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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Spouses receive 120 days to elect out of automatic GST allocations for four GRAT transfers
A husband created four grantor retained annuity trusts whose remainder interests passed to continuing trusts with generation-skipping transfer tax potential. The couple's accountant and…
Donor's estate and spouse receive 120 days to allocate GST exemption to a charitable remainder trust
A donor created a charitable remainder unitrust that paid a lifetime unitrust amount to a grandchild and then passed the remainder to charity. The donor and spouse elected to split the gift, but…
Early pro-rata trust division preserves income-tax attributes and GST exemption
Two grantors created a trust for their descendants and allocated enough generation-skipping transfer tax exemption to give it an inclusion ratio of zero. After one grantor died and family members…
Foreign entity receives 120 days to elect partnership classification on Form 8832
A foreign entity with multiple limited-liability owners intended to be treated as a partnership for U.S. federal tax purposes from its formation date. Because all owners had limited liability, the…
Fiber-optic capacity payments qualify as REIT rents from real property
A corporation intending to elect REIT status leased capacity in permanently affixed fiber-optic and coaxial cables, conduit, and distributed antenna systems under six types of long-term agreements.…
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. It requested discretionary…
Entity receives 120 days for a late classification election, but the ruling states conflicting classifications
A domestic limited liability company intended to elect association status taxable as a corporation from its initial effective date. It later filed Form 8832 with a later effective date and then…
IRS approves a county-based scholarship program for graduating students
A private foundation requested advance approval for a scholarship program encouraging county high school graduates, including home-schooled students, to pursue university, college, vocational, or…
IRS approves an employer-related scholarship program administered by an independent charity
A private foundation proposed funding an employer-related scholarship program through an independent public charity for dependent children of qualifying employees worldwide. The charity would verify…
A drug-fee reimbursement is not automatically excluded from a controlled-group member's income
A U.S. distributor paid the federal branded prescription drug fee for its controlled group and was fully reimbursed by foreign group members that manufactured the drugs and owned the related…
S corporation parties receive extra time to file a Section 336(e) election statement
A purchaser acquired all the stock of an S corporation from its shareholders in a transaction represented to be a qualified stock disposition. The parties intended to make a Section 336(e) election…
Foreign entity receives 120 days to make a late disregarded-entity election
A foreign entity with one owner intended to be treated as disregarded for U.S. federal tax purposes from the date it incorporated, but it did not timely file Form 8832. Its owner consistently…
IRS approves tax-free treatment for an S corporation business spin-off
An S corporation separated one business from another by forming a controlled subsidiary, making a qualified subchapter S subsidiary election, contributing partnership interests to the subsidiary,…
IRS approves tax-free treatment for two corporate split-offs
A corporation proposed separating parts of its businesses into two new controlled corporations so different shareholder groups could manage them without interference from one another. After…
Affiliated group receives 60 days to elect out of bonus depreciation
An affiliated corporate group intended to elect out of the Section 168(k) additional first-year depreciation deduction for every class of qualified property it placed in service during a taxable…
Corporation receives 60 days to make a late success-based fee safe-harbor election
A corporation paid a success-based advisory fee when it acquired the remaining stock of two target companies. It deducted the full fee on its return without making the Revenue Procedure 2011-29…
Fiber optic capacity payments qualify as REIT rents from real property
A company intending to elect REIT status leased capacity on permanently affixed fiber optic and coaxial cable systems under six kinds of agreements. Tenants paid fixed amounts for dedicated…
Foreign entity receives 120 days to file a late disregarded-entity election
A foreign limited company eligible to choose its U.S. federal tax classification inadvertently failed to file Form 8832 on time to be treated as a disregarded entity from its intended date. It…
IRS denies exemption to a tourism group promoting local businesses
An organization sought Section 501(c)(3) status for activities intended to attract visitors to a geographic area through brochures, social media, marketing campaigns, events, signage, business…
IRS denies exemption to a farmers market serving vendors' private interests
An organization operated a weekly farmers market, charged seasonal and daily vendor fees, promoted participating vendors, and offered discounted fees to veteran farmers. It also described future…
IRS denies exemption to a family-controlled golf training organization
An organization formed by a founder and the founder's family proposed a golf training, recreation, entertainment, and business-development complex. It planned to charge standard industry fees, offer…
IRS denies exemption to a group-purchasing and wellness trust
A trust was formed to receive health-insurance rebates, stabilize group health-plan premiums, fund wellness incentives, administer wellness programs, and procure products and services through…
IRS grants extra time for Section 338(g) and QSub elections
An LLC taxed as an S corporation acquired all the stock of a target in a qualified stock purchase. It intended to make a Section 338(g) election for the acquisition and a qualified subchapter S…
IRS grants foreign purchaser more time for Section 338(g) elections
A foreign purchaser acquired all the stock of a foreign target, with deemed acquisitions of several foreign target affiliates. The purchaser represented that the transaction was a qualified stock…
IRS permits foreign entity to change its tax classification early
A foreign entity had previously received relief to elect disregarded-entity status and later wanted to be taxed as a corporation before the usual 60-month waiting period ended. It asked the IRS for…
IRS grants foreign entity more time to elect partnership status
A foreign entity with owners having limited liability intended to be treated as a partnership for federal tax purposes from its formation date. It failed to file Form 8832 on time because of…
IRS splits preferred instrument treatment under Section 382
A publicly traded corporation issued a preferred instrument and another instrument to finance part of a stock acquisition. The preferred instrument carried cumulative fixed dividends, a liquidation…
Market-priced solar sales are not public utility property
A regulated utility planned to invest with a tax-equity investor in a partnership that would acquire a solar facility and sell its power to the utility. A federal regulator would approve the…
IRS grants foreign entity late disregarded-entity election
A foreign eligible entity intended to be classified as a disregarded entity when its federal tax classification first became relevant. It did not file Form 8832 by the deadline and requested…
IRS allows late disregarded-entity election after inadvertent filing failure
A foreign limited company intended to be treated as a disregarded entity for federal tax purposes but inadvertently failed to file Form 8832 on time. It represented that the request did not involve…
IRS grants foreign company late disregarded-entity election
A foreign limited company intended to elect disregarded-entity treatment for federal tax purposes but inadvertently missed the Form 8832 deadline. It represented that it acted reasonably and in good…
IRS treats four subsidiaries as joining consolidated returns
A parent corporation included all income, deductions, assets, and liabilities of four wholly owned subsidiaries in its federal returns but did not properly identify the subsidiaries, attach Forms…
IRS denies social-welfare exemption to a condominium association
A condominium association maintained and controlled common property for unit owners, whose membership was automatic and tied to ownership. The building was fenced against public access, and the…
Improvement carveouts invalidate conservation easement deductions
The Chief Counsel advised that a conservation easement deed fails Section 170(h) when its extinguishment clause subtracts the value of post-donation improvements, or appreciation attributable to…
IRS grants more time for Section 336(e) election statement
A partnership acquired all the stock of an S corporation from its shareholders in a transaction represented to be a qualified stock disposition. The parties intended to make a Section 336(e)…
IRS grants late affiliated-group election for personal service corporations
A medical-services group restructured under a new corporate parent and continued using the cash method based on qualified personal service corporation treatment. The parent intended to elect under…
IRS grants foreign entity late disregarded-entity election
A foreign parent transferred ownership of a foreign entity through a restructuring that ultimately placed the entity under a newly formed U.S. corporation. On the relevant date, the entity was a…
IRS grants foreign entity late partnership election
A foreign eligible entity became owned by two foreign entities with limited liability before its ownership was transferred directly and indirectly under a newly formed U.S. corporation. Its default…
IRS grants partnership late Section 754 election
A partnership failed to make a timely Section 754 election for the year in which a partner died. It represented that the failure was inadvertent, that it acted reasonably and in good faith, and that…
IRS grants converted LLC late Section 754 election
A general partnership converted into an LLC that continued to be treated as a partnership for federal tax purposes. After a partner died, the company timely filed its return but inadvertently…
IRS permits converted partnership's late Section 754 election
A general partnership converted to an LLC while remaining a partnership for federal tax purposes. After a partner died, the company timely filed its return but inadvertently failed to include a…
IRS gives limited partnership more time for Section 754 election
A limited partnership timely filed its return for the year a partner died but inadvertently omitted a valid Section 754 election. The partnership represented that it acted reasonably and in good…
Market-rate solar partnerships avoid utility normalization rules
A regulated utility planned to acquire solar projects, place them in tax-equity partnerships, and have those partnerships sell electricity directly into wholesale markets. The partnerships would…
IRS grants late corporate classification and S election
A domestic LLC intended to be an S corporation from a specified effective date but failed to file Form 2553 properly and on time. It nevertheless filed returns consistently with S corporation…
IRS grants foreign entity late disregarded classification
A foreign eligible entity intended to be disregarded as separate from its owner for federal tax purposes but inadvertently missed the Form 8832 deadline. It represented that it acted reasonably and…
IRS grants domestic entity late corporate classification election
A domestic single-owner eligible entity wanted to be classified as an association taxable as a corporation rather than use its default disregarded-entity status. It failed to file Form 8832 by the…
IRS accepts late branch-profits-tax assessment consent
A foreign corporation indirectly participated in a U.S. trade or business through a partnership, then its U.S. business assets were sold and its shareholder adopted an irrevocable liquidation…
IRS denies exemption to freemium research-software organization
An organization developed and distributed a web-based research-management platform under a freemium model, with professional users paying for expanded storage, projects, participants, security,…
IRS denies exemption to open-source cryptocurrency software project
An organization proposed to develop, maintain, and distribute free open-source software for digital currency, support volunteer developers, operate a free digital library, work with schools, and…
IRS denies exemption for community rodeo organization
An organization already exempt under Section 501(c)(4) sought recognition under Section 501(c)(3). Its primary activity was planning, funding, and conducting a community rodeo, with most revenue…
DOJ report identifies punitive part of False Claims Act settlement
Chief Counsel addressed how the pre-TCJA version of Section 162(f) applies when a False Claims Act settlement does not specify the federal tax treatment of the payment. Single damages are…
Defaulting purchaser forfeits entire payment at IRS sale
Chief Counsel considered a deferred-payment IRS property sale in which the purchaser defaulted and the area director declared the sale void. The question was whether the IRS could return part of the…
Partnership-related adjustments enter imputed underpayment computation
Chief Counsel addressed the interaction between the BBA centralized partnership audit rules and self-employment tax. It advised that every adjustment to a partnership-related item enters the imputed…
Reprisal concern does not alone permit unannounced third-party summons
Chief Counsel considered whether the IRS could contact or summon a former employee without notifying the taxpayer when the former employee feared reprisal. Section 7602(c)(3) permits the IRS to make…
Foreign-corporation reporting penalty may apply separately to each spouse
Chief Counsel considered Section 6038 penalties when one spouse is treated as constructively owning a foreign corporation through the other spouse. The IRS may assess the penalty separately against…
Appraiser interview is not required before Section 6695A assessment
Chief Counsel considered whether an IRS penalty examiner must send a particular letter or information document request, or interview the appraiser, before assessing the Section 6695A penalty. It…
COVID relief does not extend offer deadline outside relief window
Chief Counsel considered whether COVID-19 deadline relief extended a 24-month period for the IRS to accept an offer in compromise described in the email as an OIC-DALT. Notice 2020-23, its…
Written designation controls voluntary payroll tax payment
Chief Counsel explained when a taxpayer may direct how a payroll tax payment is applied. A taxpayer may designate a voluntary payment only through specific written instructions made when the payment…
Specific Social Security levy may outlast collection period
Chief Counsel explained what happens to levies when the collection statute expiration date, or CSED, passes. A continuous wage levy under Section 6331(e) must be released at the end of the CSED even…
IRS accepts late taxable REIT subsidiary election
A real estate investment trust and an indirectly owned subsidiary intended the subsidiary to be a taxable REIT subsidiary effective when its corporate tax classification began. They missed the Form…
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.