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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Partnership basis step-up need not change utility deferred-tax balances
An acquirer purchased all partnership interests in an entity that indirectly owned regulated electric transmission and distribution assets. A section 754 election would create special section 743(b)…
Late trader mark-to-market election denied because hindsight created an advantage
Married taxpayers asked for extra time to elect the section 475(f) mark-to-market method for the husband's securities trading activity. They filed the election months after its due date, after a…
Court reformation preserves QTIP, estate, and GST tax treatment
A married couple's community-property trust divided the first spouse's property between marital and family trusts, but later restatements contained several drafting errors. Those errors appeared to…
Four missed ESBT elections receive conditional S corporation relief
Four shareholders transferred S corporation stock to four trusts intended to be electing small business trusts, but the trustees did not timely file the ESBT elections. The missed elections caused…
Foreign entity receives extra time for disregarded-entity election
A foreign eligible entity intended to be treated as disregarded from its owner for federal tax purposes, but Form 8832 was not timely filed. The IRS concluded that the entity acted reasonably and in…
Late Form 8832 allowed for foreign disregarded entity
A foreign eligible entity intended to elect disregarded-entity status but did not timely file Form 8832. The IRS found that the requirements for discretionary filing relief were met and granted a…
IRS grants late disregarded-entity classification election
A foreign eligible entity intended to be classified as disregarded from its single owner, but it inadvertently missed the Form 8832 filing deadline. The IRS granted a 120-day extension to make the…
Foreign company may file late disregarded-entity election
A foreign eligible entity intended to be disregarded as separate from its owner but failed to file Form 8832 on time. The IRS determined that the entity qualified for discretionary election relief…
Filing extension granted for foreign entity classification election
A foreign eligible entity wanted disregarded-entity treatment effective from a specified date but inadvertently failed to file Form 8832. The IRS granted 120 days to submit the late election. The…
Filing extension granted for foreign entity classification election
A foreign eligible entity wanted disregarded-entity treatment effective from a specified date but inadvertently failed to file Form 8832. The IRS granted 120 days to submit the late election. The…
Filing extension granted for foreign entity classification election
A foreign eligible entity wanted disregarded-entity treatment effective from a specified date but inadvertently failed to file Form 8832. The IRS granted 120 days to submit the late election. The…
Inadvertent S corporation termination relief granted for late QSST elections
Five trusts held stock in an S corporation but their beneficiaries did not timely file qualified subchapter S trust elections when grantor-trust treatment ended. Those failures terminated, or would…
Pre-revenue development business qualifies for section 355 active-business test
A public company proposed separating an established research business from a development business through a contribution to a new controlled corporation followed by a pro rata stock distribution.…
Inadvertent S corporation termination relief granted for eight late QSST elections
Eight trusts received stock in an S corporation, but their beneficiaries did not timely make qualified subchapter S trust elections. The resulting ineligible shareholders terminated the…
IRS denies exemption to a general business networking group
A membership organization of professionals from different trades and businesses applied for exemption as a business league under section 501(c)(6). Members met weekly to exchange referrals and grow…
Inadvertent S corporation termination relief granted for late QSST and ESBT elections
Stock in an S corporation passed to a testamentary trust after a shareholder's death. The beneficiary did not timely elect qualified subchapter S trust treatment, and after that beneficiary died,…
Construction contractors may use a hybrid accounting method
Chief Counsel considered how construction contractors should account for businesses that primarily provide services but also produce, purchase, or sell merchandise. The regulations require…
Late accounting-period change application treated as timely
A corporation sought to change its tax year from June 30 to March 31 but filed Form 1128 after the short-period return deadline in Revenue Procedure 2006-45. It requested discretionary relief…
Late private activity bond volume-cap carryforward election accepted
A public housing agency received a state allocation of private activity bond volume cap for tax-exempt financing of a residential rental project. Because this was its first bond issue requiring a…
Late accounting-period change application treated as timely
A corporation sought to change its tax year from December 31 to February 28 but filed Form 1128 after the short-period return deadline in Revenue Procedure 2006-45. It requested discretionary relief…
Renewable energy partnership receives time to elect investment tax credits
A partnership with a tax equity investor intended to claim investment tax credits instead of production tax credits for renewable energy facilities. Its return preparer said it intended and believed…
Corporate group receives time to elect consolidated return filing
A domestic parent corporation and its affiliated group failed to timely elect consolidated federal income tax return filing by submitting a valid consolidated return. The group requested relief…
Inadvertent S corporation termination relief granted for two trusts' late elections
Stock in an S corporation passed to two testamentary trusts after a shareholder's death. The beneficiary did not timely elect qualified subchapter S trust treatment for either trust, and after that…
Pension plan may use substitute mortality tables for five years
A defined benefit pension plan asked to use plan-specific substitute mortality tables when calculating minimum funding under section 430. The request covered male and female annuitants and…
IRS denies exemption to an exclusive business referral group
An exclusive-category networking group admitted one member from each type of business and operated weekly breakfast meetings and periodic mixers. Its members exchanged leads and referrals, presented…
IRS approves scholarships for local high school seniors
A private foundation proposed scholarships for graduating seniors at two local high schools. Different awards would consider criteria such as a chosen field of study, participation in sports or…
IRS denies exemption because coffee shop operations serve a substantial commercial purpose
An organization planned to support Christian mission trips through grants to students and missionary organizations. It intended to fund those grants primarily by operating a public coffee shop and…
IRS revokes exemption after an organization mistakenly sought section 501(c)(3) status
An organization received section 501(c)(3) status through Form 1023-EZ after attesting that its governing documents contained the required purpose limitations and dissolution provisions. During…
Chief Counsel advises that only one FPAA generally issues per partnership year, with a tiered-partnership exception
This short Chief Counsel email answers whether the IRS can issue more than one Final Partnership Administrative Adjustment (FPAA) for the same partnership tax year under the old TEFRA partnership…
Chief Counsel corrects a training answer on when prepaid state income tax is deductible under the SALT cap
This is an internal Chief Counsel email answering whether a sample answer in IRS training materials about the state-and-local-tax (SALT) deduction was wrong. The 2017 tax law capped the SALT…
Real estate professional gets late relief to treat all rental properties as one activity
A taxpayer in a real property business qualified to make the election under IRC § 469(c)(7)(A) that treats all of his rental real estate interests as a single activity, which can make it easier to…
Invalid S election ruled inadvertent after missed QSST elections and a bad consent
A company elected S corporation status, and its stock was held by two separate subtrusts that were intended to qualify as qualified subchapter S trusts (QSSTs) for two individual beneficiaries. Two…
Late relief to opt out of automatic GST exemption allocation for 24 GRATs
Over eight years, a taxpayer funded 24 grantor retained annuity trusts (GRATs), three each year, with the remainders passing to three trusts for her three children and their descendants. When each…
Late relief to opt out of automatic GST exemption allocation for four GRATs
A married couple funded four grantor retained annuity trusts (GRATs) over several years, with the remainders passing to trusts for their two sons. When each GRAT's estate-tax inclusion period…
Late relief to opt out of automatic GST exemption allocation for four GRATs
A married couple funded four grantor retained annuity trusts (GRATs) over several years, with the remainders passing to trusts for their two sons. When each GRAT's estate-tax inclusion period…
IRS blesses an incomplete-gift non-grantor trust with a power of appointment committee
A married couple in a community property state set up an irrevocable trust funded with community property and controlled by a "power of appointment committee" made up of the spouses and several…
Corporation gets extra time to file the original Forms 3115 it forgot to attach
A domestic C corporation in a consolidated group made three automatic accounting-method changes for a tax year (covering prepaid liabilities, vacation pay, and marketing-allowance rebates) and filed…
Foreign entity gets late relief to elect partnership treatment on Form 8832
A foreign business entity eligible to choose its U.S. federal tax classification wanted to be treated as a partnership but failed to file Form 8832 (the "check-the-box" election) on time. Without…
Foreign entity gets late relief to elect partnership treatment on Form 8832
A foreign business entity eligible to choose its U.S. federal tax classification wanted to be treated as a partnership but failed to file Form 8832 (the "check-the-box" election) on time. Without…
Foreign entity gets late relief to elect partnership treatment on Form 8832
A foreign business entity that was eligible to choose how it is classified for U.S. federal tax purposes wanted to be treated as a partnership, but failed to file Form 8832 (the "check-the-box"…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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.