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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Partnership received 120 days for late section 754 election
A partnership wanted a section 754 election to apply after one of its partners died. It relied on an adviser to file the election, but the adviser failed to do so with the partnership return. The IRS …
LLC received relief for late corporate and S elections
A single-member limited liability company intended to be treated first as an association taxable as a corporation and then as an S corporation from the same effective date. It failed to timely file bo…
Missed QSST elections did not end S corporation status
Shares of an S corporation remained in one trust and later passed through two more trusts for the same beneficiary, but the beneficiary never filed qualified subchapter S trust elections. Each trust a…
Untimely QSST elections received inadvertent termination relief
Shares of an S corporation stayed in one trust and later moved through two more trusts for the same beneficiary, but the beneficiary did not file qualified subchapter S trust elections. The corporatio…
Closed years preserved gift splitting, later GRAT elections failed
A husband created a family trust for his wife and descendants and several grantor retained annuity trusts whose remainders passed to that family trust. The spouses elected gift splitting and made or r…
Foreign entity received late disregarded-entity election relief
A foreign entity owned by a nonresident alien held real property in the United States and wanted to be treated as disregarded from its formation date. It failed to file Form 8832 on time. The IRS foun…
Debtor restructuring failed Type G reorganization requirements
Chief Counsel considered whether a debtor corporation’s restructuring qualified as a Type G reorganization under section 368(a)(1)(G). No shareholder received consideration, and the debtor’s creditors…
Mistaken non-IRA deposits received rollover deadline waiver
A retirement plan participant elected direct rollovers of distributions from a profit-sharing plan and a defined benefit plan. He mistakenly identified a financial account labeled as a retirement fund…
Adviser and custodian errors justified two rollover waivers
An IRA owner took one distribution after his longtime CPA incorrectly said an earlier rollover was an excess contribution. A financial institution separately ignored his direction to roll another IRA …
Taxpayer with dementia received an IRA rollover deadline waiver
A taxpayer withdrew all funds from an IRA after misunderstanding a letter from the financial institution and deposited the distribution in a non-IRA account. The taxpayer missed the 60-day rollover de…
Community college scholarship procedures receive advance approval
A private foundation proposed scholarships for local residents attending a community college. Eligible students had to live in the community, satisfy the college's admission standards, and enroll for …
Community project grant procedures receive advance approval
A private foundation proposed grants to individuals for projects intended to improve distressed neighborhoods and develop creative, civic, educational, or professional skills. Projects had to be feasi…
Foundation may set aside funds for a public garden expansion
A private foundation devoted to city beautification wanted to expand a public garden into an adjacent parking lot and relocate and rebuild a bandstand used for free concerts. The project required publ…
Animal therapy organization loses exemption for private inurement and lack of exempt activity
A section 501(c)(3) organization previously operated an animal-assisted therapy facility and sold its horse-therapy property to another exempt organization. The IRS found that mortgage proceeds from t…
Common parent's officer must sign power of attorney for subsidiary LLC manager
A non-TEFRA LLC partnership had a corporate member-manager that belonged to a consolidated corporate group. The IRS considered who had to sign Form 2848 to authorize representation of the partnership.…
California waiting-time penalties are not wages for federal employment taxes
California law requires an employer that willfully fails to pay final wages on time to pay a waiting-time penalty based on the employee's daily wage rate for up to 30 days. The IRS concluded that this…
LLC receives more time to elect partnership tax treatment
Two owners formed a limited liability company and intended it to be taxed as a partnership from its formation date. The company did not timely file Form 8832 because of inadvertence. The IRS found tha…
REIT billboard rentals qualify as rents from real property
A real estate investment trust owned outdoor advertising displays and elected to treat qualifying displays as real property under section 1033(g)(3). It rented advertising space for fixed payments and…
State-law dissolution does not end federal corporate status
A corporation was administratively dissolved under state law after failing to file an annual report and pay a state franchise tax. Unaware of the dissolution, it continued operating as a corporation, …
IRA rollover deadline waived after deposit directive error
An IRA owner withdrew funds to change investments and obtain a better rate of return. After subtracting the required minimum distribution, the owner instructed a financial institution to place the rem…
Plan rollover deadline waived after payout paperwork error
A taxpayer intended to make direct rollovers from two retirement plans to an IRA. The financial institution prepared the requests as annuity transfer payouts instead, causing the two amounts to be dis…
Scholarship and internship grant procedures receive advance approval
A private foundation proposed a four-year program for graduating high school seniors who were unlikely to receive enough assistance from conventional sources. Awards would supplement other financial a…
Community college completion scholarship procedures receive approval
A private foundation proposed scholarships to help public community college students complete associate degrees and continue toward bachelor's degrees at four-year institutions. Eligibility depended o…
Student internship grant procedures receive advance approval
A private foundation proposed an internship program connected to its scholarship program but also open to some students who did not qualify for scholarships. Internships at nonprofits, government agen…
Reincorporated business league cannot use predecessor's exemption letter
A business league had been recognized as exempt under section 501(c)(6), then dissolved its original corporation and reincorporated in another state. The new corporation continued substantially the sa…
Seller-funded down payment program loses charitable exemption
A tax-exempt organization operated a down payment assistance program that gave buyers funds while requiring participating home sellers to pay the same amount plus an administrative fee. Although its e…
LLC receives more time to make REIT election
An LLC intended from its formation to be taxed as a real estate investment trust. Its adviser prepared Form 1120-REIT and a Form 7004 extension request, but heavy filing volume prevented the extension…
Funds receive relief for late RIC and dividend elections
Two series funds intended from inception to qualify as regulated investment companies. Their preparer timely extended the return deadlines and delivered the completed Forms 1120-RIC to the funds' trea…
Discounted stock option triggers section 409A income and additional tax
The IRS advised on the grant date, valuation, and tax consequences of a nonstatutory stock option. The grant date was the date the corporation completed the conditions necessary to create the option, …
Section 754 election does not prevent an accounting method change
A partnership deferred gains, losses, income, and deductions from securities held through basket transactions until the contracts ended. IRS examiners determined that the partnership beneficially owne…
Taxpayer receives more time for a section 362 basis election
A corporate taxpayer transferred built-in-loss assets to a subsidiary in a transaction intended to qualify under section 351. The parties intended to elect under section 362(e)(2)(C) to reduce the tax…
Corporation receives more time to elect IC-DISC status
A domestic corporation was formed to operate as an interest charge domestic international sales corporation, or IC-DISC. Its accounting firm sent Form 4876-A for signature and filing, but a staff tran…
Disability benefits paid to former spouses are taxable
A state retirement system asked whether accidental disability retirement benefits paid to former spouses under domestic relations orders could be excluded from income as workers' compensation. Section…
Parent receives more time for a deconsolidation basis election
A consolidated group parent transferred loss stock of one subsidiary to a related corporation, causing the subsidiary to leave the group. To prevent some or all of the stock-basis reduction otherwise …
Consolidated group receives more time for an extended NOL carryback
A consolidated corporate group incurred a net operating loss during the statutory period eligible for a three-, four-, or five-year carryback election. The parent intended to elect an extended carryba…
Ski lift towers qualify as real property for REIT purposes
A real estate investment trust owned ski resort assets leased to operators and asked whether its ski lift towers counted as real property. Each tower consisted of a concrete foundation, steel tower, t…
Nuclear decommissioning funds retain status through plant transfers
Two utility companies proposed to transfer nuclear plants, related liabilities, and qualified nuclear decommissioning funds to a buyer outside their consolidated group. The IRS ruled that the transfer…
Trust modification preserves generation-skipping tax exemption
A trust created before September 25, 1985, was scheduled to distribute its assets outright to three great-grandchildren. A state court modification instead placed each beneficiary's share in a separat…
Separate beneficiary trusts preserve generation-skipping tax exemption
A trust created before September 25, 1985, was due to distribute its assets outright to two great-grandchildren. A state court modification instead placed each beneficiary's share in a separate trust …
Trust reformation preserves GST exemption and creates no gift
A trust created before September 25, 1985, had ambiguous provisions governing who would receive the remainder if its primary beneficiary had no descendants. A proposed judicial reformation clarified t…
Revenue officer may notify an employer that no wages are levy-exempt
An employer challenged an IRS letter stating that none of an employee's wages were exempt from levy because the letter was signed by a GS-12 revenue officer rather than a district director. Chief Coun…
Financial adviser error qualifies for IRA rollover relief
A taxpayer received an IRA distribution and instructed her financial adviser to place the money in a rollover IRA. The adviser instead deposited it into a non-IRA account without her knowledge, even t…
Charity loses exemption over unsubstantiated overseas payments
A domestic charity primarily sent money to a related foreign organization that operated schools. The IRS found missing checks, wire-transfer records, bank statements, and other documentation for subst…
Bank account superpriority turns on actual knowledge and factual tracing
Chief Counsel discussed the section 6323(b)(10) superpriority for certain deposit-secured loans. The advice states that the priority can defeat a filed federal tax lien when the statutory elements are…
No direct penalty applies to failure to update EIN information
Chief Counsel addressed the requirement that a person issued an employer identification number provide updated application information when required by forms, instructions, or other guidance. The advi…
IRS may abate excessive penalties despite a time-barred tax refund
An amended return showed that a taxpayer's true tax liability was lower than the amount originally reported. Although section 6511 barred refunding the tax because the amended return was late, the pen…
RFRA does not generally bar seizure of church-owned property
Chief Counsel considered whether the Religious Freedom Restoration Act prevents the IRS from seizing property owned by a church. Property not directly used in religious practice, such as residences re…
TAS confidentiality discretion does not block litigation disclosure
Chief Counsel advised that the Taxpayer Advocate Service's discretion to protect information under section 7803(c)(4)(A)(iv) does not apply when the IRS must provide information for litigation. TAS th…
IRS may conform an inconsistent indirect partner return without an FPAA
An indirect partner reported inconsistently with the partnership's Schedule K-1 without filing Form 8082. Chief Counsel advised that both the partner and the IRS were bound by the partnership return a…
Prescribed medical device qualifies for the retail exemption
A manufacturer asked whether a redacted medical device was exempt from the medical device excise tax as a product generally purchased by the public at retail for individual use. The device did not fal…
Refundable-credit penalty requires deficiency procedures
A taxpayer received a refund based partly on an American Opportunity Credit that the IRS later disallowed because scholarships and grants paid all qualified education expenses. Chief Counsel explained…
Foreign mineral agreements are leases rather than sales
An energy company sought to change its treatment of foreign mineral-development agreements from leases to sales. The foreign government owned the minerals in place, permitted development in exchange f…
Laboratory analysis may satisfy refined-coal retesting rules
A taxpayer operated a facility that treated coal with chemical reagents to reduce nitrogen oxide and mercury emissions and sought to claim the section 45 refined-coal credit. It had established qualif…
Laboratory analysis may satisfy refined-coal retesting rules
A taxpayer operated a facility that treated coal with chemical reagents to reduce nitrogen oxide and mercury emissions and sought to claim the section 45 refined-coal credit. It had established qualif…
Subsidiary may use a calendar year within a 52-53 week group
A consolidated group used a 52-53 week taxable year, but one subsidiary wanted to change to a calendar year. The subsidiary owned controlled foreign corporations whose foreign-law partnerships could n…
False assurances about IRA status qualify for rollover relief
A taxpayer directed an IRA distribution into an investment fund after the fund's officer and financial institution assured him that the investment would be held as a new IRA. He raised the tax issue d…
Misdirected custodian notices qualify for rollover relief
A taxpayer inherited an IRA holding interests in a private equity fund. After she moved, the IRA custodian mailed notices to her old address stating that it would stop serving as custodian, then trans…
Mental impairment qualifies for IRA rollover relief
An elderly widow withdrew money from a traditional IRA while experiencing anxiety, clinical depression, and impaired financial judgment. She mistakenly believed the account was a Roth IRA and relied o…
Failed custodian notice qualifies for IRA rollover relief
An IRA custodian resigned and mailed notice to a taxpayer's former address. When she did not respond, the institution transferred the IRA assets to another financial institution, which placed them in …
Employee-relative scholarship procedures receive approval
A private foundation proposed to fund college scholarships for children and other relatives of employees through a public charity's established national scholarship program. Applicants had to achieve …
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.