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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S corporation election saved after four trusts missed their QSST elections
An S corporation's shares passed, after the original shareholder died, from a grantor trust into four new trusts. Each of those trusts could have qualified to hold S corporation stock as a Qualified S…
S corporation keeps its status despite a nonresident-alien shareholder that made the election invalid
A small corporation elected to be taxed as an S corporation, but the election was never valid because one of its two shareholders was a nonresident alien. Under Code § 1361, an S corporation cannot ha…
Foreign entity gets more time to elect corporate ("check-the-box") tax treatment
A foreign company wanted to be treated as a corporation for U.S. tax purposes. Under the "check-the-box" rules in Treasury Regulation 301.7701-3, an eligible entity can choose its own classification b…
Advance approval of a private foundation's scholarship procedures
A private foundation asked the IRS to pre-approve how it will award college scholarships. This approval matters because a private foundation's grant to an individual for study is normally a "taxable e…
Advance approval of a private foundation's arts fellowship grant procedures
A private foundation asked the IRS to pre-approve how it will hand out fellowship grants to individual artists. This step matters because when a private foundation gives money to an individual for tra…
Business-referral networking club denied 501(c)(6) status
A networking club applied to be recognized as a tax-exempt business league under Section 501(c)(6). Its members are business professionals who meet weekly to swap referrals ("leads"), give short comme…
Members' mutual death-benefit fund denied 501(c)(3) status
A membership organization applied for 501(c)(3) charitable status. Its main activity is pooling premiums paid by members and giving cash to any member who recently loses a close family member (a spous…
501(c)(3) status revoked for private inurement after directors routed donations to personal accounts
The IRS audited a small charity and found that its directors were using the organization to enrich themselves. The organization solicited donations online under its own name and Employer Identificatio…
Green-hydrogen industry alliance denied 501(c)(3) status
An organization formed to advance clean ("green") hydrogen applied for 501(c)(3) charitable status. It raises public awareness of hydrogen as a zero-emission energy source, supports green-energy polic…
501(c)(3) exemption revoked after the organization stopped responding to IRS record requests
The IRS audited a 501(c)(3) organization and asked, repeatedly, for the records that every exempt organization must keep and produce: books showing its receipts, expenditures, and activities. The orga…
Anti-censorship web-tunneling developer denied 501(c)(3) status
An organization that writes software to defeat internet censorship applied for 501(c)(3) charitable status. Its technology lets users reach websites blocked in certain countries through a secure tunne…
Local farmers' market denied 501(c)(6) business-league status
An organization that runs a local farmers' market applied to be recognized as a tax-exempt business league under Section 501(c)(6). It rents space to local farmers and producers (its "vendors," who ar…
Tax-free spin-off/split-off of one business line into a new public company
A publicly traded parent company runs two business lines through a global web of domestic and foreign subsidiaries. For business reasons it wants to separate one line (Business B) from the other (Busi…
Nonprofit-owned housing entity gets late relief to elect out of tax-exempt-entity depreciation treatment
A 501(c)(3) nonprofit created a wholly owned entity (treated as a corporation for tax purposes) to act as general partner in a low-income housing partnership. Because that entity is controlled by a ta…
LLC gets more time to file Form 8996 self-certifying as an Opportunity Zone fund after its accountant never flagged it
An LLC taxed as a partnership was set up to be a Qualified Opportunity Fund (QOF), the vehicle used to defer capital gains by investing in an Opportunity Zone business. To become a QOF, it had to atta…
Late Form 8716 electing a non-calendar tax year for an S corporation is accepted
An S corporation wanted to use a tax year that ends on a date other than the calendar year-end it would otherwise be required to use. Section 444 lets certain pass-through entities make that choice by…
Late Form 8996 self-certifying an Opportunity Zone fund is treated as timely filed
A limited partnership was set up to be a Qualified Opportunity Fund (QOF), the vehicle investors use to defer capital gains by putting money into distressed Opportunity Zones. To become a QOF, an enti…
Surplus from a terminated pension plan can move into two 401(k) plans without triggering the reversion excise tax
A publicly traded company terminated its defined benefit pension plan and, after paying every promised benefit, was left with about $14.4 million in surplus assets. Normally, when leftover pension mon…
Estate gets more time to make a portability election so the surviving spouse can use the unused exclusion
When someone dies, their estate can make a "portability" election so the surviving spouse can use the deceased spouse's unused estate tax exclusion (the DSUE amount). That election is made by filing a…
LLC gets late relief to be treated as a corporation and as an S corporation
A single-member LLC intended to be taxed as a corporation and then elected as an S corporation, both effective the same date. To do that it needed to file the entity-classification election and the S …
LLC gets more time to elect to be disregarded after being acquired by a corporation
An LLC had elected to be an S corporation, which meant it was automatically treated as a corporation (an "association") for tax purposes. A single corporation then bought all of the LLC's units in two…
S corporation keeps its status after three successor trusts miss their ESBT elections
An S corporation's stock was held through a grantor trust set up by a shareholder. When that shareholder died, the trust stopped being a grantor trust but remained an eligible S corporation shareholde…
Foreign entity gets more time to elect to be disregarded from its owner
A U.S. individual formed a foreign entity, which was later transferred to a corporation. By default that foreign entity is treated as a corporation (an "association") for U.S. tax purposes, but the ow…
Estate gets more time to make a portability election so the surviving spouse can use the unused exclusion
When someone dies, their estate can make a "portability" election so the surviving spouse can use the deceased spouse's unused estate tax exclusion (the DSUE amount). That election is made by filing a…
Clean-energy CPACE assessments count as real-property-secured obligations for REMIC purposes
A company holds CPACE assets (Commercial Property Assessed Clean Energy) and plans to package them into a real estate mortgage investment conduit (REMIC). CPACE programs let a commercial property owne…
Policyholders in a mutual-to-stock insurance conversion are treated as receiving and then selling the stock (companion ruling)
This is the companion ruling to a related request, issued the same day to the mutual insurance company (Corp B) rather than the acquirer (Corp A). A publicly traded company wanted to acquire the mutua…
Policyholders in a mutual-to-stock insurance conversion are treated as receiving and then selling the stock
A publicly traded company wanted to acquire a mutual insurance company by having the mutual convert into a stock insurance company. In the actual steps, the newly issued stock would go straight to the…
Two subsidiaries treated as having joined a consolidated return despite missing their Forms 1122
A parent corporation files a single consolidated tax return covering its group of subsidiaries. To join that return, each subsidiary normally files a Form 1122 consenting to be included. Here, after a…
IRS denies 501(c)(3) status to a charity built around paying student athletes for their name, image, and likeness
An organization set up as a Type I supporting organization of a public charity applied for 501(c)(3) status. Its function was to receive donations and coordinate arrangements in which partner charitie…
IRS denies 501(c)(3) status to a member group paying death benefits and scholarships to members' families
An organization applied for 501(c)(3) charitable status using the streamlined Form 1023-EZ. It collected monthly dues from members and, in return, paid death benefits to members' families and one-time…
IRS revokes a private school's 501(c)(3) exemption for failing the operational and recordkeeping tests
This is a final IRS revocation letter (Letter 6337) ending a private religious school's tax-exempt status under § 501(c)(3), along with the audit report (Form 886-A) that explains why. The school had …
Partnership gets more time to file a late Form 1128 to switch to a calendar year
A partnership wanted to change its tax year to a calendar year, which requires filing Form 1128 with its tax return. Its accounting firm timely got an extension to file the return but then missed the …
Extra time granted to elect out of automatic GST exemption allocation on gifts to two trusts
A married taxpayer set up two identical irrevocable trusts, one for each child, and made gifts to them. Gifts to that kind of trust are automatically allocated part of the taxpayer's generation-skippi…
S corporation keeps its status after a shareholder trust misses its QSST election
An S corporation's stock was transferred to a trust. For the trust to be an eligible S corporation shareholder, the beneficiary had to file a qualified subchapter S trust (QSST) election, but that ele…
Extra time granted to elect out of automatic GST exemption allocation on gifts to two trusts
A married taxpayer set up two irrevocable trusts, one for each child, and made gifts to them. Gifts to that kind of trust are automatically allocated part of the taxpayer's generation-skipping transfe…
S corporation keeps its status after a shareholder trust misses its ESBT election
An S corporation had its stock held by a grantor trust. When the trust agreement was changed so the trust stopped being a grantor trust, the trust needed to elect to be an electing small business trus…
IRS approves a foundation's grant program for visual artists who overcame life disruptions
A private foundation asked the IRS to approve, in advance, the procedures for a grant program supporting visual artists in a particular area who returned to making art after significant life disruptio…
90-day extension to file a late IC-DISC election after the IRS had no record of the original
An interest-charge domestic international sales corporation (IC-DISC) is a special entity that can give U.S. exporters a tax benefit, but a company has to elect that status by filing Form 4876-A withi…
75-day extension for an affiliated group to make a late election to file a consolidated return
A group of related corporations can choose to file one combined "consolidated" federal income tax return, with the top company as the common parent. That choice is made by actually filing the consolid…
75-day extension for a consolidated group to elect to waive its NOL carryback period
When a corporate group that files a consolidated return has a net operating loss, the default rule lets it carry that loss back to earlier years, but the group can instead elect to waive the carryback…
120-day extension to file a late check-the-box election treating a foreign entity as disregarded
A foreign entity with a single owner wanted to be treated as a disregarded entity (ignored as separate from its owner) for U.S. federal tax purposes. That requires filing Form 8832, the entity-classif…
Inadvertent S-corporation termination relief after trust beneficiaries missed their QSST elections
An S corporation can lose its tax status if the wrong kind of shareholder holds its stock. A trust can hold S-corporation stock only if it fits an allowed category, and one common route is for the ben…
75-day extension to file a late Section 336(e) election treating a stock sale as an asset sale
When a buyer purchases all the stock of an S corporation, a Section 336(e) election lets the parties treat the stock sale as if it were a sale of the company's assets, which is often better for tax pu…
IRS approves a foundation's medical-school scholarship and research-grant procedures
A private foundation whose charitable focus includes health care and education asked the IRS to approve, in advance, the procedures for two programs: a scholarship program for medical students and a g…
IRS denies 501(c)(3) status to a collector-car hobby club
The IRS denied tax-exempt status under IRC Section 501(c)(3) to a hobby club for owners and enthusiasts of a particular vintage automobile. The club described itself as a registry and social network s…
IRS revokes a 501(c)(3) organization's exemption for failing to respond to an audit
The IRS revoked the tax-exempt status of an organization that had been recognized as a public charity under Section 501(c)(3). Exempt organizations must keep records and let the IRS examine their rece…
IRS denies 501(c)(3) status to a fireworks-display organization
The IRS denied tax-exempt status under IRC Section 501(c)(3) to an organization that describes its mission as promoting "fireworks fun and safety" through education, training, hands-on experience, and…
60-day extension for a fund to make a late mark-to-market election on PFIC stock
U.S. investors in a passive foreign investment company (PFIC) can elect, under Section 1296, to "mark to market" their shares, meaning they report the annual change in value instead of facing the hars…
Five more years granted to a charitable trust to sell excess business holdings in a niche company
Private foundations (and trusts treated like them) generally cannot own more than a small slice of a business, and if a large stake lands in their hands by gift or inheritance they get five years to s…
Late Form 8996 QOF self-certification treated as timely after taxpayer wrongly assumed no filing was due
A limited liability company (taxed as a partnership) was formed to invest in an opportunity zone business and operate as a Qualified Opportunity Fund, or QOF. To become a QOF, an entity must "self-cer…
Support payments under a pre-2019 postnuptial agreement remain taxable alimony despite the TCJA repeal
Before 2019, alimony was taxable to the spouse who received it and deductible by the spouse who paid it. The 2017 Tax Cuts and Jobs Act ended that treatment, but only for divorce or separation instrum…
Inadvertent S-corporation termination relief after trusts missed their ESBT elections
An S corporation's tax status can be lost if the wrong kind of shareholder ends up holding stock. Here, one of the company's shares was held by a trust that counted as an eligible shareholder only bec…
Late Form 8996 self-certification as a Qualified Opportunity Fund treated as timely after preparer's omission
A limited liability company (taxed as a partnership) was set up to operate as a Qualified Opportunity Fund, or QOF, the investment vehicle that lets investors defer capital gains by putting them into …
120-day extension to file a late check-the-box election treating a foreign company as a disregarded entity
A foreign company wanted to be treated as a disregarded entity (ignored as separate from its owner) for U.S. federal tax purposes. To do that it had to file Form 8832, the entity-classification "check…
IRS grants more time to perfect a success-based-fee safe-harbor election
When a business pays a "success-based fee" (an advisor's fee that is owed only if a deal closes), the tax rules presume the whole fee must be capitalized rather than deducted. Revenue Procedure 2011-2…
Advisory fees paid from an annuity's value are not a taxable withdrawal to the owner
A life insurance company plans to sell "adviser" annuity contracts designed to work alongside a customer's investment adviser, who helps the owner allocate the contract's value among investment option…
IRS blesses moving a corporate group's parent from abroad to the U.S. as a tax-free "F" reorganization
A multinational corporate group wanted to move its ultimate parent company's home from a foreign country to the United States, for stated business reasons. It did this through a court-sanctioned restr…
Reducing a utility's stand-alone loss deferred tax asset because affiliates paid for the loss would break normalization
This is another ruling in the same normalization series as PLR 202426002 and 202426003, for a regulated electric utility owned by a larger parent group. The utility once had a net operating loss that,…
IRS agrees that excluding a utility's loss-based deferred tax asset from rate base would break normalization
This is the companion ruling to PLR 202426002, for another regulated electric utility owned by the same parent. The dispute is nearly the same, but here the push to strip the utility's stand-alone net…
IRS agrees a utility regulator's rate adjustments would break the depreciation normalization rules
A regulated electric utility asked the IRS to confirm that several ratemaking moves proposed by the state commission's Staff would violate the federal "normalization" rules of Section 168(i)(9). Norma…
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.