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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Curriculum-training organization denied charitable status
An organization sought recognition under IRC § 501(c)(3) to train educators and child-serving professionals in a social and educational curriculum. Its board members and other private parties received…
Private foundation revoked for self-dealing and private benefit
A private nonoperating foundation owned a rental building and was managed by a corporate trustee controlled by an individual. The examination report found that the trustee's law firm occupied foundati…
Scholarship, travel, and internship grant procedures approved
A private foundation requested advance approval for scholarships to graduates of one state's high schools who attend any of three specified universities. The scholarships were renewable for up to eigh…
Advanced doctoral scholarship procedures approved
A private foundation proposed one scholarship per academic year for a student pursuing an advanced doctoral degree at a specified university in a redacted academic field. Applicants had to be enrolled…
Product fundraisers impermissibly benefit a related business
An organization proposed fundraising programs in which schools, community groups, and religious organizations would sell or arrange donations of a product supplied by a for-profit company. The applica…
Condominium association denied social-welfare exemption
A small condominium association sought exemption as a social-welfare organization under IRC § 501(c)(4). Its members owned fewer than two dozen private units and paid dues for insurance, water, lighti…
Carryback offset earns interest through the loss-year due date
A taxpayer received a tentative refund based on a net operating loss carryback, but the IRS later disallowed most of the carryback and assessed an underpayment. On the same day, unrelated adjustments …
Corporate shareholder may make retroactive QEF election
A corporate shareholder learned years after acquiring a foreign corporation's shares that the company was a passive foreign investment company. Its internal tax department and two accounting firms had…
Utility must reflect depreciation-related NOL carryover in ADIT
A regulated natural-gas utility used accelerated depreciation and had net operating loss carryovers during the relevant years. For ratemaking, it maintained accumulated deferred income tax accounts an…
New parent receives extension for consolidated-return election
A newly formed parent corporation became the common parent of two subsidiaries but did not timely file the group's election to submit a consolidated federal income tax return. The failure occurred aft…
Corporation receives relief for ineligible S corporation shareholder
A corporation elected S corporation status effective on its formation date, but one shareholder was not eligible to own S corporation stock. After discovering the problem, that shareholder promptly di…
Corporation receives 60 days to file IC-DISC election
A domestic corporation intended to elect interest-charge domestic international sales corporation status from its formation. Its parent relied on an accounting firm to prepare and file Form 4876-A, an…
Oilfield fluid and waste services produce qualifying income
A planned publicly traded partnership would provide fluid delivery and transfer, waste treatment and disposal, equipment cleaning, vapor control, heating, slurry injection, and related services throug…
Partnership receives 120 days to make section 754 election
A general partner died and the partner's interest in a partnership transferred to another person. When preparing the partnership's return, the partnership relied on its tax adviser and did not know th…
Managing shareholder may deduct lawsuit damages and legal fees
An individual managed a closely held corporation and was sued by another shareholder for fraud, breach of fiduciary duty, and breach of contract. A jury found the manager liable and awarded compensato…
Tax-exempt-owned corporation gets 45 days for property election
A corporation wholly owned by a section 501(c)(3) organization held partnership interests connected to a rehabilitated building. Its agreements required it to make an IRC § 168(h)(6)(F)(ii) election s…
Taxpayer gets 60 days to opt out of bonus depreciation
A taxpayer timely filed its return without claiming bonus depreciation for any class of qualified property, as it intended. Its accounting firm failed to attach the statement required to elect out of …
Partnership may opt leasehold improvements out of bonus depreciation
A partnership that leased office and retail space initially reported certain property as nonresidential real property. It later determined that the property should have been classified as qualified le…
Consolidated group gets 60 days to opt out of bonus depreciation
A corporate parent and its twelve subsidiaries placed qualified property in service during the relevant year. Their timely consolidated return did not claim bonus depreciation for any property class, …
Understated tip credits may increase open-year carryforward
An owner of restaurant partnerships and S corporations discovered that the businesses had understated IRC § 45B credits for employer taxes paid on employee tips, including in years closed by the limit…
S corporation gets 60 days to opt out of bonus depreciation
An S corporation intended not to claim bonus depreciation for any class of qualified property placed in service during the year. Its timely return omitted the deductions and reported shareholder incom…
Estate gets 120 days to elect portability of unused exclusion
A decedent's estate did not file Form 706 by the deadline to elect portability of the deceased spousal unused exclusion amount. The surviving spouse, acting as executor, represented that the estate wa…
Parent may claim ordinary loss on worthless subsidiary stock
A consolidated group planned to sell the operating subsidiary held by another group member, use distributed receivables and sale proceeds to repay intercompany debt, cancel the remaining debt, and liq…
Donor may elect trust gifts out of automatic GST allocation
A taxpayer and spouse made annual gifts to an irrevocable life-insurance trust for their children and grandchildren. Their attorney advised that annual-exclusion gifts did not require gift-tax returns…
Donor gets 120 days to opt trust gifts out of GST allocation
A taxpayer and spouse made annual gifts to an irrevocable life-insurance trust for their children and grandchildren. Their attorney advised that annual-exclusion gifts did not require gift-tax returns…
Financial-institution error qualifies for rollover waiver
A retiree instructed a financial institution to receive her qualified-plan balance by direct rollover into an IRA. The institution instead deposited the funds into a non-IRA account, even though the F…
Deposit into spouse's IRA qualifies for rollover waiver
A retiring plan participant requested a direct rollover but mistakenly supplied the account number for her spouse's IRA instead of an IRA in her own name. The plan custodian issued a check payable to …
Partnership investment does not qualify for rollover waiver
An IRA owner directed his custodian to issue funds to a partnership so his IRA could acquire a partnership interest. The custodian could not hold the interest and reported the payment as a taxable dis…
Cancelled investment does not justify late IRA rollover
An IRA owner withdrew funds from a self-directed IRA intending to place them in another IRA that would finance a private investment. Litigation delayed and then cancelled the investment, and the owner…
Bank's non-IRA CD deposit qualifies for rollover waiver
An IRA owner held an IRA certificate of deposit at a bank that later failed and was taken over by another bank. When the CD matured, he closed it intending to complete a rollover into a new IRA CD at …
Trust lacks reasonable cause for first-tier tax abatement
A private-foundation trust made grants to another private foundation without a written grant agreement, annual grantee reports, or the required reports with its Forms 990-PF. The trustees also served …
Spouse-plan reimbursement depends on after-tax payment
An employer considered paying employees for health coverage obtained through their spouses' employer plans. Chief Counsel advised that payments may be excluded under IRC § 106 when the spouse paid the…
Child-care provider payments are not exempt from levy
A public-assistance program paid participating child-care providers directly on behalf of eligible low-income working families. The IRS levied the payments owed to a day-care center to collect the cen…
Barrier contracts create ownership and current tax events
A taxpayer used bank contracts labeled cash-settled barrier call options to obtain leveraged exposure to baskets of hedge-fund interests that its chosen manager could change. Chief Counsel advised tha…
Majority partnership interest is looked through for section 351
A publicly traded limited partnership planned to receive interests in an acquired master limited partnership from a newly formed corporate entity in exchange for the taxpayer's limited-partner interes…
Utility receives revised nuclear decommissioning schedule
An electric utility owned and operated an interest in a nuclear power plant whose operating license had been extended. It requested revised annual ruling amounts for deductible contributions to its nu…
Nuclear plant owner receives revised contribution schedule
An electric utility owned and operated an interest in a nuclear power plant whose operating license had been extended. It requested revised annual ruling amounts for deductible contributions to its nu…
Bank error qualifies for IRA rollover waiver
An IRA owner intended to renew a maturing certificate of deposit within an IRA, but the bank transferred the funds into a non-IRA savings account. The owner discovered the mistake while preparing his …
State excess benefit plans qualify under section 415(m)
A statewide retirement system established excess benefit plans to pay governmental-plan benefits that could not be paid from its qualified defined benefit plans because of IRC § 415 limits. The arrang…
Late section 336(e) election receives filing relief
A purchaser acquired all stock of an S corporation in a transaction represented to be a qualified stock disposition. The target and its shareholder had timely signed a binding agreement to make an IRC…
Partnership may make retroactive QEF election
A partnership indirectly acquired shares of a foreign corporation that qualified as a passive foreign investment company. Its accounting firm prepared several years of returns but did not advise the p…
Consent payment may avoid significant debt modification
A corporation planning a tax-free spinoff considered paying holders of contingent-payment debentures for consent to modify an indenture covenant and avoid litigation. The IRS ruled that the payment wo…
Utility receives revised decommissioning contribution schedule
An electric utility owned and operated an interest in a nuclear power plant with an extended operating license. It requested revised annual ruling amounts for deductible contributions to its nuclear d…
Mandatory decommissioning schedule revision is approved
An electric utility with an ownership interest in a nuclear power plant requested a mandatory revised schedule of deductible contributions to its decommissioning fund after the plant’s operating licen…
Fund’s four late tax elections are treated as timely
A series of a registered investment company prepared a timely return containing elections to be treated as a regulated investment company, carry certain late-year losses forward, treat declared divide…
Foreign entity receives late partnership election relief
A foreign eligible entity intended to be classified as a partnership for federal tax purposes from its formation date but failed to file Form 8832 on time. Its owners consistently treated it as a part…
GRAT ownership causes inadvertent S election termination
Two grantor retained annuity trusts acquired stock in an S corporation while they were eligible grantor-trust shareholders. The trusts later ceased to be grantor trusts but continued holding the stock…
Trust ownership causes inadvertent S election termination
Shares of an S corporation passed from a grantor retained annuity trust to two successor trusts that were intended to remain grantor trusts but did not qualify during a short period before their ESBT …
Foreign entity may make late partnership election
A foreign eligible entity whose owners had limited liability intended to be treated as a partnership for U.S. federal tax purposes but inadvertently failed to file Form 8832 on time. The IRS found tha…
Late ESBT elections receive inadvertent termination relief
Two trusts acquired shares of an S corporation and otherwise qualified as electing small business trusts, but their trustees failed to file timely ESBT elections. The corporation and its shareholders …
Lack of rollover information does not justify waiver
An IRA owner withdrew nondeductible contributions, moved the deductible portion and earnings to a retirement plan, and placed the remaining amount in a non-IRA credit-union account. He missed the 60-d…
Home-repair plans do not justify rollover waiver
A former employee elected a lump-sum pension distribution, less mandatory withholding, and deposited the proceeds into her checking account. She missed the 60-day rollover deadline because she did not…
Caregiving abroad supports IRA rollover waiver
An IRA owner withdrew funds and deposited them in a non-IRA account in another country shortly before traveling there to care for his elderly mother after a serious fall. He remained abroad as her car…
Scholarship procedures receive advance approval
A private foundation proposed scholarships for high-potential, low-income students attending college-preparatory high schools or colleges. Selection would consider financial need and academic promise,…
Computer reseller fails the charitable operational test
An organization proposed to buy refurbished computers, add software and warranties, and resell them primarily above cost to schools, educational programs, students, and families. Sales and fees would …
Record label fails the charitable operational test
An organization sought recognition under IRC § 501(c)(3) for a program that would give young artists experience in the entertainment industry. It planned to spend 85 percent of its time operating a re…
Children’s product sales create private benefit
An organization planned a secure social network where children would display creative work and vote on projects to be manufactured, licensed, and sold. Most profits from each winning design would go i…
Patent research would benefit the founder’s business
An organization was formed to attract funding for research and development of its founder’s patented hydro-energy technology. A related for-profit company was already developing the technology, would …
Charitable asset transfer does not create unrelated business income
A voluntary employees’ beneficiary association planned to terminate after all participants had been paid and no benefit claims or liabilities remained. After paying termination expenses, it would tran…
Charitable transfer avoids the disqualified-benefit excise tax
A business trust planned to terminate a voluntary employees’ beneficiary association after all plan benefits and liabilities had been satisfied. The remaining trust assets, all derived from previously…
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.