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 200207004: Revocation of alternative incremental research credit election allowed
A taxpayer had elected to calculate its research credit under the alternative incremental rules of IRC § 41(c)(4). After another corporation acquired it, the taxpayer requested consent to revoke…
TAM 200207003: Matched book repos produce interest income and expense
A securities dealer treated its matched book of repurchase and reverse repurchase agreements as producing net fee income. The IRS concluded that the agreements were collateralized lending…
PLR 200207002: Extended timetable for previously approved warrant calls
A company asked the IRS to extend the timetable in an earlier ruling concerning calls under warrants used to fund an expansion plan. The company said market conditions had changed and a proposed…
PLR 200207001: Expatriation filing rebuts a tax avoidance presumption without deciding motive
A former long-term U.S. resident asked for a ruling that giving up resident status did not have tax avoidance as a principal purpose. Her net worth exceeded the threshold that created a presumption…
PLR 200206058: Health care joint venture preserves charity exemption and related income treatment
A tax-exempt health care organization proposed forming a limited liability company with local physicians to provide additional treatment services. It would own at least 60 percent, appoint most of…
PLR 200206057: Private foundation may transfer all assets to two foundations before terminating
A private foundation proposed transferring all its assets to two other private foundations, then voluntarily ending its foundation status. The IRS ruled that the transfers qualify under IRC §…
PLR 200206056: Transfer of benefit trust assets to a VEBA does not create a reversion to the employer
An exempt supplemental unemployment benefit trust proposed merging into a newly established voluntary employees' beneficiary association and transferring its remaining assets there. The new…
CCA 200206055: Interview notice and third party contact rules apply in nonfiler project
Chief Counsel advised on a proposed IRS project in which revenue officers and agents would work together on cases involving people who had not filed returns. Because the project would determine…
CCA 200206054: Taxpayers cannot require agents' private information for audit site access
Chief Counsel considered security rules that required IRS agents to disclose personal information before entering taxpayers' audit sites. It advised that a taxpayer cannot condition access on an…
CCA 200206053: Public employers receive guidance on payroll taxes and employee benefits
Chief Counsel answered questions intended for a public employers’ newsletter about payroll taxes, withholding, benefits, and reporting. It explained that a state or local employee outside a public…
PLR 200206052: Late S corporation election may take effect from incorporation
A corporation intended to elect S corporation status from the date it was incorporated, but did not file Form 2553 on time. The IRS found reasonable cause for the missed deadline under IRC §…
PLR 200206051: Foreign entity gets more time to elect disregarded status
A foreign entity became wholly owned by another company and changed its legal form. It missed the deadline to elect treatment as a disregarded entity for U.S. tax purposes. The IRS granted it 60…
PLR 200206050: Consolidated group gets 45 days to file allowed loss statement
A consolidated corporate group missed the deadline to file a statement of allowed loss after a subsidiary's public offering removed it from the group. The parent said some shareholders had built-in…
PLR 200206049: Trader gets 30 days to elect a mixed straddle account
A limited liability company traded equity positions and offsetting equity futures through a designated account. It did not timely elect mixed straddle account treatment because it did not realize…
PLR 200206048: Partnership gets 30 days to correct mixed straddle election
A limited liability company's disregarded subsidiary traded securities and offsetting futures and options. After the company changed from a wholly owned entity to a partnership, its former corporate…
PLR 200206047: Group annuities tied to separate real estate accounts qualify as variable contracts
A life insurer planned to issue group annuity contracts to tax-exempt organizations using two separate accounts invested mainly in real estate. The accounts were segregated from the insurer's…
PLR 200206046: Late S corporation election may be effective from incorporation
A corporation's shareholders intended to elect S corporation treatment from the date the company was incorporated, but the election was not filed on time. The IRS found reasonable cause for the…
PLR 200206045: Appointing three older trusts into new family trusts avoids estate and GST tax
A beneficiary held testamentary powers to appoint property from three irrevocable family trusts into new trusts for relatives. He proposed to exercise those powers by will, with each new trust…
PLR 200206044: Telephone cooperative's stock sale gain is patronage income
A rural telephone cooperative bought shares in a venture created to help small telephone providers offer services to their members. After mergers changed that venture's focus and its stock became…
PLR 200206043: Officer's resolution supports relief for late S election
A corporation's president represented that the company intended to be an S corporation for its first taxable year, and the company submitted an officers' resolution showing that intent. It had not…
PLR 200206042: Late S election gets relief from incorporation date
A corporation's shareholders intended S corporation status to begin when it was incorporated, but the election was not filed by the deadline. The IRS found reasonable cause for the late filing under…
PLR 200206041: Temporary affiliate loan preserves tax treatment of planned distribution
A corporation had received an earlier ruling on its planned distribution of a subsidiary's stock to shareholders. After the September 11 attacks disrupted the lending market, the subsidiary could…
PLR 200206040: Foreign entity gets time to elect disregarded status from formation
A foreign entity had one owner from the day it was formed. Both intended it to be disregarded as a separate entity for U.S. federal tax purposes, but Form 8832 was not filed on time. The IRS found…
PLR 200206039: Single shareholder corporation receives late S election relief
A corporation with one shareholder intended to be an S corporation from the start of its first taxable year but discovered that its election was not filed on time. The IRS found reasonable cause for…
PLR 200206038: Drilling fluid production falls in chemical manufacturing asset class
A company made drilling and well completion fluids by blending minerals, chemicals, and liquids for oil and gas operators. It asked which asset class applied to depreciable property used in that…
PLR 200206037: Transfer of bare legal title does not recapture housing credits
A partnership developing low-income rental housing planned to deed bare legal title to a public housing authority, its general partner, and lease the property back. The arrangement was intended to…
PLR 200206036: Parent gets more time for section 338 elections on foreign acquisition
A corporate group acquired a foreign target and sought IRC § 338(g) elections for that stock purchase and deemed purchases of nine foreign subsidiaries. Its parent intended to elect, but valid forms…
PLR 200206035: Consistent S corporation returns support late election relief
A corporation intended S corporation status from its incorporation date but did not file Form 2553 on time. It did file S corporation returns for its first two tax years, and its shareholders filed…
PLR 200206034: Redacted state benefit does not reduce wind production credit
A company planned to own and operate a wind facility that would sell electricity to a utility. It asked whether a benefit under a state statute would reduce its renewable electricity production…
PLR 200206033: Company's late S corporation election treated as timely
A company asked whether it could make a late election to be treated as an S corporation. The IRS found that the company had reasonable cause for missing the filing deadline and ruled that its…
PLR 200206032: Company's late S corporation election treated as timely
A company asked the IRS to treat its late S corporation election as timely for a specified tax year. The IRS concluded that the company had reasonable cause for failing to file the election on time…
PLR 200206031: Active rental services keep an S corporation's rents outside passive investment income
An S corporation that owned and operated rental real estate asked whether its rental income was passive investment income under section 1362. The corporation and its employees provided extensive…
PLR 200206030: Active industrial and retail rentals are not passive investment income
A company planning to elect S corporation status owned and operated industrial and retail rental property. Its employees, officers, and contractors provided substantial inspection, repair,…
PLR 200206029: Expatriation ruling rebuts the tax avoidance presumption
A former long term resident who returned to the country of her citizenship asked the IRS to determine whether her loss of permanent resident status had a principal purpose of avoiding U.S. taxes.…
PLR 200206028: Shareholders avoid gain on an exchange of retained non equity rights
A taxpayer planned a restructuring in which its shareholders would exchange several classes of stock for corresponding classes of stock in a new parent company. The IRS had previously treated…
PLR 200206027: Fund's late dividend election is treated as timely
A regulated investment company missed the deadline to elect to treat certain dividends distributed after year end as paid during the prior tax year. Its accounting firm had tracked the wrong…
PLR 200206026: Company receives more time to elect QSub treatment
An S corporation intended to elect qualified subchapter S subsidiary treatment for a wholly owned domestic subsidiary from its formation date, but did not file the election on time. The IRS found…
PLR 200206025: Acquiring company receives more time for a QSub election
An S corporation acquired another corporation and intended to treat it as a qualified subchapter S subsidiary from the acquisition date, but inadvertently failed to file Form 8869. The IRS found…
PLR 200206024: Colorado law apportions estate tax among taxable residuary interests
An estate asked whether Colorado's estate tax apportionment statute would govern tax attributable to the decedent's residuary gifts under a will and amended trust. The documents directed payment of…
PLR 200206023: Managed property rents are not passive investment income
An S corporation owned and operated rental real estate directly and through interests in two partnerships. Its employees and a related manager performed substantial inspection, maintenance, repair,…
PLR 200206022: Business spin off qualifies as a tax free reorganization
A company transferred one product business to a controlled corporation and planned to distribute the controlled corporation's stock to its shareholders. The separation was intended to help the…
CCA 200206021: IRS denies depreciation method change for street lighting equipment
An electric utility sought to change how it depreciated street lighting and signal equipment, arguing that the equipment did not belong in its electric distribution asset class. Chief Counsel…
CCA 200206020: IRS confirms railroad employer status changes
The Railroad Retirement Board advised the IRS that one business had ceased to be an employer under the railroad retirement laws and another had become an employer. After reviewing the Board's…
PLR 200206019: Parent receives time to elect QSub status for eight subsidiaries
An S corporation acquired a company and elected to treat it as a qualified subchapter S subsidiary. It also intended that company's eight subsidiaries to receive QSub treatment, but its accountant…
PLR 200206018: Foreign subsidiary receives more time to elect disregarded entity status
A foreign private limited company wholly owned by a parent intended to elect treatment as an entity disregarded from its owner for U.S. federal tax purposes, but failed to file Form 8832 on time.…
PLR 200206017: Late S corporation election approved for first tax year
A corporation intended to elect S corporation status for its first tax year, but did not file Form 2553 on time. The IRS found reasonable cause for the missed deadline and ruled that the election…
PLR 200206016: Spouses receive more time to group rental real estate interests
Two spouses sought relief after omitting the statement needed to elect to treat all their rental real estate interests as one activity for passive loss purposes. The IRS granted them 60 days from…
CCA 200206015: Street lighting depreciation method change is denied
An electric utility asked to change how it depreciated street lighting and signal equipment, arguing that the assets did not belong in its electric distribution asset class. Chief Counsel advised…
CCA 200206014: Bank's supervisory goodwill depreciation method is denied
A bank sought to change its accounting method so it could depreciate supervisory goodwill associated with an earlier acquisition of a troubled thrift. Chief Counsel advised that consent was denied.…
PLR 200206013: First year S corporation election receives late filing relief
A corporation filed a Form 1120S for its first tax year but had not timely filed Form 2553 to elect S corporation status. The IRS concluded that it had reasonable cause for the missed election…
CCA 200206012: Retailer cannot use section 263A's three year inventory method for cost complements
A retailer using dollar value LIFO and the retail inventory method changed how it calculated cost complements after inconsistently accounting for promotional markdowns. It used a three year average…
PLR 200206011: Inadvertent IRA ownership does not end S corporation treatment
Two individual retirement accounts acquired shares of an S corporation, making them ineligible shareholders and terminating its S election. After the company's accountants discovered the problem,…
CCA 200206010: Stock payments and related party interest receive separate tax treatment
A U.S. corporation, its foreign branch, and controlled foreign subsidiaries entered into a series of loans and forward stock purchase agreements. Chief Counsel advised that stock paid by one…
CCA 200206009: Counsel returns proposed employment tax injunction request for revision
Local counsel asked national Chief Counsel to approve a letter seeking a federal court injunction against a business with a long history of unpaid employment taxes. National counsel did not approve…
CCA 200206008: Prior tax case does not settle whether a foreign lender was a conduit
A U.S. corporation and related U.S. businesses borrowed through a foreign group company whose country of residence had a treaty exempting its interest receipts from U.S. withholding. Chief Counsel…
PLR 200206007: Sole shareholder's company receives late S election relief
A corporation's president and sole shareholder intended the company to be an S corporation for a specified tax year, but the company failed to file Form 2553 on time. The IRS found reasonable cause…
CCA 200206006: Counsel challenges an artificial foreign currency loss
Unrelated LLCs borrowed foreign currency and later transferred currency and part of their loan obligations to a U.S. corporation in a section 351 transaction. The arrangement was designed to give…
CCA 200206005: Deduction for stock redemption settlement depends on payment purpose
A corporation paid a judgment and related costs arising from a family dispute over company control that ended with the surrender of some shareholders' stock. Chief Counsel advised that payments to…
PLR 200206004: Company receives late S election relief for first tax year
Two shareholders intended their newly formed company to be an S corporation from its first tax year, but the company did not timely file Form 2553. Its attorney provided an affidavit and a letter…
CCA 200206003: Acquirer takes stock compensation deduction after merger
Before a merger, officers of the target company exchanged options for restricted shares of the acquiring company and filed section 83(b) elections. The target claimed the resulting compensation…
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.