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.
No determinations match these filters
Try a different search term or clear the filters.
Pension surplus transfer qualifies for replacement-plan treatment
An employer terminated a qualified defined benefit pension plan after transferring remaining employees within its controlled group. It proposed to transfer at least 25 percent of the pension plan's su…
Military vehicles do not qualify for the off-highway or mobile-machinery exemptions, so their first retail sale is subject to the § 4051 heavy-truck excise tax
The first retail sale of a heavy truck, trailer, or tractor chassis or body carries a 12 percent federal excise tax under Code § 4051. A company that builds specialized vehicles for the U.S. military …
Excise tax waived for pension-plan liquidity shortfalls caused by risk transfers
A manufacturing company’s defined benefit pension plan had liquidity shortfalls for three quarters after two annuity purchases and a lump-sum window settled about 42 percent of the plan’s liabilities.…
IRS waives the 10% excise tax on a pension plan's liquidity shortfall caused by an annuity buyout
A cooperative sponsors a single-employer defined benefit pension plan. When a plan large enough to owe accelerated quarterly contributions runs short of liquid assets to cover benefit payments, IRC § …
Surplus from a terminated pension plan can be moved into the employer's two 401(k) profit-sharing plans as a single "qualified replacement plan," avoiding the reversion excise tax
When an employer shuts down an overfunded traditional (defined benefit) pension plan, any leftover money that comes back to the employer is a "reversion" and gets hit with a steep excise tax under Sec…
Pension surplus returned to tax-exempt club avoids reversion excise tax
A tax-exempt social club terminated its single-employer defined benefit plan and expected surplus assets to remain after all participant and beneficiary liabilities were satisfied. The club represente…
Return of surplus retiree medical assets did not disqualify pension plan
An employer terminated a frozen pension plan that included a separate IRC § 401(h) account for retiree medical benefits. After all pension and medical liabilities were satisfied, assets remained in th…
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…
Moving terminated pension surplus into 401(k) plans avoids the reversion excise tax
An employer is terminating two frozen defined benefit pension plans that will have surplus money left over after all promised benefits are paid. Normally, when a company takes back leftover pension mo…
Replacement plan qualified and final reversion taxed at 20 percent
An employer transferred all surplus assets from a terminated defined benefit plan to a suspense account in a defined contribution plan. The IRS ruled that the receiving plan was a qualified replacemen…
Surplus from a terminated pension plan can move into two 401(k) plans without triggering the reversion excise tax
A publicly traded company terminated its defined benefit pension plan and, after paying every promised benefit, was left with about $14.4 million in surplus assets. Normally, when leftover pension mon…
Pension surplus transfers qualified for the replacement-plan exception
A public company terminated two defined benefit pension plans and proposed transferring all surplus assets to two corresponding defined contribution profit-sharing plans. At least 95 percent of active…
Recovery equipment excluded from heavy-wrecker excise-tax price
A manufacturer asked whether specified recovery equipment installed on heavy wreckers could be excluded from the sale price subject to the 12 percent retail excise tax on heavy trucks. The IRS disting…
Employer can move a terminated pension plan's surplus into two ongoing 401(k) plans, treated as one "qualified replacement plan," without triggering the reversion excise tax
When an employer terminates an overfunded pension plan and takes back the leftover money, that "reversion" is hit with an excise tax under section 4980 (20 percent, rising to 50 percent) on top of reg…
Transferring excess pension assets to three defined-contribution plans as one qualified replacement plan avoids the 4980 reversion tax
An employer was terminating an overfunded defined benefit pension plan that would leave excess assets after paying all participant benefits. Normally, when excess assets revert to the employer they ar…
Fishing-reel designer is not the manufacturer for excise-tax purposes
A company designed and marketed fishing reels, owned the relevant patents and know-how, and paid for specialized tooling used by an unrelated domestic fabricator. The fabricator supplied the raw mater…
Charity's sale and restricted grant of subsidiary stock avoid UBTI and excess-benefit treatment
A public charity proposed separating one charitable program into a newly formed nonprofit organization that it controlled as sole member. It would transfer program assets and stock of a wholly owned f…
Pension surplus transfer avoids employer reversion tax
After terminating a defined benefit plan and paying all benefits, an employer proposed transferring the entire remaining surplus to two ongoing defined contribution plans. The IRS treated the two reci…
Merged replacement plan may receive pension surplus tax-free
An employer terminated a defined benefit plan and transferred its entire remaining surplus to a defined contribution plan formed by merging separate bargaining-unit and non-bargaining-unit plans. The …
Farm "forage box" bodies escape the heavy-truck excise tax, but a semitrailer's chassis components stay taxable
Section 4051 imposes a 12 percent federal excise tax on the first retail sale of truck and trailer bodies and chassis, but § 4053(2) exempts a body "primarily designed" to haul, process, spread, or lo…
Pension surplus may move to a replacement plan without employer-reversion tax
A public corporation terminated a defined benefit pension plan and proposed to transfer all surplus assets, after paying benefits and expenses, to its defined contribution plan. At least 95 percent of…
Pension surplus paid to agency triggers employer-reversion tax
A contractor sponsored two frozen defined benefit pension plans under contracts requiring a government agency to reimburse contributions and receive all surplus assets after plan termination. The cont…
Fund could revoke its section 4982 distribution-period election
A regulated investment company had elected to use its calendar tax year instead of the one-year period ending October 31 when calculating certain amounts for the section 4982 excise tax. The fund foun…
Pension surplus transfer avoided employer reversion tax
An employer terminated a frozen defined benefit plan that unexpectedly had surplus assets after all liabilities were satisfied. It proposed transferring the entire surplus directly to separate bargain…
Regulated investment company may revoke its section 4982 election
A regulated investment company had elected to use its calendar taxable year instead of the one-year period ending October 31 when computing capital gain net income for the section 4982 excise tax. It …
Fund allowed to revoke taxable-year election for excise tax
A regulated investment company had elected to use its calendar taxable year, instead of the one-year period ending October 31, when calculating capital gain net income for the section 4982 distributio…
Fund allowed to revoke taxable-year election for excise tax
A regulated investment company had elected to use its calendar taxable year, instead of the one-year period ending October 31, when calculating capital gain net income for the section 4982 distributio…
Fund allowed to revoke taxable-year election for excise tax
A regulated investment company had elected to use its calendar taxable year, instead of the one-year period ending October 31, when calculating capital gain net income for the section 4982 distributio…
Pension plan received waiver of 100-percent funding excise tax
A company requested waiver of the 100-percent excise tax on a pension plan's uncorrected minimum required contribution. It furnished evidence that imposing the tax would cause substantial business har…
VEBA surplus may fund current employee medical benefits
An employer maintained two voluntary employees' beneficiary association trusts holding assets for retiree medical benefits, one for non-bargaining employees and one for bargaining employees. Both trus…
Wagering excise tax should be assessed against the operator's own EIN, not an unrelated LLC's
This is informal Chief Counsel advice, written as an email, about how to fix a botched wagering-tax assessment. A taxpayer was convicted of running an illegal gambling operation, and the IRS prepared …
Returning a pension plan's actuarial surplus to a tax-exempt employer is allowed and not a taxable reversion
A tax-exempt employer set up a defined benefit pension plan for its employees and later decided to terminate it, pay out everyone, and complete a standard termination through the Pension Benefit Guara…
Returning an overfunded pension contribution to the employer is not a taxable reversion where the overpayment came from a mistake of fact
A company terminated its defined benefit pension plan and, to fully fund the promised benefits, contributed enough money to buy a group annuity contract covering the participants. It later turned out …
Allows overfunded retiree trust assets to fund active employee health benefits
A public utility subsidiary maintained a collectively bargained welfare benefit trust that funded retiree health benefits. After plan changes left the trust overfunded, the company proposed creating a…
Waives excise taxes for pension-plan liquidity shortfalls
A company requested relief from excise taxes after its defined benefit pension plan missed required liquidity shortfall contributions for seven quarters. The company had incorrectly believed that a qu…
Subsidiary employees may join parent S corporation's ESOP
An S corporation maintained an employee stock ownership plan holding its privately traded common stock. Its wholly owned C corporation subsidiary planned to hire employees and adopt the parent's ESOP …
Converted coal-waste products are not subject to the coal excise tax
A taxpayer developed a process that converts commercially unusable coal waste into a fuel product and an agricultural product. The process substantially changes the waste's physical properties and che…
Welfare trust amendment triggered income but not a disqualified-benefit tax
An employer had an overfunded welfare benefit trust originally used for retiree health benefits under a collective bargaining agreement. It proposed amending the trust so its assets could also pay hea…
Foundation conversion allowed beneficiary payments and split-year reporting
A non-functionally integrated Type III supporting organization planned to become a private foundation and combine two asset funds after a court-approved trust modification. Under a settlement, smaller…
Nuclear decommissioning funds may convert pooled investments to partnership treatment
Six qualified nuclear decommissioning funds pooled their assets for investment and had elected to exclude the pooling arrangement from subchapter K partnership rules. They sought to revoke that electi…
Investment funds may revoke taxable-year excise tax elections
Five regulated investment company funds had elected to use their December 31 taxable years instead of the one-year period ending October 31 when calculating distributions required to avoid the section…
Credit card payments and free companion ticket avoid air transportation tax
An airline and bank operated a co-branded credit card and rewards program. The bank made thirteen types of payments involving interchange-fee rebates, program expenses, marketing, milestones, new or q…
Investment funds may revoke their section 4982 elections
Two regulated investment funds had elected to use their calendar tax years instead of the October 31 measurement period when calculating required distributions for the section 4982 excise tax. The fun…
Fund may revoke its section 4982 election after changing tax years
A regulated investment fund planned to change its tax year from November 30 to March 31 after a reorganization. Because a section 4982(e)(4)(A) election is available only to funds with November or Dec…
Retiree trust surplus may fund current employee benefits
A utility holding company maintained a voluntary employees' beneficiary association whose assets exceeded the value of its retiree health obligations. It proposed transferring part of that surplus onc…
Private foundation tax guidance should explain reasonable cause
Chief Counsel recommended topics for IRS training material on abating first-tier private foundation taxes under section 4962. The material should explain taxable events and use the reasonable-cause st…
Organ-recovery charter flights qualify for medical-service tax exemption
A federally designated organ procurement organization chartered aircraft on short notice to carry transplant teams to donor hospitals and return recovered organs to transplant centers. The flights als…
Two-stage pension surplus transfer avoids employer reversion tax
An employer terminated a defined benefit pension plan but needed to retain part of its surplus temporarily for a contingent litigation liability. Its board committed to transfer at least 25 percent of…
Pension may retain litigation reserve, but annual filings continue
An employer terminated a defined benefit plan but retained enough surplus assets to cover a contingent litigation liability outside its control. The IRS ruled that this reserve would not undo the term…
IRS approves a VEBA trust merger and excess asset transfer
A corporate employer proposed merging two voluntary employees' beneficiary association trusts into a third VEBA trust and making a one-time transfer from an overfunded collectively bargained retiree m…
Public retiree-health asset transfers avoided specified excise taxes
A state public retirement system planned to terminate retiree-health accounts under section 401(h) after satisfying all medical-benefit liabilities, credit the remaining assets back to participating p…
Pension plan receives excise-tax waiver for liquidity shortfalls after layoffs and lump sums
A single-employer defined benefit plan suffered liquidity shortfalls during four consecutive quarters after a business slowdown, large workforce reductions, and lump-sum distributions equal to most of…
Frequent flyer mile price may exclude marketing portion
An airline sold frequent flyer miles to a credit card bank under a co-brand agreement that also provided marketing services, intellectual property rights, data, and administrative support. The agreeme…
Medical system setup is not further manufacture for excise tax purposes
A healthcare-products reseller sold and set up a system under an agreement that licensed it to install the developer’s software. The reseller did not list either the system or the software as a device…
Pension funding excise tax conditionally waived
A company's financial condition had deteriorated, it could no longer contribute to its pension plan, and it was pursuing a distress termination through the Pension Benefit Guaranty Corporation. The IR…
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.