SECTION 29. WHAT

EFFECT WILL A LETTER RULING HAVE?

Has same effect as a determination letter

Will not apply to another taxpayer

.06 The taxpayer should furnish to Employee Plans Rulings and Agreements any additional data, reasoning, precedents, etc., that were proposed by the taxpayer and discussed at the conference but not previously or adequately presented in writing. The taxpayer must furnish the additional information within 21 calendar days from the date of the conference. See section 27.06 of this revenue procedure for instructions on submission of additional information. If the additional information is not received within that time, a ruling will be issued on the basis of the information on hand or, if appropriate, no ruling will be issued.

Procedures for requesting an extension of the 21-day period and notifying the taxpayer or the taxpayer’s representative of Employee Plans Rulings and Agreements’ approval or denial of the requested extension are the same as those stated in section 27.10 of this revenue procedure regarding submitting additional information.

.07 Sometimes it will be advantageous to both Employee Plans Rulings and Agreements and the taxpayer to hold a conference before the taxpayer submits the letter ruling request to discuss substantive or procedural issues relating to a proposed transaction. These conferences are held only: if the identity of the taxpayer is provided to Employee Plans Rulings and Agreements if the taxpayer actually intends to make a request, if the request involves a matter on which a letter ruling is ordinarily issued, and at the discretion of Employee Plans Rulings and Agreements and as time permits. For example, a pre-submission conference will not be held on an issue if, at the time the pre-submission conference is requested, the identical issue is involved in the taxpayer’s return for an earlier period and that issue is being examined. See section 24 of this revenue procedure. Generally, the taxpayer will be asked to provide a statement of whether the issue is an issue on which a letter ruling is ordinarily issued and a draft of the letter ruling request or other detailed written statement of the proposed transaction, issue(s), and legal analysis before the pre-submission conference. If the taxpayer’s representative will attend the pre-submission conference, a power of attorney form is required. A Form 2848, Power of Attorney and Declaration of Representative, must be used to provide the representative’s authorization.

Any discussion of substantive issues at a pre-submission conference is advisory only, is not binding on the Service, and cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b). See section 3.06(2) of this revenue procedure. A letter ruling request submitted following a pre-submission conference will not necessarily be assigned to the group that held the pre-submission conference.

.08 A taxpayer may request that a conference of right be held by telephone. If the request is approved, the taxpayer will be advised when to call the Employee Plans Rulings and Agreements representatives (not a toll-free call).

.01 Except as described in this section 29, a letter ruling issued by Employee Plans Rulings and Agreements has the same effect as a determination letter ruling issued to a taxpayer under Part II of this revenue procedure.

.02 A taxpayer may not rely on a letter ruling issued to another taxpayer. See § 6110(k)(3).

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Will be used by the Service in examining the taxpayer’s return

May be revoked or modified if found to be in error

.03 When determining a taxpayer’s liability, the Service must ascertain whether—

(1) the conclusions stated in the letter ruling are properly reflected in the return;

(2) the representations upon which the letter ruling was based reflected an accurate statement of the material facts;

(3) the transaction was carried out substantially as proposed; and

(4) there has been any change in the law that applies to the period during which the transaction or continuing series of transactions were consummated.

.04 A letter ruling found to be in error or not in accord with the current views of the Service may be revoked or modified, unless it was part of a closing agreement as described in section 3.03 of this revenue procedure. If a letter ruling is revoked or modified, the revocation or modification applies to all years open under the period of limitation unless a request to limit the retroactive effect of a revocation or modification has been granted under § 7805(b). A request to limit the retroactive revocation or modification of a letter ruling issued by Employee Plans Rulings and Agreements should be submitted to the agent or specialist assigned to the case, and should otherwise follow the procedures described in section 23.08 of this revenue procedure.

A letter ruling may be revoked or modified by—

(1) a letter giving notice of revocation or modification to the taxpayer to whom the letter ruling was issued;

(2) the enactment of legislation or ratification of a tax treaty;

(3) a decision of the United States Supreme Court;

(4) the issuance of temporary or final regulations; or

(5) the issuance of a revenue ruling, revenue procedure, notice, or other statement published in the Internal Revenue Bulletin.

Consistent with these provisions, if a letter ruling relates to a continuing action or a series of actions, it will ordinarily be applied until any one of the events described above occurs or until the letter ruling is specifically withdrawn by the Service.

Publication of a notice of proposed rulemaking will not affect the application of any letter ruling issued under this revenue procedure.

If a letter ruling is revoked or modified by a letter to the taxpayer, the letter will state whether the revocation or modification is retroactive. If a letter ruling is revoked or modified by the issuance of final or temporary regulations or by the publication of a revenue ruling, revenue procedure, notice, or other statement in the Internal Revenue Bulletin, the document may contain a statement as to its retroactive effect on letter rulings.

January 3, 2023 238 Bulletin No. 2023–1

Letter ruling revoked or modified based on material change in facts applied retroactively

Not otherwise generally revoked or modified retroactively

Will not apply to a similar transaction in same year or any other year

Retroactive effect of revocation or modification applied to a continuing action or series of actions

May be retroactively revoked or modified if the transaction is completed without reliance on the letter ruling

Taxpayer may request that retroactivity be limited

.05 The revocation or modification of a letter ruling will be applied retroactively to the taxpayer for whom the letter ruling was issued or to a taxpayer whose tax liability was directly involved in the letter ruling if—

(1) there was a misstatement or omission of controlling facts;

(2) the facts at the time of the transaction are materially different from the controlling facts on which the letter ruling was based; or

(3) the transaction involves a continuing action or series of actions and the controlling facts change during the course of the transaction.

.06 If the revocation or modification of a letter ruling occurs, for reasons other than a change in facts as described in section 29.05 of this revenue procedure, the revocation or modification will generally not be applied retroactively to the taxpayer for whom the letter ruling was issued or to a taxpayer whose tax liability was directly involved in the letter ruling provided that—

(1) there was no change in the applicable law;

(2) the letter ruling was originally issued for a proposed transaction; and

(3) the taxpayer directly involved in the letter ruling acted in good faith in relying on the letter ruling, and revoking or modifying the letter ruling retroactively would be to the taxpayer’s detriment.

If a letter ruling is revoked or modified by a letter with retroactive effect, the letter will, except in fraud cases, state the grounds on which the letter ruling is being revoked or modified and explain the reasons why it is being revoked or modified retroactively.

.07 A letter ruling issued by Employee Plans Rulings and Agreements on a particular transaction represents a holding of the Service on that transaction only. It will not apply to a similar transaction in the same year or any other year. Except in unusual circumstances, the application of that letter ruling to the transaction will not be affected by the later issuance of regulations (either temporary or final) if conditions (1) through (3) in section 29.06 of this revenue procedure are met.

.08 If a letter ruling is issued by Employee Plans Rulings and Agreements covering a continuing action or series of actions and the letter ruling is later found to be in error or no longer in accord with the position of the Service, the Service ordinarily will limit the retroactive effect of revocation or modification to a date that is not earlier than that on which the letter ruling is revoked or modified.

.09 A taxpayer is not protected against retroactive revocation or modification of a letter ruling involving a transaction completed before the issuance of the letter ruling or involving a continuing action or series of actions occurring before the issuance of the letter ruling, because the taxpayer did not enter into the transaction relying on a letter ruling.

.10 Under § 7805(b), the Service may prescribe the extent to which a revocation or modification of a letter ruling will be applied without retroactive effect. See section 23.08 of this revenue procedure for further explanation of the procedures for requesting relief under § 7805(b).

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