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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Rate-base offset violates depreciation normalization rules
A regulated utility's state commission required shareholders to fund certain safety-related capital investments rather than charging ratepayers. The commission left those assets and their deferred tax…
Recapitalization avoids branch profits dividend equivalent
A foreign corporation indirectly owned a U.S. holding company whose earnings and profits reflected amounts previously allocated under the branch profits tax regulations. The group proposed recapitaliz…
Multiemployer plan receives five-year funding extension
A multiemployer plan requested an automatic five-year extension for amortizing certain unfunded liabilities. Its original application included bases related to funding-method changes, plan mergers, an…
Business networking group denied tax exemption
A membership organization brought together business owners and professionals from many industries for monthly networking meetings, referrals, introductions, and business presentations. Members sought …
Recurring oil and gas royalties cost social club its exemption
A section 501(c)(7) social club operated recreational facilities for members and received revenue from dues, assessments, cabin rentals, and oil and gas rights. For several years, royalties and an oil…
Organization loses exemption after withholding examination records
An organization had previously lost its section 501(c)(3) exemption, unsuccessfully challenged that revocation in Tax Court, and later obtained a new exemption. During a later examination, an officer …
Inactive charity loses exemption after incomplete filings
A section 501(c)(3) organization had once collected clothing and goods for a shelter but later had no receipts, expenditures, or activities. Its president told the examining agent that maintaining exe…
Organization that never operated loses its exemption
A section 501(c)(3) organization did not respond to repeated letters and telephone messages seeking information for an examination. An officer eventually confirmed that the organization was inactive, …
Stalled housing charity loses its exemption
A section 501(c)(3) organization was examined to determine whether its activities matched its approved exempt status. Its sole officer said the organization had received a redacted amount of revenue, …
Organization loses exemption for nonexempt operation and inurement
The IRS revoked an organization's section 501(c)(3) exemption after concluding that it had not established operation exclusively for exempt purposes. The final letter also states that the organization…
Artist cooperative gallery denied charity status
A nonprofit gallery succeeded a for-profit gallery and provided member artists with display space, advertising, shopkeeping, marketing, and sales services. Working and consignment members set prices a…
Foreign funding conduit and undocumented cash cause revocation
A domestic section 501(c)(3) organization solicited contributions in the United States to support the known activities of a foreign organization. It did not make proposal-based grants, document how th…
Common control exists but arm's-length prices require no adjustment
A taxpayer provided redacted services in transactions involving entities that were not commonly owned. The IRS advised that section 482 can still apply because its control test is disjunctive and reac…
REIT successors get more time for subsidiary elections
Two predecessor REITs intended to elect taxable REIT subsidiary status for their respective subsidiaries and filed Forms 8875 by the intended deadlines. During a later acquisition, their successors di…
New affiliated group gets more time for consolidated election
A parent acquired eight subsidiaries and intended the resulting affiliated group to file a consolidated return. The group filed a consolidated return by the extended deadline that would have applied, …
Carbon units produce qualifying income when issued, not when sold
A timber REIT received carbon-emission units under a foreign program that restricted harvesting unless replacement trees were planted. New regulations meant the separately transferable units no longer…
Corporation gets more time for IC-DISC election
A domestic corporation was formed solely to operate as an interest charge domestic international sales corporation under a commission arrangement with its parent. Its accounting firm prepared Form 487…
Parties get more time for section 336(e) election
A partnership purchased all the stock of an S corporation for cash, and the parties intended the stock sale to be treated as a deemed asset sale under section 336(e). They did not timely execute the r…
Foreign entity gets more time for corporate classification election
A foreign entity was initially classified as disregarded for federal tax purposes. Its owner intended it to become an association taxable as a corporation on a later date, but the entity did not timel…
Corporation preserves S status after issuing preferred stock
An S corporation issued preferred stock with dividend, liquidation, conversion, and voting rights different from its common stock. That issuance created a prohibited second class of stock and terminat…
Oilfield support services generate qualifying partnership income
A company planned to form a publicly traded partnership that would supply fluids to oil and gas producers, treat and dispose of oilfield waste, wash equipment, recycle drilling mud, recover hydrocarbo…
Estate gets more time to make QTIP election
An estate timely filed its federal estate tax return but did not elect qualified terminable interest property treatment for a marital trust. The executor, a CPA whose accounting firm prepared the retu…
Corporation gets more time for success-fee safe harbor
A corporate group paid an investment bank a success-based fee when its parent was acquired in a taxable stock transaction. Its accounting firm prepared the short-year consolidated return using Revenue…
Incomplete-gift trust receives favorable tax rulings
A married couple in a community property state created an irrevocable domestic trust whose distribution committee could act unanimously or with a grantor's consent. The IRS ruled that the grantors' re…
Incomplete-gift trust receives favorable tax rulings
A married couple in a community property state created an irrevocable domestic trust whose distribution committee could act unanimously or with a grantor's consent. The IRS ruled that the grantors' re…
Incomplete-gift trust receives favorable tax rulings
A married couple in a community property state created an irrevocable domestic trust whose distribution committee could act unanimously or with a grantor's consent. The IRS ruled that the grantors' re…
Ministry scholarship procedures approved
A private foundation proposed one-time scholarships for full-time students pursuing advanced religious studies at accredited theological seminaries, colleges, or universities. Applicants had to meet a…
Social club loses exemption over nonmember income
A tax-exempt social club received more than the permitted share of its gross receipts from nonmembers through bar sales and green fees. The examination report said the club exceeded the 15 percent non…
Vehicle-brand dealer group denied exemption
An association of vehicle dealers sought exemption as a business league under section 501(c)(6). Its membership was limited to dealers of one brand in a particular area, and its sole activity was adve…
Veterans post loses exemption over public bar and gambling operations
A veterans post held section 501(c)(4) status but operated a bar and gambling business that was open to the public six days a week. Although the post reported some community projects, the IRS found th…
Hockey-referee group denied exemption for serving members' private interests
A membership organization supplied paid referees to youth hockey associations, collected the contract fees, assigned games to its referee members, and paid those members for their work. The group argu…
Education-fund group loses exemption for benefiting its workers
An organization arranged for members, usually parents of students, to staff concession stands at professional sporting events. It tracked each worker's hours, credited a corresponding amount to that w…
Exemption revoked after organization withheld required records
The IRS repeatedly asked a section 501(c)(3) organization to provide records, financial statements, minutes, and documents needed to correct its articles' purpose clause. The organization received a c…
Late basis-reduction election allowed after adviser missed extension filing
A company emerging from bankruptcy reported cancellation-of-debt income and intended to elect under section 108(b)(5) to reduce the basis of depreciable property first. Its return included Form 982 ma…
Estate gets extra time for reverse QTIP election and trust severance
A decedent's estate made a QTIP election for a marital trust but did not divide the trust into GST-exempt and non-exempt shares or make a reverse QTIP election. The accountant who prepared the estate …
S corporation status preserved after shares passed to ineligible trusts
An S corporation shareholder transferred shares to seven trusts that were not eligible S corporation shareholders, terminating the company's S election. After the problem was discovered, the trustee m…
Late tax-exempt controlled entity election treated as timely
A taxable corporation wholly owned by a section 501(c)(3) organization invested in a partnership that developed rental real estate. Because the corporation was a tax-exempt controlled entity, it neede…
Partnership receives 120 days to make late section 754 election
A limited partner died, creating a transfer for which the partnership wanted a section 754 election and the related section 743(b) basis adjustment. The partnership's tax advisers neither filed the el…
Medical practice receives conditional pension funding waiver
A medical practice sought a waiver of the remaining minimum required contribution to its pension plan for the 2016 plan year. It had suffered a temporary substantial business hardship after two senior…
Single-asset investment vehicle classified as a trust
A state-law trust issued one class of units representing proportional interests in a single type of asset. Authorized participants could create or redeem baskets only through in-kind deposits or deliv…
Foreign corporation receives relief for two late tax elections
A foreign corporation sold its interest in a partnership holding U.S. real property and later learned that the sale produced taxable gain. It wanted to elect out of installment reporting and report th…
S status preserved after unequal health-plan benefits created second stock class
An S corporation allowed nonemployee shareholders, including a trust beneficiary and family members, to participate in its medical and dental plans. They paid the employee portion of the premiums but …
Bankruptcy creditors receive favorable section 382 debt treatment
A loss corporation transferred business assets to a new company during a Chapter 11 reorganization, and creditors received stock through a credit bid and a rights offering. The transaction was represe…
Corporation receives 60 days to file late IC-DISC election
A domestic corporation was formed to operate as an interest charge domestic international sales corporation, or IC-DISC, and hired an accounting firm to complete the required election. The corporation…
Inherited retirement distributions may use daughter's life expectancy
A decedent named a retirement-account subtrust as beneficiary of traditional and Roth IRAs and two section 403(b) annuity contracts. Her daughter was the subtrust's sole beneficiary, and the trust req…
Grain payments qualify as cash per-unit retain allocations
An agricultural cooperative planned to take over grain purchasing from a partnership it partly owned. The cooperative would buy members' grain at market prices under written contracts, pay from its ow…
S corporation receives 120 days for late QSub election
An S corporation formed a domestic subsidiary and owned all of its stock from the subsidiary's incorporation date. The parent intended to treat the subsidiary as a qualified subchapter S subsidiary, o…
Five subsidiary elections receive inadvertent or late-filing relief
An S corporation intended five wholly owned subsidiaries to be qualified subchapter S subsidiaries, or QSubs. Elections filed for four subsidiaries were ineffective, and the parent inadvertently faile…
Nursing scholarship procedures approved
A private foundation proposed scholarships for state residents pursuing full-time nursing degrees at colleges or universities in the state. Applicants had to be entering their sophomore, junior, or se…
Dog rescue loses exemption for commercial operation and private benefit
A self-declared section 501(c)(4) dog rescue charged fees to surrender and adopt selected breeds, did not accept strays, and stated no fee reductions based on income or need. It had never filed Form 9…
Exemption revoked after organization ignored audit document requests
A recognized section 501(c)(3) organization was selected for an audit of its Form 990-N filing. The IRS mailed two document requests, made repeated telephone calls, confirmed the organization's addres…
Exemption denied for an inadequate dissolution clause and unsupported individual assistance
An organization applied for section 501(c)(3) status using Form 1023-EZ and attested that its organizing document contained the required dissolution provision. The IRS found that the actual organizing…
Exemption denied for commercial hall rentals benefiting a fraternal organization
A membership organization sought section 501(c)(3) status for maintaining a hall and grounds used primarily by a related section 501(c)(8) fraternal organization and rented to the public for events. I…
Business league exemption denied for member-specific power contract negotiations
An organization of municipal and cooperative electric utilities sought section 501(c)(6) status after forming to negotiate a power purchase arrangement with a natural gas plant developer. Its only act…
Exemption revoked after operations ceased and records were not provided
A section 501(c)(3) organization told the IRS that it had discontinued all activities and did not intend to operate again after its president relocated. During an examination, the IRS made repeated te…
Exemption revoked for private benefits from individualized fundraising
A sports booster organization raised money for athletes who trained at a related for-profit gymnastics and cheerleading business. Members could reduce their own required assessments through fundraisin…
Exemption revoked because a labor association served its members
A management-employee labor association had been recognized under section 501(c)(3), but its articles stated that it was organized for section 501(c)(5) purposes and directed assets on dissolution to …
Exemption revoked for uncontrolled grants and unexplained officer spending
A public charity said it would make grants to institutions and individuals using board approval, reports on the use of funds, and records showing that recipients and purposes were charitable. During a…
Social club exemption revoked for excessive nonmember income
A motorcycle club held competition events and provided campgrounds, grilling, showers, and other amenities for riders and their families. The events were open to nonmembers, advertised on the club's w…
Foreign entity gets 120 days to elect disregarded status
A foreign entity's owner intended the entity to be treated as a disregarded entity for federal tax purposes from the date it was formed. The entity did not timely file Form 8832, but represented that …
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.