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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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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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.…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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…
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,…
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)…
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.…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
Nuclear unit buyer could assume the unfunded decommissioning liability
A partnership proposed selling a shut-down nuclear generating unit, its qualified nuclear decommissioning fund, and the related decommissioning liability to a buyer through a disregarded entity. The…
S election survived a wrong effective date and unauthorized shares
A corporation timely filed Form 2553 but mistakenly listed an effective date before the corporation was formed. It nevertheless acted as an S corporation from its formation date. The corporation…
Taxpayer received 120 days for two late drilling cost elections
A taxpayer held interests in two oil exploration and production partnerships and incurred intangible drilling costs in two tax years. An accounting firm advising the taxpayer failed to explain that…
New group received 60 days to perfect its consolidated return election
A corporation became the common parent of a new affiliated group after another corporation distributed its stock. The group filed a consolidated return, but the return and related election were not…
Parent received 60 days to waive the consolidated NOL carryback period
A newly formed affiliated group intended to relinquish the carryback period for its consolidated net operating loss, and it filed all returns consistently with that intent. A qualified tax…
Companies received 60 days for a protective Section 336(e) election
A consolidated group's parent distributed all the stock of a target corporation in a transaction intended to qualify under Section 355 and potentially described in Section 355(d) or (e). The parties…
Estate received 120 days for a late alternate valuation election
An estate's co-executors hired an attorney to prepare a timely Form 706, but the attorney failed to make the Section 2032 alternate valuation election. The executors later filed a supplemental…
Welfare trust amendment triggered income but not a disqualified-benefit tax
An employer had an overfunded welfare benefit trust originally used for retiree health benefits under a collective bargaining agreement. It proposed amending the trust so its assets could also pay…
Foreign entity received 120 days for a late partnership election
A foreign eligible entity defaulted to association status because all of its members had limited liability, but its partners intended partnership treatment from formation. A qualified tax…
Foreign entity could elect partnership status from formation
A foreign entity with multiple limited-liability members defaulted to association status even though its partners intended partnership treatment from the date of formation. The entity relied on a…
Late Form 8832 relief preserved intended foreign partnership status
A foreign eligible entity intended to be treated as a partnership from formation, but its limited-liability members caused corporate default classification unless it filed Form 8832. A qualified tax…
Foreign partnership election received 120-day filing relief
A foreign eligible entity intended partnership treatment from the day it was formed, but its members' limited liability caused it to default to corporate classification. Its tax professional failed…
Unitrust conversion preserved a grandfathered trust's GST exemption
A trust created by a decedent who died before December 26, 1985, remained exempt from generation-skipping transfer tax because it was irrevocable before the grandfathering date and had received no…
Captive insurer received 90 days for a late Section 831(b) election
A captive insurer had filed property and casualty insurance company returns without electing the alternative tax available to qualifying small insurers under Section 831(b). Its accounting firm told…
Foreign single-member entity received late disregarded-status relief
A foreign eligible entity was formed with one owner that had limited liability. The owner intended the entity to be disregarded for federal tax purposes from formation, but the entity failed to file…
Foundation conversion allowed beneficiary payments and split-year reporting
A non-functionally integrated Type III supporting organization planned to become a private foundation and combine two asset funds after a court-approved trust modification. Under a settlement,…
Artwork remainder transfer would be a completed gift
A surviving spouse proposed transferring legal title, naked ownership, and the remainder interest in a valuable art collection to two foreign museums while retaining possession, a life interest, and…
New parent received 60 days to waive a consolidated NOL carryback
A newly formed corporation acquired the old common parent of a consolidated group in a reverse acquisition and became the group's new common parent. The group later sustained a consolidated net…
Taxpayer received 60 days for the success-based fee safe harbor
A target company incurred a contingent financial-adviser fee when an acquirer completed a taxable reverse subsidiary merger. The target's final short-period return omitted the fee because its…
Artist alumni scholarship and project grants receive approval
A private foundation proposed four grant programs for alumni of an arts organization who had completed high school and participated in the organization for at least two years. One program would…
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.