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 excludes active commercial rental income from passive investment income
A corporation planning to elect S corporation status owned and managed commercial real estate directly and through a limited liability company. It provided repairs, maintenance, security, leasing,…
Expatriate rebuts tax avoidance presumption, but purpose remains unresolved
A U.S. citizen who also held citizenship in another country planned to give up U.S. citizenship. Because the person's net worth exceeded the statutory threshold, the expatriation could otherwise…
S corporation granted time to elect subsidiary Qsub status
An S corporation acquired all of the stock of a subsidiary whose prior S election ended when the acquisition occurred. The parent intended to elect to treat the subsidiary as a qualified subchapter…
Corporation receives relief for a late S election
A corporation's sole shareholder intended to elect S corporation status from the date the corporation was formed, but the election was not filed on time. The IRS found reasonable cause for the late…
PLR 200218029: Charitable lead trusts qualify for an estate tax deduction
An individual planned for two charitable lead trusts to receive portions of a revocable trust after the individual's death. Each charitable trust would pay a unitrust amount, generally five percent…
Former resident's expatriation found to lack a tax avoidance purpose
A former long-term U.S. resident relinquished her green card and moved to the country where she had been a citizen all her life. Her net worth exceeded the threshold that could create a presumption…
Partnership receives rulings on synthetic fuel production credit
A partnership planned to acquire and operate a facility that converts coal into solid synthetic fuel. The IRS ruled that the facility's pre-1997 construction agreement qualified as a binding written…
PLR 200218026: Late S corporation election accepted for the requested tax year
A corporation intended to be treated as an S corporation from its beginning but did not file Form 2553 on time. It filed an S corporation tax return for its first tax year. The IRS found reasonable…
PLR 200218025: Company receives extra time to make a QSub election
An S corporation bought all the stock of another S corporation and intended to treat the subsidiary as a qualified subchapter S subsidiary. The parent did not make the required QSub election on time…
PLR 200218024: Former resident's expatriation found to lack a tax avoidance purpose
A former long term U.S. resident surrendered a green card and returned to the country where he was born and where he would be taxed on worldwide income. His net worth exceeded the statutory…
PLR 200218023: Family trust partitions preserve generation skipping tax exemption
A family trust created before September 25, 1985, later received part of an estate and was divided into exempt and nonexempt portions. A beneficiary disclaimed her interest in part of the estate,…
Lease stripping transaction deductions challenged on multiple grounds
Chief Counsel analyzed a series of related party equipment leasing and lease stripping transactions through which a taxpayer reported deductions. The advice concluded that the transactions, as then…
PLR 200218021: Supplemental ruling preserves prior corporate distribution rulings
A corporate group requested a supplemental ruling after an earlier distribution of a controlled corporation. The group planned an equity infusion and an acquisition in which a foreign seller would…
PLR 200218020: Late section 338(h)(10) election receives an extension
A purchaser acquired all of a target corporation's stock from a seller and intended to make a joint section 338(h)(10) election. The election was not timely filed, so the purchaser and the seller's…
PLR 200218019: Nuclear decommissioning funds transfer without disqualification
A regulated electric utility planned to transfer nuclear plants, related liabilities, and qualified nuclear decommissioning funds to a new corporation as part of a restructuring. The IRS ruled that…
PLR 200218018: Foreign eligible entity receives more time to elect corporate classification
A foreign eligible entity formed as a limited partnership intended to be classified as an association taxable as a corporation. It did not file Form 8832 by the required deadline and requested…
PLR 200218017: Corporation may make a subchapter S election before the five-year waiting period ends
A corporation requested permission to make a subchapter S election less than five years after an S corporation had merged into it. The IRS concluded that the merger did not trigger the five-year…
PLR 200218016: Late Form 1128 treated as timely for accounting period change
A taxpayer missed the deadline to file Form 1128 to change its tax year from December 31 to March 31. The taxpayer intended to use the automatic procedure for certain corporations but filed within…
PLR 200218015: Extension granted to allocate GST exemptions to family trusts
A married couple created trusts for their children and intended to allocate generation-skipping transfer (GST) tax exemptions to the gifts. Their law firm failed to file the gift tax returns and…
CCA 200218014: Intermediary acquisition may be recast as a direct stock sale
Chief Counsel advised field counsel about a planned acquisition in which an intermediary bought a target corporation's stock and the target then sold its assets to the intended buyer. The…
PLR 200218013: Late Form 1128 accepted for accounting period request
A taxpayer sought to change its tax year from June 30 to December 31. Its accountant failed to attach Form 1128 to the tax return, and the taxpayer requested deadline relief within 90 days of the…
PLR 200218012: Couple receives extension to allocate GST exemptions to trusts
A married couple transferred community property to trusts for their children and intended to allocate generation-skipping transfer (GST) tax exemptions to the gifts. Their law firm failed to file…
PLR 200218011: Late GST exemption allocations allowed for family trusts
A couple established trusts for their children using one spouse's separate property, with the other spouse consenting to split the gifts. Their law firm missed the deadline to file the gift tax…
PLR 200218010: GST exemption allocations allowed after missed filing deadline
A married couple transferred community property to trusts for their children and intended to allocate generation-skipping transfer (GST) tax exemptions to the gifts. Their law firm did not file the…
CCA 200218009: IRS may assess court-awarded costs after the tax assessment period
A district court dismissed a taxpayer's refund suit and awarded costs to the United States. Chief Counsel advised that the IRS could assess those costs under § 6673(b)(2), even though the ordinary…
PLR 200218008: Court correction of charitable trust payout method may preserve unitrust status
A couple intended to create a charitable remainder unitrust that paid the lesser of trust income or a fixed percentage, with a make-up provision for later years. A communication error led them to…
PLR 200218007: Inadvertent S corporation termination relieved after ownership correction
An S corporation transferred a small ownership interest to a two-member LLC, mistakenly believing the LLC was disregarded for federal tax purposes. Because the LLC was treated as a partnership, it…
PLR 200218006: Late S corporation election allowed if Form 2553 is filed within 60 days
A corporation's sole shareholder intended S corporation treatment from the company's formation, but its advisers did not file the election form. The shareholder said the company had filed S…
CCA 200218005: Employer may recover some tax payments diverted by employee fraud
An employee diverted checks from his employer to the IRS as purported tax payments for a corporation he controlled. Chief Counsel advised that the employer, as the person who made the payments,…
CCA 200218004: Chief Counsel challenges capital loss from parent stock redemption
A subsidiary bought its parent's publicly traded shares, exchanged most of them for a convertible note from the parent, and sold the rest while claiming a large capital loss. Chief Counsel advised…
CCA 200218003: Prior transfer estate tax credit may reflect non-QTIP trust interests
A surviving spouse died three months after the first spouse, leaving an estate that claimed a credit for tax on a prior transfer involving a marital trust. Chief Counsel advised that the value…
PLR 200218002: Expatriation tax avoidance presumption rebutted after complete submission
A person planning to relinquish U.S. citizenship expected to exceed the net worth threshold that triggered a tax avoidance presumption under the law discussed in the letter. The person qualified to…
PLR 200218001: Couple granted GST allocation extension and gift-splitting ruling
A husband funded two family trusts, but a trust company's data entry errors caused the couple's gift tax returns to omit notices allocating generation-skipping transfer (GST) tax exemptions and to…
PLR 200217059: Nonbank storage of IRA bullion treats the metals as collectibles
Two nonbank companies asked whether IRA trustees could use their precious metals storage services without IRA bullion coins and bars being treated as collectibles. The IRS ruled that the bullion in…
PLR 200217058: Extra time granted to undo ineligible Roth IRA conversions
A taxpayer converted two traditional IRAs to Roth IRAs in 1998 after an adviser prepared a return showing income below the conversion limit. A later accounting firm found that unreported income…
Determination 200217057: Scholarship grant procedures approved for private foundation
A private foundation sought advance approval of its procedures for awarding scholarships to public high school students, initially in a primarily rural area. The program used academic achievement as…
Determination 200217056: Foundation may pay reasonable fees to related support office
A private foundation asked whether a related support office could charge it for personal and financial services performed by the support office's employees. The services included cash management,…
CCA 200217055: E-file participation may be denied for listed conduct and other bad-faith conduct
Chief Counsel addressed the conduct that may lead to denial of participation in the IRS e-file Program. The advice identified IRS Publication 1345 as the source of the program's denial factors,…
PLR 200217054: Research credit election revoked with IRS consent
A calendar year taxpayer had elected the alternative incremental research credit method under § 41(c)(4). Before the extended due date for the applicable return, the taxpayer asked to revoke that…
PLR 200217053: Extension granted to make a QSub election effective on acquisition date
An S corporation acquired all the shares of another corporation and intended to treat the subsidiary as a qualified subchapter S subsidiary from the acquisition date. It failed to file Form 8869 on…
PLR 200217052: Utility energy cost bonds treated as company obligations without immediate income
A regulated electric utility planned to create energy cost property under state law, transfer it to a bankruptcy remote special purpose entity, and issue bonds secured by customer charges tied to…
PLR 200217051: Tax free corporate separation and controlled company distribution approved
A publicly traded utility group planned to separate businesses into two corporate groups and distribute the stock of a controlled company to the distributing company's shareholders. The…
PLR 200217050: Late S corporation election relief granted
A corporation asked the IRS to treat its late election to be taxed as an S corporation as timely. The corporation had been incorporated on a redacted date, and its shareholders intended the S…
PLR 200217049: Late S corporation election accepted with timely Form 2553 filing
A corporation's shareholders intended it to be treated as an S corporation from its incorporation date, but Form 2553 was filed late. The IRS found reasonable cause for the missed deadline and…
PLR 200217048: S corporation status preserved after stock agreement correction
A bank holding company's agreement with director shareholders limited dividends and fixed the price at which they would sell their shares back to the company. The IRS concluded that the agreement…
PLR 200217047: Late application to change tax year treated as timely
A taxpayer filed Form 1128 after the deadline to request a change from a December 31 tax year to a November 30 tax year. The application was late because of an error or misunderstanding, and the…
PLR 200217046: Late S corporation election allowed after advisor missed filing
Two shareholders intended their newly incorporated company to elect S corporation status from its incorporation date. They relied on a tax advisor to file Form 2553, but the form was not filed on…
PLR 200217045: Crop share farm income excluded from S corporation passive income
A corporation planning to elect S corporation status leased farmland under crop sharing arrangements. It would receive a share of the crops and related payments, pay part of the farming costs, make…
PLR 200217044: Conditional relief from deemed asset transfer on exempt status change
A membership association had given up its tax exemption after expanding into taxable activities and later incorporated as a taxable nonstock corporation. It planned to move certain activities into a…
PLR 200217043: Expatriation tax avoidance presumption rebutted, purpose unresolved
A former long-term U.S. resident gave up her permanent resident status and returned to the country where she was born and remained a citizen. Her net worth exceeded the threshold that would…
PLR 200217042: Convertible commercial units may qualify within housing cooperative
A housing cooperative proposed issuing stock tied to units that could be used as retail space or converted to apartments. The purchaser would have the right to live in a unit, and local rules…
PLR 200217041: First year S corporation election treated as timely if filed
A corporation's president and majority shareholder intended S corporation treatment from its first taxable year. A director's written action and the corporation's Form 1120S reflected that…
PLR 200217040: Late S corporation election granted with filing and return conditions
A corporation's sole shareholder intended S corporation treatment from a specified date, but no Form 2553 was filed on time. The IRS ruled that the corporation would be treated as an S corporation…
PLR 200217039: Financing changes preserve exception for identified short sales
A trust held stock while also maintaining short sales of the same stock. It had identified the stock and short sales as offsetting positions under the transition exception to IRC § 1259 in the…
PLR 200217038: Late S corporation election treated as timely with Form 2553 filing
A corporation with one shareholder intended to be an S corporation from the start of a taxable year, but its election was not filed on time. The IRS found reasonable cause for the missed deadline…
PLR 200217037: Trust division preserves GST exemption without recognized gain
The trustee of an irrevocable testamentary trust sought to divide it into two equal successor trusts after beneficiaries' interests in investment and income distribution diverged. One trust would…
PLR 200217036: Living trust division preserves GST exemption without taxable gain
The trustee of an irrevocable living trust sought to divide it into two equal successor trusts after beneficiaries developed conflicting interests in investments and income distributions. One trust…
PLR 200217035: Successor advisory committee preserves trust GST exemption
A trustee proposed extending a trust's advisory committee after its last surviving original member died. The committee advised fiduciaries on important trust matters, but the trustee represented…
PLR 200217034: Actively managed rental income excluded from S corporation passive income
A corporation planning to elect S corporation status owned residential and commercial rental properties and leased land. Its employees negotiated leases, screened tenants, supervised repairs and…
PLR 200217033: Late S corporation election treated as timely after reasonable cause is shown
The corporation intended to elect S corporation status, but it did not file Form 2553 on time for its first taxable year. Its president and sole shareholder represented that the corporation had…
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.