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 grants a partnership extra time to make a late § 754 basis-adjustment election after a partner's death
A § 754 election lets a partnership adjust the tax basis of its assets when a partnership interest changes hands or property is distributed, so the new owner's inside basis matches what they effective…
202048010: Advance approval of a private foundation's college scholarship program under § 4945(g)(1)
A private foundation asked the IRS to approve, in advance, the way it will pick and administer scholarships. Private foundations need this approval because a grant to an individual for study can other…
Late mark-to-market election relief denied because the traders acted with hindsight after large losses
A married couple asked the IRS for extra time under the § 301.9100 late-election rules to make a § 475(f)(1) "mark-to-market" election, which lets a qualifying securities trader deduct trading losses …
120-day extension to file a late entity-classification election so a foreign entity is taxed as a partnership
A foreign business entity that is eligible to choose how it is taxed in the United States wanted to be classified as a partnership rather than as a corporation, but it missed the deadline to file Form…
IRS grants a foreign entity extra time to file a late "check-the-box" election to be treated as a disregarded entity
Under the "check-the-box" rules, an eligible business entity can choose how it is taxed by filing Form 8832; a foreign entity with a single owner can elect to be "disregarded" so it is treated as a br…
IRS grants a foreign entity extra time to file a late "check-the-box" election to be treated as a disregarded entity
Under the "check-the-box" rules, an eligible business entity can choose how it is taxed by filing Form 8832; a foreign entity with a single owner can elect to be "disregarded" so it is treated as a br…
IRS approves a utility's revised schedule of deductible contributions to its nuclear decommissioning fund
Section 468A lets the owner of a nuclear power plant take current tax deductions for money it sets aside in a qualified fund to pay the plant's eventual decommissioning costs, but the yearly deductibl…
IRS grants reasonable-cause relief for a corporation that missed its S election deadline
A corporation that wants to be taxed as an S corporation must file Form 2553 within a set window (generally by the 15th day of the third month of the target year). Here the company's sole shareholder …
IRS disregards a multinational's circular cash-and-note steps, recharacterizing a foreign-branch restructuring as direct contributions down the corporate chain
A publicly traded parent that heads a consolidated group carried out a complex multi-step restructuring to move the assets and liabilities of several foreign branches into a lower-tier foreign partner…
IRS grants a foreign entity extra time to file a late "check-the-box" election to be a disregarded entity
Under the "check-the-box" rules, an eligible business entity chooses how it is taxed by filing Form 8832; a foreign entity with a single owner can elect to be "disregarded," meaning it is treated as a…
IRS grants a late § 108(b)(5) election letting an insolvent company cut depreciable-property basis instead of its net operating losses
When debt is cancelled, the forgiven amount is normally taxable, but § 108 lets an insolvent taxpayer exclude it from income; the price is that the taxpayer must "reduce tax attributes," which by defa…
202047015: A garden-home HOA is denied 501(c)(4) social-welfare exemption because it serves its own lot owners, not the public
A homeowners association for a small garden-home subdivision applied to be recognized as a tax-exempt social welfare organization under Section 501(c)(4). Its money comes from member dues, and it spen…
202047014: A community-festival nonprofit is denied 501(c)(3) status because its social and recreational activities are too substantial
A nonprofit that organizes an annual community festival, and is already recognized as a 501(c)(4) social welfare group, applied to upgrade to charitable status under Section 501(c)(3). The festival fe…
202047013: A farmers' market nonprofit is denied 501(c)(3) status because it mainly benefits its paying vendors
A community farmers' market organization applied for charitable exemption under Section 501(c)(3) using the streamlined Form 1023-EZ. It runs a seasonal market where growers and vendors pay a fee for …
202047012: A business-networking club is denied 501(c)(3) status because it exists to promote its members' businesses
A business-networking group applied for charitable exemption under Section 501(c)(3) using Form 1023-EZ. Its members are business owners who meet weekly to exchange referrals and promote each other's …
202047011: A supporting-organization trust is reclassified as a private foundation for failing the Type II and Type III tests
An irrevocable charitable trust that is exempt under Section 501(c)(3) had been classified as a public charity, specifically a supporting organization under Section 509(a)(3), rather than a private fo…
202047010: A pop-up market organizer for small businesses is denied 501(c)(3) status as a commercial operation
An organization that produces large public events and markets for small-business vendors (makers, artists, chefs, and similar) applied for charitable exemption under Section 501(c)(3). The events are …
202047009: A construction plan-room membership service is denied 501(c)(3) status because it serves its members, not the public
An organization formed to take over a for-profit "plan room" (a facility where construction contractors review building plans and specifications to prepare bids) and convert it to a nonprofit applied …
A union trust's group annuity contract is treated as held for the employees, so § 72(u) does not strip its annuity tax treatment
A collectively bargained (Taft-Hartley) benefit plan buys a group annuity contract to provide post-employment income to covered employees. A trust, run by trustees, holds legal title to the contract a…
Tax-free separation of two businesses through a § 368(a)(1)(D) reorganization and spin-off/split-off
A publicly traded parent corporation wants to split itself into two independent companies, separating one line of business from another. To do this, it forms a new subsidiary ("Controlled"), transfers…
Built-in-gain property leaving a § 721(c) partnership for a new foreign corporation is governed by § 367, with no separate § 721(c) gain
A U.S. corporate group set up a foreign partnership and contributed appreciated (built-in-gain) property to it. Because a U.S. member contributed that property to a partnership in which related foreig…
Winding up a charitable remainder annuity trust by giving the annuity interest to the charity is a gift, not a sale, and not self-dealing
A married couple created a charitable remainder annuity trust (CRAT): they receive a 5 percent annuity for their joint lives, and a private foundation they control is the remainder beneficiary. They w…
A utility's negotiated-rate solar array is not "public utility property," so it escapes the depreciation normalization rules
A regulated electric utility built a solar photovoltaic array and dedicated part of it (a "dedicated renewable energy facility," or DREF) to serve one municipal-airport customer under a special progra…
A REIT's billboard advertising income still counts as "rents from real property" despite short-term and TRS leases
A real estate investment trust (REIT) owns buildings with large billboard signs attached, and it leases the advertising space on those signs to tenants. It has elected to treat the signs as real prope…
Home-buyer cash rebates from a brokerage's referral program are purchase-price adjustments, not income, and need no Form 1099 reporting
An online real estate brokerage matches home buyers with brokers and collects a referral fee out of the broker's commission when a deal closes. Under a promotional program, the brokerage pays a buyer …
Inadvertent-invalidity relief for an S election spoiled by operating-agreement terms that created a second class of stock
A limited liability company elected to be taxed as an S corporation. To be an S corporation, a company can have only one class of stock, meaning all owners must have identical rights to distributions …
IRS approves renewable scholarships for seniors at two local high schools
A private foundation proposed annual scholarships for graduating seniors at two local high schools. School staff would screen applications for academics, activities, community service, and financial n…
IRS denies § 501(c)(3) status to a member health-cost sharing organization
An organization applied for § 501(c)(3) recognition after changing its stated purpose from helping underserved businesses to operating a health-cost sharing program. Members would sign a statement of …
State retiree-benefit trust has excluded income and no annual return requirement
A state agency created a trust to fund health and welfare benefits for retired state employees, their spouses, and dependents. Only the agency may designate contributions, and trust assets may be used…
Parties receive time to file a late § 336(e) election statement
A partnership-taxed purchaser acquired all shares of an S corporation, and the parties intended to elect under IRC § 336(e) to treat the stock sale as an asset sale. A qualified tax professional faile…
Market-priced solar service systems are not public utility property
A company proposed owning and maintaining solar systems on customers' premises under long-term service agreements. Customers would receive a share of the electricity in exchange for monthly fees negot…
Estate receives 120 days to make a late portability election
An estate that was not otherwise required to file Form 706 failed to timely elect portability of the decedent's unused estate and gift tax exclusion to the surviving spouse. Because the filing deadlin…
Corporation receives S status relief after four trusts missed ESBT elections
A parent S corporation created a wholly owned subsidiary and elected qualified subchapter S subsidiary status for it. Four trusts later acquired parent stock but did not timely make electing small bus…
Entire city qualifies as the utility commission's service area for bond rules
A city public utilities commission had generated, transmitted, distributed, and sold electricity to retail customers throughout the city for more than ten years. The city planned to use bond proceeds …
Foreign corporation receives time to elect disregarded-entity status
A foreign private limited corporation was wholly owned by a foreign revocable grantor trust whose settlor and primary beneficiary had become a U.S. citizen. The corporation was eligible to elect disre…
S corporation receives relief after five trusts missed QSST elections
Five trusts acquired shares of an S corporation and met the substantive requirements for qualified subchapter S trusts. Their respective income beneficiaries did not timely make the required QSST elec…
Manufacturing contract uses percentage-of-completion accounting and counts supplier prepayments
A manufacturer contracted to design, build, install, and commission multiple products whose expected production periods each exceeded twelve months. It prepaid a related subsidiary to procure raw mate…
IRS approves stipends for low-income students in an after-school arts program
A private foundation proposed an after-school fine-arts program for high school juniors and seniors from low-income households. Participants would study with art professionals, complete individual and…
Labels do not turn a shareholder's personal expenses into deductible compensation
A closely held corporation paid expenses for its sole shareholder, chief executive, and president, and reported some payments as business expenses while the shareholder reported other amounts as “Othe…
Beneficiary made a taxable gift by directing a foreign foundation's assets elsewhere
A U.S. resident was the primary beneficiary of a foreign foundation and was entitled to all of its assets and liquidation proceeds. When the foundation dissolved, the beneficiary directed its assets t…
S corporation receives relief after a trust missed its ESBT election
An S corporation's shares were held by a grantor trust. After the deemed owner died, the trust remained an eligible S corporation shareholder for two years, but its trustee failed to elect electing sm…
S corporation receives relief after two trusts missed ESBT elections
Two grantor trusts held stock in an S corporation. After their deemed owner died, each trust remained an eligible S corporation shareholder for two years, but their trustees failed to elect electing s…
S corporation receives relief after two trusts failed to elect ESBT status
Two grantor trusts held stock in an S corporation. After their deemed owner died, each trust remained an eligible S corporation shareholder for two years, but their trustees failed to elect electing s…
IRS grants a constructive-ownership exception for an outbound stock exchange
A proposed transaction would reorganize a publicly traded U.S. target and have certain public shareholders exchange new U.S. target stock for stock of a new foreign subsidiary. The general rule in IRC…
LLC receives 120 days to file a late S corporation election
An LLC timely elected to be taxed as a corporation and intended to be an S corporation from the same effective date. It failed, however, to properly and timely file Form 2553. The LLC and its sole sha…
Corporate group receives 90 days to make a late consolidated-return election
A domestic parent corporation and its affiliated group failed to timely make the election to file a consolidated federal income tax return. The parent requested relief under Treas. Reg. § 301.9100-3 b…
Partnership receives 120 days to make a late § 754 election
A limited liability company taxed as a partnership intended to elect under IRC § 754 to adjust the basis of partnership property, but omitted a valid election from its timely filed return. It represen…
Life insurers preserve consolidated status through a holding-company reorganization and spin-off
A partnership placed several life insurance companies and a service company under a new holding company, then one insurer distributed the stock of another insurer to that holding company. The parties …
Pension surplus may move to a replacement plan without employer-reversion tax
A public corporation terminated a defined benefit pension plan and proposed to transfer all surplus assets, after paying benefits and expenses, to its defined contribution plan. At least 95 percent of…
Pro rata corporate spin-off receives nonrecognition rulings
A parent corporation proposed merging one subsidiary into another and then distributing all stock of the surviving controlled corporation pro rata to its two shareholders. The IRS ruled that neither t…
60-day IRA rollover deadline waived for a fraud-scheme victim
A taxpayer withdrew money from her traditional IRA but did not roll it into another retirement account within the 60 days the law normally requires. She explained that she was the victim of an interna…
IRS denies charitable status to an artists' cooperative gallery
A membership cooperative of local artists applied for 501(c)(3) charitable status using the short Form 1023-EZ. It runs a gallery where members pay an initial fee and monthly dues to display and sell …
Determining the fraud penalty in TEFRA syndicated conservation easement cases
This Chief Counsel Advice answers how the IRS applies the 75% civil fraud penalty of Section 6663(a) against a partnership that used a syndicated conservation easement (SCE) transaction, when the part…
Determining the fraud penalty in BBA syndicated conservation easement cases
This Chief Counsel Advice is the companion to the TEFRA analysis, answering how the IRS applies the 75% civil fraud penalty of Section 6663(a) against a partnership that used a syndicated conservation…
Whether an informal probate proceeding suspends the collection deadline
This is internal Chief Counsel advice, written as an email, about whether the deadline for the IRS to collect a deceased taxpayer's unpaid tax (the collection statute expiration date, or CSED) was pau…
Statute of limitations does not bar a § 6676 penalty on a fraudulent refund claim
This short internal Chief Counsel advice answers a timing question about the Section 6676 penalty, which applies to erroneous claims for tax refunds or credits. A taxpayer had filed a return more than…
Late-election relief to claim a hurricane timber loss in the prior year
Taxpayers who operate timber farms had three tracts damaged by a hurricane in a federally declared disaster area. The tax law (Section 165(i)) lets a disaster-area loss be claimed in the tax year befo…
Permission to aggregate scattered mineral royalty interests as single properties for depletion
The taxpayer is a subsidiary of an international mineral-royalty company that owns passive royalty interests (overriding oil and gas royalties in one region, and gold and other mineral royalties in an…
Extra time granted to make a late election to file a consolidated return
A parent corporation heads an affiliated group that wanted to file a single consolidated federal income tax return for one tax year. To do that, the group has to make an election under Treas. Reg. § 1…
S corporation status restored after a trustee missed the ESBT election
A company had validly elected to be taxed as an S corporation. Later, a trust acquired some of its stock. A trust can hold S corporation stock only if it qualifies as an electing small business trust …
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.