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 120 days for a late corporate-classification election
A domestic limited liability company intended to be treated as a corporation for federal tax purposes from a specified date. Because of inadvertence, it did not timely file Form 8832 making the entity…
IRS grants 60 days to file an omitted duplicate Form 3115
A taxpayer timely filed its federal return with the original Form 3115 requesting an automatic change to the cash method of accounting. The return reflected the requested method, but an administrative…
IRS grants a foreign entity 120 days for a late corporate-classification election
A foreign eligible entity intended to elect corporate treatment for U.S. federal tax purposes from a specified date but inadvertently failed to file Form 8832 on time. The IRS concluded that the entit…
Contract-paid annuity advisory fees are not distributions to the owner
A life insurer planned deferred annuity contracts designed for owners receiving ongoing professional advice about allocating contract value among available investment options. The owner would authoriz…
Annuity investment-advice fees paid by the contract are not owner distributions
A life insurer planned three types of deferred annuity contracts for owners who would receive ongoing professional advice about allocating contract value among available options. The owner would autho…
IRS restores S status after a beneficiary missed a QSST election
An S corporation's shares were held by a grantor trust whose deemed owner died. The trust remained an eligible shareholder temporarily, then transferred the shares to a second trust that met the subst…
IRS allows a late election to waive target losses' carryback to a former group
A consolidated group acquired a target corporation that had previously belonged to another consolidated group. The acquiring group intended to elect under the consolidated-return rules to relinquish t…
IRS permits revocation of an inadvertent election out of installment reporting
A taxpayer sold property for cash and a promissory note, with part of the sale eligible for installment reporting under section 453. Its return preparer inadvertently reported all of the gain in the s…
IRS allows a late investment-income election for one open year but denies two closed years
A married couple failed to elect to treat net capital gain from investment property as investment income for three tax years. That election would allow investment interest expense to offset the electe…
REIT accounting adjustments are excluded from income tests and support dividend E&P
A real estate investment trust changed its depreciation and amortization methods for communications-site assets it represented were real property or interests in real property. The changes produced po…
Payments for state-created loss-fund rights produce an amortizable section 197 intangible
A regulated company committed to make an initial contribution and later annual contributions to an optional fund created by state law after a specified damaging event. Participation gave it government…
IRS validates S status after an IRA improperly held corporate shares
A shareholder used IRA funds to acquire a corporation's shares, but the IRA trustee bought and held the stock directly instead of distributing funds to the individual. The corporation's later S electi…
A charity may exclude a one-time liquidating distribution as an unusual grant
A public charity described in section 509(a)(2) expected to receive cash and other liquid assets when another organization dissolved. The distribution was a one-time event, and its size would otherwis…
A private foundation may set aside funds for a planned art museum
A private foundation planned to create a museum for contemporary studio art glass in a recently purchased building. The artwork was tied up in an estate, and renovating the building or finding an alte…
A foundation's artist and musician grant procedures satisfy section 4945
A private foundation proposed two programs offering grants and awards to artists and musicians. One program would fund projects intended to develop artistic or musical careers, while the other would r…
A foundation may make forgivable educational loans to future local medical providers
A private foundation proposed a low-interest educational loan program for students pursuing healthcare careers. Recipients would commit to return to a specified community and work as medical providers…
An umpire association does not qualify as a section 501(c)(4) social welfare organization
An association of certified baseball and softball umpires sought exemption as a section 501(c)(4) social welfare organization after withdrawing an earlier section 501(c)(7) application. It negotiated …
A missed IRA rollover deadline is waived after a custodian mailed notice to an old address
An IRA custodian resigned and assigned real estate investment trust shares to the account owner, creating a distribution. The custodian mailed the resignation notice to the taxpayer's former address, …
A refund traced through a minimum tax credit to an NOL carryback receives the extended filing period
A corporation carried a net operating loss back to an earlier year, which created alternative minimum tax and a minimum tax credit. The corporation then carried that credit forward to a third year, wh…
A company may make retroactive QEF elections after its tax adviser missed PFIC status
A diversified investment management company held interests in four foreign funds that were passive foreign investment companies. The company hired an accounting firm for federal tax advice and return …
A retirement-services company may make retroactive QEF elections for six PFICs
A retirement-services company in a consolidated group invested in six foreign entities that were passive foreign investment companies. The company's internal tax department prepared the group's federa…
Parties receive extra time to make a section 336(e) election for an S corporation stock sale
Shareholders sold all the stock of an S corporation to purchasers and intended the transaction to be treated as an asset sale under section 336(e). The parties did not timely sign the required binding…
A mining group receives extra time to elect out of bonus depreciation
A consolidated mining group decided not to claim additional first-year depreciation for any class of qualified property placed in service during a loss year. Its return reflected that decision, but th…
Employees may allocate employer contributions between an HRA and retirement plan without creating a cash deferral election
A union maintained a health reimbursement arrangement and a qualified profit-sharing plan under collective bargaining agreements. The plans proposed allowing employees to make an annual irrevocable ch…
A political advertising organization does not qualify under section 501(c)(4)
An organization sought section 501(c)(4) status for public education, advocacy, grantmaking, and political activities. It distributed television advertisements, direct mail, and internet communication…
A student fishing club does not qualify under section 501(c)(7) because nearly all income comes from nonmembers
A university fishing club sought exemption as a section 501(c)(7) social club. Its members competed in fishing tournaments, organized a public tournament, volunteered at community events, promoted fis…
A dog training club does not qualify as a section 501(c)(3) educational organization
A dog club sought recognition as a section 501(c)(3) educational organization. It held meetings, maintained a practice facility, offered obedience, agility, and scent-work classes, conducted trials, a…
A commercial tour operators' association does not qualify under section 501(c)(3)
An association of commercial tour operators was formed to manage tours and related facilities on government-owned land. Its members had to pay for park maintenance, insurance, utilities, and other cos…
The IRS prospectively narrows a prior nonrecognition ruling for cash contributed to subsidiaries
The IRS previously issued a ruling on a corporate separation involving a contribution, distribution, initial public offering, and use of cash proceeds to repurchase stock or repay group debt. That rul…
A new fund's late RIC and dividends-paid elections are treated as timely
A new series of an investment company intended to qualify as a regulated investment company and to make a section 855 election for dividends declared and distributed after year-end. The company respon…
An S corporation remains valid after beneficiaries missed three QSST elections
Three shareholders originally placed their S corporation shares in grantor trusts. When one shareholder died, that shareholder's trust divided into three trusts intended to qualify as qualified subcha…
A transfer between two trusts owned by the same beneficiary is not recognized as a sale
An irrevocable family trust contributed stock to an LLC taxed as a partnership and later transferred part of its LLC interest to a subtrust for one beneficiary. The subtrust proposed selling part of t…
A company receives extra time to attach the success-based fee safe-harbor election
A company paid two financial advisers success-based fees in connection with the sale of its business. Its tax consultant recommended the Rev. Proc. 2011-29 safe harbor, and its return deducted 70 perc…
A retail theft analytics subscription service does not qualify under section 501(c)(3)
A nonprofit proposed a subscription database and analytics service to help retailers and law enforcement identify stolen goods, reduce return fraud, and analyze organized retail theft. It planned to c…
A farmers' market does not qualify under section 501(c)(3) because it primarily benefits vendors
A nonprofit farmers' market sought section 501(c)(3) status based on goals involving healthy food access, sustainable agriculture, community development, and public education. It operated regular mark…
A medical-office condominium association does not qualify under section 501(c)(4)
A condominium association for a medical office building sought exemption as a social welfare organization under section 501(c)(4). Its members were the unit owners, and assessments paid for landscapin…
IRS approves grants for volunteer public safety training
A private foundation proposed educational grants to help volunteer public safety service providers obtain the training, education, and skills needed for their work. Eligible applicants would generally…
IRS approves scholarships for graduates of rural high schools
A private foundation proposed a scholarship program for graduates of three rural high schools attending qualifying post-secondary institutions. Awards would cover remaining attendance costs after fami…
A mutual-assistance membership group does not qualify under section 501(c)(3)
A membership organization composed of people of a shared ethnicity collected recurring fees and made payments to members for sickness, financial distress, funerals, births, marriages, and first-home p…
A fund's late RIC and dividends-paid elections are treated as timely
A new series of an investment company intended to qualify as a regulated investment company and make a section 855 election for dividends declared and distributed after year-end. The company responsib…
Three foreign insurers receive more time to elect domestic treatment
Three foreign insurance companies writing U.S. risks intended to elect under section 953(d) to be treated as domestic corporations for federal tax purposes. Their professional adviser prepared returns…
A brand-license termination payment need not be capitalized for one replacement agreement
A partnership group paid to terminate a sublicense allowing it to use an individual's name and related brand rights, then entered three new agreements concerning the brand. One replacement license was…
IRS grants 60 days to file an IC-DISC election not found in its records
A domestic corporation was formed to operate as an interest charge domestic international sales corporation for a partnership that manufactured and sold products. Its accounting firm prepared Form 487…
S corporation status continues after an inadvertent partnership ownership period
An S corporation sold part of its ownership to a limited liability company taxed as a partnership. Because a partnership is not an eligible S corporation shareholder, the transfer terminated the corpo…
IRS consents to an early entity-classification change after an ownership shift
A foreign eligible entity originally elected to be disregarded and later elected association status taxable as a corporation. It then underwent a change of more than 50 percent in ownership and sought…
IRS permits a foreign entity's early return to disregarded status
A foreign eligible entity initially elected to be disregarded and later changed its classification to an association taxable as a corporation. After a greater-than-50-percent change in ownership, it a…
Ownership change permits an early return to disregarded status
A foreign eligible entity first elected disregarded status and later elected to be an association taxable as a corporation. It then experienced a change of more than 50 percent in ownership and reques…
IRS consents to another early disregarded-entity election
A foreign eligible entity had elected disregarded status, subsequently elected association status taxable as a corporation, and then underwent a greater-than-50-percent ownership change. It requested …
IRS allows an early check-the-box change after new ownership
A foreign eligible entity had previously changed from disregarded status to association status taxable as a corporation. More than half of its ownership then changed, and it sought consent to elect di…
Consolidated-group members receive 60 days to make a value-restoration election
A parent corporation underwent an ownership change while it and a subsidiary were members of the same controlled group. The section 382 rules reduced the parent's value by the value of its subsidiary …
Investor receives relief for a missed qualified opportunity fund deadline
An S corporation shareholder sold company stock in a transaction subject to a section 338(h)(10) election and intended to reinvest eligible gain in qualified opportunity funds. His tax attorney advise…
Estate receives 120 days to make a late portability election
An estate that was not otherwise required to file an estate tax return failed to timely file Form 706 and elect portability of the decedent's unused exclusion amount to the surviving spouse. Because t…
Partnership-style operating agreements caused an inadvertent S corporation termination
An LLC elected S corporation treatment but later adopted two successive operating agreements containing partnership-style capital-account, allocation, distribution, and liquidation provisions. Those g…
Late ESBT election receives inadvertent S corporation termination relief
A trust acquired shares of an S corporation but its trustee did not timely elect electing small business trust status. Without that election the trust was an ineligible shareholder, terminating the co…
Mining group receives relief for depreciation and expenditure-amortization elections
A consolidated mining group intended both to elect out of additional first-year depreciation for all qualified-property classes and to amortize mining exploration and development expenditures over ten…
Taxpayers receive 60 days to revoke an excessive investment-income election
Two retired taxpayers self-prepared their return and elected to treat qualified dividends and net long-term capital gain as investment income so they could deduct investment interest expense. They ina…
Estate receives 120 days to make a late QTIP election
A revocable trust became irrevocable at the decedent's death and divided property between a survivor's trust and a marital trust. The marital trust required all net income to be paid to the surviving …
Invalid S corporation and QSub elections receive inadvertent-election relief
A business trust intended to elect corporate and S corporation status and to elect three subsidiaries as qualified subchapter S subsidiaries. The forms were invalid because their signature dates prece…
Post-annuity trust distributions and expense reimbursement are not self-dealing
A charitable lead annuity trust paid an increasing annuity to a charity whose interest was later divided equally between two foundations. After the final annuity payments, the surviving-spouse trustee…
IRS approves need-based scholarships for sports, arts, and education
A private foundation proposed scholarships for education and training of youth involved in soccer and other sports and for underprivileged people developing talents in the arts, education, or athletic…
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.