Taxation and Regulatory Compliance

How Rev Proc 2019-1 Works for IRS Ruling Requests

Navigate the formal requirements for requesting an advance IRS determination on a specific tax issue according to the framework of Rev. Proc. 2019-1.

The Internal Revenue Service (IRS) provides a detailed roadmap for taxpayers seeking official guidance on tax matters through an annually updated document. Revenue Procedure 2025-1 outlines the exclusive methods for taxpayers to request formal advice from the IRS about the tax consequences of their actions before a tax return is filed.

This procedure explains the different types of advice the IRS offers and the precise steps a taxpayer must follow. Following these instructions is the required path for securing a formal determination from the agency to ensure compliance and mitigate potential disputes.

Types of IRS Guidance Available

The most formal type of guidance a taxpayer can request is a Private Letter Ruling (PLR). A PLR is a written determination that interprets and applies tax laws to a taxpayer’s specific set of represented facts. It is binding on the IRS with respect to the requesting taxpayer, meaning the agency must honor the ruling if the taxpayer files their return in accordance with it. Taxpayers seek a PLR before completing a significant or complex transaction to gain certainty about the tax treatment.

Another form of guidance is a Determination Letter, which is issued by an IRS director. It applies principles and precedents previously announced by the National Office to a specific set of facts, most commonly for issues like the qualified status of retirement plans or an organization’s tax-exempt status. Unlike a PLR, which often deals with prospective transactions, a determination letter pertains to completed actions.

A less formal type of advice is an Information Letter. This statement from a director or the National Office calls attention to a well-established interpretation of tax law without applying it to specific facts. Because it is general, an information letter is not binding on the IRS and is intended only for informational purposes.

Information Required for a Ruling Request

When preparing a request for a Private Letter Ruling, a taxpayer must compile a comprehensive package of information. A submission must include a complete statement of all relevant facts, including:

  • The names, addresses, and taxpayer identification numbers of all interested parties
  • A full description of the taxpayer’s business operations
  • A thorough account of the business reasons for the transaction
  • Any documents pertinent to the request

The request must also contain a clear statement of the specific ruling being sought, preferably framed in the precise language the taxpayer wishes to receive. Following this, the submission must include a statement of law and a supporting analysis that cites all relevant legal authorities supporting the taxpayer’s position.

The request must identify any pending legislation that could affect the transaction and disclose any authorities contrary to the position being advanced. The submission must be signed under penalties of perjury, affirming that the facts presented are true, correct, and complete.

The Submission Process and User Fees

The ruling request package can be submitted to the IRS by mail, but the agency now permanently accepts electronic submissions by fax or encrypted email. For certain issues, taxpayers may have a pre-submission conference with the IRS to help clarify the scope and required information before the formal submission.

A user fee is required for most ruling requests. The standard fee for a private letter ruling is $38,000, increasing to $43,700 for requests submitted after February 1, 2025. Reduced fees are available for taxpayers who meet certain lower income thresholds.

After submission and payment, the taxpayer receives an acknowledgment letter that assigns the request to a specific attorney or law clerk. This individual will be the taxpayer’s point of contact and may reach out to request additional information or to discuss the issues presented. The process culminates in the issuance of the formal ruling or a letter explaining why one cannot be issued.

Areas Where the IRS Will Not Issue Rulings

The IRS will not provide advance rulings on all tax matters. The agency publishes annually updated lists of subjects on which it will not issue Private Letter Rulings, found in Revenue Procedure 2025-3 for domestic issues and Revenue Procedure 2025-7 for international issues. These “no-rule areas” are established for various reasons, often because the issue is inherently factual, hypothetical, or the subject of pending legislation.

Examples of no-rule areas include questions about the market value of property, the tax effect of a transaction that lacks a bona fide business purpose, or matters that are currently under examination by an IRS field office. The IRS will not rule on hypothetical situations, requiring a real and specific transaction to be at issue.

This limitation is a practical measure to manage the IRS’s resources and avoid issuing opinions on matters better resolved through the examination process. Checking the appropriate no-rule list is a preliminary step in the ruling request process to prevent an automatic rejection of the submission.

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