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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Compensatory criminal restitution is deductible as a business expense
A consultant and later partner pleaded guilty to criminal counts arising from services performed for a firm's clients. The court imposed incarceration, probation, a fine, a special assessment, and a s…
Partnership-style operating agreement receives inadvertent S election relief
A limited liability company adopted an operating agreement containing partnership-style capital-account, allocation, and liquidation provisions before later electing S corporation status. Because thos…
Trust tax-allocation settlement avoids gift, GST, and gain consequences
A trust derived from an irrevocable pre-1985 trust incurred unusually large capital gains taxes after business interests were liquidated. Its governing instrument said income should pay “all proper ta…
Foreign entity receives 120 days to elect partnership classification
A foreign eligible entity intended to be classified as a partnership for U.S. federal tax purposes but did not timely file Form 8832. The IRS found that the entity met the regulatory standards for lat…
Late Form 8832 partnership election receives 120-day extension
A foreign eligible entity failed to timely file Form 8832 electing partnership classification for U.S. federal tax purposes. The IRS concluded that the entity satisfied the standards for regulatory-el…
Foreign business receives late partnership-classification relief
A foreign business eligible to choose its U.S. tax classification missed the deadline to elect partnership treatment on Form 8832. The IRS determined that the entity qualified for regulatory-election …
Defective trust terms receive inadvertent S corporation termination relief
An individual transferred S corporation stock to a grantor trust that later terminated and divided the stock between two successor trusts. The parties filed QSST elections for those trusts, but the go…
Corporation receives 120 days to file a late S election
A corporation intended to be taxed as an S corporation from a specified date but did not timely file the required election. The IRS found reasonable cause for the missed deadline under section 1362(b)…
Taxpayer receives late ADS and bonus-depreciation election relief
A foreign corporation depreciated several years of real property and leasehold improvements under the alternative depreciation system and consistently declined bonus depreciation for qualified propert…
Missing consents and QSST election receive inadvertent S election relief
A corporation's Form 2553 omitted required consents from an individual shareholder and a trust beneficiary and misstated the number of shares each shareholder owned. The trust beneficiary also failed …
Partnership segment counts as expansion of an existing active business
A corporate group had conducted an active business for more than five years and later bought a significant economic and voting interest in a partnership operating a segment of that business. The partn…
Entity may correct the effective date of its disregarded election
A foreign eligible entity changed ownership during a business reorganization and intended to elect disregarded-entity treatment from a specified date. Its Form 8832 mistakenly listed an earlier effect…
QTIP severance confines gift and estate consequences to the disclaimed trust
An estate had elected qualified terminable interest property treatment for a marital trust benefiting the surviving spouse. The trustee proposed dividing the GST nonexempt portion into two trusts and …
Foreign entity receives late disregarded-classification relief
A foreign eligible entity had been wholly owned by a trust from its formation date and intended to be disregarded for U.S. federal tax purposes from that date. Through inadvertence, it did not timely …
Taxpayer receives 60 days to file omitted success-fee election statement
A corporate taxpayer paid a success-based financial advisory fee when it acquired another corporation through a merger. Its return applied Revenue Procedure 2011-29's safe harbor by capitalizing 30 pe…
LLC receives 120 days to make a late corporate-classification election
A domestic limited liability company intended to elect treatment as an association taxable as a corporation from a specified date but inadvertently failed to file Form 8832 on time. The IRS found that…
State university physician organization receives section 115 income exclusion
A state university and an integral state entity operating a teaching hospital combined several departmental foundations into one physician organization. The new corporation would provide clinical facu…
Investment partnership may make a retroactive QEF election
A privately held investment partnership acquired shares in a publicly traded foreign trust that was a passive foreign investment company. Although the partnership had sophisticated accounting personne…
Investment partnership may make a retroactive QEF election
A privately held investment partnership acquired shares in a publicly traded foreign trust that was a passive foreign investment company. Although the partnership had sophisticated accounting personne…
Partnership-interest distribution triggers partnership terminations and intercompany matching
A consolidated group proposed distributing a subsidiary's minority interest in one partnership to an affiliated holding company. The holding company would then become the partnership's sole owner. The…
Corporate separation qualifies for spin-off and reorganization treatment
A publicly traded corporate group proposed separating two businesses from a third and placing the separated operations in a new company that intended to elect REIT status. The plan included numerous s…
City receives extension to elect bond volume-cap carryforward
A city received an allocation of unused state private activity bond volume cap but failed to file Form 8328 to carry the allocation forward. The allocation was not tied to a specific project, so the c…
Mandatory sick-leave conversion funds a retiree HRA
An employer proposed converting retiring employees' unused sick leave into contributions to a health reimbursement arrangement. Retirees could not receive the converted amounts as cash, and the accoun…
Taxpayer receives extension for real-property debt election
An individual realized cancellation-of-debt income after settling mortgage debt on business real estate. The individual and a tax preparer had discussed electing to exclude qualified real property bus…
Corporation receives extension for IC-DISC election
A domestic corporation was formed to serve as an interest charge domestic international sales corporation. Its accounting firm prepared Form 4876-A but recorded the wrong due date, causing the first e…
Missing return attachment does not invalidate section 83(b) election
A service provider bought units in a company and mailed a section 83(b) election to the IRS within 30 days of the transfer. The election contained the required information, but the taxpayer did not at…
Multiemployer plan receives five-year funding amortization extension
A multiemployer pension plan requested an automatic five-year extension for amortizing specified unfunded liabilities. Its actuary certified that without relief the plan would have an accumulated fund…
Multiemployer plan receives five-year funding amortization extension
A multiemployer pension plan requested an automatic five-year extension for amortizing specified unfunded liabilities. Its actuary certified that without relief the plan would have an accumulated fund…
Bank's business-day advice justified IRA rollover waiver
An IRA owner received a distribution when a certificate of deposit matured and asked a bank manager how long she had to complete a rollover. The manager incorrectly told her the deadline was 60 busine…
Foundation's revised scholarship procedures receive advance approval
A private foundation revised a scholarship program after its partner's afterschool program transitioned to a public charter school. Scholarships would cover demonstrated gaps in post-secondary educati…
Foundation's scholarly residency procedures receive advance approval
A private foundation proposed offering noncash scholarly residencies at a house it owned. Scholars, professionals, and others working in environmental science, conservation, education, or cultural and…
Foundation's individual project-grant procedures receive advance approval
A private foundation proposed grants to accomplished or promising scholars and practitioners for travel, study, and projects supporting its charitable priorities. Grant opportunities would be publiciz…
Foundation's high-school and college scholarship procedures receive approval
A private foundation proposed need-based scholarships for graduating high-school students and current or prospective college and graduate students in one state. Applicants had to meet academic, reside…
Inactive business league loses section 501(c)(6) status
A notary-related organization had been recognized as exempt under section 501(c)(6), but the IRS could not verify that it still operated as a business league. Examination letters were undeliverable, t…
Organization loses section 501(c)(3) status for blocking examination
The IRS repeatedly tried to examine an organization's Form 990 and supporting records. Its president acknowledged some correspondence and agreed to appointments, but the organization produced no docum…
Voluntary-repatriation organization denied charitable status
An organization sought recognition as a charity for a program that would pay travel and related costs for undocumented immigrants who voluntarily returned to their home countries. It also intended to …
Foundation receives extension for corpus-distribution elections
A private nonoperating foundation received most of its annual funding from another private foundation and needed to use prior excess qualifying distributions to satisfy redistribution obligations. Its…
Governmental plan transfer qualifies as direct rollover
A county proposed allowing former employees to make a one-time election to move their account balances from its governmental defined contribution plan to its governmental defined benefit plan. The rec…
Medical reimbursements are excluded and disability payments avoid payroll tax
A bankruptcy settlement funded a tax-exempt employee benefit association that established a health reimbursement arrangement and a disability plan for former employees with long-term disabilities. The…
Insurance investment portfolios may elect partnership status
A consolidated group proposed having several segregated portfolios of a mutual fund elect partnership classification. The portfolios supported variable life insurance and annuity contracts, and their …
Consolidated group receives more time to waive loss carryback
A parent corporation intended to elect to relinquish the entire carryback period for its consolidated group's net operating loss, but a valid election was not included with the timely filed return. Th…
Corporation receives more time to elect IC-DISC status
A domestic corporation was formed to operate as an interest charge domestic international sales corporation, but its Form 4876-A election was not filed for its first taxable year. The filing failure r…
Corporate group receives more time for consolidated return election
A parent and its subsidiaries failed to make a timely election to file a consolidated federal income tax return, although the group later filed the consolidated return. The IRS found that the parent r…
Entity may change classification during 60-month restriction
An eligible foreign entity had elected corporate tax classification and later underwent a change of more than 50 percent of its ownership. It asked to change to disregarded-entity status before the no…
Entity may change classification during 60-month restriction
An eligible foreign entity had elected corporate tax classification and later underwent a change of more than 50 percent of its ownership. It asked to change to disregarded-entity status before the no…
Entity may change classification during 60-month restriction
An eligible foreign entity had elected corporate tax classification and later underwent a change of more than 50 percent of its ownership. It asked to change to disregarded-entity status before the no…
Trust may use a three-year average for its unitrust payment
A trust that was irrevocable before September 25, 1985 had previously converted its income distributions to a unitrust amount. The trustee proposed changing the calculation from the prior year's asset…
Foreign entity receives late partnership election relief
A foreign eligible entity owned by five individuals intended to be classified as a partnership from its formation date but did not timely file Form 8832. It asked the IRS for an extension under the re…
Foreign entity receives late disregarded-entity election relief
A foreign eligible entity with one shareholder intended to be treated as a disregarded entity but inadvertently missed the deadline to file Form 8832. It represented that it acted reasonably and in go…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
Foreign entity receives late disregarded-entity election relief
A single-owner foreign eligible entity failed to timely file Form 8832 for disregarded-entity treatment. Its owner had consistently filed personal U.S. tax returns intending that treatment, and the en…
S corporation receives inadvertent termination relief
An S corporation shareholder transferred stock to a charitable remainder unitrust, which was not an eligible S corporation shareholder. That transfer terminated the corporation's S election, but the c…
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.