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 9940026: Late S corporation election treated as timely
A corporation with one shareholder said it had intended to be an S corporation from its incorporation and had operated that way. After its first tax year, it learned that its election was not timely…
PLR 9940025: Amended tuition plan keeps employee benefits tax free
An employer amended a tuition reduction plan that the IRS had previously reviewed. The revised plan offered three benefit levels, including one whose coverage would fail the section 410 test if that…
PLR 9940024: Late S corporation election treated as timely
A corporation with one shareholder said it had intended to be an S corporation from its incorporation and had operated that way. After its first tax year, it learned that its election was not timely…
PLR 9940023: Bait buyer is not liable for manufacturer excise tax
A company bought three artificial fishing baits from an unrelated producer, and packaged one of them after delivery. It asked whether it owed the manufacturers excise tax on sport fishing equipment…
PLR 9940022: Late S election accepted after missing form discovered
A corporation's shareholders believed it had filed an S corporation election when it was formed and reported its tax items on their individual returns. The IRS service center later said it had no…
PLR 9940021: Tax treatment of an excess benefit plan and its trust
A tax-exempt trust established a separate plan to pay benefits above the section 415 limit on a qualified plan. Contributions to the new plan's trust would be credited to separate participant…
PLR 9940020: Ineligible plan and IRA shareholders receive S corporation termination relief
A company issued stock to shareholders' pension or profit-sharing plans and individual retirement accounts in exchange for promissory notes. Those owners were ineligible S corporation shareholders…
PLR 9940019: Former resident rebuts tax-avoidance presumption, but motive remains undecided
A former U.S. long-term resident returned to the country where he, his spouse, and his parents were born. His net worth exceeded the threshold that would ordinarily create a presumption that he…
PLR 9940017: Former resident rebuts tax-avoidance presumption, but motive remains undecided
A former U.S. long-term resident returned to the country where she, her spouse, and her parents were born. Her net worth exceeded the threshold that would ordinarily create a presumption that she…
CCA 9940016: Counsel concurs that an entity ceased to be a railroad employer
Chief Counsel reviewed a Railroad Retirement Board opinion about an entity's employer status under the Railroad Retirement Act and the Railroad Unemployment Insurance Act. Based only on the…
PLR 9940015: State deferred compensation plan qualifies under section 457
A state asked whether its employee deferred compensation plan met § 457's eligibility rules. The plan limited when employees could receive benefits and held deferred amounts in a trust for…
CCA 9940014: Stock option deduction timing depends on vesting at exercise
A company deducted employee compensation when workers exercised nonstatutory stock options. Chief Counsel advised that the company could use its normal accounting method for the deduction only when…
PLR 9940013: Business separation qualifies under sections 355 and 368
An S corporation planned to place one of its three businesses in a new corporation and distribute that corporation's stock to owners of the original company. The plan aimed to retain the manager of…
CCA 9940012: Timely-return rule applies to a German company's U.S. deductions
A German machinery company had not filed U.S. tax returns for five years, then came forward after new accountants advised it to file. It sought deductions and credits despite the late returns,…
CCA 9940011: Carryover holding period may prevent dividend basis reduction
A corporation received a dividend from a company whose stock it had acquired in a tax-free exchange less than two years earlier. Chief Counsel advised that the shareholder appeared to satisfy §…
PLR 9940010: Parent gets 30 days to file late section 338 election
A U.S. corporate parent sought more time to file a § 338(g) election for a foreign subsidiary's purchase of six target companies. The parent had relied on a tax professional to file the election,…
CCA 9940009: Oil corporations may keep filing on 1982 S corporation forms
Two oil and gas corporations had elected to remain under the S corporation law as it stood in 1982 and continued to file on 1982 Forms 1120S. Chief Counsel advised that they could keep using those…
PLR 9940008: Attorney's missed filing receives late S election relief
A corporation's sole shareholder intended S corporation treatment from the date of incorporation and relied on an attorney to file Form 2553. The attorney missed the deadline. The IRS found…
CCA 9940007: Stock-linked cash instruments treated as collars, not debt
A company issued cash-settled instruments whose payout tracked shares it owned in another company, with periodic payments it labeled interest. Chief Counsel concluded that the instruments were cash…
Other 9940006: Counsel explains direct-seller rules after state law change
A correspondent sought federal guidance after the state excluded direct sellers from unemployment insurance coverage. The IRS explained § 3508's direct-seller definition, proposed regulations, and…
TAM 9940005: State recapture tax affects estate tax credit calculation
An estate had elected the lower special-use value for qualified real property, and the heirs had contracted to sell that property within the ten-year recapture period. The question was how to…
CCA 9940004: Counsel advises against severance-pay FICA refunds
An employer had paid FICA tax when it made severance payments, then sought refunds by treating those payments as nonqualified deferred compensation taxable at an earlier date. Chief Counsel advised…
PLR 9940003: Business separation receives liquidation and spin-off rulings
A corporate group planned to separate two different businesses. It would liquidate one subsidiary into the parent, exchange old shares of another company for a new voting class, and distribute those…
CCA 9940002: Welder rig payments require a case-specific wage analysis
Employers often paid employee welders an hourly wage plus a separate hourly amount for using the welders' own trucks and equipment. Chief Counsel advised that the equipment payments would be…
TAM 9940001: Truck satellite communications equipment avoids parts excise tax
A trucking company installed equipment for a two-way satellite communications system on its vehicles within six months after they entered service. Section 4051(b)(1) generally taxed parts and…
PLR 9939049: Farm education institute does not trigger self-dealing or taxable expenditure taxes
A private foundation planned to build an educational institute on land donated by its directors, who also owned a nearby farm business. The institute would hold programs about environmentally…
PLR 9939048: Direct IRA rollover does not prevent lump sum treatment for employer stock
An employee left a company and received the entire balance of a qualified retirement plan in one tax year. The plan distributed company stock to the employee and sent the remaining cash directly to…
PLR 9939047: Sale of coal car repair business permits plan distributions to transferred workers
A railroad car company sold seven of its nine coal car repair facilities to an unrelated buyer. Those facilities represented 99 percent of the assets of its coal car repair business. The company…
PLR 9939046: Foundations may pool passive investments without three excise taxes
Fifteen related private foundations planned to pool part of their assets in a general partnership that would invest mainly as a limited partner in private businesses and funds. A family owned…
PLR 9939045: Elder care network can consolidate without losing exemptions
Five exempt organizations serving older and chronically ill people proposed to consolidate their governance under a supporting organization. Church representatives would become members of that…
PLR 9939044: Hospital parent reorganization preserves exemptions and avoids unrelated business tax
An exempt community hospital reorganized under a supporting organization that became its sole member and parent. The hospital would keep operating and providing care, while the parent would handle…
PLR 9939043: Excess interest income receives inadvertent S election termination relief
A company that operated properties sold one on an installment note. The note's interest exceeded 25 percent of the company's gross receipts in each of three tax years, and the company had…
PLR 9939042: Parent corporation gets more time to elect QSUB treatment for its subsidiary
An S corporation acquired all the stock of another corporation and intended to treat it as a qualified subchapter S subsidiary (QSUB), but missed the election deadline. The IRS found that the…
PLR 9939041: Synthetic fuel from coal fines qualifies for the section 29 credit
A company planned to make solid fuel from coal fines in a facility built under a pre-1997 contract. Based on the company's tests and representations, the IRS ruled that the process would change the…
PLR 9939040: Corporate business separation qualifies as a Type D reorganization and spin off
A publicly traded parent proposed transferring one business and several subsidiary stocks to a new corporation, then distributing all of the new corporation's stock to its shareholders. The IRS…
PLR 9939039: Retirement proceeds left to a foundation qualify for estate tax deduction
A taxpayer planned to name his private charitable foundation as a beneficiary of IRAs and qualified retirement plans. The IRS ruled that proceeds passing to the foundation would qualify for an…
PLR 9939038: PFIC elections preserve inherited stock basis step up, but a second ruling is refused
A U.S. taxpayer owned shares in foreign corporations treated as passive foreign investment companies (PFICs) and controlled foreign corporations. She made qualified electing fund and deemed dividend…
PLR 9939037: Foreign personal holding company income inclusion is limited by earnings and profits
A U.S. citizen owned a foreign corporation that earned interest and rental income but expected an accumulated deficit in earnings and profits because of business losses. The taxpayer asked whether…
PLR 9939036: Stock option conduit is not a tax trust and stock transfer triggers no gain
A foreign parent used a trust arrangement to hold stock options and transfer shares to a U.S. subsidiary's employee retirement plan as matching contributions. The IRS found that the trustee acted…
CCA 9939035: Ordinary prelaunch product advertising may be deducted
Before a pharmaceutical product received regulatory approval, a business incurred costs for marketing and advertising. District Counsel determined that the costs at issue resembled ordinary business…
CCA 9939034: Foreign tax collection levies require a procedural hearing
Chief Counsel considered a levy used to collect a treaty partner's tax liability. It advised that § 6330 requires notice and an opportunity for an IRS Appeals hearing before that levy. At the…
CCA 9939031: IRS may share tax investigation identities with state tax agencies under limits
IRS Criminal Investigation asked whether it could share the identities of targets of current investigations with North and South Carolina revenue departments. Chief Counsel advised that identities…
PLR 9939030: Late S corporation election allowed if Form 2553 is filed within 60 days
A corporation intended to elect S corporation status for its first tax year, but its president did not realize that the prepared Form 2553 had to be filed with the IRS. No election was filed for…
PLR 9939029: Inadvertent S corporation termination waived after shareholder residency election
An S corporation issued shares to a nonresident alien, causing its S election to terminate because such a person could not be an eligible shareholder. The shareholder and a U.S. citizen spouse later…
PLR 9939028: Parent and subsidiary receive waiver of consolidated return waiting period
A parent corporation lost affiliation with its subsidiary after a merger and later reacquired control. The usual § 1504(a)(3)(A) rule would have delayed the subsidiary's return to the consolidated…
PLR 9939027: Inadvertent S termination waived and more time granted for subsidiary election
An S corporation formed a wholly owned subsidiary before it was eligible to elect qualified Subchapter S subsidiary (QSUB) treatment. That formation ended its S election under the law then in…
PLR 9939026: Late S election relief requires filing and amended returns within 60 days
A corporation's sole shareholder believed an accountant had filed its Form 2553, so the corporation filed S corporation returns for later years. The IRS service center had no election on file and…
PLR 9939025: Two shareholders may separate subsidiary businesses through a split off
A holding company owned two operating subsidiaries, and its two shareholders wanted to go separate ways. The company proposed to give one shareholder all the stock of one subsidiary in exchange for…
PLR 9939024: Belated trust division produces separate GST inclusion ratios
An estate tax return said a testamentary trust would be divided into exempt and nonexempt trusts and allocated the decedent's generation skipping transfer (GST) exemption to the exempt trust. The…
PLR 9939023: Foreign entity gets more time to elect disregarded tax status
A foreign entity with one owner intended to elect treatment as disregarded for U.S. federal tax purposes. A miscommunication between its attorneys and accountants left the Form 8832 election…
PLR 9939022: Expatriation tax avoidance presumption lifted, but motive left open
A former U.S. citizen who had long lived abroad sought a ruling that her loss of citizenship did not have U.S. tax avoidance as a principal purpose. Her net worth exceeded the statutory threshold…
PLR 9939021: Donated coupon rebates avoid income and may support a charity deduction
A cardholder chose to have all manufacturer coupon rebates from a shopping program sent by the program company to charity. The IRS ruled that the rebates reduced the purchase price rather than…
PLR 9939020: Corporation receives conditional relief for a late S election
A corporation operated as an S corporation but later discovered that its election had not been filed on time. It asked the IRS to treat the election as timely for a specified tax year. On the…
PLR 9939019: Late accounting year application treated as timely, with merits still pending
A taxpayer filed Form 1128 to request a change in its accounting year after the filing deadline because of an accountant's error or misunderstanding. The application was filed within 90 days of the…
PLR 9939018: Revised nuclear decommissioning fund contribution schedule approved
A utility with an ownership interest in a nuclear plant requested a revised annual schedule for payments to its decommissioning fund. The IRS accepted the proposed schedule under § 468A based on the…
PLR 9939017: Corporate simplification gets liquidation rulings but no merger qualification ruling
A foreign parent proposed to replace two U.S. holding companies with a new one through a series of sales, transfers, and liquidations. For federal tax purposes, the IRS treated the circular formal…
PLR 9939016: Three shareholder corporation receives conditional late S election relief
A corporation with three shareholders operated as an S corporation but later discovered that its S election had not been filed on time. It asked the IRS to treat the election as timely for the tax…
PLR 9939015: Partnership gets 30 days to replace a Section 754 election with the wrong year
A partnership intended to elect basis adjustments under § 754 on its final return, but the return carrying the election stated the wrong ending date. Uncertain whether that election worked, the…
CCA 9939014: Chief Counsel rejects claimed loss from mirror subsidiary stock sale
A corporate group used mirror subsidiaries to buy a target and later sold one mirror company's stock at a claimed capital loss. Chief Counsel advised that the basis used to calculate the loss came…
PLR 9939013: Late S election allowed if sole shareholder's company files within 60 days
A corporation's sole shareholder hired an attorney to file Form 2553 so the company would be treated as an S corporation from its first tax year. The attorney missed the filing deadline. On the…
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.