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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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…
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…
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…
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.…
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…
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…
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…
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…
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…
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…
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…
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.…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
IRS revokes a fraternal title-holding group's 501(c)(7) status after it sold its building and kept only investment income
This organization started as a company that owned and held title to a building for a fraternal lodge. Over the decades its tax classification shifted: originally exempt as a title-holding…
IRS approves a company foundation's employer-related scholarship procedures under 4945(g)(1)
A private foundation tied to a company asked the IRS to pre-approve the way it runs an employer-related scholarship program. The program pays for the college education of the children of the…
A low-income housing project got more time to make its 40-60 minimum set-aside election
A taxpayer owns a single-building low-income housing project and claims the low-income housing tax credit under Section 42. To qualify, a project must commit to a "minimum set-aside": renting enough…
A company got more time to fix the effective date of its REIT election
A limited liability company wanted to be taxed as a Real Estate Investment Trust (REIT) under Section 856. A REIT election is made on the company's tax return (Form 1120-REIT) for the first year it…
A complete Form 8886 can satisfy the disclosure needed to avoid the 40% economic-substance penalty, even without a separate Form 8275
When the IRS disallows a tax benefit because a transaction lacked "economic substance" (it had no real business purpose beyond tax savings), it can add a 20 percent penalty. That penalty doubles to…
Supplemental spin-off ruling lets a parent hand a spun-off subsidiary's retained shares to a bank to pay off debt without recognizing gain under section 361(c)
When a corporation spins off a subsidiary in a tax-free transaction under sections 355 and 368, it can keep some of the subsidiary's stock ("retained shares") and later use that stock to pay down…
A parent's separation of one subsidiary's four businesses into three newly spun-off corporations qualifies as tax-free "D" reorganizations and section 355 distributions
A publicly traded parent company owns a subsidiary ("Sub 1") that runs four distinct businesses through a web of lower-tier corporations and disregarded entities. To split those businesses apart,…
Widowed spouse gets 120 more days to make a missed QTIP election after the estate's accountant failed to advise it
A married person set up a revocable trust and left their whole estate to it. When they died, the trust became irrevocable and was designed to pay all its income to the surviving spouse for life, the…
Buyers and seller of an S corporation get extra time to file the late election that treats their stock purchase as an asset purchase under section 336(e)
When someone buys all the stock of an S corporation, a section 336(e) election lets the parties treat the deal as if the company sold its assets instead of its stock, which usually gives the buyer a…
Trustee gets 120 more days to certify that a non-citizen surviving spouse became a U.S. citizen, ending the special estate tax on a QDOT
When someone dies leaving property to a surviving spouse who is not a U.S. citizen, the estate normally cannot claim the unlimited marital deduction unless the property goes into a "qualified…
Investor whose late K-1s pushed the return past its deadline gets 60 more days to make a section 1045 election deferring gain on small-business stock
Section 1045 lets an investor who sells "qualified small business stock" (QSBS) held more than six months roll the gain into new QSBS bought within 60 days, deferring tax on the sale. The election…
The automatic GST-exemption allocation rules applied to a decedent's trust even though the estate never made the allocation on Schedule R
The generation-skipping transfer (GST) tax applies when wealth passes to grandchildren or later generations, but each person has a GST exemption (here $1,000,000 under the law in effect at the…
A foreign partnership gets 120 more days to make the section 754 election it forgot to file with its return
A section 754 election lets a partnership adjust the tax basis of its assets when a partner's interest changes hands or when the partnership distributes property, so that the inside basis of the…
A company that repeatedly blew its S corporation status through partnership conversions and missed trust elections gets inadvertent-termination relief under section 1362(f)
An S corporation gets pass-through tax treatment only if it stays a "small business corporation," which among other things means it can have just one class of stock and only eligible shareholders…
IRS approves a foundation's educational grant procedures for a BIPOC dance-artist support program under 4945(g)(3)
Private foundations normally owe an excise tax when they hand grant money to individuals for study or travel, unless the IRS approves the foundation's grant-making procedures in advance. Here a…
IRS approves a foundation's grant procedures for a fellowship on faith and gender equality under 4945(g)(3)
A private foundation normally owes an excise tax when it gives grant money to individuals for study or similar purposes, unless the IRS has approved its grant procedures in advance. This foundation…
IRS denies 501(c)(3) status to a retirement-community firearms and shooting club that serves its members' private interests
To be a tax-exempt charity under section 501(c)(3), an organization must be operated exclusively for charitable or educational purposes and must serve the public rather than the private interests of…
IRS revokes a fraternal chapter's 501(c)(7) social-club exemption because all its revenue came from investment income, not members
A social club exempt under section 501(c)(7) (think a fraternity chapter, country club, or hobby club) is supposed to be supported mainly by its members through dues, fees, and assessments. The law…
IRS revokes a charity that did not substantiate educational or charitable operations
A section 501(c)(3) organization told the IRS that it would carry on educational activities, but an audit found no educational opportunities or defined charitable class. The organization provided…
IRS revokes a social club whose outside catering income exceeded the nonmember-income limit
A section 501(c)(7) social club operated a gathering place for business executives and contracted with an outside catering company. The club received monthly revenue from that arrangement,…
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.