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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Company receives 45 days to complete success-fee safe-harbor election
A consolidated corporate group incurred success-based investment-banking fees in two taxable stock acquisitions. Its original return deducted 70 percent of the fees and capitalized 30 percent,…
Consolidated group receives 60 days for extended NOL carryback election
A consolidated corporate group failed to elect the temporary three-, four-, or five-year carryback period for a consolidated net operating loss after relying on a tax professional. The IRS found…
Utility must reflect depreciation-driven NOL carryover in rate base
A regulated electric utility used accelerated tax depreciation and expected a net operating loss carryover, which meant part of its accumulated deferred income tax balance had not yet produced…
Foreign entity receives 120 days for late disregarded-entity election
A single-owner foreign eligible entity intended to be treated as disregarded from its formation date but failed to file Form 8832 on time. The IRS concluded that the entity satisfied the standards…
Taxpayer receives 120 days to stop automatic GST exemption allocations
A taxpayer created a grantor retained annuity trust and three related trusts for the taxpayer's children and descendants. The taxpayer intended not to allocate generation-skipping transfer tax…
IRA penalty waived, but annuities use different life expectancies
An IRA owner's longtime friend inherited interests in several annuities after litigation with other claimed beneficiaries froze the account and delayed required minimum distributions. The IRS found…
Couple receives rollover relief after receiver mislabels IRA refunds
A married couple held both IRA and non-IRA investments with a financial institution that the Securities and Exchange Commission determined was a Ponzi scheme. A court-appointed receiver later…
Misleading distribution form leads to 60-day IRA rollover relief
An IRA owner asked the custodian to issue a check so she could roll the entire balance into an IRA at a local bank. The custodian instead used a confusing distribution form to open a non-IRA…
Custodian's confusing form leads to 60-day IRA rollover relief
An IRA owner asked the custodian to issue a check so he could roll the entire balance into an IRA at a local bank. The custodian instead used a confusing distribution form to open a non-IRA account,…
Home-purchase bridge loan does not justify late IRA rollover
An IRA owner withdrew funds to use as a short-term loan for buying a new home, intending to replace them after selling other property. She completed only a partial rollover before the 60-day…
Spouse may roll trust-routed IRA proceeds into her own IRA
A decedent died without naming an IRA beneficiary, so the account passed to his estate and then to a trust under his will. His surviving spouse was the estate's personal representative, the trust's…
Adviser errors placing IRA funds in taxable account receive rollover relief
An IRA owner instructed financial advisers to move his IRA funds into a new rollover IRA that would invest in a global investment fund. The advisers prepared documents identifying the investor as…
Bank's incorrect two-year advice leads to IRA rollover relief
An IRA owner asked a financial institution how long she had to roll a distribution into another IRA. An employee incorrectly told her that she had two years, so she left the money unused in a…
Widow abroad during rollover period receives 60-day relief
A surviving spouse left the United States for family support after her husband's death. While she was abroad, his employer plan distributed his entire benefit to her, and the full 60-day rollover…
IRA penalty waived, but annuity uses another beneficiary's life expectancy
A decedent's former spouse became entitled to part of an IRA annuity after litigation among competing beneficiaries froze the account and delayed required minimum distributions. The IRS found that…
Adviser form error leads to rollover relief for withheld tax
An IRA owner asked an investment adviser to move funds from an annuity back into the IRA. The adviser completed a distribution form but failed to mark the sections requesting a direct transfer and…
Timely authorization fixes contribution date before custodian processing
A non-bank IRA and Coverdell education account custodian accepted irrevocable letters of authorization directing transfers from customers' taxable accounts. Processing could occur after the…
Multiemployer plan receives three conditional funding waivers
A multiemployer pension plan lost more than half its contributing employers, experienced declining work hours, entered critical status, and adopted a rehabilitation plan. The IRS found that at least…
IRS modifies conditions on pension plan amortization extension
A multiemployer pension plan previously received a seven-year extension for amortizing unfunded liabilities from the plan year beginning October 1, 2002. The financial crisis and ensuing recession…
Employer-related scholarship procedures approved
A private foundation proposed nonrenewable undergraduate scholarships for children and grandchildren of a corporation's active employees. An independent administrator and outside volunteer…
Renewable scholarship procedures approved
A private foundation proposed up to four scholarships each year for high school seniors, undergraduate and graduate students, with both new and renewed awards counting toward the limit. Board…
Renewable East Coast scholarship procedures approved
A private foundation proposed renewable scholarships for high school, college, and graduate students attending or planning to attend institutions in states along the East Coast. It expected about…
Community leadership grant procedures approved
A private foundation proposed a three-year educational grant program to develop community leaders working to improve outcomes for vulnerable children. Participants would build individual leadership…
Local senior scholarship procedures approved
A testamentary trust managed by a financial institution funded renewable scholarships for graduating seniors in a specified public school system. A committee of school officials and additional…
Grants to controlled operating foundation may qualify as distributions
A private nonoperating foundation proposed unrestricted start-up and continuing grants to a related private operating foundation devoted to public art and education. The organizations shared family…
Controlled operating-foundation grants may be qualifying distributions
A private nonoperating foundation proposed unrestricted start-up and continuing grants to a related private operating foundation devoted to public art and education. The grantor, the grantor's son,…
IPO spinoff and business contribution receive nonrecognition treatment
A publicly traded parent contributed one business to a controlled domestic subsidiary, which then sold less than 20 percent of its stock in an initial public offering. The parent proposed…
Eligible replacement property may be rematched in like-kind exchange program
A taxpayer operated a high-volume equipment like-kind exchange program using an automated first-in-first-out method to match replacement property with relinquished property. Examination determined…
Future second-injury fund assessments are not unpaid losses
An insurance company estimated its future annual assessments to the federal Longshore and Harbor Workers' Compensation Act second-injury fund and included those estimates in unpaid losses under…
Taxpayer may revoke bonus-depreciation opt-out elections
An LLC taxed as a C corporation had elected on two federal returns not to claim additional first-year depreciation for all classes of qualified property. Its outside preparer made the elections…
Untimely QSST elections and income distributions receive inadvertent-termination relief
An S corporation had three trust shareholders. Separate shares of one trust and a third trust failed to make timely qualified subchapter S trust elections, while a separate share of another QSST…
LLC receives 120 days for late corporate-classification election
A domestic single-member LLC intended from its formation date to be treated as an association taxable as a corporation but failed to timely file Form 8832. The IRS concluded that the entity…
Partnership conversion and subsidiary contribution qualify under section 351
A publicly traded parent proposed converting a domestic partnership holding foreign subsidiaries into a foreign corporation under migration statutes. For federal tax purposes, the conversion would…
Business spinoff with special payment and retained stake qualifies as Type D reorganization
A corporation proposed separating Business B by contributing its operating subsidiary and related assets to a new controlled corporation. The controlled corporation would borrow from unrelated…
Purchaser and sellers receive late section 338(h)(10) election relief
A member of a consolidated group purchased all stock of an S corporation for cash and merged the target into the purchaser. The parent and sellers intended to make a joint section 338(h)(10)…
Legally required charity payments are deductible business expenses
A partnership operating regulated facilities had to satisfy conditions attached to a state certificate in order to continue doing business. When the value of qualifying services fell short of…
Donor receives extension for late GST-exemption allocations
A donor made three cash transfers to an irrevocable trust for descendants, but the accounting firm preparing the gift-tax returns failed to allocate generation-skipping transfer tax exemption to the…
Foreign entity receives late partnership-classification election relief
A foreign eligible entity intended to be treated as a partnership for U.S. federal tax purposes from its formation date but failed to timely file Form 8832. The IRS concluded that the entity…
Donor receives 120 days for late GST-exemption allocations
A donor made three cash transfers to an irrevocable trust for descendants, but the accounting firm preparing the gift-tax returns failed to allocate generation-skipping transfer tax exemption to the…
Care for dying mother-in-law justifies late rollover waiver
A taxpayer received a qualified-plan distribution and intended to roll part of it into an IRA. During the 60-day period, he was the primary caretaker for his mother-in-law as her serious medical…
Mortgage-modification delay does not justify rollover waiver
An IRA owner withdrew funds while pursuing a mortgage modification because she anticipated needing cash to prevent foreclosure. She intended to return any unused amount, but waited until the…
Death before a requested direct rollover supports a deadline waiver
A retirement plan participant requested a direct rollover to another employer plan but died before the rollover was completed. His surviving spouse, acting as the estate's personal representative,…
Improperly titled IRA transfer does not create a spousal election
A surviving spouse was the sole beneficiary of his deceased wife's IRA, but his guardian signed transfer papers as executor of the wife's estate and moved the funds to an account titled for that…
Nursing scholarship procedures receive advance approval
A private foundation proposed annual scholarships for students entering nursing or allied health sciences programs at a specified college. A four-member advisory committee would rank applicants…
Music scholarship procedures receive advance approval
A private foundation proposed renewable scholarships for music students at a specified university. Applicants would need a minimum grade point average, financial need, and evidence of character and…
Utility-assistance grants receive favorable foundation rulings
A private foundation funded a public charity's program that helped elderly, severely disabled, and income-eligible households pay emergency energy expenses. The utility and its parent were…
Founder control and private benefit defeat charitable exemption
A nonprofit formed by a for-profit insurer, a trade association, and an exempt research organization sought recognition under IRC § 501(c)(3) for healthcare research, training, data, and…
Investment managers are not limited partners for self-employment tax
An investment-management LLC treated all of its full-time individual partners as limited partners and excluded their shares of management-fee income from self-employment tax. The partners performed…
Tenant reimbursements are not rent, but some assets require ADS
A building owner received lump-sum reimbursements from a federal agency for tenant improvements beyond amounts amortized through stated rent. Chief Counsel advised that the lease and surrounding…
Late elections may defer low-income housing credit periods
A partnership placed low-income housing buildings in service but inadvertently failed to elect to start their ten-year credit periods in the following year. The IRS found that the partnership met…
Partnership receives more time for a § 754 election
A partnership relied on its tax advisor to make a § 754 election after a partner died, but the advisor inadvertently omitted the election from the partnership's timely return. The partnership…
Late tax-year change application is treated as timely
A corporation filed Form 1128 after the deadline for automatically changing its annual accounting period from a calendar year to a July 31 year-end. It sought discretionary relief under the §…
Pro rata trust divisions preserve GST status and tax attributes
Two irrevocable trusts created before September 25, 1985, held assets for four children and their descendants. The trustee proposed dividing each trust pro rata into four successor trusts so…
Ineligible shareholder causes only an inadvertent S termination
An S corporation's shareholder sold shares to an ineligible shareholder despite an agreement intended to prevent transfers that could end S status. The buyer later assigned all of the shares to an…
Late IC-DISC election receives a 60-day extension
A corporation was formed solely to operate as an interest charge domestic international sales corporation and believed it had timely mailed Form 4876-A during its first 90 days. After filing IC-DISC…
Late success-fee safe-harbor statement may be filed
A taxpayer incurred success-based fees in a corporate sale and reported them using the Rev. Proc. 2011-29 safe harbor, deducting 70 percent and capitalizing 30 percent. Its timely return omitted the…
Late QSST election does not end S corporation status
Shares of an S corporation passed from a deceased shareholder's revocable trust to another trust that was eligible to elect qualified subchapter S trust status. The beneficiary did not make the QSST…
Utility normalization must reflect depreciation-related NOLs
A regulated utility used accelerated tax depreciation while net operating losses prevented some of the associated tax benefits from actually deferring tax. For ratemaking, the utility used a…
Utility cannot flow through unrealized depreciation tax benefits
A regulated electric utility used accelerated tax depreciation while net operating losses prevented some of the associated tax benefits from currently reducing tax. The utility used a…
Trust reformation confirms a limited appointment power
An irrevocable trust intended to give a beneficiary only a limited testamentary power of appointment, but the agreement failed to expressly exclude appointments to the beneficiary, his estate, or…
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.