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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Marijuana excise tax reduced amount realized on sale
Chief Counsel considered how a Washington marijuana business should account for the state’s marijuana excise tax. Because the tax was paid in connection with disposing of property, section 164…
Payments surviving recipient’s death were not alimony
A divorced taxpayer received monthly payments under a decree incorporating a property settlement agreement. The agreement stated that the spousal-maintenance obligation would not end if the…
Formula-rate averaging complied, but projections required proration
An electric transmission utility used annually set formula rates based on projected service-year costs, followed by a later true-up to actual results. The IRS ruled that using a 13-month average for…
Formula-rate averaging complied, but projections required proration
An electric transmission utility used annually set formula rates based on projected service-year costs, followed by a later true-up to actual results. The IRS ruled that using a 13-month average for…
Formula-rate averaging complied, but projections required proration
An electric transmission utility used annually set formula rates based on projected service-year costs, followed by a later true-up to actual results. The IRS ruled that using a 13-month average for…
Project delays justified more time to spend bond proceeds
A city authority issued new clean renewable energy bonds to finance two solar facilities and a hydroelectric plant. A labor-jurisdiction dispute, the need to change the construction arrangement, and…
Retiree health trust may fund active-employee benefits without reversion tax
An employer maintained a voluntary employees' beneficiary association trust holding assets for retiree health benefits. It proposed amending the trust to segregate a redacted amount and use it…
Routine rental-vehicle collision damage is not a casualty loss
A vehicle-rental company claimed section 165 casualty losses for collision-damaged vehicles that customers had rented with a waiver limiting the company's recovery rights. The claim covered vehicles…
Retired student-loan bonds keep their tax-exempt interest treatment
A tax-exempt qualified scholarship funding corporation had issued student-loan bonds and later fully redeemed them using student loan payments and sale proceeds. After the bonds were retired, the…
Taxpayer receives time to correct success-fee safe harbor amounts
A corporation incurred success-based investment banking fees when it was acquired in a taxable stock transaction. Its original return included the statements electing Revenue Procedure 2011-29's…
Additive-treated coal and pilot testing qualify for the refined coal credit
A partnership produced refined coal by mixing proprietary additives into utility feedstock coal to reduce nitrogen oxide and mercury emissions when burned for electricity generation. University…
Refined coal process, testing, and facility changes qualify for credit treatment
A refined-coal business mixed proprietary additives into utility feedstock coal to reduce nitrogen oxide and mercury emissions during electricity generation. University pilot-scale tests reported…
Compensatory criminal restitution is deductible as a business expense
A consultant and later partner pleaded guilty to criminal counts arising from services performed for a firm's clients. The court imposed incarceration, probation, a fine, a special assessment, and a…
Taxpayer receives 60 days to file omitted success-fee election statement
A corporate taxpayer paid a success-based financial advisory fee when it acquired another corporation through a merger. Its return applied Revenue Procedure 2011-29's safe harbor by capitalizing 30…
State university physician organization receives section 115 income exclusion
A state university and an integral state entity operating a teaching hospital combined several departmental foundations into one physician organization. The new corporation would provide clinical…
City receives extension to elect bond volume-cap carryforward
A city received an allocation of unused state private activity bond volume cap but failed to file Form 8328 to carry the allocation forward. The allocation was not tied to a specific project, so the…
Mandatory sick-leave conversion funds a retiree HRA
An employer proposed converting retiring employees' unused sick leave into contributions to a health reimbursement arrangement. Retirees could not receive the converted amounts as cash, and the…
Taxpayer receives extension for real-property debt election
An individual realized cancellation-of-debt income after settling mortgage debt on business real estate. The individual and a tax preparer had discussed electing to exclude qualified real property…
Missing return attachment does not invalidate section 83(b) election
A service provider bought units in a company and mailed a section 83(b) election to the IRS within 30 days of the transfer. The election contained the required information, but the taxpayer did not…
Medical reimbursements are excluded and disability payments avoid payroll tax
A bankruptcy settlement funded a tax-exempt employee benefit association that established a health reimbursement arrangement and a disability plan for former employees with long-term disabilities.…
Public-benefit rebates need no information reporting
A political subdivision created a rebate program to pay part of property owners' costs for installing equipment on designated private properties. The installations furthered governmental purposes by…
Housing agency may correct swapped credit allocations
A low-income housing project received credit allocations for several buildings. When the housing agency prepared Forms 8609, it accidentally switched the applicable fractions for two buildings,…
Section 752 rules did not classify debt for foreclosure income
A partnership reported cancellation-of-debt income after junior loans secured by real estate were canceled following foreclosure. Its members had guaranteed the loans, and the partnership argued…
Trust division preserved tax treatment and asset basis
A trust for a daughter and her descendants proposed dividing its assets equally between two successor trusts, one for each family line. The daughter would remain a beneficiary of both trusts, and…
Wind-credit safe harbor did not cover solar partnership
Chief Counsel considered whether a partnership owning and leasing solar generators could rely on the safe harbor in Revenue Procedure 2007-65 for its allocation of section 48 energy credits. The…
First-line orphan-drug testing met credit timing rule
A pharmaceutical company conducted clinical testing of a drug for first-line treatment of a rare cancer after the FDA designated the drug as an orphan drug for that disease. The FDA had already…
Refined-coal process and facility changes preserved credit treatment
A taxpayer leased and operated a facility that mixed chemical reagents with coal to reduce nitrogen oxide and mercury emissions. The IRS ruled that the resulting product could qualify as refined…
Intercompany look-through supported worthless-stock deduction
A consolidated group’s holding company owned a subsidiary group that sold its operating assets, used retained assets to pay liabilities, and became insolvent. The parent requested rulings supporting…
Reflective roof increment qualified as solar energy property
A company planned to install bifacial solar panels that generate electricity from light striking both sides of each panel. It also planned a highly reflective roof surface that would direct…
Disability benefits paid to former spouses are taxable
A state retirement system asked whether accidental disability retirement benefits paid to former spouses under domestic relations orders could be excluded from income as workers' compensation.…
Laboratory analysis may satisfy refined-coal retesting rules
A taxpayer operated a facility that treated coal with chemical reagents to reduce nitrogen oxide and mercury emissions and sought to claim the section 45 refined-coal credit. It had established…
Laboratory analysis may satisfy refined-coal retesting rules
A taxpayer operated a facility that treated coal with chemical reagents to reduce nitrogen oxide and mercury emissions and sought to claim the section 45 refined-coal credit. It had established…
Refined-coal process and testing qualify for production credit
Three facilities mixed proprietary additives with coal to reduce nitrogen-oxide and mercury emissions before the refined coal was burned to produce steam and electricity. The IRS approved the…
Utility must net NOL carryforward against deferred-tax reserve
A regulated natural-gas utility projected net operating losses while claiming accelerated and bonus depreciation. Its regulator proposed reducing rate base by the full accumulated deferred income…
Companion refined-coal process and testing rulings approved
A partnership-owned group of three facilities mixed proprietary additives with coal to reduce nitrogen-oxide and mercury emissions before combustion. The IRS approved the process as refined coal…
Severance benefits excluded from parachute-payment definition
An organization described in section 501(c)(1) had change-in-control agreements providing severance benefits to senior executives who were disqualified individuals. The payments were contingent on a…
Bus fares are not payments for managed highway lanes
A public transit issuer planned to use bond proceeds for construction and equipment associated with privately operated managed highway lanes. Some express and regional buses would travel over the…
Late real-property debt-discharge election receives relief
Partners received cancellation-of-debt income after a short sale of residential rental property. The partnership preparer did not identify the debt as qualified real property business indebtedness,…
Management agreement termination fee need not be capitalized
A corporation paid its manager a termination fee after ending a management services agreement in connection with an initial public offering. The agreement did not give either party an exclusive…
Late election may defer low-income housing credit period
The owner of a single-building low-income housing project intended to begin its ten-year credit period in the year after the building was placed in service. Its return preparer mistakenly checked…
Couple receives late investment-income election relief
A married couple's return preparer omitted an investment-interest carryover and failed to advise them about electing to include net capital gain and qualified dividends in investment income. The…
Convertible note is disqualified only if conversion is substantially certain
A U.S. corporation proposed borrowing from its foreign parent through a note that the parent could convert into the corporation's common stock. The issuer had no conversion option, while the holder…
Housing project receives more time to make a multiple-building election
A taxpayer intended to treat all buildings in a low-income housing project as one multiple-building project but inadvertently failed to make an effective election on every Form 8609. The IRS found…
School bond proceeds receive a ten-month expenditure extension
A state instrumentality issued qualified zone academy bonds to rehabilitate and repair public schools. Contract disputes, permitting delays, historic-building redesignations, and unexpected…
Tax-exempt-controlled corporation receives relief for a late section 168 election
A C corporation wholly owned by a tax-exempt parent managed a partnership rehabilitating a certified historic structure. The corporation intended to elect under section 168(h)(6)(F)(ii) not to be…
Refined-coal emission retesting may use laboratory range analysis
A taxpayer leased and operated a facility that treated coal with two chemical reagents to reduce nitrogen oxide and mercury emissions when the fuel was burned. Field testing had shown emission…
Refined-coal emission retesting may use laboratory range analysis
A taxpayer leased and operated a facility that treated coal with two chemical reagents to reduce nitrogen oxide and mercury emissions when the fuel was burned. Field testing had shown emission…
Partners receive more time to elect real-property debt exclusion
A real-estate partnership had debt canceled after defaulting on a bank loan and reported the cancellation income to its two owners, an S corporation and an individual. Their ill tax preparer did not…
Government retiree-benefit trust has excluded income and no annual return requirement
A political subdivision created and controlled a trust to prefund health and welfare benefits for retired employees and their eligible family members. Trust assets could be used only for benefits…
Tuition benefits remain excluded after an initial employee transfer
An educational organization offered tuition reductions and scholarships for dependent children of eligible faculty and staff. It planned to transfer many employees to an affiliated nonprofit while…
Trust division and court modifications preserve grandfathered GST status
A will created a trust before September 25, 1985, but left ambiguity about when the trust ended and how its assets passed after the original beneficiary's death. A state court construed the trust to…
Trust division and court modifications preserve grandfathered GST status
A will created a trust before September 25, 1985, but left ambiguity about when the trust ended and how its assets passed after the named family members died. A state court construed the trust to…
Tax-exempt-controlled corporation receives relief for a late section 168 election
A C corporation wholly owned by a tax-exempt parent served as the general partner of a real-estate partnership. It intended to elect under section 168(h)(6)(F)(ii) not to be treated as a tax-exempt…
Housing tax-equivalency payments qualify as real property taxes
A cooperative housing corporation was required to make tax equivalency payments to state public-benefit authorities under statutes, an affordability plan, and related agreements. The payments were…
Accounting error is not a bad debt for seven-year refund period
Cash-basis partnerships mistakenly included accounts receivable from their accrual-based internal books as taxable income, overstating income and the partners' outside bases. A partner later sought…
Government retiree-benefit trust income is excluded under section 115
A political subdivision created a separate trust to fund medical and other post-employment welfare benefits for retirees, eligible spouses, dependents, and beneficiaries. Trust assets may be used…
Late environmental-remediation elections receive relief
A limited partnership incurred environmental-remediation costs while developing a low-income housing project under a state brownfield program. Its tax preparer capitalized the costs and failed to…
Easement relocation costs enter housing-credit basis
A partnership developing a low-income apartment building had to relocate a third party’s sign easement before the city would issue building permits for the approved residential design. The IRS…
Hybrid annuity receives detailed ownership and payment rulings
An individual considered buying a deferred annuity combining a general-account fixed component, publicly available mutual funds held through a separate account, and lifetime income benefits after…
Tribal welfare refund extension does not expand payment lookback
Chief Counsel explained how the Tribal General Welfare Exclusion Act of 2014 affected refund and credit claims. Claims that were still timely when the Act was enacted on September 26, 2014, received…
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.