How would I obtain a private letter ruling?
Q) How would I obtain a private letter ruling?
A) To obtain a private letter ruling (PLR) from the Internal Revenue Service (IRS), you must follow the procedures and instructions set forth in the most recent Revenue Procedure, which is published each year. The current Revenue Procedure is Revenue Procedure 2023-1.
To request a PLR, you must submit a written request to the IRS. The request must include the following information:
- Your name, address, and taxpayer identification number (TIN)
- The name and address of your authorized representative, if any
- A statement of the facts and circumstances involved in the proposed transaction
- A statement of the specific issue or issues on which you are requesting a ruling
- A statement of the reasons why you believe the IRS should rule in your favor
- A copy of any relevant documents, such as contracts, agreements, or statutes
- A user fee, which is currently $18,000 for most types of PLRs
The IRS will review your request and issue a ruling within 90 days, or longer if necessary. The ruling will be in writing and will state the IRS’s position on the issue or issues you raised.
PLRs are confidential and may not be used as precedent by other taxpayers or by IRS personnel. However, PLRs can be helpful in resolving tax disputes and in planning future transactions.
Here are some additional things to keep in mind when requesting a PLR:
- The IRS may deny your request if it does not have jurisdiction over the issue or if the issue is not significant.
- The IRS may also deny your request if the issue is too complex or if the IRS does not have enough information to make a ruling.
- If the IRS grants your request, you must follow the ruling in order to avoid penalties.
If you are considering requesting a PLR, you should consult with an experienced tax advisor to determine if a PLR is right for you.