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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Start-up partnership receives late QOF certification relief
A start-up partnership formed to invest in qualified opportunity zone property and acquired property located entirely within opportunity zones. Its chief financial officer was not involved in the qual…
Employee-shareholder dividends remain net investment income
A C corporation paid an individual shareholder's personal expenses, and an examination reclassified the payments as constructive dividends. The shareholder also worked in and materially participated i…
Opportunity fund's late self-certification is treated as timely
A limited liability company was formed to invest in qualified opportunity zone property and hired an adviser to prepare its first federal tax return and Form 8996. The adviser failed to file both by t…
Annuity-risk retrocession contract qualifies as reinsurance for federal tax purposes
A reinsurance company had assumed mortality, longevity, lapse, credit, reinvestment, and related risks under modified coinsurance agreements covering annuity contracts. It entered into a contract unde…
IRS approves tax-free spin-off and domestic treatment of foreign controlled company
A publicly traded domestic corporation proposed separating one business from another through a pro rata distribution of a newly formed company incorporated abroad. The transaction included contributio…
Opportunity fund gets 45 days to make a late self-certification election
A partnership formed to invest in qualified opportunity zone property intended to certify itself as a qualified opportunity fund for its first tax year. Its tax adviser knew Form 8996 was required but…
Late-filing relief to elect U.S. tax treatment and small-insurer status
A small foreign insurance company, owned equally by two individuals, writes extended-warranty coverage tied to a related recreational-vehicle business. It hired a tax professional who was supposed to …
IRS lets an oil-and-gas owner combine four net-profits royalty interests into one property
A calendar-year taxpayer held many mineral, royalty, overriding royalty, and net-profits interests across counties and parishes in several states. Four of its net-profits overriding royalty interests …
IRS says a consolidated REIT subsidiary is publicly offered, so a corrected overdistribution is not a preferential dividend
A REIT controlled by a publicly traded parent made a distribution that was intended to be pro rata, but rounding in ownership records caused one partnership to receive too much. The excess was later r…
Permission to aggregate scattered mineral royalty interests as single properties for depletion
The taxpayer is a subsidiary of an international mineral-royalty company that owns passive royalty interests (overriding oil and gas royalties in one region, and gold and other mineral royalties in an…
Insurer remains owner of pension separate-account assets after restructuring
An insurance company funded group pension annuity contracts through a separate account holding real estate investments. It proposed contributing most of those assets to an operating partnership that w…
IRS confirms insurer ownership of pension separate-account assets
This supplemental ruling modified a 2012 private letter ruling concerning a pension-contract separate account. The separate account would generally keep more than a redacted percentage of its assets d…
Foreign insurer gets more time for domestic-corporation and small-insurer elections
A foreign insurance company hired a tax professional to make elections to be treated as a domestic corporation under IRC § 953(d) and as a small insurance company under § 831(b). The adviser filed the…
A farm co-op's gain from selling business land is patronage income, deductible as a patronage dividend
An agricultural cooperative that processes and markets its members' farm products bought land years ago to support that business. The land is no longer needed, and the co-op is selling it at a gain. U…
Investor receives relief for a missed qualified opportunity fund deadline
An S corporation shareholder sold company stock in a transaction subject to a section 338(h)(10) election and intended to reinvest eligible gain in qualified opportunity funds. His tax attorney advise…
Late Form 8996 treated as timely for qualified opportunity fund status
A partnership was formed to operate as a qualified opportunity fund and hired an adviser to prepare its first federal return, request an automatic extension, and file Form 8996. The adviser knew the f…
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…
Chief Counsel accepted the taxpayer's income treatment
This brief advice concerns a heavily redacted examination matter indexed by the IRS under underwriting income. The taxpayer maintained that it did not have to include certain amounts in income for two…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Family company buy-sell agreement keeps its section 2703 grandfathering
A family-owned company had a stock redemption and buy-sell agreement created before section 2703 became effective. Family stock had later passed among estates, descendants, descendant trusts, and gene…
Member bar and gaming association lost social-welfare exemption
A home association affiliated with a veterans' organization held section 501(c)(4) social-welfare status. Its primary activity became operating members-only social quarters and a bar, with a substanti…
Family company agreement keeps section 2703 grandfather status
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Family company restrictions remain grandfathered under section 2703
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Pre-1990 family stock agreement remains grandfathered
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Family stock restrictions retain section 2703 grandfather protection
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Buy-sell agreement remains protected from section 2703
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Family share agreement remains grandfathered after planned changes
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Family company changes do not trigger section 2703
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Planned stock changes preserve section 2703 grandfathering
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Family company recapitalization does not end grandfathering
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Later family transfers do not alter grandfathered stock agreement
A family-owned company was governed by a stock redemption and buy-sell agreement adopted before October 8, 1990. The company and its shareholders asked whether later family transfers, administrative c…
Cooperative asset-sale gain qualifies for patronage dividend deduction
A cooperative sold substantially all of its operating assets and planned to liquidate. It proposed allocating a member portion of the gain using the average patronage-to-nonpatronage business ratio fo…
Family-company agreement remains grandfathered after transfers and recapitalization
A family-owned company’s stock redemption and buy-sell agreement predated October 8, 1990, and therefore remained outside section 2703 unless substantially modified. The IRS ruled that later transfers…
Family-company agreement remains grandfathered after transfers and recapitalization
A family-owned company’s stock redemption and buy-sell agreement predated October 8, 1990, and therefore remained outside section 2703 unless substantially modified. The IRS ruled that later transfers…
Family-company agreement remains grandfathered after transfers and recapitalization
A family-owned company’s stock redemption and buy-sell agreement predated October 8, 1990, and therefore remained outside section 2703 unless substantially modified. The IRS ruled that later transfers…
Family-company agreement remains grandfathered after transfers and recapitalization
A family-owned company’s stock redemption and buy-sell agreement predated October 8, 1990, and therefore remained outside section 2703 unless substantially modified. The IRS ruled that later transfers…
Partnership basis and at-risk limits also restrict self-employment losses
Chief Counsel considered whether general partners could use partnership losses to reduce net earnings from self-employment when those losses were disallowed for income tax purposes. The memorandum con…
Partnership may aggregate adjacent nonoperating mineral interests
A partnership held mineral royalty interests across multiple tracts at six properties and asked to aggregate the interests at each property for federal tax purposes. The partnership did not bear explo…
Foreign insurer gets time for domestic and small-company elections
A foreign property-and-casualty insurer relied on a professional adviser to make elections under sections 953(d) and 831(b), treating it as a domestic corporation and a qualifying small insurance comp…
QTIP trust severance isolates spouse's disclaimer
A marital trust had been elected as qualified terminable interest property and divided into GST-exempt and GST-nonexempt shares. The trustee proposed splitting the nonexempt share into a cash trust an…
Captive insurer receives 90 days to make a small-insurance-company election
A captive property and casualty insurer prepared a timely return and an election under section 831(b)(2) to be taxed only on taxable investment income. The company set the return aside for review but …
Rural telephone cooperative's stock-sale gain is patronage-sourced income
A taxable rural telephone cooperative had helped form telecommunications companies to obtain lower-cost network resources and better service for its members. Those companies were later combined, and t…
Life insurer could not make reserve interest-rate elections on amended returns
A life insurance group sought to use amended returns to elect five-year recomputation of the applicable federal interest rate used for reserves on older contracts. Chief Counsel concluded that the doc…
Insurer may revoke its section 831(b) election
A nonlife insurance company had elected under section 831(b) to be taxed only on its taxable investment income. Its business later grew until its premium revenue exceeded the statutory limit for that …
REIT subsidiary's distribution was not a preferential dividend
A REIT subsidiary made a pro rata common-stock distribution while new management mistakenly believed no preferred shares remained outstanding. Management later discovered preferred stock entitled to a…
Insurer gets 90 days to make late section 831(b) election
A non-life insurance company intended to elect the alternative tax on investment income under section 831(b) for its first year. Its captive-management company did not file the return because it incor…
Small insurer gets IRS consent to revoke its Section 831(b) election to avoid captive-insurance reporting
A small insurance company, formed as a risk retention group by a trade association to insure its members, had elected under Section 831(b) to be taxed only on its investment income rather than on its …
Transmittal email forwarding a CCA memo on SECA loss limitations for a general partner
This is a short transmittal email forwarding a separate Chief Counsel Advice memorandum. The email explains that the attached CCA memo, based on the offices' earlier discussions and a general fact pat…
Returning a case to Exam to fix penalty paperwork is not a prohibited ex parte communication
This short Chief Counsel advice, written as an email, addresses the ex parte rules that keep IRS Appeals independent from the examiners whose work it reviews. An Appeals Officer handling a deficiency …
Consolidated group gets 60 days to make late consent dividend elections
A consolidated corporate group had subsidiaries that were treated as paying and receiving consent dividends for two tax years. Its accounting firm analyzed personal holding company tax only at the con…
IRS lets an investment partnership aggregate its nonoperating mineral royalty interests for depletion
A U.S. investment partnership owns mineral royalty interests, spread across several tracts of land, that entitle it to royalties on production but do not require it to bear any exploration, developmen…
IRS grants a foreign reinsurance company late-election relief for both the § 953(d) domestic-treatment and § 831(b) small-insurer elections
A small foreign insurance company that reinsures insurance contracts, owned by three individuals, wanted two tax elections: one under Code Section 953(d) to be treated as a U.S. domestic corporation, …
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.