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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Estate receives 120 days to make portability election
An estate below the estate-tax filing threshold missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount. Because that estate was not otherwise…
Foreign insurer receives 60 days for domestic-corporation election
A regulated foreign insurance company intended to elect domestic-corporation treatment under section 953(d). Its accounting firm prepared the election statement, but a management firm failed to file…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to file Form 8832 on time to elect disregarded-entity status. The IRS found that the entity satisfied the standards for regulatory-election relief. It…
LNG terminal contract income qualifies under section 7704
A limited partnership planned a public offering and would indirectly own interests in a liquefied natural gas terminal. The terminal regasified imported LNG and was adding facilities to liquefy…
Tax-exempt controlled entity receives late depreciation election relief
A corporation owned equally by two section 501(c)(3) organizations was a tax-exempt controlled entity under section 168(h)(6). Its partnership agreement required an election not to be treated as…
Real estate holding company may make late depreciation election
A real estate holding company owned by two section 501(c)(3) organizations was a tax-exempt controlled entity under section 168(h)(6). Its partnership agreement called for an election not to be…
Replacement spin-off notes qualify as section 361 securities
A public corporation planned to transfer businesses to a new controlled corporation and distribute the controlled corporation's stock in a spin-off. As part of dividing existing debt, the controlled…
Returned stock remains property contributed by the partner
A partner contributed three identified lots of public-company stock to a partnership. The partnership later planned to return part of one lot to that same partner after certificate numbers had…
Identified stock lots remain the partner's contributed property
A partner contributed four identified lots of public-company stock to a partnership. Certificate numbers later changed, and the partnership exchanged part of one lot for another company's stock, but…
Invalid S corporation and QSub elections receive inadvertence relief
A corporation's S election was ineffective because one trust did not provide the proper shareholder consents and another trust failed to make an electing small business trust election. Those defects…
Religious-tolerance internship grant procedures approved
A private foundation proposed grants for college and graduate students taking unpaid or low-paying internships with nonprofits working to reduce religious intolerance and hate crimes. Applicants had…
IRS may rely on LLC manager's officer to sign corporate return
A taxpayer LLC was managed by another LLC whose sole remaining member acted through an officer. Taxpayer's counsel represented that the officer could act for the taxpayer. The IRS advised that…
Insurer retains unearned-premium and loss reserves for prior contracts
The IRS summarized reserve treatment for an insurer at the end of its 2009 tax year. The unearned-premium reserve included the part of written premiums covering unexpired periods of pre-2010…
IRS may disclose limited FFI data for vendor demonstration
The IRS wanted a prospective technology vendor to demonstrate services for identifying gaps in FATCA registration and compliance. The demonstration required access to a foreign financial institution…
Pawnshop option fee counts as retail-sale payment for cash reporting
A Colorado pawnshop used contracts in which it advanced money for delivered property while the customer retained a time-limited option to cancel the transaction. The IRS viewed the option payment as…
Tax matters partner must have authority to act for entity
This very short email gives affirmative answers to questions that do not appear in the released document. The first answer is conditional: Entity 2's tax matters partner must be a general partner or…
Post-assessment-deadline payment is refundable only within section 6511
A payment made after the assessment limitations period expires is an overpayment even if no tax was actually due. The IRS has authority to refund that payment, and a taxpayer filing a late amended…
Tax Court petition may be shared with state bar, but return information may not
The IRS considered what material it could provide to state bar disciplinary authorities. A taxpayer's return or return information could not be disclosed without the taxpayer's consent. A filed Tax…
RFPA exception may support Federal Reserve information request
This brief email addresses a Federal Reserve information request under the Right to Financial Privacy Act. The writer believed the exception in section 3413 could supply the requested explanation of…
Offsite solar-array ownership qualifies for residential energy credit
A homeowner purchased solar panels and a share of related equipment in a ground-mounted offsite array. All electricity entered the public utility's grid, and the utility applied the homeowner's…
REIT cash-and-stock distribution is taxable property distribution
A REIT recognized gain after acquiring distressed mortgage loans and foreclosing on the underlying property, then proposed a deficiency dividend to offset redetermined income. Shareholders could…
S corporation receives 120 days for late QSub election
An S corporation acquired all the stock of another corporation but failed to file Form 8869 on time to elect qualified subchapter S subsidiary status. The IRS found that the parent satisfied the…
Ineligible shareholder transfer receives inadvertent S termination relief
An S corporation's status terminated when a shareholder transferred stock to an ineligible owner. The shareholders did not know the transfer was prohibited or intend to end the S election, and the…
Taxpayer may elect out of automatic GST exemption allocation
A taxpayer and spouse transferred community property to three irrevocable trusts with generation-skipping transfer potential. Their advisers did not explain the automatic GST exemption allocation or…
GST exemption allocations to non-skip grandchildren are void
A married couple made outright gifts to two grandchildren after the grandchildren's parent, the couple's child, had died. The couple allocated generation-skipping transfer tax exemption to the gifts…
Cooperative loss recovery plan and NOL carryforwards approved
A nonexempt farmers cooperative incurred a large loss consisting of patronage and nonmember or nonpatronage portions. It planned to waive the carryback period, carry each portion forward against the…
QTIP trust severance and spouse's renunciations receive favorable rulings
A court divided a marital QTIP trust into two separate trusts, and the surviving spouse planned to renounce all interests in one divided trust and a related disclaimer trust. The IRS ruled that the…
Stock split does not substantially modify transfer restrictions
A family-owned S corporation's articles had restricted stock transfers since before section 2703's October 1990 effective date. The corporation proposed a stock split, an increase in authorized…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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-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…
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.…
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…
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…
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…
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…
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…
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…
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…
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…
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.…
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…
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…
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…
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…
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.