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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S election preserved after trusts miss QSST elections
An S corporation shareholder transferred stock to two trusts that were intended to qualify as qualified subchapter S trusts. The trusts' income beneficiaries failed to file the required QSST elections…
Corporation may revoke elections out of bonus depreciation
A corporate parent elected not to claim additional first-year depreciation for all classes of qualified property placed in service during several tax years. It made those elections because its tax dep…
Financial institution error excuses late spousal rollover
A surviving spouse received her deceased spouse's retirement plan account, including a partnership interest that she intended to roll directly into her own IRA. The paperwork identified an IRA custodi…
Hospitalization and death excuse late IRA rollover
A taxpayer received a distribution when her IRA certificate of deposit matured and intended to roll the money into another IRA. She relied on her husband for financial decisions, and he was repeatedly…
Estate gets late rollover waiver after decedent's hospitalization
An IRA certificate of deposit matured and the owner received the proceeds into a joint checking account, intending to complete a rollover. His wife went to the bank within the 60-day period, but the b…
Impaired financial judgment excuses late IRA rollover
An IRA owner withdrew funds to buy collectible gold pieces advertised on television and did not complete a rollover within 60 days. His daughter, who held power of attorney for his financial affairs, …
Adviser error excuses rollover completed two days late
A taxpayer preparing for retirement followed a financial institution vice president's advice to withdraw assets from an IRA and use the 60-day rollover period. Mistakes by the adviser prevented the ta…
Direct rollover misposted to taxable account gets waiver
A taxpayer requested a direct rollover from an employer plan to an eligible retirement account at a financial institution. The plan issued a check to the institution for the taxpayer's benefit, but an…
Captive insurer lost section 501(c)(15) exemption
A foreign captive insurer had previously received recognition as a tax-exempt small insurance company under section 501(c)(15). After examining four tax years, the IRS concluded that most direct-writt…
Journalism education grant procedures approved
A private foundation proposed grants for journalism students, working journalists, editors, news directors, and producers to study economics, business, jobs, and related subjects. Applicants had to at…
Coffee shop denied charity status for commercial operations
A nonprofit corporation opened a coffee shop to provide a gathering place, support Christian outreach, and eventually give profits to community organizations and people in need. The shop was open to t…
Repeated missed examinations lead to loss of exemption
A recognized § 501(c)(3) organization filed Form 990-N and was selected for examination. The IRS repeatedly mailed information requests, called and emailed the organization's contacts, and scheduled e…
Founder's personal expenses and missing records cost charity its exemption
A founder controlled a charitable foundation's operations, bank accounts, and spending. The IRS found that the foundation repeatedly paid the founder's personal expenses without contemporaneously trea…
Charity lost its exemption after failing to provide requested records
A charitable organization provided some financial records for one tax year but then stopped responding to IRS letters and phone calls seeking clarification, source documents, and records for another y…
Routine return surveys did not count as repetitive examinations
IRS Counsel considered whether the number of times certain taxpayers' returns had been reviewed over the years violated the law governing repetitive examinations. Counsel concluded that there was no v…
25 percent match created a substantial risk of forfeiture under § 409A
An employee elected to defer salary, and the employer added matching contributions equal to 25 percent of each salary reduction. Payment of both amounts depended on the employee continuing to provide …
Supporting organization's business holdings were exempted from excise tax
A Type III non-functionally integrated supporting organization owned a development project that would become an excess business holding when statutory transition periods expired. The organization had …
Insurer could revoke its election to recompute the federal interest rate
A life insurance company had elected under § 807(d)(4)(A)(ii) to recompute every five years the applicable federal interest rate used to calculate its life insurance reserves. Because that election co…
S corporation received more time to file original accounting-method forms
An S corporation hired an accounting firm to implement two automatic accounting-method changes involving its inventory. The firm prepared both Forms 3115, timely filed the required copies with the IRS…
Partnership received 120 more days to make a § 754 election
A limited liability company taxed as a partnership intended to elect under § 754 to adjust the basis of partnership property. It timely filed its partnership return but inadvertently omitted the elect…
New parent could make a QSub election before five-year waiting period ended
A subsidiary's qualified subchapter S subsidiary status ended when an ineligible shareholder acquired shares of its former S corporation parent. After later ownership changes, another corporation acqu…
Estate received 120 more days to elect portability of unused exclusion
An estate missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount to the surviving spouse. The personal representative represented that the gross es…
Preferred-stock terms caused an inadvertent ineffective S election
A corporation's charter gave preferred stock priority over its common stock for distributions, creating a prohibited second class of stock when the corporation attempted to elect S status. After disco…
Property insurer received more time to make the small-company tax election
A property and casualty insurer relied on a tax professional to prepare its first Form 1120-PC and the election under § 831(b) to be taxed only on investment income. Oversights at the professional's o…
Corporation received 60 more days to elect IC-DISC status
A domestic corporation was formed to operate as an interest charge domestic international sales corporation. Its accounting firm prepared Form 4876-A, an officer signed it, and another officer was ask…
Acquired company received more time for success-based fee safe harbor
A corporation incurred success-based fees while arranging its acquisition by another company. Its merger agreement required the Rev. Proc. 2011-29 safe harbor election, and its return treated 70 perce…
Partnership received conditional relief for a late § 754 election
A limited partnership failed to make a timely § 754 election for the year in which one of its partners died. The partnership represented that it acted reasonably and in good faith and that late relief…
Financial institution error justified a late retirement-plan rollover
After losing his job, an individual instructed a financial institution to roll his qualified-plan balance directly into an IRA. The institution instead deposited the distribution into his checking acc…
Mistaken deposit into non-IRA account qualified for rollover waiver
An individual asked that balances from two § 403(b) plans be rolled directly into an IRA. After only part of the requested rollover reached the IRA, she requested another direct rollover, but the rema…
Documented mental impairment justified a late IRA rollover
An individual received an IRA certificate-of-deposit distribution after the account matured. She was disabled, had limited English comprehension, had relied on her late husband to handle financial mat…
Inactive swim club no longer operated for social or recreational purposes
A former swim club sought recognition under § 501(c)(7) after its earlier exemption was automatically revoked for failing to file required returns. The pool had closed because of ground movement, and …
Tax Court docket suspended limitations period without deficiency notice
IRS Counsel considered whether § 6503(a) suspends the assessment limitations period when a deficiency proceeding is placed on the Tax Court's docket even though the IRS never issued a statutory notice…
Charity's asset sale, royalties, rent, and minority venture received favorable treatment
A charitable and educational organization sold certain assets to a new partnership, licensed intellectual property to the partnership, leased it office space, and held a minority interest through a ta…
Bankruptcy separation qualified for specified reorganization and distribution rules
A corporate group in Chapter 11 proposed separating one business into a newly corporate subsidiary and distributing that subsidiary's stock and other consideration to creditors. The IRS ruled on fifte…
Taxpayer could revoke timely section 83(b) elections
An employee exercised compensatory stock options and received employer shares subject to a substantial risk of forfeiture. The employee timely filed section 83(b) elections, then asked to revoke them …
Taxpayer could revoke timely section 83(b) elections
An employee exercised compensatory stock options and received employer shares subject to a substantial risk of forfeiture. The employee timely filed section 83(b) elections, then asked to revoke them …
Taxpayer could revoke a timely section 83(b) election
An employee exercised compensatory stock options and received employer shares subject to a substantial risk of forfeiture. The employee timely filed a section 83(b) election, then asked to revoke it l…
Utility received nuclear decommissioning fund schedules
An investor-owned utility requested a deduction schedule for a special transfer to its qualified nuclear decommissioning fund and a revised schedule of annual ruling amounts. The utility owned a redac…
Utility received nuclear decommissioning fund schedules
An investor-owned utility requested a deduction schedule for a special transfer to its qualified nuclear decommissioning fund and a revised schedule of annual ruling amounts. The utility owned a redac…
Revised nuclear decommissioning fund schedule approved
A wholly owned utility affiliate requested a mandatory revised schedule of ruling amounts for its qualified nuclear decommissioning fund. The taxpayer owned the nuclear plant, while a regulated affili…
Revised nuclear decommissioning fund schedule approved
A wholly owned utility affiliate requested a mandatory revised schedule of ruling amounts for its qualified nuclear decommissioning fund. The taxpayer owned the nuclear plant, while a regulated affili…
Foreign insurer could use local statement reserves under section 954
A U.S.-owned controlled foreign corporation sold life insurance, annuity, and certain accident and health products under its home country's insurance rules. It asked to use specified reserves and rela…
Foreign insurers could use local statement reserves under section 954
Two U.S.-owned controlled foreign corporations sold life insurance and annuity products under their home country's insurance rules. They asked to use underwriting, loss, policyholder dividend, and adv…
Foreign insurers could use local reserves for section 954 income
Two U.S.-owned controlled foreign corporations sold life insurance and annuity products under their home country's insurance rules. They asked to use specified foreign statement reserves, plus related…
S corporation received inadvertent termination relief for trust shares
An S corporation shareholder died, and the shareholder's stock passed to a trust for a minor beneficiary. The trust was intended to be a qualified subchapter S trust, but its terms did not qualify and…
S corporation received relief for a nonqualifying trust shareholder
Two shareholders transferred S corporation stock to a trust intended to be a qualified subchapter S trust. The trust terms did not meet the statutory requirements, and its beneficiary did not timely f…
Consolidated group received more time to waive loss carryback
A consolidated corporate group incurred a consolidated net operating loss and intended to waive the entire carryback period for that loss. The common parent failed to file a valid election with the gr…
S corporation received relief for ten trust election failures
Five trusts owned stock when a corporation attempted to begin S corporation status, but their common trustee failed to file electing small business trust elections. Later, an individual contributed st…
Corporation received S election and subsidiary election relief
A corporation's S election was ineffective because spouses with community property interests did not consent and the ownership information on Form 2553 was inaccurate. The corporation also failed to t…
Spouse received more time to opt out of automatic GST allocations
A married couple made cash gifts to three family trusts and elected to treat certain gifts as made one-half by each spouse. Their accountant failed to timely prepare several gift tax returns, so the w…
Donor received more time to opt out of automatic GST allocations
A husband made annual cash gifts to two family trusts, and the spouses elected to treat certain gifts as made one-half by each spouse. Their accountant failed to timely prepare several gift tax return…
Surviving spouse received a waiver for an inherited IRA rollover
After a spouse died, an inherited IRA was distributed through a revocable trust into a non-IRA account. The surviving spouse missed the 60-day rollover deadline after receiving bad advice from the fin…
Medical emergencies supported a one-day IRA rollover waiver
A taxpayer withdrew funds from an individual retirement annuity and intended to return them within 60 days. During that period, the taxpayer suffered a heart attack, underwent surgery, and experienced…
Ambiguous statements and adviser error supported IRA rollover waiver
A taxpayer surrendered an individual retirement annuity and deposited the proceeds into a non-IRA account. The taxpayer and financial planner did not initially recognize the payment as an IRA distribu…
Arts organization denied exemption for serving private interests
An arts organization sought section 501(c)(3) status to commission, perform, record, publish, and teach experimental music. Its governing documents and website focused on managing and producing the wo…
Youth ranch lost exemption for private benefit and inurement
A nonprofit operated a residential ranch program for boys with emotional and behavioral problems and had held section 501(c)(3) status since 2007. The IRS found that the organization paid ranch, vehic…
Pension fund could convert direct rollovers into annuities
Two related multiemployer funds asked whether a defined benefit pension fund could accept direct rollovers from a defined contribution annuity fund and convert them into immediate annuities. The propo…
Energy credit award disclosures should follow certification
Chief Counsel advised when the IRS should disclose recipients of credits under sections 48A, 48B, and 48C. For sections 48A and 48C, the applicant's identity and credit amount should be disclosed afte…
Inauguration Day extended federal tax deadlines
Chief Counsel confirmed that Inauguration Day is a legal holiday in the District of Columbia for purposes of section 7503. When a Code deadline fell on Friday, January 20, 2017, performance on the nex…
Private foundation tax guidance should explain reasonable cause
Chief Counsel recommended topics for IRS training material on abating first-tier private foundation taxes under section 4962. The material should explain taxable events and use the reasonable-cause st…
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.