles never met the organizational test
To be a section 501(c)(3) charity, an organization must pass an "organizational test": its founding document (its articles of incorporation) must limit its purposes to exempt purposes and must…
501(c)(6) business league loses exemption for not producing records or filing returns
A business league recognized as tax-exempt under section 501(c)(6) lost that status because it stopped cooperating with the IRS. Exempt organizations must keep adequate books and records under…
501(c)(3) exemption revoked after the organization went dormant for years
A nonprofit that had been recognized as tax-exempt under section 501(c)(3) lost that status because it stopped operating. The organization was originally formed to provide dental care and to train…
501(c)(7) social club loses exemption for too much nonmember income and missing records
A social club that had been recognized as tax-exempt under section 501(c)(7) lost that status after an IRS examination. Such clubs must be organized and operated mainly for the pleasure and…
Returning a case to Exam to fix penalty paperwork is not a prohibited ex parte communication
This short Chief Counsel advice, written as an email, addresses the ex parte rules that keep IRS Appeals independent from the examiners whose work it reviews. An Appeals Officer handling a…
Wagering excise tax should be assessed against the operator's own EIN, not an unrelated LLC's
This is informal Chief Counsel advice, written as an email, about how to fix a botched wagering-tax assessment. A taxpayer was convicted of running an illegal gambling operation, and the IRS…
Extra time granted to file a late section 336(e) election after a tax professional missed the deadline
When a buyer purchases all the stock of an S corporation, the parties can elect under section 336(e) to treat the stock sale as if it were a sale of the company's assets, which can give the buyer a…
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.