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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PLR 200220010: Corporate split-off receives tax-free reorganization treatment
An S corporation planned to transfer part of its operating business to a wholly owned subsidiary, then give that subsidiary's stock to certain shareholders in exchange for all their stock in the…
PLR 200220008: Parent gets more time to elect QSub status for two subsidiaries
An S corporation parent failed to file a timely QSub election for one subsidiary and filed an invalid election for another before that subsidiary existed. The IRS found that the requirements for…
PLR 200220007: Corporation receives relief for late S election
A corporation's shareholders intended it to be an S corporation from its first tax year and filed returns on that basis, but its attorney failed to file Form 2553. The IRS found reasonable cause for…
CCA 200220006: Insurance product development costs fall under section 848 proxy rule
IRS field counsel asked how an insurance company should treat costs incurred while developing two insurance products. Chief Counsel advised that the proxy capitalization rule in IRC § 848 generally…
CCA 200220005: Foreign subsidiary's product sales produce foreign base company sales income
A domestic group's controlled foreign corporation sold goods manufactured outside its country of incorporation to related companies for use outside that country. The group claimed the subsidiary…
PLR 200220004: Corporation receives relief for late S election
A corporation's shareholders intended it to be an S corporation from its first tax year, but no timely Form 2553 was filed. The IRS found reasonable cause for the missed deadline under IRC §…
PLR 200220003: Corporation receives relief for late S election
A corporation's sole shareholder intended it to be an S corporation from its first tax year and the corporation filed an S corporation return, but no timely Form 2553 was filed. The IRS found…
CCA 200220002: Taxpayer may waive copies of notices sent to a representative
Two taxpayers asked the IRS to send original notices and correspondence to their representative and to stop sending them copies. Chief Counsel advised that no statute or regulation prohibits a…
CCA 200220001: Taxpayer may waive copies of notices sent to a representative
Two taxpayers asked the IRS to send original notices and correspondence to their representative and to stop sending them copies. Chief Counsel advised that no statute or regulation prohibits a…
PLR 200219044: Foundation may transfer assets without ending private foundation status
A private foundation proposed to transfer 40 percent of its liquid assets to a second foundation so trustees with different charitable priorities could work separately. The IRS ruled that the…
PLR 200219043: Foundation may transfer assets without ending private foundation status
A private foundation proposed to transfer 40 percent of its liquid assets to a second foundation so trustees with different charitable priorities could work separately. The IRS ruled that the…
PLR 200219042: Government plan DROP lump sum qualifies for rollover and counts toward benefit limit
A governmental defined benefit plan offered a retroactive deferred retirement option that paid a lump sum alongside a monthly pension. The IRS ruled that the lump sum was separate from the monthly…
PLR 200219041: IRS waives pension plan liquidity shortfall excise taxes
An employer's two pension plans had liquidity shortfalls during five quarters in 1999. Its actuarial firm discovered the shortfalls later while preparing plan filings, and the employer promptly…
PLR 200219040: Executrix receives time to recharacterize invalid Roth conversion
A taxpayer converted a traditional IRA to a Roth IRA believing the couple's 1998 income was below the conversion limit. After his death, his executrix learned their income exceeded $100,000. She…
PLR 200219039: Foundation may consent to settlement of estate lawsuit
A private foundation expected to receive most of its founder's estate. One of its directors sued the estate, alleging that the founder had promised her retirement benefits and owed her compensation.…
PLR 200219038: Trust settlements do not cause foundation self-dealing
Two trusts provided benefits to nieces of their creators and gave a private foundation a contingent interest in any remaining assets. Disputes over trust distributions, investments, and trustee fees…
PLR 200219037: Radio airtime payments qualify as excluded royalties
A publisher of newspapers serving immigrant communities had also run a commercial radio station. After agreeing to license the station's airtime to another operator, it regained exemption as a…
PLR 200219036: Foundation may consent to settlement of estate lawsuit
A private foundation expected to receive most of its founder's estate. One of its directors sued the estate, alleging that the founder had promised her retirement benefits and owed her compensation.…
PLR 200219034: Limited appointment keeps trust assets out of daughter's estate
A mother left a trust for her daughter, with a limited power to direct where its assets would go. The daughter proposed to exercise that power through a codicil creating separate trusts for her…
PLR 200219033: Former resident rebuts expatriation tax-avoidance presumption
A former long-term U.S. resident gave up his green card, and his net worth exceeded the threshold that normally triggered a presumption of tax avoidance under the law then in effect. He sought a…
PLR 200219032: S corporation gets more time to elect subsidiary status
An S corporation intended to elect qualified subchapter S subsidiary (QSub) treatment for three subsidiaries but failed to file the election for one of them. It asked the IRS for more time to make…
PLR 200219031: Former resident rebuts expatriation tax presumption
A former long-term U.S. resident relinquished her green card. Her net worth exceeded the threshold that ordinarily triggered a presumption that she left to avoid U.S. tax under the law then in…
PLR 200219030: Retiring housing bonds after a project opens does not alone undo its bond financing
A partnership planned to build a low-income housing project using tax-exempt bond proceeds for more than half of the project's land and building costs. It expected to repay the bond loan and retire…
PLR 200219029: Proposed trust appointment preserves estate and GST tax treatment
A daughter held a limited power to decide how property in an older family trust would pass at her death. She proposed to use a codicil to place that property in further trusts for her descendants.…
PLR 200219028: Exercising a trust power preserves estate and GST tax treatment
A daughter held a limited power under her parent's will to direct where an older trust's assets would go after her death. She proposed to exercise that power through a codicil that would continue…
PLR 200219027: Taxpayer gets 30 days to file dual consolidated loss elections
A taxpayer missed the deadline to file elections concerning dual consolidated losses for several tax years. It said it had reasonably relied on qualified tax professionals who failed to make, or…
PLR 200219026: Patent licensing group may pass capital gain treatment to individual members
Several patent owners transferred their interests to an arrangement called a trust so the patents could be licensed together. The IRS found that its main purpose was joint exploitation of the…
PLR 200219025: Corporate separation qualifies for spin-off treatment
A publicly traded corporation planned to separate one business by placing a subsidiary's stock in a controlled company, arranging an initial public offering of that company's shares, using some…
PLR 200219024: LLC gets more time to elect corporate tax treatment
An LLC intended to be taxed as a corporation from the date it began operating but did not timely file Form 8832 to make that election. It asked the IRS for an extension under the election relief…
PLR 200219023: Corporation receives relief for late S election
A corporation intended to be taxed as an S corporation from its incorporation date but missed the election deadline. It requested relief under section 1362(b)(5), which allows a late election to be…
PLR 200219022: IRS waives life insurance test failures for some contracts
A life insurer's records did not properly reflect changes to some contracts, leading employees to accept premiums that exceeded the section 7702 guideline premium limit. The insurer sought a waiver…
PLR 200219021: Patent licensing arrangement may pass capital gain treatment to individuals
Several patent owners transferred their interests to an arrangement called a trust so the patents could be licensed together. The IRS found that its main purpose was joint exploitation of the…
PLR 200219020: Individual patent owners may receive capital gain treatment through licensing group
Several patent owners transferred their interests to an arrangement called a trust so the patents could be licensed together. The IRS found that its main purpose was joint exploitation of the…
PLR 200219019: Patent licensing partnership permits conditional capital gain treatment
Several patent owners transferred their interests to an arrangement called a trust so the patents could be licensed together. The IRS found that its main purpose was joint exploitation of the…
PLR 200219018: Receiver need not file defendants' returns but must oversee an S corporation's returns
A court-appointed receiver controlled certain properties subject to federal tax liens and served as sole director of an S corporation managing them. The receiver asked which income tax returns he…
PLR 200219017: Patent licensing group receives conditional capital gain ruling
Several patent owners transferred their interests to an arrangement called a trust so the patents could be licensed together. The IRS found that its main purpose was joint exploitation of the…
PLR 200219016: Shareholder may assign stock options to employee without recognizing income
A shareholder planned to give transferable stock options to an employee of a subsidiary as an employment incentive, without receiving direct payment. The IRS treated the substance of the transaction…
PLR 200219015: Acquired company's officers fall outside the stated compensation deduction limit
After an acquisition, a subsidiary asked whether its officers' compensation for the acquisition year was subject to the then-applicable section 162(m) deduction limit for covered employees. The IRS…
PLR 200219014: Buyer's reorganization leaves earlier power plant sale rulings in force
The IRS had previously ruled on a taxpayer's planned sale of interests in two electric generating plants. After the buyer reorganized, a subsidiary would buy the plant interests instead. The…
PLR 200219013: Late S corporation election may take effect from incorporation
A corporation's shareholder intended S corporation treatment from the date the company was incorporated, but the election was not filed on time. The corporation asked the IRS to treat the election…
PLR 200219012: Court rescission of charitable remainder trust is recognized for tax purposes
Donors funded a charitable remainder trust with stock after receiving incorrect advice about when payments to them were required and how distributions would be taxed. A state court later rescinded…
CCA 200219011: Baseball signing bonuses are advance pay for services
Chief Counsel reconsidered advice about signing bonuses a U.S. baseball team paid to nonresident alien players assigned to play abroad. It concluded that the bonuses were advance compensation for…
PLR 200219010: Federally assisted housing project receives ten-year rule waiver
A partnership planned to acquire and rehabilitate an existing low-income housing project that received federal housing assistance. It sought a waiver of the ten-year holding period that otherwise…
PLR 200219009: Federally assisted housing project receives ten-year rule waiver
A partnership planned to acquire and rehabilitate an existing low-income housing project that received federal housing assistance. It sought a waiver of the ten-year holding period that otherwise…
CCA 200219008: Tiered partnership distributions trigger termination and marketable securities rules
Two upper-tier partnerships liquidated and distributed their interests in a subsidiary partnership to their owners. Chief Counsel advised that those exchanges terminated the subsidiary partnership…
PLR 200219007: Mortgage trusts receive relief for late REMIC elections
Two mortgage securitization trusts were intended to elect real estate mortgage investment conduit (REMIC) status, but their initial returns and elections were not filed on time. The omission was…
PLR 200219006: Land sale under threat of restrictive easements qualifies as involuntary conversion
A landowner sold acreage to the Army Corps of Engineers after the Corps threatened to condemn restrictive easements over the land. Although the Corps could compel only easements, the IRS found that…
CCA 200219005: Meal and entertainment sample does not support full deduction
A company sought larger deductions for meal and entertainment costs that it had subjected to the 50 percent limit in its 1996 and 1997 returns. It argued that sampled expenses were fully deductible…
CCA 200219004: Roasting cost is compared with leaching cost for mining depletion
A mineral producer roasted rare earth concentrate before leaching and other processing. For percentage depletion purposes, it argued that roasting should be tested as incidental to all later mining…
PLR 200219003: Estate cannot reduce an irrevocable QTIP election after filing
An estate elected qualified terminable interest property (QTIP) treatment for an entire marital trust, although a smaller election would have used more of the first spouse's estate tax credit. After…
PLR 200219002: Demutualization proceeds avoid welfare fund reversion tax on stated assumption
An employer welfare benefit trust received stock when its insurance carrier demutualized and planned to distribute the proceeds to its member employers. One member asked whether receiving its share…
CCA 200219001: Indirect manufacturing costs do not enter the research credit calculation
A pharmaceutical company manufactured drugs used in clinical trials and treated both direct and indirect manufacturing costs as supply expenses for the research credit. Chief Counsel advised that…
IRS approves foundation's settlement of an estate claim
A private foundation asked whether settling a former employee's claim against its founder's estate would affect the foundation's tax exemption, create self-dealing, or create taxable expenditures.…
IRS approves foundation's settlement of an estate claim
A private foundation asked whether settling a former employee's claim against its founder's estate would affect the foundation's tax exemption, create self-dealing, or create taxable expenditures.…
IRS validates late IRA recharacterizations after preparer error
A married couple converted traditional IRAs to Roth IRAs in 1998, but their adjusted gross income exceeded the then applicable $100,000 limit. They relied on a tax preparer who did not advise them…
IRS approves IRA distributions using a surviving spouse's life expectancy
A deceased taxpayer named a trust as the beneficiary of an IRA, and a court later divided the trust into a 90 percent share for the surviving spouse and descendants and a 10 percent share for…
IRS finds commodity futures partnership investment was not jeopardizing
A private foundation invested part of its assets in a limited partnership that traded in futures and forward markets. The foundation asked whether the investment was a program related investment and…
MRI partnership supports exemption but management fees create unrelated business income
An organization formed by exempt hospitals operated a magnetic resonance imaging facility through a limited partnership. The IRS advised that the organization continued to qualify under section…
IRS approves trust construction and modification without adverse GST or gift tax effects
A trustee asked about the estate, gift, and generation-skipping transfer tax effects of a court's construction and modification of an irrevocable trust. The IRS ruled that clarifying ambiguous…
IRS treats distributor agreement cancellation payments as long term capital gain
An S corporation received transition payments after canceling a distributorship agreement when the manufacturer discontinued a product line. The IRS ruled that the payments were received in exchange…
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.