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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IRS revokes a community theater's 501(c)(3) status for running commercial tribute-band concerts and benefiting its founders' catering company
A community theater arts nonprofit had been recognized as a tax-exempt charity under Code Section 501(c)(3) since the 1990s, originally for producing plays and musicals for the public. To cut costs, i…
IRS revokes a family scholarship foundation's 501(c)(3) status for serving one family and spending funds on personal matters
A small foundation gave college scholarships only to descendants of one particular family and also compiled the family's genealogical records. The IRS revoked its 501(c)(3) charitable exemption on two…
Chief Counsel warns of legal hazards in assessing the preparer due-diligence penalty directly on an S-corp co-owner's SSN
An IRS field office asked Chief Counsel whether it could assess the tax return preparer due-diligence penalty under Code Section 6695(g), the penalty for sloppy handling of credits like the earned inc…
Chief Counsel confirms a state agency may receive return information under § 6103(l)(7) via a computer matching agreement
This is a short Chief Counsel email about sharing federal tax return information with a government agency during a security and compliance transition. Section 6103 generally keeps return information c…
IRS grants a partnership extra time to make a late § 754 basis-adjustment election after its preparer failed to advise it
When a partner dies or a partnership interest changes hands, a partnership can make a "§ 754 election" to adjust the tax basis of its property, which often lets the remaining or incoming partners clai…
IRS treats an S corporation's election termination as inadvertent after a trust missed its ESBT election, and restores S status
An S corporation is a small business corporation that is taxed by passing income through to its owners, but it can only have certain kinds of shareholders. When a trust buys S corporation stock, the t…
IRS treats an S corporation's election termination as inadvertent after two trusts missed their QSST elections, and restores S status
An S corporation can only have certain types of shareholders. When S corporation stock is held in a trust, one common way for the trust to be a permitted shareholder is for its beneficiary to elect "q…
IRS grants a multiemployer pension plan a 5-year extension to amortize its unfunded liabilities under § 431(d)
Multiemployer pension plans must fund their promised benefits over time, paying down "unfunded liabilities" through scheduled amortization charges. When a plan is struggling, Code Section 431(d) lets …
IRS denies 501(c)(7) social club status to a football officials' association that mostly collects officiating fees
A group of trained football officials organized so that school districts could hire them to officiate scholastic games; the district pays fees to the group, which passes them on to the member-official…
IRS blesses a court reformation fixing a trust's Crummey-power drafting error, finding no gift or estate tax fallout
A grandfather set up an irrevocable trust for his grandchildren, using the common "Crummey" technique of giving each grandchild a short-lived right to withdraw new contributions so the gifts qualify f…
IRS grants a corporation reasonable-cause relief for a late S corporation election
A corporation meant to be taxed as an S corporation (a pass-through, so the company itself pays no federal income tax) and filed its returns that way from the start, but it never filed the required el…
IRS grants an LLC extra time to elect partnership tax classification on a late Form 8832
A limited liability company wanted to be taxed as a partnership from the day it was formed, but it never filed the entity classification election form (Form 8832) on time. Under the "check-the-box" ru…
IRS grants a corporation reasonable-cause relief for a late S corporation election
A corporation intended to be an S corporation (taxed as a pass-through, so the company owes no federal income tax itself) and filed its returns consistently on that basis, but it never filed the requi…
IRS grants a foreign reinsurance company more time to elect to be taxed as a domestic corporation under § 953(d)
A foreign insurance company (a controlled foreign corporation whose business is reinsuring risks) wanted to be treated as a U.S. domestic corporation for tax purposes by making an election under Code …
IRS grants a foreign reinsurance company late-election relief for both the § 953(d) domestic-treatment and § 831(b) small-insurer elections
A small foreign insurance company that reinsures insurance contracts, owned by three individuals, wanted two tax elections: one under Code Section 953(d) to be treated as a U.S. domestic corporation, …
IRS grants a foreign entity extra time to elect disregarded-entity status on a late Form 8832
A single-owner foreign business entity wanted to be treated as a "disregarded entity" for U.S. tax purposes, meaning it is ignored as separate from its owner and its income flows straight onto the own…
Late Form 8832 election allowed so a foreign entity can be taxed as a partnership
A business entity formed in a foreign country wanted to be treated as a partnership for U.S. federal income tax purposes, but it missed the deadline to file Form 8832 (the Entity Classification Electi…
Late S-corporation election excused for reasonable cause under § 1362(b)(5)
A corporation with a single shareholder intended to be taxed as an S corporation from the day it was formed and had been filing its returns that way, but it never timely filed Form 2553, the election …
Court-approved restructuring of an insolvent long-term-care insurer's policies is tax-neutral to policyholders
Two affiliated life insurance companies that sold long-term care policies became insolvent and were placed into court-supervised liquidation, and a state court approved a plan to restructure their pol…
Late § 853 foreign-tax-credit pass-through election allowed for a mutual fund after a missed deadline
A mutual fund taxed as a regulated investment company (RIC) invests in foreign companies and pays foreign taxes, and each year it elects under Internal Revenue Code § 853 to pass those foreign tax cre…
Late § 853 and § 1296 elections allowed for a mutual fund after a missed return deadline
A mutual fund taxed as a regulated investment company (RIC) needed to make two elections on its return: a § 853 election to pass foreign tax credits through to shareholders, and a § 1296 election to m…
Late § 853 foreign-tax-credit pass-through election allowed for a mutual fund after a missed deadline
A mutual fund taxed as a regulated investment company (RIC) invests in foreign companies and pays foreign taxes, and each year it elects under Internal Revenue Code § 853 to pass those foreign tax cre…
Late § 853 and § 1296 elections allowed for a mutual fund after a missed return deadline
A mutual fund taxed as a regulated investment company (RIC) needed to make two elections on its return: a § 853 election to pass foreign tax credits through to shareholders, and a § 1296 election to m…
Late § 853 and § 1296 elections allowed for a mutual fund after a missed return deadline
A mutual fund taxed as a regulated investment company (RIC) needed to make two elections on its return: a § 853 election to pass foreign tax credits through to shareholders, and a § 1296 election to m…
Two charitable remainder unitrusts with a flexible charity-designation power qualify under § 664
An individual planned to create two charitable remainder unitrusts (CRUTs), a type of trust that pays a fixed percentage to the donor (and here, in one trust, a surviving spouse) each year and leaves …
Late S-corporation election excused for reasonable cause under § 1362(b)(5)
A corporation intended to be taxed as an S corporation from the day it was incorporated but never filed the required election (Form 2553) on time. It asked the IRS for relief under Internal Revenue Co…
Late Section 1022 carryover-basis election allowed for a 2010 decedent's estate
For people who died in 2010, a one-year quirk in the law let an estate choose between the reinstated estate tax and a special "carryover basis" regime under Internal Revenue Code § 1022, which is elec…
IRS consents to an early S-corporation re-election after an ESOP restructuring
When a company's S-corporation election is terminated, tax law normally bars it from electing S status again for five years unless the IRS consents. Here an S corporation accidentally terminated its o…
Late "reverse QTIP" election allowed so a marital trust keeps the decedent's GST exemption
When a person leaves property to a marital ("QTIP") trust for a surviving spouse, the spouse is normally treated as the transferor of that trust for generation-skipping transfer (GST) tax purposes. A …
Tax-free spin-off ruling for a public company separating two business groups
A publicly traded corporation wanted to split its operations into two separate business groups by contributing one group's subsidiaries and assets into a newly formed subsidiary ("Controlled") and the…
S-corporation status preserved after trusts missed their ESBT elections
An S corporation can only have certain kinds of shareholders. When a trust becomes a shareholder, it usually must file an "electing small business trust" (ESBT) election to remain a permitted owner; i…
Late relief to split a marital trust and make a "reverse QTIP" election so the estate's GST exemption sticks
When a wealthy person dies and leaves property in a marital trust for a surviving spouse, the estate can make a "reverse QTIP" election so that, for generation-skipping transfer (GST) tax purposes, th…
Adding a way to appoint an independent trustee will not trigger gift, estate, or GST tax
An old irrevocable family trust gave certain sensitive powers (including the power to narrow or cancel a beneficiary's future control over where trust assets go) only to a trustee who was not also a b…
S-corporation status preserved after five trusts missed their ESBT elections
An S corporation may only be owned by certain kinds of shareholders. When a trust receives S-corporation shares, it generally must file an "electing small business trust" (ESBT) election to remain a p…
S-corporation status preserved after three trusts missed their ESBT elections
An S corporation may only be owned by certain kinds of shareholders. When a trust receives S-corporation shares, it generally must file an "electing small business trust" (ESBT) election to remain a p…
S-corporation status preserved after three trusts missed their ESBT elections
An S corporation may only be owned by certain kinds of shareholders. When a trust receives S-corporation shares, it generally must file an "electing small business trust" (ESBT) election to remain a p…
Disclaiming a contingent share of two old family trusts is not a taxable gift
When you give up a right to receive property, tax law sometimes treats that "disclaimer" as if you had made a gift to whoever gets the property instead, which could trigger gift tax. Special rules let…
State brownfield-cleanup tax credits count as a good REIT asset and good REIT income
Real estate investment trusts (REITs) get their special tax treatment only if they stay heavily invested in real estate and earn mostly passive, real-estate-type income: at least 75% of assets must be…
IRS approves a pension plan's change to its retirement and withdrawal assumptions
A single-employer pension plan must set aside enough money each year to fund the benefits it promises, and its required contribution depends on actuarial assumptions such as how likely workers are to …
IRS pre-approves a private foundation's scholarship program, so the grants are not taxable expenditures
Private foundations normally owe a penalty excise tax when they hand money to individuals for study or similar purposes, unless the IRS approves the grant-making procedures in advance. Here a private …
IRS denies 501(c)(3) status to a commercial-style dispute-resolution organization
To be a tax-exempt charity under Internal Revenue Code § 501(c)(3), an organization must be both organized and operated exclusively for charitable or educational purposes. This organization, a former …
IRS revokes a social club's 501(c)(7) status for too much nonmember (public) golf revenue
A social or recreational club can be tax-exempt under Internal Revenue Code § 501(c)(7) only if it is supported mainly by member dues and keeps income from outsiders modest: no more than 35% of gross …
IRS revokes a fraternal society's 501(c)(8) status because it does not operate under the lodge system
A "fraternal beneficiary society" can be exempt from federal income tax under Internal Revenue Code § 501(c)(8) only if it meets two requirements: it must operate under the "lodge system" (local, larg…
IRS revokes a golf/social club's 501(c)(7) status for excessive public (nonmember) use of its facilities
A social or recreational club is tax-exempt under Internal Revenue Code § 501(c)(7) only if it is supported mainly by members and keeps outside income modest: no more than 35% of gross receipts from o…
A life insurer must use its updated morbidity tables (not the original ones) to compute tax reserves for long-term care policies
Life insurance companies get tax deductions for the reserves they must hold to pay future claims, and Internal Revenue Code § 807(d) sets rules for how those tax reserves are computed, including which…
Late relief lets a REIT make missed "taxable REIT subsidiary" elections for two subsidiaries
A real estate investment trust (REIT) and a corporation it owns can jointly elect, on Form 8875, to treat that corporation as a "taxable REIT subsidiary" (TRS) under Internal Revenue Code § 856(l), wh…
Late relief lets a REIT treat acquired subsidiaries as "taxable REIT subsidiaries"
A real estate investment trust (REIT) and a corporation it owns can jointly elect, on Form 8875, to treat that corporation as a "taxable REIT subsidiary" (TRS) under Internal Revenue Code § 856(l), wh…
IRS lets a partnership undo its election to skip bonus depreciation after a preparer error
When a business buys qualifying equipment, § 168(k) normally lets it deduct a big chunk of the cost in the first year ("bonus depreciation"), but a taxpayer can instead elect under § 168(k)(7) not to …
A VEBA may count insurance premiums in its medical-benefit reserve when figuring taxable income
A voluntary employees' beneficiary association (VEBA) is a tax-exempt trust under § 501(c)(9) that funds benefits like health, life, and disability coverage for workers. A VEBA can set money aside for…
A widow who inherited an IRA through her revocable trust may roll it into her own IRA
When someone inherits an IRA, they normally cannot roll it over into their own IRA, but a surviving spouse gets special treatment. Here a husband died naming his revocable living trust, rather than hi…
A REIT's sale of its apartment portfolios in a liquidation is not a taxable "prohibited transaction"
A real estate investment trust (REIT) faces a punishing 100 percent tax under § 857(b)(6) on profits from "prohibited transactions," meaning sales of property the REIT holds primarily for sale to cust…
Late relief lets a merged company make the 70/30 safe-harbor election for its deal fees
When a company pays "success-based fees" (advisory fees owed only if a deal closes) in an acquisition, the tax rules generally require it to capitalize those fees as costs of the transaction unless it…
A state retirement system's benefits trust owes no federal income tax on its earnings
Internal Revenue Code § 115(1) excludes from federal gross income any earnings that come from performing an "essential governmental function" and that accrue to a state or its political subdivisions. …
Private foundation may set aside funds to recruit and train a charter school leader
A private foundation that funds education initiatives (pre-K through 12 schooling, charter school formation, teacher and leadership development, and after-school programs) asked the IRS to approve a "…
201843016: Revokes an eco-tourism nonprofit's 501(c)(3) exemption for commercial services and private benefit
This is a final IRS determination revoking the section 501(c)(3) exemption of a nonprofit that promoted sustainable travel and eco-tourism. The organization sold certifications, assessments, training,…
IRS revokes a heritage club's 501(c)(8) status for having no lodge system and paying no member benefits
A "fraternal beneficiary society" qualifies for tax exemption under Internal Revenue Code § 501(c)(8) only if it both operates under the "lodge system" (local, largely self-governing branches chartere…
IRS revokes a nonprofit's 501(c)(3) status after it ignored an audit
A charity exempt under Internal Revenue Code § 501(c)(3) must keep adequate records and, when the IRS examines it, provide enough information to show it is still organized and operated for exempt purp…
IRS denies 501(c)(3) status to a charity formed mainly to fund its founder's medical costs
To be tax-exempt under Internal Revenue Code § 501(c)(3), an organization must operate exclusively for public purposes, and none of its earnings may benefit private individuals (the "inurement" and "p…
201843012: Revokes a motorcycle club's 501(c)(7) exemption for running a public motocross park
This is a final IRS determination revoking the tax-exempt status of a nonprofit motorcycle/off-road club that had been recognized under section 501(c)(7) as a social and recreation club. On audit, the…
201843011: Revokes 501(c)(3) status of a shell nonprofit that fronted for a for-profit fundraising platform
This is a final IRS determination revoking the 501(c)(3) exemption of a nonprofit that had been recognized as a public charity to educate the public about amateur athletics and to fund school, youth, …
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.