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 receives 45 days for late real-property debt election
A partner in a shopping-center business was allocated cancellation-of-debt income after the partnership defaulted on a bank loan. The taxpayer's experienced return preparer failed to discuss or make…
Partner receives 45 days for late real-property debt election
A partner in a shopping-center limited liability company was allocated cancellation-of-debt income after the company defaulted on a bank loan. The taxpayer's experienced return preparer overlooked…
Shopping-center partner receives late debt-election relief
A partner in a limited liability company operating a shopping center was allocated cancellation-of-debt income after a loan default. The taxpayer's qualified return preparer failed to advise the…
Foreign entity receives 120 days for late partnership election
A foreign entity with at least two members intended to elect partnership classification effective from its formation date. It inadvertently failed to file Form 8832 within the ordinary election…
Expired QSST grace period causes inadvertent S corporation termination
Three qualified subchapter S trusts held stock in an S corporation for one income beneficiary. After that beneficiary died, the trusts remained permissible shareholders for two years, but became…
Medical-device fabricator is not treated as the excise-tax manufacturer
One company physically produced a taxable medical device for another company under an irrevocable license agreement. The agreement transferred the relevant U.S. intellectual-property rights, gave…
Corporation receives 120 days to file late S election
A corporation intended to be treated as an S corporation from a redacted effective date but did not timely file the required election. The IRS found reasonable cause for the late filing under IRC §…
Passive-income termination treated as inadvertent with corrective conditions
An S corporation had accumulated C corporation earnings and profits and received more than 25 percent of its gross receipts from passive investment income for three consecutive years. Those…
Trust defects and late ESBT elections receive inadvertent-termination relief
An S corporation had multiple trust shareholders whose governing terms or distributions failed the qualified subchapter S trust requirements, while several additional trusts missed…
Rollover waiver denied for taxpayer's paperwork error
A taxpayer intended to roll an entire retirement-plan distribution into an IRA but completed paperwork requesting payment directly to the taxpayer. The plan therefore withheld part of the…
ESOP loan prepayment and share transfer avoid prohibited-transaction treatment
A shareholder sold company stock to an employee stock ownership plan in exchange for a nonrecourse note secured by the acquired shares. Years later, an asset-sale agreement required the company to…
Funding-waiver cases close while section 4971 tax is conditionally waived
A financially distressed private manufacturer had failed to satisfy its pension plan's minimum funding standard for three plan years and sought plan termination through the Pension Benefit Guaranty…
Multiemployer plan funding waivers denied after largest employer withdraws
A multiemployer pension plan sought minimum-funding waivers for three plan years, citing substantial business hardship among several contributing employers. After a conference, the IRS considered…
IRA rollover waiver granted after custodian rejects personal check
A taxpayer withdrew funds from an IRA after being unable to obtain the signature guarantee required for a direct transfer. Nine days before the 60-day deadline, the taxpayer mailed a personal check…
Inherited 403(b) rollover waiver granted after adviser mistake
A surviving spouse inherited a § 403(b) annuity contract and later followed a financial adviser's instructions to surrender it and deposit the proceeds into a non-IRA brokerage account. The adviser…
Rollover waiver granted for mental health impairment
A taxpayer received a lump-sum retirement-plan distribution and deposited it into a non-IRA bank account while deciding where to establish a rollover IRA. Longstanding mental health disorders…
Fee-based foreclosure counselor denied exemption
A nonprofit sought recognition under IRC § 501(c)(3) for foreclosure prevention, loan modification, homeowner advocacy, and credit counseling. The IRS found that its fee-based counseling and…
Retroactive revocation upheld for debt-management marketer
A tax-exempt organization originally represented that it would educate the public about money management and assist predominantly low-income people through information, counseling, and budget…
Nominal hay lease excludes land from investment-return assets
A private foundation owned undeveloped real estate through a disregarded limited liability company. It leased the development site for no more than one dollar per year to a government…
Property acquisition nonprofit denied exemption
A nonprofit proposed acquiring distressed and tax-sale properties, maintaining them, and transferring them at cost or significantly reduced prices to developers that would build or remodel housing.…
Seconded executives do not jeopardize a charity's exempt status
A public charity that sponsors donor advised funds asked whether moving three senior executives onto an associated corporation's payroll and seconding them back would threaten its tax exemption. The…
Partnership items must be resolved before assessment
Chief Counsel advised that a partnership item claimed on a partner's return could be assessed after the item was disallowed in a partnership-level FPAA. Sections 6221 and 6225 require partnership…
Cross-chain stock sale was not a Type D reorganization
A corporate group sold foreign corporation stock across ownership chains and later argued that the transaction was a Type D reorganization that increased its basis in another foreign subsidiary's…
Business separation qualifies as a tax-free spin-off
A corporate group proposed separating three businesses by moving one business into a newly formed controlled corporation and distributing that corporation's stock to the distributing company's…
Related-party share sale defers loss before liquidation
A consolidated corporate group proposed transferring most of a loss corporation's stock to a subsidiary, selling those shares to a related real estate investment trust for preferred stock, and later…
Two-business separation qualifies as a tax-free spin-off
A consolidated corporate group proposed separating two active businesses by transferring one business and related subsidiaries to a controlled corporation and distributing that corporation's stock…
Court-modified trust qualifies as an S corporation shareholder
A trust sought confirmation that it could qualify as a qualified Subchapter S trust and hold stock in a corporation electing S status. The trust originally allowed principal to be distributed during…
Higher reagent rate does not change the refined-coal process
A company operating a leased refined-coal facility asked whether increasing the amount of a chemical reagent applied per ton of coal would count as a change in its production process. The facility…
Optional equipment warranties qualify as insurance
An equipment seller planned to form a subsidiary that would issue optional extended warranties covering repair or replacement of specified parts after the manufacturer's warranty ended. The…
Sludge power plant components qualify for the energy credit
A company planned to build a power plant that would dry and burn sewage sludge to generate electricity for a water district. The plant would consist of a sludge bin, dryer, burner, and turbine…
Parent-company business split qualifies as a tax-free spin-off
A corporation owned by a foreign parent proposed moving one of its two active businesses into a newly formed controlled corporation and distributing the controlled corporation's stock to the foreign…
Estate receives 120 days to opt out of automatic GST allocation
A decedent created an irrevocable trust for three children and their descendants, intending it to last only for a limited period. The accountant who prepared the gift tax return did not realize the…
Foreign entity receives 120 days for late partnership election
A foreign eligible entity failed to timely file Form 8832 electing partnership classification for federal tax purposes. It asked for regulatory relief so the election could take effect on the…
Foreign business receives late partnership classification relief
A foreign eligible entity missed the deadline for filing Form 8832 to elect partnership treatment for federal tax purposes. It requested an extension so the classification could apply from its…
Pro rata QTIP trust division preserves QSST and tax treatment
A surviving spouse proposed dividing an irrevocable QTIP trust that held S corporation stock into two equal successor trusts. The assets would be divided pro rata, the spouse would remain trustee…
Public charity classified under the general-support test
An exempt organization that conducted surveys and research on First Amendment issues had previously been classified as publicly supported under § 509(a)(2). During examination, the IRS reviewed its…
IRA rollover waiver denied for transfer to an ineligible custodian
An IRA owner withdrew funds to invest in a private limited partnership that was not qualified to serve as an IRA custodian. The owner said a financial institution and the partnership's administrator…
IRA rollover waiver denied despite third-party assurances
An IRA owner transferred a distribution to a private partnership after receiving assurances that the partnership could manage IRA accounts. The partnership was not a qualified IRA custodian, and the…
IRA rollover waiver denied for self-managed partnership transfer
An IRA owner transferred a distribution to a private partnership that was not qualified to act as an IRA custodian. The owner was the managing member of the entity serving as the partnership's…
Rollover waiver denied after deposit into mislabeled account
A retirement-plan participant intended to roll a distribution into an existing IRA but gave the financial institution the number of a non-IRA account. The participant's spouse had mislabeled that…
Expanded student scholarship and support procedures approved
A private foundation asked for advance approval of expanded procedures for a student-support program that combined scholarships with mentoring, internships, cultural activities, counseling, medical…
Fully collateralized short sales avoid debt-financed income treatment
A private foundation proposed investing in partnership funds that maintained offsetting long and short stock positions. The funds would borrow securities for short sales, use the short-sale cash…
Related foundations may combine assets without Chapter 42 penalties
A charitable trust treated as a private foundation proposed transferring all of its assets and liabilities to a related private foundation controlled by the same family. The IRS ruled that the…
Founder loans and debt cancellation led to exemption revocation
The IRS revoked a foundation's § 501(c)(3) exemption after finding that it no longer operated primarily for charitable purposes and instead served private interests. The examination found that the…
Inactive charity lost exemption after years without Form 990 filings
The IRS revoked an organization's § 501(c)(3) exemption after it had no activities or assets for several years and transferred its remaining assets to another entity. The organization also failed to…
Failure to provide records caused exemption revocation
The IRS revoked an organization's § 501(c)(3) exemption after it repeatedly failed to respond to examination requests or provide records about its receipts, expenditures, and activities. The…
Social club record failures led to proposed exemption revocation
The IRS proposed revoking a social club's § 501(c)(7) exemption because the club allowed public use of its clubhouse and dock but did not keep records separating member from nonmember use or income.…
Seller-funded homebuyer assistance served private real estate interests
The IRS finally revoked a homebuyer-assistance organization's § 501(c)(3) exemption after finding that its seller-funded program primarily served private real estate interests. A grant was made only…
Missing dissolution records led to exemption revocation
The IRS revoked a private foundation's § 501(c)(3) exemption because it did not provide information needed to verify its continued qualification. The foundation reported no activity after donating…
Federal charter controlled HIRE Act credit eligibility
Chief Counsel advised that a congressionally created employer could claim the HIRE Act payroll tax credit because its governing federal statute expressly said it was not a federal instrumentality.…
Confirm pass-through status in partnership analysis
Chief Counsel agreed with a memorandum subject to several edits. It advised calling Form 1065 an information return or partnership return, not a partnership tax return. It also advised confirming…
State law identified the LLC tax matters partner representative
Chief Counsel advised that state law determines who may act for an LLC serving as tax matters partner. The representative must be a current officer or manager under state law, so a former officer or…
Direct partner consents extended the TEFRA assessment period
Chief Counsel advised that the post-2007 Form 872 signed by individual partners satisfied § 6229(b)(3). The IRS did not need a separate consent from the tax matters partner acting as the partners'…
Two-year refund lookback applied to a non-TEFRA claim
Chief Counsel advised that a refund claim was non-TEFRA and could be filed within two years of payment under § 6511(b)(2)(B). The payment could support the claim even though it related to a…
Estate tax lien remedies differed from transferee liability collection
Chief Counsel distinguished collection based on an estate tax lien from collection based on a transferee's personal liability. The IRS could levy property that remained subject to the general §…
Partnership AAR reset the interest-suspension waiting period
Chief Counsel advised that a partnership administrative adjustment request increasing taxable income was a signed document showing additional tax due for § 6404(g). The AAR on Form 1065X was treated…
Multi-step corporate separation qualified for tax-free reorganization treatment
The IRS approved the principal federal income tax consequences of a multinational group's plan to separate two business lines through a long series of internal restructurings and stock…
Ineligible shareholder caused an inadvertent S election termination
An S corporation's election terminated when an ineligible shareholder acquired its stock. The corporation corrected the problem by having that shareholder distribute the shares to eligible…
Ineligible shareholder caused an inadvertent S election termination
An S corporation's election terminated when an ineligible shareholder acquired its stock. The corporation corrected the problem by having that shareholder distribute the shares to eligible…
Consolidated group received 60 days for a missed CNOL carryback election
The common parent of a consolidated group missed the election to use an extended carryback period for a consolidated net operating loss. The IRS found that the parent reasonably relied on a…
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.