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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Missed ESBT election ruled inadvertent, so a company keeps its S corporation status
A company had elected S corporation status, and one of its shareholders was a grantor trust, which is a permitted shareholder. When the grantor and the trustees waived certain trust rights, the trust …
LLC partnership gets late relief to make a Section 754 basis-adjustment election
A state limited liability company taxed as a partnership timely filed its return for the year in which interests were transferred, but inadvertently left off the election under IRC § 754. That electio…
Partnership joint venture gets late relief to make a Section 754 basis-adjustment election
A joint venture taxed as a partnership timely filed its return for the year in which partnership interests were transferred, but forgot to attach the election under IRC § 754. A § 754 election lets a …
Trust gets extra time to make the 65-day election for a late-year distribution
A trust made a distribution to a beneficiary within the first 65 days of a tax year and wanted to treat it, under IRC § 663(b), as if it had been paid on the last day of the prior year. That election …
Late QSST election excused, so a company keeps its S corporation status
A small business had elected to be taxed as an S corporation, and one of its shareholders was a trust set up by a married couple who were its grantors, beneficiaries, and trustees. When the first spou…
Pension sponsor approved to use substitute mortality tables for its salaried plan
A company that sponsors defined benefit pension plans asked the IRS for permission to use its own "substitute" mortality tables, rather than the standard IRS tables, when calculating the minimum requi…
Pension sponsor approved to use substitute mortality tables for its hourly plan
A company that sponsors defined benefit pension plans asked the IRS for permission to use its own "substitute" mortality tables, rather than the standard IRS tables, when calculating the minimum requi…
Approves a foundation's statewide college-scholarship procedures under 4945(g)
A private foundation runs a named scholarship program that awards grants to high school seniors across one state who are heading to a two- or four-year college. It asked the IRS to approve its award p…
Approves a private foundation's scholarship grant procedures for students in two countries
A private foundation asked the IRS to approve, in advance, the procedures it uses to award scholarships to students in two countries. Private foundations normally owe an excise tax on grants to indivi…
Grants a married couple a late election to group all rental real estate as one activity
A married couple, one of whom was in a real property business, missed the election under § 469(c)(7) that lets a qualifying taxpayer treat all rental real estate as a single activity for the passive a…
Grants a corporation a late safe-harbor election for success-based deal fees
A corporation that was acquired in a merger paid success-based fees to a financial adviser and a legal adviser, fees owed only because the deal closed. Tax law presumes such fees must be capitalized (…
Grants a married couple a late election to group all rental real estate as one activity
A married couple, one of whom worked in a real property business, wanted to treat all of their rental real estate as a single activity for the passive activity loss rules under § 469(c)(7). Making tha…
Late disregarded-entity election approved before automatic partnership classification
A domestic limited liability company began with one member and later added members. It intended to be disregarded as separate from its owner from formation and then treated as a partnership when the a…
Late S corporation election treated as timely
A corporation intended to be an S corporation from its formation date and filed returns consistently with that treatment. It did not timely file Form 2553. The IRS found reasonable cause for the misse…
Partnership receives time to make a late section 754 election
A limited partnership had partnership interests transferred during a tax year and timely filed its return, but inadvertently omitted the section 754 election. That election permits basis adjustments u…
Community property trust receives income, gift, estate, and basis rulings
A married couple transferred community property to an irrevocable trust that could benefit them, their descendants, and other named beneficiaries through powers shared with a power-of-appointment comm…
Community property trust receives income, gift, estate, and basis rulings
A married couple transferred community property to an irrevocable trust that could benefit them, their descendants, and other named beneficiaries through powers shared with a power-of-appointment comm…
Community property trust receives income, gift, estate, and basis rulings
A married couple transferred community property to an irrevocable trust that could benefit them, their descendants, and other named beneficiaries through powers shared with a power-of-appointment comm…
Community property trust receives income, gift, estate, and basis rulings
A married couple transferred community property to an irrevocable trust that could benefit them, their descendants, and other named beneficiaries through powers shared with a power-of-appointment comm…
Community property trust receives income, gift, estate, and basis rulings
A married couple transferred community property to an irrevocable trust that could benefit them, their descendants, and other named beneficiaries through powers shared with a power-of-appointment comm…
City reimbursements qualify for a REIT's 95 percent income test
A real estate investment trust indirectly owned a mixed-use project and acquired rights under an economic development agreement to receive city reimbursements for public improvements. The reimbursemen…
IRS approves a private foundation's training-center set-aside
A private foundation that helps economically disadvantaged youth planned to build a training center while continuing its scholarship program. The project required land acquisition, construction, local…
IRS approves a private foundation's scholarship procedures
A private operating foundation proposed one-time scholarships for undergraduate and graduate students who belonged to the organization. It publicized the program, excluded insiders and prior recipient…
IRS approves a scientific-research grant set-aside
A private foundation sought to set aside funds for a new scientific research grant program focused on cancer, aging, and regeneration. The program required time to publicize the opportunity, evaluate …
IRS approves need-based scholarship procedures
A private foundation proposed scholarships for students attending primary, secondary, undergraduate, and graduate schools. It would publicize the program locally and select recipients based on financi…
IRS revokes exemption for failing the organizational and operational tests
An organization received section 501(c)(3) recognition through Form 1023-EZ, but an IRS examination later reviewed its governing documents and activities. The IRS found that the articles described rel…
Farmers' market denied agricultural organization exemption
An association of farmers and gardeners applied for exemption as an agricultural organization under section 501(c)(5). It operated a year-round farmers' market, charged vendors for space, assigned sta…
Restaurant denied section 501(c)(3) exemption for commercial operations
An organization sought retroactive reinstatement of section 501(c)(3) status after an earlier exemption was revoked for failing to file required returns. Its articles contemplated international school…
Charity's support for an affiliated PAC would violate campaign and private-benefit rules
A section 501(c)(3) healthcare organization proposed to let its taxable subsidiary establish a political action committee. The charity would provide employees, facilities, administrative services, and…
Payments to acquire vehicle and equipment leases must be capitalized
A financial business purchased automobile leases from dealers and equipment leases from manufacturers or vendors. It paid dealers an excess-markup premium tied to a lease's expected profit and paid eq…
Environmental remediation tax credits count as qualifying REIT income
A real estate investment trust indirectly owned a partnership developing a mixed-use project on a contaminated site in an economically distressed area. A state program awarded transferable tax credits…
Environmental remediation tax credits count as qualifying REIT income
A real estate investment trust indirectly owned a partnership developing a mixed-use project on a contaminated site in an economically distressed area. A state program awarded transferable tax credits…
Estate receives 120 days to make a late QTIP election
A decedent left the residuary estate in a trust that paid all net income to the surviving spouse at least quarterly for life, with the remainder later held for descendants. The estate timely filed For…
S corporation receives 120 days to file a late QSub election
An S corporation intended to elect qualified subchapter S subsidiary treatment for a wholly owned subsidiary but failed to file Form 8869 on time. It reported all relevant tax years consistently with …
Partnership receives 120 days to make a late section 754 election
A partnership distributed property to a retiring partner and intended to elect under section 754 to adjust partnership property basis, but it inadvertently omitted the election from its timely return.…
Parties receive 45 days to file a late section 336(e) election statement
Purchasers acquired all stock of an S corporation from its shareholders, and the parties had timely signed a binding agreement to make a section 336(e) election that would treat the stock sale as an a…
Late QSST election does not end corporation's S status
Shares of an S corporation were transferred to a trust eligible to be a qualified subchapter S trust, but the beneficiary inadvertently failed to make the required QSST election on time. That failure …
Currency gain from passive investment entities is qualifying partnership income
A limited partnership invested in corporate portfolio companies, often through partnership or disregarded holding companies that served only as passive conduits. Some holding companies used a differen…
Consolidated group receives 60 days to correct its Form 3115 filing
A corporate group intended to use the automatic-consent procedures to change its accounting method for certain prepaid expenses to the 12-month rule. Its tax adviser attached Form 3115 to the timely e…
Foreign entity receives 120 days to make a late disregarded-entity election
A foreign eligible entity failed to file Form 8832 on time to elect disregarded-entity status from its intended effective date. The IRS found that the entity satisfied the standards for regulatory-ele…
Foreign entity receives 120 days to make a late disregarded-entity election
A foreign eligible entity failed to file Form 8832 on time to elect disregarded-entity status from its formation date. The IRS found that the entity satisfied the standards for regulatory-election rel…
Foreign entity receives 120 days to make a late partnership election
A foreign eligible entity failed to file Form 8832 on time to elect partnership status from its formation date. The IRS found that the entity satisfied the standards for regulatory-election relief and…
Foreign entity receives 120 days to make a late disregarded-entity election
A foreign eligible entity failed to file Form 8832 on time to elect disregarded-entity status from its formation date. The IRS found that the entity satisfied the standards for regulatory-election rel…
Foreign entity receives 120 days to make a late disregarded-entity election
A foreign eligible entity failed to file Form 8832 on time to elect disregarded-entity status from its formation date. The IRS found that the entity satisfied the standards for regulatory-election rel…
Passive-income termination of S status was inadvertent
An S corporation had accumulated C corporation earnings and profits and, for three consecutive years, received passive investment income exceeding 25 percent of gross receipts. Those facts automatical…
Estate receives 120 days to allocate unused GST exemption
A married couple created a revocable trust that later divided into separate trusts, and the trust became irrevocable at the surviving spouse's death. The estate timely filed Form 706 but failed to all…
Missing ESBT election does not invalidate corporation's S status
A trust held stock when a corporation's S election was supposed to take effect, but the trustee had not elected electing small business trust treatment. The trust therefore was not an eligible S corpo…
Estate receives 120 days to elect portability of unused exclusion
A decedent's estate was below the estate tax filing threshold, and the surviving spouse inherited the estate through the marital deduction. The spouse hired an experienced accountant to advise on the …
Two pension plans may use substitute mortality tables for annuitants
A taxpayer asked to use plan-specific substitute mortality tables for the combined male and female annuitants of two defined benefit pension plans, excluding disabled participants. The IRS found that …
Foundation's first-generation scholarship procedures approved
A private foundation proposed renewable scholarships for financially needy students who would be among the first in their immediate families to pursue post-secondary education. Applicants also had to …
Foundation's international scholarships and professional grants approved
A private foundation proposed two programs for adults in the United States and abroad, with preferences tied to a specified state, counties, and national descent. Its scholarship program would support…
Foundation's four-year college scholarship procedures approved
A private foundation proposed scholarships for graduating high school seniors from two states who planned to attend accredited four-year colleges or universities in one of three states. Applicants had…
Employer-related scholarships for employees' children approved
A private foundation proposed renewable scholarships for dependent children of full-time employees of a beer distributor. Eligible students had to meet age and parental-service requirements, pursue fu…
Foundation's unconventional workshop grant procedures approved
A private foundation proposed educational grants enabling recipients to attend short, unconventional workshops offered by third parties. The workshops would develop professional, literary, musical, ar…
Foundation's scholarships and tobacco-research grants approved
A private foundation proposed both academic scholarships and grants for independent research on smoking cessation, tobacco harm reduction, and alternatives for tobacco farmers. Scholarship recipients …
Fine-dining club denied section 501(c)(3) exemption
A membership organization applied for section 501(c)(3) status while planning quarterly fine-dining events for members interested in food and wine. Its articles did not limit its purposes to exempt pu…
Exemption revoked after disability-services organization became inactive
A nonprofit had been recognized under section 501(c)(3) to diagnose developmental disabilities and help affected people locate services. After government funding ended, its Forms 990 reported that it …
Hospital exemption revoked after all assets were sold
A hospital had been recognized under section 501(c)(3) and was exempt from filing annual Forms 990 because it was affiliated with a government agency. It later sold all of its assets, stopped operatin…
Facility-leasing organization denied charitable status
An organization bought and renovated a former church building, then leased it to religious and educational tenants and made it available for weddings, meetings, concerts, and other events. Almost all …
Sliding-scale auto repair shop denied charitable status
An organization planned to operate an auto repair shop for the general public, using a sliding fee scale tied to household income. Some customers would pay normal market rates, the organization could …
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.