SECTION 29. WHAT

EFFECT WILL A LETTER RULING HAVE?

Has same effect as a determination letter

Will not apply to another taxpayer

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

May be revoked or modified if found to be in error

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).

.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—

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

Not otherwise generally revoked or modified retroactively

(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.

.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

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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