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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Fleeting stock ownership by ineligible holders under an equity-comp plan does not blow the company's S election
An S corporation can lose its special tax status if it ever has a shareholder who is not allowed to own S corporation stock (for example, another corporation or certain entities). This company runs eq…
Hotel management fees don't create private business use of tax-exempt bond-financed property
A governmental issuer used tax-exempt bond proceeds to finance a hotel it owns, and hired a private company to manage the hotel. Interest on state and local bonds is generally tax-free, but that break…
IVF and surrogacy costs are deductible only when the care is performed on the taxpayers themselves
A married couple asked whether they could deduct the costs of having a child through in vitro fertilization (IVF) and a gestational surrogate. One spouse has a medical condition requiring medication t…
Dividing a marital QTIP trust and disclaiming half is tax-free income-wise and produces a controlled gift, with no surprise estate inclusion
A surviving spouse was the lifetime income beneficiary of a "QTIP" marital trust (property that qualified for the estate tax marital deduction when the first spouse died and that will normally be taxe…
Dividing a marital QTIP trust and disclaiming half is tax-free income-wise and produces a controlled gift, with no surprise estate inclusion
A surviving spouse was the lifetime income beneficiary of a "QTIP" marital trust (property that qualified for the estate tax marital deduction when the first spouse died and that will normally be taxe…
A foreign subsidiary's "hovering deficit" is ignored when computing its undistributed earnings for the Section 245A dividends-received deduction
Under Section 245A, a U.S. corporation can generally take a 100% "dividends received deduction" for the foreign-source part of a dividend it gets from a 10%-owned foreign subsidiary. How much of a div…
A contingent deferred annuity linked to a taxpayer's own brokerage account is treated as an annuity under Section 72, with no straddle or loss-deferral side effects
A life insurance company plans to sell a "contingent deferred annuity," a product that guarantees a person lifetime income if their own investment account ever runs dry. Unlike a normal annuity, the b…
9100 relief to file a late statement electing the 70/30 success-based-fee safe harbor under Rev. Proc. 2011-29
This letter grants a company extra time to file a tax election it meant to make but accidentally left off its return. When a business pays fees that are contingent on closing an acquisition ("success-…
After a § 338(g) election, a subsidiary's pre-acquisition years are ignored for the worthless-stock gross-receipts test
When a company's stock in a subsidiary becomes worthless, the loss is normally a capital loss, but Section 165(g)(3) allows a more valuable ordinary loss if the subsidiary is an affiliated company and…
Section 269 and the anti-abuse rule of Temp. Reg. § 1.245A-5T reach a check-the-box GILTI-avoidance transaction
This Chief Counsel Advice tells IRS examiners how to attack a structure a U.S. multinational used to keep eleven months of a foreign subsidiary's income out of the U.S. minimum-tax base on foreign ear…
Late election granted to pass rehabilitation-credit expenditures to a tenant
The rehabilitation credit rewards owners who fix up certain older buildings. When a landlord owns the building but a tenant is the one that should claim the credit, tax rules let the landlord "elect" …
An apartment partnership gets more time to elect out of the business interest deduction limit
A limited partnership owns and operates an apartment complex. Code section 163(j) caps how much business interest a taxpayer can deduct, but a real property trade or business can elect out of that cap…
Longevity contract qualifies as an annuity while the linked brokerage account remains separate
A taxpayer proposed buying a life insurance company's longevity contract linked to a separately owned taxable investment account. The contract would support lifetime withdrawals and begin guarantee pa…
Consolidated group receives 75 days to waive former-group loss carrybacks
A consolidated group's parent acquired corporations that had belonged to another consolidated group. The parent intended to elect to relinquish the portion of the carryback period covering the acquire…
Public-school workers' compensation trust may exclude its income
A trust pools workers' compensation liabilities for public school districts and similar public entities in one state. Each member must be a political subdivision, an integral part of one, or an entity…
School district property insurance pool may exclude its income
Public school districts formed an entity to self-insure their property and share casualty risks at a lower cost than commercial coverage. The entity maintains the risk-sharing pool, buys commercial in…
Company receives 60 days to make a late tax-exempt controlled entity election
A wholly owned limited liability company elected corporate tax status and intended to elect not to be treated as a tax-exempt controlled entity under section 168(h)(6)(F)(ii). Its later dissolution un…
Climate infrastructure authority receives governmental income and contribution rulings
A county and city formed a state-law authority to undertake and support infrastructure projects that mitigate climate-change effects, including flood barriers, stormwater remediation, coastal restorat…
State public-records system receives governmental income and contribution rulings
A state created a corporation to operate an electronic system that gives the public access to records required to be available under state open-records law. The corporation contracts with state agenci…
Statutory product-liability escrows qualify as settlement funds and deposits are deductible
A manufacturer that was not a defendant in product litigation was required by multiple jurisdictions to deposit amounts into escrow accounts based on its sales of the redacted product. The accounts co…
Late entity classification and tax-exempt controlled entity elections allowed
A limited liability company wholly owned by a section 501(c)(3) organization served as general partner of a partnership that owned an affordable housing project. The operating agreement required the c…
Affordable housing partner received late election relief
A limited liability company owned by a section 501(c)(3) organization was the general partner of a partnership formed to acquire, rehabilitate, own, lease, and manage a qualified low-income housing pr…
Court-ordered payments to a regulator and related customer-debt forgiveness are nondeductible under § 162(f)
A taxpayer paid money to a government agency under a court order for violating that agency's laws, and the taxpayer's wholly owned S corporation forgave debt owed by the taxpayer's customers, also as …
County land bank income excluded and contributions deductible
A county created a corporation under state law to acquire abandoned real estate, clear title, and return nonproductive land to useful development. County and municipal officials control its board, sta…
A controlled foreign corporation cannot claim the section 245A dividends-received deduction
This Office of Chief Counsel memorandum gives general legal advice on the section 245A dividends-received deduction (DRD), which lets a U.S. corporation deduct 100% of the foreign-source portion of di…
Indexed structured settlement payments met section 130 requirements
A structured settlement assignee proposed assuming an insurer's obligation to make lifetime periodic payments to a person injured in a car accident. An affiliated life insurer would issue an annuity w…
Craft distillery was not a prohibited liquor store
A property owner planned to lease space to a craft distillery that would produce, store, and sell spirits. The owner sought the ruling because a qualified opportunity zone business cannot be a store w…
Punitive regulatory costs disallowed but corrective costs not barred
A subsidiary incurred several categories of costs after a state regulator found civil violations and imposed a package of fines, remedies, and corrective orders. The IRS advised that section 162(f) ba…
Late tax-exempt controlled entity election allowed
A nonprofit wholly owned a limited liability company that elected corporate tax status and indirectly invested in a partnership operating low-income housing. The company intended to elect under sectio…
Flexible employer benefit allocation approved
An employer proposed letting eligible employees make an annual irrevocable choice to allocate an additional employer contribution among its 401(k) plan, retiree health reimbursement arrangement, healt…
Late research expenditure elections allowed for three years
A corporation failed to make section 59(e) elections for research and experimental expenditures in three fiscal years. That election permits qualifying section 174 expenditures to be deducted ratably …
Descendant trust modifications preserve tax treatment
A trust created before September 25, 1985, had already been divided into separate trusts for two grandchildren. A state court approved further changes to one grandchild's trust, including retaining di…
Descendant trust modifications preserve tax treatment
A trust created before September 25, 1985, had already been divided into separate trusts for two grandchildren. A state court approved further changes to one grandchild's trust, including retaining di…
Late average-income housing election allowed
An owner placed a low-income housing project in service but failed to make the correct irrevocable minimum set-aside election on Form 8609. Contemporaneous documents showed that the owner intended to …
Housing partnership received 120 days to defer a building's credit period on Form 8609
A partnership placed a low-income housing building in service in one year and intended to begin the building's ten-year credit period in the following year. Its contemporaneous records reflected that …
How the § 52 controlled-group rules apply to tax-exempt organizations claiming the Employee Retention Credit
The Employee Retention Credit (ERC), a COVID-era payroll tax credit, treats related organizations as a single employer using the "controlled group" aggregation rules in § 52. This Chief Counsel Advice…
Support payments under a pre-2019 postnuptial agreement remain taxable alimony despite the TCJA repeal
Before 2019, alimony was taxable to the spouse who received it and deductible by the spouse who paid it. The 2017 Tax Cuts and Jobs Act ended that treatment, but only for divorce or separation instrum…
Reducing a utility's stand-alone loss deferred tax asset because affiliates paid for the loss would break normalization
This is another ruling in the same normalization series as PLR 202426002 and 202426003, for a regulated electric utility owned by a larger parent group. The utility once had a net operating loss that,…
IRS agrees that excluding a utility's loss-based deferred tax asset from rate base would break normalization
This is the companion ruling to PLR 202426002, for another regulated electric utility owned by the same parent. The dispute is nearly the same, but here the push to strip the utility's stand-alone net…
IRS agrees a utility regulator's rate adjustments would break the depreciation normalization rules
A regulated electric utility asked the IRS to confirm that several ratemaking moves proposed by the state commission's Staff would violate the federal "normalization" rules of Section 168(i)(9). Norma…
Tax-exempt controlled corporation received more time to make a depreciation election
A corporation wholly owned by a Section 501(c)(3) organization was a tax-exempt controlled entity and the managing member of a partnership. The corporation intended to elect under Section 168(h)(6)(F)…
Utility's decoupled attrition method violated normalization rules
A regulated utility's three-year rate plan used activity from the first year as a proxy for parts of the third-year rate base. That method produced depreciation-reserve and deferred-tax-reserve amount…
Housing project received 120 days to make omitted average-income elections
The owner of a multi-building low-income housing project intended to elect the average-income minimum set-aside under Section 42(g)(1)(C). Contemporaneous records showed that intent, but the owner ina…
Taxpayer received 60 days for late success-based fee election
A consolidated group's subsidiary paid a success-based financial-adviser fee in connection with acquiring one business and selling another. The taxpayer intended to elect the Revenue Procedure 2011-29…
Indexed structured-settlement annuity qualified under Section 130
A structured-settlement assignment company proposed buying an indexed annuity from a related life insurer to fund periodic payments for a physically injured claimant. The contract guarantees a minimum…
Indexed structured-settlement annuity met Section 130 requirements
A structured-settlement assignment company proposed buying an indexed annuity from a related life insurer to fund periodic payments for a physically injured claimant. The contract guarantees a minimum…
Public agency captive insurer's income was excluded
A public agency whose participants were public charter schools formed a captive insurance company to provide the agency with reinsurance. The captive's income came from premiums paid by the agency and…
Housing project received 120 days to make average-income elections
The owner of a multi-building low-income housing project intended to elect the average-income minimum set-aside under Section 42(g)(1)(C), as shown by contemporaneous records, but inadvertently omitte…
Clean-transportation incentives qualified for the general welfare exclusion
A state-created air-quality program provided need-based incentives to lower- income residents who scrapped high-polluting vehicles and selected cleaner vehicles or mobility options. Payments generally…
Clean-vehicle replacement incentives were excluded from recipients' income
A state-created air-quality program provided need-based incentives to lower- income residents who scrapped high-polluting vehicles and selected cleaner vehicles or mobility options. Payments generally…
Air-quality mobility incentives qualified for the general welfare exclusion
A state-created air-quality program provided need-based incentives to lower- income residents who scrapped high-polluting vehicles and selected cleaner vehicles or mobility options. Payments generally…
Low-income clean-mobility incentives were excluded from gross income
A state-created air-quality program provided need-based incentives to lower- income residents who scrapped high-polluting vehicles and selected cleaner vehicles or mobility options. Payments generally…
Vehicle-scrappage mobility incentives qualified for the general welfare exclusion
A state-created air-quality program provided need-based incentives to lower- income residents who scrapped high-polluting vehicles and selected cleaner vehicles or mobility options. Payments generally…
Proportionate stock surrenders avoid income, distribution, and gift treatment
An executive and several trusts proposed surrendering the same percentage of two classes of common shares to a corporation without receiving consideration. The corporation would retire those shares an…
Proportionate stock surrenders avoid income, distribution, and gift treatment
An executive and several trusts proposed surrendering the same percentage of two classes of common shares to a corporation without receiving consideration. The corporation would retire those shares an…
Proportionate stock surrenders avoid income, distribution, and gift treatment
An executive and several trusts proposed surrendering the same percentage of two classes of common shares to a corporation without receiving consideration. The corporation would retire those shares an…
Proportionate stock surrenders avoid income, distribution, and gift treatment
An executive and several trusts proposed surrendering the same percentage of two classes of common shares to a corporation without receiving consideration. The corporation would retire those shares an…
Proportionate stock surrenders avoid income, distribution, and gift treatment
An executive and several trusts proposed surrendering the same percentage of two classes of common shares to a corporation without receiving consideration. The corporation would retire those shares an…
Proportionate stock surrenders avoid income, distribution, and gift treatment
An executive and several trusts proposed surrendering the same percentage of two classes of common shares to a corporation without receiving consideration. The corporation would retire those shares an…
Proportionate stock surrenders avoid income, distribution, and gift treatment
An executive and several trusts proposed surrendering the same percentage of two classes of common shares to a corporation without receiving consideration. The corporation would retire those shares an…
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.