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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Pipeline safety costs do not qualify for the 10-year specified-liability-loss carryback
An energy company claimed that deductible costs to repair leaks, replace natural gas pipelines, and protect pipelines under federal safety rules generated specified liability losses eligible for a 10-…
Consolidated group gets 75 days to make a late unified-loss election
A consolidated group's subsidiary sold all the stock of its own subsidiary at a loss, ending the sold corporation's affiliation with the group. The parent intended to elect under the unified loss rule…
Late-filed REIT return is treated as a timely election
A newly taxable corporation intended to elect real estate investment trust status for its first short tax year. Its governing documents repeatedly stated that intent, and its manager relied on an acco…
Affiliated group gets 90 days to make a late consolidated-return election
A domestic parent corporation and its affiliated group failed to make a valid election to file a consolidated federal income tax return by the parent's filing deadline. The relevant assessment periods…
Deconsolidated corporations may file their own consolidated return
A parent corporation filed a consolidated return that included a subsidiary group for an entire tax year even though ownership had fallen below the required affiliation threshold during that year. The…
Estate gets 120 days to make a late portability election
A decedent's estate was not otherwise required to file an estate tax return based on the represented gross estate and taxable gifts. The estate nevertheless needed a timely Form 706 to elect portabili…
Taxpayer may revoke later underwriting-fee elections but not earlier ones
A consolidated group had inadvertently followed its financial accounting treatment and elected to capitalize intercompany underwriting fees paid for employees' debt-underwriting services. After discov…
Taxpayer gets 45 days to make a late success-based-fee election
A U.S. holding company incurred a success-based advisory fee when it acquired stock in a taxable transaction. Its newly formed, high-turnover tax department was unaware of the fee and did not elect th…
IRS approves scholarships for students who lost a parent or guardian
A private foundation proposed scholarships for full-time college students and incoming students who had lost a parent, stepparent, or guardian. Applicants had to live in the specified area, maintain a…
IRS approves scholarships for financially challenged students overcoming obstacles
A private foundation proposed scholarships and nonfinancial support for high school students who had overcome significant obstacles and planned full-time college study. Eligible students initially wou…
IRS approves one-time university scholarships
A private foundation proposed one-time academic scholarships for current or incoming students at a specified university. All such students could apply, with preferences for graduates of particular hig…
IRS denies social welfare exemption for political campaign activity
An organization sought exemption as a social welfare organization under Section 501(c)(4). Its activities included advertisements opposing a political candidate, highlighting elected officials and can…
NOL carryback waiver bars separate ten-year liability-loss carryback
The parent of a consolidated group elected under Section 172(b)(3) to waive the entire carryback period for net operating losses in two years. It later discovered specified liability losses that were …
IRS treats late opportunity-fund self-certification as timely
An S corporation formed to invest in qualified opportunity zone property intended to self-certify as a qualified opportunity fund. Its accountant mistakenly used the later filing deadline for a C corp…
IRS grants extension for late REIT election
A limited liability company elected corporate status and intended to elect real estate investment trust treatment for its first short tax year. A miscommunication between its manager and tax preparer …
IRS grants more time for stock-sale asset-treatment election
A partnership bought all the stock of an S corporation, and the parties intended to treat the stock sale as an asset sale under Section 336(e). They failed to file the required election statement on t…
Foreign entity receives time to elect disregarded status
A foreign eligible entity failed to timely file Form 8832 to elect treatment as an entity disregarded from its owner. The IRS found that the regulatory-election relief requirements were satisfied and …
Partnership receives time for opportunity-fund certification
A partnership was formed and funded to invest in a qualified opportunity zone business, but its accounting officer believed no return was required for the first year because the partnership had no pro…
Partnership receives extension for Section 754 election
A partnership interest purchase caused a technical termination under the law then in effect, and the transaction documents showed that the parties intended the partnership to make a Section 754 electi…
IRS grants S corporation and QSub election relief
A corporation intended to be an S corporation and to treat its wholly owned subsidiary as a qualified subchapter S subsidiary. It failed to file the QSub election, and three shareholder trusts failed …
Estate receives extension for portability election
An estate was not otherwise required to file an estate tax return but failed to timely file Form 706 to elect portability of the decedent's unused exclusion amount to the surviving spouse. The IRS fou…
Unmailed return receives late REIT election relief
A company intended to elect real estate investment trust treatment and relied on a tax firm to timely file its first Form 1120-REIT. During a change in the firm's paper-filing process, a temporary wor…
Deemed asset sales qualify, but anti-churning limits amortization
A corporate group planned to distribute two target companies to an upper-tier subsidiary, elect to treat those distributions as deemed asset sales under Section 336(e), and then sell the distributing …
Trustee receives extension to end QDOT tax treatment
A noncitizen surviving spouse received property through a qualified domestic trust and later became a United States citizen after continuously residing in the country. No distributions had been made f…
Trust appointment avoids estate inclusion and GST tax
An irrevocable trust created before September 25, 1985 gave the grantor's son a testamentary power to appoint its property, but not to himself, his estate, or their creditors. The son proposed to appo…
IRS grants estate more time to elect portability
An estate represented that it was below the threshold requiring an estate tax return but had not timely filed Form 706 to transfer the decedent's unused exclusion amount to the surviving spouse. After…
Estate receives time to allocate GST exemption to family trust
A revocable trust divided at the first spouse's death, with part of the deceased spouse's property passing to a family trust that could later produce generation-skipping transfers. The executor hired …
Literary fellowship and retreat grants receive IRS approval
A private foundation proposed three grant programs for established and emerging writers connected with an annual literary retreat. One program would support a career author for up to three years, anot…
S corporation stock-sale election receives filing extension
A partnership bought all the stock of an S corporation, and the parties had signed a binding agreement before the sale to elect asset-sale treatment under Section 336(e). They did not timely attach th…
State fund rights qualify for Section 197 amortization
A regulated company joined an optional fund created by state law to reimburse specified losses and provide a favorable prudency standard and a liability cap if the company met the statutory conditions…
Late Section 336(e) election statement receives relief
A partnership acquired all the stock of an S corporation from its shareholders, and the parties intended the qualified stock disposition to be treated as an asset sale under Section 336(e). They faile…
Tax-exempt controlled corporation receives late depreciation election
A corporation wholly owned by a Section 501(c)(3) organization served as co-managing member of a partnership developing affordable housing. The operating agreement required the corporation to elect un…
Taxpayers receive time for canceled real-property debt election
Two taxpayers indirectly owned partnerships whose debt for business real estate was forgiven. Their tax adviser intended to elect the qualified real property business indebtedness exclusion, excluded …
Start-up partnership receives late QOF certification relief
A start-up partnership formed to invest in qualified opportunity zone property and acquired property located entirely within opportunity zones. Its chief financial officer was not involved in the qual…
Foreign regranting program qualifies under private-foundation rules
A private foundation planned to fund three foreign charities that would independently select local organizations for projects serving disadvantaged elders, children, teenagers, and other individuals. …
IRS sustains audit treatment in a heavily redacted transaction
This Chief Counsel Advice addresses the tax treatment of a fee and the form of a proposed acquisition involving a publicly traded taxpayer, a target, and newly formed entities. The IRS release redacts…
IRS approves museum-project set-aside
A private foundation planned to establish a museum for artwork expected from an individual's estate. It had purchased a building for the museum, but pandemic conditions halted renovation planning, pre…
College scholarship procedures receive IRS approval
A private foundation proposed one-time and multiyear college scholarships, primarily for current students and graduates of specified high schools. A three-person committee would evaluate applicants un…
IRS denies exemption for funding founder-owned therapy provider
An organization proposed to pay for therapy when patients' insurance did not cover treatment. The only provider of that therapy in the state was a for-profit company solely owned by the organization's…
IRS denies exemption for insufficiently documented downtown program
An organization raised funds to revitalize a city's central business district and made grants to landlords and businesses within that district. It also ran annual community events and made grants to t…
Mandatory restitution order makes Westbrooks inapplicable
This brief Chief Counsel email addresses whether a criminal restitution case was subject to Westbrooks. The district judge's restitution order expressly stated that the defendant was subject to mandat…
Advice addresses BBA elections and partner-level consequences
This Chief Counsel email answers several questions about the centralized partnership audit regime, although most of the questions and part of the analysis are redacted. It explains that an election in…
Other victims must be paid before IRS restitution collection
This Chief Counsel email concludes that the case was not governed by Westbrooks because restitution was imposed independently as part of the sentence under a plea agreement. The government was only on…
Mandatory restitution was independently imposed
This Chief Counsel email concludes that a criminal restitution case was not governed by Westbrooks. The Title 18 conduct underlying the conviction covered all years for which restitution was ordered. …
IRS identifies flaws in monetized installment sales
Chief Counsel advised that the common promoter theory behind monetized installment sale transactions was flawed, while noting that structures can vary. A purported unsecured, nonrecourse loan may not …
IRS restitution collection limited to supervised release
The district court had authority to impose restitution independently but did not do so. The judgment placed restitution only among the conditions of supervised release, not in the part describing the …
Taxpayer may accurately disclose its own return information
A taxpayer wanted to disclose its own return information. Chief Counsel advised that there was no apparent problem as long as the taxpayer's statement was accurate. The brief public release provides n…
Participant liquidation changes cost-sharing projections
A participant withdrew from a cost-sharing arrangement during the second quarter and was to be liquidated into a U.S. subsidiary at year end. If the taxpayer already knew of that intended liquidation …
Criminal monetary penalty restitution is assessable
The criminal judgment listed restitution both as a criminal monetary penalty and as a condition of supervised release. Chief Counsel explained that restitution listed as a criminal monetary penalty is…
Additional nondisclosure language accepted
This brief Chief Counsel email reviews additional language for a nondisclosure agreement. The writer states that the language looked good and planned to contact a redacted party again. The writer also…
Bank levy reaches funds held at the levy time
Chief Counsel advised that the exact time of a bank levy matters, not merely the calendar date. A bank must surrender only property it possessed when the levy was served, so money deposited later that…
Employee-shareholder dividends remain net investment income
A C corporation paid an individual shareholder's personal expenses, and an examination reclassified the payments as constructive dividends. The shareholder also worked in and materially participated i…
QTIP commutation creates separate nonoffsetting gifts
A surviving spouse held the income interest in a QTIP trust, while two children held the remainder. An agreement commuted the trust and distributed all property to the spouse, and the parties reported…
Clean-energy bond spending period extended
A public authority issued new clean renewable energy bonds to finance solar equipment for a city's exclusive use. Significant equipment defects, contractor errors, resulting litigation, and pandemic d…
Convertible-note hedge identification receives extension
A corporate taxpayer issued convertible notes and bought call options as part of a hedge intended to raise the notes' effective conversion price. It intended to integrate the notes and call options fo…
Forward contracts require Form 1099-B only when cash-settled
This ruling modifies and supersedes an earlier letter concerning a broker's reporting duties for customer forward contracts involving specified property. If the customer takes delivery of the original…
IRS approves tax-free treatment for fifteen internal distributions
A foreign-parented multinational group proposed a 40-step restructuring to place entities engaged in nine business lines under common ownership structures. The plan included contributions of assets or…
State liquor stores need not report large cash sales
A state operated a liquor-sales monopoly through an entity represented to be an integral part of the state. Store managers sometimes accepted more than $10,000 in cash for liquor purchases and filed F…
Trust-held annuity treated as held for natural person
An irrevocable trust was divided into separate trusts, one of which had a single individual as its sole income and principal beneficiary. The co-trustees planned to buy a single-premium deferred annui…
IRS corrects facts but preserves Form 8300 conclusion
This letter modifies a prior ruling about Form 8300 reporting by correcting how the taxpayer handled the form. The corrected fact states that a store manager prepared and signed Form 8300 for the enti…
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.