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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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…
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 may seize and sell a chose in action
Chief Counsel advised an IRS employee to rely on the Internal Revenue Manual rather than an earlier Chief Counsel Advice that the email described as incorrect. A chose in action, meaning an…
Calendar year nearest 52-53 week year-end controls W-2 wage limit
A corporation used a 52-53 week tax year ending on the last Saturday in December and asked which calendar year's Forms W-2 counted toward the former domestic production deduction's wage limit. Some…
Refinancing loans qualify under student loan bond program
A state authority planned to issue bonds to refinance its existing tax-exempt bonds and use the proceeds to consolidate student loans for current borrowers. The original loans were made under a…
Taxpayer receives more time for tax-exempt controlled entity election
A tax-exempt entity wholly owned a taxpayer that was a partner in a low-income housing partnership. The taxpayer intended to elect under IRC § 168(h)(6)(F)(ii) not to be treated as tax-exempt for…
Taxpayer receives more time for success-based fee safe harbor election
A corporate taxpayer paid an investment bank a success-based fee for an acquisition. Its return capitalized 30 percent of the fee and treated 70 percent as a start-up expenditure, consistent with…
Taxpayer receives more time for real property debt exclusion election
A partner received cancellation-of-debt income through an LLC that owned a commercial building. The partner represented that the income was eligible for the qualified real property business…
Nuclear decommissioning costs qualify, subject to pre-1984 carryback limit
An energy company incurred deductible costs for permanently retired nuclear fuel, systems, and components during plant outages. The IRS ruled that qualifying removal, storage, monitoring,…
Supplier participation payments need not be capitalized as intangibles
A manufacturer paid participation amounts to obtain exclusive supplier status for components of a new product. The customer did not guarantee any orders, quantities, fixed prices, or development…
Bundled channel receipts are not film DPGR and license fees are not overhead
A multichannel video distributor claimed the former IRC § 199 domestic production deduction for subscription packages containing licensed and limited self-produced programming. Chief Counsel…
Software-license royalties qualify as domestic production receipts
A taxpayer developed unique computer software and licensed it to contracting parties that combined the software with their own data to provide services to end users. The question was whether the…
Investor qualifies for Ponzi-scheme theft-loss safe harbor
An individual transferred investment money through intermediaries that placed it into a fraudulent investment arrangement. Revenue Procedure 2009-20 generally excludes someone who invested only…
School bond expenditure period extended after redesign delays
A public school district issued qualified school construction bonds to build and equip a school and purchase its site. Construction bids substantially exceeded the original estimates, forcing the…
Tribal authority qualifies as a state political subdivision
A federally recognized tribe created an authority to promote economic development, operate enterprises, attract funding, and produce revenue for public health, safety, and welfare. The tribe…
ACE bad debt deduction must reflect reduced loan basis
Chief Counsel considered how a corporate taxpayer should calculate a bad debt deduction for adjusted current earnings after an ownership change. The taxpayer had a net unrealized built-in loss, so…
Solar systems qualify, but non-energy functions require allocation
A company designed solar electricity systems and also owned and operated some of them. The IRS ruled that the collection panels, storage batteries, wiring, conversion equipment, and control…
Housing credit period may begin in intended later year
A low-income housing building owner intended to begin the ten-year credit period in the year after the building was placed in service. Its accounting firm mistakenly checked the Form 8609 box…
Home price protection payment needs no information return
A nonprofit administered a state-created program that paid homeowners when local distress reduced the sale price of registered homes. A payment under the program became part of the homeowners'…
Bulk charitable donations may face basis and valuation limits
Chief Counsel advised on a taxpayer claiming a charitable deduction for donating a large number of items. A donor's bulk acquisition and disposition can be substantially equivalent to dealer…
Assumption reinsurance preserves life policy tax status
A holding company planned to transfer life insurance contracts from two subsidiaries to an unrelated insurer through assumption reinsurance as it exited the life insurance business. The new insurer…
Division of a grandfathered trust preserves GST status and tax attributes
A grandfathered trust proposed to divide into three trusts, one for each child and that child's descendants, and to modify the trustee provisions. The IRS ruled that the division and modifications…
VEBA may shift retiree-life reserves to retiree-health benefits without tax
An employer's voluntary employees' beneficiary association held reserves accumulated before 1984 to provide life insurance for union-represented retirees. The employer proposed moving the assets to…
VEBA may shift pre- and post-DEFRA reserves to retiree-health benefits
An employer's voluntary employees' beneficiary association held retiree-life reserves that were mostly accumulated before 1986 but might include later contributions. The employer proposed moving…
Worthless subsidiary stock cannot use product-liability carryback
A taxpayer's wholly owned subsidiary faced product-liability litigation and entered Chapter 11. Under the reorganization plan, the taxpayer's existing subsidiary stock was canceled, while the…
Deferred put-option premiums are not deductible interest
An insurer bought put options to hedge variable-annuity guarantees and paid the premiums in installments over several years. Although it obtained dealer quotes for hypothetical up-front premiums and…
Hydroelectric authority earns excluded governmental income
A county and a governmental agency created an authority to finance hydroelectric-project licensing costs, approve energy contracts, and distribute project revenue. The two political subdivisions…
Late success-based-fee safe-harbor statement gets relief
A corporate taxpayer paid an advisory fee contingent on completing a stock acquisition. Its timely return deducted 70% and capitalized 30% exactly as required by the Rev. Proc. 2011-29 safe harbor,…
Park-development PILOT payments qualify as real property taxes
A developer leased tax-exempt property in a publicly owned park and was required to make payments in lieu of taxes equal to the real property taxes that otherwise would apply. The governing statute…
Additive-treated coal and testing methods qualify for refined coal credit
A corporate group owned three facilities that mixed chemical additives with coal to reduce nitrogen oxide and mercury emissions before selling the treated fuel to power plants. The IRS ruled that…
Employee may revoke section 83(b) election within filing period
An employee received restricted employer stock and filed a § 83(b) election covering all of the shares. Less than 30 days after the stock transfer, the employee asked the IRS for permission to…
Two additive-treated coal facilities qualify under refined coal rules
A corporate group owned two facilities that mixed chemical additives into coal to reduce nitrogen oxide and mercury emissions before sale to a power plant. The IRS ruled that the treated fuel could…
County duty-disability benefits are tax-free and excluded from FICA wages
A county code paid disability benefits to eligible employees who suffered injury or sickness in the line of duty. Benefits under four plans were based on a percentage of prior compensation and were…
City retiree-benefit trust income is excluded under section 115
A city created an irrevocable trust with two sub-trusts to fund health and welfare benefits for retirees and dependents of two municipal departments. City-appointed retirement board members…
Housing project gets late multiple-building election relief
A low-income housing project owner intended to treat all project buildings as one multiple-building project but inadvertently omitted the election from the Forms 8609. The IRS found that the owner…
Payments restoring embezzled plan assets qualify as restorative payments
An administrator's principal embezzled assets from an employer's profit-sharing plan. Recoveries from financial institutions, a surety bond, and the perpetrator restored part of the loss, and the…
Additive-treated coal qualifies for refined coal credit
A partnership produced refined coal by mixing proprietary additives with feedstock coal to reduce nitrogen oxide and mercury emissions when burned at a power plant. The IRS ruled that the process…
Refined coal testing and relocation rules approved
A refined coal partnership mixed proprietary additives with coal to reduce nitrogen oxide and mercury emissions at a power plant. The IRS ruled that the output could qualify as refined coal under…
Restaurants may use precise method for kitchen labor costs
Restaurants under examination held year-end inventories consisting almost entirely of raw ingredients that had not entered production. Some had not capitalized cook and preparation-cook wages, while…
Foreign subsidiary funding preserves exemption and deductions
A domestic public charity formed a wholly owned foreign nonprofit subsidiary to carry out its charitable work supporting orphan children, initially by building an orphanage in a foreign country. The…
Missing tax-return copy does not invalidate section 83(b) election
A service provider received restricted company stock and timely filed a section 83(b) election within 30 days of the transfer. The return preparer later failed to attach a copy of the election to…
Company receives 45 days to complete success-fee safe-harbor election
A consolidated corporate group incurred success-based investment-banking fees in two taxable stock acquisitions. Its original return deducted 70 percent of the fees and capitalized 30 percent,…
Utility must reflect depreciation-driven NOL carryover in rate base
A regulated electric utility used accelerated tax depreciation and expected a net operating loss carryover, which meant part of its accumulated deferred income tax balance had not yet produced…
Taxpayer may revoke bonus-depreciation opt-out elections
An LLC taxed as a C corporation had elected on two federal returns not to claim additional first-year depreciation for all classes of qualified property. Its outside preparer made the elections…
Legally required charity payments are deductible business expenses
A partnership operating regulated facilities had to satisfy conditions attached to a state certificate in order to continue doing business. When the value of qualifying services fell short of…
Tenant reimbursements are not rent, but some assets require ADS
A building owner received lump-sum reimbursements from a federal agency for tenant improvements beyond amounts amortized through stated rent. Chief Counsel advised that the lease and surrounding…
Late elections may defer low-income housing credit periods
A partnership placed low-income housing buildings in service but inadvertently failed to elect to start their ten-year credit periods in the following year. The IRS found that the partnership met…
Pro rata trust divisions preserve GST status and tax attributes
Two irrevocable trusts created before September 25, 1985, held assets for four children and their descendants. The trustee proposed dividing each trust pro rata into four successor trusts so…
Utility normalization must reflect depreciation-related NOLs
A regulated utility used accelerated tax depreciation while net operating losses prevented some of the associated tax benefits from actually deferring tax. For ratemaking, the utility used a…
Utility cannot flow through unrealized depreciation tax benefits
A regulated electric utility used accelerated tax depreciation while net operating losses prevented some of the associated tax benefits from currently reducing tax. The utility used a…
Separate insurance fund avoids investor-control ownership
An investment company planned a new regulated investment company series available only through life insurance and variable annuity separate accounts, plus limited permitted holders. The new…
Issuer may revise bond allocations and spend reserve earnings
A public issuer financed an electric generating project with tax-exempt bonds and direct-pay Build America Bonds, then expected project costs to be lower than originally estimated. The IRS ruled…
Indexed structured settlement and hardship option qualify under section 130
An assignment company planned to assume responsibility for structured settlement payments owed to a person permanently injured in an accident. The payments could increase annually with the S&P 500…
Forfeited casino winnings are not reported or included in income
A state casino asked how federal tax rules apply when a gambler enrolled in the state's voluntary exclusion program wins but is barred from receiving the money. The IRS advised that the casino does…
Partner received 45 days to elect real-property debt exclusion
A partner's share of partnership debt cancellation potentially qualified for the § 108(c) exclusion for qualified real property business indebtedness, but the partner's tax professional overlooked…
Structured settlement reorganization received tax-free transfer rulings
An insurance group proposed moving structured-settlement obligations, related annuity contracts, and cash from one subsidiary to another before merging the transferor into an affiliated insurer. The…
Partnership received more time to start housing credit period
A partnership placed a low-income housing building in service but inadvertently failed to elect to begin the section 42 credit period in that year. The IRS found that the requirements for…
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.