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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Waives excise taxes for pension-plan liquidity shortfalls
A company requested relief from excise taxes after its defined benefit pension plan missed required liquidity shortfall contributions for seven quarters. The company had incorrectly believed that a qu…
Scholarship and educational grant procedures are approved
A private foundation requested advance approval for two programs serving students with financial need and academic promise. Its scholarship program would support private high school, college, and grad…
Different averaging rules would violate utility tax normalization
A regulated electric utility used a 13-month average to calculate rate-base items, including accumulated deferred federal income taxes. An IRS audit settlement reduced a deferred tax asset tied to net…
Assisted-living joint venture rent qualifies as REIT income
A company intending to qualify as a real estate investment trust owned assisted-living facilities through a partnership. The facilities were leased to operating partnerships owned by the REIT's taxabl…
Senior facilities and foreign income receive mixed REIT rulings
A company planning to elect REIT status acquired independent-living and assisted-living facilities in the United States and another country. The IRS ruled that the integrated senior facilities with me…
Subsidiary employees may join parent S corporation's ESOP
An S corporation maintained an employee stock ownership plan holding its privately traded common stock. Its wholly owned C corporation subsidiary planned to hire employees and adopt the parent's ESOP …
Affiliate's stock-offering profit is excluded from gross income
A publicly traded parent company sold two classes of preferred stock through an underwriting group that included a disregarded entity owned by a consolidated subsidiary. The parent paid underwriting f…
Grants 120 days for late disregarded-entity election
A foreign eligible entity intended to be treated as disregarded from its formation date but inadvertently failed to file Form 8832 on time. The entity initially had one owner and later became wholly o…
Grants late disregarded-entity election before partnership conversion
A foreign eligible entity intended to be treated as disregarded from its formation date but inadvertently failed to file Form 8832 on time. It initially had one owner and later became a multiple-membe…
Grants 120 days for foreign entity's late classification election
A foreign eligible entity had been indirectly wholly owned by the same taxpayer since its formation. It intended to elect disregarded-entity status from that date but inadvertently failed to file Form…
Grants 120 days for wholly owned foreign entity's late election
A foreign eligible entity had been wholly owned by one taxpayer since it was formed. It intended to be treated as disregarded from its formation date but inadvertently failed to file Form 8832 on time…
Grants late election before foreign entity became a partnership
A foreign eligible entity intended to be disregarded from its formation date but inadvertently failed to file Form 8832 on time. It was initially wholly owned by one taxpayer and later became a multip…
Law-enforcement association denied VEBA exemption
A membership organization for active and retired law-enforcement officers applied for exemption as a voluntary employees' beneficiary association under Section 501(c)(9). It collected dues and payment…
Political association denied charitable exemption
An unincorporated association sought recognition as a Section 501(c)(3) charity. Its bylaws promoted political activity, required officers and members to be voters of one political party, and describe…
Judicial approval protects specified principal residences from levy
Chief Counsel advised that judicial approval is required before the IRS levies property owned by a taxpayer and used as the principal residence of the taxpayer, the taxpayer's spouse, former spouse, o…
Index swaps disallow ETF dividends-received deductions
A corporate group bought shares of an exchange-traded fund that tracked a stock index while entering into short swaps tied to the same index. The positions offset the ETF's price and dividend risk, bu…
Restores S status after three years of passive income
An S corporation had accumulated earnings and profits from its prior C corporation period and received more than 25 percent passive investment income for three consecutive years. Those facts automatic…
Grants 45 days for late success-fee safe-harbor election
A corporation paid a success-based financial advisory fee in connection with a stock acquisition. Its tax preparer did not advise it to elect the Revenue Procedure 2011-29 safe harbor, which generally…
Corporate separation preserves liquidations and active businesses
A publicly traded foreign parent proposed a 36-step transaction to separate two broad business groups through entity-classification elections, internal transfers, liquidations, contributions, distribu…
Grants 60 days for late consolidated-return election
A corporation became the parent of a new affiliated group after acquiring a subsidiary. The group intended to file a consolidated federal return but failed to make a valid election under Treasury Regu…
Approves multi-step corporate separation and spin-off
A publicly traded parent proposed an extensive series of internal restructurings followed by a contribution of the separated business to a new corporation and a pro rata distribution of that corporati…
Grants 45 days to attach omitted success-fee election
A foreign entity taxed as a partnership incurred success-based fees when buyers acquired its direct and indirect ownership interests. Its return treated 70 percent of the fees as nonfacilitative and c…
Grants foreign subsidiary's late disregarded-entity election
A foreign limited liability company formed a wholly owned foreign subsidiary and intended to treat it as disregarded from formation. The subsidiary did not timely file a valid Form 8832, but its owner…
Grants 120 days for late estate portability election
An estate missed the deadline to file Form 706 and elect portability of the deceased spouse's unused estate and gift tax exclusion to the surviving spouse. The estate represented that the decedent's g…
Mortgage investment trust lacks power to vary investments
A statutory trust purchased residential mortgage loans, immediately exchanged them for mortgage-backed securities, transferred most of those securities to its sponsor, and retained an interest-only st…
Grants late Section 336(e) stock-disposition election
A partnership-taxed buyer acquired all stock of an S corporation from its shareholders for cash. The parties later decided to make a Section 336(e) election so the qualified stock disposition would be…
Waives 60-day rollover deadline after faulty NUA advice
A retired employee received employer stock from a 401(k) plan after advisers recommended using the net unrealized appreciation tax exclusion instead of rolling the stock into an IRA. The taxpayer late…
Franchise-employee scholarship procedures are approved
A private foundation proposed scholarships for employees of independently owned franchises pursuing undergraduate or vocational education. An unrelated Section 501(c)(3) organization would administer …
Scholarships for an employer's employees' children are approved
A private foundation proposed scholarships for dependent children of an employer's full-time employees. An independent organization would administer the applications, select recipients based on financ…
Equine clinic loses exemption for commercial activity and private benefit
A tax-exempt organization said it would prevent cruelty to horses, conduct research and education, provide disaster relief, make charitable grants, and offer veterinary services at below-market rates …
Youth sports charity is reclassified under Section 509(a)(2)
A Section 501(c)(3) youth sports organization operated two gymnasiums and received most of its support from basketball and volleyball programs, camps, tournaments, concessions, and hotel commissions. …
Charity loses exemption after failing to substantiate its activities and spending
A charity proposed a broad range of community programs and later operated thrift stores that it said benefited military veterans. By the examination period, it had no current activities and had not su…
Member-focused charity loses exemption for private benefit
A charity connected with a multi-state membership organization raised money through events and owned land used for gatherings. It also made loans and funeral-expense payments to members and their fami…
Tax Court can consider innocent-spouse underpayment relief in a deficiency case
Chief Counsel advised that the Tax Court can consider innocent-spouse relief for an underpayment when the case is already before it through a petition challenging a statutory notice of deficiency. Sec…
Use a closing agreement to resolve combat-zone interest in a Tax Court settlement
Chief Counsel advised Appeals to use a closing agreement to resolve an interest issue involving Section 7508 combat-zone relief. The Tax Court normally lacks jurisdiction over deficiency interest, eve…
Addiction treatment center's pension plan qualifies as a church plan
A nonprofit residential addiction treatment center serving clergy, religious personnel, and seminarians asked whether its frozen defined benefit plan qualified as a church plan. The center had longsta…
Partnership receives 120 days to make a late Section 754 election
A partnership failed to make a Section 754 election for the year in which one owner sold its interest to the remaining and incoming owners. The election would permit a transferee-specific adjustment t…
Partnership receives 120 days to make a late Section 754 election
A partnership failed to make a Section 754 election for the year in which one owner sold its interest to the remaining and incoming owners. The election would permit a transferee-specific adjustment t…
Estate receives 120 days to opt out of automatic GST exemption allocation
A decedent transferred cash to an irrevocable trust with generation-skipping transfer tax potential but did not intend to allocate GST exemption to the transfer. The accounting firm preparing the gift…
Partnership receives 120 days to make a late Section 754 election
A partnership failed to make a Section 754 election for the year in which one owner sold its interest to the remaining and incoming owners. The election would permit a transferee-specific adjustment t…
Parent receives extra time for a Section 338(g) election on a foreign acquisition
A U.S. consolidated group intended to make a Section 338(g) election for a controlled foreign corporation's purchase of a foreign target and deemed purchases of six foreign subsidiaries. The election …
Converted coal-waste products are not subject to the coal excise tax
A taxpayer developed a process that converts commercially unusable coal waste into a fuel product and an agricultural product. The process substantially changes the waste's physical properties and che…
LLC receives extra time to elect corporate tax classification
A single-owner domestic limited liability company intended to be treated as an association taxable as a corporation, but inadvertently failed to file Form 8832 on time. The IRS found that the company …
Estate receives 120 days to opt out of automatic GST exemption allocation
A decedent transferred cash to an irrevocable trust with generation-skipping transfer tax potential but did not intend to allocate GST exemption to the transfer. The accounting firm preparing the gift…
Foundation's summer-camp grant procedures receive advance approval
A private foundation proposed educational grants that would help children attend overnight summer camps promoting their religious identity, traditions, history, and culture. Eligible recipients genera…
Outdoor art installation grant procedures receive advance approval
A private foundation proposed a grant program for individuals creating durable and safe outdoor art installations, such as sculptures and murals. Applicants would submit an artwork statement, images, …
Scholarship and support grants for disadvantaged women receive approval
A private foundation proposed grants to help academically successful but financially disadvantaged women from a redacted country attend educational institutions in the United States. The program would…
Gaming and insider benefits caused revocation of a youth performance organization's exemption
The IRS revoked the Section 501(c)(3) status of an organization formed to support drum and bugle corps music and later operating color guard programs. The examination found that bingo, other gaming, a…
Withholding overpayment was available for offset on the original return due date
Chief Counsel considered whether an individual was entitled to a refund when the IRS had applied two payments in date order. The individual's overpayment came from withholding, which Section 6513(b) t…
Taxpayer seizure required following Sections 6335 and 6337
Chief Counsel addressed a redacted question involving property seized from a taxpayer. The advice stated that the IRS should follow Sections 6335 and 6337 because the seizure was from the taxpayer. Th…
Perfected security interest had priority over an FPLP levy without a filed tax lien notice
A federal contractor owed taxes, and the IRS used the Federal Payment Levy Program to levy a contract payment due from the Department of Defense. A third party held a perfected UCC-1 security interest…
S corporation co-owner penalty could pose a legal hazard without a preparer role
Chief Counsel considered whether the IRS should assess the willful or reckless return-preparer penalty under Section 6694(b) against an individual who co-owned an S corporation. An individual is subje…
Settlement labels did not control Section 162(f) treatment of payments
A taxpayer sought business-expense deductions for payments resolving government lawsuits and for a separate disgorgement payment. Chief Counsel advised that language in the settlement agreement did no…
Market-priced renewable facility share was not public utility property
A regulated electric utility planned to own renewable generation facilities whose output would serve retail customers in two states and wholesale customers. Public utility property status requires reg…
Renewable facility portions received different public utility property treatment
A regulated electric utility planned renewable generation facilities serving State A retail customers, State B retail customers, and wholesale customers. Public utility property status under the norma…
Taxpayer could revoke a mistaken election out of installment reporting
A taxpayer used a qualified intermediary for a deferred exchange of real property that began late in one tax year and finished in the next. The accountant incorrectly believed that a Form 1099-S requi…
Estate received 120 days to sever a trust for GST exemption allocation
A decedent's revocable trust directed tax-efficient use of the generation-skipping transfer tax exemption and favored trusts with inclusion ratios of either zero or one. The estate's law and accountin…
Entity received 120 days for a late partnership classification election
An eligible entity had elected to be taxed as a corporation and later experienced a change of more than 50 percent in its ownership. It wanted to change to partnership classification within the usual …
Nuclear plant sale preserved decommissioning fund treatment
A partnership owned a shut-down nuclear generating unit, its qualified nuclear decommissioning fund, and the associated decommissioning liability. It planned to place the unit and related assets into …
Decommissioning fund transferred without tax or basis change
A partnership planned to sell a shut-down nuclear generating unit through a disregarded entity, together with its qualified nuclear decommissioning fund and related liabilities. The buyer would assume…
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.