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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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…
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…
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…
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…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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.…
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.…
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…
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.…
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…
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…
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…
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…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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.…
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…
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…
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…
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…
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…
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…
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…
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…
Nonmember income costs social club its exemption
The IRS revoked a social club's Section 501(c)(7) exemption after investment and rental income exceeded the 35% limit on investment and nonmember income in four of five examined years. The…
Inactivity and missing dissolution records trigger revocation
An education-focused organization stopped conducting exempt activities but retained land and did not complete or substantiate dissolution. The IRS repeatedly requested stamped dissolution articles,…
Block beautification group fails charitable tests
A nonprofit formed to beautify and maintain a particular city block did not qualify under Section 501(c)(3). Its purpose and dissolution clauses expressly included Section 501(c)(4) purposes, so its…
Public rentals revoke social club exemption
A social club maintained a building used as rental investment property and as a meeting place for a Section 501(c)(8) organization. It advertised the facilities to the public, and nonmember facility…
Private homeowners association loses exemption
A gated homeowners association classified as a private foundation did not qualify under Section 501(c)(3). Its articles stated the nonexempt purpose of operating a homeowners association and…
Public bingo and dinners revoke club exemption
A social club opened weekly bingo, dinner events, and substantial portions of its facilities to the public, advertised bingo publicly, and leased land to a for-profit solar company. Its recurring…
Annual cultural festival did not support charity exemption
An organization recognized under Section 501(c)(3) operated an annual one-day cultural New Year festival as its sole activity. The festival featured performances and contests, charged admission and…
Property owners’ association denied business-league exemption
A commercial property owners’ association applied for exemption as a business league under Section 501(c)(6). Membership was compulsory for owners in one commercial development, and the association…
Member social club lost Section 501(c)(4) exemption
An organization created through the efforts of several veterans’ organizations was exempt as a social-welfare organization under Section 501(c)(4). Members of the related organizations automatically…
Inactive supporting organization lost charity exemption
A Type I supporting organization had no income, expenses, bank account, assets, liabilities, or activities after formation. It made no payments to its supported organization and provided no services…
Charity lost exemption after ignoring audit requests
A cultural education organization was selected for an audit of its Form 990-N filing and exempt activities. The IRS mailed multiple information requests, called the organization and its…
IRS consents to a new method for counting stock-based compensation under a cost sharing arrangement
A domestic corporation and its foreign subsidiary share the costs of developing intangible property under a cost sharing arrangement governed by IRC § 482. The corporation asked to change how it…
IRS permits three investment funds to revoke PFIC mark-to-market elections
Three regulated investment company series had made IRC § 1296 mark-to-market elections for stock in a passive foreign investment company (PFIC). They could not initially make qualified electing fund…
Timing-difference deductions will not by themselves cause foreign use of a dual consolidated loss
A U.S. parent planned entity-classification elections and transfers that would bring a foreign business into a combined separate unit for the dual consolidated loss rules. The parent expected that…
A new gain recognition agreement prevents a shareholder's death from triggering deferred gain
A U.S. shareholder had transferred domestic-company stock to a foreign corporation and entered into a gain recognition agreement (GRA) under the § 367 regulations. The shareholder later died while…
LLC receives 120 days to file a late corporate-classification election
A state-law limited liability company intended to be treated as an association taxable as a corporation from a specified date. It missed the Form 8832 filing deadline because of inadvertence and…
Parties receive extra time to elect asset-sale treatment for an S corporation stock purchase
An individual bought all the stock of an S corporation, and the buyer, target, and shareholders intended to treat the transaction as an asset sale under IRC § 336(e). Their tax professional failed…
IRS approves a prospective switch in cost-sharing treatment of stock-based compensation
A publicly traded domestic corporation shares intangible-development costs with foreign participants under a cost sharing arrangement governed by IRC § 482. It asked to change the measurement,…
S corporation keeps its status after fixing second-class-of-stock provisions
A limited liability company had elected S corporation status and later issued restricted membership units to two service providers. When those units vested, partnership-style provisions in the…
Late QSST election receives inadvertent S corporation termination relief
An S corporation shareholder sold some shares to a trust that represented it met the qualified subchapter S trust (QSST) requirements. The trust's sole income beneficiary failed to timely make the…
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.