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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Child-care provider payments are not exempt from levy
A public-assistance program paid participating child-care providers directly on behalf of eligible low-income working families. The IRS levied the payments owed to a day-care center to collect the…
UPS delivery does not satisfy notice-of-sale rules
A notice of nonjudicial sale was sent by UPS to the mailroom at the IRS address listed in Publication 4235. Chief Counsel concluded that this delivery did not satisfy IRC § 7425(c), which requires…
Vested pension rights can be levied before payout
Chief Counsel addressed a field question about levying a taxpayer’s pension-plan interest before the taxpayer had requested a distribution and before any proceeds existed. The advice states that the…
Lawyer-regulation office cannot receive return information
Chief Counsel advised that IRS personnel could not disclose a taxpayer’s return information to a state lawyer-regulation office without the taxpayer’s consent. Section 6103 permits some disclosures…
Untimely Form 1139 does not preserve a refund claim
A taxpayer filed a second Form 1139 more than one year after the close of the loss year. Chief Counsel concluded that the application was untimely under section 6411 and could not be treated as an…
Prompt paper filing preserves a rejected e-filed return
A corporation electronically transmitted an amended return before the assessment period expired, but the IRS system rejected it because that tax year was no longer accepted electronically. The…
Perjury jurat controls validity of false OID returns
A taxpayer filed returns reporting false original-issue-discount income and withholding and sought fraudulent refunds. Paper submissions on which the taxpayer crossed out the declaration under…
Integrated fracking-water services produce qualifying income
A publicly traded partnership planned to acquire a business that supplied water for hydraulic fracturing and handled the resulting waste fluids. The operations used specialized equipment and…
Selecting a tax matters partner after entity partners dissolved
Chief Counsel advised an examination team handling a TEFRA partnership proceeding whose general partners were entities that had dissolved. The two indirect partners with interests in the proceeding…
False withholding credits create an underpayment subject to fraud penalties
Chief Counsel advised that overstated withholding credits on a false Form 1099-OID can create an underpayment subject to the section 6663 civil fraud penalty. Treasury Regulation section 1.6664-2…
Overstated S corporation costs did not create omitted gross income
Chief Counsel considered whether an S corporation shareholder triggered the six-year assessment period by overstating cost of goods sold and the resulting loss. For section 6501(e), the relevant…
Settlement debt write-offs required Forms 1099-C
A financial institution settled a class action challenging collection notices and agreed to waive deficiency balances owed by class members. It argued that state law, rather than an identifiable…
Partnership unit cancellations are not treated as transfers
A limited partnership used units of a related publicly traded partnership for employee incentive awards. To maintain a one-to-one relationship between the entities’ outstanding units, the…
Fuel transportation and marketing income qualifies under section 7704
A partnership planning an initial public offering expected to become a publicly traded partnership. It earned income from transporting, storing, and marketing a redacted type of fuel, primarily…
Successive pawn loans are related for Form 8300 reporting
Chief Counsel considered repeated pawn loans between the same pawnbroker and borrower using the same collateral. Each new loan replaced the unpaid principal of the prior loan, allowing the borrower…
Foreign tax credit refund claim missed the ten-year deadline
Chief Counsel analyzed a corporate refund claim based on foreign tax credits that was filed about three weeks after section 6511(d)(3)(A)’s ten-year deadline. Earlier conversations and emails told…
NOL refund claim remains timely after foreign tax election change
A corporation first claimed a foreign tax credit for one year and used a later net operating loss carryback to offset that year’s remaining tax. It then timely changed its foreign tax treatment from…
Foreign tax election change leaves NOL refund claim timely
A taxpayer originally used a foreign tax credit and carried a later net operating loss back to the same year. It later changed the foreign tax treatment to a deduction, reducing regular tax and…
State-law write-off does not require Forms 1099-C
A financial institution agreed to write off deficiency balances as part of settling a class action over legally defective presale notices. The court’s ruling and the settlement acknowledged that…
Provider payments require reporting, but not under section 6050W
A company used separate agreements with customers and service providers, set the prices charged to customers, and paid providers under its own contracts. The IRS ruled that the company was not…
Excessive refund claims may trigger section 6676 penalty
During an examination, a taxpayer submitted refund claims based on the section 45O agricultural chemicals security credit, although the original returns had not claimed refunds. Counsel advised that…
No limitations period bars pre-AJCA section 6707 penalties
Counsel considered whether the Supreme Court's Gabelli decision supported a limitations period for section 6707 penalties imposed before statutory changes made by the American Jobs Creation Act. The…
Legal advice may be shared with Counsel staff who need it
Counsel confirmed a disclosure decision reached during a telephone conversation. A PDF copy of legal advice could be sent to other Counsel personnel who had a need to know the information. The…
Energy infrastructure revenue qualifies for publicly traded partnership rules
An energy company planned to place infrastructure assets and business interests into a partnership that would become publicly traded after an initial public offering. The partnership expected income…
Prior political-subdivision ruling receives prospective-only effect
An earlier technical advice memorandum ruled that a bond issuer was not a political subdivision during a specified period for Treasury Regulation section 1.103-1(b). The issuer requested relief…
Produced-water and skim-oil income qualifies for partnership exception
A limited partnership planned a public offering and expected to earn fees from handling saltwater produced during oil and gas exploration and production. Its dedicated system gathered, transported,…
LNG terminal contract income qualifies under section 7704
A limited partnership planned a public offering and would indirectly own interests in a liquefied natural gas terminal. The terminal regasified imported LNG and was adding facilities to liquefy…
IRS may rely on LLC manager's officer to sign corporate return
A taxpayer LLC was managed by another LLC whose sole remaining member acted through an officer. Taxpayer's counsel represented that the officer could act for the taxpayer. The IRS advised that…
IRS may disclose limited FFI data for vendor demonstration
The IRS wanted a prospective technology vendor to demonstrate services for identifying gaps in FATCA registration and compliance. The demonstration required access to a foreign financial institution…
Pawnshop option fee counts as retail-sale payment for cash reporting
A Colorado pawnshop used contracts in which it advanced money for delivered property while the customer retained a time-limited option to cancel the transaction. The IRS viewed the option payment as…
Tax matters partner must have authority to act for entity
This very short email gives affirmative answers to questions that do not appear in the released document. The first answer is conditional: Entity 2's tax matters partner must be a general partner or…
Post-assessment-deadline payment is refundable only within section 6511
A payment made after the assessment limitations period expires is an overpayment even if no tax was actually due. The IRS has authority to refund that payment, and a taxpayer filing a late amended…
Tax Court petition may be shared with state bar, but return information may not
The IRS considered what material it could provide to state bar disciplinary authorities. A taxpayer's return or return information could not be disclosed without the taxpayer's consent. A filed Tax…
IRS deed is exempt from county transfer tax
The IRS sold seized California real property and issued a deed after the taxpayer's redemption period expired. A county recorder refused to record the deed because it lacked information about the…
Later combat-zone status does not undo deficiency notice
The IRS issued a notice of deficiency before learning that the taxpayer qualified for combat-zone relief under section 7508(a). Chief Counsel advised that the notice should not be withdrawn and the…
Limitations period bars excess-interest refund suit
The IRS had paid an excessive refund of overpayment interest, and the taxpayer would not repay it voluntarily. No same-tax, same-period offset was available, leaving an erroneous-refund suit as the…
Service company was not a third-party settlement organization
A service company separately contracted with customers and with providers of goods and services. It set the prices charged to customers, paid providers under separate terms, and did not merely…
Taxpayer cannot repay prior interest-netting benefit to choose better periods
Chief Counsel considered whether a taxpayer could voluntarily repay a valid interest-netting benefit and then apply netting to different periods with a larger interest-rate difference. The advice…
Consistent-settlement rights do not cover partner-level penalty defenses
Chief Counsel addressed consistent-settlement rights for penalties in a TEFRA partnership matter. The advice stated that section 6224(c) does not give another partner a right to a consistent…
Outside-basis components are generally partnership items
Chief Counsel explained which parts of a partner's outside basis are partnership items under the TEFRA rules. Contributions, distributions, shares of income and loss, and shares of partnership…
Only the LLC member-manager qualified as tax matters partner
Chief Counsel analyzed who could serve as tax matters partner for a manager-managed limited liability company subject to TEFRA. The LLC agreement and state law vested management authority in one…
Levy proceeds could not be returned after nine-month request period
Chief Counsel considered whether the IRS could return money collected by levy. The taxpayer did not request return of the funds within nine months after the levy. Based on that delay and the facts…
Exemption revoked for inurement and cessation of operations
A religious organization received donations to publish daily devotionals and produce a television program. The IRS examination found that organization funds paid its president's personal shopping,…
Court clerks generally need not issue Forms 1099 for specified disbursements
Chief Counsel considered three information-reporting questions involving county clerks of court. A clerk that forwards garnished funds to a creditor's attorney is not the payor under sections 6041…
State-law write-off does not require Forms 1099-C
A financial institution settled a consumer class action over legally deficient notices connected with deficiency balances. The court-approved settlement barred collection and allowed offsets against…
Consolidated-group CDP notices must identify subsidiaries
Chief Counsel advised that collection due process notices involving a consolidated group must name the common parent and list the known subsidiaries from which the IRS may collect. Group members are…
Gabelli did not limit section 6707 penalty assessments
Chief Counsel advised that the Supreme Court’s Gabelli decision did not establish a limitations period for assessing pre-amendment section 6707 tax-shelter registration penalties. Gabelli…
IRS could amend deed to correct wrong plat number
An IRS deed for seized and sold real property referred to the wrong plat number. The certificate of sale and plat book showed that the IRS had sold plat 4, while the taxpayer had never owned the…
Non-TEFRA partners had to extend their own assessment periods
Chief Counsel advised that no extension was needed from a partnership entity when the IRS was not assessing tax against the entity itself. Because the partnership was outside TEFRA, each partner…
Section 6701 penalty applied once per plan application
An employee-plan professional submitted false Forms 5307 and supporting documents for multiple retirement plans, causing sponsors and participants to claim tax benefits from plans that were not…
Tier partnership bankruptcy does not end TEFRA treatment for indirect partners
Chief Counsel advised that a tier partnership's bankruptcy does not convert partnership items belonging to indirect partners or make the TEFRA partnership procedures inapplicable. The memorandum…
Corporation sole counts as a C corporation for TEFRA small-partnership exception
Chief Counsel considered whether a state-law corporation sole affected a partnership's eligibility for the TEFRA small-partnership exception. The advice explains that any corporation other than an S…
IRS consent to a foreign tax matters partner depends on U.S. access to records
Chief Counsel advised that a partnership may designate a foreign tax matters partner only with the Secretary's permission. The IRS generally should withhold consent when an overseas partner has no…
Insurance investment portfolios may elect partnership status
A consolidated group proposed having several segregated portfolios of a mutual fund elect partnership classification. The portfolios supported variable life insurance and annuity contracts, and…
Public-benefit rebates need no information reporting
A political subdivision created a rebate program to pay part of property owners' costs for installing equipment on designated private properties. The installations furthered governmental purposes by…
Form 872 can further extend an open partner assessment period
Chief Counsel advised that Form 872 extends a partner's section 6501 assessment period for all covered items, including partnership items specified in the form. Sections 6229(a) and 6229(d) may also…
Post-lien bank advance lacks priority without statutory protection
Chief Counsel agreed that a bank disbursement made after the filing of a notice of federal tax lien was a future advance. The advance would not take priority over the federal tax lien unless it…
Partnership withholding claim required an AAR
Chief Counsel advised that section 1446 withholding is a partnership item governed by the administrative adjustment request procedures. The partnership should have filed its claim on Form 8082 or…
Late return preserved three-year refund lookback
Chief Counsel concluded that a refund claim filed as part of the taxpayer's return was timely because the claim and return were the same filing. Under section 6511(a), the claim was therefore filed…
Liability-related IRS materials are return information
Chief Counsel advised that the definition of return information is broader than information appearing on a tax return. It includes material the IRS gathered, collected, or created while determining…
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.