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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TAM 200705028: Export-benefit profit groupings must meet deadlines and product-line standards
A manufacturer and its foreign sales corporation amended their returns to increase export tax benefits by regrouping products into market segments. The IRS concluded that the regulatory deadlines…
TAM 200705027: Tribal conduit borrowing remains subject to governmental-function limit
A bond issuer lent proceeds to an Indian tribal government for convention facilities and conference hotels. The issuer argued that the tribe counted as a governmental unit for the private-activity…
PLR 200705026: Commodity-linked note income qualifies for regulated investment company test
A regulated investment company proposed buying two kinds of notes whose payments depended on a commodity index or a basket of commodity futures. The fund asked whether income and gains from the…
PLR 200705025: Greater-of-income-or-five-percent trust payout preserves GST exemption
The trustee and beneficiaries of a grandfathered testamentary trust proposed changing its income payout through a court order. The income beneficiary would receive the greater of net trust income or…
PLR 200705024: Parent receives more time to elect QSub treatment for subsidiary
An S corporation intended to elect qualified subchapter S subsidiary treatment for its wholly owned subsidiary, but the IRS had no record of a timely election. The parent requested additional time…
PLR 200705023: Late QSub election allowed for wholly owned subsidiary
An S corporation intended to elect qualified subchapter S subsidiary treatment for its wholly owned subsidiary but inadvertently missed the filing deadline. It asked for relief allowing the election…
PLR 200705022: S election granted late-filing relief after consistent tax reporting
A corporation and its two shareholders intended S corporation status from incorporation but did not file Form 2553 on time. They represented that their income had been reported consistently with…
PLR 200705021: Missed QSST election receives inadvertent S termination relief
After a shareholder died, S corporation stock passed to a trust whose beneficiary failed to make the required qualified subchapter S trust election. The missed election made the trust an ineligible…
PLR 200705020: Missed trust election does not end S status if corrected
A deceased shareholder's stock passed to a trust whose beneficiary inadvertently missed the qualified subchapter S trust (QSST) election. That omission terminated the corporation's S election…
PLR 200705019: REIT may disregard rent income that would be counted twice
A real estate investment trust owned an interest in a partnership that leased a building and subleased office space to unrelated tenants. The partnership proposed buying an interest in its landlord,…
PLR 200705018: Late QSST election may restore S treatment after inherited stock transfer
A shareholder died and left S corporation stock to a trust. The trust's beneficiary inadvertently failed to make the qualified subchapter S trust (QSST) election, making the trust an ineligible…
PLR 200705017: Later stock offering and restructuring leave prior ruling intact
A parent corporation requested a supplement to an earlier ruling covering reorganizations under section 368 and an exchange under section 351. After those transactions, it removed stock-transfer…
PLR 200705016: Pro rata business spin-off qualifies for nonrecognition treatment
A publicly traded holding company proposed separating one business from its other businesses by distributing its subsidiary's voting stock pro rata to shareholders. The subsidiary had already…
PLR 200705015: S status preserved after inadvertent issuance to nonresident aliens
An S corporation issued stock to nonresident aliens under a stock purchase agreement. Because section 1361 bars nonresident alien shareholders, the issuance terminated its S election. After…
PLR 200705014: Foreign demerger treated as divisive reorganization and holding-company exchanges
A foreign corporate group separated two businesses through a multistep demerger and new holding companies. For U.S. income tax purposes, the IRS treated the steps as a contribution and stock…
PLR 200705013: Foreign redevelopment concession qualifies as a REIT real estate asset
A real estate investment trust participated through partnerships in a concession to redevelop and operate a foreign city's historic commercial complex. The concession granted long-term, generally…
PLR 200705012: Missed elections for separate trust shares receive S termination relief
S corporation shares were transferred to a trust that divided into separate shares for two beneficiaries. Both beneficiaries missed the qualified subchapter S trust (QSST) elections, terminating the…
PLR 200705011: Late S election may take effect from incorporation
A corporation intended to elect S status from its incorporation date but did not timely file Form 2553. It represented that it had acted consistently with that intended status. The IRS found…
PLR 200705010: Former executive's security flights exempt during consulting but taxable afterward
A former chairman and chief executive received personal corporate-aircraft flights for himself and his spouse under a security arrangement and reimbursed the safe-harbor airfare. In the first year,…
PLR 200705009: S election deadline relief granted to sole-shareholder corporation
A sole shareholder intended the corporation to have S status from incorporation, but Form 2553 was not timely filed. The corporation requested recognition of its election from that original date.…
PLR 200705008: Reasonable cause permits late S election on intended date
A corporation intended to elect S status on a specified date but missed the election deadline. The IRS found reasonable cause for that failure and granted relief under section 1362(b)(5). The…
PLR 200705007: Commercial property rents excluded from S passive investment income
An S corporation with accumulated earnings and profits owned, leased, and managed commercial real estate. Its employees, shareholders, and contractors provided extensive maintenance, repair,…
PLR 200705006: Serviced commercial rentals qualify for active rental-business exception
An S corporation with accumulated earnings and profits sought a ruling on rents from its commercial properties, including offices and warehouses. Employees, shareholders, and contractors performed…
PLR 200705005: Extra time granted for omitted dual consolidated loss certifications
A U.S. consolidated group's foreign subsidiary was treated as a disregarded hybrid entity for U.S. tax purposes and incurred dual consolidated losses. The parent prepared annual certifications for…
PLR 200705004: Unequal state-tax distributions receive inadvertent S termination relief
An S corporation paid state taxes for shareholders and handled refunds differently for participants in composite returns and other shareholders. The resulting unequal distributions raised concern…
PLR 200705003: Two-shareholder corporation may file late S election from incorporation
Two shareholders intended their corporation to elect S status effective on its incorporation date. Form 2553 was not filed on time, so the corporation requested late-election relief. The IRS found…
PLR 200705002: Tax-exempt employer's unfunded plan qualifies for deferred taxation
A tax-exempt employer established an unfunded deferred compensation plan for a participant, with contributions recorded in a bookkeeping account. Plan assets remained the employer's property and…
PLR 200705001: Mortgage-backed repo financing qualifies for REIT income and asset tests
A mortgage REIT proposed financing a related mortgage company through a repurchase agreement secured by assigned mortgage loans. The agreement gave the REIT possession of the loans, and defaults…
PLR 200704042: Rollover waiver denied for deliberate withdrawal for future care
A daughter acting under a durable power of attorney withdrew IRA funds for her father's future nursing-home care. Her father had a mental impairment, and she learned the withdrawal's tax…
OTHER 200704041: Seller-funded down-payment assistance organization denied exemption
A nonprofit sought section 501(c)(3) status for a down-payment assistance program aimed at low-income homebuyers. Its funding depended primarily on home sellers and related businesses, and seller…
PLR 200704040: Credit union's incorrect advice excuses two-day rollover delay
A taxpayer withdrew IRA funds while planning to buy a first home and redeposited funds two days after the 60-day rollover period expired. A credit union representative had given an incorrect…
PLR 200704039: Pension funding waiver granted subject to later contributions
A food-decoration manufacturer suffering recurring losses and restructuring costs sought relief from its pension plan's 2005 minimum funding requirement. The company raised prices, cut staffing and…
PLR 200704038: Mistaken non-IRA deposits receive rollover deadline waiver
A 78-year-old taxpayer asked a financial institution to roll over distributions from two IRAs and signed paperwork believing he had opened IRA certificates of deposit. The institution instead placed…
PLR 200704037: Educational grant program qualifies for foundation distribution treatment
A private foundation planned to award educational-initiative grants to individuals and associated organizations through its wholly owned disregarded company. The program used screening, written…
PLR 200704036: Contractual endowment units do not pass unrelated income to charitable trust
An educational charity proposed issuing contractual units linked to its endowment to charitable remainder trusts for which it served as trustee and sole charitable beneficiary. A participating trust…
PLR 200704035: Charity's endowment unit program creates no unrelated management income
An educational charity proposed allowing charitable remainder trusts to share its endowment's investment returns through contractual units. It served as trustee and sole charitable beneficiary of…
PLR 200704034: Hurricane-related extension supports late IRA rollover relief
A taxpayer withdrew IRA money to demonstrate assets and pay home-purchase closing costs, intending to replace it with proceeds from selling another residence. Tropical storms and hurricanes delayed…
PLR 200704033: Spouse may roll over IRA paid through a modified trust
A widow tried to transfer her deceased husband's IRA to her own account, but the custodian instead distributed it to a non-IRA account held by the beneficiary trust. A later court order modified the…
PLR 200704032: Educational merger qualifies for private operating foundation treatment
A charitable supporting organization proposed merging with the school it supported and conducting the school's educational and research programs itself. The IRS ruled that the merger would preserve…
TAM 200704031: Joint child-care subsidy checks do not make the state the wage employer
A state agency paid child-care subsidies through checks payable jointly to parents and their in-home day-care aides. The aides were the parents' common law employees, and the parents negotiated…
CCA 200704030: State tax credit transactions are sales rather than genuine partnerships
Promoters bought transferable state rehabilitation tax credits and routed them through purported partnerships to investors seeking state tax savings and federal capital losses. Chief Counsel…
CCA 200704029: Business ceased to be a covered railroad retirement tax employer
The Railroad Retirement Board informed the IRS that a business had ceased to be a covered employer under the Railroad Retirement Act and the Railroad Unemployment Insurance Act. Chief Counsel…
CCA 200704028: Partnership allocations of nontransferable state credits are recast as sales
After a state prohibited direct transfers of rehabilitation tax credits, promoters used partnership interests to channel the credits to investors. Investors expected state tax reductions and federal…
PLR 200704027: Missed trust election receives conditional S corporation termination relief
An S corporation's shares passed to a second trust after the original trust's beneficiary died. The new beneficiary failed to make the qualified subchapter S trust election, terminating the…
PLR 200704026: Transfers to an ineligible charitable remainder trust receive S status relief
An S corporation's grantor-trust shareholders transferred shares to a charitable remainder unitrust without realizing it was an ineligible shareholder. After an accountant identified the problem,…
PLR 200704025: Late QSST election can cure inadvertent S corporation termination
An S corporation transferred shares to a trust intended to qualify as a qualified subchapter S trust. The beneficiary failed to file the QSST election, causing the corporation's S election to…
PLR 200704024: Corporation receives 60 days to file its intended S election
A corporation intended to elect S corporation treatment from a specified date but did not timely file a valid Form 2553. The IRS found reasonable cause for the missed election under section…
PLR 200704023: Partnership may make a late basis adjustment election after a partner's death
A partner's interest in a partnership passed to another holder when the partner died. The partnership relied on its tax advisor but inadvertently failed to make a timely section 754 election for…
PLR 200704022: Two testamentary trusts receive conditional late QSST election relief
An estate transferred an S corporation's shares to two trusts with the same current income beneficiary. The beneficiary missed both qualified subchapter S trust elections, and the corporation's S…
PLR 200704021: S status relief covers ineligible general partner and possible second stock class
An S corporation converted to a state-law limited partnership taxed as a corporation and assigned a general partnership interest to another corporation owned by its individual shareholders. The…
PLR 200704020: Corporate shareholder's mistake receives retroactive S election relief
A corporation timely filed an S election while one of its shareholders was another S corporation, an ineligible shareholder on these facts. The corporate shareholder later merged into the requesting…
TAM 200704019: Tribal convention hotels fail the essential governmental function requirement
A tribe used bond proceeds to finance two convention facilities with full-service hotels, each operated together with a separately financed gaming facility. The IRS concluded that the hotel projects…
PLR 200704018: Reciprocal debt guarantees preserve earlier spin-off rulings
A company sought a supplement to an earlier ruling on a proposed business spin-off because lenders required reciprocal debt guarantees after the separation. The distributing and controlled…
PLR 200704017: Partners' self-funded health coverage qualifies as insurance
A partnership offered partners and employees a self-funded medical plan supported by premiums, partnership contributions, and stop-loss insurance. Premiums reflected projected claims and expenses,…
PLR 200704016: Operating partnership receipts and serviced rents avoid S passive-income treatment
An S corporation with accumulated earnings and profits invested in publicly traded oil-and-gas partnerships and a commercial-property partnership. The IRS ruled that the corporation must include its…
PLR 200704015: Late S election may take effect on the shareholder's intended date
A shareholder intended a newly incorporated business to be an S corporation from a specified date, but the election was not timely filed. The IRS found reasonable cause under section 1362(b)(5) and…
PLR 200704014: Corporation receives late S election relief from incorporation
A shareholder intended a corporation to elect S treatment from its incorporation date but missed the filing deadline. The IRS found reasonable cause and granted relief under section 1362(b)(5). If…
PLR 200704013: Fund's spillback dividend election is treated as timely despite a late return
A fund intended to elect to treat a later-paid dividend as paid in the preceding tax year under section 855(a). Its accounting firm inadvertently put the prepared return in a completed-return drawer…
PLR 200704012: Parent may correct one QSub election and file another late
An S corporation parent filed a subsidiary election with the correct employer identification number but an incorrect corporate name. After that subsidiary converted to a limited partnership electing…
PLR 200704011: Three funds receive 45 days for consent dividend elections after loss-limit errors
Three investment funds discovered that errors applying capital-loss limitations had understated their taxable capital gains and the dividends needed to eliminate taxable income. Their…
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.