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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Divorce-related events qualified for a late IRA rollover waiver
During divorce proceedings, a taxpayer withdrew money from her IRA to buy a residence after her spouse said he would provide the needed funds and was subject to related legal obligations. The spouse d…
College scholarship procedures receive advance approval
A private foundation proposed scholarships for undergraduate and postgraduate students who had demonstrated academic success and needed financial assistance. Applicants would submit academic, personal…
Renewable college scholarship procedures receive advance approval
A private foundation proposed renewable scholarships for high-achieving high school seniors, including homeschooled students, who needed financial assistance and had been accepted by four-year college…
Foster-care student scholarship programs receive advance approval
A private foundation proposed two scholarship programs for high school graduates who were in foster care, had previously experienced foster care, or faced similar disadvantages. One program would serv…
STEM scholarship procedures receive advance approval
A private foundation proposed annual scholarships for underprivileged local high school graduates beginning four-year undergraduate programs in science, technology, engineering, or mathematics. Applic…
Environmental leadership scholarship procedures receive advance approval
A private foundation proposed a one-time annual scholarship for a high school junior or senior who showed leadership and initiative through a conservation, preservation, restoration, or environmental …
For-profit governing documents defeat section 501(c)(3) exemption
The IRS denied section 501(c)(3) status to an organization that offered dance, cultural, educational, and youth programs. The organization was incorporated under a state's for-profit corporation law, …
Apartment rentals to the general public cause exemption revocation
The IRS revoked an organization's section 501(c)(3) exemption because its only observed activity during and after the examination years was renting its facility as apartment housing to members of the …
Inactive organization loses exemption after failing to substantiate operations
The IRS revoked an organization's section 501(c)(3) exemption after the organization reported that it had conducted no activities or financial transactions since formation and had no bank account or f…
LLC member must be a manager to serve as tax matters partner
Chief Counsel advised that either of two timing tests can allow a person to qualify as a partnership's tax matters partner. The person must have been a general partner at some point during the taxable…
Partnership relationship may permit limited tax information disclosure
Chief Counsel considered whether information from a closing agreement could be disclosed for use in another taxpayer's examination. Section 6103(h)(4)(C) permits disclosure when the parties have a tra…
Internal personnel report likely satisfies Privacy Act exceptions
Chief Counsel informally considered whether an IRS office could compile labor information into a new internal report. The advice explained that creating a new record from existing data can be a disclo…
Indirect church-employer loans violate retirement account rules
Chief Counsel considered whether the rule barring loans from a church section 403(b)(9) retirement income account to the employer applies to indirect as well as direct loans. In one situation, partici…
Section 6701 penalty is generally imposed per qualifying document
Chief Counsel explained that the section 6701 penalty for aiding or abetting a tax understatement is generally measured by each qualifying return, affidavit, claim, or other document. The IRS must ide…
Housing project receives 120 days to correct low-income elections
A taxpayer that owned a multiple-building low-income housing project intended to elect the 40-60 minimum set-aside under section 42(g)(1)(B). Its Forms 8609 did not make timely, correct elections for …
Foreign entity receives 120 days for 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 represented that it acted reasonably and in good …
Foreign entity receives late disregarded-entity election relief
A foreign eligible entity intended to be disregarded as separate from its owner beginning on its formation date, but it inadvertently missed the Form 8832 deadline. The entity represented that it acte…
Court-ordered deficiency write-offs require no Forms 1099-C
A financial institution was barred by a court from collecting consumer deficiency balances because its notices violated state law. A later class settlement required the institution to write off those …
Late ESBT election does not end S corporation status
A trust became a shareholder of an S corporation, but its trustee did not timely elect electing small business trust status. That made the trust an ineligible shareholder and technically terminated th…
Mistaken QSST filing does not terminate S corporation status
Stock in an S corporation was transferred to a trust that the trustee and corporation intended to treat as an electing small business trust. Instead, a qualified subchapter S trust election was inadve…
Revised nuclear decommissioning funding schedule is approved
A utility requested a revised schedule of deductible contributions to its qualified nuclear decommissioning fund after regulators adjusted the amounts collected for decommissioning. The proposed sched…
Base solar incentive counts as qualifying REIT income
A real estate investment trust indirectly owned a mixed-use shopping center and planned to install a rooftop solar electricity system serving only that property. A utility program would pay a lump-sum…
Shopping-center solar incentive qualifies for REIT income tests
A REIT indirectly owned a mixed-use retail center and planned a rooftop solar system that would supply electricity only to the property. A utility incentive would include a base payment for the system…
Rooftop solar base payment is qualifying REIT income
A REIT indirectly owned a regional shopping center and planned to install a rooftop solar system used only to serve that property. The local utility's incentive included a base amount for the system a…
Solar installation incentive is qualifying REIT income
A REIT indirectly owned a mixed-use shopping center and its land through a partnership. The partnership planned to install a rooftop solar system that would generate electricity only for the center. A…
Utility's base solar payment qualifies as REIT income
A REIT's partnership owned a mixed-use shopping center and the underlying land and planned to install a solar system on the roof. The system would serve only the center and would be treated as a struc…
Shopping-center solar base incentive meets REIT income tests
A REIT indirectly owned a shopping center and the land beneath it and planned a rooftop solar installation serving only the center. The utility's upfront incentive was calculated using a base rate, wi…
Mortgage settlement payment preserves REMIC qualification
A REMIC in a residential mortgage securitization trust was entitled to a settlement payment resolving claims that mortgage loans breached representations and warranties. The payment did not exceed all…
Retained trust powers leave transfers incomplete for gift tax
A husband and wife each created an irrevocable trust benefiting the grantor and their children, with distributions controlled through several grantor and committee powers. The IRS found no listed circ…
LLC receives 120 days for association election
A single-owner domestic limited liability company intended to be classified as an association for federal tax purposes from its formation date. Because of inadvertence, it did not file Form 8832 on ti…
Foreign entity receives late disregarded-entity election relief
A foreign eligible entity was indirectly wholly owned by the parent of a consolidated corporate group and intended to be disregarded for federal tax purposes from its formation date. It failed to file…
Wrong trust election is treated as an inadvertent S termination
An S corporation transferred stock to a trust that was intended and treated as an electing small business trust. The trustee inadvertently filed a qualified subchapter S trust election instead, even t…
City retiree health trust income is excluded under section 115
A city created a trust to fund health and welfare benefits for retired general employees, police officers, firefighters, and eligible family members. The city council served as trustee, and trust asse…
Partnership receives 120 days for section 754 election
A limited liability company taxed as a partnership experienced a transfer of a partnership interest after a member died. Although the partnership timely filed its return for the transfer year, it inad…
Commercial school services cause exemption revocation
The IRS revoked an educational organization's section 501(c)(3) exemption after its operations shifted toward fee-based transportation, technology-network, and property-leasing services for school dis…
Trust owes UBIT on partnership and debt-financed income
An exempt trust reported unrelated business taxable income from partnership interests and debt-financed property, paid the resulting tax, and later claimed a refund. The IRS concluded that section 501…
Partnership losses are limited by partners' economic burden
A foreign joint venture was treated as a four-partner partnership for U.S. tax purposes, even though local law treated two funding parties as lenders. Fixed payments to those funding partners were gua…
Housing building receives 120 days to correct section 42 election
A taxpayer owned a single-building low-income housing project and intended to make a section 42(g)(1) minimum set-aside election. It inadvertently failed to make a timely, correct election, despite co…
Foreign entity receives extra time to elect disregarded status
A foreign eligible entity with one owner intended to be treated as disregarded for federal tax purposes but did not timely file Form 8832. Its owner consistently filed U.S. tax returns reflecting that…
Foreign entity receives extra time to elect disregarded status
A foreign eligible entity with one owner intended to be treated as disregarded for federal tax purposes but did not timely file Form 8832. Its owner consistently filed U.S. tax returns reflecting that…
Corporation receives relief for inadvertent S election termination
An S corporation's shareholders transferred stock to an irrevocable trust intended to qualify as a qualified subchapter S trust, but the beneficiary did not timely file a QSST election. That failure t…
Investment funds may revoke taxable-year excise tax elections
Five regulated investment company funds had elected to use their December 31 taxable years instead of the one-year period ending October 31 when calculating distributions required to avoid the section…
Declared dividends are taxable before later cash payment
An individual owned all of one corporation and a majority of another. Both corporations declared dividends, recorded the amounts on their books, and remained solvent with enough assets to pay them at …
Corporate group receives 45 days for transaction-fee election
A consolidated corporate group incurred success-based fees when another company acquired its parent. Its accounting firm believed it had electronically filed a return extension, but the filing attempt…
State energy corporation qualifies as a political subdivision
A state-created public corporation planned to develop natural gas infrastructure for the benefit of state residents. State law gave it unrestricted eminent domain power, the governor appointed and cou…
Missing shareholder consent receives S corporation relief
A corporation's Form 2553 lacked the signature of the income beneficiary of a shareholder trust, making the corporation's S election ineffective. That failure also made its later election to treat a w…
Missing shareholder consent receives S corporation relief
A corporation's Form 2553 lacked the signature of the income beneficiary of a shareholder trust, making its S corporation election ineffective. The corporation and its shareholders consistently filed …
Subsidiary receives 75 days for tax-exempt entity election
A corporate subsidiary was indirectly owned by a tax-exempt organization and therefore was a tax-exempt controlled entity under section 168(h). It tried to elect out of that treatment on a timely sepa…
Corporate group receives 75 days for consolidated return election
A parent corporation intended to file a consolidated return with two subsidiaries but did not timely make a valid consolidated return election and omitted one subsidiary from the return. The parent so…
Utility formula rate complies with depreciation normalization rules
A regulated electric utility used a formula rate based mainly on historical-year data, but added a weighted projection of plant additions to rate base. It continued to use historical depreciation expe…
IRS distinguishes projected and historical utility rate calculations
A regulated electric utility used a formula rate based mainly on historical data, with projected plant additions added to rate base, and also maintained three separate riders with projected-rate and t…
Foreign entity receives extra time to elect disregarded status
A foreign eligible entity with one owner intended to be treated as disregarded for federal tax purposes but did not timely file a valid Form 8832. Its owner consistently filed U.S. tax returns reflect…
Antenna-system payments qualify as REIT real property rents
A corporation planning to elect REIT status owned or controlled cables, conduit, equipment, and property rights used in distributed antenna systems for wireless carriers. It represented that the cable…
Fertilizer and industrial-site income qualifies under section 7704
A limited liability company expected to produce and market a nitrogen-based fertilizer and to receive rent and service fees from an industrial-site tenant. The IRS held that income from producing, sto…
Funeral-benefit membership group denied tax exemption
A membership organization collected membership fees and additional payments when a member died, then paid a fixed funeral benefit to the member's family. Its articles stated that its purpose was to ra…
Charity loses exemption over activities and fiscal sponsorships
The IRS revoked an organization's section 501(c)(3) status after concluding that its cash disbursements were not shown to be exclusively charitable. The organization conducted overseas aid and scholar…
Disaster postponement suspends assessment deadline
Chief Counsel advised that section 7508A suspends the time for the IRS to make assessments during the postponement period that applies to a declared disaster. The short email pointed to examples in th…
Section 7436 employment determinations cover individuals only
Chief Counsel agreed that an IRS employment-status determination under section 7436(a)(1) can be made only with respect to individuals. The email therefore advised that entities should not be placed o…
Seller receives 60 days for transaction-fee safe harbor election
A corporation incurred a success-based financial advisory fee when its stock was sold. The purchase agreement required the corporation's return to make the Revenue Procedure 2011-29 safe harbor electi…
Orphan-drug expenses enter research credit base calculation
A drug developer claimed both the orphan drug credit and the alternative simplified research credit but excluded orphan-drug clinical testing expenses from qualified research expenses in the three pri…
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.