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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Subsidiary receives relief for mistaken QSub and S corporation election dates
An S corporation acquired all of a subsidiary's stock but failed to timely file the intended qualified subchapter S subsidiary (QSub) election, and the filed form stated the wrong effective date.…
Initial classification ruling clears the way for a late disregarded-entity election
A foreign eligible entity filed an election to be taxed as a corporation, then sought to be treated as a disregarded entity from a requested effective date. It asked the IRS to confirm that its…
Foreign entity gets extra time to elect partnership status
A foreign entity intended to be treated as a partnership for federal tax purposes but did not timely file Form 8832. It asked for an extension under the regulatory election relief rules. The IRS…
Foreign entity gets extra time to elect partnership status
A foreign entity intended to be treated as a partnership for federal tax purposes but did not timely file Form 8832. It asked for an extension under the regulatory election relief rules. The IRS…
Foreign entity gets extra time to elect partnership status
A foreign entity intended to be treated as a partnership for federal tax purposes but did not timely file Form 8832. It asked for an extension under the regulatory election relief rules. The IRS…
Married taxpayers may recharacterize excess Roth IRA contributions
A married couple made Roth IRA contributions for three years even though their modified adjusted gross income exceeded the eligibility limit. They learned of the problem while researching…
Employer-related scholarship procedures are approved
A private foundation requested advance approval for scholarships offered to children and other relatives of an employer's employees. An independent organization would select recipients through…
Descendant scholarship procedures are approved
A private foundation proposed scholarships for former employees of a company that had closed more than 50 years earlier, as well as their spouses, parents, and descendants. Awards would be based on…
Revised statewide scholarship procedures are approved
A private foundation that already had approval for a scholarship program proposed three changes. Most applicants would need to be credit union members or have a parent who was a member, scholarships…
Private foundation may set aside funds to build a boarding school
A private foundation proposed to build a tuition-free boarding school for high-achieving public school students who met its scholarship eligibility standard. The project required acquiring a site,…
Business networking association is denied social club exemption
A business association sought exemption as a social club under section 501(c)(7). Its weekly meetings focused on exchanging business information, generating leads, and expanding trade among members,…
Corporate split-up among disputing shareholders qualifies under section 355
Serious disputes among a corporation's seven shareholders were harming business operations. The corporation proposed distributing four controlled subsidiaries to different shareholder groups in…
Securities partnership receives late mixed straddle account relief
A partnership trading securities, commodities, and derivatives had timely elected mixed straddle accounts in earlier years. Its sole internal tax employee left without preparing the required Form…
Partnership receives 120 days to make a late section 754 election
A partnership intended to make a section 754 election after ownership interests were transferred but failed to attach a properly executed election to its return. The partnership and all affected…
A REIT's energy-savings charge to tenants is not disqualifying "income or profits" rent
A real estate investment trust (REIT) operates mostly through an operating partnership that leases buildings to tenants. The partnership is rolling out a program to replace older fixtures with more…
Producer correctly applies the simplified production method when old inventory carries over
A manufacturer that makes products in large batches uses the FIFO (first-in, first-out) inventory method and the "simplified production method" under section 263A to figure out how much of its…
Restructured governmental retirement plans get favorable rulings on separate contracts, tax-free transfers, and picked-up contributions
A state agency that runs several governmental defined benefit and defined contribution retirement plans reorganized them. It moved the member-funded annuity savings accounts (ASAs) out of the old…
Late section 336(e) election relief granted after buyer and S corporation missed the deadline
A partnership bought all the stock of an S corporation in a deal that qualified as a "qualified stock disposition." The parties wanted to make a section 336(e) election, which lets a stock sale be…
Incomplete non-grantor trust succeeds, contributions and committee distributions are not completed gifts
A person set up a trust for themselves and their four children, with distributions steered by a "Distribution Committee" made up of the grantor and two children. This is the increasingly common…
Late REIT election accepted after a signed return was misplaced during an office move
A limited liability company operated as a real estate investment trust (REIT) and intended to lock in that tax status by filing a Form 1120-REIT for its first year, which is how the section 856(c)…
IRS approves a revised nuclear decommissioning fund schedule based on a per-kilowatt formula
The owner of a nuclear power plant sets aside money each year in a special reserve fund to pay for eventually decommissioning (safely retiring) the plant. Section 468A lets the owner deduct those…
IRS approves a revised nuclear decommissioning fund schedule based on a per-kilowatt formula
The owner of a nuclear power plant sets aside money each year in a special reserve fund to pay for eventually decommissioning (safely retiring) the plant. Section 468A lets the owner deduct those…
Publicly traded shares donated to a private foundation qualify as "qualified appreciated stock"
Normally, when someone donates appreciated stock to a private (non-operating) foundation, section 170(e)(1)(B)(ii) trims the charitable deduction down to the donor's cost basis instead of full…
S corporation that lost its status from too much passive income gets inadvertent-termination relief
An S corporation that still had leftover accumulated earnings and profits from its old C corporation days tripped a rule that automatically ends S status: for three straight years, more than 25% of…
IRS consents to let a trust revoke its electing small business trust (ESBT) election
A trust that owns stock in an S corporation had elected to be treated as an "electing small business trust" (ESBT), one of the trust forms allowed to hold S corporation shares. The trustee later…
Incomplete non-grantor trust succeeds, contributions and committee distributions are not completed gifts
A person set up a trust for themselves and their four children, with distributions steered by a "Distribution Committee" made up of the grantor and two children. This is the increasingly common…
S corporation gets inadvertent-termination relief after a trust missed its QSST election
An S corporation had a trust as one of its shareholders. While that trust was a grantor trust (treated as owned by one individual), it was an eligible S corporation shareholder. When the trust…
Family cemetery denied 501(c)(3) exemption
An organization formed to operate and maintain a small historical cemetery for the direct descendants of one family applied for tax-exempt status under section 501(c)(3) using the streamlined Form…
Fishing-tournament organization denied 501(c)(3) exemption
An organization applied for tax-exempt status under section 501(c)(3), saying it promotes civic improvement, social interaction, and the sport of fishing, and that it funds a college scholarship. In…
Extension granted to file a late LIFO election (Form 970) after a partnership liquidation
A taxpayer owned an interest in a partnership that used the last-in, first-out (LIFO) method to value its inventory. When the partnership liquidated, its LIFO inventory was distributed to the…
Returning a pension plan's actuarial surplus to a tax-exempt employer is allowed and not a taxable reversion
A tax-exempt employer set up a defined benefit pension plan for its employees and later decided to terminate it, pay out everyone, and complete a standard termination through the Pension Benefit…
Foreign entity gets extra time to elect partnership treatment after advisors missed the filing
Two domestic partnerships formed a foreign business entity and always intended for it to be taxed as a partnership in the United States. To lock that in, the entity needed to file a "check-the-box"…
Foreign entity gets extra time to elect partnership treatment after advisors missed the filing
Two domestic partnerships formed a foreign business entity and always intended for it to be taxed as a partnership in the United States. To lock that in, the entity needed to file a "check-the-box"…
Foreign entity gets extra time to elect partnership treatment after advisors missed the filing
Three domestic partnerships formed a foreign business entity and always intended for it to be taxed as a partnership in the United States. To lock that in, the entity needed to file a…
Foreign entity gets extra time to elect partnership treatment after advisors missed the filing
Three domestic partnerships formed a foreign business entity and always intended for it to be taxed as a partnership in the United States. To lock that in, the entity needed to file a…
Extra time granted to allocate GST exemption to a trust after a missed gift tax return
A married couple set up an irrevocable trust for their children and more remote descendants and funded it with company stock, on an attorney's advice that the trust would be exempt from the…
Extra time granted to allocate GST exemption to a trust after a missed gift tax return
A married couple set up an irrevocable trust for their children and more remote descendants and funded it with company stock, on an attorney's advice that the trust would be exempt from the…
Airport may use a floating cost allocation to keep tax-exempt bonds away from liquor-store space
An airport authority is rebuilding a boarding area and financing part of the work with tax-exempt exempt-facility bonds (the kind allowed for airports under section 142). A wrinkle: section 147(e)…
IRS approves a private foundation's scholarship procedures for a global math and science video competition
A private foundation runs an annual global competition for high school students, asking them to make a short video that teaches a difficult math or science concept in an engaging way. It asked the…
IRS approves a private foundation's merit-based scholarship procedures for a university program
A private foundation set up a merit-based scholarship to help students earn an undergraduate or graduate degree at a particular university. It asked the IRS to approve, in advance, how it selects…
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,…
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…
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…
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…
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…
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…
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…
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)…
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…
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…
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…
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"…
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…
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…
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…
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…
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…
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…
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…
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…
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.