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 approves consolidation of related private foundations
A private foundation organized as a charitable trust proposed to transfer all its assets to a related private foundation organized as a nonprofit corporation. The foundations were controlled by the sa…
How to compute the accuracy-related penalty on a BBA partnership imputed underpayment
This is an internal IRS Chief Counsel email answering a question about the centralized partnership audit regime created by the Bipartisan Budget Act (BBA). When the IRS audits a partnership under that…
Whether adequately disclosed but omitted income counts in the § 6501(e) 25% denominator
This is an internal IRS Chief Counsel email about the six-year statute of limitations in IRC § 6501(e)(1)(A). Normally the IRS has three years to assess tax, but that stretches to six years when a tax…
Whether Fast Track Settlement statements are shielded by 5 U.S.C. § 574 or FRE 408
This is an internal IRS Chief Counsel email about whether things a taxpayer says during Fast Track Settlement (FTS), a mediation-style program to resolve disputes with the IRS, can later be used again…
How the "small corporation" rule eases Form 5472 penalty relief under 6038A
Section 6038A requires a U.S. corporation that is at least 25% foreign-owned to file Form 5472 reporting its transactions with related parties and to keep supporting records. Missing that filing carri…
Chief Counsel advises issuing an FPA despite a missed NAP mailing
Chief Counsel advised the IRS to proceed with issuing an FPA even though the NAP had not been mailed to the LKA. The advice gave two reasons. First, the writer concluded that the BBA does not provide …
State Medicaid in-home care payments are excludable difficulty-of-care payments
A state Medicaid agency runs an in-home supportive care program that pays individual caregivers to look after disabled or chronically ill people who would otherwise need a nursing home or other instit…
A "divide and donate" split and early termination of a charitable remainder unitrust to fund the settlors' private foundations is not self-dealing and yields income and gift tax charitable deductions
A married couple created a charitable remainder unitrust (CRUT), a trust that pays them 5% a year for life and leaves whatever remains to charity. They now want to accelerate part of the gift so money…
"Divide and donate" split of a charitable remainder unitrust, with 8 favorable rulings on self-dealing, deductions, and foundation status
A married couple created a charitable remainder unitrust (CRUT), a trust that pays them an annual amount for life and leaves what remains to charity. Because one of the family's private foundations fa…
Companion ruling to the individuals on the same "divide and donate" CRUT split, with 8 favorable rulings
This ruling is the companion to a same-day ruling on the identical "divide and donate" transaction, but this letter is directed to the married couple (H and W) rather than to their charitable remainde…
Incorrect address for partnership audit notice did not prevent a final adjustment
Chief Counsel considered whether the IRS could issue a final partnership adjustment after failing to mail an initial audit notice to the partnership representative's last known address. The advice con…
IRS could not first disclose tax-debt information solely for criminal sentencing
A U.S. Attorney's Office wanted information about a taxpayer's unpaid taxes for sentencing in a federal drug-trafficking case. Chief Counsel advised that the IRS could not disclose it. The case did no…
Erroneous examination letter did not need reissuance after partnership audit notice
Chief Counsel was asked whether the IRS needed to reissue Letter 2205-D after a notice of administrative proceeding had already been issued in a centralized partnership audit. The advice said no. Lett…
Authorized manager validly replaced deceased partnership representative
Chief Counsel reviewed whether a manager could use Form 8979 to revoke and replace a partnership representative even though the manager had not been a partner during the reviewed tax year. The Form 89…
Marked copy of Form 1040 could qualify as the taxpayers' original return
Married taxpayers responded to an IRS notice that no return was on file by sending signed pages 1 and 2 of a joint Form 1040 clearly stamped “Copy.” Chief Counsel concluded that the submission arguabl…
IRS may process protective refund claim filed on Form 843
Chief Counsel addressed a protective individual income-tax refund claim filed on Form 843 instead of the required Form 1040X. The incorrect form failed to comply with the formal claim rule in Treasury…
IRS cannot process late or improperly signed ERC adjustment requests
Chief Counsel advised that the IRS cannot accept a partnership administrative adjustment request filed after the mandatory three-year deadline in § 6227(c). It also cannot accept one lacking the signa…
Informal refund claim must clearly request a refund
Chief Counsel explained that an informal refund claim must fairly notify the IRS that the taxpayer believes an erroneous tax was assessed and seeks a refund for identified years. Whether notice is ade…
Shelved proposed regulations did not change erroneous-refund penalty analysis
Chief Counsel reviewed an earlier memorandum concerning the § 6676 erroneous-refund-claim penalty after the limitations period for another underpayment penalty had expired. That memorandum reflected a…
Live-in care payments qualify for the difficulty-of-care income exclusion
A state program asked whether Medicaid payments to personal care providers who live with the people receiving care could be excluded from the providers' income. The program operates under section 1905…
Mailing evidence may establish delivery without formal IRS procedures
Chief Counsel addressed how the IRS can prove mailing and delivery of documents in a FATCA-related penalty matter. The common-law mailbox rule creates a rebuttable presumption of receipt from proper a…
Rebate refund created an underpayment subject to deficiency procedures, limiting the erroneous-claim penalty
Chief Counsel considered a large erroneous income tax refund that was issued because the IRS treated the tax imposed as lower than the tax shown on the original return. The advice concludes that the r…
Accuracy-related penalty generally takes priority when an erroneous refund creates an underpayment
Chief Counsel advised that the first question for a large erroneous refund is whether the refund created an underpayment under IRC § 6664. If it did and the underpayment resulted from negligence or di…
Levy may reach mandatory trust income distributions but not discretionary corpus
Chief Counsel considered whether the IRS could levy a trust’s corpus when the taxpayer was a trust beneficiary. The trust required its trustee to distribute all net income to the beneficiary at least …
Life-insurance commission rebates were nontaxable price adjustments
A life-insurance agency entered rebate agreements under which it returned part of its commission to customers after they paid the premium and the carrier issued the policy. The rebate effectively redu…
Statute-extension consents signed by the wrong person left partnership audit deadlines expired
Under the centralized partnership audit rules from the Bipartisan Budget Act of 2015 (BBA), only the partnership representative (PR), or the designated individual (DI) when the PR is an entity, can ac…
Stripping taxpayer identifiers does not make return information disclosable under section 6103
Section 6103 keeps tax returns and "return information" confidential. A carve-out in section 6103(b)(2), known as the "Haskell Amendment," says return information does not include data in a form that …
Tax Court rules require only a "name" in a signature block
This is a brief internal reply about how names should appear in Tax Court filing templates (an "eCITE templating" question). Chief Counsel noted that the Tax Court rule requires only a "name," and tha…
Restricted consents to extend the partnership adjustment period under section 6235(b)
Under the centralized partnership audit rules (the BBA regime), the IRS and a partnership can agree to extend the deadline for the IRS to adjust partnership-related items, using Form 872-M. A field at…
Which address to use for a partnership representative's audit notice, and how to change it
Under the centralized partnership audit rules from the Bipartisan Budget Act of 2015, a partnership names a "partnership representative" who receives IRS audit notices on the partnership's behalf, and…
Chief Counsel comments on a BBA partnership-audit training case study
This is an internal email and set of margin comments in which Chief Counsel attorneys review a training case study about partnership audits under the Bipartisan Budget Act of 2015 (the BBA "centralize…
Partnership audit can adjust self-employment income but not impose SECA tax itself
Chief Counsel advised that self-employment tax is not itself a partnership-related item under the centralized partnership audit rules. Net earnings from self-employment reported on Form 1065 and a par…
Partner examination may determine a contributed note's partnership treatment
Chief Counsel advised that a partner's outside basis is not a partnership-related item when it is neither reported on Form 1065 nor maintained in the partnership's books and records. The contribution …
Extended three-and-a-half-year lookback permits the overpayment refund
Chief Counsel considered whether a taxpayer's overpayment refund was barred by the Tax Court lookback rules. Section 6512 generally limits a refund to tax paid within the period that would apply under…
Loan reallocation enters the imputed underpayment but deemed distribution does not
A partnership reported a $5 million loan equally between two partners, although one partner had supplied the money, and Exam proposed reallocating the entire liability to that partner. Chief Counsel a…
An IRS substitute return does not prevent a failure-to-file penalty
Chief Counsel advised that a taxpayer who does not file a return may still owe the section 6651(a)(1) failure-to-file penalty after the IRS prepares a substitute for return. Section 6651(g)(1) says th…
A parent partnership computes its section 7519 required payment using only the subsidiary income allocated to it
A partnership uses a fiscal year rather than the calendar year it would otherwise be required to use, under a section 444 election. That election lets a partnership keep a non-calendar tax year (and t…
How a partnership contribution adjustment is handled under the BBA audit rules
This is an internal Chief Counsel email answering how the IRS should handle an adjustment to a partnership contribution under the BBA centralized partnership audit regime. If the IRS adjusts contribut…
A partnership audit notice is valid if mailed to the last known address, even if not received
This internal Chief Counsel email addresses whether the notices the IRS sends during a BBA centralized partnership audit (the Notice of Administrative Proceeding, or NAP; the Notice of Proposed Partne…
Imputed underpayment used for penalty threshold
Chief Counsel advised that, when a partnership has an imputed underpayment under the centralized partnership audit rules, section 6233 treats that amount as the underpayment or understatement for calc…
Partner bad debt claim excluded from modification
Chief Counsel advised that an amended return modification under the centralized partnership audit rules may consider only partnership adjustments and partner tax attributes affected by those adjustmen…
Non-income partnership adjustments are positive for imputed underpayment
Chief Counsel explained that an imputed underpayment is calculated from net positive partnership adjustments. Adjustments to non-income items, including distributions, self-employment earnings, and se…
Insurance subsidiary remained in consolidated group during receivership
A parent corporation wholly owned an insurance subsidiary that entered a court-ordered receivership and liquidation. The receiver obtained management authority and title to the subsidiary's property, …
IRS may retain foreign-resident partnership representative designation
A partnership designated a representative who had a U.S. taxpayer identification number but lived abroad. The partnership supplied its own U.S. street address and telephone number for the representati…
Internet research saved by the IRS becomes protected return information
Chief Counsel advised that an IRS employee may search the internet for information without creating a disclosure concern. Once the employee collects information about a property and saves it in a taxp…
Partnership penalties differ under collection and push-out rules
Chief Counsel explained that partnership-level penalties are handled differently under Section 6232(f) and the partnership push-out rules. Under Section 6232(f), partners become liable for the unpaid …
Partners calculate their own tax changes after a BBA push out
Chief Counsel addressed who performs the tax calculation after a partnership subject to the centralized BBA audit rules elects to push adjustments out to its partners. Each partner computes the change…
Public Tax Court docket access differs from access through IRS systems
Chief Counsel identified a disclosure distinction between viewing filed documents on the Tax Court's public docket and viewing them through an IRS system. Public docket documents can be accessed throu…
DAWSON timing question turns on the Tax Court's EST-based rules
This brief Chief Counsel email raises a system-design question about how DAWSON should display or adjust filing dates and times. It asks whether the electronic Tax Court system should adjust those val…
Final partnership adjustment may add QBI omitted from proposed notice
Chief Counsel advised that a final partnership adjustment may include a qualified business income adjustment that was not proposed in the earlier notice of proposed partnership adjustment. Section 623…
Final partnership adjustments need not match the proposed notice
Chief Counsel advised that adjustments in a final partnership adjustment do not have to match those in the earlier notice of proposed partnership adjustment. The earlier notice contains proposed rathe…
Form 8300 guidance for legalized-substance businesses
Chief Counsel answered examination questions about Form 8300 compliance by businesses in the legalized-substance industry. The advice covers transaction descriptions and Fifth Amendment concerns, the …
Related exam teams may share return information when tax duties require it
Chief Counsel advised that IRS examination teams may share third-party return information internally under section 6103(h)(1) when the receiving employees have a tax-administration need to know it. Th…
Territory-funded trust income excluded under section 115
A United States territory created and exclusively funded a trust to hold assets for benefits the territory owed to recipients. The trust could distribute money only to the territory for those benefit …
IRS exam teams may share return information when tax administration requires it
Chief Counsel advised when information from one IRS examination could be shared with other examination teams and with taxpayers or their representatives. Section 6103(h)(1) permits internal sharing wh…
Third-party contact reports should be provided only on request
Chief Counsel advised that the IRS should give a taxpayer reports of third parties contacted during an examination only when the taxpayer requests them. The email rejected periodic issuance of those r…
Disaster relief postpones assessment deadline to end of relief period
Chief Counsel advised that section 7508A postpones covered deadlines that fall within a designated disaster postponement period. Notice 2023-71 established a postponement period from October 7, 2023, …
Partnership representative files Tax Court petition for partnership
Chief Counsel addressed whether the partnership representative or the partnership is the petitioner in a case challenging a final partnership adjustment. Section 6234 says the partnership may file the…
Partner credits applied after additional reporting year tax calculation
Chief Counsel explained how a partner calculates tax after receiving a section 6226 push-out statement. The additional reporting year tax is an adjustment to the partner's chapter 1 tax for the report…
IRS may disclose corrected taxpayer identifiers for FATCA compliance
Chief Counsel considered whether the IRS could provide corrected identifying information for account holders to a foreign tax authority when FATCA reports had incorrectly indicated that no U.S. taxpay…
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.