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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Consolidated group receives more time to elect an extended NOL carryback
A consolidated corporate group incurred a net operating loss eligible for the extended carryback rules then available under section 172(b)(1)(H). The common parent intended to carry the loss back…
Consolidated group may make a late NOL carryback waiver
A consolidated corporate group intended to waive the entire carryback period for a consolidated net operating loss and filed its returns consistently with that intent, but a valid election statement…
Consolidated group receives relief to make a late NOL carryback waiver
A consolidated corporate group failed to file a valid election waiving the carryback period for a consolidated net operating loss. The parent requested relief before the IRS discovered the failure…
Holding company may look through intercompany receipts for worthless-stock test
A corporate parent planned to claim an ordinary worthless-stock loss for a holding-company subsidiary after a restructuring. Section 165(g)(3) requires, among other things, that more than 90 percent…
Corporate separation receives five specified tax rulings
A public company proposed separating two businesses into a controlled corporation that would later elect REIT status. The IRS ruled that specified asset contributions would not prevent an internal…
Consolidated group receives late stock loss election relief
A corporation in a consolidated group merged into its parent when its liabilities exceeded the value of its assets, causing the parent to recognize a loss on the subsidiary's stock. The group did…
Corporate group receives late consolidated return election
A corporation was formed to acquire five subsidiaries and intended to elect consolidated federal income tax filing for the group, but a valid consolidated return was not filed by the deadline. The…
Consolidated group receives late stock loss election relief
A corporation in a consolidated group merged into its parent when its liabilities exceeded the value of its assets, causing the parent to recognize a loss on the subsidiary's stock. The group did…
Two businesses satisfy active management requirement
A corporation operated two businesses and was owned equally by two individual shareholders. It proposed placing one business in a newly formed controlled corporation and distributing that…
Treaty waiver excludes branch profits and excess-interest taxes
A foreign corporation conducting a U.S. business proposed liquidating its wholly owned domestic subsidiary into itself after integrating the subsidiary's operations and assets. The parties intended…
TARP status carries over and bars extended NOL carryback election
A consolidated group tried to elect the temporary three-, four-, or five-year net operating loss carryback available under the Worker, Homeownership, and Business Assistance Act of 2009. During the…
Spin-off business size and deferred-compensation stock retention approved
A publicly traded parent proposed contributing a subsidiary and other assets to a newly formed controlled corporation, distributing most of the controlled corporation's stock to its shareholders,…
Late consolidated intercompany election receives 90-day extension
A consolidated group failed to timely elect to apply the 1995 intercompany transaction regulations to earlier stock-elimination transactions with deferred gains. The parent reasonably relied on a…
Deferred intercompany stock gains excluded after deemed liquidations
Members of a consolidated group had two deferred intercompany gains from pre-1995 stock distributions. After later mergers, contributions, parent changes, and a proposed sequence of subsidiary…
Cooperative's preferred-stock exchange avoids deemed distribution
A non-stock cooperative proposed a mandatory exchange of newly issued publicly traded preferred stock for patrons' qualified written notices of allocation. Participation would be limited by recent…
Business size does not prevent spin-off qualification
A publicly traded real estate investment trust planned to form and distribute a controlled REIT that would continue a separate business through an acquired target. The IRS ruled that the relative…
Exchange rights receive section 355(e) testing rules
A publicly traded partnership proposed a complex separation that combined certain businesses with another enterprise and distributed stock of a new public company. Limited partners would receive…
Exchange rights receive section 355(e) testing rules
A publicly traded partnership proposed a complex separation that combined certain businesses with another enterprise and distributed stock of a new public company. Limited partners would receive…
Deferred losses are recognized before distribution
A public corporation planned a series of internal transfers, a subsidiary conversion and liquidation, and a pro rata distribution of a controlled corporation. Two internal sales would produce losses…
Consolidated group receives more time for an extended NOL carryback election
A former common parent of a consolidated group failed to timely elect an extended carryback period for a consolidated net operating loss under IRC § 172(b)(1)(H). The group explained that it…
Open-market repurchases are treated as pro rata for section 355(e) testing
A public corporation completed a distribution of a controlled corporation followed by a merger with another public company. It later made, and planned to continue making, open-market repurchases of…
Affiliated group receives more time to elect consolidated filing
A parent corporation and subsidiary intended to file a consolidated federal income tax return but failed to make the required election on time. The parent showed that it reasonably relied on a…
Multi-step business separation receives discrete reorganization rulings
A public parent planned a complex separation of two businesses through foreign entity restructurings, several internal distributions, a new spin company, debt exchanges, a cash transfer, and a final…
Related-entity transfers may be treated as a direct transfer
A foreign subsidiary loaned funds to a second foreign corporation, which distributed the funds to its U.S. parent. That U.S. corporation then distributed the same funds to the common U.S. parent of…
S corporation cannot claim ordinary loss for worthless subsidiary stock
An S corporation terminated its election, which also ended its subsidiary's qualified subchapter S subsidiary status, and claimed an ordinary worthless-stock loss under IRC § 165(g)(3). Chief…
Corporate successor is consolidated group's default substitute agent
A consolidated group's former common parent dissolved without designating a substitute agent. A domestic holding company had assumed the group's federal income tax liabilities through a bankruptcy…
Cash-or-stock RIC dividends are taxable property distributions
A regulated investment company planned dividends that shareholders could elect to receive in cash or common stock. Cash would equal at least 20 percent of each dividend, with cash elections prorated…
Recognized income and gain do not defeat active-business requirement
A corporate group planned to separate one business into a newly formed controlled corporation and distribute that corporation's stock to the parent's shareholders. As part of the restructuring, a…
Cash used in acquisition does not defeat active-business rule
A public corporation acquired an unrelated target in a reorganization using its own stock and cash. The target owned a subsidiary that planned to separate three businesses into newly formed…
Amount realized defines stock value under the unified loss rule
A consolidated group sold loss-share subsidiary stock for an amount far below a valuation estimate and claimed the resulting stock loss. Chief Counsel concluded that the unified loss rule required…
Extension granted to elect consolidated return filing
An affiliated corporate group intended to elect consolidated federal income tax return filing but did not make the election on time. The IRS found that the common parent had reasonably relied on a…
Extension granted to elect expiration of subsidiary loss carryovers
A consolidated group acquired a subsidiary with loss carryovers that were limited under IRC § 382. The parent intended to elect that the unusable portion expire immediately before the subsidiary…
Elective cash-and-stock REIT distributions treated as property distributions
A corporation planning to elect REIT status proposed distributing its accumulated corporate earnings and profits through shareholder elections between cash and stock, subject to a minimum cash pool…
Stock transfer between affiliated charities avoids an ownership change
Two affiliated tax-exempt organizations described in IRC § 501(c)(3) reorganized ownership of a for-profit subsidiary. The subsidiary had a net operating loss carryforward, and one exempt…
New parent receives extension for consolidated-return election
A newly formed parent corporation became the common parent of two subsidiaries but did not timely file the group's election to submit a consolidated federal income tax return. The failure occurred…
Majority partnership interest is looked through for section 351
A publicly traded limited partnership planned to receive interests in an acquired master limited partnership from a newly formed corporate entity in exchange for the taxpayer's limited-partner…
Late section 336(e) election receives filing relief
A purchaser acquired all stock of an S corporation in a transaction represented to be a qualified stock disposition. The target and its shareholder had timely signed a binding agreement to make an…
Loss corporation gets 60 days for a late closing election
A loss corporation experienced a section 382 ownership change but did not timely elect to close its books on the change date. It represented that the assessment period remained open and that it was…
Built-in-loss transfer gets 60 days for a late basis election
A partnership owned a controlled foreign corporation that transferred built-in-loss property to a newly formed corporate subsidiary in a purported section 351 exchange. Section 362(e)(2) would…
Extension granted to waive CNOL carryback period
A consolidated group intended to relinquish the entire carryback period for a consolidated net operating loss, but its return did not include a valid election under Treasury Regulation §…
Elective stock-and-cash dividends treated as property distributions
A corporation planning to elect REIT status proposed dividends allowing each Class A shareholder to choose cash or stock of equivalent value, subject to a cash pool of at least 20 percent of the…
Consolidated groups received 60 days for ratable-allocation election
A new parent acquired an old parent and its subsidiaries, terminating one consolidated group and bringing the corporations into a new consolidated group. The groups intended to elect to allocate…
New corporate group received 60 days to elect consolidated filing
A newly formed parent became the common parent of an affiliated group but did not timely file the consolidated return that would make the group’s election to file together. The parent requested…
Cash, debt exchange, and merger steps received favorable separation rulings
A public company proposed transferring one business to a controlled subsidiary, receiving stock, securities, and borrowed cash, and separating that subsidiary from its shareholders through an…
Group receives extra time for consolidated return election
A corporate parent intended for its affiliated group to elect to file a consolidated federal income tax return, but a valid election was not filed by the deadline. The parent sought discretionary…
Consolidated group receives late intercompany regulation election
A consolidated group had deferred gain from a pre-1995 distribution of foreign subsidiary stock. It failed to make the election that would apply the revised intercompany transaction regulations to…
IRS approves discrete spin-off acquisition and affiliation issues
A public-company group proposed internal and external distributions that would separate a subsidiary, along with related entity-classification, liquidation, and possible acquisition steps. The IRS…
Data-center REIT receives rulings on property, income, distributions, and hedges
A publicly traded data-center company planned to reorganize and elect real estate investment trust status. The IRS ruled that its buildings, integrated building components, and specified…
Retained spin-off shares and subsidiary liquidations receive favorable rulings
A public corporation planned to separate one business by contributing assets to a new controlled corporation and distributing most of its stock to shareholders. It would temporarily retain a…
Replacement spin-off notes qualify as section 361 securities
A public corporation planned to transfer businesses to a new controlled corporation and distribute the controlled corporation's stock in a spin-off. As part of dividing existing debt, the controlled…
REIT cash-and-stock distribution is taxable property distribution
A REIT recognized gain after acquiring distressed mortgage loans and foreclosing on the underlying property, then proposed a deficiency dividend to offset redetermined income. Shareholders could…
Successor receives 60 days for deemed-sale election
A foreign investment company transferred assets in a reorganization to a successor that elected regulated investment company status, then dissolved. The predecessor failed to attach the election for…
Discrete issues approved in a proposed REIT business separation
A publicly traded real estate investment trust proposed a multi-step separation of two businesses involving subsidiary mergers, contributions, distributions, and a shareholder spin-off. The IRS…
Temporary retention of spin-off shares was not tax avoidance
A public corporation planned to separate a higher-growth business by distributing 80.1 percent of a holding company's stock to its shareholders. It proposed retaining the remaining 19.9 percent…
Parent received more time to file section 338 elections
A corporate parent requested extra time to file section 338(g) elections after a purchaser acquired a foreign target and the target's many foreign subsidiaries. The elections were not filed by their…
Affiliated group received late consolidated-return election relief
A parent corporation acquired all the stock of a subsidiary and intended to file a consolidated federal income tax return for the acquisition year. The affiliated group did not timely make the…
Professional reliance justified late CNOL carryback election
The common parent of a consolidated group missed the deadline to elect an extended carryback period for a consolidated net operating loss. Affidavits showed that the parent had reasonably relied on…
Professional error justified late CNOL carryback waiver
A consolidated group intended to waive the entire carryback period for a consolidated net operating loss but failed to file a valid election with its return. The parent represented that the group…
Directed transfers and small businesses cleared for spin-off steps
A publicly traded parent proposed a series of internal transfers and section 355 distributions to facilitate another company’s acquisition of one business line. The IRS addressed only two discrete…
Anti-abuse rule may include target earnings in triangular reorganization dividend
An examination team planned to challenge a taxpayer's calculation of a deemed distribution arising from a triangular reorganization under Treasury Regulation section 1.367(b)-10. The taxpayer…
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.