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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IRS disqualifies a self-declared social club whose income came almost entirely from nonmembers
This letter is a final determination that a self-declared social club does not qualify for tax exemption under IRC § 501(c)(7). The club owned its building, operated bars and rented its halls to the g…
IRS revokes a charity's exemption after it ignored records requests during an audit
The IRS issued a final determination revoking an organization's IRC § 501(c)(3) tax-exempt status after the organization repeatedly failed to respond to the examiner's requests for financial and organ…
IRS denies 501(c)(3) status to a group that gave airline tickets to fee-paying veterans
The IRS issued a final adverse determination denying tax-exempt status under IRC § 501(c)(3) to an applicant that planned to provide airline tickets to veterans and service members who paid an annual …
IRS revokes a social club's exemption for excess investment income from nonmember sources
The IRS revoked a social club's IRC § 501(c)(7) exemption after finding that substantially all of its income came from investments, a nonmember source, well over the 35% of gross receipts that social …
IRS determines a dormant fraternal cemetery-plot organization does not qualify for exemption
The released package for this organization mixes two sections of the Code, and the text below is reproduced as the IRS released it. The front final determination letter states that the organization do…
IRS revokes a 501(c)(3)'s exemption after the group could not be reached during an audit
The IRS revoked an organization's IRC § 501(c)(3) exemption after it failed to respond to repeated audit requests for information about its finances and activities. The group had obtained exemption th…
IRS revokes a social club's exemption for investment income over the 35% nonmember limit
The IRS revoked the IRC § 501(c)(7) exemption of a members' club after finding that its investment income (a nonmember source) exceeded, on a continuing basis, the 35% of gross receipts that social cl…
IRS revokes an inactive charity's exemption for failing the operational test
The IRS revoked an organization's IRC § 501(c)(3) exemption after finding it had not consistently operated and had shown no concrete plans or reasonable steps to begin operating, so it failed the oper…
IRS revokes a veterans-group auxiliary's exemption because its youth baseball players do not meet the membership rules
The IRS revoked the § 501(c)(19) exemption of an auxiliary unit included in a veterans organization's group ruling. The auxiliary's main activity was operating a community youth baseball team, and its…
IRS revokes a recycling charity's exemption after its activities shifted to managing and selling a landfill
The IRS revoked the § 501(c)(3) exemption of an organization originally formed to promote recycling and create employment for people with disabilities. The organization later acquired a closed landfil…
IRS approves a small-benefit cash-out amendment without disturbing a multiemployer plan's funding extension
A multiemployer defined-benefit plan already had an IRS-approved extension for amortizing certain unfunded accrued liabilities. It proposed a mandatory cash-out window for terminated participants whos…
IRS revokes a dormant fraternity social club that had no members and lived on investment income
A local college fraternity chapter had been recognized as a tax-exempt social club under § 501(c)(7). The chapter folded, sold its fraternity house, and since then existed mainly to hold the mortgage …
IRS revokes a 501(c)(4) civic league that went inactive and stopped filing
A social-welfare organization recognized as exempt under § 501(c)(4) stopped operating and had not filed a Form 990 for multiple years. Its last return reported zero income, zero expenses, zero assets…
Late-election relief for a fund to defer a post-October capital loss under § 852(b)(8)
A regulated investment company (a business development company taxed as a RIC) intended to elect under § 852(b)(8)(A) to defer a "post-October capital loss," treating it as arising on the first day of…
Late-filing relief to attach four accounting-method-change forms to a corporate return
A corporation with two lines of business (manufacturing and distribution) made four accounting-method changes for a tax year using the IRS automatic-change procedures, covering depreciation, the simpl…
IRS lets an oil-and-gas owner combine four net-profits royalty interests into one property
A calendar-year taxpayer held many mineral, royalty, overriding royalty, and net-profits interests across counties and parishes in several states. Four of its net-profits overriding royalty interests …
Late-election relief for a foreign entity to switch from corporation to disregarded status
A single-owner foreign entity whose members all had limited liability defaulted to being treated as an association taxable as a corporation for U.S. federal tax purposes. The owner intended for it to …
Late-election relief for a foreign entity to be a disregarded entity
A foreign entity with a single owner was eligible to elect to be disregarded (ignored as separate from its owner) for U.S. federal tax purposes, but it missed the deadline to file Form 8832 making tha…
Advisory fees paid from an annuity's cash value are not a taxable distribution to the owner
A life insurance company planned to offer non-qualified deferred annuity contracts (variable, fixed-indexed, and hybrid) designed to be managed with the help of a paid investment adviser. The owner wo…
Advisory fees paid from an annuity's cash value are not a taxable distribution to the owner
A life insurance company planned to offer non-qualified deferred annuity contracts (variable, fixed-indexed, and hybrid) designed to be managed with the help of a paid investment adviser. The owner wo…
Advisory fees paid from an annuity's cash value are not a taxable distribution to the owner
A life insurance company planned to offer non-qualified deferred annuity contracts (variable, fixed-indexed, and hybrid) designed to be managed with the help of a paid investment adviser. The owner wo…
Inadvertent S-corp termination excused where an LLC operating agreement created a second class of stock
An LLC that had elected to be taxed as an S corporation later signed an operating agreement containing partnership-style allocation and liquidation provisions. Those provisions tied distributions and …
Late-election relief to use the 70/30 safe harbor for success-based deal fees
A company that acquired another business paid its financial advisors fees that were contingent on the deal closing (success-based fees). Under a safe harbor in Revenue Procedure 2011-29, a buyer may d…
Late-election relief for an LLC to be taxed as a corporation and opt out of tax-exempt-use rules
A single-member LLC, wholly owned by a § 501(c)(3) tax-exempt organization, was the co-general partner in a partnership that developed a low-income housing tax credit property for the elderly. Because…
IRS approves nonrecognition treatment for a corporate business separation structured as a Type D reorganization and spin-off
A publicly traded corporate parent proposed separating one business from another by transferring the separated business to a controlled corporation, potentially selling a minority stake in public offe…
IRS grants relief for late entity-classification and S corporation elections
An eligible entity intended to be classified as a corporation and taxed as an S corporation from the same effective date, but it did not timely file either Form 8832 or Form 2553. It asked for an exte…
IRS preserves prior spin-off rulings after a planned business combination and related payment changes
After receiving an earlier ruling for a § 355 business separation, the distributing corporation negotiated a combination between the separated company and another corporate group. The revised transact…
IRS treats a delayed taxable REIT subsidiary election as timely despite COVID-19 filing obstacles
A publicly traded REIT indirectly acquired part of a foreign corporation and intended to elect for that corporation to be a taxable REIT subsidiary from the acquisition date. COVID-19 closures delayed…
IRS grants a foreign insurance company 60 days to perfect its election for domestic tax treatment
A foreign insurance company and its U.S. parent had consistently filed as though the insurer had validly elected under § 953(d) to be treated as a domestic corporation and member of the parent's conso…
IRS grants retroactive taxable REIT subsidiary status after foreign anti-hybrid rules changed the needed structure
A REIT operated foreign data-center investments through a company that had elected to be disregarded for U.S. tax purposes. After foreign anti-hybrid rules took effect, the REIT learned that interest …
IRS says a consolidated REIT subsidiary is publicly offered, so a corrected overdistribution is not a preferential dividend
A REIT controlled by a publicly traded parent made a distribution that was intended to be pro rata, but rounding in ownership records caused one partnership to receive too much. The excess was later r…
IRS grants late taxable REIT subsidiary election relief after an adviser missed Form 8875
A newly formed REIT owned senior-housing facilities and formed a corporate subsidiary that held an interest in the operating partnership leasing those facilities. The REIT intended to elect taxable RE…
IRS recognizes a church-affiliated university's pension and 403(b) plans as church plans after committee-based correction
A tax-exempt university affiliated with a church maintained a frozen defined-benefit pension plan and an ongoing § 403(b) plan. The church selected a majority of the university's trustees, could remov…
IRS permits a late election for a tax-exempt controlled corporation to receive taxable-entity depreciation treatment
A corporation wholly owned by a § 501(c)(3) organization was the general partner of a partnership that acquired and rehabilitated multifamily housing. The corporation intended and contractually agreed…
IRS permits a late election for a tax-exempt controlled corporation to receive taxable-entity depreciation treatment
A corporation wholly owned by a § 501(c)(3) organization was the general partner of a partnership that acquired and rehabilitated multifamily housing. The corporation intended and contractually agreed…
IRS pre-approves a foundation's grant program funding under-covered labor journalism
A private foundation asked the IRS to approve, in advance, the way it selects and monitors grants made to individual journalists. The program funds reporting on under-covered stories about the U.S. wo…
IRS pre-approves a foundation's scholarship program for civic-leadership students
A private foundation asked the IRS to approve, in advance, its procedures for awarding college scholarships. The program funds the full cost of attendance for high school students who have completed a…
IRS approves a private foundation's additional set-aside for delayed renovation project
A private foundation that runs artist and writer residencies asked the IRS to bless a "set-aside" of funds for a specific project: extensive renovations to its property. Private foundations must pay o…
202050017: IRS denies 501(c)(3) status to a golf-collectors membership club
A membership organization of golf enthusiasts and memorabilia collectors, already recognized as a 501(c)(7) social club, applied to be reclassified as a 501(c)(3) charity so that donations to it would…
202050016: IRS denies 501(c)(6) business-league status to a standards-licensing consortium
A member-based organization that develops an open technical standard (for exchanging video and metadata formats) and licenses it to its members applied to be recognized as a tax-exempt "business leagu…
"Tax insurance" premiums covering a charitable-deduction adjustment are not deductible
The IRS Office of Chief Counsel advised on whether a partnership can deduct premiums it pays for a "tax insurance" policy. The policy would reimburse the partners if the IRS later reduced the tax bene…
IRS rules on a Chapter 11 "Type G" bankruptcy reorganization
A corporate group in Chapter 11 bankruptcy asked the IRS for rulings on the tax treatment of its court-approved restructuring, which is designed to qualify as a "Type G" reorganization under § 368(a)(…
IRS grants more time to fix a wrongly checked box on low-income housing credit forms
A partnership that owns a multi-building low-income housing project claimed the low-income housing tax credit under Code § 42. When it filed Forms 8609 for certain buildings, it accidentally checked t…
IRS grants extra time to file a late Section 336(e) election on an S corporation stock sale
A partnership bought all the stock of an S corporation (through two disregarded entities). The buyer, the target, and the selling shareholders intended to make a "Section 336(e) election," which lets …
IRS grants extra time to make a late Section 754 basis-adjustment election
A limited liability company taxed as a partnership had a partner die during a tax year. That death transferred the partner's interest, a situation where a "Section 754 election" is valuable because it…
IRS grants extra time to file a late Section 362(e)(2)(C) basis-reduction election
A consolidated group's foreign structure triggered a deemed asset transfer when one controlled foreign corporation's subsidiary made a check-the-box election to be treated as a corporation. Because th…
IRS rules accident-lawsuit damages, including loss of consortium, are tax-free
A man riding his bike home from work was struck by a car and suffered severe, permanent injuries, including traumatic brain injury. He and his spouse sued the driver's employer, and a jury awarded him…
IRS consents to an early entity-classification change after an ownership shift
A limited liability company started out with a single owner, so by default it was a "disregarded entity" (ignored for tax, its income reported by the owner). It then elected to be taxed as an S corpor…
IRS consents to an early entity-classification change after an ownership shift
A limited liability company started out with a single owner, so by default it was a "disregarded entity" (ignored for tax, its income reported by the owner). It then elected to be taxed as an S corpor…
IRS consents to an early entity-classification change after an ownership shift
A limited liability company started out with a single owner, so by default it was a "disregarded entity" (ignored for tax, its income reported by the owner). It then elected to be taxed as an S corpor…
IRS consents to an early entity-classification change after an ownership shift
A limited liability company started out with a single owner, so by default it was a "disregarded entity" (ignored for tax, its income reported by the owner). It then elected to be taxed as an S corpor…
IRS approves a revised nuclear-decommissioning-fund contribution schedule
A regulated electric utility that owns an interest in a nuclear power plant maintains a "nuclear decommissioning fund," a tax-favored reserve for the eventual cost of dismantling the plant. Under Code…
An environmental-mitigation trust is a qualified settlement fund, and its investment income becomes § 115 tax-exempt once the company stops running it
A company that operates a facility caused an environmental incident and, under a court-approved consent decree with a state attorney general and environmental agency, set up a trust to fund mitigation…
IRS grants a tax-exempt-controlled entity extra time to elect out of "tax-exempt entity" status so its real estate can be depreciated faster
When property is used by a "tax-exempt entity," the tax law forces slower depreciation (the alternative depreciation system) instead of the faster general system. The taxpayer here is an LLC that elec…
Farm "forage box" bodies escape the heavy-truck excise tax, but a semitrailer's chassis components stay taxable
Section 4051 imposes a 12 percent federal excise tax on the first retail sale of truck and trailer bodies and chassis, but § 4053(2) exempts a body "primarily designed" to haul, process, spread, or lo…
IRS approves a private foundation's procedures for awarding educational enrichment grants to individuals
When a private foundation makes grants to individuals for study, travel, or similar purposes, those payments are "taxable expenditures" that trigger an excise tax unless the IRS approves the foundatio…
IRS denies § 501(c)(3) exemption to an amusement-ride and event-rental nonprofit as operated for substantial recreational and commercial purposes
To be tax-exempt under § 501(c)(3), an organization must be operated exclusively for charitable, educational, or similar purposes; a single substantial non-exempt purpose defeats exemption no matter h…
IRS approves a science foundation's multi-year set-aside to fund building a new telescope and observatory
A private foundation generally must pay out a minimum amount each year (its "qualifying distributions") or face an excise tax. Section 4942(g)(2) lets a foundation instead "set aside" money for a spec…
IRS grants reasonable-cause relief for a company that filed as an S corporation for years but never actually filed the S election
To be taxed as an S corporation, a company must file Form 2553 within a set window. Here an LLC's members decided to be taxed as an S corporation and relied on their tax adviser to file the election, …
A "captive" professional corporation counts as a group member and can join the consolidated return, even though a licensed practitioner holds its stock
Many states forbid a regular company from owning a firm that practices a licensed profession (medicine, law, etc.); the stock must be held by a licensed practitioner. Businesses work around this with …
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.