Private letter ruling

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Private letter ruling

A ruling by the IRS in response to a request for interpretation of a tax law.


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.

Private letter ruling.

A private letter ruling explains a position the Internal Revenue Service (IRS) has taken on a specific issue or action that affects the amount of income tax a taxpayer owes.

While these rulings are not the law, and there's no guarantee that they won't be overturned by new IRS opinions, they can provide guidance on how to handle financial decisions that have potential tax consequences. There is a fee when you request such a ruling.

private letter ruling

An official IRS decision regarding how it will treat a transaction contemplated by the particular taxpayer who requested the private letter ruling.Private letter rulings are binding on the IRS for that one taxpayer, but other taxpayers are not entitled to rely on the position articulated in the ruling. Another taxpayer with an identical fact situation could find the IRS taking a completely different position.

References in periodicals archive ?
To address this line-drawing problem, in cases where it is unclear whether a transaction qualifies as a tax-free spin-off, tax authorities allow corporations to request a private letter ruling, in which the Service "interprets and applies the tax laws to a specific set of facts.
Private Letter Ruling 200437030 concludes that a coupon (for an item such as a ham or a turkey) is a cash equivalent fringe benefit.
In the event that the private letter ruling is not obtained by December 15, 2003, the Purchaser will have a onetime option to return its ownership interest to Marriott.
If they are unable to find court cases that address the issue at hand, they may need to turn to private letter rulings or to IRS general counsel memoranda (GCMs), which are background documents the IRS uses to support a ruling.
SAN FRANCISCO -- McKesson Corporation (NYSE:MCK) today reported that the company will record a credit to income tax expense of $80 million in its quarter ended September 30th, 2006, based on receiving a private letter ruling from the U.
13) Reporting the differential payments in Box 1 of Form W-2 (without applying payroll taxation) is consistent with the IRS's conclusion in Private Letter Ruling 8315021 (Jan.
today announced it has received a favorable supplemental private letter ruling from the Internal Revenue Service in connection with its proposed tender offer to purchase all of the outstanding shares of its Class B common stock.
A recently issued private letter ruling (unnumbered at press time but scheduled for release about Dec.
Factors that could cause actual results to differ from such forward-looking statements include (i) consummation of the spin-off is subject to the satisfaction of a number of conditions, including the Form 10 Registration Statement for Hanesbrands common stock being declared effective by the SEC, Hanesbrands common stock being accepted for listing on the New York Stock Exchange, and Sara Lee's receipt of a private letter ruling from the IRS or an opinion of counsel to the effect that the spin-off will qualify as a tax-free distribution for U.
Thus, in appropriate cases, tax liability insurance can provide tax certainty when a private letter ruling is not available.
In connection with Liberty Media's split-off from AT&T in 2001, the Internal Revenue Service issued a private letter ruling confirming that the transaction would be tax-free to AT&T and its shareholders.
In private letter ruling 9721036, a taxpayer over age 591/2 qualified for an in-service distribution of cash and employer stock from a qualified 401(k) plan.