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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Corporation receives more time for IC-DISC election
A domestic corporation was formed with the intent to qualify as an interest charge domestic international sales corporation. Its parent relied on an accounting firm to handle the election, but the…
Consolidated group may use tax book value for interest apportionment
A consolidated group historically used tax book value to apportion interest expense. It acquired another consolidated group that had used fair market value, causing the acquired corporations to join…
Foreign annuity reserves may measure a CFC's insurance income
A domestic financial-services group owned controlled foreign corporations that issued payout annuities for foreign pension plans. The foreign insurance regulator required audited annual statements…
Corporation gets extra time to elect IC-DISC status
A corporation was formed to operate as an interest charge domestic international sales corporation and relied on an accounting firm to prepare its Form 4876-A election. The firm mailed the completed…
Corporation receives more time to file its IC-DISC election
A domestic corporation formed to operate as an interest charge domestic international sales corporation failed to file Form 4876-A for its first taxable year. Its owners had relied on a law firm and…
IRS grants 60 days to make a late IC-DISC election
A domestic corporation was formed to operate as an interest charge domestic international sales corporation, or IC-DISC. Its law firm sent it Form 4876-A for signature but inadvertently failed to…
Corporation receives more time to elect IC-DISC status
A domestic corporation intended to be treated as an interest charge domestic international sales corporation from its formation. Its accounting firm failed to prepare or file Form 4876-A because of…
Corporation receives more time to elect IC-DISC status
A domestic corporation was formed to operate as an interest charge domestic international sales corporation. Its law firm said it would organize the entity and prepare Form 4876-A, but it…
Foreign corporation receives more time for branch-profits election
A foreign corporation's timely Form 1120-F calculated branch profits tax consistently with an election to reduce its U.S. liabilities. Its accounting firm omitted the required statement formally…
Corporation received 60 days to make IC-DISC election
A domestic corporation was formed solely to operate as an interest charge domestic international sales corporation. Its accounting and law firms each believed the other had filed Form 4876-A, so the…
IRS permits an early reelection of the foreign earned income exclusion
A taxpayer had elected the foreign earned income exclusion while working in one foreign country, then revoked the election when it was no longer beneficial. Before the normal five-year waiting…
Investment funds receive relief for elections on late-filed returns
Four regulated investment company funds timely extended their returns, but the employees who coordinated filing at the adviser and custodian both left before the extended due date. The unfiled…
Corporation receives 60 days to file late IC-DISC election
A domestic corporation intended to elect interest charge domestic international sales corporation status from its formation. It represented that it mailed a completed Form 4876-A after following an…
Employee may claim foreign tax credit when employer pays the tax
An employer directly paid an employee's foreign income tax liability without withholding that amount from the employee's wages. The IRS advised that the payment is additional compensation taxable to…
Risk-weighted assets usually cannot apportion a foreign bank's support expenses
Chief Counsel considered whether foreign banks may use the relative value of risk-weighted assets to divide supportive expenses between effectively connected U.S. income and other income. The…
Foreign insurer receives more time for domestic corporation election
A regulated foreign insurance company timely filed a section 953(d) election statement with its return, then mailed additional information requested by the IRS. The IRS later reported that it had…
Corporation receives 60-day extension for IC-DISC election
Shareholders formed a corporation intending interest-charge DISC treatment from inception and entered a commission agreement on the formation date. The corporation's Form SS-4 also indicated that it…
Corporation receives 60 days to file its IC-DISC election
A domestic corporation was formed to operate as an interest charge domestic international sales corporation, and its owner timely signed Form 4876-A. The form was never filed because the accounting…
Corporation may make late IC-DISC election
A domestic corporation was formed to operate as an interest charge domestic international sales corporation and filed returns on that basis. It later learned that neither its law firm nor accounting…
Corporation may replace invalid IC-DISC election
A domestic corporation was formed to operate as an interest charge domestic international sales corporation. It timely filed Form 4876-A and later filed IC-DISC returns, but the IRS found that the…
Corporation receives 60 days to file IC-DISC election
A domestic corporation intended to elect interest-charge domestic international sales corporation status from its formation. Its parent relied on an accounting firm to prepare and file Form 4876-A,…
Extension granted for first-year IC-DISC election
A corporation was formed solely to operate as an interest charge domestic international sales corporation, but Form 4876-A was not filed because its CFO, law firm, and accounting firm each believed…
Extension granted after adviser missed IC-DISC election
A corporation was formed solely to operate as an IC-DISC and relied on its law and accounting firms to complete the necessary filings. The corporation was unaware that Form 4876-A was separately…
Corporation received 60 days to file IC-DISC election
A domestic corporation was formed solely to operate as an interest charge domestic international sales corporation, and it began operating under a commission arrangement with its parent. Its…
Foreign corporation received 60 days for branch-profits-tax waiver
A foreign corporation held an interest in a domestic partnership that sold U.S. real property, creating effectively connected income. The corporation later elected partnership classification, which…
Corporation receives 60 days for late IC-DISC election
A domestic corporation was formed solely to operate as an interest charge domestic international sales corporation. Its law and accounting firms each mistakenly believed the other had filed Form…
Nonresident gambler losses and session netting addressed
Chief Counsel discussed casino player-card records used by a nonresident alien gambler to calculate gains. Unless the gambler was a professional or used session netting, losses were not taken into…
Late foreign-earned-income election granted
A taxpayer began working for a foreign affiliate abroad but did not timely file Form 2555 or otherwise elect the section 911 foreign-earned-income exclusion. Because Treasury Regulation section…
Late domestic-corporation election granted to insurer
A foreign regulated insurance company intended to elect domestic-corporation treatment under section 953(d). Its accounting firm prepared the election and instructed a management firm to file it,…
Taxpayer may reelect foreign earned income exclusion
A taxpayer living abroad had elected the section 911 foreign earned income exclusion and later revoked that election. The taxpayer requested consent to reelect the exclusion within the period…
Foreign insurer receives 60 days for domestic-corporation election
A regulated foreign insurance company intended to elect domestic-corporation treatment under section 953(d). Its accounting firm prepared the election statement, but a management firm failed to file…
Corporation receives 60 days for late IC-DISC election
A newly formed corporation intended to elect interest charge domestic international sales corporation status from inception. Its law firm and accounting firm each expected the other to file Form…
Late IC-DISC election receives relief
A domestic corporation was formed solely to operate as an interest charge domestic international sales corporation and entered into a commission agreement consistent with that intent. Its chief…
Late IC-DISC election granted after incomplete filing
A newly formed domestic corporation intended to operate as an interest charge domestic international sales corporation from its formation date. It mailed Form 4876-A within the 90-day period, but…
Late IC-DISC election received a 60-day extension
A newly formed domestic corporation intended to elect interest charge DISC status from its inception and relied on outside counsel to prepare and file Form 4876-A. Counsel sent the form and received…
Processing limit still applies to agricultural commodities
A controlled foreign corporation bought an agricultural raw material, had a related foreign corporation manufacture a finished product, and sold the product to a related U.S. corporation. The…
Corporation receives extension for IC-DISC election
A domestic corporation was formed to serve as an interest charge domestic international sales corporation. Its accounting firm prepared Form 4876-A but recorded the wrong due date, causing the first…
Corporation receives more time to elect IC-DISC status
A domestic corporation was formed to operate as an interest charge domestic international sales corporation, but its Form 4876-A election was not filed for its first taxable year. The filing failure…
Corporation receives more time to elect IC-DISC status
A domestic corporation was formed to operate as an interest charge domestic international sales corporation, or IC-DISC. Its accounting firm sent Form 4876-A for signature and filing, but a staff…
Corporation receives late IC-DISC election relief
Two shareholders formed a corporation intending it to operate as an interest-charge domestic international sales corporation. Their accounting firm accepted responsibility for the federal filings…
Taxpayer may reelect the foreign earned income exclusion
An individual elected the section 911 foreign earned income exclusion while working in one foreign country. After moving to a second country with a higher individual income tax rate, the taxpayer…
One 60-day CFC loan defeats the short-term obligation exception for all loans
A controlled foreign corporation made several loans to its U.S. parent during one tax year. Some loans were repaid within 30 days and together remained outstanding for fewer than 60 days, but…
Corporation receives more time to elect IC-DISC status
A domestic corporation was formed solely to operate as an interest charge domestic international sales corporation but did not file Form 4876-A within its first 90 days. Its accounting adviser…
Corporation receives relief to file a late IC-DISC election
A domestic corporation intended to be treated as an interest charge domestic international sales corporation, or IC-DISC, from its formation. Its attorney agreed to prepare Form 4876-A but later…
Section 882 deduction limit is a partner-level affected item
Chief Counsel advised that the section 882 limitation on deductions is not a partnership item because the partnership does not determine it under subtitle A. It is instead a partner-level affected…
Taxpayer may reelect the foreign earned income exclusion after moving countries
A taxpayer working abroad revoked the section 911 foreign earned income exclusion and instead claimed a credit for taxes paid in a high-tax country. Within five years, the taxpayer’s employer moved…
Move between countries supported foreign income reelection
A taxpayer had elected the section 911 foreign earned income exclusion and later revoked that election. Within five years, the taxpayer's employer moved him from one foreign country to another with…
Late foreign earned income exclusion election allowed
A U.S. citizen worked for a company at several locations in a foreign country. The taxpayer did not timely file Form 2555 or Form 2555-EZ to elect the foreign earned income exclusion under IRC §…
Couple may make late foreign income exclusion election
A married couple filed jointly after the wife worked as a physical therapist providing health care in a foreign country. They did not timely file Form 2555 or Form 2555-EZ to elect the foreign…
Acquired subsidiaries may adopt tax book value for interest allocation
A domestic parent corporation had long used the tax book value method to value assets for allocating and apportioning interest expense. After it merged with another consolidated-group parent, the…
Foreign life insurer may use home-country reserves to measure income
A domestic parent and its controlled foreign life insurer asked to use specified home-country statement reserves to measure insurance income under IRC § 954(i)(4)(B)(ii). The foreign insurer was…
Foreign insurer may use home-country CRVM and annuity reserves
A domestic parent and its controlled foreign life insurer asked to use specified home-country statement reserves to measure insurance income under IRC § 954(i)(4)(B)(ii). The insurer was licensed…
Taxpayer may reelect the foreign earned income exclusion
A U.S. citizen living abroad had elected the foreign earned income exclusion and later revoked that election. Before the normal waiting period for reelection expired, the taxpayer changed employers…
Sochurek test still governs pre-2005 Virgin Islands residency claims
Chief Counsel advised that the 11-factor Sochurek facts-and-circumstances test remained the proper standard for evaluating bona fide U.S. Virgin Islands residence for tax years 2002 through 2004.…
Foreign reinsurer may use regulated statement reserves
A domestic parent asked whether its controlled foreign reinsurance subsidiary could use reserves reported under its home-country insurance rules to measure income under IRC § 954(i). The subsidiary…
Corporation receives more time to elect IC-DISC status
A domestic corporation was formed solely to operate as an interest charge domestic international sales corporation, or IC-DISC. Its accounting and law firms misunderstood which adviser would file…
Offshore fund's U.S. lending and underwriting created a U.S. trade or business
Chief Counsel considered an offshore investment fund whose U.S.-based manager originated loans and underwrote stock distributions on the fund's behalf. The fund actively sought borrowers and…
Restructuring avoids immediate recapture of consolidated foreign loss accounts
A multinational group reorganized overlapping foreign and domestic subsidiaries under a newly formed holding company. A domestic group member first contributed a disregarded entity to the holding…
Corporation receives extra time to elect IC-DISC status
A domestic corporation was formed to operate as an interest charge domestic international sales corporation, or IC-DISC. Its law firm sent Form 4876-A to the related corporation for signature, but…
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…
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.