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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Retained trust powers make gift incomplete without taxing distribution committee
A grantor created an irrevocable trust whose nonfiduciary distribution committee could direct distributions with the grantor's consent or by unanimous action, while the grantor retained separate distr…
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…
Taxpayer may elect out of automatic GST allocation for three trusts
A taxpayer made transfers to a grantor retained annuity trust and two descendant trusts with generation-skipping transfer potential. The taxpayer intended not to allocate GST exemption, but the accoun…
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…
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…
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…
Investors may make retroactive QEF elections for nine PFICs
A married couple held direct or indirect interests in nine foreign corporations that were passive foreign investment companies. Their accounting and legal advisers did not identify the companies as PF…
S corporation receives 120 days to make a late QSub election
An S corporation intended to treat its wholly owned subsidiary as a qualified subchapter S subsidiary but did not timely file Form 8869. The corporation represented that it had consistently filed its …
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…
Historic-home matching grant qualifies for a set-aside
A private foundation proposed a matching grant to a public charity restoring the historic home of a former United States president. Payment depended on the charity raising matching funds, securing app…
Broad scholarship procedures approved
A private foundation proposed scholarships for students ranging from primary and secondary school through graduate and professional education. It would publicize the program broadly, apply objective c…
Information received in determining tax liability is return information
Chief Counsel considered whether information received by the IRS was return information under IRC § 6103. The advice states that return information includes information the IRS gathers, collects, or c…
Natural gas processing fees are qualifying PTP income
A publicly traded partnership indirectly owned a natural gas processing plant. The plant used cryogenic expansion to remove natural gas liquids so the remaining gas met interstate pipeline specificati…
Missed ESBT election causes only inadvertent S termination
An S corporation's stock was held by a grantor trust whose deemed owner died. The trust remained an eligible shareholder for two years after the death, but it continued holding the stock after that pe…
Partnership receives 45 days to perfect accounting-method changes
A partnership decided to make automatic accounting-method changes for IRC § 263A capitalization and accrued bonuses. Its CPA timely filed the duplicate Form 3115 with the IRS, but a staff error caused…
Captive insurer receives 90 days to make a late section 831(b) election
A newly formed captive insurance company intended to elect taxation under IRC § 831(b) for its first tax year. Its officer directed the CPA to make the election, but the CPA omitted the required state…
Captive insurer receives 90 days to make a late section 831(b) election
A newly formed captive insurance company intended to elect taxation under IRC § 831(b) for its first tax year. Its president directed the CPA to make the election, but the CPA omitted the required sta…
Corporation receives late S election and three late QSub elections
A corporation intended to elect S status and to treat three wholly owned subsidiaries as qualified subchapter S subsidiaries from their respective formation dates. None of the required elections was t…
Partnership receives 120 days to make a late section 754 election
A partner in a limited partnership died, but the partnership filed its return for that year without an IRC § 754 election. Such an election allows basis adjustments under §§ 734(b) and 743(b) followin…
Surviving spouse receives 120 days to make estate's 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. No executor or administrator had been appoi…
Foreign entity receives 120 days to elect partnership status
A foreign eligible entity had a default classification as an association taxable as a corporation, but its owners intended partnership treatment from formation. A qualified tax professional failed to …
Foreign entity receives 120 days to elect partnership status
A foreign eligible entity had a default classification as an association taxable as a corporation, but its owners intended partnership treatment from formation. A qualified tax professional failed to …
Foreign entity receives 120 days to elect partnership status
A foreign eligible entity had a default classification as an association taxable as a corporation, but its owners intended partnership treatment from formation. A qualified tax professional failed to …
Foreign entity receives 120 days to elect partnership status
A foreign eligible entity had a default classification as an association taxable as a corporation, but its owners intended partnership treatment from formation. A qualified tax professional failed to …
Foreign entity receives 120 days to elect partnership status
A foreign eligible entity had a default classification as an association taxable as a corporation, but its owners intended partnership treatment from formation. A qualified tax professional failed to …
Foreign entity receives 120 days to elect disregarded status
A single-owner foreign eligible entity was classified by default as an association taxable as a corporation, but it intended disregarded-entity treatment from formation. A qualified tax professional f…
Foreign entity receives 120 days to elect partnership status
A foreign eligible entity had a default classification as an association taxable as a corporation, but its owners intended partnership treatment from formation. A qualified tax professional failed to …
Foreign entity receives 120 days to elect partnership status
A foreign eligible entity had a default classification as an association taxable as a corporation, but its owners intended partnership treatment from formation. A qualified tax professional failed to …
Foreign entity receives 120 days to elect partnership status
A foreign eligible entity had a default classification as an association taxable as a corporation, but its owners intended partnership treatment from formation. A qualified tax professional failed to …
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…
Bond index fund may use portfolio-level currency hedge accounting
A regulated investment company held foreign-currency bonds to track a public index and used rolling one-month currency forwards to mirror the index's hedging method. Because the portfolio contained ma…
Corporate group receives 60 days to make late consolidated-return election
A corporation became the parent of a new affiliated group and intended to file a consolidated return. Its adviser prepared the return as consolidated, but a valid Form 7004 extension was not filed, so…
Parent receives 60 days for late success-fee safe-harbor election
A financial-services parent paid success-based investment-banking and legal fees in a tax-free acquisition. Its preparer deducted 70 percent of the bank fee and capitalized 30 percent, but omitted the…
IRS prospectively ends a pension plan's amortization extension
A multiemployer pension plan had received conditional approval to extend by 10 years the periods for amortizing certain unfunded liabilities. The IRS modified that ruling after the plan first failed o…
Foundation may set aside funds for a performing arts venue
A private operating foundation was formed with a corporate donation to operate and maintain a performing arts theater and related space within a larger development. Construction was expected to take f…
Foundation may set aside funds for a future academic symposium
A private foundation planned a second academic symposium for promising young scholars from around the world. It proposed reserving equal amounts in two different years and spending all of the funds on…
Prior-year withholding corrections are limited to administrative errors
Chief Counsel clarified when an employer may use Form 941-X to correct federal income tax withholding from a prior year. An administrative error is limited to a transposition or basic mathematical mis…
Joint estimated tax payments follow the spouses' agreed allocation
Chief Counsel advised how to allocate payments associated with a joint account when spouses later file separate returns. An overpayment elected as a credit becomes an estimated tax payment for the nex…
Training explains qualified derivatives dealer responsibilities
Chief Counsel training materials explain the application, documentation, withholding, reporting, and compliance duties of a qualified derivatives dealer (QDD). An eligible entity must be a qualified i…
Training explains section 871(m) and the QDD tax regime
Chief Counsel training materials explain how section 871(m) treats certain dividend-linked payments to foreign persons as U.S.-source dividends. The rules cover securities lending and sale-repurchase …
Deficiency dividends generally trigger interest but not Chapter 68 penalties
Chief Counsel analyzed the consequences when a regulated investment company or real estate investment trust obtains a section 860 deficiency dividends deduction. Assuming the entity timely filed its o…
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…
Equipment TRAC leases retain lease treatment through securitization
A vehicle manufacturer group's finance subsidiary planned to securitize equipment loans and leases, including leases with terminal rental adjustment clauses (TRACs). The IRS ruled that each qualifying…
S corporation receives relief for an ineligible shareholder
Three individuals held an S corporation through separate single-member LLCs that were disregarded for federal tax purposes. On professional advice, one owner elected to treat his LLC as an S corporati…
Foundation's international student scholarship procedures are approved
A private foundation proposed scholarships primarily for financially needy students from impoverished countries who would study in the United States, while also allowing U.S. students to apply. Awards…
Foundation's renewable college scholarship procedures are approved
A private foundation proposed renewable scholarships for residents of a state who were enrolled or planning to enroll at a qualifying college or university. Applicants would submit an essay, transcrip…
County scholarship procedures were approved
A private foundation proposed scholarships for people under age 26 from specified counties. Eligible applicants included local high school graduates, residents with disabilities seeking suitable train…
Parent may add an omitted subsidiary to its consolidated return
A parent and one subsidiary filed a consolidated return, while another wholly owned subsidiary filed a separate return reporting no income or deductions. The return preparer mistakenly believed that i…
Purchasing and rebate services did not qualify as business-league activity
An organization claimed exemption as a section 501(c)(6) business league without having applied for recognition from the IRS. Its principal activities were negotiating bulk purchases and vendor rebate…
Commercial pipe manufacturing did not qualify as charitable activity
A nonprofit successor to a for-profit business proposed developing machinery and manufacturing large corrugated metal pipes for bridges, overpasses, and disaster-recovery projects. It planned to sell …
Section 743 basis increases do not produce net consolidated deductions
A consolidated group transferred partnership interests through an intercompany section 332 liquidation and section 368 reorganization while section 754 elections were in effect. Chief Counsel conclude…
REIT and subsidiary receive relief for a late TRS election
A real estate investment trust and a corporation it partly owned intended to elect taxable REIT subsidiary (TRS) status effective from the corporation's formation. A staff administrative oversight cau…
Partnership receives 120 days to make a late section 754 election
A limited liability company taxed as a partnership timely filed its federal return but inadvertently omitted its section 754 election. That election allows basis adjustments under sections 734(b) and …
Corporation receives 60 days to correct its IC-DISC election
A domestic corporation intended to elect interest charge domestic international sales corporation (IC-DISC) status from its formation. Its accounting and law firms miscommunicated about ownership, cau…
Group receives 60 days to attach its omitted Form 3115
A consolidated group decided to change its accounting method for computer-software development costs under the automatic-change procedures. Its tax adviser timely filed the required copy of Form 3115 …
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…
Taxpayer receives 45 days to submit a late accounting-method request
A taxpayer intended to request an accounting-method change on Form 3115 but missed the applicable filing deadline. The proposed change required a section 481(a) adjustment, which ordinarily causes the…
Nuclear plant owner receives a decommissioning fund ruling amount
A partnership indirectly owned an interest in a nuclear power plant and requested an initial schedule of amounts it could deductibly contribute to a qualified nuclear decommissioning fund. It based th…
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…
Homeowners association's late tax-year change form is treated as timely
A homeowners association wanted to change from a calendar tax year to a March 31 year-end so its accounting period would align with its revenue cycle. It assigned Form 1128 to outside tax professional…
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.