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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LLC gets extra time to make a late section 754 basis-adjustment election
A partnership (an LLC taxed as a partnership) wanted to make a section 754 election, which lets a partnership adjust the tax basis of its property when a partner's interest is transferred or property …
LLC gets late-election relief to be taxed as a corporation
A single-member LLC, wholly owned by a corporation, meant to elect to be treated as an association taxable as a corporation for federal tax purposes (rather than being disregarded, which is the defaul…
S corporation keeps its status after stock went to an ineligible shareholder
An S corporation can only have certain kinds of shareholders. Here, the sole shareholder transferred some shares to another party that did not qualify as an eligible S-corporation shareholder, which a…
S corporation keeps its status after shares briefly passed through a partnership
An S corporation can only be owned by eligible shareholders, and a partnership is not one of them. Here, shares of the S corporation were sold to an LLC that is treated as a partnership for tax purpos…
Court-approved settlement of an ambiguous trust term triggers no GST, gift, or income tax
An old trust, created and made irrevocable before September 25, 1985 (so it is grandfathered as exempt from generation-skipping transfer, or GST, tax), had a will provision that was ambiguous about wh…
IRS denies 501(c)(10) fraternal exemption to a property-holding entity
An organization applied to be recognized as a tax-exempt domestic fraternal society under Section 501(c)(10). Its only activity was owning a building it rented to a related fraternal lodge; its member…
IRS denies 501(c)(3) status to a foreign political party organization
An organization applied to be recognized as a tax-exempt charity under Section 501(c)(3). Its own articles of incorporation described it as a political party, and its stated aims were to build and ope…
IRS denies 501(c)(3) status to a recreational soccer club
A recreational soccer club applied for tax-exempt charitable status under Section 501(c)(3) using the streamlined Form 1023-EZ. After the IRS asked for more detail, the facts showed the club exists ma…
IRS denies 501(c)(3) status to a business networking group
A group of business owners and skilled tradespeople applied for tax-exempt charitable status under Section 501(c)(3) using the streamlined Form 1023-EZ. Its activities were running a farmers market wh…
A blockchain's change from proof of work to proof of stake does not tax existing cryptocurrency holders
Chief Counsel considered a cryptocurrency holder whose blockchain changed its transaction-validation method from proof of work to proof of stake. The holder kept the same ten units, the earlier transa…
Parties received more time to elect asset-sale treatment for an S corporation stock sale
An S corporation's shareholders sold all of its stock to a purchaser, and the parties intended to treat the transaction as an asset sale under section 336(e). A qualified tax professional failed to ad…
Donor received 120 days to elect GST trust treatment for prior transfers
A donor created a trust for descendants and transferred cash and securities to it over two years. The donor instructed an attorney to elect on Form 709 to treat the trust as a generation-skipping tran…
Partnership received 120 days to make a late GILTI high-tax exclusion election
A partnership that owned a controlled foreign corporation wanted to make the GILTI high-tax exclusion election for an earlier tax year. Its accounting firm prepared an administrative adjustment reques…
Subsidiary received 45 days to file the original Form 3115 after a due-date error
A corporate parent acquired a subsidiary in a transaction described as a tax-free merger, which ended the subsidiary's tax year. The subsidiary sought automatic accounting-method changes for capitaliz…
Estate received 120 days to make a late portability election
A decedent left a surviving spouse and an unused portion of the federal estate and gift tax exclusion. The estate represented that it was not otherwise required to file Form 706 because of the estate'…
Missed trust elections did not end the corporation's S status
Five trusts acquired shares of an S corporation. The beneficiaries of three trusts failed to make timely qualified subchapter S trust elections, making the corporation's original S election ineffectiv…
Late Form 8996 was treated as timely after an adviser used the wrong tax year-end
A corporation that had been a qualified opportunity fund converted to a partnership and later merged into another entity, creating a short tax year. The resulting partnership intended to self-certify …
Virtual-reality entertainment platform did not qualify under section 501(c)(3)
A nonprofit corporation proposed to build and maintain an open virtual-reality platform where users could socialize, play games, enter tournaments, and connect with proprietary platforms. Its articles…
Charity revoked for undocumented activity and personal expenses
The IRS revoked an organization's section 501(c)(3) status because it did not document activities that furthered an exempt purpose and did not substantiate that its president's expenditures served cha…
Insurer cannot deduct future retiree benefits as unpaid losses
A nonlife insurance company included the discounted actuarial value of future retiree medical, reimbursement, and life insurance benefits in unpaid loss adjustment expenses for three tax years. It arg…
Estate receives 120 days to make a late portability election
A decedent left a surviving spouse and an unused portion of the federal estate and gift tax exclusion, but the estate did not timely file Form 706 to elect portability. The estate represented that its…
Buyer and sellers receive late section 338(h)(10) election relief
A corporate buyer acquired all the stock of an S corporation from its shareholders and their trusts in a transaction represented to be a qualified stock purchase. The parties intended to make a joint …
Tax-exempt-controlled company receives 60 days for late depreciation election
A taxable corporation was wholly owned by a section 501(c)(3) organization and therefore was a tax-exempt controlled entity for depreciation purposes. Through a partly owned subsidiary, it held proper…
Two foreign subsidiaries receive late disregarded-entity election relief
A foreign parent owned two foreign eligible entities that each intended to elect disregarded-entity status from its formation date but missed the Form 8832 deadline. The IRS concluded that both entiti…
Partnership-style operating agreement does not end S status
An S corporation's operating agreement contained partnership provisions that allowed liquidation distributions based on members' capital interests or section 704 capital accounts. Those terms failed t…
Late QSST election preserves S corporation status
An S corporation issued shares to a trust that qualified to be a qualified subchapter S trust, but the trust beneficiary did not timely make the QSST election. The trust and beneficiary nevertheless f…
Missed ESBT election does not end S corporation status
After a shareholder died, S corporation shares passed under the shareholder's will to a trust that could hold the stock for two years without a special election. The trust was eligible to be an electi…
Missed QSST election does not end S corporation status
Shares of an S corporation were transferred to a trust that was eligible to be a qualified subchapter S trust, but the trust beneficiaries did not timely make the required QSST election. That omission…
Invalid S corporation and QSub elections treated as effective
A limited liability company elected S corporation status, but its operating agreement allowed disproportionate liquidation distributions and therefore created a prohibited second class of stock. After…
Member fishing club denied section 501(c)(3) status
An organization applied for section 501(c)(3) status for activities centered on fishing meetings, member tournaments, and discussions of fishing and outdoor topics. It also held some events involving …
Partnership receives 30 days to file a late tax-year change request
A partnership became majority-owned by a corporation with a March 31 tax year, requiring the partnership to change from a calendar year to the majority partner's fiscal year. Its tax professionals fil…
Consolidated group receives 75 days to waive a loss carryback
A consolidated group incurred a consolidated net operating loss and intended to give up the entire carryback period, but its return did not include a valid election statement. The parent represented t…
Corporation receives 90 days to perfect its IC-DISC election
A corporation formed to operate as an interest charge domestic international sales corporation mailed Form 4876-A within the first tax year's 90-day election period. Its tax professional did not advis…
Opportunity fund receives 60 days for late self-certification
A partnership was formed to invest capital gains in qualified opportunity zone property and hired an adviser to prepare its returns and required elections. Although the adviser had the information nee…
Foreign entity receives late disregarded-entity election relief
A foreign eligible entity intended to be treated as a disregarded entity from its formation date but failed to file Form 8832 on time. The IRS concluded that the entity met the standards for discretio…
REIT receives 90 days to make a late taxable-subsidiary election
A real estate investment trust formed a subsidiary to lease and operate a hotel and intended to elect taxable REIT subsidiary status from the REIT conversion date. The election was missed because the …
Partnership receives 120 days to make a late section 754 election
A partnership failed to make a section 754 election after a deceased partner's interest passed to several successors. The IRS concluded that the partnership met the standards for discretionary relief …
Annuity-paid investment advisory fees are not owner distributions
A life insurance company proposed variable, fixed-indexed, and hybrid nonqualified deferred annuity contracts designed for owners who receive ongoing investment advice about the contracts' available o…
Annuity-paid investment advisory fees are not owner distributions
A life insurance company proposed variable, fixed-indexed, and hybrid nonqualified deferred annuity contracts designed for owners who receive ongoing investment advice about the contracts' available o…
Late qualified opportunity fund self-certification accepted
A partnership formed to operate as a qualified opportunity fund missed the deadlines for its Form 1065 and Form 8996 after a communication failure over which accounting firm would prepare the return. …
Foreign entity receives late disregarded-entity election relief
A foreign entity with one owner failed to file Form 8832 on time to elect disregarded-entity status from a redacted effective date. The IRS concluded that the entity met the standards for discretionar…
Late accounting-method-change forms treated as timely
A parent company requested filing relief for controlled foreign corporations that changed how they accounted for rent expense under the automatic consent procedures. The parent intended to extend its …
Partnership's late qualified opportunity fund certification is treated as timely
A partnership was formed to operate as a qualified opportunity fund and stated that purpose in its operating agreement. One member told an experienced tax preparer about the investment and the fund's …
Foreign entity receives 120 days for late disregarded-entity election
A foreign eligible entity intended to be classified as a disregarded entity for U.S. federal tax purposes but failed to file Form 8832 on time. It represented that the failure was inadvertent, that it…
Corporation receives 90 days to make late IC-DISC election
A corporation was formed to operate as an interest charge domestic international sales corporation and attempted to file Form 4876-A for its first tax year. The filing was outside the normal 90-day wi…
202313012: IRS approves need-based college scholarship procedures
A private foundation proposed scholarships for financially needy graduating high school students attending accredited postsecondary institutions in a specified state. The program would prioritize stud…
202313011: IRS approves applied-science and engineering scholarship procedures
A private foundation proposed renewable scholarships for students pursuing engineering, applied sciences, or related fields in a specified area. A selection committee appointed by the board would eval…
202313010: Large stock bequest qualifies as an unusual grant for public-support testing
A publicly supported charity expected a large bequest of company stock that, if counted normally, would cause it to fail the public-support test. The donor had no control over the charity and had only…
202313009: IRS denies exemption to social fraternity involved in political campaigning
A fraternity-like organization sought section 501(c)(3) status and described its members as sharing democratic, freedom, and equal-justice principles tied to a related organization in another country.…
Donor receives 120 days to elect GST trust treatment for prior transfers
A donor created a trust for descendants and made several transfers of cash and securities to it over two years. The donor instructed an attorney to elect on Form 709 to treat the trust as a generation…
Corporate group receives 120 days for late GILTI high-tax election
A U.S. corporate group wanted to make the GILTI high-tax exclusion election for income of its wholly owned controlled foreign corporation. Its accounting firm recognized the benefit before the 24-mont…
Trust settlement causes no GST, gift, gain, or excess-income tax consequences
A trust that became irrevocable before September 25, 1985 contained ambiguous instructions for dividing its remainder among descendants when it terminated. The potential beneficiaries negotiated a cou…
Housing project receives 120 days to make average-income set-aside election
The owner of a single-building low-income housing project intended to choose the average-income minimum set-aside under section 42(g)(1)(C). Its contemporaneous records reflected that intent, but it i…
Estate receives 120 days to complete GST exemption allocation to trust
A decedent's will created separate residuary trusts for three children. The estate's attorney intended to allocate all available generation-skipping transfer tax exemption to one trust on Form 706, bu…
LLC may change from S corporation status to disregarded entity within 60 months
A single-owner limited liability company had elected S corporation status, which also caused it to be classified as an association taxable as a corporation. It later came under new ownership, with the…
Late tangible-property elections are treated as timely after missed extension filing
A corporate group intended to extend its federal income tax return but failed to file Form 7004 after pandemic filing relief changed its normal extension process and staff turnover contributed to the …
Three partnerships receive 120 days to make late section 754 elections
Three related partnerships missed section 754 elections after deaths and transfers of partnership interests. The elections would have permitted basis adjustments to partnership property under sections…
Partnership cannot elect out of BBA on a late return
IRS Chief Counsel was asked whether a delinquent partnership return could make an election out of the centralized partnership audit regime commonly called BBA. The response was no. An election out is …
202311009: IRS approves scholarship procedures for student athletes
A private foundation requested advance approval for a scholarship program that would help student athletes pay for textbooks and study materials at colleges, universities, and technical or vocational …
202311008: IRS approves employer-related scholarship procedures
A private foundation sought advance approval for an employer-related scholarship program benefiting children or relatives of employees of a corporation. An independent nonprofit would run the competit…
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.