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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A partnership gets to keep its straight-line depreciation election after filing late
An LLC taxed as a partnership built a mixed-use real estate development and, based on a cost segregation study, broke it into 5-year, 7-year, 15-year, and real property. It wanted to depreciate the sh…
A QTIP trust that will fund a foundation is not yet subject to the private-foundation excise taxes
A married person set up a trust that, at death, became irrevocable and was elected to be qualified terminable interest property (QTIP) for estate tax purposes. The surviving spouse receives all the tr…
A newly formed corporation gets to fix a late S election
A corporation's sole owner wanted the company to be taxed as an S corporation from the day it was incorporated, but the company never filed its Form 2553 (the S election) on time. Under § 1362(b)(5), …
A private foundation gets extra time to make a missed corpus-distribution election
A private foundation received large stock contributions from substantial donors and made grants, but it did not distribute a full 100 percent of those contributions in the same year. To help its donor…
Letting government workers move a frozen cash-balance benefit to a 401(k) plan is tax-free and not an excess contribution
A government employer runs two retirement plans: a defined benefit plan (Plan A) that includes a cash balance component, and a defined contribution 401(k)-style plan (Plan B). It wanted to let certain…
S corporation election is restored after an inadvertent termination from excess passive income
A company that had elected to be taxed as an S corporation lost that status by operation of law. Under § 1362(d)(3), an S corporation's election terminates automatically if it has leftover C corporati…
Surviving spouse's IRA rollover through a trust was valid
A decedent named a revocable trust as the beneficiary of his IRA, and the assets were allocated to a survivor's trust for his wife. The wife was the sole income and principal beneficiary and held an u…
Timely disclaimer of a pre-1977 trust interest avoids gift tax
An irrevocable trust created before 1977 gave a beneficiary a testamentary power to appoint its remaining property among family descendants. After the beneficiary died, a family member learned that he…
Foreign entity receives late corporate-classification relief
A foreign eligible entity's owner intended the entity to be classified as a corporation for federal tax purposes, but the entity did not timely file Form 8832. The IRS concluded that the entity met th…
Inadvertent ineligible shareholder did not end S status
An S corporation transferred shares to an ineligible shareholder, which caused its S election to terminate. After discovering the problem, the corporation and its shareholders transferred the shares t…
Multiemployer plan receives an amortization extension
A multiemployer pension plan requested an automatic extension of the periods for amortizing unfunded liabilities from plan amendments, assumption changes, and actuarial losses. The plan's actuary cert…
Scholarship procedures for underprivileged students approved
A private foundation proposed scholarships to help underprivileged students complete undergraduate or graduate degrees. Applicants would provide academic records and essays, and a selection committee …
High-school entrepreneurship grants approved
A private foundation proposed grants to startup businesses developed, managed, and majority-owned by students at two high schools. Applicants would submit business plans and supporting materials, and …
Horse futurity organization denied Section 501(c)(3) status
An organization applied for Section 501(c)(3) status to operate an all-breed horse futurity with competitions, an online stallion-service auction, and a payback program for owners. Its website promote…
Exemption revoked for a donor-controlled partnership gifting program
A charity accepted donated nonvoting interests in partnerships and limited liability companies through arrangements created and administered by a professional adviser. The IRS examination found that d…
Property-holding charity reclassified as a supporting organization
A property-holding charity received almost all of its support from rents and did not meet the public-support tests for classification under Section 509(a)(1) or 509(a)(2). Its sole supported organizat…
Inactive organization's Section 501(c)(3) status revoked
An educational organization had reported little activity for several years and failed to file one annual return. A later pledge agreement called for a large contribution that the organization would pa…
Exempt status revoked after organization failed to provide audit records
The IRS selected a charitable organization for an audit of its annual return and repeatedly requested financial records, minutes, and other information. An officer said the records were stored on a co…
Social club exemption revoked for excess nonmember income
A social club promoted horses and horsemanship through shows, play days, trail rides, meetings, and use of its hall and arena. Some activities and facilities were available to nonmembers and the gener…
Breast cancer charity revoked for private benefits and inaccurate filings
A charity said its mission was to assist breast cancer patients and support education and research. The IRS found that its exempt activity was secondary to professional fundraising fees, insider salar…
IRS revokes a social welfare organization's tax exemption
An organization had been recognized as tax-exempt under Section 501(c)(4) and reported activities for emergency service workers, including social events, an awards banquet, a scholarship, and charitab…
Charity exemption revoked after repeated examination contacts failed
A charity obtained Section 501(c)(3) status through Form 1023-EZ and was later selected for examination. IRS letters sent to several located addresses came back undeliverable or refused, calls to offi…
Inactive research organization agreed to revocation
An organization conducted research and education on adult psychological development through a website, programs, and memberships. After moving to another state, it could not obtain recognition there b…
Jeopardy levy may precede normal collection notices
Chief Counsel advised that the IRS can make a jeopardy levy even when it has not made a jeopardy or termination assessment. The levy may occur at several points before the usual notice-and-waiting per…
Executrix could not disaffirm returns filed before spouse became a surviving spouse
Chief Counsel considered whether an executrix could disaffirm amended returns filed by a decedent's wife for several redacted tax years. Section 6013(a)(3) allows disaffirmance of a return made by a s…
Unsupported fee estimates did not permit deduction of acquisition costs
A taxpayer paid an investment banker a success-based fee for a completed acquisition and did not elect the Revenue Procedure 2011-29 safe harbor. The banker later estimated that 92% of its time relate…
Partnership received 120 days to make late Section 754 election
A professional-services limited liability company treated as a partnership missed the deadline to make a Section 754 election for the year in which a buyer acquired a partnership interest. The partner…
Company received 60 days to file late LIFO election
A parent company transferred LIFO inventory to an indirectly owned subsidiary in a Section 351 transaction. The subsidiary consistently used LIFO for tax and financial reporting, but the group's tax p…
Missed QSST election received inadvertent S corporation termination relief
An S corporation shareholder transferred stock through trusts after the shareholder's death. A successor trust qualified to elect as a qualified subchapter S trust, but its initial income beneficiary …
Missed ESBT election received inadvertent S corporation termination relief
A trust acquired S corporation stock from an estate and remained an eligible shareholder for two years. The trustee then failed to timely elect electing small business trust status, causing the corpor…
Water agreement does not make reservoir bonds private activity bonds
A government-owned electric utility planned to use tax-exempt bonds to finance part of a reservoir that would improve the reliable supply of water used at its coal-fired energy station. A separate agr…
Parent may claim a worthless-stock deduction using a look-through gross-receipts method
A corporate parent converted an insolvent subsidiary into a disregarded entity and represented that the subsidiary's stock was worthless. The IRS ruled that the parent could claim a worthless-stock de…
Late QSST election did not end S corporation status
An S corporation shareholder transferred stock to a grantor trust. When the shareholder died, the trust remained an eligible shareholder for two years, but it continued holding the stock after that pe…
Graduation awards are charitable distributions, not taxable expenditures
A private operating foundation provided scholarships and a required financial education program to high-achieving students with financial need from rural counties. Students learned investment skills b…
Two-year extension preserves bankruptcy liquidating trust status
A trust created under a Chapter 11 bankruptcy plan was established solely to liquidate estate assets and distribute the proceeds to beneficiaries. Its agreement limited business activity and cash rete…
Estate receives 120 days to make a late QDOT election
A decedent left the residue of his estate to his surviving spouse, who was not a United States citizen. Tax advisers told the spouse that a qualified domestic trust was needed for the estate to claim …
Employer-related scholarship procedures receive advance approval
A private foundation proposed a nonrenewable scholarship program for children and dependents of employees of a company and its subsidiaries. An independent committee would select recipients using fina…
Foundation loses exemption for private use of charitable assets
A foundation had been created to promote scientific research in physics and cosmology. After its founder died, his wife became president, and the IRS found no ongoing charitable activity, unexplained …
Bingo organization loses exemption for private benefit and minimal charity
An organization recognized under Section 501(c)(3) held volunteer-run bingo games every Friday and reported no other activity. It made only three charitable contributions during the examined year and …
Golf club loses social-club exemption for public business activity
A golf club recognized under Section 501(c)(7) operated seasonally and regularly opened its course, carts, food, and bar services to the public. It advertised public weekday access, online tee times, …
Inactive community organization loses Section 501(c)(3) status
An organization had been recognized under Section 501(c)(3) to provide language instruction, translation, help with government forms and job searches, youth support, and assistance to a Muslim communi…
Unfunded organization loses exemption after incomplete dissolution
A recently recognized charity intended to distribute religious teddy bears to children but was unable to obtain funding. Its president said the organization wanted to close, filed a Form 990-N marking…
IRS revokes exemption after organization ignores audit requests
An organization recognized under Section 501(c)(3) was selected for an audit of its Form 990. The IRS repeatedly sent examination letters and information requests and made numerous telephone calls, bu…
Government hospital loses Section 501(c)(3) status for Section 501(r) failures
A government-owned hospital also held a separate Section 501(c)(3) determination, making it a dual-status hospital subject to Section 501(r). The IRS found that the hospital had not adopted an impleme…
Exemption revoked after organization failed to provide records
An organization recognized under Section 501(c)(3) did not maintain an available business office or representatives and repeatedly failed to arrange an examination or provide requested organizational …
Tourism promoter loses exemption for commercial activities
A destination-marketing organization promoted tourism and local businesses through advertising, trade shows, referrals, visitor guides, and member benefits. Its income came substantially from assessme…
Inactive youth-health charity loses exemption
An organization formed to promote health, exercise, and healthy eating among school-age children reported no funding and did not substantiate that it conducted field days, fitness classes, or nutritio…
Scholarship trust loses exemption for trustee withdrawals
A private-foundation trust made college scholarships but its sole trustee also regularly withdrew substantial trust funds for personal purposes. The trustee recorded the withdrawals as a note receivab…
Limited partnership loses exemption after failing examination requests
An organization obtained Section 501(c)(3) status through Form 1023-EZ, but state records identified it as a limited partnership rather than a corporation, association, or trust. During an examination…
Defunct nonprofit loses exemption after failing to provide records
A nonprofit corporation stopped operating and failed to file its required Form 990-N return. Its president told the IRS that the organization had folded, had no assets to distribute, and would submit …
Social club loses exemption for recurring nonmember income
A Section 501(c)(7) social club earned rental income from two apartments above its clubhouse. Its Forms 990 showed recurring nonmember income above the statutory limits: no more than 35 percent of gro…
Jazz organization loses exemption for restaurant-focused activities
An organization formed to advance jazz education moved its performances to a restaurant controlled by substantially the same management. The IRS found that most of its activities consisted of entertai…
Cultural organization loses exemption after withholding audit records
A public charity formed to present theater, promote the arts, and revitalize a historic venue did not provide records needed to evaluate its spending, contracts, loans, and possible private benefit to…
Cemetery loses mistaken Section 501(c)(3) exemption
A cemetery organization had previously been exempt under Section 501(c)(13), but after automatic revocation it reapplied on Form 1023-EZ and obtained Section 501(c)(3) status instead of using Form 102…
Disability-services charity loses exemption for deficient articles and noncooperation
An organization offered therapy, counseling, and educational services to children with disabilities, but its articles of incorporation lacked the required dissolution clause. During an examination, th…
Trust modifications preserve GST tax exemption
A decedent’s trust created generation-skipping trusts with zero inclusion ratios because GST exemption was allocated to them. The trustees proposed a court-approved amendment giving each primary benef…
Check-the-box liquidation supports affiliated worthless-stock deduction
A corporate group planned a series of check-the-box elections that would liquidate several foreign subsidiaries up a holding-company chain. The lower-tier liquidations were represented to qualify unde…
Conservation land excluded from minimum investment return
A private operating foundation maintained undeveloped desert land adjoining its historic developed property. The land served as a security buffer for charitable and educational events, supported garde…
Late success-based-fee safe-harbor election granted
A consolidated corporate group paid a contingent adviser fee for an acquisition and reported the fee using Revenue Procedure 2011-29’s safe harbor, deducting 70 percent and capitalizing 30 percent. It…
Tax-book asset method approved for interest apportionment
A domestic parent of a consolidated group had long used the fair-market-value method to value assets when apportioning interest expense. Maintaining that method created substantial administrative work…
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.