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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Determination 200505023: Charitable exemption claim finally denied
The IRS issued a final adverse ruling on an organization's claim for tax exemption under IRC § 501(c)(3). The letter says the organization failed to establish that it operated exclusively for…
TAM 200505022: Spouse's limited trust rights fail estate tax marital deduction tests
A decedent's will placed the estate residue in a trust for the surviving spouse and later beneficiaries. The estate claimed a marital deduction for the trust property. The IRS concluded that the…
PLR 200505021: Corporation may revoke alternative research credit election
A parent corporation had elected the alternative incremental method for calculating the research credit for its controlled group. After the parent sold a subsidiary, that corporation asked to revoke…
PLR 200505020: IRS permits revocation of alternative research credit election
A corporation had elected the alternative incremental method for computing its research credit. It asked the IRS for consent to revoke that election before its return was due for a later tax year.…
PLR 200505019: Inadvertent ineligible trust ownership does not end S status
Two shareholders transferred shares of an S corporation to a trust that was ineligible to own them, terminating the company's S election. After discovering the problem, the trust returned the…
PLR 200505018: Foreign company given time to elect disregarded status
A foreign limited company became wholly owned by another company. The sale agreement called for an entity classification election effective on the acquisition date, but Form 8832 was not filed on…
PLR 200505017: Housing partnership given time to make credit elections
A partnership placed a low-income housing project in service but inadvertently missed two elections for each building. One would start the 10-year credit period in the following year; the other…
PLR 200505016: Estate given time to elect family business deduction
An estate made up primarily of family farming assets filed its estate tax return without electing the qualified family-owned business deduction. The attorney handling the return had not advised the…
PLR 200505015: Company allowed to revoke alternative research credit election
A corporation had elected to calculate its research credit under the alternative incremental method. It asked the IRS to let it revoke that election before the due date of its return for a later tax…
PLR 200505014: Corporation allowed to file late S election
A corporation's shareholder intended S corporation treatment from the date of incorporation, but the corporation did not file Form 2553 on time. The IRS found reasonable cause for the late election…
PLR 200505013: City retiree health trust income excluded from tax
A city proposed a trust funded by a single city contribution to reimburse certain retirees and spouses for health costs. The trust's funds could be used for plan benefits and administration, with…
PLR 200505012: Trust mistakes excused to preserve S corporation status
Several trusts holding an S corporation's shares failed to distribute income as required for qualified Subchapter S trusts. A beneficiary also failed to make the required elections for two other…
PLR 200505011: LLC given time for corporate classification and S elections
The sole owner of an LLC intended it to be taxed as an S corporation from a specified date. The LLC missed both the Form 8832 election to be taxed as a corporation and the Form 2553 S corporation…
PLR 200505010: S corporation restructuring qualifies as reorganization
An S corporation proposed a series of entity elections, a share exchange, and a state law conversion that would leave its business in a limited partnership taxed as a corporation. The IRS ruled that…
PLR 200505009: Spin-off stock distribution generally free of gain
A foreign parent planned to move the voting stock of a domestic subsidiary out of another subsidiary through repeated share transfers and cancellations. The IRS treated the steps as a distribution…
PLR 200505008: Estate may deduct charitable trust gifts and residue
A decedent's trust directed gifts to charities through one gift trust, gifts to individuals through two others, and the remaining property to a foundation. The estate sought an estate tax charitable…
PLR 200505007: LLC given time for corporate classification election
A limited liability company filed a corporate income tax return for its first tax year but inadvertently failed to file Form 8832 to elect corporate tax classification. The IRS found that it met the…
PLR 200505006: Company given time to file LIFO inventory election
An S corporation consistently used the last-in, first-out inventory method for tax and financial reporting after acquiring inventory, but it failed to attach the required Form 970 to its first…
PLR 200505005: Federal agency research scientist classified as employee
A federal agency asked whether a research scientist working under a memorandum of understanding was its employee for employment tax purposes. The agency assigned and supervised the work, supplied…
PLR 200505004: Lump-sum vacation pay requires supplemental wage withholding
An employer paid union employees lump-sum vacation allowances twice a year, whether or not they took vacation. Its union agreement called for income tax withholding as though each lump sum were…
PLR 200505003: Late S corporation election may take effect at incorporation
A corporation's sole shareholder intended S corporation status from the date the company was incorporated, but its Form 2553 was filed late. The IRS found reasonable cause for the missed deadline…
PLR 200505002: Missed trust election treated as inadvertent S termination
A family trust received stock in an S corporation under a shareholder's will. When the trust's two-year period as an eligible shareholder ended, its beneficiary had not elected qualified Subchapter…
PLR 200505001: Late family trust election excused for S corporation
A deceased shareholder's estate transferred S corporation stock to a family trust. After the trust's two-year period as an eligible shareholder ended, its beneficiary failed to elect qualified…
PLR 200504042: IRA rollover deadline waived after custodian error
A taxpayer transferred funds from an IRA to another custodian after an officer assured him that the money would go into IRA accounts. The officer instead placed it in ordinary certificates of…
PLR 200504041: IRA rollover waiver denied after funds spent
An older taxpayer withdrew funds from her IRA after account problems and deposited part of the distribution into a personal savings account. She used most of the IRA money for personal expenses,…
PLR 200504040: ESOP loan may be repaid from redeemed shares on termination
A company's employee stock ownership plan could no longer make its loan payments from company contributions and dividends. The company proposed to terminate the plan, redeem unallocated company…
PLR 200504039: City may treat picked-up pension contributions as employer contributions
A city agreed to pay the mandatory two percent pension contributions of certain employees to a governmental plan. The IRS ruled that the picked-up amounts would count as employer contributions under…
PLR 200504038: Pension plan receives conditional minimum funding waiver
A company's defined benefit pension plan faced a funding deficiency for its 2003 plan year. The company reported declining revenue, customer bankruptcies or closures, and losses over three years.…
PLR 200504037: Tuition payment does not justify late IRA rollover
A parent withdrew money from an IRA to pay a daughter's college tuition, expecting student loan proceeds in time to replace the money within 60 days. The aid took longer than expected, and the…
PLR 200504036: Hospitalizations justify waiver of retirement plan rollover deadline
A former employee received a lump-sum payment from an employer retirement plan after repeated hospitalizations and the loss of his job. Further hospitalizations prevented him from moving the payment…
PLR 200504035: Electric cooperative may add internet service without losing exemption
A tax-exempt rural electric cooperative proposed to offer internet service to its members through a separate communications division. Subscribers would become voting members, and each division would…
TAM 200504034: Specialized semitrailers are exempt from retail excise tax
A manufacturer sold two specialized semitrailer products: vehicles for hauling and unloading hot asphalt at paving sites, and bodies for hauling and unloading feed, seed, or fertilizer at farms. The…
CCA 200504033: Faxed collection waivers may be valid with safeguards
An IRS collection unit asked whether taxpayers could send signed Forms 900, which extend the time for tax collection in connection with installment agreements, by fax. Chief Counsel advised that a…
CCA 200504032: Frivolous return penalty has no reasonable cause exception
IRS attorneys asked Chief Counsel to reconsider earlier advice about military personnel who claimed the foreign earned income exclusion on returns seeking refunds. They supplied additional facts…
CCA 200504031: Rules for U.S. charities making grants abroad
Chief Counsel surveyed the rules for U.S. charities and private foundations funding activities abroad. A U.S. charity may operate overseas or grant funds to foreign groups and individuals, but it…
CCA 200504030: Life insurer's reserve change required accounting method consent
A life insurance company stopped including obligations tied to deferred and uncollected premiums in its federal tax reserves. It argued that IRC § 807 allowed the change without obtaining consent…
CCA 200504029: Foreign sellers may deduct costs tied to U.S. property gain
Chief Counsel addressed foreign taxpayers whose only reported U.S. income was gain from selling U.S. real property. They could not elect under IRC §§ 871(d) or 882(d) to treat that gain as…
CCA 200504028: Handling false foreign earned income exclusion refund claims
Chief Counsel reviewed returns claiming the foreign earned income exclusion while listing domestic addresses for taxpayers and employers. It advised that the frivolous return penalty under IRC §…
CCA 200504027: Federal tax treatment of New York City property tax rebates
Chief Counsel analyzed a New York City rebate of residential property taxes. A homeowner must report the rebate as income to the extent it recovers a property tax deduction that reduced federal tax…
PLR 200504026: Former resident avoids tax-avoidance presumption, but purpose remains unresolved
A former U.S. long-term resident surrendered her green card and returned to the country where she was born. Her net worth exceeded a threshold that could trigger a presumption of tax avoidance under…
PLR 200504025: Green card surrender avoids presumption, but tax purpose is undecided
A former U.S. long-term resident surrendered his green card and returned to his country of birth. His net worth exceeded a threshold for a presumption that avoiding U.S. tax was a principal purpose…
PLR 200504024: Spouses receive more time to allocate GST exemption to trusts
A married couple intended to allocate their generation-skipping transfer tax exemptions to two trusts, but their accountants omitted or mishandled allocations on gift tax returns. The IRS granted…
PLR 200504023: Former citizen rebuts expatriation tax-avoidance presumption
A U.S. citizen who had long lived in another country relinquished her U.S. citizenship. Her net worth exceeded the threshold for a presumption that avoiding U.S. tax was a principal purpose. She…
PLR 200504022: Former citizen avoids expatriation tax presumption, not factual review
A naturalized U.S. citizen renounced his citizenship and returned to his country of birth. His net worth exceeded the threshold for a presumption that avoiding U.S. tax was a principal purpose. The…
PLR 200504021: Corporation receives relief for late S election
A corporation intended to be taxed as an S corporation from the day it was incorporated, but did not file its election on time. The IRS found reasonable cause for the late filing and granted relief…
PLR 200504020: Late S election effective from intended date
A corporation intended to elect S corporation tax status from a specified date, but did not file Form 2553 on time. The IRS found reasonable cause for the late election and granted relief under IRC…
PLR 200504019: Buyer and seller receive more time for section 338 election
A corporate buyer acquired all stock of an S corporation, but the buyer and seller failed to file their joint IRC § 338(h)(10) election on time. The IRS granted 45 days from the ruling letter to…
PLR 200504018: Foreign entity gets more time for classification election
A foreign entity intended to elect treatment as a disregarded entity for U.S. federal tax purposes but did not file Form 8832 on time. It represented that it was eligible to make the election. The…
PLR 200504017: Late disregarded entity election allowed for foreign entity
A foreign entity missed the deadline to elect treatment as a disregarded entity for U.S. federal tax purposes. It represented that it was eligible to make that classification election. The IRS…
PLR 200504016: Foreign entity receives extension for Form 8832 election
A foreign entity intended to elect disregarded entity treatment for U.S. federal tax purposes but inadvertently missed the Form 8832 filing deadline. It represented that it was eligible to elect…
PLR 200504015: Late foreign entity classification election accepted
A foreign entity intended to be treated as a disregarded entity for U.S. tax purposes but inadvertently failed to file Form 8832 on time. It represented that it was eligible to make the election.…
PLR 200504014: Extension granted for foreign entity's classification election
A foreign entity intended to elect disregarded entity treatment for U.S. federal tax purposes but missed the Form 8832 filing deadline. It represented that it was eligible to make the election. The…
PLR 200504013: Foreign entity may file late disregarded entity election
A foreign entity meant to elect disregarded entity treatment for U.S. federal tax purposes, but Form 8832 was inadvertently filed late. The entity represented that it was eligible for that…
PLR 200504012: K-9 assignment permits reduced home sale gain exclusion
A police officer and spouse bought a townhouse, then the officer was selected for a K-9 assignment requiring a dog kennel at home. The townhouse association prohibited kennels, so they sold before…
PLR 200504011: LLC receives relief for late corporation and S elections
An LLC intended to elect corporate tax classification and then S corporation status, both effective when it was formed. It inadvertently missed the deadlines for Forms 8832 and 2553. The IRS gave it…
PLR 200504010: Group may file late waiver of loss carryback period
A parent and five subsidiaries left one consolidated tax group after a stock sale and intended to waive the part of their loss carryback period tied to the former group. They missed the deadline to…
PLR 200504009: Federal agency's contract worker was a common law employee
A federal agency engaged a worker under a written contract as an instructor and training developer. The agency assigned and supervised her work, set her schedule, supplied equipment, and paid an…
PLR 200504008: Municipal risk pool's income excluded under section 115
An agency formed by municipalities and other public bodies pooled members' workers' compensation and other insurance risks. Only public entities could join, and any distributions or assets remaining…
PLR 200504007: Fund may revoke distribution calculation election
A regulated investment company had elected to use its December 31 tax year instead of an October 31 measuring period to calculate capital gains for its required distribution under IRC § 4982. The…
PLR 200504006: Stock option pay qualifies as performance-based compensation if approved
A public company had granted an executive stock options under shareholder-approved plans, but the plans did not set a per-employee option limit. The grants specified their share counts and exercise…
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.