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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PLR 200523001: Corporation keeps S status after inadvertent passive income termination
An S corporation had accumulated earnings and profits and received more than 25 percent of its gross receipts from passive investment income in each of three consecutive years. That combination…
CCA 200522023: Tax treatment of proposed Nevada payments depends on their character
Nevada considered returning surplus state revenue either through equal payments to adult residents identified by motor vehicle records or through payments tied to vehicle registration charges. Chief…
Determination 200522022: Physician contracting network denied business league exemption
A physician network sought tax exemption as a business league under IRC § 501(c)(6). It negotiated contracts and fees with employers on behalf of participating physicians, marketed the network, and…
CCA 200522021: Timely bankruptcy claim can support payment after collection period expires
The IRS received a distribution from a Chapter 7 trustee on a discharged tax debt after the ordinary collection period had expired. Chief Counsel advised that the IRS could keep the payment if it…
CCA 200522020: Buyer must withhold on foreign seller's U.S. real estate option
Foreign individuals were selling options to buy U.S. real property before exercising them, and buyers were not withholding tax. Chief Counsel advised that the option itself is a U.S. real property…
CCA 200522019: IRS may update final levy demand for accrued interest and penalties
Chief Counsel considered what to do when a third party holding a taxpayer's property failed to respond to an IRS levy. The IRS could update its final demand to include interest and penalties accrued…
PLR 200522018: IRS waives missed IRA rollover deadline caused by counting error
A taxpayer withdrew funds from three IRAs to move them into a new IRA offering a better interest rate. She counted the 60-day rollover period as if every month had 30 days and tried to deposit the…
PLR 200522017: IRA transfer placed in brokerage account receives rollover waiver
A taxpayer asked to move an old IRA annuity to an account at another investment company. The account statements did not identify the funds as IRA funds, and the first company did not tell the…
PLR 200522016: Foundation's scholarship procedures approved under private foundation rules
A private foundation asked the IRS to approve scholarship procedures covering its existing and new scholarship funds. It represented that recipients would be selected objectively, disqualified…
PLR 200522015: Driver training foundation may count set-aside as a qualifying distribution
A private foundation planned classroom and obstacle course training to improve driving skills, but suitable facilities were unavailable for immediate use. It asked to set aside income for the…
PLR 200522014: Foundation may count museum site set-aside as a qualifying distribution
A private foundation's educational models had gone into storage after the museum displaying them changed its exhibits. The foundation planned to find a new museum site and asked to count funds set…
PLR 200522013: Internal business separation qualifies for specified spin-off treatment
A corporate group planned to separate one line of business from subsidiaries that also operated another line, without distributing stock to public shareholders. Several subsidiaries would transfer…
PLR 200522012: Spouse's IRA disclaimers allow trust distributions over her life expectancy
A deceased IRA owner's spouse proposed to disclaim a fractional IRA interest, her interest in a marital trust, and a related power of appointment so that the disclaimed IRA portion would pass to a…
PLR 200522011: S election saved after trust beneficiaries omitted consent
A corporation's S election was ineffective because a trust's trustee signed Form 2553 instead of the trust beneficiaries, and no qualified subchapter S trust election was made. The corporation and…
PLR 200522010: Injured police officer may exclude disability pension from income
A township police officer retired after an injury suffered in the line of duty left him permanently unable to perform police work. A local statute provided his disability pension based on salary,…
PLR 200522009: Corporation receives relief for unfiled S election
A corporation's sole shareholder intended S corporation treatment and retained an attorney to help form the corporation, but Form 2553 was never filed. The IRS found reasonable cause for the missing…
PLR 200522008: Reorganized companies get more time for LIFO election forms
Five affiliated companies received inventory and existing last-in, first-out (LIFO) pools during a reorganization. Their parent believed the prior companies' LIFO elections carried over, so the new…
PLR 200522007: Ineligible corporate shareholder did not defeat S status after relief
A corporation's S election was initially ineffective because one of its shareholders was another S corporation, which could not hold its shares under the S corporation eligibility rules. After new…
PLR 200522006: U.K. company counts disregarded entity's stock as direct ownership
A U.K. company had owned a U.S. subsidiary through wholly owned entities disregarded for U.S. tax purposes. It later acquired legal title to the subsidiary's stock and sought to count the earlier…
PLR 200522005: Foreign trust beneficiary is not yet a current beneficiary for S election
A trust that held an interest in an entity planning an S corporation election proposed to become an electing small business trust. Its beneficiary was a nonresident alien, who would make the…
PLR 200522004: Foreign beneficiary becomes a current beneficiary when trust restrictions end
A trust owned an interest in an entity planning to elect S corporation status. The trust proposed to elect treatment as an electing small business trust, but its beneficiary was a nonresident alien.…
PLR 200522003: Foreign beneficiary becomes a current beneficiary when trust restrictions end
A trust owned an interest in an entity planning to elect S corporation status. The trust proposed to elect treatment as an electing small business trust, but its beneficiary was a nonresident alien.…
PLR 200522002: Estate gets more time to split marital trust and elect reverse QTIP treatment
An estate's accountants filed its estate tax return without dividing a marital trust into exempt and nonexempt shares for generation-skipping transfer tax purposes or making a reverse QTIP election.…
PLR 200522001: Corporation receives relief for a late S election
A corporation's shareholder wanted S corporation status to begin when the corporation was formed, but the election was not filed on time. The corporation asked the IRS to treat the election as…
PLR 200521037: City may pay police pension contributions without current income tax to officers
A local government planned to pay mandatory employee contributions to its police pension plan on the officers' behalf. Its proposed resolution specified that the employer would pay those amounts…
PLR 200521036: Health problems justify extra time to roll over part of an IRA distribution
An IRA owner withdrew money intending to pay car and medical expenses and return the remainder to an IRA. Health problems affecting the owner and a daughter in the owner's care kept the owner from…
PLR 200521035: Pension plan notice tax does not apply to earlier effective amendment
An employer amended its retirement plan to remove a money purchase feature and later could not confirm that it had given participants advance notice. The employer asked the IRS to waive the excise…
PLR 200521034: Brokerage error warrants late IRA rollover relief
An IRA owner asked a brokerage firm to establish a rollover IRA within 60 days after a distribution. A trainee instead placed the money in three accounts that were not IRAs, an error the firm later…
PLR 200521033: Spouse may disclaim IRA interest while family trust uses her life expectancy
A surviving spouse proposed to disclaim part of a decedent's IRA, then disclaim her interest in a marital trust and a related appointment power so the disclaimed IRA portion would pass to a family…
TAM 200521032: Merger break-up payments must be capitalized when tied to a better deal
A corporation agreed to a merger with one buyer, then paid a termination fee and reimbursed expenses so it could merge with another company. It deducted the break-up payments and argued they were…
CCA 200521031: Late documentation can remove interest on foreign payment withholding
IRS counsel considered a withholding agent in the section 1441 voluntary compliance program that did not have foreign payee documentation by the Form 1042 due date and did not withhold at the…
CCA 200521030: Successive bankruptcies pause Tax Court filing time without stacking overlaps
IRS counsel explained how successive bankruptcy cases affect the deadline to petition the Tax Court after a notice of deficiency. A bankruptcy stay pauses the usual 90-day petition period, and that…
PLR 200521029: Expanded bar center lease preserves foundation's charitable status
A charitable foundation leased a building to a bar association for legal education and related activities. The parties planned to expand the building and amend the lease, while removing a provision…
PLR 200521028: Foundation's stock redemption avoids self-dealing tax
A corporation controlled by a private foundation and other disqualified persons offered to redeem its common stock. The foundation planned to accept cash for its shares at full fair market value,…
CCA 200521027: IRS concurs that railroad business ceased employer status
The Railroad Retirement Board told the IRS that a business had ceased to be an employer under the railroad retirement and unemployment insurance laws. IRS counsel reviewed the Board's opinion and…
CCA 200521026: Qualified amended return does not fix tax interest liability
During an ongoing audit, a corporation gave the IRS a written qualified amended return in 1994 that increased proposed tax for 1988. It sought to deduct related deficiency interest for 1994. IRS…
PLR 200521025: New corporation gets more time to elect LIFO inventory accounting
A parent corporation transferred inventory to a newly formed subsidiary and wanted the subsidiary to use the last-in, first-out inventory method. Its former accounting firm failed to advise that the…
PLR 200521024: Corporation receives relief for late S election
A newly incorporated company intended to be treated as an S corporation from its incorporation date but did not file the election on time. The IRS found reasonable cause for the late filing and…
PLR 200521023: Isolated stock redemption creates no deemed distributions for other holders
A privately held company proposed to redeem part of one shareholder's nonvoting stock for a business reason. It represented that the redemption was a single, isolated transaction, not part of a plan…
PLR 200521022: Housing project gets time to make its low-income set-aside election
A taxpayer intended to elect the 40/60 minimum set-aside for a low-income housing project but failed to make the election properly for the relevant year. That option requires at least 40 percent of…
PLR 200521021: Taxpayers get more time to elect a small-business stock gain rollover
Taxpayers sold stock received in a merger and reinvested some proceeds in a new company within the period for a qualified small-business stock rollover. Their tax advisers tracked the sales and…
PLR 200521020: Surviving corporation gets relief for missed S election
One corporation was already an S corporation when it merged into a newer corporation that survived the merger. The surviving corporation had intended to elect S status from a specified earlier date…
PLR 200521019: Corporation receives relief for late S election
A company's sole shareholder intended to be treated as an S corporation from the incorporation date but did not file the election on time. The IRS found reasonable cause for the late filing and…
PLR 200521018: Subsidiaries count as joining consolidated return despite missing consents
A parent company acquired a corporate group and filed consolidated returns that included the acquired subsidiaries' income and deductions. Its preparer listed the subsidiaries on Form 851 but…
PLR 200521017: Licensed ambulance provider qualifies for public-sector excise tax exemptions
A charitable corporation licensed by a local hospital authority provided emergency medical and ambulance services to everyone in its city and county regardless of ability to pay. It asked whether it…
PLR 200521016: Former resident's expatriation lacked a principal tax-avoidance purpose
A long-term U.S. resident planned to lose lawful permanent resident status and asked whether tax avoidance was a principal purpose. Her net worth exceeded the threshold that, under the rules…
PLR 200521015: Former resident's expatriation lacked a principal tax-avoidance purpose
A former long-term U.S. resident surrendered his green card and asked whether tax avoidance had been a principal purpose. His net worth exceeded the threshold that, under the rules discussed in this…
PLR 200521014: Active rental operation qualifies for estate tax installment treatment
An estate asked whether interests in several companies holding rental real estate counted as a closely held business for estate tax installment payments. The decedent, her spouse, their son, and…
PLR 200521013: Parent gets time to correct subsidiary S election filed under wrong name
A company elected S corporation status and received all the stock of another corporation in a reorganization. It intended to treat that corporation as a qualified subchapter S subsidiary and filed…
PLR 200521012: Puerto Rico plan distributions avoid U.S. withholding and reporting
A company moved account balances for Puerto Rico employees from a U.S. retirement plan to a Puerto Rico plan. It asked how to treat earnings that accrued before the transfer when later paid to…
PLR 200521011: University may report annual tuition charges in billing year
A university began billing full-time undergraduates in the fall for an entire academic year. It asked whether its Form 1098-T for that calendar year could include qualified tuition and related…
PLR 200521010: Independent museum association is no longer a city instrumentality
A museum association had previously been treated as a city instrumentality when it also ran the city's libraries. After the city took over the libraries, the association asked whether it remained an…
PLR 200521009: Insurer may correct cash-value error in life policies
A life insurer's policies could pay an extra amount when surrendered early, but the insurer had left that amount out when calculating the policies' cash surrender value and minimum death benefit.…
PLR 200521008: Foreign company gets time to elect corporate tax classification
A foreign unlimited liability company intended to be taxed as a corporation from the date it was organized but did not file Form 8832. It asked the IRS for more time to make the entity…
PLR 200521007: Seller may undo mistaken election out of installment reporting
An S corporation sold assets with part of the purchase price held in escrow to protect the buyer against claims. Its accountant incorrectly advised that installment reporting was unavailable, so the…
PLR 200521006: Territory entity gets time to elect disregarded status
A U.S. corporate group formed a wholly owned entity under the laws of a territory and intended it to be disregarded for federal tax purposes from formation. The entity inadvertently failed to file…
PLR 200521005: Public retiree health trust and its benefits receive income exclusions
A statewide retirement system for police officers and firefighters created a trust to fund health coverage for retirees and eligible family members. Participating employers were governmental…
PLR 200521004: Late application to change tax year treated as timely
A taxpayer filed Form 1128 late to request a change in its annual accounting period. The IRS found that the taxpayer acted reasonably and in good faith, and that granting relief would not prejudice…
PLR 200521003: Special education tuition qualifies as medical care on stated facts
Parents asked whether tuition for two dependent children with diagnosed learning disabilities qualified as a medical expense. The IRS concluded that each child attended the school principally for…
PLR 200521002: Trust termination does not defeat investment holding in property exchange
A testamentary trust planned a like-kind real estate exchange before its fixed termination date. It would put the replacement property into a single-member LLC and later distribute LLC interests to…
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.