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 a foreign entity 120 days to make a late partnership-classification election
A foreign eligible entity owned primarily by a foreign partnership intended to be classified as a partnership for U.S. federal tax purposes from its formation date but failed to timely file Form…
IRS grants a foreign entity 120 days to make a late disregarded-entity election
A foreign eligible entity wholly owned by a foreign partnership intended to be disregarded for U.S. federal tax purposes from its formation date but failed to timely file Form 8832. It requested…
IRS grants a foreign entity 120 days to make a late disregarded-entity election
A foreign eligible entity wholly owned by a foreign partnership intended to be disregarded for U.S. federal tax purposes from its formation date but failed to timely file Form 8832. It requested…
IRS grants a foreign entity 120 days to make a late disregarded-entity election
A foreign eligible entity wholly owned by a foreign partnership intended to be disregarded for U.S. federal tax purposes from its formation date but failed to timely file Form 8832. It requested…
IRS grants 60 days for a consolidated group to elect out of bonus depreciation
Six subsidiaries in a consolidated group placed qualifying 3-year, 5-year, 7-year, and 15-year property in service during a fiscal year. The group's return did not claim additional first-year…
IRS permits a retroactive qualified electing fund election
A U.S. citizen indirectly held a less-than-10-percent interest in a foreign company that was a passive foreign investment company. The taxpayer's longtime attorney did not identify the company as a…
IRS approves a currency-hedging accounting method for a bond index fund
A proposed regulated investment company planned to track an index of foreign-currency-denominated bonds whose methodology uses rolling one-month currency forwards. Rather than hedge each bond…
IRS approves a private foundation's college scholarship procedures
A private foundation proposed scholarships for graduating high school students from disadvantaged areas who showed financial need and strong academic performance. Awards would cover tuition and…
IRS clarifies the limited scope of an earlier late § 338(g) election ruling
The IRS had previously given a purchaser 45 days to file a late § 338(g) election for a stock acquisition. A question later arose about whether that ruling provided anything beyond extra time to…
IRS approves a charitable lead trust's nonvoting interest in a note-holding LLC
A charitable lead unitrust was entitled to receive part of a revocable trust's residue, which included a promissory note owed by a disqualified person. A direct transfer of that note to the…
IRS treats a late initial REIT return as a timely REIT election
An LLC elected corporate status and intended to elect real estate investment trust treatment beginning on the same effective date. Its accounting firm filed an extension for the LLC's parent fund,…
IRS denies a trader's late mark-to-market election
An individual substantially increased securities trading during part of a year but did not make a timely § 475(f)(1) mark-to-market election. Most of the year's realized trading losses and…
IRS gives a corporation 45 days to file a late LIFO election form
An LLC became an independent C corporation and acquired inventory that its former owner had accounted for under the last-in-first-out method. The corporation continued using LIFO, but two accounting…
IRS consents to a foreign insurer's revocation of its domestic-corporation election
A foreign insurance company had elected under § 953(d) to be taxed as a domestic corporation. Two U.S. corporate shareholders were considering selling their shares to the company's foreign corporate…
IRS grants 60 days for a late success-based-fee safe-harbor election
A corporate group paid contingent financial-adviser fees in connection with a taxable stock acquisition. Its timely return treated 70 percent of the fees as nonfacilitative and deductible,…
IRS gives a limited partnership 120 days to make a late corporate election
A domestic limited partnership intended to be classified as an association taxable as a corporation from a specified effective date. It failed to timely file Form 8832 and requested an extension…
IRS gives a limited partnership 120 days to make a late corporate election
A domestic limited partnership intended to be classified as an association taxable as a corporation from a specified effective date. It failed to timely file Form 8832 and requested an extension…
IRS treats payments for state-granted fund rights as an amortizable § 197 intangible
A regulated company joined a state-created fund by making an initial contribution and committing to annual contributions. Participation gave the company state-granted rights that included…
IRS denies exemption to a business networking group
An organization sought recognition as tax-exempt under § 501(c)(3). Its bylaws described a networking group for business owners associated with a particular nationality, and its activities included…
IRS denies exemption for an insufficiently documented greenspace project
An organization sought § 501(c)(3) status for a proposed greenspace and transportation project in a densely populated urban area. It described planning, financing, construction, and eventual…
IRS approves direct scholarships for public-service graduate fellows
A private foundation supports graduate students at partner universities who commit to federal government service for at least three of their first seven years after graduation. The foundation…
IRS approves a multinational business separation but requires gain for springing liabilities
A publicly traded foreign parent proposed a series of domestic and global transactions to separate one business from another. The domestic steps included contributing business assets to a controlled…
IRS grants 60 days for a success-fee election omitted from an examined return
A corporation paid a contingent advisory fee in a business acquisition and intended to use the Rev. Proc. 2011-29 safe harbor. Its accounting firm prepared the required election statement and the…
IRS grants 60 days to add an omitted success-fee election to an amended return
A corporate group completed a taxable stock acquisition and paid contingent fees to two financial advisers. Its return deducted 70 percent of the fees and capitalized 30 percent, consistently with…
IRS permits an LLC to change from corporate to partnership status within 60 months
An LLC had elected to change from disregarded-entity status to an association taxable as a corporation. Before 60 months had passed, a corporation acquired more than half of the LLC's ownership…
A regulated utility's tax-free spin-off lets it move certain assets to an affiliate that can earn a return on them
A publicly traded utility holding company has assets ("Business 2 Assets") stuck in a regulated subsidiary that, under the regulator's rules, cannot include those assets in its rate base, so the…
202035012: Two subsidiaries left off a parent's consolidated return by mistake can be added by amended return
A corporate group elected to file a consolidated tax return, but two lower-tier subsidiaries (Sub 2 and Sub 3) were accidentally left out: their consent forms (Form 1122) weren't filed with the…
Crypto earned for doing online "microtasks" is taxable ordinary income
People increasingly earn small amounts of cryptocurrency by doing tiny online jobs ("microtasks") on crowdsourcing platforms, such as reviewing images, taking surveys, downloading apps and leaving…
A trust that inherited two IRAs qualifies as a "see-through" trust, so payouts can stretch over the oldest child's life expectancy
A person died (before the SECURE Act's 2020 rules applied) naming a revocable trust as the beneficiary of two IRAs, with the decedent's three children as the trust's beneficiaries. After death, that…
IRS blesses a tax-free corporate split separating two businesses through a divisive merger and a chain of spin-offs
A corporate group that runs two separate businesses (Business A and Business B) through a tall chain of subsidiaries wants to split them apart. The plan converts an operating subsidiary into an LLC…
Fees a fiber-network REIT charges wireless carriers to use its systems are "rents from real property"
A company that plans to elect REIT status builds and owns telecommunications infrastructure, mainly fiber optic cable systems, and lets wireless carriers use dedicated capacity under long-term…
IRS grants extra time to make the "success-based fee" safe-harbor election after the required statement was left off a return
When a company is bought or reorganized, fees that are contingent on the deal closing ("success-based fees") are presumed to be capital costs that must be capitalized rather than deducted, unless…
A farm co-op's gain from selling business land is patronage income, deductible as a patronage dividend
An agricultural cooperative that processes and markets its members' farm products bought land years ago to support that business. The land is no longer needed, and the co-op is selling it at a gain.…
IRS grants an LLC extra time to elect REIT status after its accountants missed the filing deadline
An LLC intended to be taxed as a corporation and to elect real estate investment trust (REIT) status by filing a Form 1120-REIT for its first year. A REIT election is made simply by filing that…
A nonprofit that pools county governments' employee health insurance has income exempt under § 115
A state law set up a nonprofit corporation to let county governments and other public bodies band together to buy group health insurance (and related services, including medical coverage for…
A class-action settlement paid by a REMIC trustee to investors doesn't run through the REMICs, so it triggers no REMIC penalty taxes
A trustee for a group of mortgage securitizations (REMICs) was sued by investors who held "regular interests" in those deals. The investors claimed the trustee breached its duties by failing to…
A private foundation's international art grants count as qualifying distributions and aren't self-dealing, despite a director's earlier art purchase
A private foundation that promotes the arts wants to fund a foreign national arts organization ("X"), which will in turn grant money to overseas museums and galleries to buy and publicly display…
City disability-pension benefits are tax-free as "in the nature of" workers' comp, but only up to half of pay
A city runs a tax-qualified governmental pension plan that pays disability benefits to employees hurt on the job and death benefits to their survivors. The city asked the IRS how those benefits are…
202034012: IRS denies 501(c)(7) social-club status because the applicant never adequately described its activities
An organization applied to be recognized as a tax-exempt social club under IRC § 501(c)(7). Its application was largely blank: no narrative of activities, no contact person, no financial data, and…
202034011: IRS denies 501(c)(3) status to a gated-subdivision homeowners association because it serves private, not public, interests
A homeowners association for a residential subdivision applied for 501(c)(3) charitable status. It collects yearly dues, enforces covenants, and maintains commonly owned property, including a marina…
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…
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…
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…
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…
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.…
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…
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…
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…
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…
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…
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…
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…
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)…
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…
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…
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…
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…
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…
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…
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.