Recent court cases, technical advice memorandums, and published
private rulings as they pertain to the valuation engagement
The current situation in which there have been no changes in law and the Proposed Regulations are nevertheless overturning years of
private ruling determinations demonstrates that the rules in their current form fail to accurately depict pertinent industry facts.
at [paragraph] 5525 (stating that the Lucky Stores court refused to consider the
private rulings on section 6110(k)(3) grounds).
Private rulings involve the application of the law to the taxpayer's specific facts; hence, they are not designed to serve as general guidance.
Taxpayers can invoke "the reasoning" of
private rulings, too, but their success in doing so may depend on their willingness to pursue matters to litigation.
28) These
private rulings apply the revenue ruling and the regulations just as they are applied in wholly domestic situations, without any suggestion that the cross-border nature of the transaction has any effect on the analysis.
2) In some instances, employee threats to leave the company were mentioned in
private rulings, but that should not be required to obtain a ruling.
The limitations of the private letter ruling process suggest that
private rulings are no substitute for published guidance.
In a profusion of public and
private rulings, industry specialization (ISP) issue papers, and other pronouncements of policy, the Internal Revenue Service has endeavored to clarify and solidify its position.
These statements represent a radical departure from the current consolidated return regulations, the applicable case law (both pre- and post-1966),
private rulings that consistently hold that the consolidated return regulations establish methods of reporting rather than methods of accounting.
The statute was intended to constitute a safe harbor for taxpayers affected by two limited
private rulings.
