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.
No determinations match these filters
Try fewer or different words, check the spelling, or clear the filters to browse everything.
Cooperative may obtain patron consent electronically
An agricultural cooperative planned to replace paper patronage-consent forms with an online application. A patron would enter identifying information, choose either consent or waiver, type a name,…
Coordinate Medicaid insurer definitions before applying compensation deduction limit
Chief Counsel reviewed earlier advice on whether risk-bearing entities serving Medicaid recipients could be subject to the compensation deduction limit in IRC § 162(m)(6). Applying that limit…
LLC restructuring does not recapture Gulf Opportunity Zone depreciation
An individual owned two single-member LLCs that were disregarded for federal income tax purposes. One LLC owned qualifying Gulf Opportunity Zone property for which the individual had claimed…
Medicaid contractor status depends on insurance risk and beneficiary rights
The IRS analyzed when an entity providing Medicaid services is a health insurance issuer and covered health insurance provider for the compensation-deduction limit in section 162(m)(6). A…
Insolvent bank may protect depositor assets from tax unrelated to federal assistance
An insolvent bank received federal financial assistance during a receivership transaction and separately reported taxable income from a litigation recovery. The tax liability came entirely from the…
Revenue officer may use and share a credit report for hardship review
The Taxpayer Advocate Service asked Field Collection to determine whether a taxpayer faced enough financial hardship for currently-not-collectible status. Chief Counsel advised that the revenue…
Medicaid contractor status depends on insurance risk and beneficiary rights
Chief Counsel addressed when entities providing Medicaid services are health insurance issuers and covered health insurance providers for the compensation deduction limit in section 162(m)(6). A…
Cooperative's preferred-stock exchange avoids deemed distribution
A non-stock cooperative proposed a mandatory exchange of newly issued publicly traded preferred stock for patrons' qualified written notices of allocation. Participation would be limited by recent…
Life insurer may deduct partnership investment fees
Chief Counsel addressed how a life insurer should calculate its share of dividends-received deductions for separate-account assets invested through partnerships. The insurer includes its…
Cooperative grain venture preserves patronage treatment and production deduction rules
A nonexempt agricultural cooperative planned to combine its grain marketing operations with another cooperative and a corporate investor through an LLC taxed as a partnership. The cooperative would…
Corporate group may switch to tax book value for interest allocation
A domestic corporate group had long used fair market value to value assets when apportioning interest expense. It asked to switch because that method required significant professional fees and…
Acquired group may switch to tax book value for interest allocation
A domestic corporate group had used fair market value to apportion interest expense because a former parent required that method. After later ownership changes, the group asked to use tax book value…
Acquiring group may retain tax book value for interest allocation
A domestic consolidated group had long used tax book value to apportion interest expense. It acquired another group that had used fair market value, which otherwise required the combined related…
Supplier settlement is cooperative patronage income
A grocery-distribution cooperative settled litigation over alleged overcharges on products it had bought for resale to its member stores. The IRS concluded that the settlement arose directly from…
Insurer receives 90 days to make section 831(b) election
A small property and casualty insurer relied on two accounting firms to prepare and file its federal return. After changing firms, its owner discovered that neither firm had filed the return by the…
ETF investments do not give variable contract holders ownership
A regulated investment company portfolio served exclusively as an investment vehicle for variable life insurance and annuity contracts. Its adviser could allocate assets among a broad range of…
IRS must consider a vessel-replacement extension application
Section 1359 permits a qualifying vessel operator to avoid recognizing gain when it replaces a disposed vessel within the statutory replacement period. The statute also allows the IRS to designate a…
Insurer retains unearned-premium and loss reserves for prior contracts
The IRS summarized reserve treatment for an insurer at the end of its 2009 tax year. The unearned-premium reserve included the part of written premiums covering unexpired periods of pre-2010…
Cooperative loss recovery plan and NOL carryforwards approved
A nonexempt farmers cooperative incurred a large loss consisting of patronage and nonmember or nonpatronage portions. It planned to waive the carryback period, carry each portion forward against the…
QTIP trust severance and spouse's renunciations receive favorable rulings
A court divided a marital QTIP trust into two separate trusts, and the surviving spouse planned to renounce all interests in one divided trust and a related disclaimer trust. The IRS ruled that the…
Stock split does not substantially modify transfer restrictions
A family-owned S corporation's articles had restricted stock transfers since before section 2703's October 1990 effective date. The corporation proposed a stock split, an increase in authorized…
Late small-insurance-company tax election granted
A property and casualty insurer failed to timely file returns and make the election that allows a qualifying small insurance company to be taxed only on investment income. The insurer said it relied…
Cash-basis taxpayer claims additional foreign tax credit when paid
Chief Counsel advised how section 905(c) applies when a cash-basis individual pays additional creditable foreign income tax for an earlier year. Because the taxpayer had not timely elected under…
Ten-year captive excess-loss policies were not insurance
Related healthcare businesses bought ten-year excess-loss policies from a captive insurer owned by the same individual. The policies were priced before the parties set the attachment points, those…
Late section 831(b) insurance election allowed
A closely held property-and-casualty insurer intended to elect the alternative tax on investment income under section 831(b). Its first CPA filed an extension request but was later dismissed, and a…
Cooperative may charge patronage capital loss to members
A nonexempt Subchapter T cooperative received stock through a patronage-related arrangement to develop an online purchasing platform for its members. It treated the stock's receipt and vesting as…
QTIP severance confines gift and estate consequences to the disclaimed trust
An estate had elected qualified terminable interest property treatment for a marital trust benefiting the surviving spouse. The trustee proposed dividing the GST nonexempt portion into two trusts…
Captive insurer receives late small-company election relief
A captive insurance company intended to elect the small-insurance-company tax treatment under section 831(b) from its first business year. A miscommunication caused its manager and tax attorney each…
Captive insurer receives late small-company election relief
A captive insurance company intended to elect the small-insurance-company tax treatment under section 831(b) from its first business year. A miscommunication caused its manager and tax attorney each…
Retained powers kept trust transfers incomplete gifts
A grantor created an irrevocable trust that could distribute property to her and several charities. She retained veto powers over distributions and a testamentary limited power to appoint the…
Retained powers kept trust transfers incomplete gifts
A grantor created an irrevocable trust that could distribute property to him and several charities. He retained veto powers over distributions and a testamentary limited power to appoint the…
Spectrum-sale income was patronage sourced
Several taxable rural telephone cooperatives formed a limited liability company to pool resources and improve telecommunications services for their members. The company bought wireless spectrum…
Spectrum-sale income was patronage sourced
Several taxable rural telephone cooperatives formed a limited liability company to pool resources and improve telecommunications services for their members. The company bought wireless spectrum…
Spectrum-sale income was patronage sourced
Several taxable rural telephone cooperatives formed a limited liability company to pool resources and improve telecommunications services for their members. The company bought wireless spectrum…
Foreign mineral agreements are leases rather than sales
An energy company sought to change its treatment of foreign mineral-development agreements from leases to sales. The foreign government owned the minerals in place, permitted development in exchange…
Section 833 medical loss ratio uses aggregate CCIIO data
Chief Counsel advised that the section 833(c)(5) medical loss ratio is computed across all market segments, unlike the Public Health Service Act ratio, which is calculated separately for individual,…
Treaty exempts royalties for broadcasting foreign television channels
A foreign television broadcaster licensed its channels to a wholly owned U.S. subsidiary, which arranged for an unrelated U.S. distributor to show them on its platform. The subsidiary would pay…
Insurer loses exemption but receives retroactivity relief
An insurance and reinsurance company asked whether it qualified for exemption under section 501(c)(15) for three tax years and whether it should receive relief from retroactive revocation under…
REIT elective cash-and-stock dividends are not preferential
A publicly traded real estate investment trust planned distributions in which shareholders could elect cash, common stock, or a 20-percent cash and 80-percent stock combination. Aggregate cash would…
Third-party tax settlements are protected return information
A FOIA requester sought settlement documents involving third parties in related transactions without obtaining those parties' consent. Chief Counsel advised that section 6103, together with FOIA…
Leveraged forward contract lacks economic substance
Taxpayers bought an interest in a marketed leveraged forward contract pairing a loan with prepaid derivatives designed to make every loan payment. The structure generated current ordinary interest…
IRS may separately examine reinsurance recoverable estimate
A property and casualty insurer argued that the IRS could not separately challenge its estimate of uncollectible reinsurance because its combined unpaid-loss and reinsurance amounts were reasonable…
Rural telephone cooperative's spectrum gain is patronage income
A taxable rural telephone cooperative bought wireless spectrum intending to use it for expanded telecommunications services to members. It later determined that the spectrum was inadequate, costly…
Currency-fluctuation contracts with a captive insurer are not insurance
A multinational corporate group used its captive insurance company to issue contracts protecting affiliates against earnings changes caused by movements between the U.S. dollar and foreign…
Partnership cannot deduct payments tied to a predecessor cooperative’s allocation notices
An exempt farmers’ cooperative had issued qualified written notices of allocation to patrons, then converted into a limited liability company taxed as a partnership. The successor partnership later…
Insurers must spread reserve corrections over ten years under section 807(f)
Two related life insurers discovered that whole-life contracts retained by one company had been miscoded in their valuation system as term-life contracts reinsured to the other company. As a result,…
Rural telephone cooperative's spectrum gain is patronage income
A taxable rural telephone cooperative used a wholly owned subsidiary to hold nonregulated telecommunications assets. The subsidiary bought wireless spectrum to support possible future services, but…
Ex parte rules depend on whether the Appeals case is docketed
Chief Counsel addressed whether Appeals must follow ex parte communication rules while coordinating a settlement with Area Counsel because a related case was in Counsel jurisdiction. If the proposed…
Public fund investments do not make contract holders owners of fund shares
Three investment funds offered their shares exclusively to life insurance company separate accounts that funded variable life and annuity contracts. The funds expected to invest in other regulated…
No information-return penalties when withholding was reported correctly
Chief Counsel advised that penalties under IRC §§ 6721 and 6722 generally could apply to errors on Forms 1042-S. Here, however, the withholding agent correctly reported in Box 7 the amounts it…
Captive reimbursement arrangement requires facts review and accounting adjustment
Chief Counsel considered a captive insurer's deductible reimbursement policy issued to its parent. Whether the captive could report premium income and related deductions depended on the…
Insurer remains owner of variable-policy investment assets
A partnership owned two universal variable life insurance policies whose separate accounts invested in insurance-dedicated funds. The partnership also proposed investing seed capital in a publicly…
Leveraged forward contract was a swaption with a circular loan
Chief Counsel analyzed a promoted leveraged forward contract that paired a purported loan with matching payments under prepaid derivative contracts. The loan and guaranteed contract payments offset…
Reinsurance acquisition commission must be amortized under IRC § 197
Chief Counsel considered an insurer's purchase of assets from a life reinsurance business together with a retrocession arrangement covering the seller's contracts. The taxpayer treated the…
IRS advises abating excess-business-holdings tax
A private foundation held too much stock in a for-profit corporation after its tax preparer miscalculated the holdings attributable to the foundation and misread the percentage allowed by § 4943.…
Retained production royalty makes mineral transfer a lease
An international mining company transferred its interest in a mine for cash while retaining a one-time bonus royalty and a production royalty. The bonus royalty was triggered by adding reserves,…
Later foreign tax payments belong in pre-1987 annual layers
Chief Counsel addressed additional foreign taxes paid after 2008 that related to a foreign corporation's 1994 through 2008 taxable years. Because the corporation did not enter the relevant U.S.…
REIT special dividend is preferential and threatens qualification
A privately held REIT proposed two common-share classes whose mix would depend on the size of each investor's investment. Class B shares would receive a special dividend designed to offset a reduced…
LLC recapitalization transferring future profits to sons is a gift
A donor contributed real property to a family LLC and later joined in a recapitalization that allocated all future profit, loss, and asset appreciation equally to her two sons in exchange for their…
Pre-1987 foreign taxes cannot enter post-1986 credit pools
A U.S. parent claimed deemed-paid foreign tax credits after check-the-box elections produced deemed liquidations of several controlled foreign corporations. Part of the claimed credit came from…
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.