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Private Letter Ruling Requests

Virginia Tax Attorney Explains IRS Private Letter Rulings

A Private Letter Ruling or PLR is a written determination issued by the IRS in response to a taxpayer’s request for guidance about its status for tax purposes or the tax effects of a proposed transaction.  Ordinarily, the PLR request must be submitted to the IRS prior to the taxpayer filing a tax return or other report required under the tax laws or before the specific transaction in question takes place.  Private Letter Rulings can be issued to individual taxpayers, businesses, trusts and other entities seeking to obtain an advanced determination from the IRS on the tax consequences of a transaction or activity that is under contemplation by the taxpayer.

A Private Letter Ruling will generally be considered binding by the IRS where the requestor has submitted a complete and accurate description of the proposed activity and carries out the activity in the manner provided for in the PLR request.  The IRS cautions, however, that a PLR may not be relied upon as precedent by other taxpayers or IRS personnel.  In most cases, a Private Letter Ruling request will become public once all information that may reveal the taxpayer’s identify is removed from the document. 

Filing an IRS Private Letter Ruling Request

The process for filing an IRS Private Letter Ruling request can be challenging to navigate without the advice and counsel of an experienced tax law attorney.  The Internal Revenue Bulletin 2016-1 provides for detailed procedures and requirements that must be followed when petitioning the IRS for a ruling request.  For instance, the IRS sets forth the specific areas of jurisdiction of the various Associate Chief Counsel offices: Corporate, Financial Institutions and Products, Income Tax and Accounting, International, Passthroughs and Special Industries, Procedure and Administration, and Tax Exempt and Government Entities.   The IRS Bulletin also delineates under what circumstances the Associate offices may issue a letter ruling and addresses those situations under which a letter ruling is generally not appropriate, including issues that are under examination, consideration, or in litigation. 

Thorn Law Group Can Help

If you are considering filing a request for an IRS Private Letter Ruling you should discuss your situation with a law firm that has an extensive understanding of how the IRS handles PLR requests.  Thorn Law Group is a leading tax law firm counseling businesses and individual taxpayers in Virginia, across the United States and around the globe.  Many of our attorneys have worked for the Internal Revenue Service prior to joining our firm, giving us unique insights into IRS operations and procedures.  Our lawyers will undertake a full examination of your situation and the transactions you are contemplating to determine whether an IRS Private Letter Ruling may be the right option for you.  Where the tax consequences of your activities are unclear and seeking advice from the IRS may be in your best interest, we will help you gather and submit the necessary information to obtain a Private Letter Ruling. 

Contact Thorn Law Group today to find out how we can help you resolve your tax law issues.  We can be reached by calling our Virginia offices at 703-752-3752 or emailing Kevin E. Thorn, Managing Partner of Thorn Law Group at ket@thornlawgroup.com.

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