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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Parent gets 75 days for late Section 338(g) election
A consolidated group's foreign subsidiary acquired all the stock of another foreign corporation, but the parent failed to file the intended Section 338(g) election on time after relying on a qualified…
Inadvertently ineffective QSub election receives relief
After an asserted Section 368(a)(1)(F) reorganization, a subsidiary merged into a limited liability company treated as disregarded for federal tax purposes. The parent later tried to make a qualified …
See-through trust may split inherited IRA without current tax
An inherited IRA was payable to an irrevocable trust for two child beneficiaries after the prior beneficiary died before 2020 and before his required beginning date. Timely trust amendments required e…
See-through trust may split inherited IRA without current tax
An inherited IRA was payable to an irrevocable trust for two child beneficiaries after the prior beneficiary died before 2020 and before his required beginning date. Timely trust amendments required e…
See-through trust may split inherited IRA without current tax
An inherited IRA was payable to an irrevocable trust for two child beneficiaries after the prior beneficiary died before 2020 and before his required beginning date. Timely trust amendments required e…
Foreign entity gets 120 days for disregarded-entity election
A foreign limited company inadvertently failed to file Form 8832 on time to elect treatment as an entity disregarded from its owner. The IRS found that the entity acted reasonably and in good faith an…
Foreign entity gets 120 days for partnership election
A foreign limited company inadvertently failed to file Form 8832 on time to elect partnership treatment. The IRS found that the entity acted reasonably and in good faith and that relief would not prej…
Foreign entity gets 120 days for disregarded-entity election
A foreign limited company inadvertently failed to file Form 8832 on time to elect treatment as an entity disregarded from its owner. The IRS found that the entity acted reasonably and in good faith an…
Annuity-paid advisory fees are contract expenses, not distributions
A life insurer proposed variable, fixed-indexed, and hybrid deferred annuity contracts designed for owners receiving ongoing advice about allocating contract value among available options. The contrac…
Annuity-paid advisory fees are contract expenses, not distributions
A life insurer proposed variable, fixed-indexed, and hybrid deferred annuity contracts designed for owners receiving ongoing advice about allocating contract value among available options. The contrac…
Pension minimum-funding waiver approved with strict conditions
An employer in Chapter 11 sought relief from its pension plan's remaining minimum required contribution. Heavy debt-service costs had caused temporary substantial business hardship, but reduced debt, …
Partnership gets 120 days for late Section 754 election
A partnership relied on its tax adviser but failed to make a Section 754 election after two partners died. The IRS found reasonable conduct, good faith, no hindsight, and no government prejudice, and …
Direct-appointed insurance agency is a qualified Section 1202 business
A small insurance agency sold policies under direct appointments from insurers and also through wholesalers. At least 80 percent of its asset value supported the direct-appointment model. Those contra…
Direct sperm costs are deductible, but surrogacy costs are not
A married male couple planned to use one spouse's sperm, the other spouse's sister's egg, and an unrelated gestational surrogate. The IRS ruled that costs directly attributable to medical care of the …
Foundation's community scholarship procedures approved
A private foundation proposed generally one-year scholarships for foreign-born high school athletes attending a private school in a particular area. Applicants had to maintain at least a 2.0 GPA, demo…
Medical fundraiser for one person denied exemption
An organization was formed to raise money for one named person's cancer-treatment expenses through benefit dinners, community donations, and crowdfunding. Its receipts and disbursements served that in…
Member-benefit organization loses Section 501(c)(3) exemption
An organization claimed to provide financial help for medical and other needs, but membership was limited to members of a particular group and their families. Its articles did not limit it to exempt p…
Accelerated share repurchase gets open-market device analysis
After a public company spun off a business, it proposed an accelerated share repurchase through financial institutions. The institutions would borrow shares, sell an initial block to the company, acqu…
Foreign entity gets 120 days for partnership election
A foreign limited company inadvertently failed to file Form 8832 on time to elect partnership treatment. The IRS found that the entity acted reasonably and in good faith and that relief would not prej…
Foreign entity gets 120 days for disregarded-entity election
A foreign limited company inadvertently failed to file Form 8832 on time to elect treatment as an entity disregarded from its owner. The IRS found that the entity acted reasonably and in good faith an…
Foreign entity gets 120 days for partnership election
A foreign limited company inadvertently failed to file Form 8832 on time to elect partnership treatment. The IRS found that the entity acted reasonably and in good faith and that relief would not prej…
Partnership gets 120 days for late Section 754 election
A partnership timely filed its return but omitted a Section 754 election after its tax preparers failed to advise it that an election was needed. The IRS found that the partnership acted reasonably an…
Missed ESBT elections receive inadvertent-termination relief
After an S corporation shareholder died, shares passed through several trusts. Four successor trusts qualified as electing small business trusts, but their trustees did not timely file ESBT elections,…
Missed ESBT elections receive S corporation and QSub relief
After an S corporation shareholder died, stock passed to several trusts that qualified as electing small business trusts, but the trustees failed to file timely ESBT elections. Those failures technica…
Related-party debt forgiveness generally avoids recognition
A foreign financing subsidiary proposed forgiving part of debt owed by an insolvent U.S. consolidated group. The IRS ruled that the U.S. parent and two subsidiaries would recognize no income, gain, or…
Rental payment platform is a third-party settlement organization
An online platform helps landlords and property managers list rental properties, enter leases, and receive tenant payments through a payment portal. The IRS ruled that the platform operator is a third…
Homeowners association receives more time for Section 528 elections
A homeowners association inadvertently failed to file Form 1120-H elections for several taxable years. The IRS found that the association satisfied the standards for discretionary filing relief under …
Two subsidiaries are treated as joining consolidated returns
A parent corporation included all income and deductions of two wholly owned subsidiaries in its federal returns, but it did not attach Forms 851 or 1122, identify the subsidiaries, or check the consol…
Temporary wagering-loss rule does not cover gambling businesses' ordinary expenses
Chief Counsel considered whether the Tax Cuts and Jobs Act's temporary amendment to Section 165(d) treated a gambling business's ordinary and necessary expenses as wagering losses. The advice conclude…
Partnership-style operating agreement receives S corporation relief
A limited liability company's operating agreement used partnership provisions that gave members liquidation rights based on capital account balances instead of membership interests. Those provisions c…
Foreign entity receives more time for disregarded-entity election
A foreign entity wholly owned by a domestic corporation intended to be treated as a disregarded entity, and its owner consistently filed on that basis, but Form 8832 was not timely filed. The IRS foun…
Service-connected survivor benefits qualify for income exclusion
A governmental plan pays disability and death benefits to eligible firefighters and police officers and may continue those benefits to surviving beneficiaries. The IRS ruled that payments continuing j…
Nuclear plant owner receives revised decommissioning funding schedule
A nuclear power plant owner requested a revised schedule for deductible contributions to its qualified nuclear decommissioning fund after an agreement accelerated the plant's shutdown. The owner calcu…
Closed nuclear plant receives revised decommissioning funding schedule
A nuclear power plant owner requested a revised schedule for deductible contributions to its qualified decommissioning fund after the plant ceased operation under an accelerated shutdown agreement. Th…
Decommissioning unit receives revised nuclear fund schedule
A taxpayer indirectly owned a nuclear unit that had begun incurring decommissioning costs and requested an elective revised schedule of contributions to its qualified nuclear decommissioning fund. The…
Pension surplus transfer avoids employer reversion tax
After terminating a defined benefit plan and paying all benefits, an employer proposed transferring the entire remaining surplus to two ongoing defined contribution plans. The IRS treated the two reci…
Merged replacement plan may receive pension surplus tax-free
An employer terminated a defined benefit plan and transferred its entire remaining surplus to a defined contribution plan formed by merging separate bargaining-unit and non-bargaining-unit plans. The …
REIT receives more time for taxable subsidiary election
A property company intended to elect REIT status after it ceased being closely held and wanted its wholly owned service subsidiary treated as a taxable REIT subsidiary from the same date. Its earlier …
Partnership may make retroactive QEF election
A domestic partnership owned less than 10 percent of a foreign company and learned only after filing its return that the company had become a passive foreign investment company. The partnership had en…
Late PFIC discovery permits retroactive QEF election
A domestic partnership owned less than 10 percent of a foreign company and learned only after filing its return that the company had become a passive foreign investment company. The partnership had re…
Educational grant procedures receive advance approval
A private foundation proposed instructional study grants, experiential study grants, and hardship-based travel grants connected with its educational programs. The programs used eligibility and selecti…
Social club loses exemption for public use and nonmember income
A Section 501(c)(7) social club operated a bar, gaming room, event space, and other recreational facilities that were open to the public. The club did not charge members dues or give them discounts, a…
Excess investment income ends social club exemption
A Section 501(c)(7) club provided hunting, fishing, and outdoor activities to members and did not conduct activities with nonmembers. Its receipts also included dividends, interest, securities gains, …
Fraternal and private-benefit activities end charity exemption
A fraternal organization claimed that its principal charitable activity was an annual scholarship fundraiser. Its records instead showed extensive member-focused operations, including lodge meetings, …
Fund for two named children denied charity exemption
A nonprofit corporation was formed to raise money for the care and education of two children whose father had died. It planned silent auctions, dinners, races, golf tournaments, and other fundraisers,…
Public golf receipts end social club exemption
A Section 501(c)(7) golf club opened its facilities to the general public after membership declined. It earned nonmember revenue from green fees, cart rentals, tournament food and drink sales, hole sp…
Defective articles and missing records end charity exemption
An organization obtained Section 501(c)(3) status through Form 1023-EZ after attesting that its organizing document met federal requirements. During an audit, state records showed that its articles di…
No member social activity and excess investment income end exemption
An alumni organization claimed exemption as a Section 501(c)(7) social club. It had no property or member facility, held meetings virtually, and mainly published a twice-yearly newsletter, so members …
Golf club loses Section 501(c)(7) status for serving the public
The IRS revoked a golf club's exemption under IRC § 501(c)(7). The club operated a golf course, restaurant, bar, pro shop, and event facilities that were open to the general public. It advertised publ…
Recurring nonmember income ends social club exemption
A Section 501(c)(7) club opened events and facilities to both members and nonmembers but did not separately track their receipts. It also reported dividends from only one of two investment accounts on…
Inactivity and missing records cost a private foundation its exemption
A private foundation was formed to support science, technology, education, and related economic development. Its annual returns repeatedly reported no charitable activities, no qualifying distribution…
Public bingo and rentals defeat social club exemption
A self-declared social club operated public bingo games and rented its facility mostly to nonmembers. It had no identified dues structure, little member income, and no other significant activities. Th…
No educational activity or records ends charity exemption
An organization obtained Section 501(c)(3) status through Form 1023-EZ after stating that it would conduct educational activities. During an audit, it provided incomplete information and did not show …
Public hall rentals revoke social club status
A self-declared social club had three members, charged no membership dues, and rented its banquet hall and other facilities to the public. It advertised the hall and reported nonmember rental income o…
Single-family home school serves private interests
An organization sought Section 501(c)(3) status as a school, but its only activity was operating a home school for the child of its two married directors. No other children attended, and the directors…
Investment income replaces social-club activity
A social club sold the building it had held for affiliated fraternal organizations and stopped conducting social activities. After the sale, investment income represented 100 percent of its gross rece…
Catering income revokes business club exemption
A private business club contracted with an outside catering corporation and received monthly payments that made up most of the club’s gross revenue. The club correctly reported the payments as nonmemb…
Business promotion defeats historic-preservation exemption
An organization claimed that promoting a historic commercial area would combat community deterioration and preserve the neighborhood. Its actual activities consisted mainly of advertising local busine…
Undocumented dissolution revokes charity exemption
A charity filed articles of dissolution under state law but did not respond to the IRS examination. It did not file a final Form 990, provide dissolution documents to the IRS, describe the disposition…
Long-inactive charity loses exemption
An organization obtained Section 501(c)(3) status through Form 1023-EZ but later told the IRS that it had never truly been active and had no plans to reactivate. It did not provide its organizing docu…
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.