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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Science, engineering, and teaching scholarships receive approval
A private foundation proposed scholarships for graduates of a specified school who planned to major in science, engineering, or teaching. Candidates would be ranked using academic information…
County student scholarship procedures receive approval
A private foundation proposed scholarships for financially needy residents of a specified county, with preference for students of high school, college, or professional school age. A vendor would…
Vocational and college scholarship procedures receive approval
A private foundation proposed scholarships for graduates of a specified school attending vocational or technical programs or pursuing four-year degrees. Applicants needed at least a 2.0 grade point…
Foundation's feeder-fund investment avoids private-foundation excise taxes
A private foundation awaiting reinstatement proposed investing all of its donated assets in a foreign feeder corporation that invested through a partnership in diversified fixed securities. One…
Mutual insurer loses exemption after exceeding gross-receipts limits
A mutual property insurer had long held exemption under IRC § 501(c)(15), but its gross receipts exceeded the applicable $600,000 limit in each of two examined years. Although premium income…
Small insurer loses exemption after premium income disappears
A controlled foreign stock insurance company had elected under section 953(d) to be treated as a domestic corporation and received exemption under section 501(c)(15). After a related business…
Mutual malpractice insurer loses exemption under premium-income tests
A mutual trust provided excess malpractice coverage to qualifying physicians. Its gross receipts remained below the general $600,000 ceiling, but premiums did not make up more than 50 percent of…
Foreign savings cooperative denied credit-union exemption
A nonprofit financial cooperative organized under foreign law sought exemption as a credit union under IRC § 501(c)(14). Its governing law and articles allowed it to accept deposits from nonmembers…
Virginia law may impose personal liability after corporate termination
Chief Counsel advised that Virginia law appeared to impose personal liability on a business owner who continued operating beyond ordinary winding-up activities after the corporation was terminated.…
NOL carryback is directly assessable until passive-loss issues remain
Chief Counsel advised that a net operating loss carryback could be directly assessed when it was a purely computational result of partnership losses. NOL carryovers are generally computational…
Extended partnership limitations period keeps at-risk recapture open
Chief Counsel rejected a taxpayer's argument that the assessment period for IRC § 465(e) recapture had expired. The advice stated that IRC § 6229 keeps a partner's limitations period open for…
IRS may seize and sell a chose in action
Chief Counsel advised an IRS employee to rely on the Internal Revenue Manual rather than an earlier Chief Counsel Advice that the email described as incorrect. A chose in action, meaning an…
Recaptured fuel credits create interest-bearing income tax underpayments
A taxpayer claimed refundable fuel credits on its income tax returns under IRC § 34(a)(3), using part of each credit to reduce income tax and receiving the rest as refunds. The IRS planned to…
Late return may trigger three-year refund lookback
Chief Counsel tentatively agreed that a late-filed return could itself serve as a timely refund claim under IRC § 6511(a). Because the claim was filed within three years of the return, the advice…
One Form 872 is sufficient for the taxpayer's limitations extension
Chief Counsel addressed how to extend one taxpayer's assessment limitations period on the facts supplied by the requester. The advice stated that the taxpayer needed to complete only one Form 872.…
Exam must open tier-one TEFRA proceeding to dispute partnership items
Chief Counsel advised that Exam could not challenge tier-one partnership items reported on the Schedule K-1 that tier one issued to a tier-two partnership. Tier two had used those items to calculate…
Foreign disregarded entity's interest payment is U.S.-source income
A foreign disregarded entity wholly owned by a U.S. corporation paid interest to a foreign controlled corporation. Because the payor was disregarded for federal tax purposes, its activities were…
Use a summons after noncompliance with a section 6333 demand
Chief Counsel compared an IRC § 6333 demand for books and records with the IRS summons process. Unlike the summons provisions, § 6333 does not expressly provide a judicial enforcement mechanism.…
TSP will pay vested balance in response to IRS levy
Chief Counsel addressed a proposed levy on a Thrift Savings Plan account. New Federal Retirement Thrift Investment Board regulations provided that the plan would pay the vested account balance in…
Calendar year nearest 52-53 week year-end controls W-2 wage limit
A corporation used a 52-53 week tax year ending on the last Saturday in December and asked which calendar year's Forms W-2 counted toward the former domestic production deduction's wage limit. Some…
Trust receives extra time to allocate GST exemption after ETIP
A decedent created a grantor retained income trust that was subject to an estate tax inclusion period (ETIP). The tax adviser correctly did not allocate generation-skipping transfer exemption when…
LLC payments remain reportable absent a corporate election
A taxpayer argued that payments to limited liability companies were exempt from IRC § 6041 information reporting and therefore did not require backup withholding under IRC § 3406. Chief Counsel…
Shareholders may make retroactive QEF elections for PFICs
Married U.S. shareholders acquired interests in 14 foreign corporations that were passive foreign investment companies (PFICs). Their accounting firm initially failed to identify the companies as…
Refinancing loans qualify under student loan bond program
A state authority planned to issue bonds to refinance its existing tax-exempt bonds and use the proceeds to consolidate student loans for current borrowers. The original loans were made under a…
Corporation may make retroactive QEF elections for five PFICs
A U.S. corporation indirectly owned interests in five foreign corporations through a partnership. Its internal tax department failed to identify the foreign corporations as passive foreign…
Late Form 1128 is treated as timely filed
A taxpayer filed Form 1128 late when seeking to change from a calendar tax year to a tax year ending January 31. The IRS found that the taxpayer acted reasonably and in good faith and that relief…
Estate receives more time to file Form 8939 for 2010 decedent
The executrix of an estate for a decedent who died in 2010 relied on a tax professional for advice about Form 8939. The form, which elects the modified carryover basis rules of IRC § 1022 and…
Elective cash and stock REIT distributions fall under sections 301 and 305
A corporation planned to elect REIT status and distribute its accumulated pre-REIT earnings and profits before the end of its first REIT tax year. Shareholders could choose cash, stock, or both, but…
Taxpayer receives more time for tax-exempt controlled entity election
A tax-exempt entity wholly owned a taxpayer that was a partner in a low-income housing partnership. The taxpayer intended to elect under IRC § 168(h)(6)(F)(ii) not to be treated as tax-exempt for…
Foreign entity receives more time for disregarded entity election
A foreign eligible entity with one owner failed to file Form 8832 on time to elect disregarded entity status. The IRS found that the entity met the standards for discretionary relief under Treas.…
Taxpayer receives more time for success-based fee safe harbor election
A corporate taxpayer paid an investment bank a success-based fee for an acquisition. Its return capitalized 30 percent of the fee and treated 70 percent as a start-up expenditure, consistent with…
Taxpayer receives more time for success-fee elections on two acquisitions
A corporate group paid success-based investment banking fees for two acquisitions. Its return deducted 70 percent of each fee and capitalized 30 percent, consistent with the safe harbor in Rev.…
GST exemption applies automatically and marital trust may be divided
An estate made a reverse QTIP election for a marital trust but expressly allocated only part of the decedent’s GST exemption to a different bypass trust. The IRS ruled that the remaining GST…
Donors receive more time to allocate GST exemption to trust
Two donors created and funded a trust for their descendants, but their accountant failed to allocate GST exemption on their gift tax returns. The mistake was found later, before any…
Medical emergency supports late Form 8939 relief
An executor suffered a medical emergency, was hospitalized before the Form 8939 deadline, and did not return to work until after that deadline. The executor later filed the form to elect the…
Taxpayer receives more time for real property debt exclusion election
A partner received cancellation-of-debt income through an LLC that owned a commercial building. The partner represented that the income was eligible for the qualified real property business…
Group may make late elections out of bonus depreciation
An affiliated group did not claim additional first-year depreciation for any class of qualified property placed in service during two tax years. Its consolidated returns reflected that treatment,…
Corporation receives late S election relief
A newly formed corporation intended to be treated as an S corporation from its formation date but did not timely file Form 2553. The IRS found reasonable cause for the late election and granted…
Estate may sever marital trust and complete QTIP and GST elections
A decedent’s trust authorized partial QTIP treatment and separate GST planning, but the estate’s return mistakenly treated the entire marital trust as not subject to a QTIP election and omitted…
Late QSST election preserves S corporation status
An S corporation’s shares were transferred to a trust that was eligible to be a qualified subchapter S trust, but the beneficiary did not timely make the QSST election. The omission terminated the…
Nuclear decommissioning costs qualify, subject to pre-1984 carryback limit
An energy company incurred deductible costs for permanently retired nuclear fuel, systems, and components during plant outages. The IRS ruled that qualifying removal, storage, monitoring,…
Bankruptcy trust qualifies as a settlement fund
A bankruptcy plan created a trust to satisfy a group of creditors’ claims arising from an asset sale and related service obligations. The trust received interests in a separate liquidating trust,…
Supplier participation payments need not be capitalized as intangibles
A manufacturer paid participation amounts to obtain exclusive supplier status for components of a new product. The customer did not guarantee any orders, quantities, fixed prices, or development…
RIC receives more time for PFIC mark-to-market election
A regulated investment company purchased publicly traded shares of a passive foreign investment company. An accounting firm identified the PFIC, but the adviser preparing the fund’s tax return…
Cooperative may freeze trustee deferred compensation plan
A tax-exempt cooperative maintained a nonelective deferred compensation plan for trustees who served as independent contractors and completed an initial service requirement. It proposed freezing…
Recovery equipment is excluded from heavy truck excise tax base
A manufacturer sold heavy recovery vehicles that were subject to the retail excise tax under IRC § 4051. It asked whether amounts charged for installed boom assemblies, winches, outriggers, a…
Financial institution error justifies late rollover of withheld amount
A retirement plan participant instructed the plan’s financial institution to transfer his full account balance directly to a Roth IRA. The institution instead withheld state and federal taxes from…
Multiemployer plan receives five-year funding amortization extension
A multiemployer plan requested the automatic extension permitted for amortizing specified unfunded liabilities. The plan submitted the required actuarial certification that it otherwise faced a…
Impermissible SIMPLE IRA transfer may be recharacterized
A taxpayer relied on a financial adviser’s recommendation to combine a traditional IRA with her SIMPLE IRA. The custodian of both accounts transferred the traditional IRA into the SIMPLE IRA even…
IRA rollover waiver denied after missed valuation requirement
An IRA custodian treated property as distributed after the taxpayer failed to provide the annual valuation required to maintain the account. The taxpayer said he learned of the distribution only…
Multiemployer plan receives five-year funding amortization extension
A multiemployer plan requested the automatic extension permitted for amortizing specified unfunded liabilities. The plan submitted the required actuarial certification that it otherwise faced a…
IRA securities were timely rolled over based on actual distribution date
An IRA custodian reported that two securities were distributed on September 12, but its own records showed that the actual distribution occurred on November 20. After difficulties retitling the…
Missing rollover notice supports waiver for taxable plan amount
A retiree received a lump-sum distribution containing both after-tax and taxable plan amounts. She intended to roll over the taxable portion but miscalculated it because the plan did not provide the…
Missing notice supports waiver for unexpected plan distribution
A retiree believed she had already received and directly rolled over her full plan benefit. The next year, she unexpectedly received an additional distribution that was deposited into a non-IRA…
IRA ownership of gold trust shares is not a collectible acquisition
A sponsor asked whether an IRA or an individually directed qualified-plan account could buy shares of a grantor trust whose main asset was physical gold. The IRS ruled that buying and holding the…
Charity’s exemption revoked for private benefit and investor tax schemes
The IRS revoked a housing organization’s tax exemption retroactively to January 1, 2006. Although the organization operated low-income housing and provided community services, the IRS found that a…
IRS denies exemption to residential construction company operating commercially
A nonprofit residential construction company sought exemption under IRC § 501(c)(3). It performed most of its work for other nonprofits through competitive bidding, charged fees designed to cover…
Employer-related scholarship procedures receive advance approval
A private foundation asked the IRS to approve procedures for scholarships benefiting children of employees of affiliated companies. An independent administrator and selection committee would choose…
Merger preserves surviving business league’s exemption
A tax-exempt business league merged with a related social-welfare organization whose membership and advocacy work substantially overlapped with its own. The business league survived, changed its…
Domestication in another state preserves charity’s exemption
A nonprofit corporation planned to change its state of domicile by filing articles of domestication in a second state and a certificate of conversion in its original state. Both states’ laws treated…
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.