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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Whistleblower claim material withheld as return information
Chief Counsel reviewed material responsive to a Freedom of Information Act request. Pages tied to a specific whistleblower claim were treated as the taxpayer's return and were to be withheld in full u…
Direct-seller consumer products include intangible services
Chief Counsel advised that section 3508 does not limit consumer products to tangible goods. The cited cases treated a home-study course and cable television subscriptions as consumer products even tho…
Tax matters partner must sign earlier-year extensions
Chief Counsel addressed who may sign Form 921-P for earlier partnership tax years. If the named person is the tax matters partner for those years, she may sign. Otherwise, the earlier years' tax matte…
Late IC-DISC election receives 60-day extension
A domestic corporation intended to elect interest charge domestic international sales corporation status from its formation. Its accounting firm prepared Form 4876-A, but a misunderstanding resulted i…
Estate receives extension for farmland special-use valuation election
An estate intended to elect special-use valuation for farmland under section 2032A. Acting on counsel's advice, the executor requested automatic relief with the estate tax return but failed to meet th…
Estate receives extension to elect portability
An estate below the estate-tax filing threshold failed to file Form 706 by the deadline for electing portability of the deceased spouse's unused exclusion amount. The surviving spouse, acting as execu…
Partnership ownership caused inadvertent S corporation termination
An S corporation's initial shareholders transferred their stock to a partnership they wholly owned, causing the S election to terminate because the partnership was not an eligible shareholder. After d…
Late section 336(e) election receives extension
A purchaser acquired all stock of an S corporation target in a transaction the parties represented was a qualified stock disposition. The parties intended to elect under section 336(e) to treat the st…
Foreign entity receives extension for classification election
A foreign limited liability company wanted a federal tax classification different from its default status but inadvertently failed to file Form 8832 on time. The IRS found that the entity met the stan…
REIT accounting adjustments excluded from income tests
A REIT acquired assets in a carryover-basis transaction and changed their depreciation and amortization methods, producing positive section 481(a) adjustments over three tax years. The IRS ruled that …
LLC receives extension to elect corporate classification
A domestic limited liability company was eligible to elect treatment as an association taxable as a corporation but did not timely file Form 8832. The IRS found that the company satisfied the standard…
Late portability election receives 120-day extension
An estate below the estate-tax filing threshold did not timely file Form 706 to elect portability of the deceased spouse's unused exclusion amount. The failure was discovered after the election deadli…
Estate granted 120 days for portability election
An estate below the filing threshold failed to file Form 706 by the deadline for electing portability of the deceased spouse's unused exclusion amount. After discovering the omission, it requested an …
Estate granted 120 days for portability election
An estate below the filing threshold failed to file Form 706 by the deadline for electing portability of the deceased spouse's unused exclusion amount. After discovering the omission, it requested an …
Estate granted 120 days for portability election
The surviving spouse, acting as executor, missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount. The estate was below the filing threshold, and th…
Company granted time for two research expenditure elections
A parent company used the optional 10-year writeoff for research and experimental expenditures on consolidated returns for two tax years but failed to attach the required election statements. It repre…
REIT granted time for taxable subsidiary election
A real estate investment trust and an indirectly owned hotel lessee intended to elect taxable REIT subsidiary status, but their adviser omitted the lessee after receiving a list with its name misstate…
Foundation grants avoid private-foundation excise taxes
A private nonoperating foundation proposed grants to a private operating foundation building and operating a free community cultural center. Two directors served on both boards, but they could not con…
S corporation termination treated as inadvertent
An individual transferred shares of an S corporation to two trusts, one of which was not an eligible S corporation shareholder. The corporation's S election therefore terminated when the ineligible tr…
Reformed annuity trusts receive qualified-interest treatment
A grantor created several grantor retained annuity trusts intended to provide qualified interests under section 2702. The drafting attorney omitted a required prohibition against satisfying annuity ob…
Public employee health pool's income excluded
Political subdivisions formed an entity to pool and administer health and disability coverage for their employees. Its assets could be used only for benefits, related administration, and reasonable ex…
Private foundation's three scholarship programs approved
A private foundation requested advance approval for three scholarship programs serving graduating high school students. The programs included a renewable bachelor's degree scholarship, a one-time awar…
Medical aid charity reserved half its funds for one family
An organization sought section 501(c)(3) status to raise money for medical expenses of children with cancer or other life-threatening illnesses. It was originally formed to assist one named child and …
Foreign acquirer treated as a domestic corporation
Chief Counsel analyzed a heavily redacted restructuring in which a newly formed foreign corporation acquired the assets of a domestic corporation. It treated related cash-entitlement and equity-purcha…
Debt issuance costs not deductible after conversion to warrants
A company issued convertible debentures and capitalized the related issuance costs. The holder later converted the debt into warrants exercisable for common stock at a nominal price, and the company s…
Modified trust cannot deduct payments to foundations
A court modified a trust to convert a beneficiary's testamentary appointment power into a lifetime power, allowing the trust to terminate and distribute its assets to two private foundations. Chief Co…
Insurer owns variable contract investment portfolio
A life insurer used a partnership-classified investment portfolio for segregated accounts supporting variable contracts. Contract holders could choose among broad subaccounts, but they could not direc…
Group granted time to waive loss carryback
A consolidated group intended to waive the entire carryback period for a consolidated net operating loss, and its returns were filed consistently with that intent, but the required election statement …
Retained spin-off shares qualify for later debt exchange
A public company planned to separate one business by contributing it to a new corporation and distributing most of the new corporation's shares to its shareholders. It would temporarily retain a minor…
Foreign entity granted late partnership election
A foreign entity with two owners intended to elect partnership classification for federal tax purposes but did not timely file Form 8832. It represented that it was an eligible foreign entity and requ…
Partnership auction platform qualifies as matching service
A company proposed a restricted electronic auction platform for infrequent purchases and sales of third-party partnership interests. The platform would use nonfirm orders, minimum waiting periods befo…
Estate granted 120 days for portability election
An estate below the federal estate tax filing threshold missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount. After discovering the omission, the…
Estate granted 120 days for portability election
An estate below the federal estate tax filing threshold did not timely file Form 706 to elect portability of the deceased spouse's unused exclusion amount. The omission was discovered after the electi…
Sale to foreign owner caused inadvertent S termination
Two shareholders sold an S corporation's stock to a foreign corporation, which was not an eligible S corporation shareholder. After learning that the sale had terminated the S election, the parties re…
Retroactive qualified electing fund election approved
A partnership-owned shareholder invested in a foreign corporation that qualified as a passive foreign investment company. Its tax adviser did not identify the PFIC status or explain the qualified elec…
Late rental real estate grouping election approved
A married couple represented that they qualified as real property business taxpayers but filed their joint return without the statement electing to group all rental real estate interests as one activi…
Insurer owns variable contract investment portfolio
A life insurer used a partnership-classified investment portfolio for segregated accounts supporting variable contracts. Contract holders could select broad subaccounts but could not direct investment…
Late S election and QSST relief approved
An S corporation parent distributed all stock of its qualified subchapter S subsidiary to three trusts, ending the subsidiary election. The company intended to become an S corporation immediately, but…
Two taxpayers receive IRA rollover waivers
Two taxpayers took distributions from separate IRAs and mistakenly believed they had 90 days to complete their rollovers. Within 60 days they deposited the amounts into a non-IRA bank account, where t…
Private foundation's scholarship program approved
A private foundation proposed scholarships for descendants of members of two chapters of a fraternal organization who attended a specified college. Applicants had to meet enrollment, course-level, and…
IRS may restrict employer identification number issuance
Chief Counsel considered whether the IRS could deny an employer identification number when the responsible party lacked a Social Security number or individual taxpayer identification number, or had no…
Electronic signatures on Form 2678 need authorization
Chief Counsel considered whether the IRS should accept Form 2678 with a signature drawn electronically by mouse or stylus. It advised against acceptance until published guidance or the Internal Revenu…
Examination may let assessment period expire
Chief Counsel advised that Examination may use reasonable discretion to let the assessment period expire for a Form 720 excise tax. The decision could conserve resources when the return was unlikely t…
Late portability relief depends on estate size
Chief Counsel explained the available paths after an estate missed the Form 706 deadline for electing portability. If the gross estate exceeded $5 million, the filing obligation was statutory and no l…
Information sent to IRS raises no disclosure issue
The underlying question and factual context are redacted from this brief Chief Counsel email. The advice states that a disclosure made to the IRS does not create a disclosure issue on that basis. It e…
Accuracy penalty belongs in computational adjustment notice
Chief Counsel addressed where an accuracy-related penalty should appear when coordinating affected-item and deficiency procedures. It advised that the penalty should not be included in the statutory n…
House-pad work qualifies for completed contract accounting
A construction company performed subdivision work that included grading and compacting the soil pads on which house foundations would be built. The IRS concluded that this work was construction activi…
Entity conversion fixes year of worthless stock loss
Chief Counsel assumed that a subsidiary's stock became worthless several years before the taxpayer claimed the loss. Because the subsidiary remained in the taxpayer's consolidated group, the consolida…
Internal-use software credit requires complete rule set
Chief Counsel analyzed the research credit for internal-use software in years before the 2015 proposed regulations. It concluded that section 41(d)(4)(E) was not self-executing, so internal-use softwa…
Mortgage settlement payments preserve REMIC status
Several residential mortgage securitization trusts were to receive allocated shares of a settlement over alleged breaches of mortgage representations and warranties. The IRS ruled that the settlement …
Late qualified small business stock election approved
A taxpayer sold qualified small business stock but failed to make the section 1045 election on its return. That election can defer gain when replacement qualified small business stock is purchased dur…
Estate granted 120 days for portability election
An estate below the federal estate tax filing threshold failed to file Form 706 by the deadline for electing portability of the deceased spouse's unused exclusion amount. The decedent had made no taxa…
Invalid S election treated as inadvertent
A limited liability company elected corporate and S corporation treatment but failed to obtain all required shareholder consents. Its governing documents also could allow disproportionate distribution…
Late QSST elections preserve S and QSub status
A shareholder transferred S corporation stock to three trusts intended to qualify as qualified subchapter S trusts, but their income beneficiaries did not timely file QSST elections. The missing elect…
Couple granted late foreign earned income elections
A married couple filed joint returns while one spouse worked for an employer in a foreign country. They did not timely file Form 2555 or Form 2555-EZ to elect the section 911 foreign earned income exc…
Incomplete-gift trust receives requested tax treatment
A grantor created an irrevocable trust with distribution powers held by the grantor and a distribution committee. While the committee remained in existence, the IRS found no stated circumstances that …
Estate granted 120 days for portability election
An estate below the federal estate tax filing threshold failed to file Form 706 by the deadline for electing portability of the deceased spouse's unused exclusion amount. The decedent had made no taxa…
Group trust participants counted separately for REIT test
A tax-exempt group trust pooled assets for qualified plans, IRAs, governmental plans, and other retirement arrangements and invested in real estate investment trusts. It asked whether all REIT stock h…
Group trust participants counted separately for REIT test
A tax-exempt group trust pooled assets for qualified plans, IRAs, governmental plans, and other retirement arrangements and invested in real estate investment trusts. It asked whether all REIT stock h…
Late success-based fee safe-harbor statement approved
A subsidiary paid a success-based broker fee in a completed stock acquisition. The taxpayer's return treated 70 percent of the fee as deductible and 30 percent as capitalized under Revenue Procedure 2…
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.