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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Corporation receives 60 days for late IC-DISC election
A newly formed corporation intended to elect interest charge domestic international sales corporation status from inception. Its law firm and accounting firm each expected the other to file Form 4876-…
Late election may prevent automatic GST allocation to three trusts
A taxpayer and spouse contributed community property to three irrevocable trusts for their children. Their accounting firm and consultant did not advise them about automatic GST exemption allocation o…
Patent infringement litigation costs are deductible business expenses
A manufacturer licensed patented technology from an affiliate and shared litigation costs under the license agreement. The patent case concerned whether a competitor infringed the patent and whether t…
Estate receives 120-day extension for portability election
An estate below the mandatory estate-tax filing threshold missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount. Because the estate was not otherw…
Successor receives 60 days for deemed-sale election
A foreign investment company transferred assets in a reorganization to a successor that elected regulated investment company status, then dissolved. The predecessor failed to attach the election for d…
LLC receives late corporate-classification and depreciation election relief
An LLC owned by two section 501(c)(3) organizations served as general partner of a low-income housing partnership. Its partnership agreement required both corporate tax classification and an election …
Estate receives 120 days to make omitted QTIP election
A decedent's revocable trust created a marital trust that paid all net income to the surviving spouse for life. The estate timely filed Form 706, but its attorney mistakenly omitted the trust from Sch…
IC-DISC election extension granted, but capitalization defect remains
A corporation formed to operate as an IC-DISC missed its election deadline after personnel changes disrupted tracking and its management firm sent Form 4876-A to an incorrect ZIP code. The IRS found t…
Mental impairment supports waiver of IRA rollover deadline
An IRA owner withdrew funds while experiencing mild cognitive impairment, moderate clinical depression, and emotional distress that impaired financial decision-making. The owner did not discover the m…
Erroneous custodian advice supports IRA rollover waiver
An IRA owner withdrew funds to buy private-company stock after relying on a custodian's prior instructions for a similar investment. When the custodian refused the new stock, its adviser told the owne…
Financial-institution error supports inherited IRA rollover waiver
A decedent named a trust as IRA beneficiary, and the surviving spouse was the trust's sole trustee with power to distribute its assets to herself. A financial adviser intended to transfer the inherite…
IRA rollover waiver denied for personally held precious-metal coins
An IRA owner withdrew funds to purchase physical Gold American Eagle and Silver American Eagle coins and kept personal possession of them. Her financial adviser had said the investment could not be ma…
Custodian error supports post-death plan rollover waiver
A retired plan participant elected a direct rollover to an IRA but died eleven days later. The plan custodian instead deposited funds into the personal representative's checking account, and the rollo…
Scholarship procedures receive advance approval
A private foundation proposed scholarships for residents seeking education or training for jobs in their region's visitor industry. Its board would select recipients using the proposed training progra…
Trade-program scholarship procedures approved
A private foundation proposed scholarships for trade-program students to buy required equipment, tools, materials, or testing. A committee of former educators and community members would use academic …
Renewable scholarship procedures approved
A private foundation proposed scholarships for qualifying undergraduate, graduate, and professional students, with renewals available for up to four years. Eligibility depended on citizenship, school …
Former-employee scholarship procedures approved
A private foundation proposed scholarships for certain former company employees, their spouses, and their descendants. Applicants had to attend an eligible educational institution, show financial need…
Need-based high school scholarships approved
A private foundation proposed need-based scholarships for graduates of a specified public Title I high school. A committee of foundation leaders and school principals would rank applicants using finan…
Market-rate consulting fails exemption tests
An organization sought section 501(c)(3) status for mediation, quality-management consulting, hospital-accreditation preparation, internal auditing, and services involving veterans and older people. I…
IRS deed is exempt from county transfer tax
The IRS sold seized California real property and issued a deed after the taxpayer's redemption period expired. A county recorder refused to record the deed because it lacked information about the loca…
Later combat-zone status does not undo deficiency notice
The IRS issued a notice of deficiency before learning that the taxpayer qualified for combat-zone relief under section 7508(a). Chief Counsel advised that the notice should not be withdrawn and the ex…
Limitations period bars excess-interest refund suit
The IRS had paid an excessive refund of overpayment interest, and the taxpayer would not repay it voluntarily. No same-tax, same-period offset was available, leaving an erroneous-refund suit as the go…
Late disregarded-entity election granted
A foreign eligible entity was formed for a trust and had one owner. The entity, the trust, and the trust's grantor intended from formation to treat the entity as disregarded for federal tax purposes a…
Late IC-DISC election receives relief
A domestic corporation was formed solely to operate as an interest charge domestic international sales corporation and entered into a commission agreement consistent with that intent. Its chief financ…
Late election out of bonus depreciation granted
A consolidated corporate group placed qualified property in service and did not claim additional first-year depreciation for any property class. Its parent timely filed the return but inadvertently om…
Late success-fee safe-harbor election granted
A corporation incurred success-based fees in taxable stock acquisitions and intended to use the Revenue Procedure 2011-29 safe harbor, deducting 70 percent and capitalizing 30 percent. Its longtime ac…
Late merger-fee safe-harbor election granted
A corporation incurred success-based fees in merger transactions carried out through bankruptcy plans. Its timely return deducted 70 percent and capitalized 30 percent under the Revenue Procedure 2011…
Late disregarded-entity elections granted for twelve foreign entities
A domestic corporate parent formed or acquired twelve wholly owned foreign eligible entities and consistently reported their activities, assets, and liabilities as if they were disregarded entities. I…
Late small-insurance-company tax election granted
A property and casualty insurer failed to timely file returns and make the election that allows a qualifying small insurance company to be taxed only on investment income. The insurer said it relied o…
Service company was not a third-party settlement organization
A service company separately contracted with customers and with providers of goods and services. It set the prices charged to customers, paid providers under separate terms, and did not merely settle …
Discrete issues approved in a proposed REIT business separation
A publicly traded real estate investment trust proposed a multi-step separation of two businesses involving subsidiary mergers, contributions, distributions, and a shareholder spin-off. The IRS issued…
Temporary retention of spin-off shares was not tax avoidance
A public corporation planned to separate a higher-growth business by distributing 80.1 percent of a holding company's stock to its shareholders. It proposed retaining the remaining 19.9 percent tempor…
Late accounting-period application treated as timely
A taxpayer filed Form 1128 late when seeking to adopt a calendar tax year. The delay resulted from an oversight or misunderstanding by the taxpayer's tax professional. The IRS found that the taxpayer …
Estate received 120 days to make a portability election
An estate below the estate-tax filing threshold missed the deadline to file Form 706 and elect transfer of the deceased spouse's unused exclusion amount to the surviving spouse. Because the estate was…
Late low-income housing credit-period elections granted
A partnership placed multiple low-income housing buildings in service but inadvertently failed to elect that their 10-year credit periods begin in that year. The IRS found that the standards for regul…
Late election to capitalize employee lease costs granted
A partnership incurred employee compensation costs while entering into a long-term office lease and intended to elect to capitalize those costs. Its return preparer included the election in the draft …
Late IC-DISC election granted after incomplete filing
A newly formed domestic corporation intended to operate as an interest charge domestic international sales corporation from its formation date. It mailed Form 4876-A within the 90-day period, but the …
Exemption denied for market-oriented real estate activities
A nonprofit corporation proposed to spend most of its time and money buying, rehabilitating, selling, and leasing real property. It did not limit all customers to a charitable class, establish afforda…
Scholarship procedures received advance approval
A private foundation proposed scholarships for qualifying high school seniors, including but not limited to children of employees of two companies. An independent committee would select recipients usi…
Multi-year educational website set-aside approved
A private foundation planned a multi-year educational website addressing global scientific and policy issues. It requested approval to set aside a redacted amount because immediate payment would not a…
Musical education grant and instrument-loan procedures approved
A private foundation proposed a program supporting young classical-music students with instrument loans, paid instruction, ensemble scholarships, supplies, performance opportunities, and related assis…
Child-care charity lost exemption after shifting to resale operations
An organization had received section 501(c)(3) status to operate a child-care center for low-income families. It later closed the child-care facility, distributed its physical assets to other exempt o…
Exemption revoked after operations ceased and records were withheld
A public charity had been recognized to support children and their families through financial, medical, educational, and in-kind assistance. During examination, the IRS repeatedly requested organizati…
Exemption revoked because organization funds benefited its president
A religious organization conducted concert tours through its president, an ordained minister and musician. The IRS examination found that organization funds paid the president's personal expenses and …
Cash-basis taxpayer claims additional foreign tax credit when paid
Chief Counsel advised how section 905(c) applies when a cash-basis individual pays additional creditable foreign income tax for an earlier year. Because the taxpayer had not timely elected under secti…
Taxpayer cannot repay prior interest-netting benefit to choose better periods
Chief Counsel considered whether a taxpayer could voluntarily repay a valid interest-netting benefit and then apply netting to different periods with a larger interest-rate difference. The advice conc…
Consistent-settlement rights do not cover partner-level penalty defenses
Chief Counsel addressed consistent-settlement rights for penalties in a TEFRA partnership matter. The advice stated that section 6224(c) does not give another partner a right to a consistent settlemen…
Outside-basis components are generally partnership items
Chief Counsel explained which parts of a partner's outside basis are partnership items under the TEFRA rules. Contributions, distributions, shares of income and loss, and shares of partnership liabili…
Only the LLC member-manager qualified as tax matters partner
Chief Counsel analyzed who could serve as tax matters partner for a manager-managed limited liability company subject to TEFRA. The LLC agreement and state law vested management authority in one perso…
Levy proceeds could not be returned after nine-month request period
Chief Counsel considered whether the IRS could return money collected by levy. The taxpayer did not request return of the funds within nine months after the levy. Based on that delay and the facts of …
Parent received more time to file section 338 elections
A corporate parent requested extra time to file section 338(g) elections after a purchaser acquired a foreign target and the target's many foreign subsidiaries. The elections were not filed by their o…
S corporation received more time to file duplicate Form 3115
An accrual-method S corporation timely filed its return and attached the original Form 3115 for a depreciation accounting-method change. It failed to send the required signed duplicate to the IRS offi…
Taxpayer received more time for success-based fee safe harbor
A corporation incurred success-based fees in merger transactions completed through bankruptcy plans. Its short-period return treated 70 percent of the fees as deductible and capitalized 30 percent und…
Foreign entity received more time to elect disregarded status
A foreign eligible entity intended to be treated as disregarded from its owner for U.S. federal tax purposes but inadvertently failed to file Form 8832 on time. The entity represented that it acted re…
Foreign entity received 120 days to elect disregarded status
A foreign eligible entity intended to elect treatment as a disregarded entity for U.S. federal tax purposes but did not timely file Form 8832. It represented that the late request did not involve hind…
Foreign entity received more time to elect corporate status
A foreign eligible entity intended to elect treatment as an association taxable as a corporation for U.S. federal tax purposes but inadvertently missed the Form 8832 deadline. It represented that it a…
Utility must account for NOLs when reducing rate base for deferred taxes
A regulated natural gas utility used accelerated tax depreciation while carrying net operating losses. For ratemaking, its accumulated deferred income tax account normally reduces rate base because de…
Financial institution error excused late inherited IRA rollover
A surviving spouse asked the IRS to waive the 60-day deadline for rolling over an IRA distribution received after her husband's death. She had requested a trustee-to-trustee transfer, but the financia…
Serious illness excused late rollovers from two IRAs
An individual withdrew amounts from two IRAs while suffering from a serious medical condition that impaired her ability to manage her finances. Her condition continued through the 60-day rollover peri…
Mental impairment excused late rollover of bullion coins
An IRA owner and her spouse both experienced serious mental conditions that impaired their financial decision-making. Acting under a power of attorney, the spouse withdrew bullion coins from the owner…
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.