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 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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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.…
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…
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…
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…
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…
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…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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:…
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…
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.…
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…
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…
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…
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.