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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S corporation receives relief after stock passed to an ineligible trust
Two shareholders transferred S corporation stock to a trust they intended to qualify as an eligible shareholder. The trust instrument did not cause the trust to be treated as wholly owned by them for …
Fishing-reel designer is not the manufacturer for excise-tax purposes
A company designed and marketed fishing reels, owned the relevant patents and know-how, and paid for specialized tooling used by an unrelated domestic fabricator. The fabricator supplied the raw mater…
Related natural-gas retailer does not taint producer's independent status
A consolidated energy group included a natural-gas producer, a marketer, and a related company that sold natural gas at retail. The producer sold most of its gas to the marketer, which combined econom…
Holding company may count subsidiary's historic receipts for worthless-stock test
A U.S. subsidiary organized foreign companies to develop and commercialize a product, then contributed them to a foreign holding company. The product failed, monetizing its intellectual property prove…
Three late QSST elections do not terminate S corporation status
After a shareholder died, one stock-holding trust divided into three trusts, two of which required qualified subchapter S trust elections, and a separate trust also later required a QSST election. Non…
LGBTQ social and recreational group denied Section 501(c)(3) exemption
An organization sought Section 501(c)(3) status for activities serving adult LGBTQ participants around a redacted activity. It held networking, safety education, fundraising, pride, and other events, …
Private foundation's need-based scholarship procedures receive advance approval
A private foundation asked the IRS to approve procedures for scholarships serving financially needy graduates of high schools in a specified county and state. The program would award approximately a r…
Different deadlines apply to audited and pass-through partnership push-out statements
Chief Counsel advised on the deadlines for furnishing push-out statements under the centralized partnership audit rules. An audited partnership must furnish its statements within 60 days after the adj…
Statutory overpayment-interest limits apply in the savings-bond context
Chief Counsel addressed interest in connection with the purchase of U.S. Series I savings bonds through Form 8888. The brief email states that, in the bond context, the listed provisions of Section 66…
IRS cannot waive matching funds for Puerto Rico and Virgin Islands tax clinics
Chief Counsel considered whether the Low-Income Taxpayer Clinic Program Office could waive matching-fund requirements for grant recipients in Puerto Rico or the U.S. Virgin Islands. Section 7526(c)(5)…
Retained stock and delayed debt exchanges preserve corporate separation treatment
A publicly traded corporation proposed separating one of its three businesses into a newly formed controlled corporation. It would contribute the business to the controlled corporation, distribute at …
Twelve missed trust elections do not end S corporation status
An S corporation's shares passed to ten trusts whose beneficiaries did not timely make qualified subchapter S trust elections and two trusts whose trustees did not timely make electing small business …
Bankruptcy tort-claim trust qualifies as a settlement fund and permits a current deduction
A corporate group faced more than a redacted number of disputed product-related tort claims and placed a redacted cash amount into a bankruptcy-court-approved trust to resolve them. The court retained…
Foreign entity receives 120 days to file a late disregarded-entity election
A foreign eligible entity was classified by default as an association taxable as a corporation. Its owners did not file Form 8832 because they did not know an election was required, while the majority…
Foreign entity receives 120 days to file a late partnership election
A foreign eligible entity was classified by default as an association taxable as a corporation. Its owners did not file Form 8832 because they did not know an election was required, while its majority…
S corporation's business separation qualifies as a tax-free reorganization
An S corporation proposed separating one business from another by forming a controlled corporation, electing qualified subchapter S subsidiary status, contributing a disregarded subsidiary and an inte…
DMT sacrament organization denied exemption and church status
An organization sought Section 501(c)(3) exemption and church classification for a spiritual community whose primary activity was conducting paid weekend ceremonies using a redacted plant sacrament co…
Foundation receives advance approval for scholarship and individual grant programs
A private foundation sought advance approval for scholarship procedures under Section 4945(g)(1) and other individual grant procedures under Section 4945(g)(3). Its scholarships would support students…
Food and beverage industry service network denied Section 501(c)(3) exemption
A limited liability company sought Section 501(c)(3) exemption after operating for several years with a profit-making purpose and attempting, without evidence of a state filing, to convert to another …
Horse-show association denied Section 501(c)(3) exemption
An association organized competitions for a particular horse breed, including its main annual reining event, and funded itself through memberships, donations, sponsorships, advertising, and entry fees…
Partnership receives 120 days to make a late Section 754 election
A partnership intended to make a Section 754 election after a member died but inadvertently omitted a properly executed election from its return. The partnership and all affected partners filed their …
Foreign entity receives 120 days to file a late partnership election
A foreign eligible entity failed to file Form 8832 on time to elect partnership classification from a requested effective date. The IRS concluded that the entity met the standards for discretionary el…
Consolidated group receives 90 days to make a late unified-loss election
A consolidated group failed to elect under Treasury Regulation Section 1.1502-36(d)(6)(i)(A) to reduce the parent's basis in transferred loss shares of a subsidiary by the attribute-reduction amount. …
Deemed dividend cures S election termination from passive investment income
An S corporation had accumulated C corporation earnings and profits at the end of three consecutive tax years, and passive investment income exceeded 25 percent of gross receipts in each year. Those f…
Buyer and target receive 60 days to elect the success-fee safe harbor
A corporate buyer and its acquisition target paid several success-based advisory fees in a covered transaction but did not make the Revenue Procedure 2011-29 safe-harbor election on their original ret…
Regulated customer fees used for business obligations are gross income
An S corporation operating a regulated facility charged clients separate fees to fund legally required future activities and placed the money in interest-bearing accounts subject to varying degrees of…
Foundation receives advance approval for scholarships and educational grants
A private foundation proposed scholarships for higher-education students who lacked sufficient financial resources and educational grants for individuals pursuing artistic, intellectual, or other skil…
A partnership's designated individual needs no relationship to its entity partnership representative
This short Chief Counsel email explains who may serve as the designated individual for an entity partnership representative. The designated individual does not need any relationship with the entity se…
A levy can reach current and future rent fixed by an existing lease
Chief Counsel addressed which levy form the IRS should use for rent payable under a contract and whether using the other form changes the levy’s reach. The email found no authority expressly requiring…
A claim is for refund only if allowance would return money to the taxpayer
Chief Counsel explained how to distinguish a refund claim from a claim that merely seeks to reduce an unpaid assessment. A balance due when the claim is filed does not decide the issue. The key questi…
Section 7507 blocks recovery of a tentative refund paid to a bank in receivership
The FDIC filed Form 1139 for an insolvent bank in receivership, claimed the bank’s full 2018 alternative minimum tax credit, and received a tentative refund. The IRS later concluded that the request n…
Grants to an independent city-supporting organization qualify and are not taxable expenditures
A private foundation planned to fund a Type III functionally integrated supporting organization created to help a city maintain budget stability, reduce its property-tax rate, and undertake community …
Deferred divorce-settlement payments receive nonrecognition and transfer-tax relief
Two spouses used a written settlement agreement to divide their marital property through equal annual payments over a redacted number of years, with an option for a discounted lump-sum prepayment. Som…
Deferred divorce-settlement payments receive nonrecognition and transfer-tax relief
Two spouses used a written settlement agreement to divide their marital property through equal annual payments over a redacted number of years, with an option for a discounted lump-sum prepayment. Som…
IRS permits an entity to change classification within the 60-month limit
A single-owner limited liability company had elected corporate tax status and later underwent a complete ownership change. It wanted to elect disregarded-entity status effective on the acquisition dat…
IRS accepts appraised preferred-stock values for an extraordinary-dividend election
A taxpayer acquired nonpublicly traded preferred stock and received four quarterly dividends within two years. Each dividend exceeded five percent of the taxpayer’s adjusted basis and otherwise qualif…
IRS grants extra time to complete a Section 336(e) election
An individual, acting through a disregarded entity, acquired all the stock of an S corporation from its shareholders. The parties intended to make an IRC § 336(e) election so the represented qualified…
IRS grants extra time for a Section 338(h)(10) election
A purchaser acquired all the stock of an S corporation from its shareholders. The parties intended a joint IRC § 338(h)(10) election, which would treat the target as selling all its assets and then li…
IRS approves a matching-grant set-aside for historic restoration
A private foundation asked to set aside a grant for a county historical society’s restoration of a historic public structure. The foundation planned to provide roughly one-third of the project cost as…
Surviving spouse may roll a trust-held inherited Roth IRA into her own Roth IRA
A deceased spouse named a revocable trust as the sole beneficiary of his Roth IRA. The surviving spouse was the trust’s sole trustee and beneficiary and could demand all trust principal and income. Th…
IRS grants 60 days for two late consent-dividend elections
A corporation sought to make consent-dividend elections for two prior tax years. A consent dividend is a hypothetical distribution that consenting shareholders treat as an actual dividend and that the…
City deferred-compensation plan qualifies under Section 457(b)
A city established a deferred-compensation plan and trust for its employees and asked whether the arrangement met IRC § 457. The plan allowed elective deferrals, designated Roth contributions, statuto…
Foreign entity receives 120 days to elect partnership status
A foreign eligible entity was classified by default as an association taxable as a corporation for U.S. tax purposes. After its majority indirect owner became a U.S. resident, that owner began reporti…
Neighborhood security group denied Section 501(c)(4) status
A mutual benefit corporation sought recognition as a tax-exempt social welfare organization under Section 501(c)(4). It collected voluntary donations from homeowners in one subdivision and hired a pri…
Industry networking group denied Section 501(c)(3) status
An industry group sought recognition as a charitable and educational organization under Section 501(c)(3). Its activities included industry luncheons, a fundraising golf tournament for scholarships, a…
Partnership received 120 days to make a late Section 754 election
A partnership failed to make a Section 754 election after a partner died because it was unaware of the death when it filed its return. The election would permit basis adjustments to partnership proper…
Foreign subsidiary received 60 days to make a late entity classification election
A foreign corporation wanted to elect retroactively to be treated as disregarded from its foreign parent for U.S. federal tax purposes. Without that election, an earlier contribution of assets produce…
Limited liability company received 120 days to elect corporate status
A limited liability company intended to elect to be taxed as a corporation from a specified date but inadvertently missed the deadline to file Form 8832. Its default federal tax classification was a d…
Purchaser received 75 days to make late Section 338 elections for two foreign targets
A U.S. corporation acquired all the stock of two foreign corporations and intended to make Section 338(g) elections that would treat the stock purchases as asset acquisitions for federal tax purposes.…
Buyer and seller received 75 days to make a late Section 338(h)(10) election
A corporate purchaser acquired all the stock of an S corporation, and the purchaser and seller intended to make a joint Section 338(h)(10) election. That election would treat the target as selling its…
Parties received 75 days to file a late Section 336(e) election statement
A partnership bought all the stock of an S corporation from its shareholders, and the parties intended to make a Section 336(e) election. That election would treat the stock disposition as an asset di…
Foreign purchaser received 75 days to make a late Section 338(g) election
A foreign corporation, acting through a disregarded foreign entity, bought all the stock of another foreign corporation and intended to make a Section 338(g) election. That election would treat the st…
IRA owner received a waiver of the 60-day rollover deadline after an adviser failed to transfer stock
An IRA owner received company stock from a traditional IRA after its custodian resigned and intended to roll the shares into a new IRA. She relied on a chief financial officer who had previously helpe…
IRS revokes an educational charity's exemption because its water-sports rental business served commercial and private interests
The IRS revoked a nonprofit's Section 501(c)(3) exemption after concluding that its primary activity was renting water-sports equipment in a commercial manner. The organization showed renters a brief …
Examiners may assert withholding tax when a foreign microcaptive's payments are not insurance premiums
Chief Counsel advised examiners about foreign microcaptive arrangements in which a captive elects under Section 953(d) to be treated as a domestic corporation. If an examination finds that payments to…
Microcaptive promoters can face Section 6700 penalties for false tax claims and material factual statements
Chief Counsel considered what types of false or fraudulent statements can support a Section 6700 penalty against a promoter of abusive tax shelters. The promoter marketed microcaptive insurance transa…
Estate receives 120 days to make a late portability election for unused estate tax exclusion
An estate that was not otherwise required to file Form 706 missed the deadline to elect portability of the decedent's unused estate tax exclusion to the surviving spouse. The estate asked for discreti…
Estate receives 120 days to make a late portability election for unused estate tax exclusion
An estate that was not otherwise required to file Form 706 missed the deadline to elect portability of the decedent's unused estate tax exclusion to the surviving spouse. The estate asked for discreti…
Political subdivision may liquidate its wholly owned service subsidiary without triggering Section 337(d)
A political subdivision proposed merging its wholly owned public-service subsidiary into itself to reduce administrative costs and public confusion. The subsidiary's income was excluded from gross inc…
Corporation receives 60 days to perfect a late safe-harbor election for success-based fees
A corporation paid a success-based fee when it was acquired and reported the fee using the Revenue Procedure 2011-29 safe harbor, deducting 70 percent and capitalizing 30 percent. Its return preparer …
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.