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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Community political-advocacy group denied 501(c)(6) status for lacking a common business interest
An unincorporated association formed to raise the political influence of a particular community applied to be recognized as a tax-exempt business league under IRC § 501(c)(6). Members joined by…
Charter-fishing trade association denied 501(c)(3) status for serving members' private business interests
A professional trade association of charter fishing boat operators applied to be recognized as a tax-exempt charity under IRC § 501(c)(3), using the streamlined Form 1023-EZ. The IRS denied the…
Ethnic-business networking group denied 501(c)(3) status for promoting members' for-profit businesses
An organization that describes itself as promoting commerce, cultural exchange, and business integration for a particular ethnic community and for immigrant entrepreneurs applied to be recognized as…
Revised two-step cost-allocation key is a more reliable 1.482-9 method, so the taxpayer's section 482 setoff claim should be accepted
A company that performs shared services for its affiliated corporate group priced those intercompany services for two tax years using the comparable profits method with a markup on costs. During an…
Foreign government institution's accident insurance, rehab clinics, and safety guidance are governmental functions, not commercial activities under section 892
A foreign government's controlled entity, a non-profit public-law institution, asked the IRS whether three of its activities would cause it to be treated as engaged in commercial activities under…
Consent to partially revoke a net-capital-gain-as-investment-income election under 163(d)(4)(B)
An individual taxpayer's tax preparer, completing Form 4952, mistakenly elected to treat too much net capital gain as investment income under section 163(d)(4)(B), instead of the smaller amount the…
Extra time granted to make a late section 336(e) election on a stock sale
An individual bought all the stock of an S corporation from its shareholder. A section 336(e) election lets a qualifying stock sale be treated as a sale of the company's assets for tax purposes,…
Extra time granted to file late Forms 3115 for an inventory accounting-method change
A corporation that heads a consolidated group hired a CPA to change how it and its subsidiaries identify and allocate costs to inventory under Section 263A. That change requires filing Form 3115…
Estate may take an unlimited section 642(c) charitable deduction for income paid to charities
A decedent's will directed that, after specific bequests, taxes, debts, and administrative costs, a percentage of the estate's residue go to organizations that are exempt charities under Section…
An indexed structured-settlement annuity still counts as a section 130 qualified funding asset
When someone is injured and settles for periodic payments over time (a "structured settlement"), the defendant usually hands off its payment obligation to an assignment company, which buys an…
Inadvertent S-corp termination relief after three trusts missed their QSST elections
An S corporation's stock passed into a series of trusts. One shareholder put his shares into a grantor trust, which was an eligible S-corporation shareholder while he was alive and for two years…
Extra time granted to make a late GST-exemption allocation after the return went unfiled
A taxpayer set up a trust before 2001 that split into two equal shares, one for each of the taxpayer's two children, with lifetime interests passing to more remote descendants. Those trusts could…
Extra time granted to make a late real-property-trade-or-business election out of the 163(j) interest cap
Section 163(j) caps how much business interest a taxpayer can deduct, but a real property trade or business can elect out of that cap by making a 163(j)(7)(B) election (the trade-off is slower…
Extra time granted to make a late real-property-trade-or-business election out of the 163(j) interest cap
Section 163(j) caps how much business interest a taxpayer can deduct, but a real property trade or business can elect out of that cap by making a 163(j)(7)(B) election (the trade-off is slower…
Advance approval of a foundation's scholarship procedures under 4945(g)(1)
A private foundation asked the IRS to approve, in advance, the procedures it will use to award scholarships. That approval matters because Section 4945 taxes a private foundation's "taxable…
501(c)(3) denied to a religious-media ministry that resold its founder's for-profit products
An organization applied for 501(c)(3) status as a religious broadcasting and television ministry. Its founder and sole officer is an ordained pastor who also runs a for-profit media company that…
How the "small corporation" rule eases Form 5472 penalty relief under 6038A
Section 6038A requires a U.S. corporation that is at least 25% foreign-owned to file Form 5472 reporting its transactions with related parties and to keep supporting records. Missing that filing…
Extra time granted for a foreign insurer's lost 953(d) election to be taxed as a U.S. corporation
A regulated insurance company organized in a foreign country, but wholly owned inside a U.S. corporate group, wanted to be treated as a domestic corporation for U.S. tax purposes by making an…
60-day extension to make a late election opting out of bonus depreciation
A corporation that files a consolidated return for its group placed business property in service and, for tax-planning reasons, decided not to claim the extra "bonus" depreciation that § 168(k)…
60-day extension to file a late Form 8996 self-certifying as a Qualified Opportunity Fund
A company set up to be a Qualified Opportunity Fund (QOF), the investment vehicle that lets investors defer and reduce tax on capital gains put into economically distressed Opportunity Zones, missed…
60-day extension to file a late Form 8996 self-certifying as a Qualified Opportunity Fund
A company formed to be a Qualified Opportunity Fund (QOF), the vehicle that lets investors defer and reduce capital-gains tax by investing in distressed Opportunity Zones, missed the deadline to…
Inadvertent S-corp termination relief after a trust missed its QSST election
An S corporation's stock passed through a chain of family trusts after two deaths. When the stock landed in one trust, the income beneficiary failed to file the election needed to make it a…
Inadvertent S-corp termination relief after a trust missed its QSST election
An S corporation's stock moved through a series of family trusts after two deaths. When the stock reached one trust, its income beneficiary failed to file the election needed to make it a Qualified…
60-day extension to make a late election not to be treated as a tax-exempt entity
An LLC wholly owned by a § 501(c)(3) charity was the managing member of a partnership that put a project into service. Because a tax-exempt owner sits at the top, property tied to the venture can be…
120-day extension to file a late check-the-box election to be taxed as a corporation
A limited liability company wanted to be taxed as a corporation rather than under its default classification. Making that choice requires filing Form 8832, the "check-the-box" entity classification…
120-day extension for two foreign entities to file late check-the-box elections
Two foreign entities became relevant for U.S. tax purposes and wanted to lock in their U.S. classifications: one to be treated as a partnership, the other to be disregarded (treated as part of its…
Utility plant priced under a special (non rate-of-return) method is not "public utility property," so no normalization is required
A regulated electric and gas utility owns a power plant. It asked the IRS how the depreciation rules treat certain plant assets it is acquiring, given that its state commission will set the rates…
Bonds for a water-purification plant do not fail the private-business tests because output is allocable to governmental and public buyers
A public water agency plans to issue tax-exempt bonds to build an advanced water-purification facility. Tax-exempt status is lost if the bonds are "private activity bonds," which happens under §…
Advance approval of a foundation's scholarship and cultural-grant procedures under 4945(g)
A private foundation tied to a Native shareholder community asked the IRS to pre-approve how it hands out scholarships and cultural grants. Private foundations owe an excise tax on "taxable…
Advance approval of a foundation's field-specific county scholarship procedures under 4945(g)(1)
A private foundation asked the IRS to pre-approve how it awards a scholarship for students pursuing a degree in a particular field who live in or graduated from two specified counties. Private…
Governmental unit affiliate need not file Form 990
A tax-exempt organization asked the IRS to excuse it from filing Form 990, the annual information return most exempt organizations must submit. The IRS agreed. Under IRC § 6033(a)(3)(B), the IRS has…
120-day extension to make a late estate-tax portability election
When a married person dies without using all of their federal estate-tax exemption, the surviving spouse can inherit the leftover amount, called the "deceased spousal unused exclusion" (DSUE), but…
A publicly traded parent's multi-step internal restructuring and spin-off-then-merger qualifies as tax-free under sections 355 and 368
A publicly traded multinational parent (called "Distributing") wants to separate one part of its business (the "SpinCo Business," made up of two lines of business) from the part it will keep (the…
Two LLCs that missed the deadline to elect corporate tax status get 120 more days to file Form 8832
Two limited liability companies wanted to be taxed as corporations instead of under the default rules that apply to an LLC. To make that choice, an eligible entity files Form 8832, the entity…
Buyer and seller of an S corporation's stock get extra time to make a late section 336(e) election treating the sale as an asset sale
When someone buys the stock of an S corporation, a section 336(e) election lets the parties treat the deal as if the company sold its assets instead of its shares, which can give the buyer a…
An LLC that never filed Form 8996 is allowed to self-certify late as a Qualified Opportunity Fund after its manager died
A Qualified Opportunity Fund (QOF) is an investment vehicle that lets investors defer and reduce tax on capital gains if they put the money into designated low-income "opportunity zones." To become…
IRS approves a pension plan's own substitute mortality tables for funding calculations, for up to 10 years
A company that sponsors a single-employer defined benefit pension plan asked the IRS for permission to use its own substitute mortality tables, rather than the standard tables, when calculating the…
IRS approves substitute mortality tables for an aggregated group of three defined benefit plans, excluding certain disabled annuitants
A company that sponsors several single-employer defined benefit pension plans asked the IRS for permission to keep using its own substitute mortality tables, rather than the standard tables, when…
IRS pre-approves a foundation's statewide academic scholarship procedures
A private foundation asked the IRS to approve, in advance, the procedures for an academic scholarship program for students in a single state. Under IRC Section 4945, a private foundation's grants to…
IRS pre-approves a company foundation's employer-related scholarship programs for employees' children and local residents
A company-affiliated private foundation asked the IRS to approve, in advance, two scholarship programs: one for the children of the company's employees, and one for residents of certain counties in…
IRS denies 501(c)(3) status to a mixed-use real-estate redevelopment group that mostly leases commercial space and benefits a for-profit owned by its director
An organization applied to be recognized as a tax-exempt charity under IRC Section 501(c)(3), saying it would redevelop a former production facility in a poor neighborhood into a mixed-use building…
IRS denies 501(c)(4) social-welfare status to a homeowners' association with no areas open to the public
A homeowners' association for a residential subdivision applied to be recognized as a tax-exempt social welfare organization under IRC Section 501(c)(4). The IRS denied it, and because the…
IRS grants a 1-year approval of substitute mortality tables for a plan's non-annuitant populations after a coverage change
A company that sponsors several defined benefit pension plans asked the IRS for permission to use its own substitute mortality tables for the male and female non-annuitant populations of one plan…
IRS pre-approves a foundation's travel and workshop grants for educators in an invention-education network
A private foundation runs a program that supports a network of educators, nonprofit leaders, and researchers working in a specialized field of education. It asked the IRS to approve, in advance, the…
IRS excuses a governmental-unit affiliate from filing Form 990
Most tax-exempt organizations must file an annual information return (Form 990) with the IRS. This organization asked to be excused from that requirement. The IRS has discretion under IRC Section…
IRS denies 501(c)(3) status to a homeowners'-association-style membership group
An organization that operates like a homeowners' association applied for 501(c)(3) charitable tax-exempt status using the streamlined Form 1023-EZ, and the IRS denied it. The group is a membership…
IRS denies 501(c)(6) business-league status to a business-referral networking group
A business-referral networking group (the kind where each member is the sole representative of their occupation and everyone is expected to pass leads to the others) applied for tax exemption as a…
IRS denies 501(c)(3) status to a commercial-style legal payment and practice-management platform
An organization that runs an online payment-processing and practice-management platform for lawyers (branded "D" in the redacted letter) applied for 501(c)(3) charitable status, pitching itself as a…
IRS denies 501(c)(3) status to a short-term rental house run as a church "supporting organization"
A newly formed nonprofit that operates a single short-term rental house (a 4-bedroom farmhouse listed on a popular booking site) applied for 501(c)(3) status, and the IRS denied it. The organization…
IRS grants 120 more days to make a late election passing the rehabilitation credit through to a tenant
A limited liability company that owns a rehabilitated building asked the IRS for extra time to make a tax election it had missed. Under the rehabilitation credit rules (Code section 47), the owner…
120 days granted to make a late Section 754 basis-adjustment election after a partner's death
An LLC treated as a partnership for tax purposes had a partner die during the year. When a partner dies (or a partnership interest otherwise transfers), a Section 754 election lets the partnership…
Late Form 8996 accepted, letting an LLC self-certify as a Qualified Opportunity Fund
Two investors deferred capital gains by putting the money into an LLC they intended to run as a Qualified Opportunity Fund (QOF), the vehicle that lets taxpayers defer and reduce tax on gains…
LLC granted late relief to elect corporate status and be treated as an S corporation
An LLC wanted to be taxed as an S corporation, but it never filed the two elections that requires. An LLC first has to elect to be treated as a corporation (Form 8832), and then elect S corporation…
60 days granted to make a late election letting a tax-exempt-controlled corporation use faster depreciation
A C corporation was owned by a parent partnership whose partners were more than half tax-exempt entities. That made the corporation a "tax-exempt controlled entity" under Section 168(h). Normally…
Late Form 8996 accepted, letting an LLC self-certify as a Qualified Opportunity Fund
Two investors deferred capital gains by putting the money into an LLC they intended to run as a Qualified Opportunity Fund (QOF), the vehicle that lets taxpayers defer and reduce tax on gains…
120 days granted to make a late Section 754 basis-adjustment election, via an amended partnership return
An LLC taxed as a partnership meant to make a Section 754 election, which lets a partnership adjust the tax basis of its property when interests change hands or property is distributed, but it…
120 days granted to make a late Section 754 basis-adjustment election, via an amended partnership return
An LLC taxed as a partnership meant to make a Section 754 election, which lets a partnership adjust the tax basis of its property when interests change hands or property is distributed, but it…
75 days granted to make a late Section 362(e)(2)(C) election in a built-in-loss property transfer
A taxpayer transferred property to a corporation in a transaction meant to qualify as a tax-free Section 351 exchange. The catch: the property's total tax basis was higher than its fair market…
75 days granted to make a late Section 362(e)(2)(C) election in a built-in-loss property transfer
A taxpayer transferred property to a corporation in a transaction meant to qualify as a tax-free Section 351 exchange. The property's total tax basis was higher than its fair market value, so there…
75 days granted to make a late Section 382 closing-of-the-books election after an ownership change
A corporation with tax losses went through an "ownership change" under Section 382, which limits how much pre-change loss the company can use to offset income earned after the change. In the year of…
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.