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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Social club loses exemption after recurring public-use income exceeds 15 percent
A social and recreational club regularly opened its dance and bowling activities to nonmembers, who could enter through an unlocked gate and pay a nonmember fee at the counter. Its nonmember…
Weekly campus market is an unrelated business and vendor fees are not rent
An alumni-support organization operated a public market every weekend on a community college’s parking lots and derived substantially all of its revenue from vendor fees. The organization used the…
Each representative must personally sign the Form 2848 declaration
One representative signed Part II of Form 2848 in his own name for another designated representative, and the IRS processed all three representatives onto its authorization file. Chief Counsel…
Late Form 1128 treated as timely filed
The taxpayer filed Form 1128 late when seeking to change from a taxable year ending on the Saturday nearest September 30 to a calendar year. The IRS granted an extension under Treasury Regulation §…
Extensions granted for QSub and entity-classification elections
An S corporation failed to timely elect qualified subchapter S subsidiary status for a wholly owned entity, and related entity-classification elections also were not timely made. The IRS concluded…
Extension granted to waive CNOL carryback period
A consolidated group intended to relinquish the entire carryback period for a consolidated net operating loss, but its return did not include a valid election under Treasury Regulation §…
Two corporations retain S status after restructuring
An S corporation planned to become a state-law general partnership owned by two other S corporations. Its shareholders would become shareholders of one of the two corporate owners, which would have…
No-fault family-care payments excluded from income
A state-created entity administered a no-fault plan for children with birth-related neurological injuries. Under the governing statute, parents or legal guardians could be paid for medically…
Negotiated-rate solar facility is not public utility property
A regulated electric utility planned to own and operate a solar facility whose entire output would be sold to a federal installation under a negotiated contract. Although the buyer was a federal…
Extension granted for estate portability election
An estate below the estate-tax filing threshold failed to timely file Form 706 to elect portability of the decedent’s unused exclusion amount to the surviving spouse. Because the estate represented…
Inadvertent invalid S election and termination relieved
A limited liability company’s S corporation election was initially ineffective because some owners did not properly consent. Interests were then issued to three individual retirement accounts, which…
Elective stock-and-cash dividends treated as property distributions
A corporation planning to elect REIT status proposed dividends allowing each Class A shareholder to choose cash or stock of equivalent value, subject to a cash pool of at least 20 percent of the…
Extension granted to elect out of bonus depreciation
A foreign corporation claimed bonus depreciation on its original return, then repeatedly tried to electronically file an amended return electing out for all qualified property classes before the…
Extension granted for success-based fee safe-harbor election
A corporation incurred success-based advisory fees in a taxable acquisition and intended to use Revenue Procedure 2011-29’s safe harbor, under which 70 percent of the fees are treated as…
Extension granted for 2010 carryover-basis election
The personal representative of an individual who died in 2010 sought additional time to file Form 8939, elect the special carryover-basis regime under § 1022, and allocate basis increases to…
Extension granted for first-year IC-DISC election
A corporation was formed solely to operate as an interest charge domestic international sales corporation, but Form 4876-A was not filed because its CFO, law firm, and accounting firm each believed…
Extension granted after adviser missed IC-DISC election
A corporation was formed solely to operate as an IC-DISC and relied on its law and accounting firms to complete the necessary filings. The corporation was unaware that Form 4876-A was separately…
Extension granted for partnership § 754 election
A limited liability company classified as a partnership relied on its adviser to make a § 754 election after a partner died, but the adviser failed to include the election for the relevant year. The…
Lower-tier partnership receives § 754 election extension
A lower-tier partnership was partly owned by an upper-tier partnership whose partner died. To obtain the optional basis adjustment at both tiers, both partnerships needed § 754 elections, but the…
Limited partnership receives § 754 election extension
A state limited partnership relied on its adviser to make a § 754 election after a partner died, but the adviser failed to make the election for the relevant year. The IRS found that the partnership…
Partnership shareholder caused inadvertent S termination
Two shareholders transferred their S corporation stock to a limited partnership, an ineligible S corporation shareholder. After discovering the resulting termination, the partnership distributed the…
Trust reformations respected for gift and estate tax
A married couple created an irrevocable trust for their children, but several provisions mistakenly retained amendment, distribution, and reversionary powers inconsistent with their intent to make…
Extension granted for acquisition-fee safe-harbor election
A corporation paid success-based advisory fees in a taxable acquisition and intended to use Revenue Procedure 2011-29’s 70/30 safe-harbor allocation. Its timely return applied that allocation but…
Estate receives portability-election extension
An estate below the estate-tax filing threshold did not timely file Form 706 to elect portability of the deceased spouse’s unused exclusion amount. The surviving spouse, acting as executor,…
Foreign settlors own revocable trust and assets receive basis adjustments
Two non-U.S. spouses funded a foreign trust with separate property and retained revocation rights during their joint lives. The IRS ruled that each spouse would be treated as owner of the…
Portability-election extension granted despite taxable gifts
An estate did not timely file Form 706 to elect portability of the decedent’s unused exclusion amount. The surviving spouse, acting as personal representative, disclosed that the decedent had made…
Disability justified waiver of 60-day rollover deadline
A taxpayer took a retirement-plan distribution to cover anticipated medical expenses but could not complete a rollover within 60 days. Medical documentation supported that chronic pain from an…
Medical conditions justified waiver of IRA rollover deadline
An elderly taxpayer took a distribution from his IRA intending to roll it over within 60 days. He had recently undergone hip replacement surgery, his spouse had chronic orthopedic problems, and…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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.