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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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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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…
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…
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…
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…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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…
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…
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…
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.…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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,…
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…
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…
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,…
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…
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.