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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Family reunion organization denied social-club exemption
The IRS denied section 501(c)(7) exemption to an organization formed to continue one family's reunions. Membership was limited to descendants of a family member, and a privately owned family LLC was e…
S corporation receives relief for late ESBT elections
Two trusts acquired shares in an S corporation but their trustees did not timely elect electing small business trust status, causing the corporation's S election to terminate. The corporation represen…
Late REMIC election treated as timely
A trust intended one segregated mortgage asset pool to elect real estate mortgage investment conduit status as part of a tiered REMIC structure. Its administrator timely filed the elections for the ot…
Fixed wellness payments are taxable wages when no medical expense remains
An employer offered employees a fixed-indemnity health policy funded through $1,200 monthly salary reductions under a Section 125 cafeteria plan. The policy paid $1,000 when an employee completed a qu…
Employer needs employee repayment or consent for tax-equalization FICA refund
A multinational employer used a tax-equalization agreement that reduced an employee's stated salary and required the employer to pay the employee's United States and foreign taxes. The employer later …
Recovery equipment excluded from heavy-wrecker excise-tax price
A manufacturer asked whether specified recovery equipment installed on heavy wreckers could be excluded from the sale price subject to the 12 percent retail excise tax on heavy trucks. The IRS disting…
LLC gets 120 days to file late corporate classification election
A domestic limited liability company intended to be classified as an association taxable as a corporation from a redacted effective date. It failed to file Form 8832 on time because of inadvertence bu…
Estate gets 120 days to make late portability election
An estate below the normal estate-tax filing threshold failed to file Form 706 on time to transfer the deceased spouse's unused exclusion amount to the surviving spouse. Because the estate represented…
Partnership gets 60 days to opt out of bonus depreciation
A partnership claimed 100 percent bonus depreciation on five-year and seven-year property placed in service during a redacted tax year. After filing its return, the partnership and its return preparer…
Scholarship procedures approved for low-income students
A private foundation sought advance approval for a scholarship program serving low-income current or former residents of a state, with a preference for people connected to one county. Awards would be …
Economic-development group denied 501(c)(3) status
An organization created by the officers of a Section 501(c)(6) business league sought Section 501(c)(3) status to fund and perform local economic-development work. The IRS found that its articles fail…
Missed QSST election does not terminate S corporation status
A trust acquired shares of an S corporation and met the substantive requirements for a qualified subchapter S trust, but its beneficiary failed to make the QSST election on time. Without that election…
IRS grants 90 more days to file a late IC-DISC election that was never recorded
A company was formed to operate as an interest charge domestic international sales corporation (IC-DISC), a special export-incentive entity that earns commissions on a related business's export sales …
IRS grants extra time to file a late section 336(e) election on an S corporation stock sale
A partnership bought all the stock of an S corporation from its shareholders. The buyers and sellers wanted the deal treated for tax purposes as if the company had sold its assets rather than its stoc…
IRS blesses a tax-free section 355 spin-off separating two businesses
A multinational corporate group wanted to separate two of its businesses into different corporate branches without triggering tax. A parent company owned a distributing corporation that ran one busine…
Surviving spouse may roll over a late husband's IRA even though it passed through his estate
A man died owning a traditional IRA but never named a beneficiary, so under the account rules the money went to his estate. His will left the entire residual estate, including the IRA, to his survivin…
Surviving spouse may roll over two inherited IRAs consolidated into an estate-beneficiary IRA
A person owned two traditional IRAs and named their own estate as the beneficiary of both. After death (which occurred before required distributions had to begin), the surviving spouse, who is the est…
IRS grants extra time to make a late section 754 partnership basis-adjustment election after a partner died
A general partnership had a partner who died owning roughly a certain percentage of the firm. When a partnership interest changes hands (including on a partner's death), a "section 754 election" lets …
IRS forgives a botched S corporation election where trusts consented wrong and missed an ESBT election
A company elected to be taxed as an S corporation, which requires that every shareholder be an eligible type of owner and that all shareholders properly consent. Two of its shareholders were grantor t…
IRS forgives an inadvertent S corporation termination after a conversion put shares in an ineligible partnership
A company was formed as a corporation and elected S corporation status. Later it converted from a state corporation into a state limited partnership and elected (on Form 8832) to still be taxed as a c…
IRS forgives an inadvertent S corporation termination after a conversion put shares in an ineligible partnership
A company was formed as a corporation and elected S corporation status. Later it converted from a state corporation into a state limited partnership and elected (on Form 8832) to still be taxed as a c…
IRS grants 60 more days to file a missed safe-harbor election for success-based deal fees
A corporation that heads a consolidated group made an acquisition and paid its advisers "success-based fees," fees owed only if the deal closed. Tax rules presume such fees must be capitalized (spread…
IRS grants 60 more days to file a missed safe-harbor election for success-based deal fees
A corporation that heads a consolidated group made an acquisition and paid an adviser "success-based fees," fees owed only if the deal closed. Tax rules presume such fees must be capitalized (spread o…
IRS blesses a large tax-free spin-off separating two business lines from a public company
A publicly traded company that heads a worldwide group ran four business lines across a deep web of domestic and foreign subsidiaries. It wanted to split off two of those lines (Business A and Busines…
Splitting a GST-grandfathered trust into four equal trusts is tax-free across income, gift, estate, and GST tax
A trust created long ago (irrevocable before September 25, 1985, so it is "grandfathered" and exempt from the generation-skipping transfer, or GST, tax) held everything in a single share for one child…
S election with missing shareholder consents and a second class of stock gets inadvertent-termination relief
An LLC (called X) elected to be taxed as an S corporation, but its election was defective from the start because it never collected all the shareholder consents that Form 2553 requires. On top of that…
9100 relief to file a late section 336(e) election treating an S-corp stock sale as an asset sale
An individual bought all the stock of an S corporation from its shareholders. The buyer and sellers wanted the stock purchase treated as if the company had sold its assets, an option the tax law allow…
9100 relief to make a late election out of bonus depreciation after the preparer forgot to attach the statement
A partnership (an LLC filing Form 1065) decided to elect out of bonus depreciation, the extra first-year write-off that section 168(k) otherwise allows, for all classes of qualified property it placed…
9100 relief to file a late section 754 election after a partnership interest sale
A partnership (an LLC taxed as a partnership) had part of its ownership sold to a new partner. When a partnership interest changes hands, the partnership can make a section 754 election so the buyer's…
Advance approval of a foundation's fellowship-grant procedures for early-career therapists under section 4945(g)(3)
A private foundation asked the IRS to pre-approve the procedures it will use to award educational fellowship grants to individuals. Advance approval matters because a private foundation that pays a gr…
IRS approves a private foundation's set-aside to fund a multi-year drug-development and cultural-facility project
A private foundation asked the IRS to approve a "set-aside" under section 4942(g)(2). Private foundations must pay out a minimum amount each year for charitable purposes, and a set-aside lets a founda…
501(c)(3) denied to a members' group offering discounted insurance and career promotion to its industry members
An organization applied for 501(c)(3) charitable status using the short Form 1023-EZ, describing its mission as providing members with health, life, or disability insurance and financial planning. Whe…
IRS revokes a senior social club's 501(c)(7) exemption for inadequate records and excess nonmember income
The IRS revoked the tax-exempt status of a small social club that ran a gathering place for senior citizens. The club had been recognized under section 501(c)(7), which covers social and recreation cl…
IRS revokes a senior social club's 501(c)(7) exemption for charging no dues and keeping no records (companion to 202321015)
The IRS revoked the tax-exempt status of a small social club that ran a gathering place for senior citizens. The club had been recognized under section 501(c)(7), which covers social and recreation cl…
IRS revokes a youth-sports charity's 501(c)(3) status after it went inactive
The IRS revoked the 501(c)(3) charitable exemption of a nonprofit that had run a youth sports league for underprivileged children, offering free spots, player scholarships, and equipment to families w…
IRS revokes an arts-philanthropy charity whose main activity was investing in private secured loans
The IRS revoked the 501(c)(3) exemption of a nonprofit that had been incorporated to "promote philanthropy within the community through the Arts" and was recognized as a public charity after filing a …
IRS revokes an inactive educational private foundation and asserts a 4942 excise tax in the alternative
The IRS revoked the 501(c)(3) exemption of a nonprofit that had been organized to bring technology into schools (providing infrastructure, software, hardware, and support services to enhance education…
IRS revokes a scholarship charity whose incorporation papers lacked a purpose limitation and dissolution clause
The IRS revoked the 501(c)(3) exemption of a charity that awards scholarships to students at a specific school, not because of what it did, but because of what its organizing paperwork left out. To be…
IRS revokes a 501(c)(4) civic group that mainly ran a bar and gaming room for a related veterans post
The IRS revoked the 501(c)(4) social-welfare exemption of a civic organization whose main activity was running a bar and a gaming room (pull-tabs and lottery-type games) for the members of a related v…
IRS revokes a members' club's 501(c)(3) status because its activities were primarily social and recreational
The IRS revoked the 501(c)(3) exemption of a members' club that had been organized around promoting a standard and educating people about care requirements (its articles simply say it operates "as a n…
IRS revokes a 501(c)(3) that never responded to the audit or produced records
The IRS revoked the 501(c)(3) exemption of an organization that simply did not cooperate with its audit. The audit report walks through months of certified letters and phone calls to the group's presi…
IRS revokes a members-only horse boarding club for serving private, not public, interests
The IRS revoked the 501(c)(3) exemption of an organization that runs a horse boarding facility for its own club members. The group collects dues and fees from members to cover operating costs (grounds…
IRS revokes a charity that ran a for-profit coffee shop instead of its promised training program
The IRS revoked the 501(c)(3) exemption of an organization that had been recognized on the promise that it would run in-house training programs and employment for survivors of a particular hardship (c…
IRS grants a late-filing extension for a fund to self-certify as a Qualified Opportunity Fund
An LLC taxed as a partnership was formed specifically to be a Qualified Opportunity Fund (QOF), the vehicle that lets investors defer and reduce capital-gains tax by investing in designated low-income…
IRS grants late-filing relief for a fund to self-certify as a Qualified Opportunity Fund after its accountant missed the return
An LLC taxed as a partnership was formed to be a Qualified Opportunity Fund (QOF), the vehicle that lets an investor defer capital-gains tax by reinvesting the gain in a business located in a designat…
IRS forgives an S corporation's accidental termination after shares went to an ineligible shareholder
An S corporation gets pass-through tax treatment only if it stays within strict eligibility limits, including a rule that every shareholder must be an eligible type (generally an individual, an estate…
IRS grants late-election relief for a partnership to keep its chosen fiscal year under section 444
A partnership normally must use a "required" tax year tied to its owners' tax years, but IRC § 444 lets it elect a different fiscal year (with a limited deferral period) if it files Form 8716 on time …
IRS grants late-filing relief to self-certify as a Qualified Opportunity Fund after the preparer omitted Form 8996
An LLC taxed as a partnership was formed to be a Qualified Opportunity Fund (QOF), the vehicle that lets investors defer capital-gains tax by reinvesting the gain in a designated low-income "opportuni…
IRS grants late-filing relief to self-certify as a Qualified Opportunity Fund after the preparer omitted Form 8996
An LLC taxed as a partnership was formed to be a Qualified Opportunity Fund (QOF), the vehicle that lets investors defer capital-gains tax by reinvesting the gain in a designated low-income "opportuni…
Late partnership basis-adjustment election (§ 754) allowed under 9100 relief
A limited partnership meant to make a section 754 election, which lets a partnership adjust the tax basis of its assets when interests change hands or property is distributed, so the incoming or affec…
Late Form 1128 to change a corporation's tax year allowed under 9100 relief
A C corporation that provides engineering and architectural design services wanted to change its tax year end and file Form 1128 (Application to Adopt, Change, or Retain a Tax Year) to do so. Under th…
Late election to amortize R&E expenditures over 10 years allowed under 9100 relief
A calendar-year, accrual-method taxpayer wanted to spread its research and experimental (R&E) expenditures over 10 years using the election in Code section 59(e), rather than deduct them all at once. …
501(c)(3) status revoked for failing to respond to an audit and for defective organizing documents
The IRS revoked a group's recognition as a tax-exempt charity under section 501(c)(3). The organization was selected for audit, but it never provided the records the IRS repeatedly asked for. The exam…
501(c)(7) social club loses exemption for too much investment income (over the 35% limit)
A tax-exempt social club under section 501(c)(7) (the kind of exemption used by alumni associations and similar member clubs) lost its exemption because too much of its money came from outside its mem…
Self-declared 501(c)(4) disqualified as a never-active shell with no social-welfare activity
The IRS issued a final determination that an organization did not qualify as a 501(c)(4) social welfare organization. The group had never applied for or received a determination letter; it simply self…
Fraternity alumni group denied 501(c)(7) social club status
An alumni organization tied to a college fraternity applied to be reinstated as a 501(c)(7) social club after its earlier group-ruling exemption was automatically revoked for failing to file returns. …
Masonic fraternal order denied 501(c)(3) charity status (it fits 501(c)(10))
A Masonic-style fraternal order applied to be recognized as a 501(c)(3) charity using the streamlined Form 1023-EZ, and the IRS denied it. When the IRS asked for the group's actual Articles of Incorpo…
501(c)(3) status revoked for failing to produce records during an audit
The IRS revoked a charity's 501(c)(3) exemption because it would not turn over the financial records the IRS needed to audit it. The examiner spent months trying: the first appointment letter came bac…
501(c)(7) social club loses exemption because its main activity was managing property, not member recreation
A tax-exempt social club under section 501(c)(7) lost its exemption after an IRS audit found it was really in the business of managing real estate rather than providing recreation and fellowship to me…
501(c)(3) veterans charity revoked for private-benefit real-estate deals, undocumented grants, and a missing dissolution clause
A veterans-assistance charity recognized as a 501(c)(3) public charity lost its exemption after an IRS audit found three problems. First, its articles of incorporation lacked the dissolution clause re…
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.