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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Other victims must be paid before IRS restitution collection
This Chief Counsel email concludes that the case was not governed by Westbrooks because restitution was imposed independently as part of the sentence under a plea agreement. The government was only on…
Mandatory restitution was independently imposed
This Chief Counsel email concludes that a criminal restitution case was not governed by Westbrooks. The Title 18 conduct underlying the conviction covered all years for which restitution was ordered. …
IRS restitution collection limited to supervised release
The district court had authority to impose restitution independently but did not do so. The judgment placed restitution only among the conditions of supervised release, not in the part describing the …
Taxpayer may accurately disclose its own return information
A taxpayer wanted to disclose its own return information. Chief Counsel advised that there was no apparent problem as long as the taxpayer's statement was accurate. The brief public release provides n…
Criminal monetary penalty restitution is assessable
The criminal judgment listed restitution both as a criminal monetary penalty and as a condition of supervised release. Chief Counsel explained that restitution listed as a criminal monetary penalty is…
Additional nondisclosure language accepted
This brief Chief Counsel email reviews additional language for a nondisclosure agreement. The writer states that the language looked good and planned to contact a redacted party again. The writer also…
Bank levy reaches funds held at the levy time
Chief Counsel advised that the exact time of a bank levy matters, not merely the calendar date. A bank must surrender only property it possessed when the levy was served, so money deposited later that…
Forward contracts require Form 1099-B only when cash-settled
This ruling modifies and supersedes an earlier letter concerning a broker's reporting duties for customer forward contracts involving specified property. If the customer takes delivery of the original…
State liquor stores need not report large cash sales
A state operated a liquor-sales monopoly through an entity represented to be an integral part of the state. Store managers sometimes accepted more than $10,000 in cash for liquor purchases and filed F…
IRS corrects facts but preserves Form 8300 conclusion
This letter modifies a prior ruling about Form 8300 reporting by correcting how the taxpayer handled the form. The corrected fact states that a store manager prepared and signed Form 8300 for the enti…
Rental payment platform is a third-party settlement organization
An online platform helps landlords and property managers list rental properties, enter leases, and receive tenant payments through a payment portal. The IRS ruled that the platform operator is a third…
COVID postponement preserves a late-return refund claim
A taxpayer's 2016 wage withholding was deemed paid on April 15, 2017, and the taxpayer filed a delinquent 2016 return in June 2020 claiming a refund. Ordinarily, the refund claim needed to be filed by…
Seafood trade-relief payments can qualify for the tribal fishing-income exclusion
Members of a federally recognized Indian tribe received payments under the Department of Agriculture's Seafood Trade Relief Program after foreign retaliatory tariffs reduced seafood exports. IRC § 787…
COVID filing postponement did not extend the refund lookback period
Notice 2020-23 postponed the deadline for filing a 2019 federal income tax return until July 15, 2020. It did not change the rule that 2019 withholding and estimated taxes were deemed paid on April 15…
The IRS should not sign another form after providing the required deed
Counsel addressed a request involving a sales disclosure form after the IRS provided a deed. The short email states that the Service satisfied the statutory requirements when it provided the deed. Cou…
Home-buyer cash rebates from a brokerage's referral program are purchase-price adjustments, not income, and need no Form 1099 reporting
An online real estate brokerage matches home buyers with brokers and collects a referral fee out of the broker's commission when a deal closes. Under a promotional program, the brokerage pays a buyer …
State retiree-benefit trust has excluded income and no annual return requirement
A state agency created a trust to fund health and welfare benefits for retired state employees, their spouses, and dependents. Only the agency may designate contributions, and trust assets may be used…
Determining the fraud penalty in TEFRA syndicated conservation easement cases
This Chief Counsel Advice answers how the IRS applies the 75% civil fraud penalty of Section 6663(a) against a partnership that used a syndicated conservation easement (SCE) transaction, when the part…
Determining the fraud penalty in BBA syndicated conservation easement cases
This Chief Counsel Advice is the companion to the TEFRA analysis, answering how the IRS applies the 75% civil fraud penalty of Section 6663(a) against a partnership that used a syndicated conservation…
Whether an informal probate proceeding suspends the collection deadline
This is internal Chief Counsel advice, written as an email, about whether the deadline for the IRS to collect a deceased taxpayer's unpaid tax (the collection statute expiration date, or CSED) was pau…
Statute of limitations does not bar a § 6676 penalty on a fraudulent refund claim
This short internal Chief Counsel advice answers a timing question about the Section 6676 penalty, which applies to erroneous claims for tax refunds or credits. A taxpayer had filed a return more than…
Government retiree-benefit trust income is excluded and no annual return is required
Political subdivisions created a trust to invest irrevocably contributed funds for retiree health and other post-employment welfare benefits. Each participating government retained a separate account,…
An original return starts the limitations periods despite a superseding return
Chief Counsel considered which filing starts the three-year limitations periods when a taxpayer files an original return and then a superseding return before an extended due date. The memorandum concl…
A refund traced through a minimum tax credit to an NOL carryback receives the extended filing period
A corporation carried a net operating loss back to an earlier year, which created alternative minimum tax and a minimum tax credit. The corporation then carried that credit forward to a third year, wh…
The IRS prospectively narrows a prior nonrecognition ruling for cash contributed to subsidiaries
The IRS previously issued a ruling on a corporate separation involving a contribution, distribution, initial public offering, and use of cash proceeds to repurchase stock or repay group debt. That rul…
Partner-level basis may be adjusted without reopening the partnership return
Chief Counsel advised that a partner's outside basis is an affected item that may be adjusted in a partner-level examination while accepting the partnership return as filed. The examiner may correct t…
Current IRS officials may approve returns made by an agent
Chief Counsel was asked who may approve a request under Treasury Regulation section 1.6012-1(a)(5) for an income tax return to be made by an agent now that IRS district directors no longer exist. The …
IRS employees may show collection documents to an outside notary
Chief Counsel considered whether an IRS employee may use a licensed outside notary when an IRS employee notary is unavailable. Documents such as deeds from administrative or judicial property sales ca…
Changing the identified hedge fund partner did not require a separate audit
A partnership used contracts with a bank to retain investment exposure to interests in a hedge fund that was also taxed as a partnership. The parties reported the bank as the owner and partner, but th…
IRS could not refund OIC payments without an overpayment
A taxpayer made payments toward an offer in compromise that the IRS had rejected, apparently because of an IRS administrative mistake. The payments were properly applied against the taxpayer's existin…
Partnership-interest platform qualifies as a matching service
A limited liability company proposed a web platform for matching buyers and sellers of limited partnership interests. The platform would use nonfirm quotes, bar binding agreements for 15 days, delay c…
Municipal homeowner grants were taxable and reportable
A municipal corporation offered grants to eligible owner-occupants for installing approved home systems intended to address a local problem. Homeowners selected contractors and systems from approved l…
IRS contacts with DOJ generally are not third-party contacts
IRS Chief Counsel advised that requests to the Department of Justice for documents or verbal information about a non-tax settlement generally are government contacts excluded from section 7602(c)’s th…
Chief Counsel advises that only one FPAA generally issues per partnership year, with a tiered-partnership exception
This short Chief Counsel email answers whether the IRS can issue more than one Final Partnership Administrative Adjustment (FPAA) for the same partnership tax year under the old TEFRA partnership audi…
Currency gain from passive investment entities is qualifying partnership income
A limited partnership invested in corporate portfolio companies, often through partnership or disregarded holding companies that served only as passive conduits. Some holding companies used a differen…
Form 1099-B required for cash settlement but not physical delivery
A dealer entered into forward contracts under which customers paid for the right to receive property later. A customer could take delivery of the property originally set aside, take delivery of substi…
Later ownership changes do not alter an earlier tax matters partner designation
Chief Counsel addressed whether later changes in a person's ownership or management status affect that person's role as tax matters partner for an earlier audit year. The advice treats a partnership a…
Incorrect officer title does not invalidate partnership return
The CFO of a corporation that was a partnership's sole general partner signed the partnership's electronic filing authorization using another title he held. IRS Chief Counsel advised that the partners…
Late IRS signature invalidated one assessment extension but prior POA consent remained valid
A taxpayer signed a Form 872 extending the assessment period, but the IRS did not sign before the limitations period expired because of a government shutdown. Chief Counsel advised that the consent wa…
Tribal refunding bonds needed volume cap only for excess issue price
A tribal government wanted to issue $76 million of current refunding bonds, using $75 million to retire outstanding Tribal Economic Development Bonds and $1 million for issuance costs. Notice 2019-39 …
Supplement filing year controlled the penalty amount
This brief Chief Counsel email addressed a supplement that was due in one year and filed the next year. It advised that the failure to file occurred in the due year, and that year determined the penal…
Each taxpayer must sign Form 921-I to extend the assessment period
Chief Counsel advised how taxpayers should execute Form 921-I when a flow-through entity extends the assessment period for each owner’s share of common-improvement costs. The basic Form 921 applies to…
Third party must use the statutory lien-discharge remedy
Chief Counsel advised that a third party paying another person’s tax liability must use the remedies under sections 6325(b)(4) and 7426(a)(4). Those provisions superseded the refund-suit route recogni…
Dragnet clause does not defeat purchase-money mortgage priority
Chief Counsel considered whether a cross-collateralization, or dragnet, clause prevents a deed of trust from qualifying as a purchase-money mortgage for federal tax lien purposes. The advice found no …
Charitable lead trust termination avoided private-foundation tax
A testamentary charitable lead annuity trust paid an escalating quarterly annuity to a charity, later divided between two successor foundations, with the remainder passing to the grantor's children. T…
Four operating units conducted active businesses for section 6166
A decedent's revocable trust held a large interest in a closely held corporation with six operating units. The estate asked whether four units' activities rose to the level of carrying on a trade or b…
Terminally ill donor's disclaimed life estates valued with special factor
An income beneficiary disclaimed life estates in three trusts while in hospice care with a medical prognosis of at least a 50-percent probability of death within one year. She died five days later, an…
Fraternity-house landlord lost social-club exemption
A corporation owned and maintained fraternity housing but was not itself a fraternity or sorority. Its income came from investment returns and rent paid by undergraduate occupants associated with two …
Refund barred after deadline to sue on disallowed claim
Chief Counsel advised that a refund was barred when the taxpayer did not sue within two years after the IRS issued a notice disallowing the refund claim. Assuming no waiver or extension applied, secti…
IRS may levy accumulated funds in a 401(k)
Chief Counsel advised that the IRS is not limited to levying retirement-plan distributions as they are paid. The IRS may also levy the accumulated funds in a 401(k) when it follows the procedures and …
Foreign shareholder's agency refusal triggers section 6038C rules
Chief Counsel considered a transaction between a foreign corporation conducting a U.S. trade or business and its related foreign shareholder. It advised that if the shareholder does not authorize the …
IRS retroactively revoked late section 754 election relief
The IRS had previously given a taxpayer 120 days to make a late section 754 election. That relief was based on a representation that no affected return was under examination, before Appeals, or before…
Oil and gas management fee is qualifying partnership income
A publicly traded partnership indirectly owned an operating partnership engaged in oil and gas exploration, development, and production. The operating partnership had no employees or contractors of it…
Settlement debt write-offs require Forms 1099-C
A financial entity settled class-action claims alleging that defective presale notices made borrowers' remaining deficiency balances unenforceable under certain state laws. The entity agreed to write …
Valueless tax lien may be discharged in short sale
Chief Counsel advised that the IRS may discharge real property from a federal tax lien when the government's interest has no value, including a short sale where a senior creditor permits payments to j…
Interest allowed on non-liable spouse's misapplied remittance
A wife joined her husband in selling property subject to a federal tax lien securing his old joint liabilities with a former spouse. Because an IRS discharge letter overstated the government's interes…
QSub conversions and S revocation do not withdraw construction fund
An S corporation maintained a merchant-marine capital construction fund and owned vessels through qualified subchapter S subsidiaries. It planned to convert those subsidiaries under state law into dis…
Returned tax deposit does not suspend interest on a later deficiency
Chief Counsel advised that a remittance held as a section 6603 deposit does not suspend underpayment interest for the time it was held if the IRS returns it at the taxpayer's written request and later…
Non-taxpayer lien payment must use the statutory discharge remedy
Chief Counsel advised that a non-taxpayer former spouse who paid a federal tax lien could not use equitable subrogation to seek a refund. Equitable subrogation generally applies when a junior lienhold…
Revenue agents should stop communicating under invalid powers of attorney
Chief Counsel addressed a disclosure question involving Forms 2848, which authorize representatives to act for taxpayers. The advice states that if the forms were invalid, the revenue agents should st…
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.