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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In-home care payments qualified for income exclusion
A state department asked how to treat payments to individual providers who care for eligible aged, blind, or disabled recipients in the providers' homes under four in-home supportive-care programs. Th…
Wellness cash rewards and premium refunds are taxable wages
Chief Counsel analyzed employer wellness programs that offered health benefits plus cash rewards, gym-fee payments, or refunds of employee premiums paid through salary reduction. Medical coverage and …
Hotel management contract does not create private business use
A governmental issuer planned to use bond proceeds to finance a hotel operated by a private manager. The manager would receive a base fee equal to a percentage of gross revenue and an incentive fee pa…
Major program-expansion grant qualifies as an unusual grant
A publicly supported charity expected a substantial one-time grant to expand preschool, college, afterschool, and summer programs serving low-income working and military families. The donor had not pr…
Withholding is not credited to another year until the overpayment is processed and applied
Chief Counsel explained that section 6513(b) treats withheld tax as paid on the return’s due date. That deemed payment does not automatically credit the amount against an outstanding liability for a d…
Purchase-accounting write-down does not reduce taxable advance payment
A corporation received an advance payment for a two-year service contract and used Revenue Procedure 2004-34 to defer part of the income. After an unrelated buyer acquired its stock, purchase accounti…
FCPA disgorgement payment to SEC is not deductible
A United States company settled Securities and Exchange Commission claims arising from Foreign Corrupt Practices Act accounting violations and paid disgorgement equal to alleged profits plus prejudgme…
Generator’s interconnection payment is taxable construction aid
A solar generator paid an electric distribution company to construct an intertie connecting the generator’s facility to the distribution system. The utility argued that the payment was a nonshareholde…
Solar facilities are not public utility property under market-based rates
A regulated electric utility planned to construct three solar facilities and allocate their output among state-regulated, non-jurisdictional, and wholesale customers. Property is public utility proper…
Insurer merger does not restart life policy tax tests
Two affiliated life insurance companies planned to merge, with one company surviving and assuming the other's policies. The policy terms would not change, and the surviving company would not issue rep…
Relocation reimbursements excluded but reimbursed costs yield no deduction or basis
A partnership-owned business had to relocate because a state agency acquired part of its premises for a federally assisted highway project. The business received payments under the Uniform Relocation …
IRS cannot accept late election to waive NOL carryback
The IRS considered whether it could accept an election under section 172(b)(3) after the extended due date for the return reporting a net operating loss. It advised that the election deadline is statu…
Partnership receives extension for housing credit election
A partnership placed a low-income housing building in service but inadvertently failed to make a timely section 42(f)(1) election to begin the building's credit period that year. The IRS concluded tha…
Charity matches tied to PAC donations are not deductible
A corporation offered to make charitable donations in employees' names when the employees contributed specified amounts to its political action committee. The corporation asked to deduct those matchin…
Housing authority gets 45 days for volume-cap election
A public housing authority received private activity bond volume cap for a qualified residential rental project but failed to file Form 8328 to carry the unused allocation forward. Responsibility for …
Tangible-property method change protects pre-change material costs from audit adjustment
Chief Counsel considered a taxpayer that timely filed Form 3115 to adopt the final tangible property regulations for non-incidental materials and supplies, using the limited section 481(a) adjustment …
Book-entry partnership interests in a student-loan pool qualify as registered obligations
A taxpayer proposed holding nearly all of a partnership that would acquire and manage a pool of student loans. Partnership interests could be transferred only with the general partner's consent and th…
Qualified zone academy bonds receive two more years to spend proceeds
A state authority issued qualified zone academy bonds and loaned the proceeds to a tax-exempt school operator for rehabilitating and equipping school facilities. The original project stalled when nego…
Annual nuclear storage payments arise only when the plant operates
A nuclear power operator sought to treat deductions for several state-law storage payment obligations as specified liability losses eligible for extended net operating loss carrybacks. The IRS advised…
Nuclear fuel storage costs qualify as abandonment and decommissioning costs
A regulated utility incurred costs to construct and later decommission an on-site facility for dry storage of spent nuclear fuel after its nuclear plant stopped operating. The IRS concluded that the f…
Temporary grid link preserves solar placed-in-service status
A renewable-energy developer expected two solar projects to be complete and operating during the relevant year, but the utility might not finish one project's permanent grid connection on time. The de…
Pension medical account may reimburse another retiree group
A company had excess assets in a section 401(h) account used to pay medical costs for one grandfathered group of retirees. It proposed amending its plans so that the account could also reimburse quali…
Pooled mortgage investment interests qualify as registered obligations
An investment manager proposed a tiered structure of partnerships, statutory trusts, and series trusts that would hold mortgage loans. The underlying mortgage loans were not in registered form, but in…
Holding company may look through intercompany receipts for worthless-stock test
A corporate parent planned to claim an ordinary worthless-stock loss for a holding-company subsidiary after a restructuring. Section 165(g)(3) requires, among other things, that more than 90 percent o…
Renewable energy bond spending period extended for permit delay
An electric power cooperative asked the IRS for 24 more months to spend the remaining proceeds of new clean renewable energy bonds. The cooperative had expected to spend all proceeds within the origin…
Late tax-exempt controlled entity election received 60-day relief
A corporation wholly owned by a tax-exempt entity was a general partner in a partnership that owned low-income housing. The corporation intended to elect under section 168(h)(6)(F)(ii) not to be treat…
Coin donations over $5,000 generally require a qualified appraisal
Chief Counsel advised that a taxpayer generally needs a qualified appraisal when donating a coin or coin collection claimed to be worth more than $5,000. The cash exception for readily valued property…
Public-employer benefit trust receives income exclusion
A multiple-employer trust lets public agencies set aside funds for retiree health and welfare benefits, pension obligations, or both. Each employer has a separate account, employees cannot contribute,…
Residential solar subsidies are excluded from income
A state-created clean energy organization used funds collected through utility bill surcharges to pay contractors that reduced homeowners' cost of installing residential solar systems. The IRS conclud…
Housing project receives late section 42 election relief
A taxpayer inadvertently failed to make its intended section 42(i)(2)(B) election for every building in a low-income housing project for which the state agency issued Forms 8609. The election concerne…
Housing project receives late multiple-building election
A taxpayer intended to treat all buildings in a low-income housing development as one multiple-building project but inadvertently failed to make an effective election on the Forms 8609 issued for ever…
Housing project receives late multiple-building election
A taxpayer intended to treat all buildings in a low-income housing development as one multiple-building project but inadvertently failed to make an effective election on the Forms 8609 issued for ever…
Housing project receives late multiple-building election
A taxpayer intended to treat all buildings in a low-income housing development as one multiple-building project but inadvertently failed to make an effective election on the Forms 8609 issued for ever…
Service-related disability benefits are excluded from income
Local pension plans paid disability benefits under a state statute to members whose employment ended because of an injury received while performing official duties or an occupational disease arising f…
Housing project receives late section 42 election relief
A taxpayer inadvertently failed to make its intended section 42(i)(2)(B) election for every building in a low-income housing project for which the state agency issued Forms 8609. The election concerne…
Missing return copy does not invalidate section 83(b) election
A service provider purchased restricted company stock and executed a section 83(b) election on the transfer date. The election contained the required information and reached the IRS within the 30-day …
Charity-owned entity receives late section 168 election
A charity formed a wholly owned taxable entity to hold an interest in an affordable-housing partnership after advisers concluded that the charity should not hold the interest directly. The new entity …
Bond recovery payment creates only incidental private benefit
A state nonprofit organization financed a project with state-issued bonds, later defaulted, and reorganized in bankruptcy. Replacement bonds issued under the reorganization included a payment based on…
TARP status carries over and bars extended NOL carryback election
A consolidated group tried to elect the temporary three-, four-, or five-year net operating loss carryback available under the Worker, Homeownership, and Business Assistance Act of 2009. During the lo…
IRS may adjust section 108(i) deferred debt-cancellation income
A sole proprietor reacquired an $800 debt for $500 but reported and elected to defer only $100 of the resulting cancellation-of-debt income instead of $300. Chief Counsel advised that, depending on fu…
Online transaction processing falls outside narrow software exceptions
Chief Counsel analyzed whether receipts from a taxpayer's Internet-based transaction processing could qualify under section 199 as receipts from the disposition of computer software. The regulations g…
Amortization plan cures utility normalization violation
A regulated electric utility discovered that errors in an old accounting system had partially flowed the tax benefits of accelerated depreciation through to ratepayers. The IRS ruled that the inadvert…
Taxpayer may revoke bonus depreciation opt-out for open years
A consolidated corporate group elected out of additional first-year depreciation for several years after receiving incorrect internal advice that its fixed-asset system could not handle the deduction.…
Deferred losses are recognized before distribution
A public corporation planned a series of internal transfers, a subsidiary conversion and liquidation, and a pro rata distribution of a controlled corporation. Two internal sales would produce losses w…
Completed Form 8332 gives exemption to noncustodial parent
Both divorced parents claimed dependency exemptions for their children, and the noncustodial parent attached Form 8332 stating that the release applied to all future years. Chief Counsel advised that …
Deed in lieu produces capital gain on mortgage note
Chief Counsel assumed that a taxpayer held a mezzanine mortgage note as an investor rather than as inventory or another excluded asset. On that assumption, the note was a capital asset under section 1…
Unused vacation may fund a 401(k) plan or retiree health account
An employer proposed allowing collectively bargained employees to make an advance, irrevocable election to direct the value of forfeitable unused vacation to a 401(k) plan, a retiree health reimbursem…
Cooperative grain venture preserves patronage treatment and production deduction rules
A nonexempt agricultural cooperative planned to combine its grain marketing operations with another cooperative and a corporate investor through an LLC taxed as a partnership. The cooperative would co…
Fraudulent-conveyance settlement must be capitalized
A corporate subsidiary paid cash and stock to settle claims that assets had been fraudulently transferred during a reorganization. Chief Counsel concluded that amounts attributable to the fraudulent-c…
S corporation cannot claim ordinary loss for worthless subsidiary stock
An S corporation terminated its election, which also ended its subsidiary's qualified subchapter S subsidiary status, and claimed an ordinary worthless-stock loss under IRC § 165(g)(3). Chief Counsel …
Purchased seismic data does not qualify for G&G amortization
An oil and gas company acquired seismic data as part of a larger asset purchase after the seller had used the data to locate and develop producing properties. The company amortized the amount allocate…
Partnership may make late low-income housing credit elections
A partnership placed several buildings in service but inadvertently failed to elect to begin their low-income housing credit periods in the following year. The IRS found that the partnership met the s…
Legal aid fee award is not income to client with no fee obligation
A taxpayer obtained injunctive relief in a discrimination lawsuit while represented by two legal aid organizations. Both retainer agreements stated that the taxpayer would not have to pay the lawyers,…
Employee-funded pension contributions remain taxable wages
A city and its employees agreed to use part of the employees' fixed salaries to pay a portion of the city's required employer contributions to a governmental retirement plan. The city asked the IRS to…
Tribal organization may receive deductible charitable contributions
Federally recognized Indian tribes in one region formed and funded an organization to carry out a shared project. The project promoted economic development, preserved cultural and subsistence resource…
Government insurance trust's income is excluded under Section 115
An association of state political subdivisions operated a trust that provided self-insured property, liability, and workers' compensation pools, along with group medical, dental, and disability insura…
Local-government association's income is excluded and Form 990 waived
An association of state special districts helped its governmental members share information, manage risks and insurance, obtain financial and administrative assistance, and reduce operating costs. Its…
Levy does not reach contract payments that are not yet due
Chief Counsel confirmed the position stated in CCA 199930003 and agreed that the government should concede the issue in the pending case. The levy did not reach payments that a third party might make …
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.