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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Late ESBT election receives inadvertent-termination relief
After an S corporation shareholder died, the shareholder's grantor trust eventually ceased to be an eligible shareholder because the trustee did not timely elect electing small business trust treatmen…
Two late ESBT elections receive inadvertent-termination relief
An S corporation shareholder transferred shares to two trusts that were eligible to elect electing small business trust treatment, but neither trustee made the election. Both trusts became ineligible …
Online marketplace is a third-party settlement organization
An online marketplace connected customers with unrelated service providers, collected customer payments, extinguished customers' obligations upon payment, guaranteed providers would be paid, deducted …
Shareholder may make retroactive QEF election
A U.S. shareholder acquired stock in a foreign corporation that was a passive foreign investment company but did not make a timely qualified electing fund election. The shareholder's tax adviser knew …
Division into three family trusts preserves tax attributes
An irrevocable trust for three daughters and their descendants had a zero generation-skipping transfer tax inclusion ratio. A state court conditionally approved dividing it into three equal trusts, ea…
Taxpayer receives 60 days to recharacterize a Roth IRA contribution
A married taxpayer made Roth IRA contributions for several years before learning that the couple's income exceeded the applicable contribution limits. The taxpayer had relied on a tax return preparer …
Taxpayer receives 60 days to undo Roth IRA conversions
A taxpayer converted two traditional IRAs to Roth IRAs after a tax adviser said that partnership losses would offset the conversion income. The IRS later disallowed those losses because state law prot…
Surviving spouse receives a 60-day IRA rollover waiver
A surviving spouse received a distribution from her deceased spouse's individual retirement annuity and deposited it in a non-IRA bank account. She and her investment adviser had believed the annuity …
Incorrect 90-day advice supports an IRA rollover waiver
A taxpayer transferred money from a SEP-IRA to a savings account while considering an office purchase. A financial institution employee told him that he could redeposit the money within 90 days, but t…
Dementia and hospitalization support a post-death IRA rollover waiver
An IRA owner withdrew money from several IRAs while experiencing diminished mental capacity and then was hospitalized during the 60-day rollover period. A physician stated that she had non-reversible …
Financial institution error does not defeat a retirement plan rollover
A retirement plan participant received a check payable to a financial institution for his benefit and marked it for deposit into his IRA. The institution instead placed the money in a non-IRA account …
Inactive recovery-housing charity loses exemption
The IRS revoked the exemption of an organization formed to provide housing and support for people recovering from substance abuse. The examination found that the organization was inactive, reported no…
Food-bank charity loses exemption after failing to substantiate its operations
The IRS revoked the exemption of an organization formed to solicit and distribute surplus food and other items to people struggling to make ends meet. The organization reported cash and noncash contri…
Inactive educational organization loses exemption after bankruptcy
The IRS revoked the exemption of an educational organization that had planned supplemental programs for young people and a charter high school. The organization filed for Chapter 7 bankruptcy, and its…
Gaming and property activities disqualify public charity
The IRS revoked the exemption of an organization that conducted bingo games, sold pull tabs and scratch games, and maintained property used by a related fraternal organization. Although the organizati…
Closed private school loses exemption
The IRS revoked the exemption of a private school that had educated children from pre-kindergarten through eighth grade. The school experienced financial difficulties as enrollment declined, served a …
Inactive organ-recovery organization loses exemption
The IRS revoked the exemption of an organization formed to facilitate the recovery, processing, and distribution of human organs and tissue. The organization sold its fixed and cash assets and transfe…
Housing organization loses exemption after noncharitable operations
The IRS revoked the exemption of an organization originally formed for drug and alcohol prevention that later acquired and operated apartment complexes. The examination found that the housing operatio…
Daycare organization loses exemption over records and insider transfers
The IRS revoked the exemption of an organization that operated three full-time daycare facilities and participated in government-subsidized child-care and food programs. After repeated document reques…
Private foundation may receive most of a related foundation's assets
A private foundation asked about receiving approximately 78 percent of another private foundation's net assets after the transferor's directors disagreed about how to carry out its charitable purposes…
Foundation may transfer most assets subject to distribution safeguards
A private foundation proposed transferring approximately 78 percent of its net assets to another commonly controlled private foundation while continuing its own charitable work with the remaining asse…
Foundation may buy out partners in low-income housing LLC
A private foundation that managed an affordable-housing LLC proposed buying the interests of the LLC's investor and special members, leaving the foundation as sole owner. The IRS ruled that the housin…
IRS may choose a consistent method for electronic-filing penalty calculations
Chief Counsel considered how to calculate the percentage-based penalty when a filer intentionally disregards the requirement to submit information returns electronically. Section 6721 penalties apply …
Some IRS employee audits may require personal attendance at interviews
Chief Counsel addressed whether an IRS employee may send a representative to the initial interview in the employee's own tax audit. Section 7521 generally allows taxpayers to attend through representa…
Partner bankruptcy does not bar signing for a nonbankrupt entity
Chief Counsel considered whether an indirect partner's bankruptcy affected that person's ability to sign a statute-of-limitations extension for an entity partner. The entity partner itself had not fil…
Online transaction processing falls outside narrow software exceptions
Chief Counsel analyzed whether receipts from a taxpayer's Internet-based transaction processing could qualify under section 199 as receipts from the disposition of computer software. The regulations g…
Estimated-tax ruling does not apply to Form 1042
Chief Counsel considered whether Revenue Ruling 99-40 applies to a credit election involving a withholding tax return on Form 1042. Counsel advised that the ruling's treatment of unpaid estimated-tax …
Refund claim filed within three years was timely
A taxpayer timely filed a 2010 return on April 18, 2011, after Emancipation Day affected the filing deadline. The taxpayer filed an amended return claiming a refund on April 17, 2014. Chief Counsel ad…
Discounted stock option triggered section 409A income
Chief Counsel rejected taxpayers' arguments against proposed adjustments for a stock option granted with an exercise price below fair market value. The stock was readily tradable on an established ove…
Corporation receives more time for success-fee safe harbor election
A corporation intended to elect the Revenue Procedure 2011-29 safe harbor for success-based fees incurred in a business acquisition. Its accounting firm prepared the return using the safe harbor's 70 …
Life insurer may deduct partnership investment fees
Chief Counsel addressed how a life insurer should calculate its share of dividends-received deductions for separate-account assets invested through partnerships. The insurer includes its distributive …
LLC receives 120 days to elect corporate classification
A single-owner limited liability company intended to be classified as an association taxable as a corporation but did not timely file Form 8832. The company represented that its federal tax and inform…
Estate receives 120 days to elect portability
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 executor represented that the gross estate and taxab…
Business size does not prevent spin-off qualification
A publicly traded real estate investment trust planned to form and distribute a controlled REIT that would continue a separate business through an acquired target. The IRS ruled that the relative size…
Taxpayer receives 60 days to opt out of bonus depreciation
An affiliated corporate group intended to elect out of additional first-year depreciation for every class of qualified property placed in service during a short tax year. Its return preparer timely pr…
Partnership receives 120 days to make section 754 election
A partnership timely filed its return for a year in which ownership interests were transferred but did not make a section 754 election or reflect the related basis adjustments. The partnership represe…
Amortization plan cures utility normalization violation
A regulated electric utility discovered that errors in an old accounting system had partially flowed the tax benefits of accelerated depreciation through to ratepayers. The IRS ruled that the inadvert…
Second stock class defect does not invalidate S status
A corporation's original operating agreement created a second class of stock, making its S corporation election invalid. After discovering the problem, the corporation adopted a new agreement that rem…
Corrected transfers do not end S corporation status
An S corporation made transfers to shareholders and shareholder-owned entities that its adviser believed might be disproportionate distributions violating the one-class-of-stock rule. The corporation'…
Corporate conversion preserves qualified small business stock status
A corporation sold and redeemed portions of its original shareholders' stock, then converted under state law into a limited liability company that remained taxed as a corporation. The taxpayer represe…
Corporate conversion preserves qualified small business stock status
A corporation sold and redeemed portions of its original shareholders' stock, then converted under state law into a limited liability company that remained taxed as a corporation. The taxpayer represe…
Corporate conversion preserves qualified small business stock status
A corporation sold and redeemed portions of its original shareholders' stock, then converted under state law into a limited liability company that remained taxed as a corporation. The taxpayer represe…
Corporate conversion preserves qualified small business stock status
A corporation sold and redeemed portions of its original shareholders' stock, then converted under state law into a limited liability company that remained taxed as a corporation. The taxpayer represe…
Corporate conversion preserves qualified small business stock status
A corporation sold and redeemed portions of its original shareholders' stock, then converted under state law into a limited liability company that remained taxed as a corporation. The taxpayer represe…
Taxpayer may revoke bonus depreciation opt-out for open years
A consolidated corporate group elected out of additional first-year depreciation for several years after receiving incorrect internal advice that its fixed-asset system could not handle the deduction.…
Court-ordered write-offs do not require Forms 1099-C
A financial institution was barred by a court order from collecting deficiency balances after its notices were found defective under state law. A later class settlement required the institution to wri…
Estate receives 120 days to elect portability
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 executor represented that the gross estate and taxab…
Exchange rights receive section 355(e) testing rules
A publicly traded partnership proposed a complex separation that combined certain businesses with another enterprise and distributed stock of a new public company. Limited partners would receive right…
Exchange rights receive section 355(e) testing rules
A publicly traded partnership proposed a complex separation that combined certain businesses with another enterprise and distributed stock of a new public company. Limited partners would receive right…
Unnecessary QTIP election is treated as null and void
An estate made a qualified terminable interest property election for a trust that was intended to use the decedent's unified credit. The election was unnecessary because the estate tax would have been…
Estate receives 120 days to elect portability
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 executor represented that the gross estate was below…
Deferred losses are recognized before distribution
A public corporation planned a series of internal transfers, a subsidiary conversion and liquidation, and a pro rata distribution of a controlled corporation. Two internal sales would produce losses w…
Late trust elections do not end S corporation status
Stock in an S corporation was transferred to seven trusts, but the beneficiaries or their guardians did not timely elect qualified subchapter S trust status. The trusts therefore became ineligible sha…
Financial institution error qualifies for rollover waiver
An individual intended to roll an IRA distribution into another IRA, but the receiving institution placed the funds in a non-IRA account. The error traced back to transaction forms that another financ…
Medical condition qualifies for rollover waiver
An individual withdrew funds from an IRA intending to roll them into another IRA. During and before the rollover period, she was undergoing cancer treatment, including surgery, radiation therapy, foll…
Assessment clock runs after waiver despite bankruptcy tolling
Chief Counsel addressed how section 6213(f) affects the assessment deadline in two bankruptcy situations. If a taxpayer waives assessment restrictions during the tolled period, the assessment clock be…
Different signature style does not invalidate Form 872
Chief Counsel advised that the best practice is to sign Form 872 in the same manner as the related tax return. If the taxpayer's name changed, the form should use the new name followed by “formerly kn…
Completed Form 8332 gives exemption to noncustodial parent
Both divorced parents claimed dependency exemptions for their children, and the noncustodial parent attached Form 8332 stating that the release applied to all future years. Chief Counsel advised that …
Non-FPLP levy falls under section 6331(a) or (e)
Chief Counsel considered a levy involving payments from a federal government entity. Counsel concluded that the levy was not issued through the electronic Federal Payment Levy Program and therefore wa…
Attorney payments may support continuous wage levy
Chief Counsel considered a levy on payments to an attorney that might qualify as federal payments. The IRS implements section 6331(h) only through electronic levies served on federal agencies under th…
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.