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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Inadvertent S-corporation termination from partnership-style operating agreements excused under 1362(f)
An S corporation is allowed only one class of stock, meaning all shares must confer identical rights to distributions and liquidation proceeds. Here an LLC that had elected to be taxed as an S corpora…
Late portability (DSUE) election allowed under 9100 relief
When one spouse dies without using all of their federal estate-tax exclusion, the surviving spouse can inherit the leftover amount (the "deceased spousal unused exclusion," or DSUE) only if the deceas…
Pre-IPO restructuring qualifies on key D-reorganization issues, including a check-the-box deemed liquidation as the required distribution
A family-owned foreign holding company held most of the stock of an operating company that was preparing for an initial public offering. To set an appropriate share value for the IPO and satisfy forei…
Consent granted to make retroactive QEF elections for foreign investments the taxpayers' accountants never flagged as PFICs
U.S. investors in a passive foreign investment company (PFIC) face a punitive tax regime unless they elect to treat it as a "qualified electing fund" (QEF) and pay tax on their share of its income eac…
Final adverse determination denying 501(c)(3) exemption to an off-highway-vehicle recreation club
An off-highway-vehicle (OHV) club applied for recognition as a tax-exempt charity under § 501(c)(3), using the streamlined Form 1023-EZ. The IRS denied it. To qualify, an organization must pass both a…
Advance approval of a private foundation's creator-grant program under 4945(g)(3)
A private foundation asked the IRS to approve, in advance, the procedures for a grant program that funds individual creators (podcasters, filmmakers, writers, musicians, artists, journalists, and othe…
Late check-the-box election to be a disregarded entity allowed under 9100 relief
A foreign business entity with a single owner can choose, using a "check-the-box" election on Form 8832, to be treated as a disregarded entity (ignored for U.S. tax, so its income flows straight to th…
How long the IRS has to assess tax after the section 7507 insolvent-bank bar lifts
Section 7507(a) can bar the IRS from assessing tax against a bank while the bank is insolvent. This Chief Counsel Advice answers how much time the IRS has to assess once that bar lifts. The answer app…
Follow-up confirming a standard Form 872-H and Form 56 suffice for a sub-trust, with no special-trustee signature
This short Chief Counsel email follows up on advice about extending the assessment limitations period for a retirement trust that has a sub-trust. It clarifies that the Form 872-H (consent to extend t…
Use a standard Form 872-H and Form 56 signed by the Form 5500 signatories to extend a trust's limitations period
This short Chief Counsel email advises how to extend the assessment limitations period for retirement trusts (including sub-trusts). The recommended approach is to use the standard Form 872-H (consent…
A delinquent estate-tax return likely does not start the assessment clock until the correct service center receives it
This Chief Counsel email addresses when the three-year assessment clock starts for a late-filed estate tax return (Form 706) that an estate mailed to the wrong IRS location instead of the designated K…
Employer cannot get a later-year refund of over-withheld income tax it paid on a tax-equalized foreign-assignment employee's behalf
Companies that send U.S. employees abroad often use "tax equalization," reducing the employee's salary by a hypothetical U.S. tax and then paying all the employee's actual taxes for them, so the forei…
Late qualified-opportunity-fund self-certification (Form 8996) allowed under 9100 relief
An LLC taxed as a partnership was set up to be a qualified opportunity fund (QOF), a vehicle that lets investors defer and reduce tax on capital gains they reinvest in economically distressed "opportu…
Late portability (DSUE) election allowed under 9100 relief
When one spouse dies without using all of their federal estate-tax exclusion, the surviving spouse can inherit the leftover amount (the "deceased spousal unused exclusion," or DSUE) only if the deceas…
Late reverse-QTIP election allowed so the deceased's GST exemption can shelter the marital trust
When a marital trust qualifies for the estate-tax marital deduction under the QTIP rules, the surviving spouse (not the deceased) would normally be treated as the "transferor" for generation-skipping …
Late QDOT citizenship notice (Form 706-QDT) allowed so the trust escapes the section 2056A estate tax
When a U.S. decedent's surviving spouse is not a U.S. citizen, property qualifies for the estate-tax marital deduction only if it passes to a qualified domestic trust (QDOT), and distributions of prin…
Late portability (DSUE) election allowed under 9100 relief
When one spouse dies without using all of their federal estate-tax exclusion, the surviving spouse can inherit the leftover amount (the "deceased spousal unused exclusion," or DSUE) only if the deceas…
Late RIC (section 851(b)) and foreign-tax pass-through (section 853) elections allowed under 9100 relief
A new fund intended to elect to be taxed as a regulated investment company (RIC) under § 851(b) for its first year, and also to elect under § 853 to pass the foreign taxes it paid through to its share…
Late portability (DSUE) election allowed under 9100 relief
When one spouse dies without using all of their federal estate-tax exclusion, the surviving spouse can inherit the leftover amount (the "deceased spousal unused exclusion," or DSUE) only if the deceas…
Late section 42(f)(1) election to defer the low-income-housing credit period allowed under 9100 relief
The low-income housing credit under § 42 is claimed over a 10-year "credit period" that starts the year a building is placed in service, unless the owner makes an irrevocable § 42(f)(1) election to st…
Late check-the-box election to be a disregarded entity allowed under 9100 relief
A foreign business entity with a single owner can choose, using a "check-the-box" election on Form 8832, to be treated as a disregarded entity (ignored for U.S. tax, so its income flows straight to th…
Final adverse determination denying 501(c)(3) exemption to a shopping-center merchants' association
A membership group made up of the businesses in a shopping-center area applied for recognition as a tax-exempt charity under § 501(c)(3), using the streamlined Form 1023-EZ. The IRS denied it. To qual…
Final adverse determination revoking a 501(c)(7) social club's exemption for excessive nonmember income
A fraternal and social membership club had been treating itself as tax-exempt under § 501(c)(7) as a self-declared exempt organization (it never filed Form 1024). On audit the IRS found the club drew …
Late check-the-box elections for two foreign entities to be disregarded allowed under 9100 relief
A foreign business entity with a single owner can use a "check-the-box" election on Form 8832 to be treated as a disregarded entity (ignored for U.S. tax, so its income flows straight to the owner) in…
Late safe-harbor election for success-based deal fees allowed under 9100 relief
When a company buys a business, advisory fees that are payable only if the deal closes ("success-based fees") are presumed to be a cost of the acquisition and must be capitalized rather than deducted.…
Retroactive QEF election allowed for a PFIC after the preparer missed it
A U.S. investor who owns shares in a passive foreign investment company (PFIC) faces harsh default tax rules unless the investor elects to treat the company as a "qualified electing fund" (QEF), which…
Late identification for integrating convertible notes with a hedge allowed under 9100 relief
Tax rules let a company combine ("integrate") a qualifying debt instrument with a hedge so the pair is taxed as if it were a single fixed-rate note, but only if the company records and identifies the …
Late portability election for a deceased spouse's unused exclusion allowed under 9100 relief
When someone dies without using all of their federal estate-tax exclusion, the unused portion (the "deceased spousal unused exclusion," or DSUE amount) can be passed to the surviving spouse, but only …
Late election to file a consolidated return allowed under 9100 relief
A group of affiliated corporations can choose to file a single consolidated federal income tax return under a common parent instead of separate returns. That election is made by timely filing the cons…
Late portability election for a deceased spouse's unused exclusion allowed under 9100 relief
When someone dies without using all of their federal estate-tax exclusion, the unused portion (the "deceased spousal unused exclusion," or DSUE amount) can be passed to the surviving spouse, but only …
Late consent-dividend election for a REIT allowed under 9100 relief
A corporation (here a real estate investment trust, or REIT) can claim a deduction for "dividends paid" that includes "consent dividends," which are hypothetical dividends a shareholder agrees to trea…
Tax-free split-up of a feuding family S corporation into eight controlled corporations
A family-owned S corporation held and operated rental real estate through a web of qualified subchapter S subsidiaries (QSubs) and disregarded LLCs. It was owned by eight family groups locked in serio…
Late section 754 basis-adjustment election allowed under 9100 relief
A partnership can make a "§ 754 election" so that, when it distributes property or a partner's interest changes hands, it adjusts the tax basis of its assets (under §§ 734(b) and 743(b)) to match econ…
Late check-the-box election for a foreign eligible entity allowed under 9100 relief
A foreign business entity that is eligible can use a "check-the-box" election on Form 8832 to choose how it is classified for U.S. tax purposes (as a corporation, a partnership, or a disregarded entit…
Late corporate-classification and S corporation elections allowed under 9100 relief
A limited liability company that wants to be taxed as an S corporation has to clear two hurdles: it must be treated as a corporation (which an LLC can achieve by filing Form 8832, or automatically thr…
Late check-the-box election to be a disregarded entity allowed under 9100 relief
A foreign business entity with a single owner can use a "check-the-box" election on Form 8832 to be treated as a disregarded entity (ignored for U.S. tax, so its income flows straight to the owner) in…
Final adverse determination denying 501(c)(3) exemption to an open-source wireless-network organization
An organization applied for recognition as a tax-exempt charity under § 501(c)(3), and the IRS denied it. The group was formed to develop and promote open-source software for a decentralized wireless …
Final adverse determination denying 501(c)(3) exemption to a university alumni social and networking club
A local alumni group affiliated with a university applied for tax-exempt charity status under § 501(c)(3) using the streamlined Form 1023-EZ, and the IRS denied it. The group's stated mission was to e…
Final adverse determination denying 501(c)(3) exemption to a community recreational sports club
A community sports club applied for tax-exempt charity status under § 501(c)(3) using the streamlined Form 1023-EZ, and the IRS denied it. The club fielded youth and adult teams, ran leagues and tourn…
A GRAT funded during a pending merger failed section 2702 because the donor used an outdated, undervalued appraisal
The founder of a very successful company was exploring a sale. After investment bankers solicited bids and five corporations made offers, the founder set up a two-year grantor retained annuity trust (…
9100 relief lets a qualified opportunity fund self-certify late on Form 8996 after its preparer wrongly told it not to file
A limited liability company set up as a Qualified Opportunity Fund (QOF) missed the deadline to self-certify by filing Form 8996 with its tax return. It had hired a tax firm to prepare the return, but…
9100 relief to make a late section 336(e) election and a late S corporation election after a stock sale
When buyers purchased all the stock of an S corporation, the parties intended to make two tax elections but missed the deadlines. The first, a section 336(e) election, lets a "qualified stock disposit…
9100 relief to file a late section 336(e) election statement after an S corporation stock sale
Buyers acquired more than 80% of the stock of an S corporation from its sellers. The parties intended for the stock sale to be treated as an asset sale by making a section 336(e) election, which lets …
9100 relief to file a late Form 8832 electing to be taxed as a corporation
A limited company that is an "eligible entity" under the check-the-box rules wanted to be classified as an association taxable as a corporation for federal tax purposes, but through inadvertence it ne…
9100 relief for a partnership to self-certify as a qualified opportunity fund after its accountant forgot to file Form 8996
A limited liability company taxed as a partnership was organized to invest in opportunity zone property and intended to self-certify as a Qualified Opportunity Fund (QOF). Self-certifying requires fil…
Permission to integrate foreign-currency hedges with an anticipated cross-border stock acquisition under section 988
A publicly traded U.S. parent, whose functional currency is the dollar, is using a subsidiary to acquire 100% of a foreign publicly traded target. Target shareholders can take cash (paid in the foreig…
9100 relief to make a late portability election so a surviving spouse can use the DSUE amount
When one spouse dies without using all of their federal estate tax exclusion, the unused portion (the "deceased spousal unused exclusion," or DSUE) can pass to the surviving spouse, but only if the de…
Tax-free section 355/368(a)(1)(D) public spin-off of a worldwide group's Controlled Business into a new standalone company
A publicly traded parent company (Distributing) that runs two businesses through a worldwide group of subsidiaries wants to separate them, spinning off one business (the Controlled Business) into a ne…
9100 relief to file a late QSLOB election (Form 5310-A) for a walled-off defense contractor's 401(k) plan
A U.S. subsidiary that performs classified work for the U.S. government must be walled off from its foreign parent under a "Foreign Ownership, Control and Influence" (FOCI) security framework, and it …
9100 relief to file a late Form 8832 classifying a foreign entity as a partnership
A foreign business entity, eligible under the check-the-box rules to choose how it is classified for U.S. federal tax purposes, wanted to be treated as a partnership as of a chosen effective date. It …
9100 relief to file a late section 754 election after a partner's death
A limited partnership had a partner who died, an event that lets the partnership step up (or down) the basis of its assets to match the successor's basis in the partnership interest, but only if the p…
Retroactive scrivener's-error trust fix does not create a spousal general power of appointment, and the reverse QTIP election stays valid
When the grantor of a revocable trust died, the trust split into a family fund and a marital trust for his surviving spouse. An earlier draft of the trust required that any successor trustee be indepe…
Inadvertent S corporation termination forgiven where a chain of shareholder trusts missed their QSST and ESBT elections
An S corporation's stock passed through a series of family trusts over many years as owners died and trusts distributed shares to successor trusts. To hold S corporation stock, a trust generally must …
How to tell the deductible from the non-deductible parts of a False Claims Act health care fraud settlement under section 162(f)
When a company settles a False Claims Act (FCA) case and the settlement agreement is silent on tax treatment, the pre-TCJA version of IRC § 162(f) still bars a deduction for the punitive (non-compensa…
9100 relief to make a late QSub election after the subsidiary was fixed to qualify as a corporation
An S corporation formed a wholly owned LLC subsidiary and tried to elect to treat it as a qualified subchapter S subsidiary (QSub), which lets the parent ignore the subsidiary as a separate entity and…
9100 relief to make a late portability (DSUE) election for an estate not otherwise required to file
When a married person dies without using all of their federal estate-tax exclusion, the estate can elect "portability" to pass the unused amount (the deceased spousal unused exclusion, or DSUE) to the…
Inadvertent invalid S election forgiven where a shareholder trust missed its ESBT election
A corporation elected to be taxed as an S corporation, but one of its shareholders was a trust that had to file its own election to be an "electing small business trust" (ESBT) to be an eligible S cor…
Final adverse determination revoking a social club's 501(c)(7) exemption for too much non-member income
A tax-exempt social and recreation club described in § 501(c)(7) had its exemption revoked because too much of its income came from outside its membership. Social clubs are exempt only if they are sup…
Final adverse determination revoking a charity's 501(c)(3) exemption for not responding to an audit
A charity recognized under § 501(c)(3), which had described itself as running a summer camp program for abused, neglected, and abandoned teens, lost its tax-exempt status because it did not cooperate …
Final adverse determination revoking a 501(c)(3) exemption for an unanswered audit and a missing dissolution clause
A small charity that had obtained § 501(c)(3) status through the streamlined Form 1023-EZ application lost that status after an examination. The IRS sent a long series of letters and made repeated pho…
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.