Are Private Letter Rulings Public? + FAQs

Private letter rulings (PLRs) are not public records in full, although tax authorities do publish their anonymized contents after issuance. According to a 2018 Council On State Taxation survey, nearly one-third of U.S. state tax agencies still did not publicly release these rulings, risking inconsistent secret tax guidance.

💡 Straight Answer & Why It Matters: Immediate yes/no on PLR publicity and why it affects everyone (business owners, tax pros, general taxpayers).
⚖️ Federal vs. State Differences: How IRS vs. state tax agencies handle PLRs, and where rulings stay secret or see daylight.
⚠️ Common Mistakes & Misconceptions: Pitfalls like relying on someone else’s PLR or thinking a private ruling sets precedent (it doesn’t – learn why).
📚 Real Examples & Key Terms: Actual scenarios where PLRs made a difference (spin-offs, estate fixes, retirement plans) and definitions of IRS, FOIA, IRC sections, etc., so no one is left in the dark.
❓ Court Rulings & Quick FAQs: How courts view private rulings (hint: not binding precedent), plus rapid-fire Q&A to answer frequent forum questions in plain English.

Direct Answer: Are Private Letter Rulings Public or Private?

Private letter rulings are partially public and partially private. In simple terms, the content of a Private Letter Ruling (PLR) is made public (after some processing), but the specific taxpayer’s identity and details remain private. The IRS issues a PLR as a written response to one taxpayer’s inquiry about a specific tax scenario. By design, it’s “private” in that it applies only to that taxpayer and cannot be used as binding precedent by others. However, under federal law, the IRS must publish the text of most rulings – removing any confidential personal identifiers – so that the public can see what conclusions the IRS reached. In other words, you can read what the ruling decided, but you won’t know who it was for, and it won’t automatically apply to you.

This arrangement means PLRs live in a gray area: they aren’t kept completely secret, but they also aren’t fully public in the way a law or court case is. The dual nature serves two goals: protecting taxpayer privacy (so your competitors or nosy neighbors won’t know you sought a ruling) and promoting transparency (so no “secret tax law” develops behind closed doors). We’ll dive into how this works for both federal and state rulings, common misconceptions, and why it matters for everyone from CPAs and attorneys to small business owners and ordinary taxpayers.

Why Private Letter Rulings Are (and Aren’t) Public – Law & Policy

To understand the public/private status of PLRs, we need to look at the law and policy behind IRS rulings. Several key legal provisions set the stage:

Internal Revenue Code § 6103 (Confidentiality): This law generally makes taxpayer information strictly confidential. The IRS cannot disclose your tax return or details about your private ruling request to the public. This is why PLRs are initially private – they stem from a specific taxpayer’s situation, which is protected information.
Internal Revenue Code § 6110 (Public Inspection of Rulings): Enacted in the late 1970s, this section flips the script by requiring that written determinations by the IRS (including PLRs, determination letters, and technical advice memoranda) be made public after redacting identifying details. In short, once a PLR is issued, the IRS has to remove names, addresses, and any sensitive data, then publish the ruling’s content for everyone to see. This provision was Congress’s answer to concerns that the IRS might be creating a body of “secret law” through private rulings accessible only to those who ask (and can pay) for them. The change came after scandals and transparency pushes in the 1970s – lawmakers wanted to ensure equal access to tax guidance.
Freedom of Information Act (FOIA): Before IRC § 6110 was in place, people tried using FOIA to get copies of private rulings. FOIA is a general law that lets the public request federal agency records. Initially, the IRS resisted FOIA requests for private rulings, citing taxpayer confidentiality. Some court battles ensued, and ultimately Congress stepped in with the specific tax code rules above. Now, FOIA is less commonly used for PLRs since §6110 provides a direct path to access – the IRS pro-actively releases redacted rulings (often on its website or through bulletins). However, FOIA can still be a backstop if someone believes the IRS hasn’t properly released something it should have.

The upshot of these laws: The IRS must strike a balance. It cannot reveal who got the ruling or any trade secrets or personal details, but it must reveal what the ruling decided. Practically, this means a PLR document released to the public will look a bit like a case study with blanks – e.g., “Taxpayer A is proposing ______. Under section ____ of the Internal Revenue Code, we rule that ______.” Names and identifying facts are replaced with generic descriptors or deleted. These public write-ups appear weeks or months after the ruling is given to the taxpayer.

From a policy perspective, making PLRs public (in redacted form) has important benefits and limitations:

Transparency: The tax community at large can see how the IRS approached a novel or tricky issue. This helps prevent perceptions of favoritism or “secret deals.” Tax professionals often study PLRs to glean how the IRS might view similar facts.
Consistency: If the IRS has issued several PLRs taking a certain position, it signals a de-facto policy. Even though others can’t cite those rulings as official precedent, everyone knows the IRS’s mindset and can act accordingly (or avoid a path the IRS clearly dislikes).
Limitation – No Precedent: Crucially, the law (IRC §6110(k)(3)) explicitly says that PLRs (and similar determinations) can’t be used as precedent. This means that while the information is out there, it does not bind the IRS to give someone else the same result. Each taxpayer’s situation could be handled differently if circumstances differ. We’ll discuss later how courts treat this, but it’s a firm rule: reading a favorable PLR that someone else got does not guarantee you’ll win your case if you try the same thing.
Taxpayer Privacy: By redacting details, the IRS maintains the confidentiality of the taxpayer. If you get a PLR, your name and identifying info won’t show up in public. Only you and those you choose to tell will know it’s your ruling. (Of course, in some highly unique rulings, savvy observers might guess the parties involved, but the IRS takes care to genericize facts as much as possible.)

Historical note: Before 1976, PLRs truly were private (secret). Only the requesting taxpayer and the IRS knew about them. This led to criticism that well-advised or wealthy taxpayers could get advance private deals with the IRS that others didn’t know about. After the Tax Reform Act of 1976 established the current disclosure rules, thousands of past letter rulings were eventually released to the public. It was a watershed for transparency in tax administration. Today, the IRS releases written determinations weekly. For example, in 2020 the IRS issued 777 private letter rulings on various issues – all of those became available for public inspection in due course, each scrubbed of names and identifying details. In essence, the “secret law” problem has been addressed: anyone can read the content of IRS rulings (often for free on the IRS’s Electronic Reading Room or via tax research services), ensuring that tax professionals and taxpayers can stay informed about the informal decisions the IRS is making.

However, the sheer volume of PLRs also means not everyone reads them, and they can be hard to parse without context. They are often written in dense technical language and may refer to code sections and regulations without explanation. That’s why we’ll break down key terms later on, and why having a ruling doesn’t replace more accessible forms of guidance.

Federal vs. State: How Public Are Private Letter Rulings in Different Jurisdictions?

When it comes to state tax rulings, the rules of the game can differ significantly from the federal IRS practice. Just as the IRS issues PLRs for federal tax questions, most U.S. states have some form of private ruling or advisory opinion process for state taxes (like income, sales, or property tax matters under state law). But whether those state rulings are made public is a patchwork:

States That Publish Rulings: Many states do strive for transparency similar to the IRS. They will issue redacted letter rulings or advisory opinions and publish them on a state website or official bulletin. For example, Illinois provides redacted letter rulings online – often called “General Information Letters” or “Private Letter Rulings” – for public viewing, with the caveat that they’re not binding precedent (just like the IRS). New York issues Advisory Opinions at the state level, which are published with identifying details removed. Arizona publishes a number of its private taxpayer rulings and tax court decisions with redactions. Indiana posts its “Letters of Findings” and revenue rulings in a searchable database, minus the taxpayer names. California’s Franchise Tax Board doesn’t do a lot of formal PLRs for income tax, but the state tax agency does release Legal Rulings and annotated opinion letters on issues, and the California Department of Tax and Fee Administration (for sales tax) publishes annotated advice letters. In short, many larger states make rulings or similar guidance available to ensure consistent treatment and help taxpayers at large understand the state’s position on tricky tax issues.
States With Limited or No Publication: Some states historically kept rulings private or only shared them on request. For instance, a few years ago Arkansas did not routinely publish its legal opinion letters – a taxpayer or practitioner had to know to ask (via a state FOIA request) to get a redacted copy. Arkansas has since moved toward more transparency, but it’s an example of how practices can lag. Mississippi, for example, long maintained that private letter rulings were not published at all; the state only publishes broader “official” declaratory opinions (which, interestingly, are public by law, so taxpayers rarely use them, preferring the truly private rulings that stay confidential!). Colorado traditionally didn’t publish administrative hearing decisions or ruling letters publicly (though one could request them). Kansas was noted for not publishing any letter ruling or guidance in an easily accessible way, which frustrated tax practitioners there. Tennessee and Virginia were also cited in surveys as states that do not publish private rulings or rulings by their Department of Revenue hearing officers. These practices vary, and some states simply had no formal ruling program at all.
Recent Trends – Increasing Transparency: The trend has been moving toward greater openness. In the mid-2010s, several states revamped their policies. For example, in 2016 North Carolina passed a law requiring its Department of Revenue to publish all private letter rulings (called “written determinations”) in redacted form within 90 days of issuance. Maryland created a brand new binding ruling program around 2017 and, as part of that, had to set up procedures to make those rulings public. Arkansas began publishing redacted rulings and decisions starting in 2016 after previously only giving them out via FOIA. These changes came in response to businesses and tax professionals advocating for fairness – if one taxpayer gets a beneficial interpretation, others want to at least know about it so they can ask for similar treatment or avoid landmines. Council On State Taxation (COST) and other groups have graded states on transparency, pushing laggards to catch up.
States Without a PLR Program: Interestingly, a few states choose not to issue private rulings at all, taking the position that they don’t want to give potentially advantageous guidance to one taxpayer that’s not available to everyone. Minnesota is a notable example – for a long time, Minnesota’s revenue department offered only informal guidance and would not issue binding private letter rulings. Minnesota instead publishes Revenue Notices and other public guidance to address issues broadly, believing that is more equitable. If you asked Minnesota for a ruling, they might just give you informal advice or point to existing publications, and they argue this keeps things transparent (since nothing is hidden).

In summary, at the state level there’s a mosaic: roughly two-thirds of states now publish some form of redacted letter rulings or advisory opinions, while the rest either require a special request to obtain them or simply don’t issue them publicly. The landscape is changing as more states recognize the benefits of transparency.

For taxpayers and practitioners, this means you should check your state’s rules. If you request a state private letter ruling, ask whether it will be published. In many cases the answer is yes, with your name/info stripped out. In other cases, the ruling might remain truly private (which can be comforting for confidentiality, but less helpful to others in similar boats). And if you’re researching a state tax question, see if the state provides an online archive of rulings – many do, and it can be a goldmine of insight, just like IRS PLRs are for federal taxes.

Comparing Federal and State Ruling Openness – A Quick View

To highlight the differences, here’s a snapshot comparison of scenarios regarding public access to private rulings:

Scenario	How It’s Handled
IRS (Federal) PLR – after 1976	Published publicly with redactions. By law, the IRS must release the PLR’s content (usually within 90 days of issuance). Identities are removed. The ruling can be found on IRS’s online database or publications.
State with Transparent Policy (e.g., IL, NY, AZ)	Published publicly with redactions. The state tax agency posts ruling letters or opinions on its website or bulletins. Identities removed, not binding on others, but available for reference.
State with Secret Rulings (e.g., historically MS, AR pre-2016)	Not published by default. The ruling is given only to the requester. Others cannot see it unless they file a FOIA request (if allowed) or the taxpayer chooses to share it. This can lead to uneven knowledge in the tax community.
State with No PLR Program (e.g., MN)	No private rulings issued. Taxpayers must rely on general published guidance or request broader policy clarification. Nothing to publish or hide – the state opts to address issues publicly rather than privately.

As you can see, federally you can expect to find a redacted version of any given PLR, whereas at the state level you need to know the specific practice of that jurisdiction.

Comparing Private Letter Rulings to Other Forms of Tax Guidance

It’s important to put PLRs in context with other types of tax guidance and decisions. How do they stack up against regulations, revenue rulings, or court cases? Let’s break down the key differences:

Private Letter Ruling (PLR): A PLR is initiated by a taxpayer’s request. It’s narrow, answering a specific set of facts for that one taxpayer. PLRs are binding on the IRS only for that taxpayer and only if all facts were accurately disclosed. They are not binding for anyone else. They get published in redacted form, as we’ve discussed, but cannot be cited as authoritative guidance by other taxpayers. Think of a PLR as getting a tailor-made answer from the IRS in advance – useful for certainty, but officially it’s between you and the IRS.
Revenue Ruling: In contrast, a Revenue Ruling is initiated by the IRS (often to clarify a point of law for everyone). It’s published in the Internal Revenue Bulletin and provides an official interpretation of tax law on a general scenario. Revenue rulings are public from the start, and they can be relied upon by all taxpayers as precedent (though they’re lower authority than regulations or statutes). For example, the IRS might issue a revenue ruling to declare “Under these facts, the taxpayer can deduct X expense.” That applies to anyone whose facts match. Difference from PLR: A revenue ruling is broader, applies generally, and is precedential; a PLR is specific, applies only to one case, and isn’t precedential. Also, revenue rulings go through more internal vetting because they effectively set policy for all, whereas a PLR is an ad hoc advice for one situation.
Tax Regulations: These are rules issued by the Treasury Department/IRS to interpret statutes, and they carry the force of law (often after public notice-and-comment). Regulations are completely public and binding on all; they are high in the authority hierarchy. PLRs, by comparison, are much lower in authority – they interpret law but only informally and only for one case. You would never cite a PLR over a regulation; the reg wins every time.
Court Decisions: A decision by the Tax Court or another federal court on a tax matter is public (courts don’t do secret decisions) and can set precedent (especially appellate court decisions). Courts are not bound by IRS rulings or even revenue rulings, though they often give some deference or consideration. If an issue goes to court, a judge might look at how the IRS handled similar issues in PLRs or revenue rulings as persuasive background, but the court makes its own determination based on law. PLRs vs Court cases: Court cases carry precedential weight (at least within that court’s jurisdiction or as persuasive authority elsewhere); PLRs do not. Also, importantly, if you have a PLR in hand for your issue, generally the IRS won’t litigate that issue with you – the PLR is like an agreement. But someone without a PLR could end up in court fighting the IRS on the same issue.
Technical Advice Memorandum (TAM): A TAM is like a cousin of the PLR. TAMs are advice memos issued by the IRS Office of Chief Counsel in response to a request from an IRS examiner or agent auditing a taxpayer. So if during an audit a tricky issue comes up, the agent might request a TAM from National Office. The TAM is also taxpayer-specific and is publicly released in redacted form just like a PLR. The difference: a PLR is pre-transaction guidance requested by the taxpayer; a TAM is during audit and requested internally by IRS staff. TAMs also aren’t precedential for others, but they show how IRS resolves specific disputes. They too fall under IRC §6110’s public disclosure requirement.
Chief Counsel Advice (CCA): This is a broader term for various written advice from the IRS Chief Counsel’s office (including TAMs, Field Service Advice, etc.). By law (after some high-profile litigation in the 1990s), many of these internal memos must be released publicly in redacted form. They can give insight into IRS legal positions behind the scenes. However, CCAs, like PLRs, are not binding on taxpayers in general.
Determination Letters: These are often issued by IRS district offices for more routine determinations – for example, whether a pension plan meets qualification requirements, or whether an organization is tax-exempt under 501(c)(3). Determination letters typically apply to common scenarios where the IRS has a checklist of requirements. Some determination letters (like on exempt status) are made public (in the case of nonprofits, the letter is often publicly available as part of their records). Others, like plan determinations, are not proactively published by IRS, though they’re obtainable by FOIA. The key point: determination letters are less about novel interpretations and more about applying settled law to a specific entity.
Informal Guidance (FAQs, Publications, etc.): The IRS also gives lots of informal advice – e.g., online FAQs, Publications, Private Email/Phone responses (though those often say “not binding”). These are publicly available and can be helpful, but they are not legally binding. A PLR is more authoritative for the one taxpayer than an FAQ would be, but an FAQ is aimed at everyone. If an FAQ or Publication contradicts what your private letter ruling says, your PLR wins for your case (assuming no change in law).

In short, PLRs vs other guidance can be summarized like this:

Scope: PLR = one taxpayer’s situation; Revenue Ruling/Reg/Court = broad audience.
Public availability: PLR = initially private, later redacted and published; Revenue Ruling/Reg/Court = public from the outset.
Authority: PLR = binding only between IRS and that taxpayer; not a source of law for others. Revenue Ruling = IRS’s official position, can rely on it (though IRS could revoke or modify rulings prospectively). Reg = strong authority. Court = strong authority (if relevant jurisdiction).
Usefulness: PLR = great for getting certainty if you’re the one who got it, and a useful hint for others but with caution. Other guidance = direct directions that anyone can follow and cite.

Approaches to Tax Uncertainty: Get a PLR or Not? (Scenarios)

When you’re facing a murky tax question, you generally have a few options. To illustrate the value and trade-offs of a private letter ruling, let’s compare three common approaches a taxpayer might take:

Your Approach	Outcome & Considerations
1. Request your own Private Letter Ruling (“Ask the IRS for a ruling on my specific facts.”)	Certainty (for you): You get an official answer from the IRS, binding for your situation. Upfront Cost: High – user fee can be thousands (often $10k–$30k for businesses), plus professional fees to prepare the request. Time Lag: It may take several months (commonly 3–6+ months) to receive a ruling, as IRS attorneys carefully study your case. Privacy: Your identity remains confidential in the published version, but the scenario (facts) will be public in generic form. Precedent: Only protects you – others in your industry might see your ruling and take cues, but they aren’t covered by its protection.
2. Don’t request a PLR; rely on public guidance (“Do my best with available IRS publications, revenue rulings, or even other people’s PLRs.”)	No Direct Cost: You save the hefty IRS ruling fees and time investment. Use of Existing Authority: You base your position on what’s out there – e.g., a relevant IRS revenue ruling or regulation (if one exists) or perhaps you found a similar PLR for another taxpayer that suggests a favorable outcome. Uncertainty: Without your own ruling, you have no guarantee. Even if you found a PLR where someone in a similar situation got a green light, the IRS is not obligated to give you the same result. Your interpretation might hold if audited, or you might end up in a dispute. Risk Factor: If you guess wrong on a grey area, you could face back taxes, interest, and penalties later. You might have to fight in IRS appeals or court, which is costly and stressful.
3. Proceed without guidance and hope for the best (“Just take a position on my tax return with no ruling or clear authority.”)	Immediate Action: You move forward without waiting for any IRS input, which might be necessary if timing is critical. Cost Saving: No upfront cost for rulings or perhaps even for extensive tax advice (though this is not recommended – complex issues merit professional input!). High Risk: You are essentially testing the waters. If the IRS disagrees with your treatment on audit, you are exposed to adjustments and potentially steep penalties. You might argue that you thought it was correct, but without clear authority or ruling, it’s harder to avoid penalties. No Guidance Benefit: You aren’t contributing to the body of knowledge. If you discover the IRS’s view only through an audit, it’s too late for others to proactively learn from your case (unless it goes to court and becomes public).

In reality, many taxpayers choose option 2: they research existing guidance thoroughly and maybe get an opinion from a tax attorney, but they shy away from a PLR due to cost or time. Option 3 is basically flying blind – workable for small stakes or simple issues, but dangerous for big-dollar or aggressive positions. Option 1, requesting a PLR, makes the most sense when the issue is truly uncertain, the amounts are large or consequences severe, and there’s no easier way to gain certainty. Large corporations often take option 1 for major transactions (mergers, spin-offs, etc.), whereas small businesses and individuals might lean on option 2 (or take the plunge with option 1 if the issue is critical enough to justify the expense).

Common Mistakes and Misconceptions about Private Letter Rulings

Despite the IRS’s efforts to clarify what a PLR is and isn’t, misunderstandings abound. Let’s debunk some common mistakes and misconceptions regarding private letter rulings:

Mistake 1: “If I find someone else’s PLR with facts like mine, I’m in the clear.”
Reality: This is a dangerous assumption. It’s true that finding a favorable PLR for a scenario similar to yours is encouraging, but it does not guarantee the IRS will bless your transaction. One taxpayer’s PLR cannot be cited as legal authority by another (again, by law, PLRs have no precedential value). The IRS could even change its position next time around, or your facts might differ in ways that you think are minor but legally are crucial. A PLR can hint at how the IRS might view an issue, but it’s not a substitute for your own ruling or other binding guidance. Think of it as a single data point, not a green light. Many tax advisors will say, “This PLR is a good sign, but we can’t rely on it; we might still need to request our own or get a formal opinion.”

Mistake 2: “A private letter ruling creates a loophole everyone can use.”
Reality: Sometimes when a novel PLR gets publicized (especially if it seems to sanction a tax-saving strategy), people get excited about a “new loophole.” For example, when an IRS PLR allowed a company to offer a 401(k) match tied to employees’ student loan payments (an innovative benefit idea), other companies wanted to copy it. But initially, only that company had the ruling. Everyone else technically did not have IRS approval. The PLR did push the IRS to consider broader guidance (and indeed, the IRS later opened up that option generally), but in the interim, those who jumped on the idea without their own ruling were taking a risk. A PLR is not like a new law – it’s more like a one-time hall pass. Unless and until the IRS issues a revenue ruling or regulation based on that PLR, others don’t automatically get to use the “loophole.” Always verify if broader guidance exists.

Mistake 3: “Once I get a PLR, I don’t have to worry about an audit on that issue.”
Reality: If you fully disclosed your situation and got a favorable PLR, it’s true the IRS is bound by it for your case – they generally won’t go back on their word. However, that doesn’t mean you’re exempt from audit or further questions. The IRS could audit you to verify that the facts on your return match the facts you described in the ruling request. If you represented everything accurately and followed any conditions in the ruling, you should be fine on that issue. But if your facts diverged or you didn’t comply with some requirement the ruling assumed, the ruling might not protect you. Also, a PLR doesn’t prevent the IRS from auditing other unrelated issues on your return. So, a PLR is peace of mind on a specific issue, not a blanket audit shield.

Mistake 4: “Private letter rulings are easy to get – I can just call the IRS and ask.”
Reality: Obtaining a PLR is a formal, often complex process. You don’t get it by a simple phone call. It involves writing a detailed request (often dozens of pages including facts, analysis of law, and your proposed conclusion), paying the required user fee, and corresponding with the IRS Counsel’s office. The IRS has Revenue Procedures (updated annually, e.g., Rev. Proc. 2025-1, etc.) outlining exactly how to prepare and where to send your request, what forms to include, and so on. It usually requires the help of a tax professional to do properly. Additionally, the IRS won’t answer every question – some topics are “no ruling” areas (each year the IRS publishes a list of subjects on which it will not issue rulings, often because they are too factual or involve matters under examination or in litigation). If you informally call an IRS help line or agent with a question, they may give guidance or refer you to publications, but that advice is not binding. Only a formal PLR (or determination letter, etc.) is binding. So, don’t conflate the friendly help desk answer with an official ruling – they are worlds apart.

Mistake 5: “My private ruling will stay truly private (secret).”
Reality: As discussed, no – the content will become public (with redactions) after a short period. Some taxpayers are surprised to learn this. If you thought you could quietly get an answer and no one would ever know the issue even came up, you might be taken aback when your PLR surfaces in a tax research database a few months later. The IRS is required by law to release it. They will remove your name, location, identifying numbers, etc., but if the transaction was unique enough, industry watchers might speculate it was you. Generally, though, unless you or your advisors publicize it, the connection likely won’t be obvious. Still, you should expect that the ruling will be part of the public domain in anonymized form. This is not a “mistake” per se – it’s by design – but it’s a misconception some have before learning the rules.

Mistake 6: “A private letter ruling can solve any tax uncertainty I have.”
Reality: A PLR is powerful for preemptively resolving questions, but it’s not always available or practical. The IRS might decline to rule on certain highly factual or policy-sensitive issues (for example, they often won’t rule on whether something has a “business purpose” or on tax consequences that hinge on future events). Also, PLRs take time – if you need an answer within weeks and the normal ruling process takes months, you’re out of luck (though in urgent cases you can request expedited handling, it’s not guaranteed). And as mentioned, the cost can be prohibitive for smaller matters. So while a PLR is a great tool in the tax toolkit, it’s not a panacea. Sometimes you have to make a judgement call without one, or seek other forms of comfort (like a legal opinion letter from a tax attorney, which isn’t binding but at least gives you a professional’s analysis to fall back on).

Avoiding these misconceptions can save you from costly errors. The bottom line: use PLRs wisely – understand their limitations, and always complement them with a solid grounding in primary tax law sources.

Real-Life Examples: When Private Letter Rulings Made a Difference

To make this discussion more concrete, let’s look at a few real-world examples where private letter rulings played a key role. These examples show the practical impact of PLRs and how their public nature (or lack thereof) influenced broader tax understanding:

Example 1: Tax-Free Corporate Spin-Offs
One of the most common uses of IRS private rulings is in corporate transactions – for instance, when a company wants to spin off a subsidiary into a separate company without incurring taxes. The tax law (IRC §355) allows tax-free spin-offs if numerous conditions are met. However, these deals are complex, and companies crave certainty that the IRS won’t later challenge them. So, large corporations almost always request a PLR for a spin-off. For example, when a giant conglomerate plans to split into two independent companies, it will pay for a PLR to confirm the spin-off qualifies as tax-free. The IRS reviews their plan (business purpose, lack of device for earnings distribution, etc.) and if satisfied, issues a ruling blessing the transaction. What happens next? That ruling’s content (minus the company’s name) gets published. Other companies and tax lawyers eagerly read these redacted PLRs to glean the IRS’s thinking: Did the IRS allow a certain novel structure? Did it impose any conditions or caveats? Over time, a collection of PLRs in this area effectively sets out the IRS’s unofficial standards, even before they might issue a formal revenue ruling or regulation. In fact, many revenue rulings are born because the IRS saw a pattern in multiple PLRs and decided to publish general guidance. So, corporate America benefits from the PLR system: Company A’s private ruling becomes public information that Companies B, C, and D can learn from (though B, C, and D would still get their own rulings for protection). The transparency helps ensure fairness – if the IRS allowed a structure once, others know and can request the same treatment.

Example 2: Innovative Retirement Plan Feature (Student Loan Benefit)
In 2018, an IRS private letter ruling (widely reported in tax news) allowed a specific employer to implement an unusual 401(k) plan feature: the employer wanted to make “matching” contributions to employees’ 401(k) accounts when those employees paid off student loan debt, even if the employees weren’t contributing to the 401(k) at that time. Ordinarily, matching contributions require an employee 401(k) deferral. This was a novel idea – helping employees save for retirement by rewarding them for reducing student loans. The IRS had never officially sanctioned it, and there was concern it might violate pension rules. So the employer sought a PLR. The IRS’s ruling approved the concept for that employer’s plan, basically saying it would not treat the student loan benefit as violating 401(k) rules. Impact: Although that ruling technically applied only to the requesting employer, it instantly became a hot topic in the benefits world. Other employers asked, “Can we do that too?” They couldn’t rely on the PLR directly, but its public existence showed the IRS was open to the idea. Benefits consultants used the PLR to lobby the IRS for broader guidance. Within a couple of years, the IRS did issue broader guidance (in the form of an IRS Notice) opening a pathway for all employers to offer similar student-loan-related contributions. This is a great example where one private ruling sparked a change in general policy. Had that ruling been kept secret, others might not have even known the idea was tested and accepted. Because it was published (anonymously), it served as a catalyst for industry change. It also shows the positive side of PLRs being public – a good idea in one case can spread to benefit many.

Example 3: Estate Planning Fix-It Ruling
Consider an estate planning scenario: A married couple set up an estate plan using a joint trust, but after one spouse died, the plan wasn’t executed correctly, potentially messing up the tax benefits. The family’s new advisor discovered the mistake and needed the IRS to approve a fix after the fact. In one real case (reflected in a PLR a few years ago), the IRS was asked to forgive a missed requirement and allow a do-over so the trust could be split properly between a decedent’s trust and survivor’s trust. The IRS issued a private letter ruling granting relief, essentially saying, “We won’t penalize this mistake; you can retroactively make the division and still qualify for the estate tax exclusion.” This ruling was a lifesaver for that family’s estate – potentially preserving hundreds of thousands in tax savings. Once published in redacted form, this PLR also served as a cautionary tale and a roadmap for estate planners: It highlighted the pitfalls of joint trusts and demonstrated that the IRS had discretion to cure certain missteps, at least in sympathetic cases. Practitioners who read it learned both to avoid the problem in the first place and that, if caught in time, a ruling request could rescue the situation. It’s a nuanced area, and not something covered in a generic IRS publication, so the PLR provided valuable insight. Estate tax attorneys often comb through such rulings to see how the IRS applies concepts like “substantial compliance” or relief provisions under Section 9100 (which allows extensions of time to make elections, etc.). Without the public release, that knowledge would remain siloed.

Example 4: The Risk of Relying on Someone Else’s Ruling – A Cautionary Tale
Not all examples are happy ones. There have been instances where a taxpayer saw a favorable PLR for someone else and assumed the same result would apply to them – only to be disappointed. For instance, say a PLR was issued to a company allowing a certain tax credit claim under specific facts. Another company, with superficially similar facts, claimed the credit on their tax return without getting a PLR. On audit, the IRS disallowed the credit, noting differences in the situation. The company might protest, “But in PLR 20XX12345, you allowed it for that other company!” The IRS agent will respond, “That was that case; it’s not precedent.” If it escalates to court, the judge likely won’t even admit the other PLR as evidence (or if they do, they’ll note it’s not controlling). The second company could end up with a tax bill and penalties, whereas the first company (with the PLR) is safe. This kind of scenario underscores the earlier point: use others’ PLRs only as a hint, not a hall-pass. It’s wiser to get your own ruling if the issue is critical. Tax forums are rife with tales of someone saying “Taxpayer X got this ruling, so I did the same” – that’s a gamble that might not pay off.

These examples show both the value and limits of private letter rulings. They offer bespoke solutions and can pave the way for broader change, but they must be approached with eyes open about their scope. The public aspect of PLRs ensures that these learnings aren’t confined to a vault – the broader community can adapt and respond, making tax administration more dynamic.

Key Terms and Entities in the World of Private Rulings

Let’s explain some of the important terms, entities, and legal provisions that have come up, to ensure we’re all on the same page:

Internal Revenue Service (IRS): The U.S. federal tax authority. Within the IRS, the Office of Chief Counsel is the division that actually reviews and issues private letter rulings. When you request a PLR, it’s handled by attorneys in the national office (e.g., Corporate, Income Tax & Accounting, Employee Benefits, Exempt Organizations divisions of Chief Counsel, depending on the subject). The IRS is tasked with enforcing tax laws and also providing guidance – PLRs are one form of guidance, though personalized.
Private Letter Ruling (PLR): A written determination by the IRS in response to a taxpayer’s request. It applies tax law to the taxpayer’s specific facts and gives the IRS’s conclusion (e.g., “Yes, this transaction will be non-taxable” or “No, you cannot deduct that expense in this scenario”). It’s binding on the IRS for that taxpayer and those facts. Taxpayers usually seek PLRs before undertaking a transaction (to ensure they know the outcome) or sometimes before filing a return for a completed action if they want certainty. Each PLR is assigned a number (often showing the year and ruling sequence). PLRs are subject to user fees and procedural rules (see Revenue Procedures). Not precedent for others, per IRC 6110(k)(3).
Revenue Ruling: An official interpretation of tax law by the IRS, published for the public and applicable to anyone with similar facts. Cited as Rev. Rul. [year]-[xx]. These often arise to clarify issues that affect many taxpayers. Unlike PLRs, revenue rulings don’t wait for a taxpayer question; the IRS chooses to issue them. Taxpayers can rely on them, and IRS agents are supposed to follow them (unless superseded or clarified by law changes). If a PLR is like a custom helpdesk answer, a revenue ruling is like an FAQ posted for everyone.
Internal Revenue Code (IRC) §6103: The statute that mandates tax return confidentiality. It’s why IRS employees can’t just share your info. PLRs fall under “return information,” so 6103 keeps them private until 6110 intervenes to allow a sanitized version out.
Internal Revenue Code (IRC) §6110: The statute that requires the public disclosure of written determinations (like PLRs, determination letters, and TAMs) and related background file documents, after redaction. It lays out the process: the IRS must redact identifying details and then make the ruling available for public inspection. Taxpayers who get a PLR are given a chance to suggest redactions (for example, if certain details might give away trade secrets or identities, they can request those be removed or generalized). There’s even a mechanism to go to court if there’s a dispute about what should be redacted. Section 6110 also says these disclosed rulings “shall not be used or cited as precedent” (subsection (k)(3)), cementing that they’re informational only for other parties. It’s a unique provision creating a window of transparency in what is otherwise a very confidential tax system.
Freedom of Information Act (FOIA): A law allowing the public to request records from federal agencies. Before PLRs were routinely published, FOIA was a tool to try obtaining them. Even now, FOIA can be used for various IRS records. However, FOIA has exemptions – and one exemption (Exemption 3) incorporates other laws like §6103 that forbid disclosure of identifying taxpayer info. In short, FOIA can’t force the IRS to give out something that 6103 protects. FOIA does, however, require agencies to publish certain opinions and orders, etc. The interplay is complex, but practically, FOIA might be used to get unpublished rulings at the state level or internal IRS emails, etc., but for federal PLRs, §6110 covers it.
IRS Revenue Procedure: The IRS annually issues a Revenue Procedure that outlines how to request a PLR (among other things). For example, Rev. Proc. 2025-1 (if following the pattern) would contain the general instructions for 2025. It covers everything from formatting the request, where to send it, how to pay, what issues the IRS won’t rule on, etc. If you’re seeking a PLR, reading the current revenue procedure is crucial. There are also separate Rev Procs for specific areas (like Rev. Proc. 2025-3 might list “no-rule” areas, Rev. Proc. 2025-4 might cover user fees, etc.). The National Office adheres to these procedures strictly – missing a requirement can delay your ruling or cause a rejection.
User Fee: The fee charged by the IRS to process a ruling request. Congress permits the IRS to charge these to cover costs. The fees have grown steeply over the years. As of the early 2020s, a standard business-related PLR could cost $30,000 or more in user fee alone (for large entities). Smaller entities or certain requests have reduced fees (e.g., a small nonprofit might pay a few thousand). The high cost is a barrier for many; as mentioned earlier, the Taxpayer Advocate has criticized this as limiting access for ordinary taxpayers. The IRS occasionally revises fees; always check the current fee schedule (often in Rev. Proc. 202X-4 or so). Note: if the IRS declines to rule on your request (for example, you asked something in a no-rule area), they typically refund the fee or part of it.
Tax Court (and other courts): Judicial bodies that resolve tax disputes. The Tax Court is a specialized federal court for tax cases. Other courts (District Courts, Court of Federal Claims, Courts of Appeals, Supreme Court) also handle tax cases at times. In court, your PLR (if you have one) is part of your case’s facts – it’s essentially an agreement by the IRS on a position, so the IRS wouldn’t litigate that point. If you don’t have a PLR and cite someone else’s, the court will give it no precedential value. Courts generally say: IRS rulings for others are not binding on the IRS for this case. Some taxpayers have tried fairness arguments (“if IRS gave them that break, I deserve it too”), but unless a constitutional issue (like equal protection) is at play – which is a long shot in tax – those arguments don’t win. Courts do acknowledge that PLRs reflect the IRS’s interpretation at the time, and in rare instances, if there’s no other authority, a court might find an IRS ruling persuasive as a general statement of IRS thinking (this is similar to the concept of Skidmore deference, where an agency’s informal guidance might be considered for its reasoning). But more often than not, if you’re in court, the statutes, regulations, and prior court opinions are what matter, not somebody’s old PLR.
Taxpayer Advocate Service (TAS): An independent organization within the IRS that helps taxpayers with problems and recommends improvements to the tax system. The National Taxpayer Advocate (at the time of writing, a position once held by Nina Olson, now Erin Collins) often comments on issues like PLR fees and accessibility. TAS has argued that PLRs should be affordable and accessible because they help taxpayers voluntarily comply. They also push for clearer public guidance so that fewer people need PLRs. While TAS doesn’t directly get involved in PLR requests, it’s good to know they exist if you face procedural issues or hardships – but generally not for the PLR process itself unless something egregious occurred.
Tax Analysts / Tax Notes: Tax Analysts is a publisher of tax news (they produce Tax Notes publications) and has been a champion of transparency in tax law. They have, in the past, sued the IRS for access to documents and generally publish PLRs, CCAs, etc., making them readily searchable. They were involved in some FOIA litigation that led to more disclosure of Chief Counsel Advice in the late 1990s. In the state context, State Tax Notes (also a Tax Analysts publication) often surveys state practices on rulings. When we mention a “Tax Analysts survey” earlier, it’s reflecting input from state tax officials about their ruling publication policies.
Precedent & Stare Decisis: Precedent refers to legal decisions or rulings that are binding in future similar cases. Stare decisis is the doctrine that courts will follow their prior decisions for consistency. In the context of PLRs, the key is: PLRs are not precedent. The IRS even stamps on each PLR something like “This letter is directed only to the taxpayer who requested it. Section 6110(k)(3) of the Internal Revenue Code provides that it may not be used or cited as precedent.” This disclaimer is a direct reminder of the law. So, unlike a court case which becomes part of the body of law, a PLR does not.
FOIA Reading Room / IRS Written Determinations Archive: The IRS provides access to PLRs through an online portal often referred to as the “IRS Written Determinations” page. This is essentially the modern electronic reading room fulfilling §6110. One can search by release date or keyword. It’s not the most user-friendly interface, which is why many practitioners use tax research software to find relevant PLRs (which index them by topic). But it’s there for public use. Historically, PLRs were published in paper form or microfiche for public inspection at certain locations. Now it’s all digital.

Having these terms defined, you should feel more comfortable with the jargon and entities surrounding private letter rulings. It’s a bit of an alphabet soup (PLR, TAM, CCA, IRC, etc.), but each has a specific role in the tax guidance ecosystem.

Relationships: How Private Letter Rulings Interact with Tax Law and Taxpayers

It’s worth exploring the relationships between private letter rulings and other elements of tax law and administration. PLRs do not exist in a vacuum – they influence and are influenced by various parties and doctrines:

Relationship with Taxpayers and Tax Professionals: A PLR is fundamentally a communication between a taxpayer and the IRS. It arises from a taxpayer saying, “Here’s what I plan to do, and I’m not 100% sure how the tax law applies. IRS, will you bless this or tell me the consequences?” This relationship is usually mediated by tax professionals (attorneys or CPAs) who prepare the ruling request and negotiate with the IRS reviewers. In a way, it’s a collaborative process: the taxpayer lays out everything (full disclosure is required – hiding facts can invalidate a ruling), and the IRS might ask clarifying questions or suggest modifications. For example, the IRS might say, “We can’t rule favorably unless you tweak your transaction this way.” The taxpayer can then decide to adjust their plan. So a PLR process can involve dialogue and negotiation. Once a ruling is issued, the taxpayer must stick to the facts as presented. If they change the plan later, that relationship aspect means the ruling might not cover the new facts.
Relationship with Internal Revenue Code and Regulations: PLRs interpret the Code and regs, but they do not override them. They must be consistent with law. If Congress changes a law or a regulation is updated, any PLR (even issued) becomes irrelevant if inconsistent with new law (the IRS often includes caveats in a ruling: “This ruling is based on the law as it stands today; any change in law may void the ruling”). If a court later interprets the law differently than a PLR did, the IRS might announce that it will no longer follow that PLR position for new rulings. There’s a give-and-take: PLRs sometimes reveal areas where the law is vague. If the IRS finds itself issuing many PLRs on the same issue, that signals to Treasury, “maybe we need a regulation or revenue ruling to address this broadly.” Conversely, if a law is super clear in a regulation, the IRS might refuse to issue a PLR at all, saying essentially, “just follow the reg; no need for a ruling.” In Rev. Procs, IRS lists issues “ordinarily not ruled upon,” often because the law already answers it or it’s under study.
Relationship with IRS Enforcement (Audits): The existence of PLRs can indirectly influence enforcement. If IRS field agents know the National Office has consistently ruled a certain way on an issue, they might be less likely to challenge taxpayers on that issue (even those without PLRs) because they know how their colleagues in HQ see it. Alternatively, if no PLR exists and an issue is gray, field agents might push boundaries until someone obtains a PLR or it goes to court. Also, a taxpayer with a PLR in pocket has a very different audit experience: they can show the agent the ruling, and that issue will generally be taken off the table. Thus, PLRs can be seen as risk management tools that shape how an audit will go.
Relationship with Penalty Relief and Taxpayer Behavior: If a taxpayer takes a position without a PLR and is later found wrong, one factor in penalties is whether the taxpayer had “reasonable cause” and acted in “good faith.” Citing reliance on professional advice or even on IRS guidance can help show reasonable cause. While you can’t rely on someone else’s PLR as authority, knowing that the IRS had approved something in a PLR might bolster a good faith argument (“I genuinely thought it was acceptable, as evidenced by this ruling out there”). Some practitioners include mentions of favorable PLRs in opinion letters or discussions with IRS appeals to argue the taxpayer’s position wasn’t frivolous. The IRS might not concede the tax, but they might waive penalties if they see the issue was one even their own ruling history suggests is arguable. In that sense, PLRs indirectly contribute to notions of fairness and reasonableness in the system.
Interactions with the Courts (Skidmore/Auer and deference): If a dispute goes to court, and the issue is one with, say, a bunch of PLRs all leaning one way, the court might take notice. Formally, as we said, they aren’t precedent. But under the Skidmore deference principle, an agency’s interpretation can be given weight according to its persuasiveness and consistency. So if 10 PLRs over 5 years all concluded XYZ, and the IRS now tries to argue ABC in court, the taxpayer can highlight that inconsistency. The court might question the IRS why it changed or give weight to the earlier interpretation if it finds it logical. Similarly, the IRS sometimes publishes Action on Decision (AOD) memos after court losses, but PLRs could be early signals of IRS thinking that courts watch. Also, some PLRs effectively telegraph how the IRS would distinguish or accept certain court decisions. The relationship here is subtle but real: PLRs are part of the tapestry of “authority” that tax litigators consider, even if they cite them only sparingly.
Peer Influence – Taxpayers Inter se: In some industries or transactions, taxpayers will share or compare notes on PLRs. For instance, insurance companies might each get rulings on a new product design; they might then (through their lawyers) compare the conditions IRS imposed. There’s a bit of a network effect, where practitioners use PLRs as a common knowledge base. Sometimes industry groups petition the IRS for guidance, using a collection of anonymous PLR scenarios to make their case that “you’ve been ruling like this behind closed doors, just issue a public revenue ruling so everyone is on equal footing.” Thus, PLRs can drive collective action in the tax community.
State and Federal Interplay: As a relationship, consider how a federal PLR might affect state taxes. States are not bound by an IRS ruling, but many states piggyback on federal definitions of income. If the IRS rules a transaction is tax-free federally, states often follow that implicitly (assuming they conform to that part of the Code). But if a state had any doubt, they might issue their own ruling. Some states explicitly say a taxpayer must disclose if they’ve gotten a federal ruling when seeking a state ruling on the same matter. There have been instances where a taxpayer got a favorable IRS PLR but a state authority disagreed for state tax purposes (or vice versa). These are relatively rare, but it’s a reminder that each jurisdiction can differ.

In essence, private letter rulings sit at an intersection: between taxpayers and the law, between the IRS’s internal deliberations and public clarity, between one taxpayer’s situation and the broader community’s understanding, and between administrative guidance and judicial resolution. They are a behind-the-scenes mechanism that, thanks to disclosure laws, has meaningful front-stage effects.

Court Rulings: How Do Courts View and Use Private Letter Rulings?

If a tax dispute ends up in court, what role (if any) does a private letter ruling play in the courtroom? This question ties back to the precedential value of PLRs (or lack thereof), but let’s explore the judicial perspective:

Binding Precedent: Simply put, courts do not treat private letter rulings as binding precedent. Courts follow the law (statutes, regs, and higher court decisions). A PLR is an IRS position in an individual case, not an authority passed by Congress or a regulation that went through notice-and-comment. In fact, if you read many Tax Court and appellate court opinions, when a taxpayer or the IRS attempts to mention a PLR, the court often includes a footnote: “Private letter rulings are not precedential and we accord them no weight.” This echoes IRC 6110(k)(3). For example, the Tax Court once stated: “While the petitioners cite a private letter ruling in support of their argument, we note that under section 6110, such rulings may not be used as precedent. We therefore do not rely on that ruling in reaching our decision.” The idea is to avoid a scenario where savvy taxpayers could create de facto law by getting a PLR and then having courts propagate it.

Persuasive Value: That said, some courts have acknowledged that PLRs can have informational value. A court might say, “We are aware that the IRS in private rulings has taken Position X on similar matters; while this does not bind us, it is consistent with the conclusion we reach” (or occasionally inconsistent, which the court might then explain why they’re diverging). Particularly, if a case of first impression comes up and neither side has much to cite except maybe an array of PLRs, a court may at least look at them to see how the IRS has been treating the issue administratively. They won’t treat it as law, but under Skidmore (as mentioned) the court can give weight to an agency’s informal interpretation if it finds it reasoned and consistent. On the flip side, inconsistent PLRs (where the IRS has not been uniform) can undermine any persuasive effect.

Citing PLRs in Court: Procedurally, can lawyers even cite PLRs in briefs? They often try, especially if it helps their case’s narrative. But the opposing side or the judge may disregard it. The U.S. Tax Court Rules don’t forbid citing non-precedential material, but they caution that it’s not authoritative. Some judges have been known to roll their eyes at extensive discussion of PLRs, preferring counsel stick to binding authority. However, there are instances where courts explicitly discuss IRS private rulings in their opinions to illustrate a point. For example, the Court of Appeals might note: “We observe that the IRS has privately ruled in a handful of cases that XYZ is the proper treatment, although those rulings are not precedent.” This can help show that what the court is deciding isn’t coming out of nowhere. But just as often, courts might choose to ignore PLRs entirely in their analysis to avoid confusion.

When the Taxpayer Has Their Own PLR: If the taxpayer in the case actually has a PLR on the issue (maybe the IRS issued a ruling but then on audit years later tried to challenge the issue anyway, or a new interpretation arises), the court will likely hold the IRS to that PLR for that taxpayer. It’s rare for the IRS to litigate against its own ruling, but it can happen if, say, the IRS claims the facts in reality didn’t match the facts the PLR was based on. In such a scenario, the case might revolve around whether the PLR applies – basically a contract-like argument: did the taxpayer live up to their side (full disclosure, following ruling conditions)? If yes, the court would tell the IRS to honor the ruling. Such cases are few because usually the IRS will concede if the PLR was valid.

Fairness and Equitable Arguments: Some taxpayers have tried to use others’ PLRs in court under theories of fairness or equal treatment. For example, “Taxpayer A got a ruling allowing this, denying it to me is unfair.” Courts have consistently ruled that the IRS’s action or inaction with respect to other taxpayers is irrelevant to the case at hand. Each case stands on its own legal merits. There’s even a concept that the government isn’t bound by “erroneous” rulings it might have given out before – meaning, if a PLR was arguably wrong on the law, the IRS isn’t forced to perpetuate the mistake for everyone else. That frustrates taxpayers, but that’s how the system is set up: the IRS can correct course, and only published regulations or higher authority truly bind it broadly.

Case Law Examples: There are a few well-known cases often cited about PLRs: Hanover Bank (1962) was a case where the court said private rulings (at that time not publicly available) can’t be relied on by others. Knetsch v. United States (1960) and other older cases recognized that an IRS letter to another taxpayer isn’t a get-out-of-tax-free card. In International Business Machines Corp. v. United States (1996), IBM tried to compel the IRS to apply a favorable private ruling issued to another company (Texas Instruments) regarding a tax credit. The Court of Federal Claims, affirmed by the Federal Circuit, held that the IRS’s differing treatment did not entitle IBM to the same result – essentially upholding that PLRs don’t create rights for third parties. The rationale is that allowing one taxpayer’s ruling to govern another would transform PLRs into a parallel law system, which they are not.

Deference in Absence of Other Authority: In certain narrow circumstances, if a regulation is ambiguous and the only interpretation the IRS has given (even if informally, like a PLR) addresses it, a court might consider that interpretation under what’s known as Auer deference (if it were in something like a less formal guidance, though Auer mainly applies to interpretations of the agency’s own regulations) or Skidmore. But with the evolution of administrative law, courts have become more reluctant to defer to very informal guidance when there wasn’t public participation or notice. PLRs, by nature, had no public input; they are not published in advance. So they carry less persuasive force than, say, a long-standing revenue ruling or a widely published IRS position in the Manual.

In Summary: When you go to court, plan as if PLRs don’t exist (unless it’s yours). Base your arguments on the statute, regs, and case law. Use PLRs, if at all, as background color: “Even the IRS has in private rulings acknowledged X…” but be ready for the court to say “irrelevant.” If an issue is so novel that no other authority exists, and both sides bring up PLRs to show the IRS’s leanings, the court will carefully analyze the statute’s text and purpose and come to its own conclusion. They might mention those PLRs in passing but will not say “because of these PLRs, taxpayer wins/loses.” It will be because the law, in the court’s view, dictates that outcome.

Finally, it’s worth noting that courts themselves are fully public, and all their precedential decisions are published. So, paradoxically, if you do litigate a matter that was in a PLR, the court decision that comes out could have far more sweeping impact than the original private ruling. Many tax issues that start with PLR discussions eventually end up settled by a court case or a regulation that everyone must then follow. The PLR is often just the first scene in the play, not the final act.

FAQ: Frequently Asked Questions about Private Letter Rulings

Q: Are private letter rulings available to the public?
A: Yes. The IRS publishes private letter rulings in a redacted form (taxpayer identities removed) typically within a few months of issuance, so anyone can read the content of the ruling.

Q: Can I rely on someone else’s private letter ruling for my taxes?
A: No. A PLR binds only the taxpayer it was issued to. You cannot cite another taxpayer’s PLR as legal authority for your own tax position, as it’s not precedent for others.

Q: Do state tax agencies publish their private letter rulings?
A: Yes, many state revenue departments publish redacted rulings or advisory opinions, but some do not. It varies by state. Always check your state’s policy – transparency and availability differ across jurisdictions.

Q: Is a private letter ruling binding on the IRS for my case?
A: Yes. If you obtain a PLR, the IRS is bound by the ruling’s conclusion for your specific situation, as long as you accurately presented all facts and stick to the described transaction.

Q: Can any taxpayer request a private letter ruling from the IRS?
A: Yes. Any taxpayer can request a PLR by following the IRS’s procedures and paying the required user fee. However, it can be expensive and time-consuming, so it’s usually used for significant or unclear matters.

Q: Are private letter rulings considered legal precedent by tax courts?
A: No. Tax courts and other federal courts do not treat private letter rulings as precedent. They may acknowledge them as illustrative but will base decisions on statutes, regulations, and precedential court opinions.

Q: Will my name or details be disclosed in a published private letter ruling?
A: No. The IRS will redact your name, identifying information, and any sensitive details from the PLR before it’s made public. The published ruling will describe the facts generally (e.g., “Company does X”) without revealing who you are.

Q: How can I access IRS private letter rulings?
A: Yes, you can access them for free on the IRS’s online database of written determinations or through tax research services. The rulings are indexed by number and release date, and many tax publishers provide searchable archives.

Q: Is it true that private letter rulings cost a lot of money?
A: Yes. The IRS charges significant user fees for PLR requests (often in the tens of thousands of dollars for corporate rulings, with lower fees for small entities or individuals). On top of that, you may incur professional fees to prepare the request.

Q: Do I really need a lawyer or CPA to get a private letter ruling?
A: Yes, generally. While not legally required, it’s highly advisable. The request must be precise and thorough, citing tax law and presenting facts clearly. Most PLRs are prepared by experienced tax professionals to ensure the best chance of a favorable ruling.