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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Shareholders' entity restructuring does not end S election
Three individuals owned an S corporation and planned to hold their shares through separate limited liability companies and limited partnerships. None of the new entities would elect corporate tax…
More time allowed for foreign entity classification election
A foreign entity missed the deadline to file Form 8832 for its intended federal tax classification. The IRS found that it satisfied the standards for an extension under Treasury Regulation section…
Late S election allowed after company omitted Form 2553
A corporation intended to be an S corporation from its first tax year and filed an S corporation return. Its shareholders mistakenly thought that return was enough, so they never filed Form 2553.…
Extra time to identify buildings in housing credit project
A partnership failed to identify all the buildings in a low income housing project as part of one multiple building project on Form 8609. The IRS found good cause and granted an extension under the…
Inadvertent S election termination from trust shareholders waived
An S corporation's shares were transferred to nine trusts that were not then eligible S corporation shareholders. The IRS found that this terminated its S election, but that the termination was…
Bond issuer denied protection from retroactive exemption revocation
An issuer sold tax exempt bonds to finance facilities for a nonprofit borrower whose section 501(c)(3) status was later revoked. The issuer sought relief under section 7805(b) so the revocation…
Trust receives damages without donor income, but attorney fees are taxable
Parents transferred their claim to part of a punitive damages judgment to a charitable trust while the case was still on appeal. The IRS ruled that the portion effectively transferred to the trust…
Subsidiary conversion and merger preserve stated S corporation treatment
An S corporation planned to transfer part of a qualified subchapter S subsidiary to an LLC, convert the subsidiary into a limited partnership, and merge a related S corporation into the parent. The…
Utility securitization financing proceeds are not immediate income
An electric utility planned to finance costs from industry restructuring by transferring its right to collect special customer charges to a wholly owned LLC, which would issue bonds. The IRS ruled…
Business separation receives liquidation, contribution, and spin-off rulings
A corporate group planned to separate two businesses by merging several subsidiaries, transferring assets and stock to a new controlled corporation, and distributing that corporation's stock to…
Child's gift does not replace decedent as transferor of entire trust
Trustees of a charitable lead annuity trust proposed to give one child a remainder interest, which the child would then assign to the child's children. They asked the IRS to treat the child as the…
Late S election accepted after attorney failed to file form
A corporation intended to elect S status for its first tax year and relied on its attorney to file Form 2553. Its state election form and an attorney letter showed that intent, but the IRS had no…
Late S corporation election treated as timely
A single shareholder corporation intended S corporation treatment from its incorporation but discovered that its election had not been filed on time. The IRS ruled that the election would be treated…
Counsel recommends denying early deduction for plan contributions
An accrual basis employer sought a refund based on deducting retirement plan contributions paid on the last day of its tax year but tied to employee compensation earned in the next year. In this…
Revised nuclear decommissioning funding schedule approved
A utility with an ownership interest in a nuclear plant sought a revised schedule for deductible payments to its decommissioning fund. The IRS found that its proposed schedule met section 468A's…
Reasonable cause relief for late S corporation election
A corporation's shareholders intended to elect S status from a specified date, but the election was filed late. The IRS found reasonable cause for the missed deadline and granted relief under…
Investment funds receive extensions for section 855 elections
Eight investment funds missed the return filing deadline for their elections under section 855(a) after their agent failed to request filing extensions. The agent discovered the omission and later…
Corporate business spin-off qualifies for tax deferred treatment
A publicly traded corporation planned to separate two businesses by transferring one business's assets to a new corporation and distributing the new corporation's shares to its shareholders. The IRS…
Nuclear plant and decommissioning fund transfers receive tax rulings
An electric utility planned to transfer nuclear plants, decommissioning obligations, and related funds to an affiliated company as part of a reorganization. The IRS ruled that the qualified…
Late tax year change application treated as timely
A taxpayer missed the deadline to file Form 1128 for a change in its tax year. The IRS found that it acted reasonably and in good faith and that relief would not prejudice the government. Under…
Revised decommissioning schedule approved for one utility commission
A utility sought a revised schedule of deductible payments to its nuclear decommissioning fund after one utility commission changed the decommissioning costs included in its rates. The IRS found the…
Late Form 1128 accepted for processing
A taxpayer filed Form 1128 late to request a change in its tax year. The IRS found that the taxpayer acted reasonably and in good faith and that accepting the late form would not prejudice the…
Proportionate trust division preserves GST grandfather status
A family proposed to divide an older trust into five separate trusts to resolve disputes among beneficiaries. Each new trust would receive assets in proportion to the existing income interests, and…
Extra time to elect deemed asset purchase of foreign target
A consolidated group bought all the stock of a foreign corporation and intended to make a section 338(g) election but missed the Form 8023 deadline. The IRS found that the parent had acted…
Late section 338 elections allowed for foreign target and affiliates
A consolidated group bought a foreign corporation that owned two foreign subsidiaries and missed the deadline for related section 338(g) elections. The IRS found reasonable, good faith reliance on a…
Surviving spouse may roll estate's IRA proceeds into her own IRA
A deceased IRA owner's estate was the named beneficiary of his IRA. His surviving spouse was both the estate's sole executrix and its sole residuary beneficiary, and she moved the IRA proceeds from…
PLR 200106046: Son treated as designated beneficiary of an IRA through a trust
An IRA owner named an irrevocable trust as beneficiary before his required beginning date. His son was the trust's beneficiary, and the custodian had received a copy of the trust. The IRS ruled that…
PLR 200106045: Son remains an IRA beneficiary after a trustee transfer
An IRA owner named his son as beneficiary of two IRAs before his required beginning date. One IRA was later transferred to another IRA through a trustee transfer, with the son also named as its…
PLR 200106044: Charity restructuring preserves exemption and avoids unrelated business income
A charity providing counseling and home health services proposed a restructuring with two related exempt organizations. One would take over home health services; the other would hold some endowment…
PLR 200106043: Charity restructuring preserves exemption and avoids unrelated business income
A charity providing counseling and home health services proposed a restructuring with two related exempt organizations. One would take over home health services; the other would hold some endowment…
PLR 200106042: Charity restructuring preserves exemption and avoids unrelated business income
A charity providing counseling and home health services proposed a restructuring with two related exempt organizations. One would take over home health services; the other would hold some endowment…
PLR 200106041: Foundation grants tied to employee volunteer hours
A private foundation proposed grants to public charities and government units when employees or retirees of a substantial contributor volunteered a set number of hours. Volunteers would choose where…
PLR 200106040: Foundation asset transfer carries tax attributes to recipient
Two private foundations controlled by the same people proposed transferring about half of one foundation's assets to the other under section 507(b)(2). The transferring foundation represented that…
PLR 200106039: Revised IRA payment calculation qualifies for early distribution exception
An IRA owner under age 59½ proposed monthly withdrawals intended to qualify as substantially equal periodic payments. The annual amount was based on the IRA balance, the joint life expectancy of the…
PLR 200106038: Hospital board changes preserve charitable status
A nonprofit health care system proposed changes to the boards and committees of its parent and hospital. The revised governance would add defined community and medical staff roles, quorum rules,…
PLR 200106037: Hospital board changes preserve charitable status
A nonprofit health care system proposed changes to the boards and committees of its parent and hospital. The revised governance would add defined community and medical staff roles, quorum rules,…
PLR 200106036: Late Form 970 correction allowed for parts inventory
A company used the last-in, first-out (LIFO) inventory method for both new machinery and new parts, but its Form 970 listed only the machinery. The company found the omission during a review of its…
PLR 200106035: Partnership gets more time to file LIFO election
A foreign partnership used the last-in, first-out (LIFO) method for its inventory. Its Form 970 election was filed with an owner's Form 5471, raising a question about whether the partnership made a…
PLR 200106034: Active rental business income excluded from S corporation passive income
An S corporation with accumulated earnings and profits owned residential and commercial rental properties. Its two officer-employees worked full time in the rental business, and the company provided…
PLR 200106033: Fund may revoke distribution calculation election
A regulated investment company had elected to use its calendar tax year to calculate parts of its required distribution under section 4982. It found that the election created administrative burdens…
PLR 200106032: Funeral home's family payments need no information returns
A funeral home advanced money to service providers selected by families, then received dollar-for-dollar reimbursement. It did not control the providers' work, negotiate prices, or profit from the…
PLR 200106031: Late S corporation election may be treated as timely
A corporation's sole shareholder said a timely S corporation election had been filed for its first tax year, but the IRS service center had no record of it. The corporation and shareholder had filed…
PLR 200106030: Partnership property rents excluded from passive investment income
A corporate group planned S corporation and qualified subchapter S subsidiary elections. Through partnerships, its subsidiaries held interests in two rental properties that received substantial…
PLR 200106029: Marital trust settlement produces distinct gift tax effects
A surviving spouse and other beneficiaries settled litigation over a marital trust for which an estate tax deduction had been elected. The trustee would distribute most of the marital share to the…
PLR 200106028: Late S corporation election receives relief
A corporation intended S corporation treatment from a specified effective date but did not file its election on time. The IRS found reasonable cause for the late election under section 1362(b)(5).…
PLR 200106027: Attorney misunderstanding excused for S election
A corporation intended to elect S corporation status from its first tax year and relied on its attorneys to file the necessary papers. A misunderstanding among the attorneys meant that no Form 2553…
PLR 200106026: Misplaced corporate file leads to late S election relief
A corporation intended S corporation treatment for its first tax year. Its law firm prepared Form 2553 but misplaced the corporate file and never filed the form. The IRS found reasonable cause for…
PLR 200106025: Missing Form 2553 receives late election relief
A corporation's sole shareholder intended S corporation treatment from its first tax year and relied on an accountant to prepare the election. Form 2553 was never filed, although the corporation's…
PLR 200106024: Misunderstood filing responsibility excused for S election
Two shareholders expected their attorney to file an S corporation election, while the attorney understood the work to cover only incorporation. No Form 2553 was filed, though the corporation and…
PLR 200106023: Accountant's missed Form 2553 filing receives relief
A corporation's shareholders intended S corporation treatment from its first tax year. The corporation's minutes and S corporation return reflected that intent. Its attorney had instructed its…
PLR 200106022: Late fiscal year election treated as timely
An S corporation intended to elect a September 30 tax year but its tax professional failed to file Form 8716 by the deadline. The IRS found that the corporation had relied reasonably on the…
PLR 200106021: Settlement fund reports interest but not property tax refunds
A court-approved fund would pay class members refunds of a state intangible property tax and interest after settlement of a class action. The IRS treated the fund as a qualified settlement fund. It…
CCA 200106020: Taxpayer withdraws accounting method change request
Chief Counsel advised a district office that a taxpayer withdrew part of its Form 3115 request. The taxpayer had sought to change the accounting method for rental property from inventory treatment…
CCA 200106019: Satellite sale and leaseback does not support depreciation
Chief Counsel analyzed a claimed sale and leaseback of transponders on a communications satellite. The taxpayer's subsidiaries held legal title and claimed depreciation, but the seller and lessee…
CCA 200106018: QSST beneficiary's death releases some passive losses
A deceased income beneficiary of a qualified subchapter S trust had been treated as the owner of its S corporation stock for income tax purposes. The beneficiary had suspended passive activity…
PLR 200106017: Reformed trust can qualify as S corporation shareholder
A trust held S corporation stock but could not qualify as a qualified subchapter S trust because its terms allowed a distribution to someone other than its current income beneficiary during that…
PLR 200106016: REIT may allocate tenant website costs across properties
A real estate investment trust offered tenants at multiple commercial properties access to a website for vendor services and information. The site was available to all tenants, making it difficult…
PLR 200106015: Mission organization qualifies as a religious order
A tax-exempt missionary organization asked whether it was a religious order for employment and self-employment tax rules. Its members followed a spiritual covenant, trained for service, lived and…
PLR 200106014: More time granted for revised plant ruling schedule
A taxpayer missed the deadline to request a revised schedule of ruling amounts for a plant under the section 468A regulations. It sought an extension under the rules for late regulatory elections.…
PLR 200106013: More time granted for revised plant ruling schedule
A taxpayer missed the deadline to request a revised schedule of ruling amounts for a plant under the section 468A regulations. It sought an extension under the rules for late regulatory elections.…
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.