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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202034010: IRS denies 501(c)(6) business-league status to a group of bridal salons that ran a joint sales event
A nonprofit made up of independently owned bridal salons applied to be recognized as a tax-exempt business league under IRC § 501(c)(6). Its main activity was organizing an annual multi-store sales ev…
IRS pre-approves an art-residency foundation's grant procedures, so its artist honoraria aren't taxable expenditures
A private foundation runs a residency program that gives visual artists and art professionals time, space, and a modest honorarium to work on their projects. Because private foundations owe an excise …
202034008: An unexpected cash grant for scholarships qualifies as an "unusual grant," protecting a school-support charity's public status
A 501(c)(3) nonprofit that supports a school by funding scholarships and special-needs projects received an unusually large cash grant from an unrelated entity. The grant was much bigger than the dona…
202034007: A large unexpected bequest counts as an "unusual grant," so it won't cost a public charity its public-support status
A public charity (one that qualifies under IRC §§ 509(a)(1) and 170(b)(1)(A)(vi)) received an unexpected all-cash bequest from a decedent's estate. The gift was so large it threatened the charity's st…
Advance approval of a foundation's art-scholarship grant procedures
A private foundation runs a scholarship program for graduating seniors at one local high school who have shown a commitment to the arts, paying tuition directly to the college where they study art. Be…
Approval of a revised funding schedule for a nuclear plant's decommissioning fund
Owners of nuclear power plants can set aside money for the eventual cost of dismantling the plant and take a tax deduction for those contributions, but only up to an annual "ruling amount" that the IR…
A utility's solar facility sold under market-priced contracts is not "public utility property"
A regulated electric utility plans to buy a solar generating facility to meet large commercial customers' demand for renewable power. Unlike its normal operations, the utility will not put the facilit…
Late-election relief to identify convertible notes and call options as an integrated transaction
Tax rules let a company treat a debt instrument and a related hedge as a single "integrated" transaction, which changes how the interest and cash flows are taxed, but only if the company writes down a…
Surviving spouse may roll over her community-property share of a deceased spouse's IRA held through a trust
A husband and wife in a community property state set up a family trust, and the husband's IRA named the trust as its beneficiary. When the husband died, half of the IRA was the wife's community proper…
Foundation's grants for electric buses are qualifying distributions, not self-dealing with its utility founder
A private foundation was created and is funded entirely by a regulated electric and gas utility, which makes the utility a "disqualified person" the foundation generally cannot benefit. The foundation…
IRS refuses to waive the 60-day IRA rollover deadline for a distribution used to buy a house
Money taken out of an IRA is normally taxable unless it is rolled back into a retirement account within 60 days. A taxpayer, on his real estate agent's advice, pulled cash out of his IRA to make an al…
Automatic 5-year extension to amortize a multiemployer pension plan's unfunded liabilities
Multiemployer pension plans must fund their promised benefits over time, paying down "unfunded liabilities" on set amortization schedules. When a plan is stressed, Section 431(d) lets it apply to stre…
Neighborhood mutual-benefit corporation denied 501(c)(3) status
A group of homeowners incorporated to fight the expansion of a commercial storage facility they say was built next to their subdivision without proper zoning or permits. They applied for 501(c)(3) cha…
Tax-free split-off of a family S corporation held through a terminating trust
A family S corporation runs a single business on land it owns and leases. All of its stock is held by a trust set up by the founder; four siblings are the trust's remainder beneficiaries. The founder …
Late notice extension to treat two subsidiaries as separate lines of business for retirement-plan testing
An employer that runs genuinely separate businesses can test its retirement plans for coverage and nondiscrimination line-by-line instead of across the whole controlled group, but only if it files a n…
Tax-free split-up of a family S corporation into four sibling-owned companies
A family-owned S corporation is run by five siblings who disagree about how to manage the single business it operates. To go their separate ways, the company proposes to split the business into four s…
Utility's cost-of-removal deferred taxes are not protected by the depreciation normalization rules
A regulated electric and gas utility asked the IRS how the depreciation "normalization rules" of Section 168(i)(9) apply to two things: its deferred taxes tied to the cost of removing retired assets (…
Late election to defer the start of a low-income housing credit period
A partnership owns and operates a multi-building low-income housing project and claims the low-income housing credit under Section 42. The credit runs for a 10-year "credit period." A building owner c…
IRS waives the 60-day deadline for two IRA rollovers mishandled by advisers
A married couple relied on a financial adviser and two institutions to place IRA distributions into self-directed IRAs that would invest in a real estate partnership. Instead, a distribution taken by …
IRS waives the 60-day deadline for two IRA rollovers placed in non-IRA accounts
A married couple took distributions from separate IRAs intending to roll the funds into new IRAs that would invest in real estate partnerships. They relied on a financial adviser and financial institu…
202032008: IRS denies 501(c)(3) status to a planned restaurant with limited charitable programs
An organization formed to address food insecurity planned to operate a farm-to-table restaurant open to the public, reserve a small percentage of tables for nonpaying families, train underserved young…
202032007: IRS denies a chamber of commerce's request to change to 501(c)(3) status
A chamber of commerce already exempt under IRC § 501(c)(6) applied to change its status to a 501(c)(3) charity. It conducted historic preservation, public events, volunteer upkeep, and education, but …
202032006: IRS approves a private foundation's procedures for five educational grant programs
A private foundation sought advance approval for five educational grant programs serving students, faculty, artists, writers, and environmental researchers connected with an eleven-institution consort…
202032005: IRS approves a private foundation set-aside for a historic building restoration
A private foundation requested approval to set aside funds for a matching grant to an organization that owned and maintained a historic building. The recipient planned to restore the building's histor…
IRS grants 90 days to file a late consolidated-return election for 52-53-week tax years
A corporate parent filed consolidated returns for an affiliated group whose members included corporations using a 52-53-week tax year. After acquired subsidiaries joined the group, all members' tax ye…
IRS says a foreign subsidiary liquidation will not trigger a branch-tax disposition
A foreign corporate group planned to liquidate a foreign subsidiary into its foreign parent under IRC § 332. The subsidiary indirectly held a U.S. holding company and a disregarded foreign entity, and…
IRS says two renewable-energy facilities are not public utility property
A regulated electric utility planned to develop one solar and battery facility and acquire another under a state renewable-energy program. State law permanently excluded both facilities' capital inves…
IRS treats a regulated investment company's late dividend election as timely
A regulated investment company prepared and signed its Form 1120-RIC with an election under IRC § 855(a) to treat qualifying dividends as paid during the prior tax year. Its fund administrator intende…
202031011: IRS denies 501(c)(3) status to an organization running rodeos and recreational events
An organization formed to promote education, recreation, the Western way of life, and equine sports applied for 501(c)(3) status. It ran rodeos, barrel racing, roping, and other prize-based events thr…
202031010: IRS denies 501(c)(3) status to a for-profit used car dealership
A domestic for-profit limited liability company operating a used car dealership and repair shop applied for 501(c)(3) status. Its only income came from car sales and repair services, and paid director…
202031009: IRS classifies a winding-down foundation's large endowment transfer as an unusual grant
A publicly supported charity expected a large grant from a nonoperating private foundation that was winding down and distributing its assets. The transfer would establish endowed funds benefiting char…
IRS explains annuity tax rules when grantor and non-grantor trusts own the contracts
A life insurer asked how the 10 percent additional tax and the non-natural-person annuity rule apply when a trust owns a nonqualified deferred annuity. For a grantor trust, the IRS ruled that the gran…
IRS allows an estate-owned IRA to be divided into inherited IRAs for trust beneficiaries
An unmarried IRA owner died after her required beginning date and named her estate as the IRA beneficiary. Her will passed the residuary estate, including the IRA, to a trust that divided the assets e…
IRS approves tax-free split-offs separating three sibling shareholders
Three siblings inherited equal shares of a corporation holding several income-producing assets and later disagreed over business strategy. The corporation planned to form two controlled corporations, …
IRS grants 90 days for late consolidated-return and de minimis safe-harbor elections
A domestic parent corporation and its affiliated group failed to timely make two elections with their federal return. One election was to file a consolidated return with the corporation as common pare…
IRS grants 90 days to make a late consolidated-return election
A domestic parent corporation and its affiliated group failed to timely elect to file a consolidated federal income tax return. The parent requested discretionary relief while the assessment periods f…
IRS excludes a municipal-utility service organization's income under IRC § 115
A nonprofit corporation was formed to help municipally owned utilities provide reliable and economical utility service. Its members were public utilities that were political subdivisions or entities w…
IRS allows F reorganization treatment after an invalid interstate domestication
A corporation attempted to domesticate from one state to another and dissolved in its original state. It later discovered that the original state's law did not permit the domestication, leaving it uni…
IRS treats marina docks and storage rents as qualifying REIT property and income
A real estate investment trust planned to acquire interests in marina properties containing floating docks, dry-dock storage, and short-stay cabins. The floating docks were permanently attached by dee…
IRS waives the 60-day deadline for an IRA rollover after a divorce
A taxpayer had relied on her spouse to handle financial and tax matters throughout their 45-year marriage. After their divorce, she received an IRA distribution and deposited it within 60 days into a …
IRS grants more time to elect the success-based fee safe harbor
A corporation paid a success-based fee to a financial adviser in connection with a nontaxable acquisition and merger. Its return deducted 70 percent of the fee and capitalized 30 percent, consistent w…
IRS grants more time for a corrected success-based fee election
A corporation incurred financial adviser fees while acquiring and merging with a related company. Its return preparer applied the Rev. Proc. 2011-29 safe-harbor percentages but omitted the required el…
IRS finds both corporations meet the active-business test after a split-off
An S corporation proposed to transfer the assets of one state operation to a newly formed controlled corporation, then distribute that corporation's stock to one shareholder in exchange for the shareh…
REIT subsidiary does not operate health care facilities managed by an independent operator
A real estate investment trust's taxable REIT subsidiary planned to acquire indirect majority interests in foreign partnerships that owned senior housing and health care communities. The local partner…
IRS grants a partnership more time to elect the success-based fee safe harbor
A partnership incurred success-based transaction fees when a buyer acquired the stock of its two corporate owners. Its tax professional prepared a return that deducted 70 percent of the fees and capit…
IRS approves a foundation's cybersecurity grant procedures
A private foundation proposed a program making grants to individuals who would develop technical solutions to complex cybersecurity problems and contribute to knowledge in cybersecurity and artificial…
IRS approves a foundation's college scholarship procedures
A private foundation proposed a scholarship program for high school seniors and incoming college students attending a U.S. community college, trade or vocational school, or four-year institution. Appl…
IRS approves a foundation's set-aside for a historic restoration grant
A private foundation planned a matching grant to a public charity for rehabilitating and restoring a historic residence, including accessibility and code-compliance improvements. The grant would cover…
Section 265 does not bar a charitable deduction in calculating UBTI
A tax-exempt organization claimed a charitable-contribution deduction when calculating its unrelated business taxable income. Chief Counsel considered whether section 265(a)(1) disallowed the deductio…
IRS allows a late success-based fee election after an attachment was omitted
A limited liability company paid a transaction fee to a financial adviser when its owners sold their interests to an acquirer. The company's return preparer determined that the fee qualified for the R…
IRS grants inadvertent S corporation termination relief after a partnership bought shares
An S corporation's election terminated when a partnership, which was not an eligible S corporation shareholder, acquired some of its shares. After discovering the problem, the corporation and its shar…
IRS approves a foundation's need-based scholarship procedures
A private foundation operated a scholarship program for study at U.S. educational institutions, with funds available for tuition, books, supplies, and room and board. Applicants had to provide transcr…
IRS approves agricultural scholarships for women from farmworker families
A private foundation proposed scholarships for daughters or transgender females from families working in agriculture who would enter a two-year agriculture and natural-resources degree program at a sp…
An original return starts the limitations periods despite a superseding return
Chief Counsel considered which filing starts the three-year limitations periods when a taxpayer files an original return and then a superseding return before an extended due date. The memorandum concl…
IRS approves tax-free treatment for a multinational group's separation of three businesses
A publicly traded parent proposed an 81-step restructuring to separate three worldwide businesses through internal asset transfers, entity elections, mergers, split-offs, and two public spin-offs befo…
IRS approves a set-aside for a historic-site matching grant
A private foundation planned a matching grant to a governmental unit for restoring a property listed on the National Register of Historic Places. The project included historic restoration, safety work…
IRS revokes an animal-rescue organization's exemption for private inurement
An organization recognized under section 501(c)(3) conducted animal rescue, rehabilitation, education, and related public activities. The IRS found that its founder and president had sole control over…
IRS revokes a patriotism organization's exemption for inactivity
An organization was formed to promote patriotism and national unity through a coordinated public event, but the planned event did not occur. The examination found one early year with fundraising activ…
Conservation land's exempt-use value is excluded from a foundation's investment return
A private foundation owned conservation land containing threatened plants, endangered bird habitat, native forests, and other natural resources protected by a conservation easement. It managed the pro…
A new foreign parent's year begins after redomiciliation for the small-redemption rule
A consolidated loss group was indirectly owned by a publicly traded foreign parent that redomiciled through a newly formed foreign corporation. Shareholders exchanged their old-parent shares one for o…
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.