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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201841008: Denies 501(c)(3) status because the applicant did not document a valid nonprofit corporation
An organization applied for section 501(c)(3) status while its filed articles showed it as a stock-issuing for-profit business corporation. The articles had neither a clause limiting the…
201841007: Denies 501(c)(3) status because the articles lacked exempt-purpose and dissolution clauses
A nonprofit corporation applied for section 501(c)(3) status but submitted its bylaws instead of its articles of incorporation. The IRS obtained the articles from the state and found that they did…
An enforceable owner note can count toward a disregarded entity's net value
Chief Counsel considered how to compute the “net value” of a disregarded entity that held an intercompany note from its corporate owner. Treas. Reg. § 1.752-2(k) treats a disregarded entity as…
Equitable reformation and estoppel preserve two Forms 872
Chief Counsel considered whether two Forms 872 validly extended the assessment period. Both forms used an incorrect caption, but the advice concluded that a court could reform the captions to…
Grants 120 days for a late section 59(e) election on research expenditures
A corporation intended to file its return and elect under section 59(e) to deduct research and experimental expenditures ratably over ten years. Its internal tax accountant mistakenly believed Form…
Grants 120 days for a late section 754 election after a partnership-interest transfer
A limited liability company taxed as a partnership timely filed its return for a year in which one member transferred part of its interest to another member, but it did not attach a section 754…
A construction grant for a REIT redevelopment project is qualifying income
A REIT planned to redevelop a distressed, high-vacancy property into modern retail, residential, and other uses. It applied for a state economic-development grant that would reimburse documented…
Grants 120 days to elect the investment tax credit for renewable facilities
A taxpayer intended to make the irrevocable section 48(a)(5) election to claim the investment tax credit instead of the section 45 production tax credit for renewable-energy facilities. Its internal…
Advance approval of a private foundation's scholarship procedures for economically disadvantaged foreign students under section 4945(g)(1)
A private foundation asked the IRS to approve, in advance, the procedures for a scholarship program funding the education of economically disadvantaged students in foreign countries, aiming to give…
Advance approval of a private foundation's procedures for postdoctoral science research fellowships under section 4945(g)(3)
A private foundation asked the IRS to approve, in advance, the procedures for a program that funds three-year fellowships for postdoctoral scientists working in physical and life sciences,…
LLC allowed to switch back to partnership taxation within the usual 60-month lock-out because ownership changed by more than half
An LLC can choose how it is taxed (disregarded, partnership, or corporation), but once it elects to change its classification, it generally cannot change again for 60 months. Here an LLC started as…
Children behind "see-through" trusts count as designated beneficiaries, so a deceased 401(k) participant's benefits can stretch over the oldest child's life expectancy
When someone dies with money in a 401(k), how fast the account must be paid out depends on whether there is a "designated beneficiary" who is an actual individual. If a trust is named as…
An auction platform for partnership interests is a "qualified matching service," so trading on it does not make the partnerships publicly traded
Under § 7704, a partnership whose interests are "publicly traded" gets taxed as a corporation, which partnerships generally want to avoid. But the regulations create a safe harbor: transfers through…
Partnership gets a late section 754 election after a member bought out another, subject to basis-adjustment conditions
An LLC taxed as a partnership had one member transfer her entire interest to another member. The partnership filed its return for that year on time but did not include the § 754 election that would…
A liquidation provision that created a second class of stock made an S election invalid, but the IRS treats the defect as inadvertent
An S corporation may have only one class of stock, meaning all shares must confer identical rights to distributions and liquidation proceeds. Here an LLC elected to be taxed as an S corporation, but…
Partnership gets more time to make a section 754 basis-adjustment election it filed its returns as if it had made
A § 754 election lets a partnership adjust the basis of its assets after a partner's interest changes hands, matching inside basis to what happened at the partner level. The election has to be filed…
Grantor granted more time to allocate GST exemption to two trusts after the accountant left it off the gift tax return
A grantor set up and funded two irrevocable trusts for descendants and reported the gifts on a gift tax return (Form 709), but the accounting firm that prepared the return failed to allocate any of…
Estate gets extra time to split a marital trust into QTIP and non-QTIP shares and fix its generation-skipping tax planning
When a spouse dies, property left in trust for the surviving spouse can qualify for the unlimited estate-tax marital deduction if the executor makes a "QTIP" election under § 2056(b)(7). Where only…
Advance approval of a private foundation's procedures for two artist grant programs under section 4945(g)(3)
A private foundation that funds the arts asked the IRS to approve, in advance, the procedures for two educational grant programs supporting individual artists. This advance approval matters because…
501(c)(3) exemption denied to an organization that conducted no activities and did not respond to IRS requests
An organization applied for 501(c)(3) tax-exempt status using the streamlined Form 1023-EZ, attesting that its organizing documents met the requirements. When the IRS asked for details about its…
Companion ruling grants the other spouse extra time to elect out of automatic GST exemption allocation to a GRAT
This is the companion to PLR 201839012, covering the other gift-splitting spouse for the same grantor retained annuity trust (GRAT). A taxpayer created a GRAT that continued for family members after…
Fund company gets more time to make the joint election that shifts a built-in loss from asset basis to stock basis
When property with a built-in loss (basis higher than value) is contributed to a corporation in a tax-free § 351 exchange, § 362(e)(2) normally forces the receiving corporation to reduce its basis…
Spouse granted extra time to elect out of automatic GST exemption allocation to a GRAT
A taxpayer created a grantor retained annuity trust (GRAT) that continued for family members after the annuity term ended, giving it generation-skipping transfer (GST) potential. The taxpayer and…
New owners may re-elect S corporation status early, waiving the usual five-year wait after a prior termination
When a corporation's S election is terminated, § 1362(g) normally bars it from electing S status again for five years unless the IRS consents. Here the sole shareholder had voluntarily terminated…
Returning an overfunded pension contribution to the employer is not a taxable reversion where the overpayment came from a mistake of fact
A company terminated its defined benefit pension plan and, to fully fund the promised benefits, contributed enough money to buy a group annuity contract covering the participants. It later turned…
Parent company gets extra time to elect to file a consolidated return for the year it acquired a group of subsidiaries
A group of affiliated corporations can choose to file one combined ("consolidated") federal income tax return instead of separate returns, but the group makes that election simply by filing the…
Corporation gets more time to file the election to be treated as an IC-DISC after its form went missing
An interest-charge domestic international sales corporation (IC-DISC) is a special export tax vehicle that lets qualifying exporters defer some U.S. tax on export income. To claim that status, a…
Corporation gets more time to file the election to be treated as an IC-DISC after its form went missing
An interest-charge domestic international sales corporation (IC-DISC) is a special export tax vehicle that lets qualifying exporters defer some U.S. tax on export income. To claim that status, a…
Tax-free treatment for a corporate spin-off separating two business lines within a foreign-parented group
A domestic corporation inside a larger foreign-parented group ran two separate business lines and wanted to split them apart so the group could be organized by business rather than by geography. To…
Widow may roll her late husband's retirement plan benefit into her own IRA even though it passes through his estate
A man died without naming a beneficiary on his employer retirement plan, so under the plan's terms the benefit became payable to his estate. He also died without a will, and his children disclaimed…
Partnership gets more time to make a section 754 basis-adjustment election it missed
When someone buys into a partnership, the partnership can make a § 754 election so the new partner's share of the partnership's assets gets a basis adjustment that matches what they paid, which…
Extra time granted to elect out of automatic GST exemption allocation after accountant missed it
A taxpayer set up a grantor retained annuity trust (GRAT) that, once the annuity term ended, continued for the benefit of the taxpayer's descendants, meaning it could later generate a…
Partnership gets consent to undo its election out of bonus depreciation after a technical termination
A limited partnership placed depreciable equipment in service and, on its return, elected under § 168(k)(7) NOT to take the 50% bonus (additional first-year) depreciation, because the general…
Late allocation of GST exemption to a charitable lead trust is allowed after the accountant forgot to make it
A married couple set up and funded an irrevocable charitable lead unitrust that pays a foundation for 20 years, then hands the remainder to their grandchildren. Because the grandchildren are two…
Advance approval of an employer-related scholarship program
A private foundation, funded by the founder of a for-profit corporation and his wife, asked the IRS to approve in advance the way it will run an employer-related scholarship program. This approval…
501(c)(3) exemption denied to a nonprofit art gallery
An organization that started as a for-profit LLC art gallery converted to a nonprofit and applied for 501(c)(3) charitable exemption. It ran a gallery showing and selling the work of local…
501(c)(3) exemption denied to a wedding-industry networking group
A group formed as a nonprofit mutual benefit corporation to connect professionals in the wedding industry (caterers, bakers, photographers, venues, and the like) applied to be recognized as a…
Community-property incomplete-gift non-grantor trust gets six favorable rulings
A married couple in a community-property state set up an "incomplete-gift non-grantor" trust (often called an ING or, in community-property form, a CING) funded with their community property. The…
Community-property incomplete-gift non-grantor trust gets six favorable rulings
A married couple in a community-property state set up an "incomplete-gift non-grantor" trust (often called an ING or, in community-property form, a CING) funded with their community property. The…
Community-property incomplete-gift non-grantor trust gets six favorable rulings
A married couple in a community-property state set up an "incomplete-gift non-grantor" trust (often called an ING or, in community-property form, a CING) funded with their community property. The…
Community-property incomplete-gift non-grantor trust gets six favorable rulings
A married couple in a community-property state set up an "incomplete-gift non-grantor" trust (often called an ING or, in community-property form, a CING) funded with their community property. The…
Community-property incomplete-gift non-grantor trust gets six favorable rulings
A married couple in a community-property state set up an "incomplete-gift non-grantor" trust (often called an ING or, in community-property form, a CING) funded with their community property. The…
Community-property incomplete-gift non-grantor trust gets six favorable rulings
A married couple in a community-property state set up an "incomplete-gift non-grantor" trust (often called an ING or, in community-property form, a CING) funded with their community property. The…
Late relief to elect out of bonus depreciation on rehabbed leasehold improvements
Two partnerships that buy, rehabilitate, and lease real estate placed qualified leasehold improvement property in service and claimed the § 47 rehabilitation credit on it. When you claim that…
Journal advertising is not the exempt society's unrelated business income
A 501(c)(6) professional society publishes a scholarly journal through a contract with a for-profit publisher. The society controls the editorial content, but under the contract the publisher alone…
Late relief granted to elect partnership classification
A foreign business entity, owned by foreign persons, wanted to be classified as a partnership for U.S. federal tax purposes once it became relevant to U.S. tax, but it missed the deadline to file…
A voting trust is a permissible S corporation shareholder
An S corporation is limited in who can own its stock; certain trusts qualify, but the wrong kind of shareholder can blow the S election. Here the shares were held by an electing small business trust…
County hospital trust's income is tax-exempt as an essential government function
A county hospital authority, a political subdivision of its state, planned to sell hospital assets to a for-profit operator. State law required it to park the net sale proceeds in an irrevocable…
Late relief granted to elect foreign disregarded-entity status
A foreign business entity with a single owner wanted to be treated as a "disregarded entity" for U.S. federal tax purposes (meaning it is ignored as separate from its owner, so the owner reports its…
Court fix of a botched Crummey clause carries no estate, gift, or GST tax
A grandfather set up an irrevocable trust split into three shares, one for each grandchild, meant to keep the trust assets out of the grandchildren's taxable estates and to use up his and his wife's…
Court fix of a botched Crummey clause carries no estate, gift, or GST tax
A grandfather set up an irrevocable trust split into three shares, one for each grandchild, meant to keep the trust assets out of the grandchildren's taxable estates and to use up his and his wife's…
Court fix of a botched Crummey clause carries no estate, gift, or GST tax
A grandfather set up an irrevocable trust split into three shares, one for each grandchild, meant to keep the trust assets out of the grandchildren's taxable estates and to use up his and his wife's…
Court fix of a botched Crummey clause carries no estate, gift, or GST tax
A grandfather set up an irrevocable trust split into three shares, one for each grandchild, meant to keep the trust assets out of the grandchildren's taxable estates and to use up his and his wife's…
Court fix of a botched Crummey clause carries no estate, gift, or GST tax
A grandfather set up an irrevocable trust split into three shares, one for each grandchild, meant to keep the trust assets out of the grandchildren's taxable estates and to use up his and his wife's…
Group trust looks through to each beneficiary for the pension-held REIT test
A large pension trust fund pools the retirement money of many separate pension plans into one "group trust" (an "81-100 group trust," named after Rev. Rul. 81-100) and invests it in U.S. real…
Late relief granted to waive an NOL carryback for a consolidated group
The parent company of a consolidated group had a consolidated net operating loss (CNOL) for one tax year. It meant to give up the right to carry that loss back to earlier years (so it could instead…
120-day extension granted to make a late QSub election for a wholly owned subsidiary
An S corporation acquired all the stock of another S corporation and intended to fold it in as a "qualified subchapter S subsidiary" (QSub), which makes the subsidiary disappear for tax purposes so…
Consent granted for a retroactive QEF election on a PFIC investment
A U.S. financial-services firm held a minority stake, through a U.S. subsidiary, in a foreign special-purpose vehicle used in a building-redevelopment financing. That foreign company was a passive…
Foundation's health-care scholarship procedures approved under 4945(g)(1)
A private foundation runs a scholarship program for local residents pursuing health-care degrees or certifications at nearby schools, and asked the IRS to approve how it selects recipients. Private…
Gas-lease royalty group denied 501(c)(6) exemption for performing particular services for members
A membership group formed to help mineral-lease owners fight improper deductions from the gas royalties they were owed under a particular lease form. It collected dues, hired lawyers and accountants…
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.