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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Taxpayer may consent to sharing innocent-spouse records with state
Chief Counsel found no evidence of a proper written request from the head of the California Franchise Tax Board under section 6103(d)(2). It advised instead that the taxpayer could consent under secti…
IRS may abate unpaid tax on newly nontaxable welfare benefits
Chief Counsel advised that the IRS may abate unpaid assessments for years in which legislation deems welfare payments nontaxable. Although taxpayers cannot file formal income-tax abatement claims unde…
Welfare-payment refund claims depend on filing and payment dates
Chief Counsel analyzed refund claims under legislation enacted September 26, 2014. Claims involving returns filed before September 26, 2011 generally may be denied, subject to extensions, unresolved t…
Tribal welfare Act extends claim deadline, not refund lookback
Chief Counsel tentatively concluded that the Tribal General Welfare Exclusion Act applies only to tax years whose section 6511 refund period was still open when the Act was enacted on September 26, 20…
Valid Form 2848 permits communication with representative
Chief Counsel advised that a Form 2848 meeting the procedural requirements is presumed valid until revoked. A suggestion that the taxpayer may have lacked capacity when signing other documents did not…
Entity receives late disregarded-entity election relief
An eligible entity intended to elect disregarded-entity status but failed to file Form 8832 on time. It represented that it acted reasonably and in good faith, did not rely on hindsight, and would not…
LLC receives late corporate classification and S election relief
A limited liability company intended to be taxed as a corporation and as an S corporation from a specified date, but neither Form 8832 nor Form 2553 was timely filed. The company represented that the …
Leveraged forward contract lacks economic substance
Taxpayers bought an interest in a marketed leveraged forward contract pairing a loan with prepaid derivatives designed to make every loan payment. The structure generated current ordinary interest ded…
Financial disability does not toll carryback refund deadline
Chief Counsel advised that section 6511(h)'s financial-disability suspension does not extend the special carryback refund period in section 6511(d)(2). The tolling provision expressly names only the p…
Accounting error is not a bad debt for seven-year refund period
Cash-basis partnerships mistakenly included accounts receivable from their accrual-based internal books as taxable income, overstating income and the partners' outside bases. A partner later sought a …
IRS may separately examine reinsurance recoverable estimate
A property and casualty insurer argued that the IRS could not separately challenge its estimate of uncollectible reinsurance because its combined unpaid-loss and reinsurance amounts were reasonable in…
Government retiree-benefit trust income is excluded under section 115
A political subdivision created a separate trust to fund medical and other post-employment welfare benefits for retirees, eligible spouses, dependents, and beneficiaries. Trust assets may be used only…
Foreign entity receives late partnership classification election relief
A foreign eligible entity with three U.S. individual owners was classified by default as an association and failed to timely elect partnership status before later merging into another foreign entity. …
Deemed plant transfer preserves nuclear decommissioning trusts
A corporate group planned for a disregarded subsidiary to elect corporate status, causing a deemed transfer of interests in two nuclear plants and their qualified decommissioning trusts. The operating…
Late ESBT elections receive inadvertent S termination relief
Shares of an S corporation passed through related corporate reorganizations and were transferred to two trusts. The trusts otherwise qualified as electing small business trusts, but their trustees fai…
Rural telephone cooperative's spectrum gain is patronage income
A taxable rural telephone cooperative bought wireless spectrum intending to use it for expanded telecommunications services to members. It later determined that the spectrum was inadequate, costly to …
Passive-income termination receives conditional S corporation relief
An S corporation had accumulated earnings and profits and received more than 25 percent of its gross receipts from passive investment income for three consecutive years. That combination terminated it…
Late ESBT election receives conditional S termination relief
An S corporation’s shareholder trust became ineligible after shares passed from a grantor trust to a successor trust and no timely electing small business trust election was filed. The IRS found the r…
Cooperative interests qualify as REIT real property
A real estate investment trust planned to acquire membership certificates in a nonprofit mobile-home cooperative together with occupancy agreements granting long-term use of specific home plots. The c…
Late environmental-remediation elections receive relief
A limited partnership incurred environmental-remediation costs while developing a low-income housing project under a state brownfield program. Its tax preparer capitalized the costs and failed to advi…
Easement relocation costs enter housing-credit basis
A partnership developing a low-income apartment building had to relocate a third party’s sign easement before the city would issue building permits for the approved residential design. The IRS conclud…
PFIC look-through rules disregard domestic-group items
A publicly traded foreign pharmaceutical corporation owned a first-tier U.S. subsidiary, which in turn owned another U.S. corporation. The foreign parent irrevocably waived treaty protection against t…
Coordinated trust land sale preserves transfer-tax treatment
Two related, pre-September 25, 1985 trusts jointly owned intermingled farm acreage and proposed a coordinated sale to a partnership owned by a descendant and trust beneficiary. The price was supported…
Coordinated trust land sale preserves transfer-tax treatment
Two related, pre-September 25, 1985 trusts jointly owned intermingled farm acreage and proposed a coordinated sale to a partnership owned by a descendant and trust beneficiary. The price was supported…
Coordinated trust land sale preserves transfer-tax treatment
Two related, pre-September 25, 1985 trusts jointly owned intermingled farm acreage and proposed a coordinated sale to a partnership owned by a descendant and trust beneficiary. The price was supported…
Coordinated trust land sale preserves transfer-tax treatment
Two related, pre-September 25, 1985 trusts jointly owned intermingled farm acreage and proposed a coordinated sale to a partnership owned by a descendant and trust beneficiary. The price was supported…
Hybrid annuity receives detailed ownership and payment rulings
An individual considered buying a deferred annuity combining a general-account fixed component, publicly available mutual funds held through a separate account, and lifetime income benefits after the …
Tribal welfare refund extension does not expand payment lookback
Chief Counsel explained how the Tribal General Welfare Exclusion Act of 2014 affected refund and credit claims. Claims that were still timely when the Act was enacted on September 26, 2014, received u…
Caregiver duties justify late IRA rollover waiver
A taxpayer withdrew funds from an IRA intending to return them within 60 days, but his spouse’s serious medical problems required hospitalization, surgeries, and more than six weeks of around-the-cloc…
Participant’s death supports late plan rollover relief
A plan participant elected a distribution and opened an IRA, but died before the plan issued its checks. The financial institution then refused to deposit the checks into the IRA because of the death,…
Member promotion does not qualify as a business league
A local wedding-industry association limited membership by vendor category, vetted selected businesses, advertised only members, featured weddings involving multiple members, and held a bridal expo th…
Conservation-scientist fellowship procedures are approved
A private foundation proposed a one-year fellowship offering intensive communication, leadership, policy, and management training to conservation scientists in specified regions. Fellows would be sele…
Local college scholarship procedures are approved
A private foundation proposed two years of scholarships for graduating seniors from three local public high schools who had at least a 2.5 grade-point average, qualified for free or reduced-price lunc…
Foundation asset transfer receives broad excise-tax rulings
After a corporate reorganization, one private non-operating foundation transferred cash, stock, two assigned grant commitments, and an endowment grant to a newly created, commonly controlled private f…
Predesignated scholarship beneficiary causes exemption revocation
A private foundation received advance approval for procedures designed to award scholarships to students from a local area. Before the foundation was formed, however, its creator had identified four i…
Inactive pet-support charity loses exemption after changing purpose
A charity was recognized as exempt to help people with AIDS or HIV keep their pets by providing pet food and arranging pet-related care. The IRS found that it had conducted no consistent exempt activi…
Related-company software venture denied exemption for commerciality
An organization sought section 501(c)(3) status to provide grant-writing software, cloud subscriptions, consulting, workshops, and other business assistance to nonprofits and small businesses. It was …
Bankrupt inactive organization loses exemption
An exempt organization had declared Chapter 7 bankruptcy, liquidated all of its assets, and remained inactive for several years. It also forfeited its nonprofit corporate status with its state and gav…
Scholarship charity for related for-profit art school denied exemption
A volunteer organization sought section 501(c)(3) status to fund scholarships, equipment, facilities, and art programs for students at a related private for-profit academy. The academy was started by …
Bankrupt organization loses exemption after withholding records
An exempt organization had declared Chapter 7 bankruptcy and remained inactive for an extended period. It completed the tax filings required in bankruptcy but did not give a position on whether it sho…
Façade-easement organization loses exemption for serving private tax interests
An organization formed to preserve historic properties accepted façade easements arranged by a for-profit tax consulting firm. The IRS found that the organization performed little due diligence, relie…
Three-year periods govern assessment and refund of a preparer penalty
IRS examiners asked about the time limits that apply when a return preparer files an amended return containing a meritless refund position. Chief Counsel advised that section 6696(d) gives the IRS thr…
Corporate group gets more time to complete its consolidated-return election
A corporate parent intended to elect consolidated-return treatment for itself and nine subsidiaries, but a valid election was not filed by the return due date. The parent requested discretionary relie…
Taxpayer may change stock-compensation methods in its cost-sharing arrangement
A domestic corporation and its subsidiary used a cost-sharing arrangement for developing intangibles. The corporation asked to replace the default tax-deduction method for measuring and timing certain…
School district gets more time to spend construction bond proceeds
A public school district issued qualified school construction bonds and expected to spend all available project proceeds within the original three-year period. Unexpected reductions in state funding l…
Refined-coal producer may use range-based laboratory testing for redeterminations
A taxpayer operated a leased facility that treated coal with chemical reagents to reduce nitrogen oxide and mercury emissions. It used full-scale continuous emissions testing and proposed laboratory t…
Insurance-dedicated portfolios may elect partnership status without becoming publicly traded
A business trust maintained 17 separate investment portfolios whose shares supported variable life insurance and annuity contracts. The parent planned for each portfolio to stop being a regulated inve…
Partnership gets 120 days to make a late section 754 election
A limited liability company taxed as a partnership failed to make a section 754 election for the year in which one of its members died. It represented that it had acted reasonably and in good faith an…
Barter-exchange clearinghouse has no separate broker-reporting duty
A clearinghouse operated a marketplace that let members of separate barter exchanges trade with one another using a common trade-credit currency. The ultimate buyers and sellers were members of their …
Hospital pension plan receives a conditional minimum-funding waiver
A nonprofit hospital requested a waiver of the minimum funding standard for its money purchase pension plan after a temporary business hardship. The IRS granted the waiver for the 2007 plan year on th…
Automotive company receives a conditional minimum-funding waiver
An automotive-equipment manufacturer requested a waiver of its pension plan's required minimum contribution after the recession caused a temporary substantial business hardship. The IRS granted the wa…
Child-care nonprofit receives a conditional minimum-funding waiver
A nonprofit child-care provider sought a waiver of its pension plan's minimum funding standard for the 2011 plan year. Major state funding cuts and overspending by inexperienced successor managers lef…
Related foundations may transfer assets, but not qualifying-distribution carryovers
A private foundation transferred cash, publicly traded stock, and two grant commitments to a related private foundation after their corporate sponsor reorganized. The IRS ruled that the transfer would…
VEBA asset transfer preserves the transferor's tax exemption
A voluntary employees' beneficiary association held assets for retiree life insurance and proposed transferring assets to another VEBA to fund retiree medical benefits under the same welfare plan. Eve…
Forfeiture payment under a deferred prosecution agreement is not deductible
A taxpayer made a payment to the government in lieu of criminal or civil forfeiture under a deferred prosecution agreement. Chief Counsel advised that the payment was a fine or similar penalty and the…
Generic correspondence is not subject to the section 6702 penalty
Chief Counsel was asked for legal advice about the section 6702 penalty. The response explained that the Code identifies the kinds of documents subject to that penalty. It advised that generic corresp…
IRS has two years to refund an administrative adjustment request
Chief Counsel advised an IRS campus about the time limit for issuing a refund based on an administrative adjustment request. The IRS has two years from the request's filing date to issue the refund un…
Retiree welfare trust remains collectively bargained and its set-aside income is exempt
A section 501(c)(9) voluntary employees' beneficiary association held assets for health benefits promised to union retirees under a collectively bargained plan. After the employer shut down production…
College scholarship procedures receive advance approval
A non-exempt charitable trust that was also a private foundation requested advance approval for a college scholarship program. Eligible students had to complete two years in specified science or engin…
Large first-time bank grant qualifies as an unusual grant
A publicly supported organization proposed receiving a large cash grant from a bank over five years to develop technology-based services for underserved consumers. The grant was much larger than any p…
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.