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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IRS blesses a tax-free split-up of a feuding family's S corporation into two new corporations, one for each sibling's branch
A family-owned S corporation was jointly owned, through trusts and family members, by two siblings' branches. The siblings could no longer get along, and the disputes made it impossible to keep runnin…
Tax-free spin-off of one business under sections 355 and 368(a)(1)(D), with a debt-for-cash "purging distribution"
A publicly traded parent corporation asked the IRS to bless a tax-free spin-off. The parent (Distributing) plans to separate two of its businesses by contributing one business to a newly formed subsid…
Buyer and sellers get more time to make a late section 338(h)(10) election to treat an S corporation stock purchase as an asset sale
When a corporation buys the stock of an S corporation in a qualified stock purchase, the buyer and the selling shareholders can jointly elect under section 338(h)(10) to treat the deal as if the targe…
Tax-free "Reverse Morris Trust" separation and merger under sections 355 and 368(a)(1)(D) (19 rulings)
A publicly traded parent corporation asked the IRS to bless a tax-free "Reverse Morris Trust" transaction, in which it separates one of its businesses and combines it with an unrelated public company.…
Tax-free spin-off: a public company's multi-step internal separation and distribution of a business to its shareholders qualifies under sections 355 and 368
A publicly traded parent company (called Distributing) wanted to separate one of its businesses from the rest of its worldwide group and spin it off to its shareholders. To get there it ran a series o…
Buyer and seller of an S corporation get extra time to make a late Section 336(e) election treating the stock sale as an asset sale
A § 336(e) election lets the parties to certain stock sales treat the deal as if the company had sold its assets instead of its stock, which can give the buyer a stepped-up basis in the underlying ass…
Tax-free split-off of a family-owned S corporation's business into a new company distributed to one family branch
A closely held S corporation owned by two family branches wanted to separate its businesses so one branch could go its own way. It proposed a "split-off": the company would drop part of its assets int…
IRS grants extra time to file the statement waiving family attribution so a stock redemption qualifies as a sale
When a corporation buys back (redeems) all of a shareholder's stock, the shareholder generally gets favorable sale-or-exchange treatment only if their interest is completely terminated. But tax rules …
IRS lets a consolidated group exclude two deferred intercompany gains from income after internal reorganizations
When members of a consolidated group sell or distribute property to each other, the resulting gain is generally deferred rather than taxed right away, and it comes back into income (a "deferred interc…
Basis, retained-share, and debt-exchange rulings for a leveraged spin-off that splits one business from another
A corporate group wants to separate two lines of business (call them Business A and Business B) through a chain of steps: an internal split-off that moves a foreign subsidiary in exchange for surrende…
A Blue Cross Blue Shield insurer's spin-off into a mutual holding company is tax-free and keeps its special § 833 status
A nonprofit, nonstock health insurance company (an existing Blue Cross Blue Shield organization) is the parent of a group of companies that files one consolidated federal tax return. It asked the IRS …
IRS grants late relief to file § 336(e) election statements for two S corporation stock sales
A buyer acquired the stock of two S corporations, and the parties wanted to treat those stock purchases as asset purchases for tax purposes, which a Section 336(e) election allows for a "qualified sto…
IRS rules a family-owned company's split-off to one of its three owner families is a tax-free D reorganization
A company owned equally by three families wants to separate part of its business and give it to one of those families, letting that family exit as owners of the parent. The company will form a new sub…
IRS rules non-voting preferred stock in a buyout vehicle is "plain vanilla" preferred that does not break affiliation under Section 1504(a)(4)
A corporate parent that files a consolidated tax return set up a new subsidiary to buy a public company in an all-cash merger. To fund the deal, the subsidiary took on debt and also raised equity from…
Buyer gets extra time to make late Section 338(g) elections for acquired foreign subsidiaries
When a corporation buys the stock of a target company, a Section 338 election lets the buyer treat the stock purchase as if it were an asset purchase for tax purposes, which can change the tax basis o…
Tax-free spin-off rulings for an internal cross-border corporate restructuring
A corporate parent group planned an internal reorganization that ends with one foreign subsidiary ("Distributing") spinning off a lower-tier foreign corporation ("Controlled") up the chain to the pare…
Quarterly tax-payment distributions by an S corporation are not partial-liquidation distributions
An S corporation adopted a plan of partial liquidation and distributed most of one business line's assets to its shareholders. Separately, the company has a standing obligation to make quarterly cash …
Two internal upstream distributions of a subsidiary's stock qualify as tax-free spin-offs under section 355
A corporate group wanted to move one lower-tier subsidiary ("Controlled") up its ownership chain without triggering tax. After an internal merger, the group carried out two back-to-back distributions:…
A corporation's tax-free spin-off of one of its two businesses into a new subsidiary qualifies as a "D" reorganization
A corporation runs two separate businesses (Business A and Business B) and wants to split them apart for business reasons. It plans to form a new corporation (Controlled), move Business B's assets and…
Extra time to file a late section 336(e) election so an S corporation stock sale can be treated as an asset sale
A section 336(e) election lets certain stock sales be treated, for tax purposes, as if the company sold its assets instead, which can give the buyer a stepped-up basis in the underlying assets. Here a…
Late section 362(e)(2)(C) basis-election statement allowed under 9100 relief
When property is transferred to a corporation in a tax-free § 351 exchange and the property's tax basis is higher than its value, § 362(e)(2) normally forces the receiving corporation to reduce its ba…
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…
Pre-IPO restructuring qualifies on key D-reorganization issues, including a check-the-box deemed liquidation as the required distribution
A family-owned foreign holding company held most of the stock of an operating company that was preparing for an initial public offering. To set an appropriate share value for the IPO and satisfy forei…
Tax-free split-up of a feuding family S corporation into eight controlled corporations
A family-owned S corporation held and operated rental real estate through a web of qualified subchapter S subsidiaries (QSubs) and disregarded LLCs. It was owned by eight family groups locked in serio…
9100 relief to make a late section 336(e) election and a late S corporation election after a stock sale
When buyers purchased all the stock of an S corporation, the parties intended to make two tax elections but missed the deadlines. The first, a section 336(e) election, lets a "qualified stock disposit…
9100 relief to file a late section 336(e) election statement after an S corporation stock sale
Buyers acquired more than 80% of the stock of an S corporation from its sellers. The parties intended for the stock sale to be treated as an asset sale by making a section 336(e) election, which lets …
Tax-free section 355/368(a)(1)(D) public spin-off of a worldwide group's Controlled Business into a new standalone company
A publicly traded parent company (Distributing) that runs two businesses through a worldwide group of subsidiaries wants to separate them, spinning off one business (the Controlled Business) into a ne…
A supplemental ruling that letting one company officer also sit on the spun-off company's board will not disturb an earlier tax-free spin-off ruling
A parent company (Distributing) had already received a private letter ruling in July 2021 blessing a tax-free spin-off, in which it would separate part of its business into a subsidiary (Controlled) a…
A tax-free spin-off separating two businesses, with rulings that the parent can use the deal's borrowed cash and stock to retire its own debt without triggering tax
A publicly traded parent company (Distributing) runs two business lines and wants to separate one of them (Business B) into a standalone public company (Controlled) and hand Controlled's stock to its …
IRS rules on a multi-step tax-free separation of a public subsidiary through internal and external distributions
A publicly traded parent company owned a majority stake in a separately public subsidiary ("Controlled") through a chain of holding companies, and it wanted to fully separate that subsidiary and hand …
IRS rules that a parent company's pro rata spin-off of a subsidiary business qualifies as a tax-free reorganization
A publicly traded parent company wanted to separate one of its two businesses into a new, independent public company and give the new company's stock to its own shareholders. To do that, the parent fo…
IRS rules that gaps in revenue do not stop a research business from being an "active trade or business" for a spin-off
A publicly traded company in a highly regulated industry does research and development on two separate product lines. It wanted to split the newer product line into a separate company and give that co…
IRS grants extension of time to make a Section 336(e) election for an S corporation stock sale
A purchaser bought all the stock of an S corporation from its shareholder in a deal the parties intended to treat, for tax purposes, as a sale of the company's assets rather than its stock. That treat…
In a spin-off, temporarily retaining Controlled stock is not a tax-avoidance plan under Section 355(a)(1)(D)(ii)
A publicly traded parent corporation (Distributing) planned a spin-off to separate two businesses. It would convert a wholly owned LLC (Controlled) into a corporation, distribute at least 80 percent o…
IRS grants 75 more days to file a late Section 336(e) election statement after a tax pro missed the deadline
A partnership bought all the stock of an S corporation in a deal the parties treated as a qualified stock disposition. They intended to make a section 336(e) election, which lets a qualifying stock sa…
Cash payout of a sold business's proceeds is a partial liquidation, giving shareholders exchange (capital-gain) treatment
A publicly traded corporation sold off one of its three businesses and planned to distribute the net cash proceeds pro rata to its shareholders under a formal plan of partial liquidation, while contin…
Loss company may use shareholder questionnaires to measure overlapping public ownership after a merger under Section 382
A publicly traded corporation with large net operating loss (NOL) carryforwards acquired another public company in a tax-free stock-for-stock reorganization. Section 382 limits how much of its NOLs a …
IRS blesses a multi-step Section 355 spin-off, including an internal restructuring and a leveraged external spin-off with cash distribution
A publicly traded parent company that runs two lines of business asked the IRS to confirm the tax treatment of a series of transactions that separate one business (Business A) from the rest of the gro…
IRS rules a deferred intercompany gain is excluded and a downstream merger meets continuity of business enterprise despite deconsolidation
A corporate group that files a consolidated tax return planned a multi-step restructuring: a chain of subsidiary liquidations, an "F" reorganization of the parent holding company, and a downstream mer…
How to count overlapping shareholders and stock buybacks in a spin-off followed by a merger, so the spin-off stays tax-free under section 355(e)
A publicly traded parent company plans to split off one of its businesses into a new corporation (the Spin-off), then immediately merge that new corporation into a subsidiary of a second public compan…
IRS grants a 9100 extension of time for a consolidated group to make a closing-of-the-books election under Treas. Reg. section 1.382-6(b) after a section 382 ownership change
When a loss corporation undergoes an "ownership change," section 382 limits how much of its pre-change losses it can use against post-change income. Regulations let the corporation elect to "close its…
IRS grants a 9100 extension of time for a consolidated group to make a closing-of-the-books election under Treas. Reg. section 1.382-6(b) after a section 382 ownership change
When a loss corporation undergoes an "ownership change," section 382 limits how much of its pre-change losses it can use against post-change income. Regulations let the corporation elect to "close its…
Section 304 does not apply to acquisition with less than 50 percent shareholder overlap
A corporate parent used a wholly owned subsidiary to acquire all the stock of a foreign target in exchange for parent stock and cash. Because several institutional investors owned shares in both the p…
Loss corporation receives 75 days for a late closing-of-the-books election
A loss corporation experienced a Section 382 ownership change but missed the deadline to elect to close its books on the change date. Without that election, the regulations generally allocate change-y…
Retained stock and delayed debt exchanges preserve corporate separation treatment
A publicly traded corporation proposed separating one of its three businesses into a newly formed controlled corporation. It would contribute the business to the controlled corporation, distribute at …
S corporation's business separation qualifies as a tax-free reorganization
An S corporation proposed separating one business from another by forming a controlled corporation, electing qualified subchapter S subsidiary status, contributing a disregarded subsidiary and an inte…
Consolidated group receives 90 days to make a late unified-loss election
A consolidated group failed to elect under Treasury Regulation Section 1.1502-36(d)(6)(i)(A) to reduce the parent's basis in transferred loss shares of a subsidiary by the attribute-reduction amount. …
IRS grants extra time to complete a Section 336(e) election
An individual, acting through a disregarded entity, acquired all the stock of an S corporation from its shareholders. The parties intended to make an IRC § 336(e) election so the represented qualified…
IRS grants extra time for a Section 338(h)(10) election
A purchaser acquired all the stock of an S corporation from its shareholders. The parties intended a joint IRC § 338(h)(10) election, which would treat the target as selling all its assets and then li…
Purchaser received 75 days to make late Section 338 elections for two foreign targets
A U.S. corporation acquired all the stock of two foreign corporations and intended to make Section 338(g) elections that would treat the stock purchases as asset acquisitions for federal tax purposes.…
Parties received 75 days to file a late Section 336(e) election statement
A partnership bought all the stock of an S corporation from its shareholders, and the parties intended to make a Section 336(e) election. That election would treat the stock disposition as an asset di…
Foreign purchaser received 75 days to make a late Section 338(g) election
A foreign corporation, acting through a disregarded foreign entity, bought all the stock of another foreign corporation and intended to make a Section 338(g) election. That election would treat the st…
Political subdivision may liquidate its wholly owned service subsidiary without triggering Section 337(d)
A political subdivision proposed merging its wholly owned public-service subsidiary into itself to reduce administrative costs and public confusion. The subsidiary's income was excluded from gross inc…
Purchaser receives 75 days to file late Section 338 elections for foreign targets
A U.S. corporation acquired all the stock of a foreign target and treated the target's foreign affiliates as deemed acquired. The purchaser intended to make Section 338(g) elections so the stock acqui…
IRS approves tax-free treatment for an S corporation business spin-off
An S corporation separated one business from another by forming a controlled subsidiary, making a qualified subchapter S subsidiary election, contributing partnership interests to the subsidiary, and …
IRS approves tax-free treatment for two corporate split-offs
A corporation proposed separating parts of its businesses into two new controlled corporations so different shareholder groups could manage them without interference from one another. After preliminar…
IRS grants extra time for Section 338(g) and QSub elections
An LLC taxed as an S corporation acquired all the stock of a target in a qualified stock purchase. It intended to make a Section 338(g) election for the acquisition and a qualified subchapter S subsid…
IRS grants foreign purchaser more time for Section 338(g) elections
A foreign purchaser acquired all the stock of a foreign target, with deemed acquisitions of several foreign target affiliates. The purchaser represented that the transaction was a qualified stock purc…
IRS splits preferred instrument treatment under Section 382
A publicly traded corporation issued a preferred instrument and another instrument to finance part of a stock acquisition. The preferred instrument carried cumulative fixed dividends, a liquidation ri…
IRS treats four subsidiaries as joining consolidated returns
A parent corporation included all income, deductions, assets, and liabilities of four wholly owned subsidiaries in its federal returns but did not properly identify the subsidiaries, attach Forms 851 …
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.