letter ruling


Also found in: Dictionary, Thesaurus, Legal, Acronyms, Encyclopedia.
Related to letter ruling: Private letter ruling, IRS Private Letter Ruling

Ruling

An official opinion by the IRS on how it interprets U.S. tax law. The IRS may make a ruling, for example, after seeing taxpayers apply a deduction or credit to an unusual, but still relevant situation. The IRS determines whether or not it will accept the situation, and, afterward, applies the ruling to all comparable situations. It is also called a revenue ruling, a letter ruling, or a private letter ruling.

letter ruling

letter ruling

A written statement from the IRS to a particular taxpayer, containing an interpretation of tax law as it applies to that taxpayer's situation. Letter rulings are issued in response to a request from a taxpayer and are not binding on the IRS as it relates to other cases.

References in periodicals archive ?
The letter ruling states that the acknowledgment must set forth the date the credit card company remits the contribution to the charity, not just the calendar year.
However, in two recent letter rulings, (43) the Service allowed S status even though the IRS had no record of Form 2553 being filed.
Another letter ruling (42) had fairly unique facts.
Erroneous investment advice: In Letter Ruling 200407023, a 60-year-old widow with no financial knowledge or experience intended to withdraw an amount from one IRA and deposit it into another, until a bank employee suggested that she deposit the amount into a regular account, to take advantage of a higher interest rate.
In Letter Ruling 200551018, note 61 supra, B owned 50% of the target corporation and 90% of the acquiring corporation.
The letter ruling said that under the facts presented, RK was a surgical procedure that affected a structure or function of the body, its purpose was to correct a physical defect and it was not cosmetic surgery.
Recent private letter rulings confirm that what is old is new and that partial liquidations are alive and well.
In Letter Ruling 200625009, a company and a co-owner had acquired a property and operated it as tenants in common.
Letter ruling 200402029 (taxpayer's physical incapacity prevented compliance with rollover requirements).
Where the guidelines are not satisfied, taxpayers are invited to describe other corporate business purposes that may persuade the IRS to issue a private letter ruling.
In Letter Ruling 200546027, (16) an S corporation could have been deemed to have a second class of stock due to its distributions to shareholders and the terms of shareholder agreements.
While the letter ruling did not include exact amounts, the total cost of ERP systems could range from $2 million to $200 million depending on the company's size.