SECTION 4. ON WHAT

ISSUES MUST WRITTEN ADVICE BE REQUESTED UNDER DIFFERENT PROCEDURES?

Issues involving alcohol, tobacco, and firearms taxes

Certain issues involving qualified retirement plans, individual retirement accounts (IRAs), and exempt organizations

.06 Issues under the jurisdiction of the Associate Chief Counsel (International) include the tax treatment of nonresident aliens and foreign corporations, withholding of tax on nonresident aliens and foreign corporations, foreign tax credit, determination of sources of income, income from sources outside the United States, subpart F questions, domestic international sales corporations (DISCs), foreign sales corporations (FSCs), exclusions under § 114 for extraterritorial income (ETI), international boycott determinations, treatment of certain passive foreign investment companies, income affected by treaty, U.S. possessions, and other matters relating to the activities of non-U.S. persons within the United States or U.S.-related persons outside the United States, and changes in method of accounting for these persons.

For the procedures to obtain advance pricing agreements under § 482, see Rev. Proc. 2015-41, 2015-35 I.R.B. 263.

For competent authority procedures related to bilateral and multilateral advance pricing agreements, see Rev. Proc. 2015-40, 2015-35 I.R.B. 236.

.07 Issues under the jurisdiction of the Associate Chief Counsel (Passthroughs, Trusts and Estates) include those that involve income taxes of S corporations (except accounting periods and methods) and certain noncorporate taxpayers (including partnerships, common trust funds, and trusts), entity classification, estates (excluding § 6166), gifts, and generation-skipping transfer.

.08 Issues under the jurisdiction of the Associate Chief Counsel (Procedure and Administration) include those that involve Federal tax procedure and administration, disclosure and privacy law, reporting and paying taxes (including payment of taxes under § 6166), assessing and collecting taxes (including interest and penalties), abating, crediting, or refunding overassessments or overpayments of tax, and filing information returns.

.01 The procedures for obtaining letter rulings, closing agreements, determination letters, information letters, and oral advice that apply to Federal alcohol, tobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction of the Alcohol and Tobacco Tax and Trade Bureau of the Department of the Treasury.

.02 The procedures for obtaining certain letter rulings, closing agreements, determination letters, information letters, and oral advice on qualified retirement plans and IRAs that are under the jurisdiction of the Commissioner, TE/GE, are provided in Rev. Proc. 2025-4, this Bulletin. Rev. Proc. 2025-4 also includes the procedures for issuing determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under §§ 401, 403(a), 409, and 4975(e)(7), and the status for exemption of any related trusts or custodial accounts under § 501(a). See also Rev. Proc. 2025-5, this Bulletin, for the procedures for issuing determination letters on the tax-exempt status of organizations under § 501 and § 521, the foundation status of organizations described in § 501(c)(3) and the foundation status of nonexempt charitable trusts described in § 4947(a)(1).

For the user fee requirements applicable to requests under the jurisdiction of the Commissioner, TE/GE, see Section 30 of Rev. Proc. 2025-4, and Section 14 of Rev. Proc. 2025-5.

December 30, 2024 12 Bulletin No. 2025–1

SECTION 5. UNDER WHAT CIRCUMSTANCES DO THE ASSOCIATE OFFICES ISSUE LETTER RULINGS?

In income and gift tax matters

Special relief for late S corporation and related elections in lieu of letter ruling process

A § 301.9100 request for extension of time for making an election or for other relief

.01 In income and gift tax matters, an Associate office generally issues a letter ruling on a proposed transaction or on a completed transaction if the letter ruling request is submitted before a return containing a tax position on the completed transaction is filed.

An Associate office will not ordinarily issue a letter ruling on a completed transaction if the letter ruling request is submitted after a return containing a tax position on the completed transaction is filed. “Not ordinarily” means that unique and compelling reasons must be demonstrated to justify the issuance of a letter ruling submitted after the return is filed for the year in which the transaction is completed. The taxpayer must contact the field office having audit jurisdiction over their return and obtain the field’s consent to the issuance of such a letter ruling. See section 7.05(2) of this revenue procedure.

.02 In lieu of requesting a letter ruling under this revenue procedure, a taxpayer may obtain relief for certain late S corporation and related elections by following the procedure in Rev. Proc. 2013-30, 2013-36 I.R.B. 173. This procedure is in lieu of the letter ruling process and does not require payment of any user fee. See section 3.01 of Rev. Proc. 2013-30, and section 15.03(3) of this revenue procedure.

.03 An Associate office will consider a request for an extension of time for making an election or other application for relief under § 301.9100-3 of the Treasury Regulations, even if submitted after the return covering the issue presented in the § 301.9100 request has been filed, an examination of the return has begun, the issues in the return are being considered by Appeals or a Federal court, or the liability reflected on the return has been assessed and subject to collection. Except for certain requests pertaining to applications for recognition of tax exemption under the jurisdiction of the Commissioner, TE/GE, a § 301.9100 request is a letter ruling request. Therefore, the § 301.9100 request should be submitted pursuant to this revenue procedure . However, a § 301.9100 request involving recharacterization of an IRA ( see § 1.408A-5, Q&A-6) should be submitted pursuant to Rev. Proc. 2025-4, this Bulletin. An election made pursuant to § 301.9100-2 for an automatic extension of time is not a letter ruling request and does not require payment of any user fee. See § 301.9100-2(d) and section 15.03(1) of this revenue procedure.

(1) Format of request . A § 301.9100 request (other than an election made pursuant to § 301.9100-2 and certain requests pertaining to applications for recognition of tax exemption under the jurisdiction of the Commissioner, TE/GE which are addressed in Rev. Proc. 2025-5) must be in the general form of, and meet the general requirements for, a letter ruling request. These requirements are given in section 7 of this revenue procedure. A § 301.9100 request must include an affidavit and declaration from the taxpayer and other parties having knowledge or information about the events that led to the failure to make a valid regulatory election and to the discovery of the failure. See § 301.9100-3(e)(2) and (e)(3). In addition, a § 301.9100 request must include the information required by § 301.9100-3(e)(4).

(2) Period of limitation . The filing of a request for relief under § 301.9100 does not suspend the running of any applicable period of limitation. See § 301.9100-3(d)(2). The Associate office ordinarily will not issue a § 301.9100 ruling if the period of limitation on assessment under § 6501(a) for the taxable year in which an election should have been made, or for any taxable years that would have been affected by the election had it been timely made, will expire before receipt of

Bulletin No. 2025–1 13 December 30, 2024

Determinations under § 999(d)

a § 301.9100 letter ruling. See § 301.9100-3(c)(1)(ii). If, however, the taxpayer consents to extend the period of limitation on assessment under § 6501(c)(4) for the taxable year in which the election should have been made and for any taxable years that would have been affected by the election had it been timely made, the Associate office may issue the letter ruling. See § 301.9100-3(d)(2). Note that the filing of a claim for refund under § 6511 does not extend the period of limitation on assessment. If § 301.9100-3 relief is granted, the Associate office may require the taxpayer to consent to an extension of the period of limitation on assessment. See § 301.9100-3(d)(2).

(3) Taxpayer must notify the Associate office if examination of its return begins while the request is pending . The taxpayer must notify the Associate office if the Service begins an examination of the taxpayer's return for the taxable year in which an election should have been made, or for any taxable years that would have been affected by the election had it been timely made, while a § 301.9100-3 request is pending. This notification must include the name and telephone number of the examining agent. See § 301.9100-3(e)(4)(i) and section 7.05(1)(b) of this revenue procedure.

(4) Associate office will notify examination agent, Appeals officer, or attorney of a § 301.9100 request if the taxpayer’s return is being examined by a field office or is being considered by an Appeals office or a Federal court . If the taxpayer's return for the taxable year in which an election should have been made, or for any taxable years that would have been affected by the election had it been timely made, is being examined by a field office or considered by an Appeals office or a Federal court, the Associate office will notify the appropriate examination agent, Appeals officer, or attorney that a § 301.9100 request has been submitted to the Associate office. The examination agent, Appeals officer, or attorney is not authorized to deny consideration of a § 301.9100 request. The letter ruling will be mailed to the taxpayer and a copy will be sent to the Appeals officer, attorney, or appropriate Service official in the operating division that has examination jurisdiction over the taxpayer's tax return.

(5) Inclusion of statement required by section 4.04 of Rev. Proc. 2009-41. Eligible entities requesting a letter ruling because they do not meet all of the eligibility requirements of section 4.01 of Rev. Proc. 2009-41, 2009-39 I.R.B. 439, must include either the following representation as part of the entity’s request for a letter ruling or an explanation regarding why they do not qualify to do so: “All required U.S. tax and information returns of the entity (or, if the entity was not required to file any such returns under the desired classification, then all required U.S. tax and information returns of each affected person as defined in Section 4.02 of Rev. Proc. 2009-41) were filed timely or within 6 months of the due date of the respective return (excluding extensions) as if the entity classification election had been in effect on the requested date. No U.S. tax or information returns were filed inconsistently with those described in the prior sentence.”

(6) Relief for late classification election. In lieu of requesting a letter ruling under § 301.9100-1 through § 301.9100-3 and this revenue procedure, entities that satisfy the requirements set forth in section 4.01 of Rev. Proc. 2009-41, 2009-39 I.R.B. 439, may apply for late classification election relief under Rev. Proc. 2009-41. Requests for such relief are not subject to user fees. See section 3.01 of Rev. Proc. 2009-41 and section 15.03(2) of this revenue procedure.

.04 As provided in Rev. Proc. 77-9, 1977-1 C.B. 542, the Associate Chief Counsel (International) issues determinations under § 999(d) that a particular operation of a person, or of a member of a controlled group (within the meaning of § 993(a)(3)) that includes that person, or a foreign corporation of which a member of the controlled group is a U.S. shareholder, constitutes participation in or cooperation with an international boycott. The effect of that determination is to deny certain benefits of the foreign tax credit and the deferral of earnings of foreign subsidiaries and domestic international sales corporations (DISCs) to that person. The same principles shall apply with respect to exclusions under § 114 for exterritorial income (ETI). Requests for determinations

December 30, 2024 14 Bulletin No. 2025–1

In matters involving § 367

under Rev. Proc. 77-9 are letter ruling requests and should be submitted to the Associate office pursuant to this revenue procedure.

.05 Unless the issue is covered by section 6 of this revenue procedure, the Associate Chief Counsel (International) may issue a letter ruling under § 367 even if the taxpayer does not request a letter ruling as to the characterization of the transaction under the reorganization provisions of the Code. The Associate office will determine the § 367 consequences of a transaction but may indicate in the letter ruling that it expresses no opinion as to the characterization of the transaction under the reorganization. The Associate office may decline to issue a § 367 ruling in situations in which the taxpayer inappropriately characterizes the transaction under the reorganization provisions.

In estate tax matters .06 In general, the Associate Chief Counsel (Passthroughs, Trusts and Estates) issues letter rulings on transactions affecting the estate tax on the prospective estate of a living person. The Associate office will not issue letter rulings for prospective estates on computations of tax, actuarial factors, or factual matters. With respect to the transactions affecting the estate tax of the decedent’s estate, generally the Associate office issues letter rulings before the decedent’s estate tax return is filed.

If the taxpayer is requesting a letter ruling regarding a decedent's estate tax and the estate tax return is due to be filed before the letter ruling is expected to be issued, the taxpayer should obtain an extension of time for filing the return and should notify the Associate office branch considering the letter ruling request that an extension has been obtained.

If the return is filed before the letter ruling is received from the Associate office, the taxpayer must disclose on the return that a letter ruling has been requested, attach a copy of the pending letter ruling request to the return, and notify the Associate office that the return has been filed. See section 7.05(2) of this revenue procedure. The Associate office will make every effort to issue the letter ruling within 3 months of the date the return was filed.

If the taxpayer requests a letter ruling after the return is filed, but before the return is examined, the taxpayer must notify the field office having jurisdiction over the return that a letter ruling has been requested, attach a copy of the pending letter ruling request, and notify the Associate office that a return has been filed. See section 7.05(2) of this revenue procedure. The Associate office will make every effort to issue the letter ruling within 3 months of the date the return has been filed.

If the letter ruling cannot be issued within that 3-month period, the Associate office will notify the field office having jurisdiction over the return, which may, by memorandum to the Associate office, grant an additional period for the issuance of the letter ruling.

In matters involving additional estate tax under § 2032A(c)

In matters involving qualified domestic trusts under § 2056A

In generation-skipping transfer tax matters

.07 In matters involving additional estate tax under § 2032A(c), the Associate Chief Counsel (Passthroughs, Trusts and Estates) issues letter rulings on proposed transactions and on completed transactions that occurred before the return is filed.

.08 In matters involving qualified domestic trusts under § 2056A, the Associate Chief Counsel (Passthroughs, Trusts and Estates) issues letter rulings on proposed transactions and on completed transactions that occurred before the return is filed.

.09 In general, the Associate Chief Counsel (Passthroughs, Trusts and Estates) issues letter rulings on proposed transactions that affect the generation-skipping transfer tax and on completed

Bulletin No. 2025–1 15 December 30, 2024

In employment and excise tax matters

In procedural and administrative matters

In Indian tribal government matters

transactions that occurred before the return is filed. In the case of a generation-skipping trust or trust equivalent, letter rulings are issued either before or after the trust or trust equivalent has been established.

.10 In employment and excise tax matters, the Associate offices issue letter rulings on proposed transactions and on completed transactions, if the letter ruling request is submitted before the return is filed for the year in which the transaction is completed.

Letter ruling requests regarding employment status (employer/employee relationship) from Federal agencies and instrumentalities or their workers must be submitted to the Internal Revenue Service as set forth in the current Instructions for Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding . If the Federal agency or instrumentality service recipient (the firm) makes the request, the firm will receive any issued letter ruling. A copy will also be sent to any identified workers. If the worker makes the request and the firm has been contacted for information, both the worker and the firm will receive any issued letter ruling. The letter ruling will apply to any individuals engaged by the firm under substantially similar circumstances. See section 12.04 of this revenue procedure for requests regarding employment status made by taxpayers other than Federal agencies and instrumentalities or their workers.

.11 The Associate Chief Counsel (Procedure and Administration) issues letter rulings on matters arising under the Code and related statutes and regulations that involve the time, place, manner, and procedures for reporting and paying taxes; or the filing of information returns.

.12 Pursuant to Rev. Proc. 84-37, 1984-1 C.B. 513, as modified by Rev. Proc. 86-17, 1986-1 C.B. 550, and this revenue procedure, the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes) issues determinations recognizing a tribal entity as an Indian tribal government within the meaning of § 7701(a)(40) or as a political subdivision of an Indian tribal government under § 7871(d) if it determines, after consultation with the Secretary of the Interior, that the entity satisfies the statutory definition of an Indian tribal government or has been delegated governmental functions of an Indian tribal government. Requests for determinations under Rev. Proc. 84-37 are letter ruling requests, and, therefore, should be submitted to the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes) pursuant to this revenue procedure.

(1) Definition of Indian tribal government. The term “Indian tribal government” is defined under § 7701(a)(40) to mean the governing body of any tribe, band, community, village, or group of Indians, or (if applicable) Alaska Natives, which is determined by the Secretary of the Treasury, after consultation with the Secretary of the Interior, to exercise governmental functions. Section 7871(d) provides that, for purposes of § 7871(a), a subdivision of an Indian tribal government shall be treated as a political subdivision of a state if the Secretary of the Treasury determines, after consultation with the Secretary of the Interior, that the subdivision has been delegated the right to exercise one or more of the substantial governmental functions of the Indian tribal government.

(2) Inclusion in list of tribal governments. Rev. Proc. 2008-55, 2008-2 C.B. 768, designates the Indian tribal entities that appear on the current or future lists of federally recognized Indian tribes published annually by the Department of the Interior, Bureau of Indian Affairs, as Indian tribal governments that are treated similarly to states for certain Federal tax purposes. Rev. Proc. 84-36, 1984-1 C.B. 510, as modified by Rev. Proc. 86-17, 1986-1 C.B. 550, provides a list of political subdivisions of Indian tribal governments that are treated as political subdivisions of states for certain Federal tax purposes. Under Rev. Proc. 84-37, as modified by Rev. Proc. 86-17, tribal governments or subdivisions recognized under § 7701(a)(40) or § 7871(d) will be included in the list of recognized tribal government entities in future lists of federally recognized Indian

December 30, 2024 16 Bulletin No. 2025–1

On constructive sales price under § 4216(b) or § 4218(c)

In exempt organizations matters

In qualified retirement plan and IRA matters

tribes published annually by the Department of the Interior, Bureau of Indian Affairs, or revised versions of Rev. Proc. 84-36.

.13 The Associate Chief Counsel (Energy, Credits, and Excise Tax) will issue letter rulings in all cases on the determination of a constructive sales price under § 4216(b) or § 4218(c) and in all other cases on prospective transactions if the law or regulations require a determination of the effect of a proposed transaction for Federal tax purposes. See section 6.14(5) of this revenue procedure.

.14 In exempt organizations matters, the Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes) generally issues letter rulings on proposed transactions or on completed transactions if the letter ruling request is submitted before the return is filed for the year in which the transaction is completed. The Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes) will not ordinarily issue a letter ruling on a completed transaction if the letter ruling request is submitted after the return is filed for the year in which the transaction is completed. “Not ordinarily” means that unique and compelling reasons must be demonstrated to justify the issuance of a letter ruling submitted after the return is filed for the year in which the transaction is completed. The taxpayer must contact the field office having audit jurisdiction over their return and obtain the field’s consent to the issuance of such a letter ruling.

See Rev. Proc. 2025-5, this Bulletin, for the procedures for issuing determination letters on issues under the jurisdiction of the Director Exempt Organizations Rulings and Agreements, including determination letters on the tax-exempt status of organizations under § 501 and § 521, the foundation status of organizations described in § 501(c)(3), and the foundation status of nonexempt charitable trusts described in § 4947(a)(1).

.15 In qualified retirement plan and IRA matters (other than those listed in Rev. Proc. 20254, this Bulletin), the Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes) will generally issue letter rulings on proposed transactions and on completed transactions, if the letter ruling request is submitted before the return is filed for the year in which the transaction is completed, including those involving:

(1) §§ 72 (other than the computation of the exclusion ratio), 219, 381(c)(11), 402, 403(b) (except with respect to whether the form of a plan satisfies the requirements of § 403(b) as provided in Rev. Proc. 2025-4), 404, 408, 408A, 412, 414(e) and (h), 511 through 514, 4971(b) and (g), 4972, 4973, 4974 (other than requests for a waiver under § 4974(d)), 4978, 4979, and 4980;

(2) Waiver of the minimum funding standard ( see Rev. Proc. 2004-15, 2004-1 C.B. 490, section 3.04 of which is modified by Rev. Proc. 2025-4);

(3) Whether a plan amendment is reasonable and provides for only de minimis increases in plan liabilities in accordance with §§ 401(a)(33) and 412(c)(7)(B)(i) of the Code ( see Rev. Proc. 79-62, 1979-2 C.B. 576);

(4) With respect to employee stock ownership plans and tax credit employee stock ownership plans, §§ 409, 1042, 4975(d)(3) and 4975(e)(7). Qualification issues arising under these sections (as well as under §§ 401-420 generally) are generally within the jurisdiction of Employee Plans Determinations. However, see Rev. Proc. 2025-3, this Bulletin, section 4.02(12);

(5) Abatement of first tier excise taxes under § 4962;

Bulletin No. 2025–1 17 December 30, 2024

A request to revoke an election

Under some circumstances before the issuance of a regulation or other published guidance

SECTION 6. UNDER WHAT CIRCUMSTANCES DOES THE SERVICE NOT ISSUE LETTER RULINGS OR DETERMINATION LETTERS?

Ordinarily not if the request involves an issue under examination or consideration or in litigation

(6) Relief under § 301.9100-1 that is not related to Roth IRA recharacterizations; and

(7) Grants of extensions of time other than pursuant to § 301.9100-1.

.16 If a taxpayer is required to file a letter ruling request to obtain consent to revoke an election made on a return, an Associate office will consider the request, even if an examination of the return has begun or the issues in the return are being considered by Appeals or a Federal court. The procedures in this revenue procedure applicable to a § 301.9100 request apply to a letter ruling request to revoke the election.

.17 In general, the Service will not issue a letter ruling or determination letter on an issue that it cannot readily resolve before the promulgation of a regulation or other published guidance. See section 6.09 of this revenue procedure.

However, an Associate office may issue letter rulings under the following conditions:

(1) Answer is clear or is reasonably certain . If the letter ruling request presents an issue for which the answer seems clear by applying the statute, regulations, and applicable case law to the facts or for which the answer seems reasonably certain but not entirely free from doubt.

(2) Answer is not reasonably certain . If the letter ruling request presents an issue for which the answer does not seem reasonably certain, the Associate office may issue the letter ruling, using its best efforts to arrive at a determination, if it is in the best interest of tax administration.

.01 The Service ordinarily does not issue a letter ruling or a determination letter if, at the time of the request, the identical issue is involved in the taxpayer's return for an earlier period and that issue—

(1) is being examined by a field office;

(2) is being considered by Appeals;

(3) is pending in litigation in a case involving the taxpayer or a related party;

(4) has been examined by a field office or considered by Appeals and the statutory period of limitations on assessment or on filing a claim for refund or credit of tax has not expired; or

(5) has been examined by a field office or considered by Appeals and a closing agreement covering the issue or liability has not been entered into by a field office or by Appeals.

December 30, 2024 18 Bulletin No. 2025–1

Ordinarily not in certain areas because of factual nature of the problem or for other reasons

Ordinarily not on part of an integrated transaction

Ordinarily not on which of two entities is a common law employer

Ordinarily not to business associations or groups

Ordinarily not where the request does not address the tax status, liability, or reporting obligations of the requester

If a return dealing with an issue for a particular year is filed while a request for a letter ruling on that issue is pending, an Associate office will issue the letter ruling unless it is notified by the taxpayer or otherwise learns that an examination of that issue or the identical issue on an earlier year's return has been started by a field office. See section 7.05 of this revenue procedure. In income and gift tax matters, as well as in qualified retirement plan, IRA, and exempt organizations matters, even if an examination has begun, an Associate office ordinarily will issue the letter ruling if the field office agrees by memorandum to the issuance of the letter ruling.

.02 The Service ordinarily does not issue letter rulings or determination letters in certain areas because of the factual nature of the matter involved or for other reasons. Rev. Proc. 2025-3 and Rev. Proc. 2025-7, this Bulletin, provide a list of these areas. This list is not all-inclusive because the Service may decline to issue a letter ruling or a determination letter when appropriate in the interest of sound tax administration, including due to resource constraints, or on other grounds whenever warranted by the facts or circumstances of a particular case.

Instead of issuing a letter ruling or determination letter, the Service may, when it is considered appropriate and in the interest of sound tax administration, issue an information letter calling attention to well-established principles of tax law.

If the Service determines that it is not in the interest of sound tax administration to issue a letter ruling or determination letter due to resource constraints, it will adopt a consistent approach with respect to taxpayers that request a ruling on the same issue. The Service will also consider adding the issue to the no rule list at the first opportunity. See sections 2.01 and 3.02 of Rev. Proc. 2025-3.

.03 General rule. An Associate office ordinarily will not issue a letter ruling on only part of an integrated transaction. If a part of a transaction falls under a no-rule area, a letter ruling on other parts of the transaction may be issued. Before preparing the letter ruling request, a taxpayer should call a branch having jurisdiction for the matters on which the taxpayer is seeking a letter ruling to discuss whether the Associate office will issue a letter ruling on part of the transaction.

.04 The Service ordinarily does not issue a letter ruling or a determination letter on which of two entities, under common law rules applicable in determining the employer-employee relationship, is the employer, when one entity is treating the worker as an employee.

.05 The Service ordinarily does not issue letter rulings or determination letters to business, trade, or industrial associations or to similar groups concerning the application of the tax laws to members of the group. Groups and associations, however, may submit suggestions of generic issues that could be appropriately addressed in revenue rulings. See Rev. Proc. 89-14, 1989-1 C.B. 814, which states the objectives of, and standards for, the publication of revenue rulings and revenue procedures in the Internal Revenue Bulletin. See also Rev. Proc. 2016-19, 2016-13 I.R.B. 497, which describes procedures for taxpayers and other entities to submit issues for consideration under the Service’s Industry Issue Resolution (IIR) Program.

The Service may issue letter rulings or determination letters to groups or associations on their own tax status or liability if the request meets the requirements of this revenue procedure.

.06 The Service ordinarily does not issue letter rulings or determination letters regarding the tax consequences of a transaction for taxpayers who are not directly involved in the request if the requested letter ruling or determination letter would not address the tax status, liability, or reporting obligations of the requester. For example, a taxpayer may not request a letter ruling relating to the tax consequences of a transaction to a customer or client, if the tax status, liability, or reporting obligations of the taxpayer would not be addressed in the ruling, because the customer

Bulletin No. 2025–1 19 December 30, 2024

Ordinarily not to foreign governments

Ordinarily not on Federal tax consequences of proposed legislation

Ordinarily not before issuance of a regulation or other published guidance

or client is not directly involved in the letter ruling request. The tax liability of each shareholder is, however, directly involved in a letter ruling on the reorganization of a corporation. Accordingly, a corporate taxpayer could request a letter ruling that solely addressed the tax consequences to its shareholders of a proposed reorganization.

Rev. Proc. 96-16, 1996-1 C.B. 630, sets forth rules for letter ruling requests involving taxexempt state and local government obligations.

.07 The Service ordinarily does not issue letter rulings or determination letters to foreign governments or their political subdivisions about the U.S. tax effects of their laws. The Associate offices also do not issue letter rulings on the effect of a tax treaty on the tax laws of a treaty country for purposes of determining the tax of the treaty country. See section 13.02 of Rev. Proc. 201540, 2015-35 I.R.B. 236. Treaty partners can continue to address matters such as these under the provisions of the applicable tax treaty. In addition, the Associate offices may issue letter rulings to foreign governments or their political subdivisions on their own tax status or liability under U.S. law if the request meets the requirements of this revenue procedure.

.08 The Associate offices ordinarily do not issue letter rulings on a matter involving the Federal tax consequences of any proposed Federal, state, local, municipal, or foreign legislation. The Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes) may issue letter rulings regarding the effect of proposed state, local, or municipal legislation upon an eligible deferred compensation plan under § 457(b) provided that the letter ruling request relating to the plan complies with the other requirements of this revenue procedure. The Associate offices also may provide general information in response to an inquiry.

.09 Generally, the Service will not issue a letter ruling or a determination letter if the request presents an issue that cannot be readily resolved before a regulation or any other published guidance is issued. When the Service has closed a regulation project or any other published guidance project that might have answered the issue or decided not to open a regulation project or any other published guidance project, the Associate offices may consider all letter ruling requests unless the issue is covered by section 6 of this revenue procedure, Rev. Proc. 2025-3, or Rev. Proc. 2025-7, this Bulletin.

Not on frivolous issues .10 The Service will not issue a letter ruling or a determination letter on frivolous issues. A "frivolous issue" is one without basis in fact or law or one that asserts a position that courts have held frivolous or groundless. Examples of frivolous or groundless issues include, but are not limited to:

(1) frivolous "constitutional" claims, such as claims that the requirement to file tax returns and pay taxes constitutes an unreasonable search barred by the Fourth Amendment, violates Fifth and Fourteenth Amendment protections of due process, violates Thirteenth Amendment protections against involuntary servitude, or is unenforceable because the Sixteenth Amendment does not authorize nonapportioned direct taxes or was never ratified;

(2) claims that income taxes are voluntary, that the term “income” is not defined in the Internal Revenue Code, or that preparation and filing of Federal income tax returns violates the Paperwork Reduction Act;

(3) claims that tax may be imposed only on coins minted under a gold or silver standard or that receipt of Federal Reserve Notes does not cause an accretion to wealth;

December 30, 2024 20 Bulletin No. 2025–1

(4) claims that a person’s income is not taxable because he or she falls within a class entitled to "reparation claims" or an extra-statutory class of individuals exempt from tax, e.g., "free-born" individuals;

(5) claims that a taxpayer can refuse to pay taxes on the basis of opposition to certain Governmental expenditures;

(6) claims that taxes apply only to Federal employees; only to residents of Puerto Rico, Guam, the U.S. Virgin Islands, the District of Columbia, or "Federal enclaves”; or that §§ 861 through 865 or any other provision of the Code imposes taxes on U.S. citizens and residents only on income derived from foreign based activities;

(7) claims that wages or personal service income are “not income," are "nontaxable receipts," or are a “nontaxable exchange for labor”;

(8) claims that income tax withholding by an employer on wages is optional; or

(9) other claims that the courts have characterized as frivolous or groundless.

Additional examples of frivolous or groundless issues may be found in IRS publications and other guidance (including, but not limited to, Notice 2010-33, Frivolous Positions, and I.R.M. Exhibit 25.25.10-1, Frivolous Arguments).

No “comfort” letter rulings .11 Except with respect to issues under §§ 332, 351, 355, 368, 1036, and related operative provisions, a letter ruling will not be issued with respect to an issue that is clearly and adequately addressed by a statute, regulation, or decision of a court, revenue rulings, revenue procedures, notice, or other authority published in the Internal Revenue Bulletin (Comfort Ruling). However, an Associate Office may, in its discretion, issue a Comfort Ruling if the Associate office is otherwise issuing a letter ruling to the taxpayer on another issue arising in the same transaction.

Not on alternative plans or hypothetical situations

Not on property conversion after return filed

Circumstances under which determination letters are not issued by a Director

.12 The Service will not issue a letter ruling or a determination letter on alternative plans of proposed transactions or on hypothetical situations.

.13 An Associate office will not issue a letter ruling on the replacement of involuntarily converted property, whether or not the property has been replaced, if the taxpayer has already filed a Federal tax return for the first taxable year in which any of the gain was realized from the converted property. A Director may issue a determination letter in this case. See section 12.01 of this revenue procedure.

.14 A Director will not issue a determination letter if—

(1) the taxpayer has directed a similar inquiry to an Associate office;

(2) the same issue, involving the same taxpayer or a related party, is pending in a case in litigation or before Appeals;

(3) the request involves an industry-wide problem;

Bulletin No. 2025–1 21 December 30, 2024