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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Mental incompetency did not authorize penalty abatement
A taxpayer sought abatement of a $5,000 section 6702 penalty imposed after he submitted a Form 843 asserting frivolous positions. A federal district court later found him incompetent to stand trial,…
In-home care payments qualified for income exclusion
A state department asked how to treat payments to individual providers who care for eligible aged, blind, or disabled recipients in the providers' homes under four in-home supportive-care programs.…
Tax-refund facilitator had no payment-reporting duty
A company helped banks disburse clients' tax refunds and instructed banks to deduct tax-preparation fees from refunds and send them to return preparers. The company did not own or control the client…
Heir must show an affected material interest to obtain estate or gift tax information
Chief Counsel advised that estate return information is governed by section 6103(e)(1)(E), while a deceased donor’s gift tax information is governed by section 6103(e)(3). Beyond an estate’s…
District court may consider underlying tax liability in government collection suits
Chief Counsel advised that a taxpayer’s underlying liability may be considered in a government suit to reduce an assessment to judgment or foreclose a federal tax lien. Sections 7402 and 7403,…
Classified third-party contact names may be provided only in a secure setting
An exempt-organization examination involved a taxpayer’s classified contract with a government agency. Revenue agents interviewed government officials whose identities were themselves classified,…
An LLC tax matters partner acts through a person authorized under state law
Chief Counsel advised that when an LLC is the tax matters partner, a person legally authorized to act for the LLC may sign a statute-of-limitations extension on its behalf. Whether someone is a…
Online marketplace must report provider payments under section 6050W
An online marketplace connected customers with independent service providers, collected customer payments, and remitted the providers’ fees after subtracting the platform’s charges. Under the…
Bulk nitrogen fertilizer income qualifies for partnership exception
A corporation planned a publicly traded partnership that would produce, store, transport, and market several nitrogen-based fertilizers. The IRS ruled that income from bulk sales of ammonia,…
FPAA may determine components of outside basis but not basis itself
The IRS considered what a final partnership administrative adjustment could determine about a partner's outside basis. It advised that, absent a section 754 election, outside basis itself is not a…
Section 6512 does not bar refund suit after collection case
The IRS considered whether section 6512(a) prevents a taxpayer from disputing a liability in a refund suit after the Tax Court determined that liability in a collection proceeding. It advised that…
Interest-free period applies regardless of who claims withholding refund
The IRS considered the 180-day interest-free period for refunds of withholding taxes under chapters 3 and 4. It advised that section 6611(e)(4) applies whether the refund is claimed by an account…
Collateral sentence challenge does not delay restitution assessment
The IRS considered whether it could assess criminal restitution while an appeal involving a motion under 28 U.S.C. § 2255 remained pending. Section 6201(a)(4)(B) delays assessment until appeals of…
Bank lien priority limited to original loan amount
The IRS considered the extent of a bank's lien priority outside bankruptcy. It advised that the bank's priority was limited to the original loan amount. Under section 6323(h)(1), the bank has a…
Incorrect Form 1042-S TIN penalties depend on knowledge
Chief Counsel advised that an incorrect taxpayer identification number on Form 1042-S does not automatically justify a penalty against the withholding agent. Penalties normally should not be…
Misstated prior gifts do not keep later gift tax years open indefinitely
Chief Counsel addressed a taxpayer who failed to report gifts in one year and then understated the cumulative prior-year gifts shown on later gift tax returns. Section 6501(c)(9) leaves the…
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…
Partnership losses are computational adjustments, but sham-related fees need partner-level action
Chief Counsel addressed the procedural treatment of losses and professional fees after a partnership-level examination. Disallowing capital and ordinary losses reported by the partnership is a…
Pipeline, water-service, and interest-rate hedge income qualifies
A publicly traded partnership provided crude-oil and natural-gas gathering, transportation, storage, and interconnection services. It also transported produced water, planned integrated fresh-water…
Oilfield service income qualifies for partnership exception
A corporation formed a limited partnership to own and finance oil and gas midstream activities before a planned public offering. The partnership would provide freshwater distribution, produced-water…
Assessment ends one partnership's Form 872-A extension
Chief Counsel considered whether a Form 872-A consent extending the assessment period had terminated for three partnerships. An assessment attributable to one partnership ended the consent as to…
Form 872 may extend the section 6501(f) assessment period
Chief Counsel advised that Form 872 may extend an assessment period that remains open under section 6501(f), even if the ordinary three-year period under section 6501(a) has expired. No additional…
IRS letters need not show a taxpayer's full TIN
Chief Counsel advised that no legal requirement compels the IRS to include a taxpayer's full taxpayer identification number on a letter sent to that taxpayer. The advice did not say that the number…
IRS may work with an LLC's authorized representatives on a plan matter
Chief Counsel advised that the IRS should continue dealing with an LLC in its role as a plan sponsor. The agency could communicate with anyone authorized under state law to act for or bind the LLC.…
FPAA may address partnership-item basis in the sale year
Chief Counsel advised that the IRS could issue a final partnership administrative adjustment for the year in which an item was sold. The item's basis was a partnership item, and the transaction…
Aggregated return data must adequately mask taxpayer identities
Chief Counsel described the IRS's general rule that grouped return information should include at least three taxpayers before it is treated as statistical. Three taxpayers may still be insufficient…
Oilfield fluid management and disposal produce qualifying income
A limited liability company planned to take a subsidiary public as a publicly traded partnership providing fluid management and disposal services to oil and gas producers. The services included…
PATH Act makes section 6676 deficiency question moot
Chief Counsel considered which form should extend the assessment period for a section 6676 penalty when the penalty was subject to deficiency procedures. The advice explains that the Tax Court's…
Residential solar subsidies are excluded from income
A state-created clean energy organization used funds collected through utility bill surcharges to pay contractors that reduced homeowners' cost of installing residential solar systems. The IRS…
Terminating VEBA's member distributions avoid inurement but are wages
A voluntary employees' beneficiary association funded solely by mandatory payroll deductions voted to terminate and distribute its remaining assets to current and former employee members. Its…
Online marketplace is a third-party settlement organization
An online marketplace connected customers with unrelated service providers, collected customer payments, extinguished customers' obligations upon payment, guaranteed providers would be paid,…
IRS may choose a consistent method for electronic-filing penalty calculations
Chief Counsel considered how to calculate the percentage-based penalty when a filer intentionally disregards the requirement to submit information returns electronically. Section 6721 penalties…
Some IRS employee audits may require personal attendance at interviews
Chief Counsel addressed whether an IRS employee may send a representative to the initial interview in the employee's own tax audit. Section 7521 generally allows taxpayers to attend through…
Partner bankruptcy does not bar signing for a nonbankrupt entity
Chief Counsel considered whether an indirect partner's bankruptcy affected that person's ability to sign a statute-of-limitations extension for an entity partner. The entity partner itself had not…
Estimated-tax ruling does not apply to Form 1042
Chief Counsel considered whether Revenue Ruling 99-40 applies to a credit election involving a withholding tax return on Form 1042. Counsel advised that the ruling's treatment of unpaid…
Refund claim filed within three years was timely
A taxpayer timely filed a 2010 return on April 18, 2011, after Emancipation Day affected the filing deadline. The taxpayer filed an amended return claiming a refund on April 17, 2014. Chief Counsel…
Court-ordered write-offs do not require Forms 1099-C
A financial institution was barred by a court order from collecting deficiency balances after its notices were found defective under state law. A later class settlement required the institution to…
Assessment clock runs after waiver despite bankruptcy tolling
Chief Counsel addressed how section 6213(f) affects the assessment deadline in two bankruptcy situations. If a taxpayer waives assessment restrictions during the tolled period, the assessment clock…
Different signature style does not invalidate Form 872
Chief Counsel advised that the best practice is to sign Form 872 in the same manner as the related tax return. If the taxpayer's name changed, the form should use the new name followed by “formerly…
Non-FPLP levy falls under section 6331(a) or (e)
Chief Counsel considered a levy involving payments from a federal government entity. Counsel concluded that the levy was not issued through the electronic Federal Payment Levy Program and therefore…
Attorney payments may support continuous wage levy
Chief Counsel considered a levy on payments to an attorney that might qualify as federal payments. The IRS implements section 6331(h) only through electronic levies served on federal agencies under…
Attorney payments may support continuous wage levy
Chief Counsel considered a levy on payments to an attorney that might qualify as federal payments. The IRS implements section 6331(h) only through electronic levies served on federal agencies under…
Oilfield fluid and waste services produce qualifying income
A planned publicly traded partnership would provide fluid delivery, water transfer, equipment washout, and waste processing and disposal services to oil and gas producers. It would also recover,…
Purchased local tax-lien certificates likely have priority over the federal lien
Private parties purchased local tax-lien certificates and, under the relevant state law, stepped into the taxing authority’s position. Chief Counsel advised that their lien interests were likely…
Taxpayer may record examination meeting about transfer pricing
IRS employees planned to meet with a taxpayer about transfer-pricing studies used to determine its tax liability. Chief Counsel advised that the meeting was an in-person taxpayer interview covered…
Tribal organization may receive deductible charitable contributions
Federally recognized Indian tribes in one region formed and funded an organization to carry out a shared project. The project promoted economic development, preserved cultural and subsistence…
IRS may consider an informal abatement request after the assessment period expires
Chief Counsel advised that the IRS may consider new information submitted as an informal request to abate an income, estate, or gift tax assessment even though IRC § 6404(b) does not give taxpayers…
Indirect partner may receive partnership audit information
Chief Counsel advised that an indirect partner may receive a Form 886A from a partnership-level audit, provided disclosure would not seriously impair federal tax administration. Under IRC § 6224(a),…
IRS may rely on partnership return in applying TEFRA procedures
Chief Counsel advised that TEFRA partnership procedures applied when a partnership's Form 1065 listed a flow-through entity as a partner. IRC § 6231(g) allows the IRS to rely on the partnership…
IRS office may use an unredacted private letter ruling
Chief Counsel advised that the relevant IRS office should have an unredacted copy of a private letter ruling available for use in addressing a question about self-created goodwill. If that office…
IRS employees may receive unredacted ruling for tax administration
Chief Counsel advised that IRC § 6103(h)(1) permitted disclosure of an unredacted private letter ruling to a Treasury attorney and revenue agent who needed it for tax administration. The requester…
Credit election moved after assessment period was not covered by revenue ruling
Chief Counsel advised that Rev. Rul. 85-67 did not apply when a credit election was not transferred to the following tax year, which had an unassessed liability, until after the assessment statute…
Governmental employee-benefit trust income excluded from tax
Political subdivisions created a trust to fund health and welfare benefits for current and former employees and their families. The IRS ruled that providing those benefits was an essential…
Reconsideration does not extend refund-suit deadline
Chief Counsel advised that the law governing the deadline for a refund suit had not changed. Once the two-year period under IRC § 6532(a)(1) expires, the IRS cannot allow the refund unless the…
Monday bankruptcy filing suspends Tax Court petition period
Chief Counsel considered how the Tax Court petition deadline interacts with a bankruptcy filing. When the 90th day falls on a weekend and the following Monday is not a District of Columbia holiday,…
Publication 1 required for Form 8300 examinations
Chief Counsel advised that IRS Publication 1 is required in examinations involving Form 8300. The penalties under IRC §§ 6721 and 6722 for failing to file the form are assessable penalties treated…
Ground-lease income qualifies for publicly traded partnership treatment
A publicly traded partnership acquired leases of raw land and building rooftops used by tenants for cellular towers, broadband installations, billboards, wind turbines, and solar arrays. It…
Oil-and-gas service income qualifies as partnership income
A publicly traded partnership planned to acquire a business that supplied handling, treatment, processing, and related services for oil-and-gas exploration and production, including hydraulic…
Carryback offset earns interest through the loss-year due date
A taxpayer received a tentative refund based on a net operating loss carryback, but the IRS later disallowed most of the carryback and assessed an underpayment. On the same day, unrelated…
Oilfield fluid and waste services produce qualifying income
A planned publicly traded partnership would provide fluid delivery and transfer, waste treatment and disposal, equipment cleaning, vapor control, heating, slurry injection, and related services…
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.