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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Retroactive accounting-method change relief denied
An accrual-method S corporation bought merchandise on credit from a related cash-method S corporation and deducted the purchases before the seller recognized corresponding income, a method the buyer d…
Overlap methodology approved for planned spin-offs
Two publicly traded corporate groups planned to combine under a new holding company and then separate three businesses through distributions intended to qualify under sections 355 and 368(a). Because …
Late section 336(e) election relief granted
A purchaser acquired all the stock of an unrelated S corporation through a disregarded subsidiary, and the parties intended to elect under section 336(e) to treat the stock sale as an asset dispositio…
Late QSub election relief granted
An S corporation acquired all the stock of a subsidiary but did not timely file Form 8869 to elect qualified subchapter S subsidiary status. It represented that it intended QSub treatment and that bot…
Revised nuclear decommissioning funding schedule approved
A limited liability company taxed as a corporation acquired a qualifying ownership interest in a nuclear power plant and requested a revised schedule of deductible payments to its nuclear decommission…
Early entity-classification change and late filing allowed
A single-member limited liability company had elected corporate classification and was treated as a qualified REIT subsidiary through a chain of disregarded entities. After a taxable spin-off placed t…
Early entity-classification change and late filing allowed
A single-member limited liability company had elected corporate classification and was treated as a qualified REIT subsidiary through a chain of disregarded entities. After a taxable spin-off placed t…
Formula-based decommissioning schedule approved after license extension
An investor-owned electric utility requested mandatory review of its nuclear decommissioning fund schedule after the Nuclear Regulatory Commission extended its plant's operating license. The utility p…
Revised decommissioning schedule approved for partial plant owner
A limited liability company taxed as a corporation acquired a partial qualifying interest in a nuclear power plant and requested a mandatory revised schedule of deductible decommissioning fund payment…
Late QSub election relief granted
An S corporation formed a subsidiary and intended to elect qualified subchapter S subsidiary status from the formation date but did not timely file Form 8869. The parent represented that it had filed …
Late QSub election relief granted after stock acquisition
An S corporation acquired all the stock of another corporation and intended to elect qualified subchapter S subsidiary status from the acquisition date. It continued to own all the subsidiary's stock …
Retroactive cash-to-accrual method relief denied
A manufacturing S corporation using the cash method concluded that its business activities required an accrual method. After its founder's death and an ownership change, it sought extra time to file F…
Three LLCs receive late partnership election relief
Three limited liability companies intended to elect partnership classification from the date they were formed but did not timely file Form 8832. Each company represented that it was eligible for partn…
Late section 336(e) election statement accepted
A partnership purchaser acquired all the stock of an S corporation through a disregarded entity, and the parties intended to elect under section 336(e) to treat the stock sale as an asset disposition.…
Rezoning agreement does not make foundation property debt-financed
A private foundation owned debt-free real property leased to unrelated businesses and hired an unrelated developer to pursue higher-density rezoning. The developer would initially bear most rezoning c…
Ineligible trust ownership treated as inadvertent S termination
An eligible trust transferred S corporation shares to a complex trust without realizing that the receiving trust was not an eligible S corporation shareholder. The company and its shareholders continu…
IRA rollover deadline waived after unauthorized withdrawals
A taxpayer's spouse repeatedly withdrew three distributions from her IRA without her knowledge or consent. After discovering the withdrawals, she contacted a criminal attorney about pursuing theft cha…
Exemption denied to fee-funded mortgage broker
A nonprofit applicant planned to originate mortgages for the general public and receive a one-percent loan origination fee from lenders for each loan it brokered. Its founder was also the owner of a f…
NOL rule does not reopen closed refund period
A taxpayer's overpayment was offset against outstanding tax liabilities, then the taxpayer filed amended returns after discovering a deduction that eliminated the original tax and generated a net oper…
Reconsideration allowed when refund grounds were overlooked
Chief Counsel explained that a supplemental refund claim generally cannot amend an original claim after the IRS has taken final action. A narrow exception applies when the IRS's disallowance did not f…
Valid overpayment credit creates a later payment date
Chief Counsel advised that when an overpayment is credited against another tax liability, section 7422(d) treats the credit as a payment for refund-suit purposes. Section 6407 dates that credit when t…
Taxpayer assistance order may expedite review but not compel refund
Chief Counsel advised the Taxpayer Advocate Service to continue communicating with the responsible IRS office or consider an operations assistance request before issuing a taxpayer assistance order. I…
Federal tax liens upheld against both named entities
An unincorporated division incurred a FICA tax liability. The requesting office asked whether the resulting federal tax lien attached to another entity's assets when that entity's charter authorized c…
Religious organization's pension plan qualifies as a church plan
A tax-exempt religious organization formed by a religious institute within a church maintained a frozen defined benefit plan for its employees. Its board appointed a committee whose principal purpose …
Foreign insurance statement reserves approved for Subpart F calculation
A controlled foreign corporation sold life insurance and annuity contracts in its home country under local insurance regulation. Its domestic parent asked to use specified home-country statement reser…
Late unified loss basis-reduction election granted
A consolidated group's parent sold all the stock of two subsidiaries at losses, ending their affiliation with the group. The parent intended to elect under the unified loss rules to reduce its stock b…
Two trust eligibility failures treated as inadvertent S terminations
An S corporation's shares remained in a former grantor trust for more than two years after the grantor's death, making that trust an ineligible shareholder and terminating the S election. The trustee …
Retroactive QEF elections granted for two PFIC investments
A partnership invested in two passive foreign investment companies and relied on a qualified accounting firm for international tax advice and return preparation. The firm failed to identify the compan…
Late section 336(e) agreement and election allowed
Two individuals bought all the stock of an S corporation for cash and a note, and the parties intended to elect under section 336(e) to treat the stock sale as an asset disposition. A qualified tax pr…
Alaska Native Settlement Trust receives section 646 treatment
An Alaska Native Corporation established an irrevocable Settlement Trust under the Alaska Native Claims Settlement Act for holders of its voting Settlement Common Stock and planned to elect section 64…
Late success-based transaction fee safe-harbor election granted
A limited liability company acquired all the stock of a target through a merger and paid a professional adviser a fee contingent on the transaction's successful closing. While preparing a late pre-tra…
Power agreements do not create private business use of bond-financed plant
A public power issuer financed its interest in an electric generating plant with revenue bonds, and a city held a take-or-pay right to a share of the plant's capacity and energy. The city planned to b…
Utility proration depends on when interim and final rates apply
A regulated electric utility used a forecasted test year to set refundable interim rates that began during the test year, while final rates would take effect only after that year ended. The IRS ruled …
Set-aside approved for construction of a specific exhibit
A private foundation requested approval to set aside a redacted amount for a specific exhibit planned by another organization. The exhibit was part of a larger capital campaign, and the long planning …
Exemption revoked after organization ignored audit requests
A section 501(c)(3) organization was selected for examination but did not respond to repeated letters and telephone calls seeking records needed to audit its Form 990. Some certified letters were retu…
Exemption denied for defective organizing terms and inadequate records
An organization applied to regain section 501(c)(3) status after an automatic revocation for failing to file required annual returns. Its articles directed assets on dissolution to a named organizatio…
Active rental services kept real estate income from being passive investment income
A corporation planning to elect S corporation status had accumulated earnings and profits and earned rent through real estate held directly and through limited liability companies. It and its affiliat…
Foreign entity received extra time to elect disregarded status
A foreign eligible entity intended to be treated as a disregarded entity from a redacted effective date but inadvertently failed to file Form 8832 on time. It represented that it acted reasonably and …
Spouses received extra time to elect out of automatic GST exemption allocation
A married couple created an irrevocable trust that divided into separate trusts for their children, including two trusts with generation-skipping transfer tax potential. Their accounting firm prepared…
Spouses received extra time to stop automatic GST exemption allocations
A married couple established an irrevocable trust with separate trusts for their children, including two intended to remain non-exempt from generation-skipping transfer tax. Their accounting firm prep…
Partnership received 120 days to make a late section 754 election
A limited liability company classified as a partnership timely filed its federal tax return but inadvertently omitted a section 754 election. That election permits basis adjustments to partnership pro…
Corporate group received 60 days to make a late consolidated-return election
A newly formed parent corporation acquired a C corporation and an S corporation with qualified subchapter S subsidiaries. The resulting affiliated group intended to elect consolidated federal return t…
Corporate group received extra time to elect an extended NOL carryback
A consolidated corporate group incurred a consolidated net operating loss for a qualifying tax year and wanted to carry it back beyond the ordinary two-year period. The group missed the election deadl…
REIT and hotel company received 90 days to make a late TRS election
A real estate investment trust indirectly owned a single-member limited liability company that leased a hotel operated by an eligible independent contractor. The parties intended for the company to el…
Mortgage settlement shares preserved REMIC tax treatment
A trustee for numerous residential mortgage-backed securitization trusts sought rulings about a bank settlement resolving alleged breaches of mortgage representations and warranties. Each settling tru…
Purchaser received 45 days to make a late section 338 election
A corporation acquired all the stock of a foreign target that had been a controlled foreign corporation and represented that the acquisition was a qualified stock purchase. The purchaser intended to m…
Allocated mortgage settlement payments preserved REMIC treatment
Two trustees for residential mortgage-backed securitization trusts requested rulings about a bank settlement over alleged mortgage representation and warranty breaches. Settlement shares would be base…
Adviser mishandling justified a waiver of the IRA rollover deadline
An IRA owner consulted an attorney about using a self-directed IRA to buy real estate. Following the attorney's instructions, she had an IRA distribution wired to the attorney's title-company account …
Professional-development grant procedures received advance approval
A private foundation proposed grants for professional-development opportunities benefiting people who work at its grantee organizations. Applicants could seek funding for conferences, training, semina…
Medical scholarship procedures received advance approval
A private foundation proposed scholarships for students pursuing premedical or medical studies at accredited colleges and universities and planning medical careers. Applicants would be evaluated on ac…
Export-promotion organization failed both section 501(c)(3) tests
An organization was formed to support a section 501(c)(6) group and a government office in promoting U.S. exports, initially through a sponsored conference. It planned to collect registration and spon…
Exemption revoked after the organization ignored audit requests
A section 501(c)(3) organization was selected for an examination of its Form 990-N but did not provide the information needed for the audit. The IRS sent repeated letters to the organization, a second…
Related-party securities transfers produced no deductible losses
An individual and a hedge-fund partnership transferred publicly traded securities to a broker's proprietary trading account and reported tax losses. The individual controlled that account and retained…
Acquisition financing did not prevent a foreign target's F reorganization
A U.S. corporate group planned to acquire the public shares of a foreign target that one group member already partly owned. Under a court-approved scheme, a new foreign company would issue short-term …
Estate received 120 days to make a late portability election
A decedent's estate missed the deadline to file Form 706 and elect portability of the deceased spousal unused exclusion amount to the surviving spouse. The personal representative stated that the gros…
Trust reformation prevented estate inclusion and a taxable gift
An irrevocable trust gave the grantor's spouse a testamentary power of appointment but failed to expressly exclude appointments to the spouse, the spouse's estate, or their creditors. The grantor repr…
Grantor received extra time to stop automatic GST exemption allocations
A grantor and spouse created an irrevocable trust with three separate trusts for their children, each with generation-skipping transfer tax potential. An accounting firm prepared a gift tax return ele…
Grantor received extra time to prevent GST exemption allocations to two trusts
A taxpayer created a family trust for descendants and a grantor retained annuity trust whose remaining assets would pass to the family trust after the estate tax inclusion period ended. The taxpayer d…
Corporation kept S status after a trust missed its ESBT election
After a shareholder died, the shareholder's estate transferred S corporation stock to a trust under the will. The trust could hold the shares temporarily but failed to make a timely electing small bus…
Estate received 120 days to elect portability for the surviving spouse
An estate failed to file Form 706 by the deadline needed to elect portability of the decedent's unused exclusion amount to the surviving spouse. The estate represented that the decedent's gross estate…
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.