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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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…
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…
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…
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…
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…
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…
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 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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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,…
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,…
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…
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…
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…
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…
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…
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…
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…
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…
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. §§…
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. §§…
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…
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…
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…
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…
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…
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,…
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…
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…
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.