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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Taxpayer allowed to revoke bonus depreciation opt-out
A corporate parent had elected for a subsidiary not to claim additional first-year depreciation on qualified property. The parent made that choice because its tax director believed a net operating los…
Development tax credits treated as qualifying REIT income
A real estate investment trust indirectly invested in a partnership developing rental real estate in a designated economic-development area. State law awarded transferable tax credits based on the pro…
Revised nuclear decommissioning fund schedule approved
An investor-owned electric utility requested a mandatory revised schedule of deductible payments to its nuclear decommissioning fund. The plant's operating license had been terminated, most decommissi…
Late success-based fee election statement allowed
A corporation used Revenue Procedure 2011-29's safe harbor to deduct 70 percent and capitalize 30 percent of success-based fees from a covered transaction. Its tax professional intended to attach the …
Pension minimum funding waiver approved with conditions
An employer sought a waiver of the remaining unpaid minimum required contribution for its pension plan's 2018 plan year. The IRS found that project-related problems had caused a temporary substantial …
Annuity-paid advisory fees not treated as owner distributions
A life insurer planned to offer nonqualified deferred annuity contracts designed for owners receiving ongoing advice about allocating contract value among available investment options. Owners could au…
Corporate separation receives tax-free reorganization rulings
A publicly traded corporate group proposed a multistep restructuring to separate two businesses, followed by an initial public offering and either a spin-off or split-off of the controlled company. Th…
Foreign foundation denied charitable exemption
A foreign foundation created under a decedent's will sought recognition as a section 501(c)(3) private foundation. Its stated purposes included education, science, and research, but the will also requ…
Mathematics grant procedures approved
A private foundation proposed three programs supporting undergraduate mathematics education, enrichment, and related teaching or research activities. One program would provide multiyear summer tuition…
Scientific conference travel grants approved
A private foundation proposed grants for graduate students and postdoctoral researchers to travel to scientific conferences and similar educational events concerning the study of intelligence. Grants …
Need-based community scholarships approved
A private foundation proposed scholarships for financially needy students graduating from specified high schools in several communities. High schools would screen applications and forward up to three …
Employer-related scholarships approved
A private foundation proposed scholarships for children and grandchildren of employees of a corporation and its affiliates. Eligible applicants would be recent high school graduates or current undergr…
Late corporate classification election allowed
An eligible business entity intended to be treated as a corporation for federal tax purposes from the date it was formed, but it inadvertently failed to file Form 8832 on time. The entity represented …
Partnership allowed late section 754 election
A foreign limited partnership made liquidating distributions to three partners but did not attach a section 754 election to its timely filed return because its tax preparers failed to explain the elec…
Estate receives extra time for portability election
An estate that was not otherwise required to file Form 706 missed the deadline to elect portability of the decedent's unused estate and gift tax exclusion to the surviving spouse. Because the return d…
Trust allowed to revise dividend investment-income election
A trust elected to treat a specified amount of qualified dividend income as investment income when calculating its investment interest deduction. It based the election on a Schedule K-1, but the issue…
Late ESBT elections receive inadvertent-termination relief
An S corporation's stock was held by two grantor trusts. When each trust later stopped being a grantor trust, its trustee failed to make a timely electing small business trust election, causing the co…
Vacation fund payments are wages but preserve exemption if properly handled
A tax-exempt employee benefit plan paid vacation benefits when delinquent employers failed to contribute and proposed additional distributions from surplus reserves. The IRS declined to reverse an ear…
Omitted success-based fee election statement accepted late
A corporate taxpayer incurred success-based fees in an acquisition and reported them using Revenue Procedure 2011-29's 70-percent deduction and 30-percent capitalization safe harbor. Its accounting fi…
Acquisition fee safe-harbor election allowed late
A consolidated corporate group paid a success-based financial advisory fee when acquiring another company. Its tax adviser prepared a transaction-cost analysis concluding that the fee qualified for Re…
Trust reformation preserves charitable estate tax deductions
A decedent's trust paid a unitrust amount to children and descendants, with portions shifting to a foundation as beneficiaries died and the remainder ultimately passing to charity. The trust initially…
Trust modification preserves GST exemption without estate or gift tax
A trust created before September 25, 1985 proposed changing how assets would be held for the grantor's descendants after the primary beneficiary's death. Instead of distributing shares outright at age…
Descendant trust changes retain GST-exempt status
A grandfathered trust proposed replacing age-21 outright distributions to descendants with lifetime separate trusts for each beneficiary. The new terms would permit discretionary support distributions…
Lifetime descendant trusts preserve tax treatment
A pre-1985 irrevocable trust proposed modifying descendant shares that otherwise would have been distributed outright at age 21. The new provisions would keep each share in a lifetime discretionary tr…
Grandfathered trust may create lifetime beneficiary shares
A trust irrevocable before September 25, 1985 proposed converting descendant shares from age-21 outright distributions into lifetime separate trusts. Each trust could make discretionary support distri…
Modified descendant trusts keep GST grandfathering
A grandfathered irrevocable trust proposed holding descendant shares in separate lifetime trusts rather than distributing them outright when beneficiaries reached age 21. The modified terms would auth…
Descendant share modification avoids transfer taxes
A pre-1985 trust proposed changing descendant shares from mandatory income and outright age-21 distributions to separate lifetime discretionary trusts. Beneficiaries would receive testamentary general…
Healthcare education scholarships approved
A private foundation proposed renewable scholarships for students pursuing post-secondary healthcare education in the area served by a hospital. Awards could continue for up to four years while recipi…
Late QSub election allowed
An S corporation acquired all the stock of a subsidiary and intended to elect qualified subchapter S subsidiary treatment from the acquisition date. It inadvertently failed to file Form 8869, although…
Second-class-of-stock defect receives S election relief
A corporation made an S election while its stock was subject to an agreement that created a second class of stock, making the election invalid. After discovering the problem, the corporation canceled …
Foreign entity allowed late partnership classification election
A foreign eligible entity intended to be classified as a partnership for federal tax purposes but inadvertently failed to file Form 8832 on time. It represented that it acted reasonably and in good fa…
Contract-specific advisory fees are not annuity distributions
A life insurer proposed nonqualified deferred annuity contracts designed for owners who receive ongoing professional advice about allocating contract value among available options. Owners could author…
Late duplicate Forms 3115 accepted
A consolidated corporate group implemented three accounting method changes involving depreciation, advance payments, and the remodel-refresh safe harbor. Its accounting firm attached the original Form…
QTIP trust severance isolates spouse's disclaimer
A marital trust had been elected as qualified terminable interest property and divided into GST-exempt and GST-nonexempt shares. The trustee proposed splitting the nonexempt share into a cash trust an…
Annuity-funded advice fees excluded from owner receipts
A life insurance company planned three nonqualified deferred annuity contracts whose owners would receive ongoing advice about choosing among the contracts' investment options. Owners could authorize …
Wind facility is not public utility property, loss ruling declined
A regulated utility and a tax-equity investor planned a joint venture to acquire a wind facility and sell most of its electricity to the utility under a long-term wholesale power purchase agreement. A…
Annuity advisory fees treated as contract expenses
A life insurer proposed three nonqualified deferred annuity contracts designed for owners who would receive professional advice about allocating contract value among available options. The owner could…
Direct annuity advisory fees are not owner distributions
A life insurance company proposed three nonqualified deferred annuity products meant to operate with continuing investment advice. Owners could authorize fees capped at 1.5 percent of contract value t…
Contract-paid investment advice is not an annuity receipt
A life insurer designed three nonqualified deferred annuity contracts for owners using ongoing investment advisers. The insurer would pay authorized fees directly from contract value, capped at 1.5 pe…
Investment advice fees excluded from annuity receipts
A life insurer proposed three nonqualified deferred annuity contracts intended for use with ongoing investment advice. Owners could authorize direct payment from contract value of advisory fees capped…
Two annuity products may pay advisory fees without distribution treatment
A life insurer proposed two nonqualified deferred annuity contracts, one variable and one nonvariable, for owners using ongoing investment advice. The contracts could pay authorized advisory fees dire…
Advisory fees for two annuities are contract expenses
A life insurance company planned two nonqualified deferred annuity contracts, one variable and one nonvariable, designed for owners receiving ongoing investment advice. Contract value could pay adviso…
Charity leader sabbatical grants approved
A private foundation proposed sabbatical grants for individual leaders of charities to pursue personal and professional growth through conferences, courses, travel, extended learning, and rejuvenation…
Sports officials association denied charitable exemption
A membership association trained school sports officials, assigned them to games under contracts with schools, collected the schools' payments, and distributed those payments to its member officials. …
Business networking group denied business-league exemption
A private networking group admitted only one professional or business owner from each designated business category. Its breakfasts, presentations, one-on-one meetings, guest introductions, referrals, …
Incorrect officer title does not invalidate partnership return
The CFO of a corporation that was a partnership's sole general partner signed the partnership's electronic filing authorization using another title he held. IRS Chief Counsel advised that the partners…
Later-available information may inform arm's-length price
IRS Chief Counsel advised that the section 482 regulations do not categorically bar reliable, relevant information from an arm's-length pricing analysis merely because the information existed contempo…
Late Form 3115 attachment allowed for repair-cost method change
A corporation intended to make an automatic accounting-method change so that qualifying repair and maintenance costs would be deducted rather than capitalized. It timely sent the duplicate Form 3115 t…
Cash realized on employer debt can fund deductible pension contribution
A company proposed contributing its own publicly traded investment-grade debt securities to its defined benefit pension trust. The debt itself was only the company's promise to pay and therefore was n…
Partnership receives 120 days for late Section 754 election
A limited liability company taxed as a partnership did not include a section 754 election with its timely return for the year one of its two owners died. Its professional return preparer had not told …
Retaining spin-off shares does not show tax-avoidance plan
A public company planned to separate one business from its other businesses through contributions to a controlled corporation and a pro rata distribution of at least a controlling amount of the contro…
Trust may revise qualified-dividend investment-income election
A trust elected to treat a stated amount of qualified dividends as investment income for its investment-interest deduction based on a Schedule K-1. After the issuer supplied an amended Schedule K-1 sh…
Amended K-1 permits revised dividend election
A trust elected to treat a stated amount of qualified dividends as investment income for its investment-interest deduction based on a Schedule K-1. After the issuer supplied an amended Schedule K-1 sh…
Trust receives relief to reduce dividend election
A trust elected to treat a stated amount of qualified dividends as investment income for its investment-interest deduction based on a Schedule K-1. After the issuer supplied an amended Schedule K-1 sh…
Individual may reduce dividend investment-income election
An individual filing as head of household elected to treat a stated amount of qualified dividends as investment income for the investment-interest deduction based on Schedules K-1 from two entities. A…
Joint filers may reduce dividend investment-income election
A married couple filing jointly elected to treat a stated amount of qualified dividends as investment income for the investment-interest deduction based on a Schedule K-1. After the issuer supplied an…
S corporation split-off qualifies as a tax-free reorganization and distribution
An S corporation proposed transferring a business and other assets to a qualified subchapter S subsidiary, then distributing all of that subsidiary's stock to one shareholder group in exchange for its…
Biopharmaceutical company receives 60 days to make a success-based fee safe-harbor election
A biopharmaceutical company paid success-based advisory fees when it acquired another company. Its accounting firm deducted 70 percent of the fees and capitalized 30 percent under the safe harbor in R…
Corporate group receives 60 days to attach a success-based fee safe-harbor election
A corporate group paid a success-based advisory fee in connection with a stock acquisition and merger. Its return deducted 70 percent of the fee and capitalized the remaining 30 percent under Revenue …
Captive insurer receives 90 days to make a small-insurance-company election
A captive property and casualty insurer prepared a timely return and an election under section 831(b)(2) to be taxed only on taxable investment income. The company set the return aside for review but …
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.