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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Trust conversion is nontaxable and not self-dealing but gives no new deduction
A split-interest trust proposed adding a substitution power that would convert it from a nongrantor trust to a grantor trust. The power would be held in a nonfiduciary capacity by the grantor's siblin…
Trust conversion is nontaxable and not self-dealing but gives no new deduction
A split-interest trust proposed adding a substitution power that would convert it from a nongrantor trust to a grantor trust. The power would be held in a nonfiduciary capacity by the grantor's siblin…
Tribal gaming payments to children are unearned income
A tribe distributed gaming revenue to minor members under an approved per capita revenue-allocation plan. A return preparer argued that the payments were earned income for purposes of the tax rules fo…
Utility contracts do not create private use of bond-financed power projects
A governmental electric-power issuer planned bonds to refund outstanding obligations and finance capital work on a generating project. Certain nongovernmental utilities paid shares of project costs un…
Pharmacy rotations do not create private use of a bond-financed hospital
A county hospital financed with tax-exempt bonds planned a five-year agreement allowing a nonprofit school's pharmacy students and instructors to complete clinical rotations at the facility. The schoo…
Wind generators' grid-upgrade payments are capital contributions
An investor-owned utility agreed to upgrade its transmission system with payments from independent wind generators seeking greater delivery capacity and fewer curtailments. The utility would own the i…
Post-redemption mission change does not taint scholarship bond interest
A nonprofit scholarship-funding corporation had issued qualified scholarship funding bonds and later redeemed all of them using taxable debt. It remained a qualifying corporation and the bond obligor …
Former CEO is not a covered employee for the compensation deduction cap
A publicly held corporation's former chief executive officer had served as CEO for only part of the tax year. The company disclosed the former CEO in its compensation table because securities rules re…
Property owner receives relief for a late rehabilitation-credit passthrough election
A property owner rehabilitated a leased property and agreed to pass its qualified rehabilitation expenditures through to the tenant. The owner inadvertently missed the deadline to elect under Treasury…
Online platform fees do not qualify as domestic production gross receipts
A taxpayer treated fees from several online platforms as domestic production gross receipts eligible for the former IRC § 199 deduction, reasoning that customers directly used software comparable to s…
Insurer may deduct state-mandated medical education payment
A medical malpractice insurer was required by state law to transfer part of its reserve to a state fund supporting graduate medical education. The insurer expected the programs to increase the number …
Housing owner receives relief for a late multiple-building election
An owner intended to treat all buildings in a low-income housing development as one multiple-building project but inadvertently failed to make an effective election for every building on Form 8609. Th…
IRS likely waived recovery after not contesting probate distribution
A probate court paid a secured creditor ahead of an IRS claim even though the IRS claim had priority under IRC § 6323 and potentially under the federal insolvency statute. Chief Counsel advised that t…
Refunded-bond mortgage loans remain allocated to transferred proceeds
An issuer used transferred proceeds of refunding mortgage bonds both to make new mortgage loans and to fund a reserve. When investments exceeded the bonds' universal cap, the issuer treated the mortga…
Oil hedging results are excluded from property income for the IDC preference
Chief Counsel considered whether gains and losses from oil-price hedges enter the property-income calculation used for the alternative minimum tax preference for excess intangible drilling costs. The …
Railroad group receives extra time to file credit forms
A consolidated railroad group did not timely file Forms 8900 for track-maintenance expenditures incurred by Class II and Class III railroad subsidiaries. The group had misunderstood consolidated repor…
Court-approved trust divisions avoid gift and estate tax and generally preserve income tax treatment
Two continuing trusts created after a grantor retained annuity trust ended proposed dividing their assets into separate successor trusts for each of the grantor's two sons and their respective descend…
Peaking power plant is not public utility property for depreciation rules
A taxpayer owned a peaking electric generating facility whose wholesale power rates were negotiated or set through the market. A state authority annually determined a contract-based revenue requiremen…
Refundable fan membership proceeds are not gross income to stadium financing organization
A taxable nonprofit membership corporation planned to collect refundable amounts from sports-team fans in connection with membership interests and personal seat license rights. The amounts would be se…
Tax-exempt controlled entity receives late election relief for rehabilitation project
A limited liability company wholly owned by a section 501(c)(3) organization was a tax-exempt controlled entity and the general partner of a partnership developing a project that claimed rehabilitatio…
Section 163(j) statute controls despite unexercised regulatory authority
Chief Counsel considered whether unexercised regulatory authority affected the operation of IRC § 163(j). The advice relied on a Tax Court decision holding that a charitable-contribution exception tie…
County land bank's income is excluded and public-purpose gifts are deductible
A county created an organization under state law to reclaim, demolish, rehabilitate, and return abandoned or foreclosed property to productive use. Public officials controlled its board, government so…
Predictable wellness payments are taxable income and wages
Chief Counsel analyzed arrangements marketed as self-funded health plans that paid employees large fixed amounts for completing routine health-related activities after employees made much smaller afte…
Mass-tort trust qualifies as a settlement fund and transfers are deductible
Affiliated companies entered bankruptcy proceedings to resolve thousands of present and future personal-injury claims arising from exposure to a redacted product component. Their reorganization plan c…
Insolvent taxpayer could not revoke a basis-reduction election
An insolvent real estate professional excluded cancellation-of-debt income and, on professional advice, elected to reduce the basis of depreciable property before reducing net operating losses. After …
Community solar facility is not public utility property
A regulated electric utility planned to build, own, and operate a voluntary community solar facility funded through customer subscriptions. The facility's electricity would be charged to all customers…
Bonus depreciation true-up complies with normalization rules
A regulated electricity transmission utility initially set formula rates based on an intent not to claim bonus depreciation. After its regulator ordered a change, management claimed the additional fir…
Coal-site testing is mining exploration, not qualified research
A corporation investigated whether coal beneath its land could support a proposed processing plant. Contractors performed geological mapping, core drilling, seismic surveys, and related site-selection…
County property-redevelopment entity receives governmental tax treatment
A county created an entity under state law to reclaim, revitalize, and return abandoned or foreclosed real estate to productive use. Public officials controlled its board, government sources supplied …
Utility receives guidance on ADFIT proration and true-ups
A regulated utility used projected formula rates and later true-ups while reducing rate base for accumulated deferred federal income taxes tied to accelerated depreciation. The IRS ruled that the proj…
Legal fees tied to pre-section 199 sales do not reduce production income
A consolidated corporate group incurred legal fees defending product-harm lawsuits involving products manufactured and sold before section 199 took effect. The group claimed that the fees should not b…
LLC receives more time for entity classification and tax-exempt control elections
A tax-exempt organization wholly owned a limited liability company that served as general partner of a partnership operating residential rental property. The LLC intended to elect corporate tax treatm…
LLC receives more time for corporate and depreciation elections
A tax-exempt organization wholly owned a limited liability company that was the general partner of a residential rental partnership. The LLC intended to elect treatment as a taxable corporation and to…
LLC gets late corporate and tax-exempt control elections
A tax-exempt organization owned an LLC that served as general partner of a partnership holding rehabilitated residential rental property. The LLC meant to elect corporate status and opt out of treatme…
County land-recovery entity receives governmental income exclusion
A county created an entity under state law to reclaim abandoned and foreclosed property, stabilize communities, and promote economic and housing development. County officials controlled its board, the…
Merger approval conditions were not automatically facilitative costs
A regulated holding company incurred customer credits, community payments, charitable commitments, and other costs required as conditions for regulatory approval of a merger. The examining agent argue…
Tax-exempt controlled entity received late MACRS election relief
A corporation indirectly owned by a tax-exempt entity developed residential rental property and intended to elect not to be treated as a tax-exempt controlled entity for depreciation purposes. The ele…
Rental-property company received late MACRS election relief
A rental-property corporation wholly owned by a tax-exempt entity intended to elect not to be treated as a tax-exempt controlled entity under the depreciation rules. Its transaction documents required…
County land-reclamation entity's income is excluded and donations are deductible
A county created an entity under state law to acquire, demolish, rehabilitate, and return abandoned or foreclosed property to productive use. County and state officials controlled the entity, supplied…
County land-reclamation entity's income is excluded and donations are deductible
A county created an entity under state law to reclaim, rehabilitate, and return abandoned or foreclosed property to productive use. County and other local officials controlled the entity, public bodie…
Historic church property transfer qualifies as an unusual grant
A cemetery association proposed transferring a historic church site and native prairie to a related public charity formed to preserve the property and provide educational programs. The property's valu…
No objection to excluding tribal death-related payments from income
An IRS office asked Chief Counsel for assistance with refund claims filed by individuals who received payments from an Indian tribal government when a tribal member died. The responding Chief Counsel …
Tribal settlement distributions were taxable income
Chief Counsel considered payments made to tribal members from a settlement of contract litigation between the federal government and certain tribes. Based on the facts provided and the applicable law,…
Racing car parts are separate assets when cars are disassembled
A racing team built a new race entry for each event by assembling owned parts, then stripped the car back into parts for inspection, reuse, storage, or disposal. The IRS ruled that each owned part was…
Pro rata trust division preserves tax treatment and S eligibility
An irrevocable grantor trust holding S corporation stock and other assets proposed moving the non-S stock assets, pro rata, into eight separate family trusts while retaining the S corporation shares. …
Utility rate base must reflect NOL-related deferred tax assets
An electric utility used accelerated and bonus depreciation, generating net operating loss carryforwards while maintaining accumulated deferred income tax liabilities for ratemaking. The utility also …
Company may reverse elections made instead of bonus depreciation
A consolidated corporate group had elected under former section 168(k)(4) to forgo bonus depreciation and instead increase specified credit limitations. A later adviser determined that the former tax …
Post-1993 partnership intangibles remain amortizable after consolidation
A business group consolidated several lower-tier partnerships into disregarded entities and then contributed the consolidated operations to a new partnership joint venture. The lower-tier entities hel…
Bond exchange produces issuance premium and current repurchase deductions with one integrated-tranche exception
A public parent corporation issued seven new bond tranches in exchange for bonds previously issued by a consolidated subsidiary. Because the new bonds traded on an established market, their issue pric…
Divorce judgment's lump-sum payments are not deductible alimony
A divorce judgment required an individual to make lump-sum and annual payments described as alimony. The individual asked whether the lump-sum payments qualified as alimony deductible under section 21…
Related-party REIT sale losses are deferred until spin-off removes assets from group
A parent REIT planned to separate properties leased to a financially troubled tenant into a newly public REIT. Before a taxable spin-off, the parent and an affiliate would sell partnership interests a…
Variable-contract holders are not owners of insurance-dedicated fund portfolios
Three insurance-dedicated regulated investment company portfolios served as investment options for variable life insurance and annuity contracts. Some portfolio assets would be invested in publicly av…
Prior ruling on compensatory research-fellow stipends is revoked prospectively
The IRS had previously ruled that stipends paid to research fellows from grants outside the National Research Service Award program were not wages for employment tax purposes. It later determined that…
Parent may claim affiliated-subsidiary worthless stock deduction after conversion
A corporate taxpayer owned a services subsidiary whose group faced large settlement costs and client claims tied to investments made with a third party. Several lower-tier subsidiaries had already liq…
Fixed-indemnity health payments are taxable when coverage was paid pre-tax
The advice addresses employer fixed-indemnity health and wellness plans that pay preset cash amounts without tying payments to actual medical expenses. When employees pay premiums with after-tax wages…
Integrated section 338 election and spin-off receive specified rulings
A public company proposed separating one business into a newly formed controlled corporation through a multi-step transaction. The plan included asset distributions, a stock transfer followed by a sec…
Retiree trust surplus may fund current employee benefits
A utility holding company maintained a voluntary employees' beneficiary association whose assets exceeded the value of its retiree health obligations. It proposed transferring part of that surplus onc…
Physical-injury damages are excluded from income
A taxpayer received a redacted payment for actual damages arising from a criminal-law violation that caused personal physical injuries. Section 104(a)(2) excludes damages received on account of person…
Unspent Build America Bond proceeds do not defeat prior credits
A bond issuer planned to use tax-exempt refunding bonds to redeem Direct-pay Build America Bonds while some original project proceeds remained unspent. It represented that the remaining proceeds and t…
Physical-injury damages are excluded from income
An individual received damages to compensate for actual harm caused by a criminal-law violation that resulted in personal physical injuries. The IRS concluded that the payment was received on account …
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.