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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School district gets more time to spend construction bond proceeds
A public school district issued qualified school construction bonds and expected to spend all available project proceeds within the original three-year period. Unexpected reductions in state funding…
Refined-coal producer may use range-based laboratory testing for redeterminations
A taxpayer operated a leased facility that treated coal with chemical reagents to reduce nitrogen oxide and mercury emissions. It used full-scale continuous emissions testing and proposed laboratory…
Forfeiture payment under a deferred prosecution agreement is not deductible
A taxpayer made a payment to the government in lieu of criminal or civil forfeiture under a deferred prosecution agreement. Chief Counsel advised that the payment was a fine or similar penalty and…
Ponzi-scheme theft loss was discovered when a lead figure died and a receiver was appointed
A taxpayer invested in an alleged fraudulent arrangement involving multiple lead figures and claimed a theft loss under the Ponzi-scheme safe harbor. In one year, a government agency filed a civil…
Taxpayer receives 45 days to file a success-fee safe-harbor statement
A consolidated group acquired a target corporation in a covered stock transaction, and the target paid a success-based advisory fee. The group's timely return treated 70 percent of the fee as…
Offshore wind farm is functionally used within the United States
A partnership planned an offshore wind farm located more than three but less than twelve nautical miles from a state's coast. The turbines, offshore platform, undersea cables, land-based control…
Tax-exempt controlled entity receives late-election relief
A corporation wholly owned by a tax-exempt entity was a tax-exempt controlled entity and served as the general partner of a partnership holding real property. It intended to elect under section…
Corporation receives 60 days for a tax-exempt controlled entity election
A corporation partly owned and controlled by a tax-exempt shareholder was a tax-exempt controlled entity and served as the general partner of a partnership holding real property. It intended to…
Indirectly controlled corporation receives late-election relief
A corporation indirectly controlled through a parent by a tax-exempt organization was a tax-exempt controlled entity and served as the general partner of a partnership holding real property. It…
Wholly owned corporation receives late-election relief
A corporation wholly owned by a tax-exempt entity was a tax-exempt controlled entity and served as the general partner of a partnership. It intended to elect under section 168(h)(6)(F)(ii) not to be…
Tax-exempt parent's subsidiary receives late-election relief
A corporation wholly owned by a tax-exempt parent was a tax-exempt controlled entity and served as the general partner of a partnership holding real property. It intended to elect under section…
Refined coal process and testing support production tax credit
A partnership operated a facility that mixed coal with chemical additives intended to reduce nitrogen oxide and mercury emissions. It asked whether the product qualified as refined coal for the…
Chapter 15 recognition supports bankruptcy debt discharge exclusion
Several domestic subsidiaries participated in foreign insolvency proceedings that restructured and partly forgave debt owed by the U.S. group. A U.S. bankruptcy court recognized the foreign…
Domestic re-adoption is not required for adoption credit
Chief Counsel addressed an examination that disallowed an adoption tax credit because a non-Hague foreign adoption was not followed by a U.S. re-adoption. Revenue Procedure 2005-31 allows a taxpayer…
AOTC refundability depends on claimant's child status
Chief Counsel addressed when the refundable portion of the American Opportunity Tax Credit is unavailable under the child-status rules. The credit may cover qualified education expenses of the…
Truck service facilities require 39-year depreciation
A partnership claimed 15-year depreciation for facilities leased to a related truck dealer that sold and leased trucks, sold parts, and performed maintenance and repairs. The properties sold oil,…
Municipal utility cooperative's income remains excluded under section 115
A state nonprofit cooperative owned by political subdivisions asked the IRS to modify and supersede an earlier ruling about its federal tax treatment. The cooperative pooled resources to procure…
Tax-exempt controlled entity receives late section 168 election relief
A corporation indirectly controlled by a section 501(c)(4) organization was a tax-exempt controlled entity and served as general partner of a partnership holding real property. It intended to elect…
Tax-exempt controlled entity receives late section 168 election relief
A corporation indirectly controlled by a section 501(c)(4) organization was a tax-exempt controlled entity and served as general partner of a partnership holding real property. It intended to elect…
Tax-exempt controlled entity receives late section 168 election relief
A corporation indirectly controlled by a section 501(c)(4) organization was a tax-exempt controlled entity and served as general partner of a partnership holding real property. It intended to elect…
Corporation receives 60 days to make late section 168 election
A corporation wholly owned through tax-exempt section 501(c)(4) organizations was a tax-exempt controlled entity and served as general partner of a real-estate partnership. The partnership agreement…
Dairy farmer may revoke bonus depreciation opt-out
A dairy farmer elected not to claim the 50 percent additional first-year depreciation deduction for all classes of qualified property placed in service during a tax year. After the return was filed,…
Rehabilitation credit disposition triggers $21,600 recapture
A taxpayer earned a $100,000 rehabilitation credit for a historic building, used $20,000 in the first year and $16,000 in the second, and carried $64,000 forward. The taxpayer then disposed of the…
Late tax-exempt controlled entity election allowed
A C corporation was majority owned through an organization exempt under IRC § 501(c)(4), making the corporation a tax-exempt controlled entity for depreciation purposes. As the general partner of a…
Closed tax year does not bar late controlled-entity election
A C corporation majority owned by an organization exempt under IRC § 501(c)(4) was a tax-exempt controlled entity for depreciation purposes. As the general partner of a real-estate partnership, it…
Water-system improvements satisfy governmental and exempt-facility tests
A state political subdivision planned bonds to improve two physically distinct raw-water systems. It proposed governmental bonds for the upstream system, whose take-or-pay contracts were expected to…
Tax-exempt controlled entity receives late-election relief
A corporation controlled by a tax-exempt organization intended to elect out of treatment as a tax-exempt controlled entity under IRC § 168(h)(6)(F)(ii), but its return preparer did not attach the…
Refined coal facility and emissions testing qualify for production credit rules
A partnership operated a facility that mixed coal with chemical additives to reduce nitrogen oxide and mercury emissions. The IRS ruled that the resulting product could qualify as refined coal under…
Lessee includes the full rehabilitation credit in income
A taxpayer was treated as acquiring a qualified rehabilitated building after the lessor made the investment-credit pass-through election under IRC § 50(d)(5) and former § 48(d). Chief Counsel…
Partnership receives more time for low-income housing credit elections
A partnership placed several low-income housing buildings in service but inadvertently failed to make timely elections under IRC § 42(f)(1) to begin their credit periods in that year. The IRS found…
Controlled corporation receives relief for missed depreciation election
A corporation majority-owned by a tax-exempt organization was a tax-exempt controlled entity under IRC § 168(h)(6)(F)(iii). It intended to elect under § 168(h)(6)(F)(ii) not to be treated as…
Corporation receives 60 days for missed depreciation election
A corporation was indirectly controlled by a tax-exempt organization and therefore was a tax-exempt controlled entity under IRC § 168(h)(6)(F)(iii). It intended to elect under § 168(h)(6)(F)(ii) not…
Wholly owned corporation receives late depreciation election relief
A corporation wholly owned by an IRC § 501(c)(4) organization was a tax-exempt controlled entity under § 168(h)(6)(F)(iii). It intended to elect not to be treated as tax-exempt but failed to attach…
Tax-exempt-owned corporation receives election relief
A corporation wholly owned by an IRC § 501(c)(4) organization was a tax-exempt controlled entity under § 168(h)(6)(F)(iii). It intended to elect under § 168(h)(6)(F)(ii) not to be treated as…
Controlled corporation may make a missed depreciation election
A corporation wholly owned by an IRC § 501(c)(4) organization was a tax-exempt controlled entity under § 168(h)(6)(F)(iii). It intended to elect under § 168(h)(6)(F)(ii) not to be treated as…
Controlled-substance businesses use pre-1986 inventory rules for cost of goods sold
Chief Counsel explained how a business trafficking in a Schedule I or Schedule II controlled substance determines cost of goods sold while IRC § 280E disallows its business deductions and credits.…
Public fund investments do not make contract holders owners of fund shares
Three investment funds offered their shares exclusively to life insurance company separate accounts that funded variable life and annuity contracts. The funds expected to invest in other regulated…
Pooled fund and trust interests qualify as registered-form obligations
An investment-fund sponsor planned a master partnership and a disregarded statutory trust that would hold beneficial interests in distressed commercial mortgage loans. The mortgage loans themselves…
Refined coal process and testing qualify for production credit rules
A company leased and operated a facility that applied two chemical reagents to coal to reduce nitrogen oxide and mercury emissions. The IRS ruled that coal produced through the described process…
Utility upgrade reimbursements are not capital contributions
An electric utility upgraded its transmission system to accommodate a new transmission project. A municipal power entity ultimately paid the upgrade costs under agreements that gave it transmission…
Extended bond swap avoids abusive-arbitrage treatment
A conduit borrower and bondholder entered into total-return swaps tied to fixed-rate refunding bonds and proposed extending the swaps for five years at improved pricing. The bond proceeds had been…
Reinsurance acquisition commission must be amortized under IRC § 197
Chief Counsel considered an insurer's purchase of assets from a life reinsurance business together with a retrocession arrangement covering the seller's contracts. The taxpayer treated the…
Bargained customer incentives reduce gross sales
Chief Counsel considered a media company's program that provided customers with redacted merchandise or points as part of negotiated advertising purchases. The company and each customer bargained…
Housing project gets more time for low-income set-aside election
The owner of a low-income housing project began its credit period but inadvertently failed to make the intended election under IRC § 42(g)(1)(B) on Form 8609. That election requires at least 40…
Statutory PILOT payments qualify as deductible real property taxes
A developer planned a leasehold condominium on land owned by a governmental school-construction fund and later reverting to a city. Because the government-owned land was exempt from property tax,…
Only governmental building owners may allocate § 179D deductions to designers
The IRS field asked which building owners may allocate the energy-efficient commercial building deduction to the property's designer. Chief Counsel explained that § 179D(d)(4) permits an allocation…
Mortgage interest follows liability and the source of payment
Chief Counsel addressed how taxpayers should divide a mortgage interest deduction when more than one person is liable on the loan. If interest is paid from a joint account owned equally by two…
Partner receives extra time to elect real-property debt exclusion
An individual partner received cancellation-of-debt income through several real estate partnerships after they restructured debt. The same tax firm prepared the partnership and individual returns…
Housing agency may correct credit allocations on Forms 8609
A state housing agency made two carryover allocations of low-income housing credit to a project whose buildings entered service across two years. The agency later issued two Forms 8609 for each…
Nuclear units were abandoned, but loss deduction must await claims
A regulated public utility permanently retired two nuclear generating units after a steam leak revealed extensive wear in replacement generators. It removed the fuel, made regulatory filings…
Transmission-upgrade reimbursements are not capital contributions
An electric and gas utility had to upgrade its transmission system to accommodate a new transmission project linking two regional grids. A municipal power entity ultimately paid the upgrade costs…
S corporation may make late real-property debt exclusion election
An S corporation with interests in several real estate partnerships received cancellation-of-debt income through three Schedules K-1. Its accountant properly excluded the eligible qualified real…
Failed earn-out milestones fix loss on installment stock sale
A limited liability company converted secured notes into stock and sold its majority interest in a company through a merger. The sale included contingent earn-out payments, so the seller initially…
Reflective roof's incremental cost qualifies as solar energy property
A manufacturer planned to install bifacial solar panels that generated electricity from light striking both sides of each panel. It would replace only the roof area beneath the panels with a highly…
Bankruptcy fund qualifies as DOF and supports bad-debt deduction
A U.S. company in chapter 11 had guaranteed debt issued by a foreign affiliate and faced disputed prepetition guarantee claims. It proposed creating a court-controlled fund, transferring cash or…
Late historic-status certification application treated as timely
A taxpayer renovated a property while relying on a consultant and accountant but did not learn until after the property was placed in service that the first part of its historic-preservation…
LED display election changes depreciation without accounting consent
An outdoor advertising company planned to elect real-property treatment for its permanently affixed displays. It represented that the election would reclassify certain digital LED displays from…
IRS approves refined-coal testing and facility-relocation rules
A partnership operated a relocated facility that mixed chemical additives with low-sulfur coal to reduce nitrogen oxide and mercury emissions. The IRS ruled that the resulting product could qualify…
IRS approves refined-coal testing and facility-relocation rules
A partnership operated a relocated facility that mixed chemical additives with low-sulfur coal to reduce nitrogen oxide and mercury emissions. The IRS ruled that the resulting product could qualify…
IRS approves refined-coal testing and facility-relocation rules
A partnership operated a relocated facility that mixed chemical additives with low-sulfur coal to reduce nitrogen oxide and mercury emissions. The IRS ruled that the resulting product could qualify…
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.