Tax Exempt Bonds 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. 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.

The procedures and user fees for obtaining a letter ruling are published annually in the first revenue procedure of each calendar year; see Revenue Procedure 2023-1. See also IRS Procedures, Frequently Asked Questions under Code, Revenue Procedures, Regulations, Letter Rulings, “How would I obtain a private letter ruling?”