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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Table-and-chair rental organization lost its social welfare exemption
An organization recognized under section 501(c)(4) rented tables and chairs to individuals and organizations at fixed rates. The rentals were its only activity and its only source of income,…
Preparer penalty examination could begin before the underlying return examination ended
Chief Counsel considered when the IRS could begin examining return-preparer penalties under sections 6694 and 6695 while the underlying taxpayer's return remained under examination. The three-year…
Improperly signed partnership return was invalid but did not control a partner's assessment period
A limited liability company's Form 1065 was signed with the name of a foreign entity, apparently by someone other than a partner or member manager. Chief Counsel advised that the form was not a…
Nonprofit home-financing LLC was excluded from taxable mortgage pool treatment
Two section 501(c)(3) organizations used a nonprofit limited liability company to finance home loans for low- and moderate-income borrowers in communities needing stabilization. The LLC proposed…
Inflation-swap income qualified for a regulated investment company's income test
A regulated investment company proposed using swaps tied to the Consumer Price Index to reduce inflation risk on mutual-fund shares and non-inflation-indexed bonds. The fund represented that the…
Corporation received relief for a late S corporation election
A corporation and its sole shareholder intended the corporation to be an S corporation from a specified date, but its Form 2553 was not filed on time. The IRS found reasonable cause for the late…
Limited appointment of grandfathered trust assets did not trigger generation-skipping tax
A beneficiary proposed using a testamentary special power of appointment over a trust that became irrevocable before September 25, 1985. The appointment would divide the assets into successor trusts…
Consolidated group received more time to make a unified loss rule election
A consolidated group failed to timely elect under Treas. Reg. § 1.1502-36(d)(6)(i)(A) to reduce the basis of subsidiary stock after a restructuring and loss-share transfer. The parent showed that it…
Parent received more time to elect a subsidiary stock basis reduction
A consolidated group missed the deadline to elect under Treas. Reg. § 1.1502-36(d)(6)(i)(A) to reduce its basis in transferred loss shares of subsidiary stock. The parent showed that it reasonably…
Single-owner LLC received more time to elect corporate tax classification
A domestic single-owner limited liability company intended to be treated as an association taxable as a corporation from the date it registered to do business in another state. Because of…
Corporation preserved S status after missed QSST elections
An S corporation's stock was held through grantor trusts and later successor trusts whose beneficiaries failed to timely make qualified subchapter S trust elections. Those failures made the original…
Tax-exempt controlled entity received more time to make a depreciation election
A taxable entity owned through partnerships by tax-exempt organizations indirectly invested in projects that relied on accelerated depreciation. Its accounting and law firms did not advise it to…
Joint nonprofit housing program's financing LLC avoided taxable mortgage pool status
Two section 501(c)(3) organizations formed a nonprofit limited liability company to issue multiple-maturity notes secured by home loans to low- and moderate-income borrowers. The loans supported…
Mistaken pension overcontribution could return without reversion excise tax
An employer contributed money to fully fund the standard termination of its defined benefit pension plan but mistakenly omitted a plan money-market account when measuring existing assets. After all…
Limited lump-sum window for current annuitants did not violate required distribution rules
A company proposed amending two defined benefit pension plans to offer a one-time, 30-to-90-day window in which participants and beneficiaries already receiving annuities could elect a lump sum or…
S corporation distributions to employee stock plan were not annual additions
An S corporation was wholly owned by its employee stock ownership plan and held cash exceeding the board's estimate of reasonable business needs. It proposed making section 1368(a) shareholder…
Taxpayer received an IRA rollover waiver after relying on a financial advisor
A taxpayer withdrew money from an individual retirement account after a financial advisor said it would be invested in another tax-qualified retirement plan. Months later, the taxpayer discovered…
Political advertising and polling prevented social welfare exemption
An organization sought exemption under section 501(c)(4) for activities described as public education on issues including climate change, health care, and food policy. Most of its program-service…
Residual mortgage interests did not make holding company a securities dealer or trader
A holding company owned residual interests in trusts backed by mortgage loans and claimed that loan modifications by a subservicer made it a securities dealer entitled to mark the loans to market.…
Taxpayer received more time to file the national-office copy of Form 3115
A taxpayer and five subsidiaries timely attached the original Form 3115 to their consolidated return and reflected a change in accounting method for software-development costs qualifying as research…
Taxpayer received more time to elect the success-based-fee safe harbor
A holding company paid an investment bank a success-based fee when it was acquired in a merger. It intended to use the safe harbor that permits 70 percent of such a fee to be deducted and requires…
Nineteen foreign subsidiaries received more time to elect disregarded status
A taxpayer requested late entity-classification elections for 19 foreign subsidiaries. Each subsidiary was eligible to elect its federal tax classification but had failed to timely file Form 8832…
Investors received consent to make a retroactive QEF election
U.S. taxpayers owned shares of a foreign corporation that was a passive foreign investment company. They gave their longtime tax preparer the relevant information and mentioned the shares, but the…
Estate substantially complied with GST exemption allocation requirements
A decedent left three fixed-dollar bequests to skip persons and divided the residuary estate between a GST trust and a non-GST trust. The estate timely filed Form 706, but its accountant made a…
Late QSST elections did not end the corporation's S status
Shares of an S corporation were held by three grantor trusts. When the grantor stopped being treated as the trusts' owner, each trust was eligible to become a qualified subchapter S trust, but its…
Family business split-up qualified for nonrecognition treatment
Two family shareholder groups disagreed about the management and direction of a closely held operating company. A parent first proposed to give equal portions of stock to members of the two groups.…
Data-center services and foreign inclusions qualified for the REIT income tests
A real estate investment trust owned and leased data centers where tenants connected their equipment to telecommunications carriers and sometimes used basic on-site support. The IRS ruled that…
Business separation qualified for tax-deferred reorganization treatment
A public company operating two businesses proposed to place one business and related entities, instruments, and debt in a newly formed controlled corporation. The controlled corporation would borrow…
Life insurance transfer between grantor trusts avoided the transfer-for-value rule
A married couple owned a grantor trust holding life insurance policies on their joint lives and on one spouse. A separate grantor trust owned by the other spouse proposed to buy the policies so that…
Shareholder received consent to make a retroactive QEF election
A U.S. individual bought shares of a foreign corporation over several years and later sold them. The individual's longtime accountant knew about the shares but did not identify the corporation as a…
Foreign entity received more time to elect disregarded status
A foreign entity with one shareholder intended to elect disregarded-entity treatment but inadvertently failed to file Form 8832 on time. Based on the submitted information and representations, the…
Three foreign-subsidiary distributions received nonrecognition treatment
A U.S. public-company group proposed a multinational restructuring that moved two foreign controlled corporations through several levels of its ownership chain. The plan included three actual or…
Estate received more time to elect the 2010 carryover-basis regime
The executor of an estate for a person who died in 2010 hired a tax professional for estate-tax advice, including whether Form 8939 was required. The executor later sought relief to elect out of the…
Investors received consent for retroactive QEF elections
Taxpayers held shares of a foreign corporation over several years and relied on an accountant for their U.S. tax and filing obligations. After the corporation warned that it was likely a passive…
Consolidated group received more time to elect an extended NOL carryback
A consolidated corporate group incurred a net operating loss eligible for the temporary three-, four-, or five-year carryback election and intended to carry it to an earlier year. The common parent…
Couple received consent for a retroactive QEF election on inherited shares
A married couple inherited a one-third interest in a foreign corporation whose main assets were a family vacation property and a related bank account. The corporation was a passive foreign…
Acquired group could adopt the parent's asset-valuation method
A domestic parent used the alternative tax book value method to value assets when apportioning interest expense. It acquired another consolidated group that had historically used fair market value.…
Credit counseling organization lost exemption for commercial DMP operations
A credit counseling organization had been recognized under section 501(c)(3) to provide financial education, counseling, and budget planning. The examination found that its primary activity had…
IRA rollover deadline was waived after a mistaken stock purchase
A taxpayer directed the custodian of an IRA to wire a distribution to another financial institution to buy its stock. The taxpayer’s instructions stated that the purchase was an IRA investment, and…
Limited pension annuity window did not violate RMD rules
A company proposed amending two defined benefit plans to offer current annuitants a one-time window of 60 to 90 days to change their payment form. Depending on status, eligible individuals could…
Limited lump sum window did not violate pension RMD rules
A company proposed amending five defined benefit plans to offer a one-time lump sum window lasting 60 to 90 days. The offer would cover a broad group of retirees, beneficiaries, and alternate…
Retiree lump sum window did not violate pension RMD rules
A company proposed amending a defined benefit plan to offer a one-time lump sum window lasting 30 to 60 days. The offer would cover broad groups of participants, beneficiaries, and alternate payees,…
Multiple-employer pension lump sum window met RMD rules
A sponsor proposed amending two multiple-employer defined benefit plans to offer a one-time lump sum window lasting 60 to 90 days. The offer would apply to certain retired participants, alternate…
Apartment rent and parking avoided UBIT, but coin laundry did not
A private operating foundation planned to receive a debt-free apartment complex from its grantor and trustee. The IRS ruled that the complex was not a business enterprise subject to the excess…
Photography grant procedures received advance approval
A private foundation proposed an educational grant program focused on photography and related fields. Eligible recipients included photographers, writers, scientists, other professionals, teachers,…
VEBA could cover nonmember affiliate employees and retirees
A voluntary employees' beneficiary association sponsored by a national labor union provided insurance and other welfare benefits to union members. It proposed adding active and retired employees of…
Partnership and partners received 120 days for missed IDC elections
An oil and gas partnership's return preparer overlooked intangible drilling and development costs on the partnership's first return reporting those costs. The partnership therefore missed the…
Partnership and partners received 120 days for missed IDC elections
An oil and gas partnership's return preparer overlooked intangible drilling and development costs on the partnership's first return reporting those costs. The partnership therefore missed the…
Partnership and partners received 120 days for missed IDC elections
An oil and gas partnership's return preparer overlooked intangible drilling and development costs on the partnership's first return reporting those costs. The partnership therefore missed the…
Taxpayer received consent for retroactive QEF election
A U.S. taxpayer bought shares of a foreign corporation over several years and later sold them. The taxpayer's accountant knew about the investment but did not recognize that the corporation might be…
Corporation received 120 days to file late S election
A corporation intended to be treated as an S corporation from its incorporation date but did not timely file the required election. It requested late-election relief under section 1362(b)(5). The…
Taxpayers may make retroactive QEF elections for a foreign corporation
Two taxpayers owned shares of a foreign corporation for several years before learning that it was likely a passive foreign investment company. They had relied on a longtime certified public…
Stock-for-stock split-off qualifies for tax-free treatment
A parent corporation proposed transferring all stock of a wholly owned subsidiary to one shareholder in exchange for part of that shareholder's nonvoting stock in the parent. The parent group and…
Shareholder separation qualifies as a divisive Type D reorganization
Two shareholders disagreed over the management, operation, and growth of a corporation's business. To separate them, the corporation proposed forming a controlled corporation, transferring a portion…
Partnership and partners receive extensions for drilling-cost elections
An oil-producing limited liability company taxed as a partnership incurred intangible drilling and development costs for the first time. Its return preparer overlooked those costs, so the…
Semiconductor manufacturer receives extensions for two missed tax elections
A semiconductor manufacturer intended to opt out of additional first-year depreciation for all classes of qualified property placed in service during a tax year. It also intended to elect under IRC…
Estate receives extension to allocate GST exemption to early trust transfers
A decedent created an irrevocable trust for his daughter and grandson and transferred property to it each year for seventeen years. His tax professional did not advise him to file gift tax returns…
Foreign subsidiary receives extension for disregarded-entity election
A company owned a foreign subsidiary that was eligible to elect disregarded-entity status for federal tax purposes. The owner intended that classification to take effect when the subsidiary was…
Corporate separation qualifies as a tax-free Type D reorganization and spin-off
A corporate group operated two active businesses and wanted to separate them so one business could raise capital and avoid exposure to environmental liabilities associated with the other. The parent…
Administrative trust changes preserve grandfathered GST tax exemption
Two trusts became irrevocable before September 25, 1985, and no later additions were made to them, so they were exempt from generation-skipping transfer tax. The trusts proposed adding a family…
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.