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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Employer-related scholarship procedures approved
A tax-exempt private foundation asked the IRS to approve procedures for scholarships benefiting children of employees in specified divisions of an employer. An independent committee would select recip…
Exemption revoked for private benefit and lack of charitable control
The IRS revoked a religious grantmaking organization’s section 501(c)(3) status retroactively to its formation. The organization’s sole significant asset was a nonvoting limited-partnership interest t…
Selecting a tax matters partner after entity partners dissolved
Chief Counsel advised an examination team handling a TEFRA partnership proceeding whose general partners were entities that had dissolved. The two indirect partners with interests in the proceeding co…
Field office facts may support a technical advice request
Chief Counsel responded to a question about the statement of facts for a technical advice request. The email quoted Revenue Procedure 2015-2, which requires the field office to submit its declaration …
False withholding credits create an underpayment subject to fraud penalties
Chief Counsel advised that overstated withholding credits on a false Form 1099-OID can create an underpayment subject to the section 6663 civil fraud penalty. Treasury Regulation section 1.6664-2 requ…
Overstated S corporation costs did not create omitted gross income
Chief Counsel considered whether an S corporation shareholder triggered the six-year assessment period by overstating cost of goods sold and the resulting loss. For section 6501(e), the relevant omitt…
Purchased domain names must be capitalized and may be amortizable
Chief Counsel addressed the tax treatment of internet domain names purchased on the secondary market for use in a business. Acquisition costs for both generic and non-generic domain names must be capi…
Promotional donation program payments may be business expenses
A business promoted a program that distributed amounts to tax-exempt, nonprofit, and for-profit organizations. Chief Counsel preliminarily concluded that the money belonged to and was paid by the busi…
Church-affiliated college retirement plan qualified as a church plan
A private tax-exempt college asked whether its defined contribution retirement plan qualified as a church plan under section 414(e). The college was an official institution of a church, shared its rel…
City received 45 days to file private-activity-bond carryforward election
A city received private-activity-bond volume cap for a proposed multifamily housing bond issue and obtained a state carryforward allocation. Its adviser did not timely tell it that Form 8328 also had …
Foreign entity received 120 days to file corporate classification election
A foreign entity intended to elect corporate tax classification effective on a specified date but inadvertently failed to file Form 8832 on time. It represented that it acted reasonably and in good fa…
Corporation received 60 days to file IC-DISC election
A domestic corporation was formed solely to operate as an interest charge domestic international sales corporation, and it began operating under a commission arrangement with its parent. Its accountin…
Reasonable cause supported late mixed-straddle-account elections
An investment business intended to establish mixed straddle accounts after acquiring an entity that became disregarded for federal tax purposes. Its return preparer misunderstood the acquired entity’s…
Foreign corporation received 60 days for branch-profits-tax waiver
A foreign corporation held an interest in a domestic partnership that sold U.S. real property, creating effectively connected income. The corporation later elected partnership classification, which ca…
Dividing grandfathered trust preserved GST exemption without gift tax
A trustee proposed dividing a pre-September 25, 1985 testamentary trust into four equal trusts, one for each grandchild’s family line, while continuing to provide for the grantor’s son. Each asset wou…
Tax-exempt-controlled corporation received 60 days to make depreciation election
A taxable corporation wholly owned by a section 501(c)(3) organization indirectly invested in a partnership that developed low-income rental housing. Because the corporation was tax-exempt controlled,…
Settlement debt write-offs required Forms 1099-C
A financial institution settled a class action challenging collection notices and agreed to waive deficiency balances owed by class members. It argued that state law, rather than an identifiable repor…
Highly compensated finance officer was a covered employee
Chief Counsel considered the section 162(m) status of a smaller reporting company’s principal financial officer. Notice 2007-49 generally excludes an officer whose compensation is disclosed solely bec…
Partnership received 120 days to make section 754 election
A partnership had transfers of ownership interests during a taxable year and intended to make a section 754 election to adjust the basis of partnership property. Its tax adviser inadvertently failed t…
Grid-frequency storage device was five-year service property
A taxpayer used a large electricity-storage device to stabilize grid frequency by taking electricity from the grid when frequency was high and returning it when frequency was low. The taxpayer asked t…
Pension liquidity-shortfall excise taxes were waived
A company’s two defined benefit plans experienced liquidity shortfalls that were not identified by either of two actuarial consulting firms until years later. The company had not received enough infor…
Husband’s death justified waiver of IRA rollover deadline
A taxpayer acting under a durable power of attorney withdrew funds from her seriously ill husband’s IRA to move them into safer IRA investments. Her husband died during the 60-day rollover period, and…
Estate lacked proof that decedent intended an IRA rollover
An IRA owner withdrew funds into a checking account and died shortly afterward. His mother, acting as executrix, later moved the estate funds into her own checking account after a court-approved final…
Bank’s duplicate IRA distribution justified rollover waiver
A taxpayer received scheduled substantially equal periodic payments from several IRAs. A computer error caused the financial institution to make an unauthorized duplicate distribution from one IRA, an…
Delayed notice of reversed IRA deposit justified rollover waiver
A taxpayer deposited a distribution back into her IRA within 60 days and confirmed online that the redeposit had been accepted. The check was later returned because of confusion about the bank account…
Consolidated groups received 60 days for ratable-allocation election
A new parent acquired an old parent and its subsidiaries, terminating one consolidated group and bringing the corporations into a new consolidated group. The groups intended to elect to allocate ordin…
Revised nuclear decommissioning fund schedule approved
A taxpayer requested mandatory review of its nuclear decommissioning fund schedule after the Nuclear Regulatory Commission extended the plant’s operating license. The proposed amounts used a recent in…
New corporate group received 60 days to elect consolidated filing
A newly formed parent became the common parent of an affiliated group but did not timely file the consolidated return that would make the group’s election to file together. The parent requested regula…
Cash, debt exchange, and merger steps received favorable separation rulings
A public company proposed transferring one business to a controlled subsidiary, receiving stock, securities, and borrowed cash, and separating that subsidiary from its shareholders through an exchange…
Employee-paid optional life insurance could avoid imputed income
A life insurer provided employees basic group-term life insurance at no cost and offered separate optional coverage paid for by employees with after-tax dollars. The basic and optional obligations ord…
Hurricane Sandy victims received 45 days for prior-year loss election
Homeowners sustained a federally declared Hurricane Sandy disaster loss and claimed it on the return for the disaster year. Their original tax adviser did not know they could elect under section 165(i…
Ineligible entity shareholders caused only an inadvertent S termination
An S corporation’s sole shareholder transferred shares to another S corporation and a partnership, both ineligible S corporation shareholders, which terminated the subsidiary’s S election. After disco…
Charity's exemption revoked for insider benefit
A foundation raised donations through a telemarketing company owned by its founder and president. The IRS found that the foundation depended on that company for its revenue, facilities, workers, fundr…
Exemption revoked for commercial debt-management operations
The IRS revoked a consumer credit-counseling organization’s section 501(c)(3) status. The organization operated an inbound call center whose primary activity was enrolling consumers in fee-based debt-…
Sabbatical grant procedures approved for a private foundation
A private foundation requested advance approval of procedures for a grant program supporting sabbaticals for chief executives of charitable organizations. The grants would fund the executives’ living …
Utility must prorate deferred taxes for projected test periods
A regulated electric utility asked how the tax normalization rules applied to projected rate adjustments, formula rates, and later true-ups. The IRS ruled that projected rate periods are future test p…
Partnership unit cancellations are not treated as transfers
A limited partnership used units of a related publicly traded partnership for employee incentive awards. To maintain a one-to-one relationship between the entities’ outstanding units, the partnerships…
Fuel transportation and marketing income qualifies under section 7704
A partnership planning an initial public offering expected to become a publicly traded partnership. It earned income from transporting, storing, and marketing a redacted type of fuel, primarily throug…
Corporation may make a new S election before five years expire
A corporation had voluntarily revoked its S corporation election and later changed its ownership by selling shares to additional eligible S corporation shareholders. It sought permission to make a new…
Group receives extra time for consolidated return election
A corporate parent intended for its affiliated group to elect to file a consolidated federal income tax return, but a valid election was not filed by the deadline. The parent sought discretionary reli…
Revised nuclear decommissioning funding schedule approved
The owner of a nuclear power plant requested a revised schedule of deductible contributions to its nuclear decommissioning fund after the plant’s operating license was extended. The taxpayer based its…
Late disregarded-entity election receives 120-day extension
A foreign entity intended to be treated as a disregarded entity for federal tax purposes but inadvertently failed to file Form 8832 on time. It represented that its returns were consistent with the re…
Late ESBT election does not end S corporation status
Shares of an S corporation passed under a shareholder’s will to a trust that was eligible to hold S corporation stock for two years. When that period ended, the trust failed to make a timely electing …
Late corporate classification election receives 120-day extension
A foreign entity intended to elect classification as an association taxable as a corporation but failed to file Form 8832 on time. It represented that it acted reasonably and in good faith, did not us…
Taxpayer receives extra time to elect alternative depreciation
An electric power generator used the general depreciation system for property placed in service during two tax years. Its accounting firm had not told it that it could elect the alternative depreciati…
Exemption denied for commercial healing services and private benefit
An organization sought section 501(c)(3) status for healing services involving people and animals, free work for animal rescues, retreats, workshops, and outreach. The IRS found that a substantial por…
STEM and economics scholarship procedures approved
A private foundation proposed renewable scholarships for financially needy, high-achieving students pursuing degrees in economics or STEM fields. An independent selection committee would rank applican…
Franchisee association denied business-league exemption
An association of franchise store owners sought exemption as a business league under section 501(c)(6). Its activities focused on increasing members’ sales through brand-specific advertising, promotio…
Pet-care business denied charitable exemption
An organization succeeded a for-profit pet boarding and veterinary business and sought section 501(c)(3) status. It planned some public education, reduced-cost services for rescue animals, and support…
Foreign pension plan qualifies and later contributions remain deductible
A U.S.-owned foreign partnership assumed obligations under a foreign pension plan through a series of acquisitions and restructurings. The written plan held assets in an irrevocable trust for employee…
Governmental plan may pick up mandatory employee contributions
A government-owned medical center established a defined contribution plan for senior management employees. The plan required participating employees to contribute a fixed percentage of compensation th…
Successive pawn loans are related for Form 8300 reporting
Chief Counsel considered repeated pawn loans between the same pawnbroker and borrower using the same collateral. Each new loan replaced the unpaid principal of the prior loan, allowing the borrower to…
Foreign tax credit refund claim missed the ten-year deadline
Chief Counsel analyzed a corporate refund claim based on foreign tax credits that was filed about three weeks after section 6511(d)(3)(A)’s ten-year deadline. Earlier conversations and emails told the…
NOL refund claim remains timely after foreign tax election change
A corporation first claimed a foreign tax credit for one year and used a later net operating loss carryback to offset that year’s remaining tax. It then timely changed its foreign tax treatment from a…
Foreign tax election change leaves NOL refund claim timely
A taxpayer originally used a foreign tax credit and carried a later net operating loss back to the same year. It later changed the foreign tax treatment to a deduction, reducing regular tax and freein…
State-law write-off does not require Forms 1099-C
A financial institution agreed to write off deficiency balances as part of settling a class action over legally defective presale notices. The court’s ruling and the settlement acknowledged that state…
Insurer receives 90 days to make section 831(b) election
A small property and casualty insurer relied on two accounting firms to prepare and file its federal return. After changing firms, its owner discovered that neither firm had filed the return by the ex…
Nuclear plant receives revised decommissioning funding schedule
An investor-owned utility requested a mandatory revision of its nuclear decommissioning fund schedule after the plant’s operating license was extended. The proposed annual amounts used an independent …
Spouse may disclaim trust income interest without making a gift
A spouse became entitled to half of a husband’s trust income upon marriage and proposed to disclaim the entire interest within nine months. The spouse had received no distributions, and a court had di…
Parent receives 120 days for two late QSub elections
An S corporation wholly owned two domestic subsidiaries and intended to elect qualified subchapter S subsidiary status for both on the date its own S election became effective. It failed to file Forms…
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.