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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Inactive charity loses exemption after failing the operational test
A charity had reported no revenue or expenses on its returns. During an examination, its director told the IRS that the organization had been inactive since its inception because it could not obtain f…
Charity loses exemption after its assets served private interests
The IRS examination report said a charity solicited tax-deductible donations but its founder used the organization’s income and assets for himself, his family, and business partners. The report descri…
Parties receive more time to complete a section 336(e) election
A purchaser acquired all the stock of an S corporation, and the parties intended to elect under section 336(e) to treat the stock transaction as an asset disposition. They did not fully complete the e…
Corporation receives more time for a GILTI high-tax election
A domestic corporation wanted to make the GILTI high-tax exclusion election for four controlled foreign corporations for an earlier tax year. The corporation intended to amend that year’s return after…
Estate receives more time to allocate GST exemption to a trust
A decedent and spouse created separate irrevocable trusts and made gifts to them in the same year. Their attorney drafted the trusts but did not adequately advise them to file gift and generation-skip…
Market-priced solar facility avoids public-utility normalization rules
A regulated utility planned to invest with a tax-equity investor in a solar facility that would sell electricity into a wholesale market. The project company would have market-based rate authority, an…
Estate receives more time for QTIP and reverse QTIP elections
A decedent’s revocable trust divided at death into a bypass trust and a marital trust for the surviving spouse. The marital trust was to be divided into generation-skipping transfer tax exempt and non…
Corporation keeps S status after correcting unequal stock rights
An S corporation’s operating agreements required member capital accounts and tied liquidation distributions partly to those balances. Those provisions created nonidentical distribution and liquidation…
Foreign entity receives more time for disregarded-entity election
A foreign eligible entity intended to elect classification as an entity disregarded from its owner for federal tax purposes but did not timely file Form 8832. The IRS found that the entity met the req…
Corporation receives relief for a late S election
A corporation’s shareholders intended it to be an S corporation from its formation date, but the company inadvertently failed to file Form 2553 on time. The IRS found reasonable cause for the late ele…
LLC may change from corporate to disregarded-entity status
A limited liability company had elected S corporation status, which caused it to be treated as an association taxable as a corporation. Before 60 months had passed, a series of transactions changed mo…
IRS revokes 501(c)(7) status of a social club with excessive non-member income
A tax-exempt social club under section 501(c)(7) drew a large share of its money from non-members: banquet food and bar sales, rentals of its hall and equipment to outsiders, investment income, and re…
IRS revokes 501(c)(3) status of a non-responsive supporting organization that could not substantiate its charitable purpose
An organization had been recognized as a 501(c)(3) public charity classified as a supporting organization under section 509(a)(3), set up to support two named charities. During the audit it essentiall…
IRS revokes 501(c)(7) status of a golf and country club with excessive non-member income
A tax-exempt social club under section 501(c)(7) ran a country club and golf course that was open to the public most days of the year. The audit found the club earned substantial income from non-membe…
IRS revokes 501(c)(3) status of a dormant family private foundation for failing the operational test
A private non-operating foundation had been set up as a grantmaking family foundation, expected to fund charities chosen by its board. By the years the IRS examined, it had gone completely dormant: no…
IRS revokes 501(c)(7) status of a club whose hall and bar were open to the general public
A tax-exempt social club under section 501(c)(7) operated a clubhouse and bar that, according to its own website, were open to the general public. Much of its income came from renting the hall to non-…
IRS revokes 501(c)(3) status of a residential youth program for inurement to its director and destroyed records
A charity ran a residential program for youth with difficult behaviors, offering mentoring, outdoor activities, farm work, and counseling. The IRS revoked its 501(c)(3) exemption on two grounds. First…
A TEFRA tax matters partner is the person designated on the partnership return, not in the operating agreement
This is informal Chief Counsel advice, sent as an email, answering a question about the old TEFRA partnership audit rules: who is a partnership's tax matters partner (TMP)? The advice explains that th…
Training slides built from real exam files are "return information," but IRC 6103(h)(1) lets the IRS show them to employees who need them
A Chief Counsel attorney reviewed a set of internal IRS training slides and advised that the deck still contained "return information" even after some taxpayer data had been stripped out, because the …
Tax-free spin-off of an early-stage product line into a new subsidiary
A privately held company does research and development on two products that both need regulatory approval before they can be sold. One product is further along and needs fresh capital to reach commerc…
Late Form 8996 allowed so an LLC can self-certify as a Qualified Opportunity Fund
A partnership (organized as an LLC) was set up to be a Qualified Opportunity Fund (QOF), which lets investors defer or reduce capital gains taxes by investing in designated low-income "Opportunity Zon…
Late Section 336(e) election allowed for an S corporation stock sale
When buyers acquire all the stock of an S corporation, the parties can elect under Section 336(e) to treat the stock sale as if it were an asset sale, which can produce a better tax result (a stepped-…
Tax-free two-step spin-off separating a business line and pushing it up to a foreign parent
A domestic corporate group, ultimately owned by a foreign parent through a chain of disregarded entities, wanted to separate one of its two active businesses (Business B) from the other (Business A). …
Late portability election allowed so a surviving spouse can use the deceased spouse's unused estate-tax exclusion
When someone dies, any unused portion of their federal estate-tax exclusion can be passed to a surviving spouse (the "deceased spousal unused exclusion," or DSUE) through a "portability" election. Tha…
Late check-the-box election allowed for a foreign entity to be disregarded
Under the "check-the-box" rules, an eligible business entity can choose how it is taxed by filing Form 8832. A single-owner entity can elect to be "disregarded," meaning it is ignored as separate from…
Late check-the-box election allowed for a foreign entity to be disregarded
Under the "check-the-box" rules, an eligible business entity can choose how it is taxed by filing Form 8832. A single-owner entity can elect to be "disregarded," meaning it is ignored as separate from…
S corporation status restored after stock accidentally went to an ineligible IRA shareholder
An S corporation is a small business corporation that passes its income through to its shareholders, but only certain shareholders are allowed; an individual retirement account (IRA) is not an eligibl…
IRS approves a private foundation's scholarship procedures under section 4945(g)(1)
A private foundation asked the IRS to approve, in advance, the way it picks students to receive scholarships. Private foundations owe an excise tax on "taxable expenditures," and a grant to an individ…
IRS treats a foundation grant to a public charity as an "unusual grant" that will not undercut its public-support status
A public charity that is tax-exempt under section 501(c)(3) and classified as a publicly supported charity under sections 509(a)(1) and 170(b)(1)(A)(vi) was about to receive a large grant from a relat…
IRS approves a foundation's scholarship procedures for youth-development program members under section 4945(g)(1)
A private foundation asked the IRS to bless, in advance, how it awards scholarships to members of a youth-development and agricultural-education program pursuing higher education. Private foundations …
IRS approves a media-affiliated foundation's scholarship and educational-grant procedures under sections 4945(g)(1) and (g)(3)
A private foundation affiliated with a large international media company asked the IRS to approve, in advance, two sets of award procedures: scholarships under IRC section 4945(g)(1) and other educati…
IRS denies 501(c)(3) exemption to a resident-owned manufactured-home community
A resident-owned cooperative that bought the land under a manufactured-home community, to keep lot rents low and prevent displacement, applied for 501(c)(3) charitable exemption. The IRS denied it. Th…
IRS revokes 501(c)(4) status of an employee association operating as an exclusive labor unit
An association of sworn municipal employees, recognized as tax-exempt under section 501(c)(4) as a local association of employees, was audited and lost its exemption. To qualify, such an association m…
IRS revokes 501(c)(7) status of a social club funded almost entirely by investment income
A tax-exempt social club under section 501(c)(7) charged no membership dues and drew all of its support from a stock-and-securities portfolio. Social clubs may receive no more than 35 percent of their…
IRS revokes 501(c)(3) status of an "education" charity that ran a commercial travel-package auction business
A group recognized as a 501(c)(3) educational charity said its mission was to train other nonprofits on how to run better fundraising events. In practice, the IRS found, its money came almost entirely…
IRS grants extra time to make a branch-profits-tax E&P election after a check-the-box conversion
A foreign parent corporation wholly owned a U.S. limited liability company that was a disregarded entity running a U.S. trade or business, so the parent paid the branch profits tax on the branch's ear…
IRS grants extra time to file a late Form 8996 self-certifying as a Qualified Opportunity Fund
A real estate LLC taxed as a partnership set itself up to invest in Qualified Opportunity Zone property and intended to be a Qualified Opportunity Fund (QOF). To become a QOF, an entity must self-cert…
IRS grants extra time for a partnership to make a section 1045 rollover election on qualified small business stock
A partnership sold qualified small business (QSB) stock and reinvested the proceeds in replacement QSB stock, intending to defer the gain by electing section 1045 rollover treatment. Section 1045 lets…
IRS grants a foreign entity extra time to elect disregarded-entity status
A foreign business entity with a single owner wanted to be treated as a "disregarded entity" (ignored as separate from its owner) for U.S. federal tax purposes, effective from a specific date. To do t…
IRS grants a single-owner foreign entity extra time to elect disregarded-entity status
A foreign entity wholly owned by a single member wanted to be treated as a disregarded entity (ignored as separate from its owner) for U.S. federal tax purposes from the date it was formed. That requi…
Scholarship procedures for graduating seniors approved
A private foundation asked the IRS to pre-approve the procedures it uses to award college scholarships. Under section 4945, a grant a private foundation makes to an individual for study is a "taxable …
Dissertation-research grant procedures approved
A private foundation asked the IRS to pre-approve the procedures for a program that funds PhD dissertation research. Under section 4945, a private foundation's grants to individuals for study are "tax…
Need-based scholarship procedures approved
A private foundation asked the IRS to pre-approve its need-based scholarship procedures. Under section 4945, a private foundation's grants to individuals for study are "taxable expenditures" that trig…
Theological doctoral scholarship procedures approved
A private foundation asked the IRS to pre-approve the procedures for a scholarship program that funds doctoral study in theology. Under section 4945, a private foundation's grants to individuals for s…
Business-major scholarship procedures approved
A private foundation asked the IRS to pre-approve the procedures for a scholarship program aimed at low-income, high-achieving students. Under section 4945, a private foundation's grants to individual…
60-day IRA rollover waiver for a fraud-scam victim
When you take money out of a traditional IRA, you normally must put it back into a retirement account within 60 days or it counts as a taxable distribution. Here, a taxpayer withdrew money from her IR…
College-readiness scholarship procedures approved
A private foundation asked the IRS to pre-approve its scholarship procedures. Under section 4945, a private foundation's grants to individuals for study are "taxable expenditures" that trigger an exci…
At-risk youth mentorship scholarship procedures approved
A private foundation asked the IRS to pre-approve the procedures for a scholarship program aimed at at-risk youth. Under section 4945, a private foundation's grants to individuals for study are "taxab…
Graduate-school scholarship procedures approved
A private foundation asked the IRS to pre-approve the procedures for a graduate-school scholarship program. Under section 4945, a private foundation's grants to individuals for study are "taxable expe…
Research grant procedures approved under 4945(g)(3)
A private foundation asked the IRS to pre-approve the procedures for making research grants to individuals. Under section 4945, a private foundation's grants to individuals for study or research are "…
International scholarship procedures approved
A private foundation asked the IRS to pre-approve the procedures for a scholarship program serving students from developing countries. Under section 4945, a private foundation's grants to individuals …
Need-based state scholarship procedures approved
A private foundation asked the IRS to pre-approve its scholarship procedures. Under section 4945, a private foundation's grants to individuals for study are "taxable expenditures" that trigger an exci…
IRS revokes 501(c)(7) social-club exemption for exceeding the nonmember-income limit and failing to keep required records
A social club, recognized years earlier as tax-exempt under IRC Section 501(c)(7), was audited and lost its exemption. A 501(c)(7) club is a members-only recreation group, funded mainly by member dues…
IRS denies 501(c)(3) status to a dues-based mutual-aid group that pays members' equipment-repair costs
An organization applied for 501(c)(3) charitable status using the short Form 1023-EZ. It describes itself as representing a community of haulers and offering them financial and educational help. In pr…
IRS denies 501(c)(3) status to a group maintaining a shared irrigation pipeline for a set of neighboring families
An organization applied for 501(c)(3) charitable status on the short Form 1023-EZ, describing its main activity as managing water usage for residents of a particular area. On closer review, its purpos…
IRS revokes 501(c)(3) status of a dormant supporting-organization foundation that only traded securities and made no charitable distributions
A foundation had been recognized as a 501(c)(3) public charity, specifically a Section 509(a)(3) supporting organization, meaning it existed to support one named charity. A supporting organization kee…
IRS denies 501(c)(3) status to a fee-charging gap-analysis consulting and training business
An organization applied for 501(c)(3) status on the short Form 1023-EZ, claiming educational purposes. Its main activity is consulting: it runs "gap analysis" for clients, using surveys and interviews…
IRS revokes a public charity's 501(c)(3) status where it ran a commercial café and rental operation and stopped its charitable distribution
A charity had been recognized as a 501(c)(3) public charity, the kind that must draw substantial support from the general public (Section 509(a)(1) and 170(b)(1)(A)(vi)). Its charitable purpose involv…
IRS revokes a cultural social club's 501(c)(7) status for excess public-use and rental income
A cultural social club had been recognized as tax-exempt under Section 501(c)(7), the category for members-only clubs run for pleasure and recreation. It offered members a social environment, free tut…
IRS revokes a social club's 501(c)(7) status where its only income was investment returns and it charged no dues
A social club recognized as tax-exempt under Section 501(c)(7) had a purpose of providing social and recreational activities to its members, tied to a group that once provided housing at a campus. A 5…
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.