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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Insurer's contingent deferred annuity qualified under section 72
A life insurance company planned to issue a contingent deferred annuity linked to an individual's separately owned taxable investment account. The individual would retain control of the account, while…
Insurer's contingent deferred annuity qualified under section 72
A life insurance company planned to issue a contingent deferred annuity linked to an individual's separately owned taxable investment account. The individual would retain control of the account, while…
Estate received 120 days to make a late portability election
An estate was not otherwise required to file Form 706 because the decedent's gross estate and adjusted taxable gifts were below the filing threshold. The estate nevertheless needed a timely return to …
Parties received extra time to complete a section 336(e) election
A purchaser acquired all the stock of an S corporation from its shareholder, and the parties intended to elect under section 336(e) to treat the qualified stock disposition as an asset disposition. Th…
S corporation received relief after four trusts missed ESBT elections
An S corporation shareholder transferred stock to a grantor trust. When the shareholder died, the trust remained an eligible S corporation shareholder for two years, but its trustee failed to make an …
S corporation received 120 days to file a late QSub election
An S corporation intended to treat a wholly owned subsidiary as a qualified subchapter S subsidiary (QSub) but did not timely file Form 8869. It asked for an extension under Treasury Regulation § 301.…
Foreign entity received 120 days to elect partnership status
A foreign eligible entity intended to be classified as a partnership for U.S. federal tax purposes but did not timely file Form 8832. It represented that it acted reasonably and in good faith and that…
Real estate business received 60 days to make a late interest election
A real estate and investment advisory company intended to make the real property trade or business election that removes an electing business from the section 163(j) business-interest limitation. Its …
Partnership received 120 days to make a late section 754 election
A partnership timely filed its return for the year in which a partner died, but it inadvertently omitted a valid section 754 election to adjust the basis of partnership property. The IRS found that th…
Partnership received 120 days to make a late section 754 election
A limited partnership missed a section 754 election for the year in which a partner died and the partner's interest was to pass to testamentary lifetime trusts. The partnership had relied on its retur…
LLC received 120 days to elect corporate tax status
A limited liability company reorganized in a second state and intended to be treated as an association taxable as a corporation from the reorganization date. It failed to file Form 8832 on time becaus…
IRS approves a renewable college scholarship program
A private foundation asked the IRS to approve its procedures for renewable scholarships for high school seniors, graduates, and GED recipients entering undergraduate or vocational study. Applicants ha…
Pension plan receives ten-year substitute mortality table approval
A pension plan asked to use experience-based substitute mortality tables for male and female annuitants, including disabled participants, beginning November 1, 2022. The plan added 2019 experience to …
IRS approves a litigation-related contingent set-aside
A private foundation was subject to a court order requiring a fiduciary to hold distributions otherwise payable to one beneficiary while litigation was pending. The funds had to remain invested with t…
IRS approves a community scholarship program
A private foundation created a nonrenewable scholarship program honoring its founder and serving members of a large religious community, their children, and participants in the community's youth and r…
IRS approves expanded international employee scholarships
A private foundation asked to expand an already approved employer-related scholarship program to children of employees of affiliated companies outside the United States. International awards would gen…
IRS revokes a treatment program's exemption for private benefit
The IRS revoked a treatment program's section 501(c)(3) status after concluding that it served private interests and allowed earnings to benefit insiders. The program charged for treatment but did not…
Baseball umpire association denied 501(c)(3) reinstatement
A local baseball umpire association applied to reinstate its section 501(c)(3) exemption after an automatic revocation for missed annual filings. The IRS found that its articles did not limit its purp…
Social club loses exemption over public hall rentals
The IRS revoked a social club's section 501(c)(7) exemption after it regularly rented its facility to the general public. The club made the hall available on Saturdays, displayed signs advertising ren…
Charity loses exemption after failing to substantiate its overseas support activity
The IRS revoked a charity's section 501(c)(3) exemption after an examination produced too little information to establish how it operated. The organization said it supported an overseas educational or…
IRS approves employer-related community scholarship procedures
A private foundation asked the IRS to approve an employer-related scholarship program for students in its community. Employees and their dependents could apply after six months of employment, and othe…
Supplemental split-off ruling clarifies the overlapping-shareholder comparison
The IRS supplemented and modified an earlier ruling involving a split-off distribution followed by a combination with another company. The change explains how the distributing corporation must compare…
Foreign corporation received 30 days to file a late branch-tax election statement
A foreign corporation owned a disregarded U.S. limited liability company that conducted a U.S. trade or business. When the LLC elected corporate status, its assets were treated as contributed to a new…
Corporation received 120-day relief for a late GILTI high-tax election
A domestic corporation sought to make the GILTI high-tax exclusion election for its wholly owned controlled foreign corporation on an amended return. The election regulations were not final when the o…
IRS issues tax rulings for a business spin-off and Reverse Morris Trust combination
A publicly traded corporation proposed to separate one business into a controlled corporation and then combine that company with an unrelated public corporation. The distribution could occur as a pro …
Affiliated group received 75 days to make a late consolidated-return election
A corporate parent and its affiliated group failed to timely elect to file a consolidated federal income tax return for a redacted tax year. The parent sought discretionary relief before the IRS disco…
Consolidated group received 75 days to waive an NOL carryback period
A consolidated corporate group incurred a consolidated net operating loss and intended to give up the entire carryback period for that loss. The group filed its return consistently with that intention…
Foreign entity received 120 days for a late corporate classification election
A foreign eligible entity was formed through an amalgamation and intended from formation to be treated as an association taxable as a corporation for U.S. federal tax purposes. It failed to file Form …
Parties received relief for a late section 336(e) election
A partnership, acting through a disregarded entity, acquired more than 80 percent of an S corporation target from its shareholders. The parties intended to elect under section 336(e) to treat the stoc…
Estate received 120 days to make a late QTIP election
A decedent's trust divided at death into a family trust and a marital trust intended to qualify as qualified terminable interest property. The marital trust required all income to be paid to the survi…
Opportunity-zone business may count land-sale income toward its active-business test
A qualified opportunity zone business was developing a retail and multifamily real estate project on two parcels. During its start-up period, an unrelated buyer unsolicitedly offered to purchase one p…
LLC kept S corporation status despite agreements creating a second stock class
A limited liability company elected S corporation treatment while operating agreements gave its owners different rights to regular and liquidating distributions. The agreements required capital accoun…
Corporation received 120 days to file a late S election
A corporation's two shareholders intended for the company to be an S corporation from its incorporation date, but the company inadvertently failed to timely file Form 2553. The IRS found reasonable ca…
Foreign entity received 120 days for a late disregarded-entity election
A foreign eligible entity intended to be disregarded as separate from its owner from its formation date but failed to timely file Form 8832. The IRS found the discretionary late-election standards sat…
LLC received 120 days for late corporate-classification and S elections
A domestic limited liability company intended to be taxed as an S corporation from its formation date but did not properly and timely file Form 2553. Because an LLC must first be treated as a corporat…
Large endowment grant qualifies as an unusual grant
A publicly supported charity expected a large grant from an unrelated private foundation to create an endowment supporting fellowships for emerging scholars researching financial history. The donor ha…
Charity loses exemption over uncontrolled foreign spending and private benefit
The IRS revoked a charity that primarily wired funds to a separately organized foreign entity and relied on a local manager to spend them. The charity had no written agreements, did not require suppor…
Social club loses exemption over public operations and excess nonmember income
The IRS revoked a social club whose facility, bar, games, fundraisers, food sales, and event rentals were open to members and the general public. Member dues were only a small portion of revenue, whil…
Charity loses exemption after ignoring repeated examination requests
The IRS repeatedly asked a charity for financial and operational records needed to examine its continued qualification under section 501(c)(3). An initial letter was returned, but later requests were …
Franchise advertising cooperative denied business-league exemption
A group of franchisees for one company formed a marketing cooperative to pool required advertising contributions and buy sponsorships, direct mail, digital advertising, and other promotions for their …
Dissolved charity loses exemption after failing the operational test
A charity failed to provide records requested during an IRS examination, even after receiving an extension because of the global pandemic. The organization later told the IRS that it had dissolved bec…
Youth charity loses exemption after officers received personal benefits
A youth charity conducted speaking programs and camps that furthered exempt purposes, but its records showed substantial personal payments to its two remaining officers beyond reasonable compensation.…
Non-filer portal simplified return starts the assessment limitations period
Chief Counsel advised that a one-dollar simplified return filed through the Economic Impact Payment non-filer portal is a federal income tax return, including for the assessment limitations period in …
Deferred intercompany stock-distribution gain is excluded after subsidiary merger
A consolidated group acquired a subsidiary and its lower-tier subsidiary in a taxable stock purchase without a section 338 election. The acquired parent later distributed the lower-tier subsidiary’s s…
Temporary retention of spun-company shares does not show a tax-avoidance plan
A publicly traded foreign corporation planned to separate one business after first selling a minority stake in the operating subsidiary through an initial public offering. The separation used share ex…
Three foreign entities received 120 days for late disregarded-entity elections
Three foreign eligible entities intended to be disregarded as separate from their common owner from their respective formation dates but failed to timely file Forms 8832. The IRS found that all three …
Spouse received 120 days to allocate GST exemption to an irrevocable trust
A married couple created separate irrevocable trusts and transferred assets to them, but their attorney did not adequately advise them to file gift tax returns or allocate generation-skipping transfer…
S corporation sale received relief for a late section 336(e) election
A partnership, acting through a disregarded entity, acquired more than 80 percent of an S corporation target from its shareholders. The parties intended to elect under section 336(e) to treat the stoc…
Parties received relief to complete a late section 336(e) election
A partnership, acting through a disregarded entity, acquired more than 80 percent of an S corporation target from its shareholders. The parties intended to elect under section 336(e) to treat the stoc…
Estate received 120 days to make a late portability election
A decedent’s estate was not otherwise required to file an estate tax return but needed Form 706 to elect portability of the deceased spouse’s unused exclusion amount to the surviving spouse. The estat…
Corporation keeps S status after beneficiary missed QSST election
Shares of an S corporation were transferred to a trust that met the substantive requirements for a qualified subchapter S trust, but the income beneficiary failed to make the required QSST election. T…
GRAT donor received 120 days to opt out of automatic GST allocation
A taxpayer transferred a company interest to a grantor retained annuity trust whose remainder would pass to a family trust after the retained annuity period ended. The taxpayer intended to preserve ge…
IRS approves a foundation's scholarship procedures for local students under section 4945(g)(1)
A private foundation asked the IRS to approve, in advance, how it awards scholarships. Private foundations owe an excise tax on grants to individuals for study unless the IRS pre-approves the award pr…
IRS approves a foundation's educational-grant procedures for faith-based social entrepreneurs under section 4945(g)(3)
A private foundation asked the IRS to approve, in advance, how it awards educational grants. Private foundations owe an excise tax on grants to individuals unless the IRS pre-approves the award proced…
IRS approves a foundation's scholarship procedures for local high school and vocational students under section 4945(g)(1)
A private foundation asked the IRS to approve, in advance, how it awards scholarships. Private foundations owe an excise tax on grants to individuals for study unless the IRS pre-approves the award pr…
IRS denies 501(c)(3) status to a cultural group that mainly pays members' funeral costs
An organization that promotes a particular cultural heritage applied to be recognized (actually, reinstated) as a tax-exempt charity under IRC section 501(c)(3) after losing its exemption for not fili…
IRS denies 501(c)(3) status to a group promoting trade between two countries for its member businesses
An organization applied (using the streamlined Form 1023-EZ) to be recognized as a tax-exempt charity under IRC section 501(c)(3). Its stated purpose is to be an impartial promoter of commerce, touris…
Private foundation loses exemption after failing to provide examination records
The IRS asked a private foundation to schedule an examination and provide its books, records, and activity information. The request was sent to the address shown on its return, was not returned as und…
Inactive charity loses exemption after repeated recordkeeping failures
A charity had previously failed an IRS recordkeeping review and signed an agreement to maintain source documents, legible receipts, loan records, bank statements, and other financial records. In a lat…
Political organization denied social-welfare exemption for campaign activity
An organization asserted that it qualified as a social-welfare organization under section 501(c)(4) without requesting a determination letter. It was closely affiliated with a political action committ…
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.