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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Unawareness of the requirement supported portability relief
An estate missed the deadline to file Form 706 and elect portability of the deceased spouse's unused estate and gift tax exclusion. It represented that the decedent's gross estate, including taxable g…
Estate obtained relief for a missed portability election
An estate missed the deadline to file Form 706 and elect portability of the deceased spouse's unused estate and gift tax exclusion. It represented that the decedent's gross estate, including taxable g…
Art foundation lost exemption after failing to verify its activities
A private foundation was recognized as tax-exempt based on plans to present art exhibitions and provide art to museums. The examination report said the foundation claimed only one domestic exhibition …
Multiyear college scholarship procedures were approved
A private foundation proposed scholarships for graduating high school seniors entering college. Applicants needed at least a 3.0 GPA and would submit a resume and essay, with finalists selected throug…
Industrial park association was denied social-welfare exemption
An association of industrial park lot owners applied for exemption as a social-welfare organization under section 501(c)(4). It maintained the park's common areas, paid utilities and other operating c…
Military morale club was denied charitable exemption
An unincorporated association limited membership to military personnel at a particular location who held a specified rank. It organized picnics, paintball trips, gaming and sports tournaments, and oth…
Single-vendor software group was denied business-league exemption
A software user group sought exemption as a business league under section 501(c)(6). Membership was limited to organizations licensed to use a particular commercial software system, and most forum act…
Hospital lost its exemption for failing the community health needs assessment rules
The IRS revoked a hospital organization's section 501(c)(3) status because it did not satisfy the community health needs assessment requirements of section 501(r). The hospital had obtained an assessm…
Organization loses exemption after failing to provide audit records
The IRS revoked an organization's section 501(c)(3) exemption after it repeatedly failed to provide requested financial records and information about its activities. The organization did not respond t…
Farmers market loses exemption for commercial private benefit
A nonprofit operated several farmers markets where farmers, food producers, artisans, and other vendors sold goods directly to the public. Vendors paid membership dues and market fees, while the organ…
LLC receives 180 days to file a late partnership classification election
A limited liability company intended to be taxed as a partnership from a redacted effective date, but it did not timely file the required entity classification election. It later elected corporate sta…
Gift tax return substantially complied with GST exemption allocation rules
A husband transferred property to a trust for his descendants, and the spouses elected to treat the gift as made one-half by each of them. The wife elected out of the automatic GST exemption allocatio…
Township deferred compensation plan qualifies under section 457(b)
A township adopted a nonqualified deferred compensation plan and related trust for its employees and beneficiaries. The plan allowed regular and Roth deferrals, statutory catch-up contributions, distr…
Regulated group receives rulings on a multistep corporate simplification
A regulated public company proposed a multistep simplification of its domestic and foreign subsidiary structure. The plan used check-the-box conversions, successive subsidiary liquidations, an asset c…
Corporation receives 120 days to file a late S election
A corporation's sole shareholder intended the company to be an S corporation from a redacted effective date, but the company did not timely file Form 2553. The IRS found reasonable cause for the misse…
Estate receives time to sever a marital trust and make a reverse QTIP election
A decedent's estate made a QTIP election for a marital trust but did not sever the trust, make a reverse QTIP election, or allocate the decedent's unused GST exemption. The executor had relied on a la…
Gift tax return substantially complied with GST exemption allocation rules
A husband transferred property to a trust for his descendants, and the spouses elected to treat the gift as made one-half by each of them. The husband elected out of the automatic GST exemption alloca…
Spin-off may retain stock for debt exchanges without defeating control distribution
A public company proposed separating one business segment through a multistep domestic and foreign restructuring followed by three distributions. One distributing company would temporarily retain cont…
Business expansion and minority stock retention do not block proposed spin-off
A public company planned divisive reorganizations under sections 368(a)(1)(D) and 355. In one transaction, the company and two group members would contribute assets and cash to a new controlled corpor…
Mortgage settlement allocations do not disrupt REMIC tax treatment
A trustee represented numerous residential mortgage-backed securitization trusts that had elected REMIC status. The trusts entered a settlement with a banking organization over alleged breaches of mor…
Mortgage settlement allocations do not disrupt REMIC tax treatment
A trustee represented numerous residential mortgage-backed securitization trusts that had elected REMIC status. The trusts entered a settlement with a banking organization over alleged breaches of mor…
Charitable trust may track a school's endowment without generating UBTI
A charitable remainder unitrust had a school as its trustee and sole charitable remainder beneficiary. The school proposed issuing contractual endowment units so the trust could receive returns matchi…
Missed ESBT elections do not invalidate corporation's S status
Two trusts held shares when a corporation's S election became effective, but their trustee did not timely file electing small business trust elections. The corporation and trusts consistently filed as…
Nuclear plant transfer preserves qualified decommissioning fund treatment
A partnership that owned a nuclear generating unit proposed transferring the unit, its decommissioning liability, and its qualified and nonqualified decommissioning funds to a wholly owned disregarded…
School may issue endowment units to charitable trusts without UBTI
A tax-exempt school served as trustee and sole charitable remainder beneficiary of a charitable remainder unitrust. It proposed issuing contractual units tied to its pooled endowment so the trust coul…
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…
Corporation receives 120 days to file a late S election
A corporation's shareholder intended the company to be an S corporation from a redacted effective date, but the S election was not timely filed. The IRS found reasonable cause for the missed deadline …
Credit card payments and free companion ticket avoid air transportation tax
An airline and bank operated a co-branded credit card and rewards program. The bank made thirteen types of payments involving interchange-fee rebates, program expenses, marketing, milestones, new or q…
Estate receives 120 days to make a late portability election
An estate missed the deadline to file Form 706 and elect portability of the decedent's unused estate and gift tax exclusion for the surviving spouse. The estate represented that the gross estate and l…
Estate receives 120 days to make a late portability election
An estate missed the deadline to file Form 706 and elect portability of the decedent's unused estate and gift tax exclusion for the surviving spouse. The estate represented that the gross estate and l…
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…
Estate receives 120 days to make a late portability election
An estate missed the deadline to file Form 706 and elect portability of the decedent's unused estate and gift tax exclusion for the surviving spouse. The estate represented that the gross estate and l…
Affiliate service arrangements do not defeat active-business spin-off rules
A consolidated group proposed separating one business through a contribution to a new corporation, two section 355 distributions, and a later liquidation into a disregarded entity. Both the retained a…
Estate receives 120 days to make a late portability election
An estate missed the deadline to file Form 706 and elect portability of the decedent's unused estate and gift tax exclusion for the surviving spouse. The estate represented that the gross estate and l…
Corporate group receives 60 days to make a late consolidated return election
A parent corporation acquired a former consolidated group and intended to file a new consolidated federal income tax return with itself as common parent. A valid election was not filed by the regulato…
Foreign insurer may revoke its election to be treated as domestic
A foreign insurance company had elected under section 953(d) to be treated as a domestic corporation before a new corporate group acquired it. The company operated only in its home country and abandon…
Mortgage settlement allocations do not disrupt REMIC tax treatment
A trustee represented numerous residential mortgage-backed securitization trusts that had elected REMIC status. The trusts entered a settlement with a banking organization over alleged breaches of mor…
Parties receive time to file a late section 336(e) election statement
A partnership purchased a controlling percentage of an S corporation's stock from its shareholders. Before the filing deadline, the parties signed binding agreements to make a section 336(e) election …
Parties receive time to file a late section 336(e) election statement
A partnership purchased a controlling percentage of an S corporation's stock from its shareholder. The parties timely signed binding agreements to make a section 336(e) election and filed the target's…
Estate receives 120 days to make a late portability election
An estate missed the deadline to file Form 706 and elect portability of the decedent's unused estate and gift tax exclusion for the surviving spouse. The estate represented that the gross estate and l…
Temporary partnership owner causes only inadvertent S termination
An S corporation was owned through a disregarded limited liability company. The individual owner transferred part of the LLC to a grantor trust, then died, causing the trust to lose grantor-trust stat…
Estate receives 120 days to make a late portability election
An estate below the estate-tax filing threshold missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount. Because the estate was not otherwise requir…
Employer-related scholarship procedures approved
A private foundation asked the IRS to approve procedures for one-time scholarships for qualifying children of active, retired, and deceased employees of a company. An independent public charity would …
Large bequest qualifies as an unusual grant
A publicly supported charity expected a large bequest from a donor who did not create or control the organization. The charity had consistently met the public-support test, actively solicited public c…
Local academic scholarship procedures approved
A private foundation proposed up to five annual scholarships for high school seniors in a particular geographic area who planned to attend nonprofit colleges in the United States. The foundation would…
Transitional-housing exemption denied for vague plans and private benefit
A nonprofit sought recognition under IRC § 501(c)(3) for a planned transitional-housing program. It repeatedly said that it would develop its facility, admissions policies, fees, services, staffing, a…
Marine-services exemption denied for commercial operations
A nonprofit provided project planning and arranged underwater engineering and marine-science services for academic and research clients. It hired third-party contractors, charged clients its costs plu…
Fishing-market organization denied agricultural exemption
An organization formed to preserve a commercial fishing fleet bought seafood from local fishermen above open-market prices and resold it to the public, both uncooked and as prepared meals. The IRS con…
Refined-coal investors bought tax benefits rather than a production stake
A partnership owned refined-coal facilities and allocated IRC § 45 credits to two outside investors. The governing contracts tied the investors' contributions to credit generation, guaranteed operatin…
Corporation receives 60 days to perfect success-fee safe-harbor election
A corporation paid success-based investment-banking fees in an acquisition. Its return deducted 70 percent of those fees and capitalized 30 percent, consistent with the safe harbor in Revenue Procedur…
Estate receives 120 days to elect out of automatic GST allocation
A decedent transferred limited-partnership interests to three irrevocable trusts primarily benefiting the decedent's children. The law firm that prepared the trusts and gift-tax return failed to advis…
Estate receives 120 days to make a late portability election
An estate below the estate-tax filing threshold missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount. Because the estate was not otherwise requir…
Invalid QSST consent and possible ineligible owners receive inadvertent relief
A corporation attempted to elect S status while one shareholder was a trust intended to be a qualified subchapter S trust. The trustee signed both the QSST election and the corporation's Form 2553 con…
Partnership receives 120 days to make a late section 754 election
A partnership underwent a technical termination under then-applicable IRC § 708(b)(1)(B) when an owner's interest changed hands. The partnership intended to make an IRC § 754 election but did not file…
College endowment units do not create UBTI for charitable remainder trust
A charitable remainder unitrust proposed exchanging assets for contractual units tied to the pooled endowment of the college serving as its trustee and remainder beneficiary. The units would provide p…
Cost-only endowment management creates no UBTI for college
A tax-exempt college proposed issuing contractual units in its pooled endowment to a charitable remainder trust for which it was trustee and sole charitable remainder beneficiary. The trust would rece…
Nuclear plant sale preserves qualified decommissioning fund treatment
A utility proposed selling a nuclear generating unit and transferring its qualified and nonqualified decommissioning trust assets to corresponding funds maintained by the buyer. The IRS ruled that the…
Nuclear plant buyer may receive qualified decommissioning fund assets tax-free
A corporate buyer proposed acquiring a nuclear generating unit and receiving the seller's qualified and nonqualified decommissioning trust assets in corresponding buyer funds. The IRS ruled that the s…
Estate receives 120 days to make a late portability election
An estate below the estate-tax filing threshold missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount. Because the estate was not otherwise requir…
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.