SECTION 6. EFFECT OF THE

LETTER RULING

.01 General rule. A taxpayer ordinarily may rely on a letter ruling issued by the Service pursuant to this revenue procedure subject to the conditions and limitations described in section 12 of Rev. Proc. 97–1. A letter ruling issued on a specific environmental cleanup transaction represents a holding by the Service on that transaction only. It will not apply to any transaction not specifically addressed in the letter ruling.

.02 Return previously filed. The conclusion in the letter ruling, whether adverse or favorable to the taxpayer, will generally be applied prospectively to all future transaction years. In addition, if a letter ruling involves tax years for which a return has already been filed, it will generally apply retroactively to all open years unless the Service exercises discretionary authority under § 7805(b) to limit the retroactive effect of the conclusion.

.03 Use in examining the taxpayer’s return. If a taxpayer is under examination or is later selected for examination, the letter ruling will be used by the district director in examining the taxpayer’s returns for prior and future transaction years in the manner described in section 12.03 of Rev. Proc. 97–1.

.04 Prior settlement or closing agree- ment. A letter ruling issued under this revenue procedure will not affect any taxable year(s) that are the subject of a prior settlement or closing agreement entered into with the district director or an appeals office.