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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Inadvertent S corporation termination excused after a trust missed its ESBT election
An S corporation's stock was transferred from one trust to a second trust. To stay an eligible S corporation shareholder, the second trust had to file an "electing small business trust" (ESBT) electio…
Extension granted to make a late section 336(e) election on an S corporation stock sale
An individual bought all the stock of an S corporation from its shareholder. The buyer and seller wanted to treat that stock sale as if the company had sold its assets, using a section 336(e) election…
120-day extension to make a late section 754 election after a partner died
A limited partnership had a partner die. When a partnership interest transfers (including at death), a section 754 election lets the partnership adjust the tax basis of its property so the new owner's…
45-day extension to file the original Form 3115 for a 263A accounting method change
A partnership hired a CPA to change how it capitalizes costs on self-constructed assets under IRC § 263A, using the IRS automatic-consent process for accounting method changes. That process requires f…
IRS consents to an early re-election of S corporation status after a change of ownership
A corporation had been an S corporation, but its S election terminated. Normally, once an S election ends, the company cannot elect S status again for five years unless the IRS consents. After the ter…
120-day extension to make a late check-the-box election to be taxed as a corporation
A domestic limited liability company wanted to be taxed as a corporation for federal tax purposes. To do that, it had to file Form 8832 (the check-the-box election), but it never filed it. Without the…
120-day extension to make QTIP and reverse-QTIP elections after an accountant's Schedule M error
When a spouse dies leaving property in a marital trust, the estate can elect "qualified terminable interest property" (QTIP) treatment under § 2056(b)(7) so the property qualifies for the estate-tax m…
Modifying a grandfathered 1985 trust into lifetime issue trusts keeps GST-exempt status with no estate or gift tax
An irrevocable trust created before September 25, 1985 is "grandfathered" from the generation-skipping transfer (GST) tax, a valuable status that careless changes can destroy. Here the grantor, the da…
Companion ruling: modifying a grandfathered 1985 trust into lifetime issue trusts keeps GST-exempt status with no estate or gift tax
This is a companion ruling to a sibling trust in the same family (the facts and analysis mirror the related ruling, with a different IRS control number). An irrevocable trust created before September …
Modifying a grandfathered pre-1985 trust into lifetime issue trusts keeps GST-exempt status, with no estate or gift tax
An irrevocable trust created before September 25, 1985 is "grandfathered" from the generation-skipping transfer (GST) tax, a valuable status that poorly designed changes can destroy. Here the grantor,…
Modifying a grandfathered pre-1985 trust into lifetime issue trusts keeps GST-exempt status, with no estate or gift tax
An irrevocable trust created before September 25, 1985 is "grandfathered" from the generation-skipping transfer (GST) tax, a valuable status that poorly designed changes can destroy. Here the grantor,…
Modifying a grandfathered pre-1985 trust into lifetime issue trusts keeps GST-exempt status, with no estate or gift tax
An irrevocable trust created before September 25, 1985 is "grandfathered" from the generation-skipping transfer (GST) tax, a valuable status that poorly designed changes can destroy. Here the grantor,…
Modifying a grandfathered pre-1985 trust into lifetime issue trusts keeps GST-exempt status, with no estate or gift tax
An irrevocable trust created before September 25, 1985 is "grandfathered" from the generation-skipping transfer (GST) tax, a valuable status that poorly designed changes can destroy. Here the grantor,…
Inadvertent S-corp termination relief for a missed QSST election and two missed ESBT elections
An S corporation can only have certain kinds of shareholders. If ineligible shares end up in a trust that has not made the right election, the company's S election silently terminates, which can be an…
Inadvertent S-corp termination relief for a trust that missed its ESBT election after receiving shares
An S corporation loses its special tax status the moment an ineligible shareholder holds its stock. Here the company's stock moved from one trust ("Trust 1"), which was a valid electing small business…
Advance approval of a private foundation's two county scholarship programs under 4945(g)(1)
A private foundation asked the IRS to pre-approve the way it picks scholarship winners. Foundations need this sign-off because IRC § 4945 taxes "taxable expenditures," and a grant to an individual for…
Advance approval of an employer-related scholarship program under 4945(g)(1) using the facts-and-circumstances test
A private foundation asked the IRS to pre-approve a scholarship program for the children of a particular company's employees. These "employer-related" scholarships get extra scrutiny because they can …
Advance approval of a private foundation's scholarship program for young women under 4945(g)(1)
A private foundation asked the IRS to pre-approve how it selects scholarship winners. Foundations need this approval because IRC § 4945 taxes "taxable expenditures," and a grant to an individual for s…
Advance approval of a private foundation's scholarship program for members of an affiliated entity under 4945(g)(1)
A private foundation asked the IRS to pre-approve how it selects scholarship winners. Foundations need this approval because IRC § 4945 taxes "taxable expenditures," and a grant to an individual for s…
Home-heating-fuel buying group denied 501(c)(4) status for serving fee-paying members over the community
A nonprofit formed to negotiate lower home-heating-fuel prices (oil, kerosene, propane) for residents of certain counties applied to be recognized as a tax-exempt social welfare organization under IRC…
Community political-advocacy group denied 501(c)(6) status for lacking a common business interest
An unincorporated association formed to raise the political influence of a particular community applied to be recognized as a tax-exempt business league under IRC § 501(c)(6). Members joined by referr…
Charter-fishing trade association denied 501(c)(3) status for serving members' private business interests
A professional trade association of charter fishing boat operators applied to be recognized as a tax-exempt charity under IRC § 501(c)(3), using the streamlined Form 1023-EZ. The IRS denied the applic…
Ethnic-business networking group denied 501(c)(3) status for promoting members' for-profit businesses
An organization that describes itself as promoting commerce, cultural exchange, and business integration for a particular ethnic community and for immigrant entrepreneurs applied to be recognized as a…
Revised two-step cost-allocation key is a more reliable 1.482-9 method, so the taxpayer's section 482 setoff claim should be accepted
A company that performs shared services for its affiliated corporate group priced those intercompany services for two tax years using the comparable profits method with a markup on costs. During an IR…
Foreign government institution's accident insurance, rehab clinics, and safety guidance are governmental functions, not commercial activities under section 892
A foreign government's controlled entity, a non-profit public-law institution, asked the IRS whether three of its activities would cause it to be treated as engaged in commercial activities under sect…
Consent to partially revoke a net-capital-gain-as-investment-income election under 163(d)(4)(B)
An individual taxpayer's tax preparer, completing Form 4952, mistakenly elected to treat too much net capital gain as investment income under section 163(d)(4)(B), instead of the smaller amount the ta…
Extra time granted to make a late section 336(e) election on a stock sale
An individual bought all the stock of an S corporation from its shareholder. A section 336(e) election lets a qualifying stock sale be treated as a sale of the company's assets for tax purposes, which…
Extra time granted to file late Forms 3115 for an inventory accounting-method change
A corporation that heads a consolidated group hired a CPA to change how it and its subsidiaries identify and allocate costs to inventory under Section 263A. That change requires filing Form 3115 (Appl…
Estate may take an unlimited section 642(c) charitable deduction for income paid to charities
A decedent's will directed that, after specific bequests, taxes, debts, and administrative costs, a percentage of the estate's residue go to organizations that are exempt charities under Section 501(c…
An indexed structured-settlement annuity still counts as a section 130 qualified funding asset
When someone is injured and settles for periodic payments over time (a "structured settlement"), the defendant usually hands off its payment obligation to an assignment company, which buys an annuity …
Inadvertent S-corp termination relief after three trusts missed their QSST elections
An S corporation's stock passed into a series of trusts. One shareholder put his shares into a grantor trust, which was an eligible S-corporation shareholder while he was alive and for two years after…
Extra time granted to make a late GST-exemption allocation after the return went unfiled
A taxpayer set up a trust before 2001 that split into two equal shares, one for each of the taxpayer's two children, with lifetime interests passing to more remote descendants. Those trusts could trig…
Extra time granted to make a late real-property-trade-or-business election out of the 163(j) interest cap
Section 163(j) caps how much business interest a taxpayer can deduct, but a real property trade or business can elect out of that cap by making a 163(j)(7)(B) election (the trade-off is slower depreci…
Extra time granted to make a late real-property-trade-or-business election out of the 163(j) interest cap
Section 163(j) caps how much business interest a taxpayer can deduct, but a real property trade or business can elect out of that cap by making a 163(j)(7)(B) election (the trade-off is slower depreci…
Advance approval of a foundation's scholarship procedures under 4945(g)(1)
A private foundation asked the IRS to approve, in advance, the procedures it will use to award scholarships. That approval matters because Section 4945 taxes a private foundation's "taxable expenditur…
501(c)(3) denied to a religious-media ministry that resold its founder's for-profit products
An organization applied for 501(c)(3) status as a religious broadcasting and television ministry. Its founder and sole officer is an ordained pastor who also runs a for-profit media company that sells…
How the "small corporation" rule eases Form 5472 penalty relief under 6038A
Section 6038A requires a U.S. corporation that is at least 25% foreign-owned to file Form 5472 reporting its transactions with related parties and to keep supporting records. Missing that filing carri…
Extra time granted for a foreign insurer's lost 953(d) election to be taxed as a U.S. corporation
A regulated insurance company organized in a foreign country, but wholly owned inside a U.S. corporate group, wanted to be treated as a domestic corporation for U.S. tax purposes by making an election…
60-day extension to make a late election opting out of bonus depreciation
A corporation that files a consolidated return for its group placed business property in service and, for tax-planning reasons, decided not to claim the extra "bonus" depreciation that § 168(k) normal…
60-day extension to file a late Form 8996 self-certifying as a Qualified Opportunity Fund
A company set up to be a Qualified Opportunity Fund (QOF), the investment vehicle that lets investors defer and reduce tax on capital gains put into economically distressed Opportunity Zones, missed t…
60-day extension to file a late Form 8996 self-certifying as a Qualified Opportunity Fund
A company formed to be a Qualified Opportunity Fund (QOF), the vehicle that lets investors defer and reduce capital-gains tax by investing in distressed Opportunity Zones, missed the deadline to certi…
Inadvertent S-corp termination relief after a trust missed its QSST election
An S corporation's stock passed through a chain of family trusts after two deaths. When the stock landed in one trust, the income beneficiary failed to file the election needed to make it a Qualified …
Inadvertent S-corp termination relief after a trust missed its QSST election
An S corporation's stock moved through a series of family trusts after two deaths. When the stock reached one trust, its income beneficiary failed to file the election needed to make it a Qualified Su…
60-day extension to make a late election not to be treated as a tax-exempt entity
An LLC wholly owned by a § 501(c)(3) charity was the managing member of a partnership that put a project into service. Because a tax-exempt owner sits at the top, property tied to the venture can be l…
120-day extension to file a late check-the-box election to be taxed as a corporation
A limited liability company wanted to be taxed as a corporation rather than under its default classification. Making that choice requires filing Form 8832, the "check-the-box" entity classification el…
120-day extension for two foreign entities to file late check-the-box elections
Two foreign entities became relevant for U.S. tax purposes and wanted to lock in their U.S. classifications: one to be treated as a partnership, the other to be disregarded (treated as part of its sin…
Utility plant priced under a special (non rate-of-return) method is not "public utility property," so no normalization is required
A regulated electric and gas utility owns a power plant. It asked the IRS how the depreciation rules treat certain plant assets it is acquiring, given that its state commission will set the rates for …
Bonds for a water-purification plant do not fail the private-business tests because output is allocable to governmental and public buyers
A public water agency plans to issue tax-exempt bonds to build an advanced water-purification facility. Tax-exempt status is lost if the bonds are "private activity bonds," which happens under § 141(b…
Advance approval of a foundation's scholarship and cultural-grant procedures under 4945(g)
A private foundation tied to a Native shareholder community asked the IRS to pre-approve how it hands out scholarships and cultural grants. Private foundations owe an excise tax on "taxable expenditur…
Advance approval of a foundation's field-specific county scholarship procedures under 4945(g)(1)
A private foundation asked the IRS to pre-approve how it awards a scholarship for students pursuing a degree in a particular field who live in or graduated from two specified counties. Private foundat…
Governmental unit affiliate need not file Form 990
A tax-exempt organization asked the IRS to excuse it from filing Form 990, the annual information return most exempt organizations must submit. The IRS agreed. Under IRC § 6033(a)(3)(B), the IRS has d…
120-day extension to make a late estate-tax portability election
When a married person dies without using all of their federal estate-tax exemption, the surviving spouse can inherit the leftover amount, called the "deceased spousal unused exclusion" (DSUE), but onl…
A publicly traded parent's multi-step internal restructuring and spin-off-then-merger qualifies as tax-free under sections 355 and 368
A publicly traded multinational parent (called "Distributing") wants to separate one part of its business (the "SpinCo Business," made up of two lines of business) from the part it will keep (the "Rem…
Two LLCs that missed the deadline to elect corporate tax status get 120 more days to file Form 8832
Two limited liability companies wanted to be taxed as corporations instead of under the default rules that apply to an LLC. To make that choice, an eligible entity files Form 8832, the entity classifi…
Buyer and seller of an S corporation's stock get extra time to make a late section 336(e) election treating the sale as an asset sale
When someone buys the stock of an S corporation, a section 336(e) election lets the parties treat the deal as if the company sold its assets instead of its shares, which can give the buyer a stepped-u…
An LLC that never filed Form 8996 is allowed to self-certify late as a Qualified Opportunity Fund after its manager died
A Qualified Opportunity Fund (QOF) is an investment vehicle that lets investors defer and reduce tax on capital gains if they put the money into designated low-income "opportunity zones." To become a …
IRS approves a pension plan's own substitute mortality tables for funding calculations, for up to 10 years
A company that sponsors a single-employer defined benefit pension plan asked the IRS for permission to use its own substitute mortality tables, rather than the standard tables, when calculating the pl…
IRS approves substitute mortality tables for an aggregated group of three defined benefit plans, excluding certain disabled annuitants
A company that sponsors several single-employer defined benefit pension plans asked the IRS for permission to keep using its own substitute mortality tables, rather than the standard tables, when comp…
IRS pre-approves a foundation's statewide academic scholarship procedures
A private foundation asked the IRS to approve, in advance, the procedures for an academic scholarship program for students in a single state. Under IRC Section 4945, a private foundation's grants to i…
IRS pre-approves a company foundation's employer-related scholarship programs for employees' children and local residents
A company-affiliated private foundation asked the IRS to approve, in advance, two scholarship programs: one for the children of the company's employees, and one for residents of certain counties in th…
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.