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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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…
Territory-funded trust income excluded under section 115
A United States territory created and exclusively funded a trust to hold assets for benefits the territory owed to recipients. The trust could distribute money only to the territory for those benefit …
Timely revocation of section 83(b) election approved
A service provider received restricted class A units subject to a risk of forfeiture and filed an election under section 83(b). The taxpayer then asked the IRS for permission to revoke the election le…
County captive reinsurer's income excluded under section 115
A nonprofit captive insurance company was wholly owned by an authority whose members were counties. The authority operated a self-insurance pool for the counties, and the captive provided reinsurance …
Employee could revoke a section 83(b) election within the original deadline
An employee received an option to buy employer stock that was subject to a risk of forfeiture and filed a section 83(b) election covering all of the shares. Less than 30 days after the grant, the empl…
Shorter utility asset life complied with tax normalization rules
A regulated natural-gas utility had excess deferred income tax after the Tax Cuts and Jobs Act reduced the corporate tax rate. Because its accounting records lacked the vintage data needed for the ave…
A transaction's amount realized included the present value of a guarantee
A corporation proposed admitting another corporation as its member and giving that member control rights, while the member would provide future services and guarantee a stated level of cost savings. T…
A transaction's amount realized included the present value of a guarantee
Two corporations proposed a transaction in which one would become the other's member and receive control rights, provide future services at arm's-length prices, and make a cost-savings guarantee. The …
Corporation received 60 days to make a section 59(e) election
A corporation serving the energy industry failed to timely elect under section 59(e) to amortize qualified expenditures for a fiscal year. The election can apply to research and experimental expenditu…
Late average-income housing elections allowed
The owner of a multi-building housing project intended to choose the average-income minimum set-aside for the low-income housing credit. Contemporaneous documents showed that intent, but the owner ina…
Condemned utility assets' deferred tax reserves had to be removed
A city condemned the regulated utility assets of two subsidiaries, and the taxpayer deferred gain under section 1033 by investing the proceeds in replacement utility property. After the condemnation, …
Consolidated group received 75 days to make a late CNOL carryback waiver
The common parent of a consolidated group failed to make a valid election to give up the entire carryback period for a consolidated net operating loss. The group represented that it had not carried an…
Target company received 60 days to make a late success-fee safe-harbor election
A privately held corporation was acquired through a taxable stock purchase and paid a financial adviser's contingent fee after the merger closed. Revenue Procedure 2011-29 offers a safe harbor that tr…
Real estate partnership received 60 days to make a late section 163(j) election
A partnership owning and operating a real estate project intended to elect out of the section 163(j) business-interest limitation as an electing real property trade or business. Its operating agreemen…
Housing project receives extra time to start its credit period
The owner of a single-building housing project intended to begin its low-income housing credit period in the year the building was placed in service, but it failed to make the required election on tim…
Late election to amortize research costs allowed
A corporation that develops and sells software tools failed to timely elect under section 59(e) for a fiscal year. That election allows qualifying research and experimental expenditures otherwise dedu…
Housing project receives more time to make average-income election
A taxpayer owned a single-building low-income housing project and intended to make the average-income minimum set-aside election under section 42(g)(1)(C). Its contemporaneous records showed that inte…
Extension granted to elect ten-year amortization of research expenditures
A corporation developing automated driving solutions failed to make a timely election under section 59(e) for research and experimental expenditures. That election allows qualifying expenditures that …
Oil and gas partnership receives more time to expense drilling costs
An oil and gas joint venture taxed as a partnership failed to timely elect to deduct intangible drilling and development costs for a tax year. Without that election, the regulations generally treat th…
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…
The S portion of an ESBT may carry a net operating loss that passed through from its S corporation into another year
An electing small business trust (ESBT) is a special kind of trust allowed to own S corporation stock. For tax purposes it is split in two: the "S portion," which holds the S corporation stock and is …
A merged company gets 9100 relief and 60 days to make the late Rev. Proc. 2011-29 safe-harbor election for its investment banker's success fee
When a company is acquired, it often pays its investment banker a "success-based fee" that only comes due if the deal closes. Tax rules presume such fees are capitalized (not currently deductible) bec…
A city redevelopment nonprofit's income is tax-free under § 115(1) as an essential governmental function
A nonprofit corporation was created as a "component unit" of a public redevelopment authority to carry out a city's economic redevelopment plan, including managing a tax allocation district and buildi…
IRS gives a foreign real estate partnership 60 more days to elect out of the business-interest deduction limit
Section 163(j) generally caps how much business interest a taxpayer can deduct. A real property trade or business can elect out of that cap under section 163(j)(7)(B) (the "RPTOB election"), accepting…
Tax-exempt controlled entity gets 60 more days to elect out of tax-exempt treatment after its preparer misclassified it
An LLC was part-owned by tax-exempt organizations, which made it a "tax-exempt controlled entity" under section 168(h). That status can force slower depreciation on property the entity uses through a …
A nonprofit cooperative's conversion to a for-profit corporation qualifies as an "F" reorganization, and redeemed capital credits are ordinary income
A nonprofit cooperative corporation (with members instead of shareholders, and "capital credit" accounts tracking each member's patronage) planned to convert into a for-profit corporation. The steps: …
Corporation gets 60 more days to elect out of tax-exempt-controlled-entity status after its firm forgot the election
A corporation was majority-owned by a section 501(c)(3) tax-exempt organization, which made it a "tax-exempt controlled entity" under section 168(h). That status can force slower depreciation (the alt…
Mixed design purposes may still satisfy the research-credit experimentation test
An apparel retailer claimed research credits for activities used to develop a new or revised business component. Examination disallowed the claim in part because it viewed the development work as dire…
Partnership interests in a mortgage-loan pool qualify as similar pooled-fund interests
A limited partnership planned to use investor capital principally to acquire beneficial interests in a trust holding U.S. real-estate loans. The trust interests were represented to be registered-form …
LLC interests in a mortgage-loan pool qualify as similar pooled-fund interests
A limited liability company taxed as a partnership planned to use investor capital principally to acquire beneficial interests in a trust holding U.S. real-estate loans. The trust interests were repre…
Debt-limit conversion of Demand Deposit SLGS preserves arbitrage treatment
During a federal debt-limit suspension, Treasury regulations converted outstanding Demand Deposit State and Local Government Series securities into special 90-day certificates of indebtedness. Issuers…
Government retiree health trust receives four favorable rulings
An association of state boards of education created a trust to fund medical, dental, and vision benefits for its retired employees. The IRS had previously ruled that the association performed essentia…
Worthless-stock losses in foreign subsidiaries did not "occur in" the COVID disaster area, so no section 165(i) disaster-loss election
A U.S. consolidated corporate group had a subsidiary that owned three foreign corporations (CFCs). Through entity-classification elections and a reorganization, each CFC was deemed to liquidate, and t…
Late success-fee safe-harbor election denied after audit disallowance
A corporation paid an investment bank a success-based fee in connection with its acquisition and chose not to use Revenue Procedure 2011-29's safe harbor, which would have allowed a 70 percent deducti…
Fixed wellness payments are taxable wages when no medical expense remains
An employer offered employees a fixed-indemnity health policy funded through $1,200 monthly salary reductions under a Section 125 cafeteria plan. The policy paid $1,000 when an employee completed a qu…
Splitting a GST-grandfathered trust into four equal trusts is tax-free across income, gift, estate, and GST tax
A trust created long ago (irrevocable before September 25, 1985, so it is "grandfathered" and exempt from the generation-skipping transfer, or GST, tax) held everything in a single share for one child…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
IRS rules a facility-relocation reimbursement deal is a long-term construction contract accounted for under the percentage-of-completion method
A company provides services to a customer at facilities the company owns on land the customer owns, under an easement that lets the customer force a relocation of those facilities. The customer exerci…
IRS revokes, going forward only, part of an earlier ruling on a taxpayer's 6041 reporting duty
The IRS had earlier issued a private letter ruling (PLR 202016001) to this taxpayer that, in part, addressed whether the taxpayer had to file information returns under Code § 6041 for payments it make…
Every FSA claim must be substantiated by an independent third party, or the whole cafeteria plan's benefits become taxable
This Chief Counsel Advice tells IRS employment tax policy staff how strict the substantiation rules are for health and dependent care flexible spending arrangements (FSAs) inside a Section 125 cafeter…
Court-approved settlement of an ambiguous trust term triggers no GST, gift, or income tax
An old trust, created and made irrevocable before September 25, 1985 (so it is grandfathered as exempt from generation-skipping transfer, or GST, tax), had a will provision that was ambiguous about wh…
Court-approved settlement of an ambiguous trust term triggers no GST, gift, or income tax
An old trust, created and made irrevocable before September 25, 1985 (so it is grandfathered as exempt from generation-skipping transfer, or GST, tax), had a will provision that was ambiguous about wh…
Court-approved settlement of an ambiguous trust term triggers no GST, gift, or income tax
An old trust, created and made irrevocable before September 25, 1985 (so it is grandfathered as exempt from generation-skipping transfer, or GST, tax), had a will provision that was ambiguous about wh…
Tax-exempt-controlled company receives 60 days for late depreciation election
A taxable corporation was wholly owned by a section 501(c)(3) organization and therefore was a tax-exempt controlled entity for depreciation purposes. Through a partly owned subsidiary, it held proper…
Trust settlement causes no GST, gift, gain, or excess-income tax consequences
A trust that became irrevocable before September 25, 1985 contained ambiguous instructions for dividing its remainder among descendants when it terminated. The potential beneficiaries negotiated a cou…
Housing project receives 120 days to make average-income set-aside election
The owner of a single-building low-income housing project intended to choose the average-income minimum set-aside under section 42(g)(1)(C). Its contemporaneous records reflected that intent, but it i…
Specially formulated infant food is not a deductible medical expense
A parent asked the IRS whether the cost of a specially formulated food for their infant qualifies as a medical-care expense deductible under § 213. The product delivers a specific nutrient early in li…
Disaster-driven power and gas costs are extraordinary items a city utility can finance with tax-exempt refunding bonds
A municipal electric and gas utility got hit with extraordinary power and fuel costs when a disaster caused massive, unprecedented outages and price spikes across its regional grid. The utility is lit…
LLC owned by a charity gets 120 days to make two missed elections so a rehab project isn't stuck with slower depreciation as tax-exempt use property
When property is owned (through partnerships) by a tax-exempt entity, part of it can be treated as "tax-exempt use property," which forces slower depreciation and can undercut credits. The Code offers…
Corporate group gets 60 days to make a late success-based-fee safe-harbor election it forgot to attach, conditioned on fixing which subsidiary paid the fee
When a company pays an investment banker a fee that is contingent on closing an acquisition (a "success-based fee"), the tax rules presume the whole fee must be capitalized unless the company document…
Late success-based-fee election denied because the investment banking fee was the private-equity seller's selling cost, not the target's deduction
When a business is sold, investment banking "success-based fees" tied to closing the deal can sometimes be split under a safe harbor (Rev. Proc. 2011-29), deducting 70 percent and capitalizing 30 perc…
A drug company must capitalize what it pays to buy an FDA Priority Review Voucher, and how it later recovers that cost depends on whether it uses the voucher or resells it
The FDA gives drug companies a "Priority Review Voucher" (PRV) when they develop treatments for certain neglected, rare-pediatric, or national-security diseases. A voucher lets its holder jump the FDA…
Splitting a GST-grandfathered trust into five family trusts triggers no tax
A family asked the IRS how dividing one irrevocable trust into five separate trusts, one for each branch of the family, would be taxed. The original trust was created before the generation-skipping tr…
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.