Determination Letter, Defined

A “determination letter” is a written determination issued by an IRS Director that applies the principles and precedents previously announced by the IRS to a specific set of facts. It is issued only when a determination can be made based on clearly established rules in a statute, a tax treaty, the regulations, a conclusion in a revenue ruling, or an opinion or court decision that represents the position of the IRS.

The IRS Employee Plans Rulings and Agreements Office issues determination letters on the status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under Internal Revenue Code Sections 401, 403(a), 409, and 4975(e)(7), and the status for exemption of any related trusts or custodial accounts under Code Section 501(a).