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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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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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.…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
501(c)(6) denied to a farmers'-market group that serves its own vendors, not a whole line of business
An organization that runs a weekly summer farmers' market (plus a one-day festival) applied to be recognized as a tax-exempt business league under section 501(c)(6), and the IRS denied it. To…
501(c)(3) revoked because its charter gives assets to members on dissolution (fails the organizational test)
A regional association that coordinates member-club shows and awards an annual scholarship, recognized as a 501(c)(3) public charity (classified under 509(a)(2)), lost its exemption on a technical…
IRS may offset COVID-19 employment tax credits against a PEO's own tax debts, even for credits tied to client wages
This Chief Counsel Advice, issued as an internal email, addresses whether the IRS can apply (offset) refundable COVID-19 employment tax credits, such as the employee retention credit (ERC) and the…
Late election to waive the NOL carryback period granted to a consolidated group (9100 relief)
A parent company that files a consolidated tax return for its corporate group asked the IRS for extra time to make a missed election. When a consolidated group has a net operating loss (a "CNOL"),…
Cloud-software company is not a "reputation or skill" business, so its stock can qualify for the section 1202 gain exclusion
A founder who sold his stock in an enterprise cloud-software company asked the IRS to confirm that the company is not the kind of business disqualified from the section 1202 tax break for "qualified…
S corporation's inadvertent termination forgiven under section 1362(f) after ineligible LLC shareholders bought in
A company that had elected to be taxed as an S corporation accidentally lost that status when three limited liability companies (one taxed as a partnership, two owned by corporations) bought shares.…
Late Form 1128 to change an accounting period allowed under 9100 relief
A taxpayer wanted to change its tax year (accounting period) and needed to file Form 1128 to get IRS permission, but missed the filing deadline. Under Rev. Proc. 2002-39, Form 1128 must be filed by…
Partnership allowed to revoke an accidental election out of the installment method
A partnership sold property and took back promissory notes payable over several years, so the gain qualified to be reported under the "installment method," which spreads the taxable gain over the…
Credit union must file Forms 1099-C for debt written off in a class-action settlement (an "identifiable event")
A credit union asked the IRS to rule that it did not have to file Forms 1099-C (the information return for cancelled debt) when it wrote off deficiency balances as part of a class-action settlement.…
S corporation's inadvertent termination forgiven where a trust shareholder missed its ESBT election
A company taxed as an S corporation had a shareholder that was a trust. The trust started out as a grantor trust (treated as owned by an individual, which is an eligible S corporation shareholder),…
Late check-the-box election to be taxed as a corporation allowed under 9100 relief
A limited liability company wanted to be classified as a corporation for federal tax purposes (an "entity classification," or "check-the-box," election) effective on a chosen date, but it missed the…
Late QSub election allowed under 9100 relief
An S corporation bought another corporation as a wholly owned subsidiary and meant to treat it as a qualified subchapter S subsidiary (a "QSub"), which lets the IRS ignore the subsidiary as a…
Inadvertent S-corp termination relief after trust missed its ESBT election
A corporation was taxed as an S corporation, which passes its income through to shareholders instead of paying corporate tax. S corporations can only have certain kinds of shareholders. When the…
Inadvertent S-corp termination relief after trust missed its ESBT election
A corporation was taxed as an S corporation, which passes its income through to shareholders instead of paying corporate-level tax. S corporations may only have certain kinds of shareholders. When…
Inadvertent invalid S election relief where an IRA held the stock
A company elected to be taxed as an S corporation, which passes income through to its shareholders. S corporations may only have eligible shareholders. From the very start, though, some of the…
9100 relief for a late Section 59(e) election to amortize R&D costs over 10 years
A consolidated group of corporations wanted to spread the deduction for its research and experimental (R&D) costs over 10 years rather than take them all at once, an option Code § 59(e) allows if…
Consent to a retroactive QEF election after an advisor missed the foreign company's PFIC status
A U.S. taxpayer owned an interest in a foreign company that was a passive foreign investment company (a "PFIC"). PFIC ownership triggers unfavorable U.S. tax rules unless the shareholder makes a…
IRS revokes a fraternity chapter-house club's 501(c)(7) exemption for leasing its house to nonmembers and losing member fellowship
A tax-exempt social club, described in the record as a fraternity or sorority chapter-house corporation, lost its federal income tax exemption. To qualify under IRC Section 501(c)(7), a club must…
IRS denies 501(c)(7) exemption to a club funded by hall rentals, catering, and a bar that also pays member death benefits
An organization applied to be recognized as a tax-exempt social club under IRC Section 501(c)(7), and the IRS turned it down. A qualifying social club must be run mainly for the pleasure and…
IRS denies 501(c)(3) status to a fee-based health care sharing membership program as serving private, commercial interests
An organization that runs a health care sharing program applied for charitable tax-exempt status under IRC Section 501(c)(3), and the IRS denied it. Members pay a monthly fee and, in return, get…
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.