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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Integrates contribution and merger steps in a proposed spin-off
A foreign parent proposed moving selected U.S. assets and subsidiaries from one U.S. consolidated group to another through contributions, two stock distributions, a contribution to the receiving U.S. …
Integrates contribution and merger steps in a proposed spin-off
A foreign parent proposed moving selected U.S. assets and subsidiaries from one U.S. consolidated group to another through contributions, two stock distributions, a contribution to the receiving U.S. …
Conditionally approves revised pension-plan actuarial assumptions
A pension plan sponsor asked to change non-prescribed assumptions used to calculate the plan's funding target. The sponsor said participants were retiring later and cash-balance participants were leav…
Employer-related scholarship procedures receive advance approval
A private foundation proposed scholarships for children and other relatives of employees of a company and its subsidiaries. An independent organization and its selection committees would choose recipi…
Scholarship procedures for graduates of two schools receive approval
A private foundation proposed a scholarship for students who graduated from two specified schools and met stated grade and course-completion requirements. Every qualifying eighth grader at one school …
Trade association denied Section 501(c)(6) exemption because it primarily advertised members
An association of businesses along a scenic highway sought exemption as a business league under section 501(c)(6). Its members included galleries, lodging providers, restaurants, fishing lodges, and r…
Section 6901 generally does not reach employment taxes or trust fund recovery penalties
Chief Counsel advised that section 6901(a)(1) and (2) generally does not provide a collection route for employment taxes or the trust fund recovery penalty. Employment taxes arise under subtitle C, wh…
CFC debts do not offset a related U.S. person's obligation without actual extinguishment
Chief Counsel considered how to measure a controlled foreign corporation's investment in U.S. property under section 956 when the CFC held an obligation of a U.S. person and owed money to another memb…
Section 6503(a) rarely adds to the collection-statute suspension for a pending installment agreement
Chief Counsel considered when the collection statute expiration date could be suspended simultaneously under sections 6503(a) and 6331(k). Section 6503(a) concerns deficiencies and deficiency litigati…
Partnership receives 120 days to make a late Section 754 election
A lower-tier partnership sought extra time to make a section 754 election after a partner in its upper-tier partnership died. Both partnerships timely filed their returns, but an adviser inadvertently…
Upper-tier partnership receives 120 days to make a late Section 754 election
An upper-tier partnership sought extra time to make a section 754 election after one of its partners died. The upper-tier partnership and a lower-tier partnership timely filed their returns, but an ad…
REIT group receives 90 days to make late taxable REIT subsidiary elections
A company planning to qualify as a REIT acquired interests in six health care companies that had previously been taxable REIT subsidiaries of another REIT. New joint elections on Form 8875 were requir…
Medical center bonds avoid advance-refunding bar because buyer and university are unrelated
A tax-exempt buyer acquired an academic medical center from a university using taxable debt, and the university used part of the proceeds to defease previously advance-refunded tax-exempt bonds. The i…
Church-controlled social-service ministry's pension plan qualifies as a church plan
A nonprofit social-service ministry asked whether its frozen defined benefit pension plan qualified as a church plan under section 414(e). A church official was the ministry's sole member, appointed i…
Late return still makes timely election out of bonus depreciation after filing-extension error
A corporate group decided not to claim additional first-year depreciation on seven-year property placed in service during a short tax year. Its return preparer believed it had timely filed Form 7004, …
Subsidiaries receive relief for late elections out of bonus depreciation
Two subsidiaries decided not to claim additional first-year depreciation on five-year and seven-year property placed in service during a short tax year. Their corporate parent's return preparer believ…
S corporation keeps status after shares briefly pass to an ineligible shareholder
An S corporation's election terminated when all of its shares were transferred to an ineligible shareholder. After discovering the problem, the ineligible shareholder transferred the shares in equal p…
Foreign entity receives 120 days to elect partnership classification
A foreign eligible entity intended to be treated as a partnership for U.S. federal tax purposes but inadvertently failed to file Form 8832 on time. Under the entity-classification regulations, a forei…
Estate receives 120 days to allocate GST exemption after incorrect gift-splitting returns
A husband funded four trusts for his children, and the spouses elected to split their gifts equally under section 2513. Their gift tax returns mistakenly reported three-fourths of the total gift to th…
Expired limitations period fixes incorrect gift split but not the husband's GST share
A husband funded four trusts for his children, and the spouses elected to split their gifts equally under section 2513. Their gift tax returns mistakenly reported three-fourths of the total gift to th…
Corporation receives relief after trust misses ESBT election
A corporation's S election was ineffective because a shareholder trust did not timely elect to be an electing small business trust and was therefore an ineligible shareholder. The corporation represen…
IRS approves a private foundation's grants for developing new theatrical works
A private foundation asked the IRS to approve its procedures for grants that help individuals study the arts and develop new theatrical works. Applicants would submit scripts and other production mate…
IRS denies business-league exemption to an umpires association that arranged member jobs
An association of baseball and softball umpires sought tax exemption as a business league under IRC Section 501(c)(6). It represented members before a state athletics body, negotiated and billed schoo…
IRS denies social-welfare exemption to a small condominium association
A condominium association with fewer than 20 units applied for tax exemption as a social-welfare organization under IRC Section 501(c)(4). The association collected member dues to maintain a small com…
IRS denies charitable exemption after applicant fails to document its organization and activities
An organization applied for recognition as a charity under IRC Section 501(c)(3), but it did not provide its articles of incorporation or attest that they contained the required purpose and dissolutio…
Selective cash-balance offsets fail pension nondiscrimination and participation tests
An employer maintained a cash-balance pension plan and a profit-sharing plan. The cash-balance plan offset benefits for nonhighly compensated employees by their profit-sharing benefits, reducing those…
Employer-paid expatriate tax-return preparation is taxable compensation
A U.S. employer paid a multinational accounting firm to prepare domestic and foreign tax returns for employees on international assignments as part of a tax-equalization program. Chief Counsel conclud…
S corporation keeps its status after promptly undoing an ineligible partnership shareholder transfer
An S corporation issued stock to a partnership even though its governing documents prohibited the transfer and a partnership generally cannot be an S corporation shareholder. The corporation discovere…
Partnership-to-REIT asset transfers qualify for specified nonrecognition treatment
A publicly traded partnership planned to form a real estate investment trust and contribute substantially all of its operating assets to the new REIT. It would later acquire more assets through a fund…
Replacement-property payments need no Forms 1099 when taxable income cannot be determined
A company's subsidiaries were required by state law to provide nearby property owners with a permanent replacement service or system because of concerns about the subsidiaries' facilities. Property-da…
S corporation receives 120 days to make a late QSub election
An S corporation intended to elect qualified subchapter S subsidiary status for its wholly owned subsidiary but did not timely file the required election form. It nevertheless filed its returns consis…
Consolidated group receives 90 days to make a late intercompany-stock election
A consolidated corporate group inherited deferred gains from stock distributions completed before new intercompany-transaction regulations took effect in July 1995. The former parent had missed the el…
Consolidated election survives acquisition and deferred intercompany gain is excluded
A corporate group had deferred gain from an old intercompany stock distribution and received a companion ruling allowing a late election to apply newer consolidated-return regulations. After the group…
IRS approves a private foundation's nursing scholarships
A private foundation asked the IRS to approve scholarships for financially needy students entering their junior or senior year in a nursing program. Recipients would be selected based on financial nee…
IRS approves renewable college scholarships for graduating seniors
A private foundation proposed scholarships for graduating seniors from a specified school who had been admitted to college, generally targeting students with at least a 3.0 GPA. Selection would consid…
IRS approves trade-school scholarships for low-income high school seniors
A private foundation proposed scholarships for low-income graduating seniors who wanted trade training rather than a traditional college program. Applicants would document financial need, explain thei…
IRS revokes charity whose only activity was a business networking event
A tax-exempt organization described its purpose as promoting trade, commerce, tourism, and friendship between countries. During the examined year, its only activity was a free trade, commerce, and cul…
IRS reclassifies fundraising charity as a private non-operating foundation
A private foundation raised money through solicitations, events, ticket sales, and merchandise. It distributed most of the proceeds to a public charity supporting cancer research and also funded a mem…
IRS revokes group-home charity that never began operations or answered examination requests
A charity was formed to operate a group home offering life-skills training to teenage girls. It reported no income and no operations for several years, did not file one required Form 990, and did not …
IRS corrects scholarship group's public-charity classification to Section 509(a)(2)
A group of educators raised funds through a scholarship luncheon, a dance, and a regional conference, then awarded scholarships and book awards to students entering education. On its streamlined exemp…
IRS revokes business league operated as a member referral and advertising network
A membership organization brought together one representative from each of many different businesses. Members met weekly to advertise their businesses, exchange referrals, give short commercials, and …
Taxpayer may make retroactive QEF elections for 31 PFIC subsidiaries
A U.S. taxpayer owned a foreign company and 31 direct or indirect subsidiaries that were passive foreign investment companies. Competent tax advisers had not identified the entities as PFICs and there…
Rural telephone cooperative's wireless-spectrum gain is patronage-sourced income
A taxable rural telephone cooperative and its wholly owned subsidiary sold wireless-spectrum licenses after concluding that they could not use the licenses effectively before expiration. The cooperati…
Acquired corporation receives 60 days to file a late success-fee safe-harbor election
A corporation paid financial and transaction advisers success-based fees in connection with a cash acquisition. It intended to use the Rev. Proc. 2011-29 safe harbor, which generally treats 70 percent…
Solar-only home battery qualifies for the residential solar credit
A married couple already had a residential solar photovoltaic system and planned to add a battery, inverter, wiring, and control software. The software would ensure that the battery charged only from …
Export corporation receives 60 days to file a late IC-DISC election
A domestic corporation was formed to operate as an interest charge domestic international sales corporation in connection with its parent's exports. Its law firm prepared Form 4876-A, but the IRS rece…
Newly formed export corporation receives 60 days to correct its IC-DISC election
A domestic corporation was formed late in a calendar year to operate as an IC-DISC for a related agricultural-equipment exporter. Its law firm filed Form 4876-A using the corporation's first full cale…
IRS revokes charity that repeatedly refused to provide examination records
An organization recognized under section 501(c)(3) did not provide the records and information the IRS needed to examine its activities and operations. The IRS sent repeated letters, contacted board m…
Employer-related scholarship procedures are approved
A private foundation proposed one nonrenewable scholarship each year for a child of a company employee with at least three years of service. Applicants had to be college sophomores, juniors, or senior…
Botanical fellowship and internship grant procedures are approved
A private foundation proposed two educational grant programs in botanical science and art, plant biology, horticulture, gardens, landscape design, plant uses, and conservation. One would make generall…
Medical travel and international research grant procedures are approved
A private foundation proposed two educational grant programs in a redacted medical specialty. The first would help outstanding residents travel to a professional organization's annual meeting after su…
Hotel restoration project is denied Section 501(c)(3) status
An organization bought a vacant, deteriorated hotel near a historic business district and planned to renovate it into ten guest rooms, a dining room, and possibly a coffee shop, wine cellar, and spa. …
Bionic-hand developer is denied exemption for private benefit and nonexempt purposes
An organization planned to develop open-source bionic hands and related control software for people with limb differences through worldwide collaboration, university programs, and hackathons. Its init…
IRS revokes organization dissolved by court as fraudulent
An organization had been recognized under section 501(c)(3) to help convicted felons and their families pursue rehabilitation, housing, careers, counseling, and other goals. A state court later found …
Send an estate's deficiency notice to authorized representatives as a safeguard
Chief Counsel advised that, when an estate has authorized one or more representatives to receive tax information, the safest practice is to send each representative a copy of the statutory notice of d…
Employee self-employment tax offsets employer FICA liability but not penalties
An employer had intentionally misclassified workers as nonemployees, making the reduced assessment rules of section 3509 unavailable. The workers reported the compensation as self-employment income an…
Disaster relief does not override mandatory overpayment offsets
Chief Counsel explained that section 6402 requires the IRS to credit an overpayment against other assessed federal tax liabilities before issuing a refund, and disaster-relief authority under section …
Entire administrative record is generally advisable with summary judgment motion
Chief Counsel advised that it is generally appropriate to submit the entire administrative record to the Tax Court with a motion for summary judgment, given the court's desire for information in the r…
Partnership receives 120 days to make a late Section 754 election
A limited liability company taxed as a partnership had a partner that was a grantor trust. After the grantor died, the partnership relied on an adviser to file a section 754 election for that year, bu…
Taxpayer may make retroactive QEF elections for seven PFICs
A foreign citizen working in the United States became a U.S. person while owning direct or indirect interests in seven passive foreign investment companies. The taxpayer disclosed the interests to an …
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.