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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Taxpayer is denied extra time to file Form 1128 for an accounting-period change
A taxpayer asked for an extension to file Form 1128 and change its annual accounting period under IRC § 442. The application was due with the short-period return, but the taxpayer did not seek late-el…
Taxpayer is denied extra time to file Form 1128 for an accounting-period change
A taxpayer asked for an extension to file Form 1128 and change its annual accounting period under IRC § 442. The application was due with the short-period return, but the taxpayer did not seek late-el…
Taxpayer is denied extra time to file Form 1128 for an accounting-period change
A taxpayer asked for an extension to file Form 1128 and change its annual accounting period under IRC § 442. The application was due with the short-period return, but the taxpayer did not seek late-el…
Credit card rewards may qualify for the recurring item exception
Chief Counsel analyzed when an accrual-method credit card issuer may deduct reward liabilities under Section 461. A reward liability becomes fixed and reasonably determinable when the cardholder can r…
Volunteer emergency-service awards qualified as a LOSAP
A state plan paid retirement and death benefits to long-serving volunteer firefighters and emergency medical workers. Eligible volunteers received only expense reimbursements, reasonable benefits, and…
Borough's deferred compensation plan qualified under Section 457(b)
A political subdivision adopted a nonqualified deferred compensation plan and related trust for its employees and beneficiaries. The plan allowed timely compensation-deferral elections, designated Rot…
Revised nuclear decommissioning fund schedule was approved
A utility that owned a qualifying interest in a nuclear power plant requested a mandatory revised schedule of deductible contributions to its nuclear decommissioning fund. The proposed schedule used a…
Late mark-to-market election denied for hindsight and prejudice
An individual who actively traded securities sought permission to make a late section 475(f)(1) mark-to-market election. The taxpayer had not known about the election when trading began and later lear…
Partnership received more time to change its tax year
A partnership used a calendar tax year because its tax firm mistakenly believed the majority-interest partner also used a calendar year. After learning that the majority partner used a different year-…
IRS rules a bankruptcy-plan settlement trust for governmental plaintiffs is a qualified settlement fund whose income is tax-exempt under Section 115
A group of companies that had been sued by many state and local governments over a product-related public health crisis went through bankruptcy, and their reorganization plan set up a trust to receive…
IRS denies a late mark-to-market election because the trader used hindsight
An individual securities trader asked the IRS for extra time to make a late "mark-to-market" election under section 475(f)(1). That election lets a trader treat securities gains and losses as ordinary…
IRS denies a late mark-to-market (section 475(f)) election because the trader relied on hindsight
An individual who traded securities wanted to make a "mark-to-market" election under section 475(f)(1). That election lets a qualifying trader treat gains and losses as ordinary and value positions at…
Married couple gets 120 days to make a late election grouping all their rental real estate as one activity, after their tax pro never told them the election existed
Rental real estate is normally treated as "passive," which limits how much of its losses can offset other income. A real estate professional who qualifies under Section 469(c)(7) can escape that rule,…
Real estate professionals get 120 days to make a late election grouping all rental properties as one activity
Rental real estate is normally treated as a "passive activity," so losses from it can only offset passive income. Section 469(c)(7) gives an exception to taxpayers who qualify as real estate professio…
An activity that meets the 5/10 material-participation test cannot also be a significant participation activity
A taxpayer owned an S corporation (through grantor trusts) that conducted many separate business activities, and wanted to avoid the passive activity loss limits of section 469 by showing "material pa…
IRS consents to a cost-sharing participant switching to the elective method for counting stock-based compensation
A U.S. company shares the cost of developing intangible property with a foreign affiliate under a cost sharing arrangement (CSA) governed by the transfer-pricing rules of IRC § 482. When employees who…
IRS consents to a cost-sharing participant switching to the elective method for counting stock-based compensation
A U.S. company shares the cost of developing intangible property with a foreign affiliate under a cost sharing arrangement (CSA) governed by the transfer-pricing rules of IRC § 482. When employees who…
IRS gives a married couple 120 days to make a late election to treat all their rental real estate as one activity
Rental real estate income is normally treated as "passive," which limits when the owner can deduct losses against other income. Taxpayers who qualify as real estate professionals under § 469(c)(7) can…
Real estate investor gets more time to elect to treat all rental properties as one activity under section 469(c)(7)
Rental real estate is normally treated as a passive activity, but a qualifying taxpayer in a real property business can elect under section 469(c)(7) to treat all of their rental real estate interests…
Sale of a nuclear power plant: transfer of its qualified decommissioning fund is tax-free, and the seller's assumed cleanup liability counts toward amount realized
A regulated utility group sold a nuclear power plant to a nuclear-decommissioning company in a deal treated as an asset sale. The plant came with a qualified nuclear decommissioning reserve fund, a tr…
Sale of a nuclear power plant: transfer of its qualified decommissioning fund is tax-free, and the seller's assumed cleanup liability counts toward amount realized
A regulated utility group sold a nuclear power plant to a nuclear-decommissioning company in a deal treated as an asset sale. The plant came with a qualified nuclear decommissioning reserve fund, a tr…
A nuclear decommissioning fund transfers tax-free when a shut-down reactor is sold to a decommissioning specialist
An energy company owns a nuclear generating unit that has permanently shut down and is being decommissioned. It maintains a qualified nuclear decommissioning fund (a QDF) under § 468A, a tax-favored t…
A nuclear utility's spent-fuel storage costs count as "decommissioning costs" payable from its qualified fund
A public utility owns a majority interest in a nuclear plant with three reactors. For each reactor it maintains a qualified nuclear decommissioning reserve fund (a QNDRF) under § 468A, a fund whose co…
A utility's nuclear decommissioning trust funds stay qualified after it gives up leased reactor interests but keeps the decommissioning liability
Under section 468A, a utility that owns an interest in a nuclear power plant can set aside money in a special tax-favored "qualified nuclear decommissioning fund" (QNDT) to pay the eventual cost of di…
Bankruptcy claims trusts are qualified settlement funds; operating subsidiary deducts settlement funding and recognizes no gain on transferring parent stock
A regulated operating company and its holding-company parent went through Chapter 11 bankruptcy because of massive damage claims tied to their failure to maintain their property. Under the confirmed p…
When short-term (vacation) rental income is hit with self-employment tax under section 1402(a)(1)
This Chief Counsel Advice addresses short-term rentals, the kind listed on online marketplaces like Airbnb or VRBO, and whether the owner's net rental income is subject to self-employment (SECA) tax. …
IRS denies a day-trader's request to make a late mark-to-market election, citing hindsight
A securities trader wanted to elect the "mark-to-market" method of accounting under Internal Revenue Code § 475(f), which lets a trader in securities treat trading gains and losses as ordinary (rather…
A day-trader who waited too long is refused permission to make a late mark-to-market election
A married couple asked the IRS for extra time to make a "mark-to-market" election under section 475(f), which lets a securities trader treat trading gains and losses as ordinary (rather than capital) …
A volunteer award plan that also covers reserve police officers is not a length of service award plan, so it falls under section 457(f) and its benefits are FICA wages
A state's plan pays retirement and death benefits to long-term volunteers who provide services such as firefighting, emergency medical care, and reserve police work. The plan sponsor asked the IRS to …
A nonelective points-based deferred compensation plan for a 501(c)(6) sports organization's non-employee members qualifies under section 457(e)(12)
A tax-exempt business league described in section 501(c)(6), whose mission is to promote a sport, created a deferred compensation plan for its non-employee members, including board members. Members ea…
A securities-trading fund is denied 9100 relief for a late mark-to-market election because it acted with hindsight
A securities-trading fund wanted to make a mark-to-market election under section 475(f), which lets a trader treat gains and losses as ordinary (so trading losses are fully deductible rather than capp…
A securities-trading fund is denied 9100 relief for a late mark-to-market election because it acted with hindsight
A securities-trading fund wanted to make a mark-to-market election under section 475(f), which lets a trader treat gains and losses as ordinary (so trading losses are fully deductible rather than capp…
S corporation cannot change its tax year merely to accelerate a refund
Chief Counsel considered whether an S corporation could recover an overpaid federal tax deposit sooner by changing its accounting period. Because the corporation already used a December 31 year-end, S…
Bankruptcy tort-claim trust qualifies as a settlement fund and permits a current deduction
A corporate group faced more than a redacted number of disputed product-related tort claims and placed a redacted cash amount into a bankruptcy-court-approved trust to resolve them. The court retained…
City deferred-compensation plan qualifies under Section 457(b)
A city established a deferred-compensation plan and trust for its employees and asked whether the arrangement met IRC § 457. The plan allowed elective deferrals, designated Roth contributions, statuto…
Depreciation method-change adjustments enter the Section 163(j) ATI addback
A taxpayer changed the recovery period for depreciable property from seven years to five years, producing a net negative Section 481(a) adjustment of $100x in 2020. Chief Counsel advised that the adju…
Nuclear decommissioning funds retain qualified status in plant transfer
A utility planned to transfer two nuclear plants, their nuclear decommissioning trusts and qualified funds, and their decommissioning liabilities to a formerly disregarded subsidiary that would elect …
Nuclear decommissioning funds keep qualified status through plant transfer
A utility planned to transfer two nuclear plants, their decommissioning trusts and qualified funds, and their decommissioning liabilities to a subsidiary that would elect corporate status and sell int…
Nuclear decommissioning funds keep qualified status through plant transfer
A utility planned to transfer two nuclear plants, their decommissioning trusts and qualified funds, and their decommissioning liabilities to a subsidiary that would elect corporate status and sell int…
Nuclear decommissioning funds keep qualified status through plant transfer
A utility planned to transfer two nuclear plants, their decommissioning trusts and qualified funds, and their decommissioning liabilities to a subsidiary that would elect corporate status and sell int…
Distributor incentive liability arises when qualifying sales occur
An accrual-method manufacturer promised independent distributors a guaranteed minimum of sales incentives for products sold during a qualifying period in the following year. The taxpayer reduced its Y…
Participant liquidation changes cost-sharing projections
A participant withdrew from a cost-sharing arrangement during the second quarter and was to be liquidated into a U.S. subsidiary at year end. If the taxpayer already knew of that intended liquidation …
Nuclear decommissioning funds remain qualified after plant sale
A utility seller planned to transfer three nuclear plant units, their qualified decommissioning funds, and the related decommissioning liabilities to an S corporation buyer. The parties represented th…
Decommissioning funds may exchange pooled investment interests
Two qualified nuclear decommissioning funds maintained by the same company planned coordinated transactions involving a partnership that pooled investments. One fund would contribute cash equal to the…
Nuclear decommissioning funds remain qualified after plant sale
A utility seller planned to transfer three nuclear plant units, their qualified decommissioning funds, and the related decommissioning liabilities to an S corporation buyer. The parties represented th…
Insolvent subsidiary may deduct assumed product liabilities on liquidation
A consolidated group had acquired a manufacturer facing product-liability claims that were later resolved through master settlement agreements. Before the subsidiary became a disregarded entity in a p…
Reseller's inventory cost is limited to acquisition costs
A small reseller valued inventory at cost under Section 471 but did not use a Section 471(c) method or apply Section 263A. The IRS advised that the reseller may capitalize only the goods' net invoice …
Nuclear plant owner receives revised decommissioning funding schedule
A nuclear power plant owner requested a revised schedule for deductible contributions to its qualified nuclear decommissioning fund after an agreement accelerated the plant's shutdown. The owner calcu…
Closed nuclear plant receives revised decommissioning funding schedule
A nuclear power plant owner requested a revised schedule for deductible contributions to its qualified decommissioning fund after the plant ceased operation under an accelerated shutdown agreement. Th…
Decommissioning unit receives revised nuclear fund schedule
A taxpayer indirectly owned a nuclear unit that had begun incurring decommissioning costs and requested an elective revised schedule of contributions to its qualified nuclear decommissioning fund. The…
IRS consents to a new method for counting stock-based compensation under a cost sharing arrangement
A domestic corporation and its foreign subsidiary share the costs of developing intangible property under a cost sharing arrangement governed by IRC § 482. The corporation asked to change how it measu…
IRS approves a prospective switch in cost-sharing treatment of stock-based compensation
A publicly traded domestic corporation shares intangible-development costs with foreign participants under a cost sharing arrangement governed by IRC § 482. It asked to change the measurement, timing,…
IRS approves corporate reorganizations and related cost-sharing treatment
A publicly traded domestic parent completed a multi-step restructuring that moved intangible-property rights and reorganized domestic and foreign subsidiaries. The taxpayer asked whether two parts of …
IRS approves transfer of nuclear decommissioning fund assets
Three utility sellers planned to sell their interests in a nuclear power plant to a buyer's disregarded entity and transfer all assets from their qualified nuclear decommissioning funds to a new buyer…
IRS approves transfer of nuclear decommissioning fund assets
Three utility sellers planned to sell their interests in a nuclear power plant to a buyer's disregarded entity and transfer all assets from their qualified nuclear decommissioning funds to a new buyer…
IRS approves transfer of nuclear decommissioning fund assets
Three utility sellers planned to sell their interests in a nuclear power plant to a buyer's disregarded entity and transfer all assets from their qualified nuclear decommissioning funds to a new buyer…
IRS approves transfer of nuclear decommissioning fund assets
Three utility sellers planned to sell their interests in a nuclear power plant to a buyer's disregarded entity and transfer all assets from their qualified nuclear decommissioning funds to a new buyer…
IRS approves revised nuclear decommissioning ruling amounts
An electric utility requested elective review of the ruling amounts for contributions to its nuclear decommissioning fund after a public utility commission revised the decommissioning costs included i…
IRS approves revised nuclear decommissioning ruling amounts
An electric utility requested elective review of the ruling amounts for contributions to its nuclear decommissioning fund after a public utility commission revised the decommissioning costs included i…
IRS approves revised nuclear decommissioning ruling amounts
An electric utility requested an elective revised schedule of ruling amounts for contributions to its nuclear decommissioning fund. The proposed schedule relied on an independent decommissioning study…
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.