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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Clean-technology consulting organization does not qualify under section 501(c)(3)
An organization sought section 501(c)(3) status to slow climate change by accelerating clean technologies into commercial markets. It sold research, consulting, training, networking, market-access, an…
IRS approves a four-year youth coaching and scholarship program
A private foundation and a co-funder designed a four-year program for high school students combining character development, individualized coaching, entrepreneurial problem-solving, career exposure, c…
Nonunion pension plans approved to use substitute mortality tables
A controlled group requested permission to use plan-specific substitute mortality tables for male and female participants, including disabled participants, in two nonunion defined benefit plans. The t…
Union pension plans approved to use substitute mortality tables
A controlled group requested permission to use plan-specific substitute mortality tables for male and female participants, including disabled participants, in three union defined benefit plans. The ta…
Partnership receives 120 days to make a late § 754 election
A limited liability company taxed as a partnership expected to redeem a deceased member's interest, so it did not make a section 754 basis-adjustment election for the year of that death. The interest …
Government plan switch allowed only when employee contributions stay the same
Two state retirement systems for judges and legislators proposed a one-time election allowing existing members to move from defined benefit tiers to hybrid cash balance plans. The IRS ruled that membe…
Foreign entity receives 120 days to file a late classification election
A foreign eligible entity intended to elect disregarded-entity status for federal tax purposes but inadvertently failed to file Form 8832 on time. The IRS concluded that the entity satisfied the stand…
S corporation may revoke its election out of installment reporting
An S corporation sold most of one operating division for an initial payment plus monthly installments beginning two years later. Its preparer reported the full gain on the sale-year return, which cons…
S corporation receives relief after shares passed to ineligible foreign owners
An S corporation's election terminated when shares began being transferred to two nonresident aliens, who were ineligible S corporation shareholders. After discovering the problem, the corporation and…
Couple receives 60 days to make a late investment-income election
A married couple had investment-interest expense and capital gain from property held for investment, but their longtime accountant did not advise them to elect on Form 4952 to include part of the gain…
Foreign entity receives 120 days to elect disregarded status
A foreign eligible entity failed to file Form 8832 on time to elect disregarded-entity status with its requested effective date. The IRS found that the entity met the standards in Treas. Reg. §§ 301.9…
Foreign entity receives 120 days to elect disregarded status
A foreign eligible entity failed to file Form 8832 on time to elect disregarded-entity status with its requested effective date. The IRS found that the entity met the standards in Treas. Reg. §§ 301.9…
Parties receive extra time to complete a section 336(e) election
A partnership purchased at least 80 percent of an S corporation's stock from its shareholders, after which the target converted to an LLC. The parties intended to make a section 336(e) election so the…
Wind facility is not public utility property, but loss question goes unanswered
A regulated electric utility and an independent investor planned to form a partnership to buy and operate a wind facility intended to qualify for the section 45 production tax credit. The partnership …
State-law limits avoid power-of-appointment transfer taxes for old trusts
A decedent was the trustee and lifetime income beneficiary of two family trusts created before September 25, 1985. State law later limited a trustee-beneficiary's power to distribute trust property to…
State-law limits avoid power-of-appointment transfer taxes for old trusts
A decedent was the trustee and lifetime income beneficiary of two family trusts created before September 25, 1985. State law later limited a trustee-beneficiary's power to distribute trust property to…
State-law limits avoid power-of-appointment transfer taxes for old trusts
A decedent was the trustee and lifetime income beneficiary of two family trusts created before September 25, 1985. State law later limited a trustee-beneficiary's power to distribute trust property to…
Independent senior living facilities are not health care facilities under REIT rules
A real estate investment trust owned unlicensed independent retirement living facilities whose residents were responsible for their own personal and health care needs. The facilities supplied meals, h…
Government plan switch allowed for Tier 2 but not Tier 1 members
Three state retirement systems proposed a one-time election allowing Tier 1 and Tier 2 members to move from defined benefit plans to hybrid cash balance plans. The IRS ruled that Tier 2 members could …
Late QSST elections do not end corporation's S status
Shares of an S corporation were held through revocable grantor trusts established by two owners. After the owners died, one trust transferred shares to another trust and the other trust continued hold…
Estate receives 120 days to make a late portability election
A decedent's estate was not otherwise required to file Form 706 because the represented gross estate and adjusted taxable gifts were below the filing threshold. The estate had unused exclusion availab…
Estate receives 120 days to make a late portability election
A decedent's estate was not otherwise required to file Form 706 because the represented gross estate and adjusted taxable gifts were below the filing threshold. The estate had unused exclusion availab…
Chief Counsel catalogs 121 charitable-contribution cases
Chief Counsel prepared an updated case list covering 121 selected charitable-contribution decisions and orders from 2012 through April 15, 2020. Most entries concern conservation easements, including …
Partner-level basis may be adjusted without reopening the partnership return
Chief Counsel advised that a partner's outside basis is an affected item that may be adjusted in a partner-level examination while accepting the partnership return as filed. The examiner may correct t…
Foundation may fund relocation and housing for STEM interns
A private foundation proposed stipends helping underserved and underrepresented college students pay relocation and housing costs for STEM internships. Eligible students would be rising sophomores, ju…
Foundation's artist residency grants receive advance approval
A private foundation proposed an artist residency program providing time, space, housing, and financial support for artists to create work and exchange ideas. Recipients would generally receive a week…
Exemption revoked for commercial historic-tax-credit business
The IRS revoked a historic-preservation organization's Section 501(c)(3) exemption after concluding that its main activity was a commercial historic-tax-credit business. The organization entered partn…
Cryptocurrency software organization denied section 501(c)(3) status
An organization applied for section 501(c)(3) status to support an open-source cryptocurrency, its blockchain software, a digital wallet, related websites, research, merchant integration, and user sup…
Social club may treat one-time carbon-offset credits as unusual income
A tax-exempt social club owned forestland that its members used for hiking, hunting, fishing, and other outdoor recreation. It proposed entering a state carbon-offset program that required long-term f…
Governmental commodity authority's income excluded under section 115
A nonprofit authority was formed by governmental members to buy, sell, manage, and distribute a redacted commodity on their behalf. Its members were political subdivisions or entities whose income was…
S corporation receives 120 days to make a late QSub election
An S corporation wholly owned one subsidiary, which in turn wholly owned a second subsidiary. The parent had elected to treat the first subsidiary as a qualified subchapter S subsidiary and intended t…
LLC receives 120 days to make a late corporate classification election
A limited liability company intended from its formation to be classified as an association taxable as a corporation for federal tax purposes. It did not timely file Form 8832 to make that entity-class…
Closing agreement still governs payments after section 162(f) amendment
A corporate group had entered a binding settlement agreement requiring perpetual annual payments and later entered an IRS closing agreement governing the payments' tax treatment. The closing agreement…
Estate receives 120 days to make a late portability election
An estate was not otherwise required to file Form 706 because the decedent's gross estate and adjusted taxable gifts were below the filing threshold. The decedent left a surviving spouse and an unused…
LLC receives relief for late corporate classification and S elections
A limited liability company intended to be treated as an S corporation from a redacted effective date but inadvertently failed to file Form 2553 properly and on time. Because an LLC must first be clas…
Foreign entity receives 120 days to make a late disregarded-entity election
A foreign entity wholly owned by a U.S. citizen was formed to hold interests in another entity. It became relevant for U.S. tax purposes on a redacted date and intended to be classified as disregarded…
Foreign entity receives 120 days to make a late partnership election
A foreign entity owned by a U.S. citizen and another investor was formed to hold interests in another entity. It became relevant for U.S. tax purposes on a redacted date and intended to be classified …
Prehire staffing period counts for qualified-plan eligibility and vesting
A company used a staffing agency for workers who typically worked full time under a leasing arrangement for four months before the company hired them directly. Its defined benefit plan required one ye…
Late Form 8996 treated as timely for qualified opportunity fund status
A partnership was formed to operate as a qualified opportunity fund and hired an adviser to prepare its first federal return, request an automatic extension, and file Form 8996. The adviser knew the f…
Proposed split-off and debt exchange qualify for corporate nonrecognition
A publicly traded parent planned to separate one business by contributing its assets and subsidiaries to a newly formed controlled corporation. The controlled corporation would borrow money, transfer …
Estate receives relief for late alternate valuation election
An estate's personal representative intended to elect the alternate valuation method under section 2032 after receiving advice about its potential benefits. The necessary alternate-date appraisals wer…
S corporation receives inadvertent termination relief for missed ESBT elections
Two trusts were eligible S corporation shareholders until a redacted date, when they needed electing small business trust elections to remain eligible. Their trustees did not timely make those electio…
Corporation receives 120 days to file a late S election
A corporation's sole shareholder intended the company to be an S corporation, but Form 2553 was not filed on time. The company requested late-election relief for a redacted effective date. It represen…
Foreign entity receives late disregarded-entity election relief
A foreign entity intended to elect disregarded-entity treatment but did not timely file Form 8832. It represented that it was eligible for the election, acted reasonably and in good faith, did not use…
Taxpayer may elect out of automatic GST allocation for two GRATs
A taxpayer created two grantor retained annuity trusts, transferred company stock to them, and intended to elect out of automatic generation-skipping transfer exemption allocation. The taxpayer's atto…
Missed ESBT elections treated as inadvertent S corporation termination
An S corporation's shares were held by a grantor trust whose deemed owner died. The trust remained an eligible S shareholder for two years after the owner's death, but no ESBT election was made when t…
S corporation received more time to make a QSub election
An S corporation acquired all the stock of a subsidiary and intended to treat it as a qualified subchapter S subsidiary (QSub) from the acquisition date. The corporation failed to file Form 8869 on ti…
Surviving spouse could roll inherited plan benefits into her IRA
A deceased employee's estate was the beneficiary of his qualified retirement plan and section 403(b) annuity plan. His surviving spouse was the estate's sole executor, the sole trustee and beneficiary…
Defective governing terms and missing consent did not prevent S status
A company's S corporation election was ineffective because its operating agreement created more than one class of stock and one shareholder did not sign Form 2553. A later amendment left the same uneq…
Taxpayer received 45 days to file a duplicate Form 3115
An S corporation timely attached an original Form 3115 to its federal return for two accounting method changes affecting its QSub subsidiaries. Its accounting firm was also supposed to send the requir…
Current IRS officials may approve returns made by an agent
Chief Counsel was asked who may approve a request under Treasury Regulation section 1.6012-1(a)(5) for an income tax return to be made by an agent now that IRS district directors no longer exist. The …
IRS employees may show collection documents to an outside notary
Chief Counsel considered whether an IRS employee may use a licensed outside notary when an IRS employee notary is unavailable. Documents such as deeds from administrative or judicial property sales ca…
Changing the identified hedge fund partner did not require a separate audit
A partnership used contracts with a bank to retain investment exposure to interests in a hedge fund that was also taxed as a partnership. The parties reported the bank as the owner and partner, but th…
IRS could not refund OIC payments without an overpayment
A taxpayer made payments toward an offer in compromise that the IRS had rejected, apparently because of an IRS administrative mistake. The payments were properly applied against the taxpayer's existin…
Chief Counsel accepted the taxpayer's income treatment
This brief advice concerns a heavily redacted examination matter indexed by the IRS under underwriting income. The taxpayer maintained that it did not have to include certain amounts in income for two…
Healthcare investor group denied business league exemption
A membership organization of accredited healthcare investors sought exemption as a business league under section 501(c)(6). It screened healthcare startups, selected companies to present at investment…
Foundation scholarship procedures received advance approval
A private foundation proposed scholarships for financially needy international students graduating from high schools in a specified city and attending college in the United States. Applicants would be…
Affiliated group received more time to elect consolidated filing
A domestic parent corporation and its affiliated group failed to make a timely election to file a consolidated federal income tax return. The limitations period remained open, the parent was not tryin…
Closing agreement continued to govern settlement payment deductions
A subsidiary made perpetual settlement payments under an agreement entered before December 22, 2017, and an IRS closing agreement treated those payments as deductible business expenses rather than fin…
Taxpayer received more time for success-fee safe harbor election
A corporation paid contingent financial-advisor fees in connection with a taxable acquisition of all its stock. Its return preparer applied the Revenue Procedure 2011-29 safe harbor, which treats 70 p…
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.