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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Sports-betting winnings paid to nonresident alien required 30 percent withholding
Chief Counsel addressed U.S. withholding on sports-betting winnings paid to a nonresident alien. For a U.S. taxpayer, the payment would not have triggered Form W-2G reporting or withholding under IRC …
Tax-exempt employer may exclude qualifying 403(b) deferrals and cafeteria-plan health amounts from Section 4960 remuneration
Chief Counsel considered whether remuneration for the IRC § 4960 excise tax includes an employee’s elective deferrals to a § 403(b) annuity and salary reductions under a § 125 cafeteria plan for quali…
Casino may use a gaming day for withholding deposits in this instance
Chief Counsel considered whether a casino could use its gaming business day rather than a calendar day when determining deposit timing for withheld gambling taxes. Gambling winnings subject to withhol…
Federal credit unions can claim the COVID employee retention credit for 2021 wages, but not for 2020 wages
This Chief Counsel Advice answers a non-taxpayer-specific question from the IRS's exempt-organizations counsel: can federal credit unions claim the COVID-19 employee retention credit (ERC)? The answer…
RSU income for foreign transferees has different FITW and FICA treatment
A U.S. corporation granted restricted stock units to employees who later transferred to controlled foreign corporations before the awards vested. The IRS advised that the entire RSU income was wages f…
Federal credit unions qualify for ARP paid-leave credits but not FFCRA credits
Federal credit unions claimed refundable credits for paid sick and expanded family and medical leave provided during 2020 and 2021. The IRS concluded that federal credit unions are instrumentalities o…
IRS may offset COVID-19 employment tax credits against a PEO's own tax debts, even for credits tied to client wages
This Chief Counsel Advice, issued as an internal email, addresses whether the IRS can apply (offset) refundable COVID-19 employment tax credits, such as the employee retention credit (ERC) and the cre…
A city's dual-plan pension election and Plan A to Plan B service-purchase transfer are not an impermissible cash-or-deferred arrangement, and the picked-up contributions stay untaxed until distributed
A city that runs its own retirement system for a group of employees asked the IRS to bless a change to how those employees save for retirement. The employees must contribute 12 percent of pay no matte…
Trust-held interest payments remain subject to reporting and backup withholding
A program paid taxable interest directly to beneficiaries from accounts held in a trust and filed Forms 1099-INT. Many recipients had missing or incorrect taxpayer identification numbers, but the payo…
Medicaid care payments remain subject to employment tax unless an exception applies
A parent received state-program payments for providing in-home care to the parent's disabled child. Notice 2014-7 treats qualifying Medicaid waiver payments as difficulty-of-care payments excluded fro…
Employer cannot get a later-year refund of over-withheld income tax it paid on a tax-equalized foreign-assignment employee's behalf
Companies that send U.S. employees abroad often use "tax equalization," reducing the employee's salary by a hypothetical U.S. tax and then paying all the employee's actual taxes for them, so the forei…
Written designation controls voluntary payroll tax payment
Chief Counsel explained when a taxpayer may direct how a payroll tax payment is applied. A taxpayer may designate a voluntary payment only through specific written instructions made when the payment i…
A state medical school's faculty-practice entities are state instrumentalities for FICA and FUTA
A state university's medical school ran its clinical operations through two nonprofit entities: one that supports the medical school and its own wholly owned LLC that acts as the faculty practice plan…
A religious community's members are a religious order, so their support isn't taxable wages
A Section 501(c)(3) tax-exempt organization is part of a church-controlled network of communal religious communities. Its members take vows of poverty, chastity, and obedience, give up all private pro…
A religious community's members are a religious order, so their support isn't taxable wages
A Section 501(c)(3) tax-exempt organization is part of a church-controlled network of communal religious communities. Its members take vows of poverty, chastity, and obedience, give up all private pro…
A religious community's members are a religious order, so their support isn't taxable wages
A Section 501(c)(3) tax-exempt organization is part of a church-controlled network of communal religious communities. Its members take vows of poverty, chastity, and obedience, give up all private pro…
Section 530 worker-classification relief can cover state and local government workers under Social Security Act agreements
A Chief Counsel office considered whether state and local governments can receive Section 530 worker-classification relief for workers whose positions are included in Social Security Act § 218 agreeme…
Vacation fund payments are wages but preserve exemption if properly handled
A tax-exempt employee benefit plan paid vacation benefits when delinquent employers failed to contribute and proposed additional distributions from surplus reserves. The IRS declined to reverse an ear…
SS-8 unit should normally process Forms 1099-K
Chief Counsel agreed that the IRS SS-8 unit should follow its normal processing rules when it receives Forms 1099-K while making employment-status determinations. The short email did not describe the …
Tribal Social Security election affects FICA status only
Chief Counsel considered whether a tribe's decision to enter a Social Security Act section 218A agreement for tribal council members changed their worker classification for other tax purposes. The adv…
Employer and payroll agent each issue Forms W-2 for wages they paid
Chief Counsel addressed who must issue Forms W-2 when an employer appoints a Treasury Regulation section 31.3504-1 payroll agent partway through a calendar year. Each entity must issue Forms W-2 for t…
How CPEOs must report payments to self-employed individuals, including partners
This Chief Counsel Advice clarifies, in response to practitioner questions about the preamble to the proposed Certified Professional Employer Organization (CPEO) regulations, how a CPEO must treat and…
A religious residential community qualifies as a "religious order," so its members' support is not taxable wages
When people who take religious vows work for their order, the support the order gives them (food, housing, and similar) is exempt from federal employment taxes. This taxpayer is a tax-exempt religious…
Tip-box cash required FICA notice and demand procedures
A taxpayer treated service providers as volunteers even though customers left cash for them in tip boxes. After determining that the workers were employees, the IRS considered how to assess the employ…
A Section 3504 agent may appoint a subagent through an approved Form 2678
Counsel distinguished a Section 3504 agent from a payroll service provider. A payroll service provider files separate employment tax returns under each employer's EIN, while a Section 3504 agent files…
Reasonable-wage adjustment is not worker reclassification
Chief Counsel advised that an employment tax audit did not involve worker classification when a corporation had consistently treated its sole officer as an employee. In some years the corporation paid…
Common law employer remains liable when payroll company fails to remit taxes
An S corporation used a professional employer organization to administer payroll and employment-tax filings, but the organization failed to remit the taxes. Chief Counsel advised that the professional…
Tax Court discovery ruling does not require worker-return disclosure during audits
Chief Counsel addressed whether Mescalero v. Commissioner required the IRS to give employers worker tax-return information during employment-tax examinations or Appeals proceedings. The advice conclud…
Form SS-8 required an original signature
Chief Counsel considered whether the IRS SS-8 worker-classification program could accept a signature other than an original signature on Form SS-8. The advice concluded that existing IRS procedures al…
IGRA trust distributions require income tax withholding
Chief Counsel considered distributions from trusts established under the Revenue Procedure 2011-56 safe harbor for tribal members who are minors or legally incompetent. The safe harbor defers benefici…
Shared-service company qualifies as successor employer for payroll tax wage bases
A corporate group planned to move support employees from four subsidiaries to a shared-service subsidiary as part of a regulatory reorganization. The transferring subsidiaries would also convey substa…
Direct-seller consumer products include intangible services
Chief Counsel advised that section 3508 does not limit consumer products to tangible goods. The cited cases treated a home-study course and cable television subscriptions as consumer products even tho…
Union settlement payments treated as wages with limited payroll tax exceptions
A union asked how to tax and report settlement payments to city employees for wage increases the city had not paid under a collective bargaining agreement. The IRS treated the distributions as back pa…
Short-week benefits remain wages when not tied to unemployment payments
A multiple-employer supplemental unemployment trust paid short-week benefits to employees who worked fewer than a redacted number of hours in the prior month. Although the plan description said employ…
Public hospital authority gets governmental income and payroll-tax treatment
A county created a separate public authority to receive and operate its hospital, provide care to indigent residents, and preserve the hospital's viability. The IRS ruled that the authority performed …
Short-week benefits remain subject to FICA tax
Chief Counsel considered whether benefits paid when employees worked fewer than 36 hours or could not work because of weather were excluded from FICA wages. The workers receiving these short-week paym…
Unaffiliated companion sitter may be a household employee
Chief Counsel considered whether a companion sitter who was not connected with a placement service could be an employee of the person receiving the services. The answer depends on common-law factors, …
Shared-services company qualifies as a successor employer
Two subsidiaries planned to transfer all employees in a support function, along with the related owned assets and rights to use affiliate-owned assets, to a shared-services company. The employees woul…
Terminating VEBA's member distributions avoid inurement but are wages
A voluntary employees' beneficiary association funded solely by mandatory payroll deductions voted to terminate and distribute its remaining assets to current and former employee members. Its formula …
Employee-funded pension contributions remain taxable wages
A city and its employees agreed to use part of the employees' fixed salaries to pay a portion of the city's required employer contributions to a governmental retirement plan. The city asked the IRS to…
Employment tax employer regulations identified for review
Following an employment tax discussion, Chief Counsel provided temporary regulations under IRC § 3501 and Announcement 85-113. It also identified portions of the regulations defining an employer under…
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.