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 revokes 501(c)(7) status of a social club left with no members and only investment income
A tax-exempt social club (a subordinate chapter under a parent group exemption) had its 501(c)(7) status revoked after an IRS audit. A 501(c)(7) club must be organized and operated substantially for…
IRS denies 501(c)(6) business-league status to a referral-networking club
A membership group applied to be recognized as a tax-exempt business league under 501(c)(6). Its members meet weekly to swap sales leads and refer business to one another, and it caps membership at…
IRS denies 501(c)(3) status to a group that runs an annual community automotive festival
An organization already recognized as a 501(c)(4) social-welfare group applied to be reclassified as a 501(c)(3) charity, which would let donors deduct their gifts. Its main activity is planning and…
A PPP loan forgiven based on false statements is taxable income
This is internal legal advice from IRS Chief Counsel to fraud counsel about Paycheck Protection Program (PPP) loans. Normally, when a PPP loan is forgiven, a special rule (15 U.S.C. § 636m(i) and…
Extension of time for a corporate group to make a late section 59(e) election to amortize R&E expenses over 10 years
Companies that incur research and experimental (R&E) expenses can elect under section 59(e) to spread the deduction ratably over 10 years instead of taking it all at once, which can be useful for…
Extension of time for a life insurer that heads a consolidated group to file a late copy of its accounting-method-change form
A life insurance company that is the parent of a consolidated group filed an automatic accounting-method change with its tax return, attaching the original Form 3115 (Application for Change in…
Extension of time for a life insurer in a consolidated group to file a late copy of its accounting-method-change form
A life insurance company that is a member of a consolidated group filed an automatic accounting-method change with its tax return, attaching the original Form 3115 (Application for Change in…
Extension of time for a life insurance company to file a late copy of its accounting-method-change form
A life insurance company filed an automatic accounting-method change with its tax return, attaching the original Form 3115 (Application for Change in Accounting Method) to the return. Through…
How commonly controlled partnerships count toward the section 7874 inversion ownership fraction
Section 7874 is the anti-inversion rule: when a foreign corporation acquires a U.S. business, the tax law measures how much of the new foreign parent the former U.S. owners hold (the "ownership…
Marina floating docks are REIT real property, and related storage, insurance, and amenity income qualifies
A company that owns and operates marinas planned to elect to be taxed as a real estate investment trust (REIT). REITs must meet strict tests: most of their assets must be real estate, and most of…
Extension of time for a corporate group to make a late election to file a consolidated return
A group of affiliated corporations can elect to file a single consolidated federal income tax return, with a common parent, instead of separate returns. The election is made by timely filing…
Extension of time to file a late section 336(e) election treating an S corporation stock sale as an asset sale
When a buyer purchases all the stock of an S corporation, the parties can elect under section 336(e) to treat the stock sale as if the corporation had sold its assets, which often gives the buyer a…
Extension of time for an estate to make a portability election preserving the deceased spouse's unused exclusion
When a spouse dies without using all of their federal estate-tax exemption, the surviving spouse can claim the leftover (the "deceased spousal unused exclusion," or DSUE) only if the deceased…
Final denial of 501(c)(3) exemption to a hobby-enthusiast archive operated for substantial social purposes
An organization built around a particular product or brand (referred to only as "Z," described as part of automotive history) applied for charitable tax-exempt status under section 501(c)(3). Its…
Retained surface-mining rights disqualify a conservation easement deduction under section 170(h)
This is internal legal advice from IRS Chief Counsel to a field attorney about conservation easement charitable deductions. To deduct the value of a conservation easement, the gift must be made…
Extension of time for an estate to make a portability election preserving the deceased spouse's unused exclusion
When someone dies without using up their full federal estate-tax exemption, the leftover amount (the "deceased spousal unused exclusion," or DSUE) can be passed to the surviving spouse, but only if…
Extension of time for an insurance company to file late copies of its accounting-method-change forms
An insurance company filed automatic accounting-method changes with its consolidated tax return, attaching the original Forms 3115 (Application for Change in Accounting Method) to the return.…
Tax-free rulings for a multi-step corporate reorganization and spin-off of a controlled subsidiary
A publicly traded parent corporation that files a consolidated return with its subsidiaries planned to reorganize its corporate structure and then spin off one subsidiary to its shareholders. The…
IRS grants a foreign subsidiary extra time to file a late "check-the-box" election to be a disregarded entity
A foreign subsidiary wholly owned by a parent company wanted to be treated as a "disregarded entity" for U.S. federal tax purposes, meaning it is ignored as separate from its owner and its…
IRS grants a foreign subsidiary extra time to file a late "check-the-box" election to be a disregarded entity
A foreign subsidiary wholly owned by a parent company wanted to be treated as a "disregarded entity" for U.S. federal tax purposes, meaning it is ignored as separate from its owner and its…
A VEBA may expand its membership to all former employees without losing its tax exemption
A voluntary employees' beneficiary association (VEBA) is a tax-exempt group under section 501(c)(9) that pays life, sick, accident, or similar benefits to its employee-members. This VEBA, funded…
IRS grants an LLC late-election relief to be taxed as a corporation and then as an S corporation
A single-owner limited liability company (LLC) wanted to be taxed as an S corporation. That takes two steps: first the LLC must elect to be treated as a corporation (an association) by filing Form…
IRS lets a housing partnership amend Forms 8609 to fix inadvertent low-income housing credit election errors
A limited partnership owns a multi-building housing project that received low-income housing tax credits under section 42. To claim those credits, the owner files a Form 8609 for each building and…
IRS grants a foreign entity extra time to file a late "check-the-box" election to be taxed as a partnership
A foreign business entity wanted to be treated as a partnership for U.S. federal tax purposes. To do that, an eligible entity files a "check-the-box" election on Form 8832 under the entity…
IRS grants advance approval of a private foundation's scholarship and educational grant procedures
A private foundation asked the IRS to approve, in advance, how it will award scholarships and related educational grants. This approval matters because section 4945 taxes a private foundation's…
IRS treats a large trust distribution to a public charity as an "unusual grant" that will not upset its public-support status
A publicly supported charity must normally show that a large share of its funding comes from broad public support rather than a few big donors. A single very large gift can distort that math and…
IRS denies 501(c)(3) status to a juice and smoothie bar as a commercial business
An organization applied for recognition as a tax-exempt charity under section 501(c)(3). Its stated purpose was to promote health through education and by selling affordable organic juices,…
IRS denies 501(c)(4) social welfare exemption to a tax-preparation operation run like a for-profit business
An organization applied to be recognized as a tax-exempt social welfare group under section 501(c)(4). Its sole activity was tax preparation, along with related services like tax resolution, audits,…
An entity lacking dealer or bank-type regulatory supervision is not a qualified derivatives dealer eligible entity, so its application should be rejected
U.S. tax rules on payments to foreign persons let certain foreign financial firms register as qualified derivatives dealers (QDDs), a status that changes how withholding applies to…
A section 965 underpayment from disregarding a regulation cannot be spread over installments and is due at once
The 2017 tax law imposed a one-time transition tax under section 965 on U.S. companies' accumulated offshore earnings, and it let a company elect to pay that tax in eight annual installments. Here a…
An S corporation's accidental election termination is treated as inadvertent, so S status continues if the trust beneficiary makes a late QSST election
An S corporation had a trust among its shareholders. While the trust's grantor was alive, the trust counted as a grantor trust owned by him, which is a permitted S corporation shareholder. When the…
IRS consents to revoke a mark-to-market election on a foreign fund so the investor can switch to a QEF election
A U.S. investment partnership held stock in a foreign company that is a passive foreign investment company (PFIC). A U.S. owner of PFIC stock generally must choose a tax regime for it, and two…
A REIT's accounting-method adjustments are excluded from its income tests and treated as paid from E&P
A real estate investment trust (REIT) earns nearly all of its income through a partnership that owns communications towers and related real estate. The partnership discovered it had been…
Advisory fees paid out of an annuity's cash value are not a taxable distribution under section 72(e)
A life insurance company offers deferred annuity contracts designed to be managed with the help of an investment adviser. The owner authorizes the company to deduct the adviser's fee (capped at 1.5%…
Court-ordered restructuring of long-term care policies in an insurer rehabilitation is not a taxable event for policyholders
A state-domiciled life insurance company that sold guaranteed-renewable long-term care policies was placed into rehabilitation by a state court because its projected liabilities far exceeded its…
S corporation relief after its operating agreement created a second class of stock
An S corporation can have only one class of stock, meaning all shares must confer identical rights to distributions and liquidation proceeds. Here the company's owners signed an operating agreement…
Tax-free split-off lets two family branches divide a closely held S corporation
A closely held S corporation is owned by two branches of a family that disagree about how to run the business. To separate, the corporation (Distributing) will form a new subsidiary (Controlled),…
Late relief to elect out of the bankruptcy loss rule under section 382(l)(5)
Section 382 limits how much of a corporation's past losses it can use after an ownership change. A special rule, section 382(l)(5), applies when the ownership change happens in bankruptcy (a title…
IRS treats a subsidiary as having consented to a consolidated return despite a missing Form 1122
A corporate parent and its wholly owned subsidiary wanted to be treated as filing a consolidated federal income tax return, but the parent had mistakenly treated the subsidiary as a disregarded…
IRS approves a foundation's set-aside for a historic decorative-arts restoration matching grant
A private foundation asked the IRS to approve a "set-aside," which lets it earmark money now for a specific project and still count it toward the minimum it must distribute each year, as long as it…
IRS approves a foundation's set-aside for a matching grant to a community fund's historic restoration
A private foundation asked the IRS to approve a "set-aside," which lets it earmark money now for a specific project and still count it toward its required annual distributions, as long as it pays…
IRS approves a foundation's set-aside for phase three of a historic building restoration
A private foundation asked the IRS to approve a "set-aside," which lets it earmark money now for a specific project and still count it toward the minimum amount it must distribute each year, as long…
IRS approves a private foundation's set-aside for a historic restoration matching grant
A private foundation asked the IRS for permission to "set aside" money for a specific project instead of paying it out right away. Private foundations must distribute a minimum amount each year, and…
IRS denies 501(c)(3) status to a cemetery organization
An organization whose only purpose is to hold title to and preserve a cemetery applied to be recognized as a tax-exempt charity under § 501(c)(3), using the streamlined Form 1023-EZ. The IRS denied…
Late relief for a surviving spouse's estate-tax portability election
When someone dies, any unused portion of their federal estate-tax exclusion can be passed to a surviving spouse, but only if the estate makes a "portability" election on a timely filed estate tax…
Late relief to elect disregarded-entity status for a foreign company
A foreign company wholly owned by a single owner wanted to be treated as a disregarded entity for U.S. federal tax purposes, meaning it would be ignored as separate from its owner. To get that…
S corporation gets relief after a shareholder's exempt status changed and disqualified it
A company had elected to be taxed as an S corporation. One of its shareholders was a charity described in § 501(c)(3), which the tax law allows to hold S corporation stock. Later the IRS…
S corporation gets inadvertent-termination relief after eleven trusts missed their ESBT elections
An S corporation's special tax status can terminate automatically if its stock is held by an ineligible shareholder. A trust can hold S corporation stock only if it qualifies as an Electing Small…
Estate gets extra time to make a QTIP marital-deduction election after preparer's Schedule M error
When one spouse dies leaving property in a marital trust, the estate can defer estate tax by making a "QTIP" election under IRC § 2056(b)(7), which treats the trust property as passing to the…
Corporate group gets extra time to elect to file a consolidated return
A parent corporation and its affiliated group wanted to file one combined (consolidated) federal income tax return, an election made under Treas. Reg. § 1.1502-75(a)(1) by timely filing that…
Pension plan may keep using its substitute mortality tables after a change in plan sponsor
A company's pension plans had been approved to use their own experience-based "substitute" mortality tables (instead of the IRS standard tables) for funding calculations under IRC § 430. A problem…
IRS denies 501(c)(3) status to a group whose only activity is renting out a community center
An unincorporated association applied for § 501(c)(3) charity status using the streamlined Form 1023-EZ, stating it maintains a community center that residents can rent for meetings, parties, and…
IRS revokes a charity's 501(c)(3) status after it failed to produce records substantiating its exempt purpose
A § 501(c)(3) organization (which appears to run gaming, raffle, and meal fundraisers connected to youth sports) was selected for audit. The IRS made repeated attempts by mail and phone to obtain…
IRS finds a self-declared social-welfare group does not qualify under 501(c)(4)
An organization incorporated in its state and began filing annual returns with the IRS without ever applying for exempt status. Because a § 501(c)(4) social welfare organization does not need a…
IRS revokes a charity's 501(c)(3) status after it went silent during an audit
The IRS selected a § 501(c)(3) charity for examination and repeatedly tried to reach it by mail and phone, but the organization never produced its records. The group appeared to have dissolved with…
IRS revokes a social club's tax exemption for excessive non-member income
A tax-exempt social club (IRC § 501(c)(7)) owned a building with two halls it rented to both member and non-member groups. On audit, the IRS found the club's income from non-members exceeded the…
No estate-tax deduction for a charitable-remainder-trust payout the trustee can split between spouse and charity at will
This is internal Chief Counsel advice to an IRS area counsel, not a ruling to a taxpayer. A decedent left part of his estate to a charitable remainder unitrust (CRUT) paying 5% a year for his…
Advisory fees pulled from an annuity's cash value are not a taxable distribution to the owner
A life insurance company (which files consolidated returns with a parent) plans to sell deferred annuity contracts designed to work alongside an investment adviser, who helps the owner choose among…
Advisory fees pulled from an annuity's cash value are not a taxable distribution to the owner
A life insurance company plans to sell deferred annuity contracts designed to work alongside an investment adviser, who helps the owner choose among the contract's interest-crediting options. The…
Late Opportunity-Zone fund self-certification allowed after tax preparer missed the deadline
An LLC taxed as a partnership meant to certify itself as a Qualified Opportunity Fund (QOF), the vehicle that lets investors defer capital gains by reinvesting them in Opportunity Zones under IRC §…
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.