TEB Private Letter Rulings: Some Basic Concepts
A private letter ruling, or PLR, is a written statement issued to a taxpayer that interprets and applies tax laws to the taxpayer’s represented set of facts. A PLR is issued in response to a written request submitted by a taxpayer. A PLR may not be relied on as precedent by other taxpayers or by IRS personnel.
It is important to distinguish between a PLR, generally issued by Chief Counsel, and TEB’s Voluntary Closing Agreement Program set forth in Notice 2008-31 and IRM 7.2.3. A PLR is appropriate when the issuer/taxpayer wishes to confirm with the IRS that a prospective transaction will not likely result in a tax violation. Whereas, a closing agreement is appropriate when the issuer/taxpayer wants to conclusively resolve tax matters relating to a violation, even if there are legal arguments that can be asserted to suggest a violation did not in fact occur.
Revenue Procedure 2013-1 sets forth the issues on which taxpayers may request PLRs and the circumstances under which the IRS does not issue PLRs. It also provides instructions on what documents and information are to be provided as well as on procedural requirements. Appendix A provides a schedule of user fees. Appendix B provides a sample format for a PLR request. Appendix C provides a checklist to ensure that the PLR request is complete. This revenue procedure is updated annually. See also IRS Procedures, Frequently Asked Questions under Code, Revenue Procedures, Regulations, Letter Rulings, “How would I obtain a private letter ruling?”