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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Relocation reimbursements excluded but reimbursed costs yield no deduction or basis
A partnership-owned business had to relocate because a state agency acquired part of its premises for a federally assisted highway project. The business received payments under the Uniform Relocation …
Corporation receives inadvertent S election termination relief
An S corporation's trust shareholder was intended to be a qualified subchapter S trust, but the beneficiary did not file a timely QSST election and the trust temporarily failed the current-income-dist…
Financial institution error supports rollover deadline waiver
A taxpayer directed a financial institution to roll funds from a qualified plan and an IRA into a traditional IRA, but the institution deposited both amounts into the wrong IRA. The taxpayer documente…
Multiemployer plan receives five-year funding extension
A multiemployer pension plan requested a five-year extension for amortizing specified unfunded liabilities beginning with its May 1, 2014 plan year. Its actuary certified that without the extension th…
Collateral sentence challenge does not delay restitution assessment
The IRS considered whether it could assess criminal restitution while an appeal involving a motion under 28 U.S.C. § 2255 remained pending. Section 6201(a)(4)(B) delays assessment until appeals of the…
Bank lien priority limited to original loan amount
The IRS considered the extent of a bank's lien priority outside bankruptcy. It advised that the bank's priority was limited to the original loan amount. Under section 6323(h)(1), the bank has a protec…
IRS cannot accept late election to waive NOL carryback
The IRS considered whether it could accept an election under section 172(b)(3) after the extended due date for the return reporting a net operating loss. It advised that the election deadline is statu…
Medicaid contractor status depends on insurance risk and beneficiary rights
The IRS analyzed when an entity providing Medicaid services is a health insurance issuer and covered health insurance provider for the compensation-deduction limit in section 162(m)(6). A non-risk-bea…
Partnership receives extension for housing credit election
A partnership placed a low-income housing building in service but inadvertently failed to make a timely section 42(f)(1) election to begin the building's credit period that year. The IRS concluded tha…
Consolidated group receives extension to waive NOL carryback
A consolidated group intended to waive the carryback period for a consolidated net operating loss, and its other returns were consistent with that intent, but it failed to file a valid election with t…
Nuclear plant transfers preserve qualified decommissioning funds
Two utility subsidiaries planned to transfer nuclear plants, related liabilities, and qualified decommissioning funds to another entity that was not in their consolidated group. The IRS ruled that the…
Taxpayers receive relief to elect out of installment method
Shareholders sold all of their company stock in an installment sale and instructed their return preparer to elect out of installment reporting. The preparer accidentally transmitted a different draft …
Nuclear plant receives revised decommissioning contribution schedule
The owner of an unregulated nuclear power plant requested a revised schedule of deductible contributions to its qualified decommissioning fund. The proposed amount was based on an industry decommissio…
Charity matches tied to PAC donations are not deductible
A corporation offered to make charitable donations in employees' names when the employees contributed specified amounts to its political action committee. The corporation asked to deduct those matchin…
Late QSST election does not end corporation's S status
A trust became a shareholder of an S corporation and qualified as a qualified subchapter S trust, but its beneficiary did not file the required QSST election on time. That failure made the trust an in…
Erroneous IRA withdrawal receives rollover deadline waiver
A taxpayer asked her financial adviser to move money from a personal account to her checking account, but the adviser's company mistakenly distributed the money from her IRA. She did not discover the …
Unauthorized inherited IRA transfer receives rollover waiver
A surviving spouse was the primary beneficiary of her deceased husband's Roth IRA. A financial adviser directed the bank to transfer the IRA to her trust without her authorization, without signed pape…
Unsupported postal-error claim does not justify rollover waiver
A taxpayer tried to move IRA assets to a new custodian by mailing the new custodian's account-transfer form from his residential mailbox. He later learned that the new custodian had never received the…
Non-MSSP accountable care organization denied exemption
A tax-exempt health system formed an accountable care organization to integrate employed and independent physicians, measure performance, and negotiate incentive-based agreements with private payers. …
Social club denied exemption because of recurring royalty income
A hunting, fishing, shooting, and boating club sought reinstatement of exemption under section 501(c)(7). Although its membership and facilities served recreational purposes, most of its revenue came …
Long-term care scholarship procedures receive advance approval
A private foundation proposed scholarships for employees of long-term care facilities who were accepted into nursing or related education programs. An independent selection committee would evaluate ap…
Motorcycle chapter denied social club exemption
A motorcycle owners' chapter spent most of its time on rides and social gatherings, but a sponsoring dealership and related brand organizations retained extensive control over its officers, members, c…
Medical cannabis collective denied charity status
A nonprofit corporation proposed to cultivate or obtain medical cannabis and deliver it to qualified patients who joined its collective. Its business plan also called for membership growth, advertisin…
Dog-breed parent club denied charity status
A parent club for a specific dog breed hosted four to six conformation shows each year and also maintained breed standards, a registry, health information, and educational materials. Dog shows produce…
Dance scholarship charity denied for private benefit
A nonprofit planned scholarships, camps, workshops, and other performing-arts programs for underserved girls. Its founder also owned a related for-profit dance company, and the nonprofit would award s…
Inactive small-business lender loses exemption
A nonprofit was formed to provide equity capital and loans to disadvantaged small businesses in low- and moderate-income neighborhoods. An IRS examination found that it had stopped making loans, condu…
Political advertising group denied social welfare exemption
A community organization sought exemption under section 501(c)(4) after spending all of its first-year expenditures on election mailers and radio advertisements that supported or opposed candidates. I…
Extended testing period for otherwise excludable employees allowed
Chief Counsel advised that an employer may treat an early-participating employee as an “otherwise excludable employee” beyond the date the employee reaches age 21 and completes one year of service. Th…
Incorrect Form 1042-S TIN penalties depend on knowledge
Chief Counsel advised that an incorrect taxpayer identification number on Form 1042-S does not automatically justify a penalty against the withholding agent. Penalties normally should not be asserted …
Success-fee safe-harbor election gets 60-day extension
A taxpayer properly deducted 70 percent of a success-based acquisition fee and capitalized 30 percent under the safe harbor in Rev. Proc. 2011-29, but its tax department omitted the required election …
Late portability election treated as timely
An estate below the estate-tax filing threshold missed the deadline to elect portability of the decedent's unused exclusion amount for the surviving spouse. The estate later filed Form 706 and request…
Estate receives 120 days for portability election
An estate below the estate-tax filing threshold failed to file Form 706 by the deadline for electing portability of the decedent's unused exclusion amount. Because the estate was not otherwise require…
Housing authority gets 45 days for volume-cap election
A public housing authority received private activity bond volume cap for a qualified residential rental project but failed to file Form 8328 to carry the unused allocation forward. Responsibility for …
REIT gets 90 days for two subsidiary elections
A REIT intended two corporations in its investment structure to be taxable REIT subsidiaries, but outside advisers failed to coordinate the required joint Form 8875 elections. The entities had no empl…
Spouses get 120 days to complete GST allocations
A married couple made split gifts to two irrevocable trusts with generation-skipping transfer tax potential. Their Forms 709 reported amounts of GST exemption, but the accountant failed to attach the …
Couple gets 120 days for trust GST allocations
A married couple treated a gift to an irrevocable trust as made one-half by each spouse and reported amounts of GST exemption on their Forms 709. Their accountant advised them to allocate the exemptio…
Unneeded QTIP election voided, but spouse becomes GST transferor
An estate made a QTIP election for a marital trust even though the spouse already held a qualifying lifetime income interest and a testamentary general power of appointment. Because the election was u…
S status restored after trust election and income failures
An S corporation's stock passed to a trust that was eligible to be a qualified subchapter S trust, but the beneficiary did not timely make the QSST election. The trustee also failed for several years …
S status restored after late ESBT election
An S corporation's shares were held by a qualified subchapter S trust when the trust's income beneficiary died. The trust could remain an eligible shareholder for two years after the death, but its tr…
Options dealer gets 30 days for mixed-straddle election
An options dealer became a partnership when its parent admitted a new partner. The parent's outside accounting firm explained that the new partnership could use mixed-straddle account treatment but di…
Credit counseling organization loses exemption over commercial operations and private benefits
The IRS examined a nonprofit credit counseling organization whose main operation was a call center that enrolled and serviced consumers in debt management plans. The agency concluded that the organiza…
Scholarship procedures for heritage and faith communities approved
A private foundation proposed a scholarship program for students connected to specified heritage and faith communities who would study at qualifying schools in the United States or a redacted country.…
Automatic member death benefits prevent charitable exemption
An organization serving members of specified immigrant communities applied for section 501(c)(3) status. Its activities included counseling, cultural events, aid to people in need, and payments to mem…
Tangible-property method change protects pre-change material costs from audit adjustment
Chief Counsel considered a taxpayer that timely filed Form 3115 to adopt the final tangible property regulations for non-incidental materials and supplies, using the limited section 481(a) adjustment …
Misstated prior gifts do not keep later gift tax years open indefinitely
Chief Counsel addressed a taxpayer who failed to report gifts in one year and then understated the cumulative prior-year gifts shown on later gift tax returns. Section 6501(c)(9) leaves the assessment…
Insolvent bank may protect depositor assets from tax unrelated to federal assistance
An insolvent bank received federal financial assistance during a receivership transaction and separately reported taxable income from a litigation recovery. The tax liability came entirely from the li…
Partnership losses are computational adjustments, but sham-related fees need partner-level action
Chief Counsel addressed the procedural treatment of losses and professional fees after a partnership-level examination. Disallowing capital and ordinary losses reported by the partnership is a computa…
Unidentified revenue ruling is compatible with the proposed approach
The released Chief Counsel email is extremely brief. It addresses an unidentified revenue ruling in connection with an approach that is not described in the public release. The author says the ruling …
Revenue officer may use and share a credit report for hardship review
The Taxpayer Advocate Service asked Field Collection to determine whether a taxpayer faced enough financial hardship for currently-not-collectible status. Chief Counsel advised that the revenue office…
Risk-weighted assets usually cannot apportion a foreign bank's support expenses
Chief Counsel considered whether foreign banks may use the relative value of risk-weighted assets to divide supportive expenses between effectively connected U.S. income and other income. The memorand…
Estate receives extra time to elect portability for a surviving spouse
An estate missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount for the surviving spouse. The estate represented that the decedent's gross estate,…
S status survives a possible second class of stock during entity conversions
An S corporation converted first into a limited partnership that elected corporate tax treatment and then into another corporation. The first conversion may have created a prohibited second class of s…
Estate receives 120 days to elect portability for a surviving spouse
An estate missed the deadline to file Form 706 and elect portability of the deceased spouse's unused exclusion amount for the surviving spouse. The estate represented that the decedent's gross estate,…
Estate receives 120 days to make a late portability election
An estate failed to file Form 706 by the deadline for electing portability of the deceased spouse's unused exclusion amount. The estate represented that the decedent's gross estate, including taxable …
Book-entry partnership interests in a student-loan pool qualify as registered obligations
A taxpayer proposed holding nearly all of a partnership that would acquire and manage a pool of student loans. Partnership interests could be transferred only with the general partner's consent and th…
Corporation receives relief for a late S election
A corporation intended to be taxed as an S corporation from a specified effective date but did not timely file the required election. The IRS found reasonable cause for the late filing and granted rel…
Foreign entity receives 120 days for a late corporate classification election
A foreign entity owned through a qualified Subchapter S subsidiary intended to be classified as an association taxable as a corporation from a specified date. It failed to timely file Form 8832 to mak…
Estate gets 120 days to file a late portability election
An estate missed the Form 706 deadline for electing portability of the deceased spouse's unused exclusion amount. It represented that the decedent's gross estate, after considering taxable gifts, was …
REIT and subsidiary receive 90 days for a late TRS election
A real estate investment trust and its wholly owned subsidiary intended to file Form 8875 so the subsidiary would be treated as a taxable REIT subsidiary for an acquired hotel property. Their tax advi…
Estate receives 120 days after missing the portability requirement
An estate did not timely file Form 706 to elect portability of the deceased spouse's unused exclusion amount for the surviving spouse. It represented that the decedent's estate, after taxable gifts, w…
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.