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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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…
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…
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…
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.…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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.…
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…
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…
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…
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…
"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…
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 §…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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"),…
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.