How to Write a Private Letter Ruling Request? + FAQs

According to a 2025 national survey, nearly 50% of Americans admit they don’t fully understand how to fill out their tax forms, risking costly mistakes and IRS penalties. A Private Letter Ruling (PLR) request is the IRS’s way of giving you a definitive answer on your tricky tax questions before it’s too late. Writing a successful PLR request means following strict guidelines, providing detailed facts, and paying a hefty fee to get the IRS’s stance in writing — but it can save you from audits and surprises.

📝 Step-by-step guidance – Learn the exact process to draft and submit a winning PLR request with confidence.
💼 For individuals & businesses – Discover how people and companies alike use PLRs to clarify complex tax situations (federal and state).
💰 Costs & timing – Find out how much a PLR costs, how long it takes, and why some skip it at their peril.
⚠️ Mistakes to avoid – Save yourself grief by avoiding common pitfalls and “no-go” areas that can derail your ruling request.
🏛️ Expert tips & alternatives – Get insider insight on IRS rules, key forms, real examples, state rulings, plus FAQs that address your burning questions.

What Is a Private Letter Ruling (and Why You Might Need One)

A Private Letter Ruling is a written decision from the Internal Revenue Service (IRS) that answers how the tax law applies to your specific situation. In plain language, it’s like asking the IRS for permission or clarity before you file your taxes. If you have an unusual situation or a big transaction and you’re not 100% sure what the tax outcome will be, a PLR can remove the guesswork. The IRS studies the facts you provide and sends you an official ruling letter telling you, for example, whether your planned action is taxable or tax-free.

Most people and businesses consider a PLR when the stakes are high or the law is ambiguous. For instance, imagine selling a business, restructuring a company, or handling a complex trust – situations where one wrong tax move could cost thousands or trigger an audit. A PLR gives peace of mind: it’s binding on the IRS for your case, meaning the IRS can’t later say “just kidding” as long as you followed the facts and conditions in the ruling. In other words, once you have a favorable PLR in hand and you abide by it, you can move forward confidently without fearing penalties on that issue.

However, PLRs aren’t casual advice – they are formal and expensive. The IRS charges a hefty fee and only issues them for complex questions, not simple ones. That’s why not everyone needs a PLR – they’re usually reserved for businesses, estates, or individuals dealing with high-stakes, first-of-their-kind scenarios. But if you’re facing a gray area with serious consequences, a PLR is the golden ticket to certainty.

When and Why to Request a PLR

Timing is key. The best time to request a private ruling is before you complete a transaction or file a tax return involving the uncertain issue; the IRS won’t issue a PLR on something already under audit or in court, so plan to ask early. A classic scenario is a planned transaction – say, reorganizing your business or making a major sale – where one wrong move could mean a huge tax bill. By submitting your PLR request before pulling the trigger, you get the IRS’s answer in advance and can proceed or adjust accordingly.

Common scenarios that justify a PLR include:

Complex business deals: Mergers, acquisitions, spin-offs – any major restructuring where it’s unclear if the transaction is tax-free under the law.
Estate or gift situations: Unique trust arrangements, large gifts, or inheritance transfers that don’t fit neatly into existing tax rules.
New or unusual investments: Cryptocurrency transactions or novel financial instruments where tax law isn’t settled and you want official guidance.
Missed elections or deadlines: If you missed a required tax election deadline, a PLR (via 9100 relief) can grant a late extension so you don’t lose a tax benefit.
Ambiguous deductions or credits: A large deduction or credit you think you qualify for but aren’t certain; a ruling can confirm it and prevent future disputes.

In short, seek a PLR when you’re facing high ambiguity and high stakes. If the tax outcome could go either way on a big-dollar issue, a PLR can be worth the cost.

On the other hand, for minor issues or trivial sums, a PLR is overkill. Always weigh the cost vs. benefit. A $10,000+ ruling might be worthwhile to avert a six-figure tax hit, but it’s not worth it just to confirm a $100 deduction.

Federal vs State: Two Different Worlds for Letter Rulings

When we talk about a “private letter ruling,” we usually mean the IRS (federal) version, but states have their own similar rulings too. Every state with complex taxes (income, sales, etc.) can issue state tax rulings or advisory opinions. A state ruling works much the same way: you write to the state’s Department of Revenue to get an interpretation of state tax law for your situation. The big difference is that an IRS PLR covers federal tax issues, whereas a state ruling covers state taxes (only that state’s laws).

Procedures and costs vary by state. Many states offer rulings for free or a nominal fee, making them far more accessible than the IRS’s pricey PLRs. For example, some states will issue a ruling for free with just a written request; others might charge a few hundred dollars.

Timelines differ, too. Some state tax departments respond in weeks, whereas the IRS can take six months or more. And not every state calls it a “private letter ruling” – you might see names like “letter ruling,” “revenue ruling,” or “advisory opinion” instead.

Remember, a federal PLR won’t cover state taxes, and vice versa. If your issue spans both federal and state tax law, you may need rulings at both levels. For example, you might get an IRS PLR for the federal treatment and also request a state ruling to confirm how that transaction is taxed under state law.

States also differ in transparency. Many publish their ruling letters (with identifying details removed) on their websites or in bulletins, so others can learn from them. However, a few states won’t issue any private rulings at all, preferring to give only general guidance to everyone. Bottom line: Check your state’s rules – getting a written answer on a state tax question can be a lifesaver, especially if your business operates in multiple states.

Step-by-Step: How to Write a Winning PLR Request

Step 1: Confirm Your Issue Qualifies for a Ruling

Before you invest time and money, make sure the IRS will even consider your request. Each year, the IRS publishes a list of topics it won’t issue rulings on (often called the “no-rule list”). For example, the IRS might refuse rulings on certain routine business matters or highly subjective issues.

If your question falls into one of these no-rule areas, a PLR request will be automatically declined (and usually the IRS will refund your fee). Also, the IRS generally won’t issue a PLR if your situation is already being examined in an audit or court case. Double-check that your issue is eligible and not explicitly off-limits.

Step 2: Read the Latest IRS Guidance (Revenue Procedure)

Start with the official playbook: the IRS issues a detailed Revenue Procedure at the beginning of each year explaining how to request a ruling (for example, Rev. Proc. 2025-1 for 2025). This document is essentially the IRS’s rulebook for PLR requests, outlining what your letter must include, how to format it, where to send it, and the required fee. Before drafting anything, download the latest revenue procedure and read the sections on private letter rulings. It even provides checklists and sample letter templates – following these to the letter greatly increases your chances of success.

Step 3: Gather All Relevant Facts and Documents

A PLR request lives or dies by the facts. The IRS’s ruling will be based solely on the facts you present, so they must be complete and accurate. Take time to gather every relevant detail about your situation. This includes dates, parties involved, dollar amounts, transaction steps, and any supporting documents (contracts, agreements, trust documents, etc.) that shed light on the issue.

It often helps to write a narrative of what happened (or will happen) in chronological order. Don’t omit information that could affect the outcome – if the IRS discovers a fact you left out, your ruling could be void. In short, be exhaustive and truthful in documenting your facts before you start writing the request.

Step 4: Define the Specific Tax Question Clearly

What exactly do you want the IRS to decide? You’ll need to formulate the question you’re asking in a clear, precise way. In the body of your request, this often appears as a sentence starting with “Ruling requested: …”. For example, “Ruling requested: Whether the gain from the sale of 100% of the shares of XYZ Corp will be recognized as capital gain under §1234 of the Internal Revenue Code.”

The question should be narrow and focused on the tax issue at hand – not a vague “Is this okay?” but a concrete point of law (ideally referencing the relevant code section or regulation). If you have multiple issues, list each as a separate question. Being specific helps the IRS attorneys quickly understand what they need to rule on and reduces the chance of misunderstandings.

Step 5: Research the Tax Law (and Maybe Consult an Expert)

Before you draft your request letter, make sure you understand the tax law that applies to your situation. The IRS doesn’t expect you to be a lawyer, but a well-prepared request usually includes a summary of the relevant law – this shows you’ve done your homework. Identify the Internal Revenue Code sections, IRS regulations, revenue rulings, or court cases that relate to your issue.

For instance, if your question is about whether certain income is taxable, find the Code section and regulations that define or exclude that income. If a published Revenue Ruling or tax court case has dealt with a similar scenario, you can cite it to support your position. (You cannot cite someone else’s private letter ruling as precedent, since PLRs bind only the requesting taxpayer.)

Many taxpayers hire a tax attorney or CPA at this stage, and it’s often worth it. An expert can help frame your issue in technical terms and ensure you’re citing the right authorities. They might also draft a brief legal analysis to include in your request, explaining why the law supports the favorable ruling you’re seeking. While not strictly required, including your own analysis of the law can strengthen your request and show the IRS that you’re well-prepared.

Step 6: Draft the Request Letter in Proper Format

Now it’s time to write the ruling request itself. This is a formal letter to the IRS, and format matters. Start with your name (or business name) and identifying info (address, ID numbers), and the IRS office address specified in the revenue procedure. Clearly label the subject line (e.g. “Request for Private Letter Ruling under Rev. Proc. 2025-1”). In the opening paragraph, identify the taxpayer, the tax year(s) involved, and give a one-line summary of the ruling you seek.

Organize the body of the letter into sections for Facts, Issue, Law, and Discussion/Analysis, as needed:

Facts: Present the factual narrative you compiled in Step 3. Stick to the relevant facts and include enough detail for the IRS to understand the scenario.
Issue (Ruling Requested): State the specific question(s) you want answered (from Step 4). You can even bold or underline this part to make it stand out.
Law and Analysis: (Optional but recommended) Summarize the tax law and explain how it applies to your facts. Here’s where you include the key authorities and reasoning from Step 5, essentially arguing why the law supports a favorable ruling.
Conclusion: Wrap up with a brief conclusion, perhaps restating the ruling you hope the IRS will issue (e.g., “Therefore, we respectfully request a ruling that [your desired outcome]”).

Keep the tone professional and concise. Use clear, plain language – this isn’t the time for flowery prose or emotional appeals. Also, include any specific declarations or statements the revenue procedure requires you to make. For example, you usually must affirm that to the best of your knowledge, the issue in question is not currently being examined by any IRS office or litigated in any court. (The Rev. Proc. provides exact wording for these representations – be sure to include them.)

By the end of the letter, the IRS should have a complete understanding of your situation, the question, and your perspective on the answer.

Step 7: Include a Penalties-of-Perjury Declaration

At the end of your letter (just before your signature), you must include a specific certification statement. This is the “penalties of perjury” declaration, and it’s required to make your request officially valid. The typical wording is: “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and to the best of my knowledge and belief, the facts presented in support of this request are true, correct, and complete.”

Write out that statement (using the exact phrasing given in the revenue procedure) and then sign and date the letter. If you have an authorized representative (like your attorney) signing the letter on your behalf, make sure you include a Power of Attorney (Form 2848) authorizing them to represent you. This declaration is critical – without it, the IRS will not consider your ruling request complete.

Step 8: Complete the Checklist and Attach Supporting Documents

The IRS doesn’t leave you guessing about what to include – the annual revenue procedure usually provides a checklist (often at the end) of all required items for a ruling request. Use it! Go through that checklist line by line and make sure you’ve included or addressed each item in your packet. Typically, this means verifying you have:

The proper user fee payment (see Step 9),
All required statements and declarations (like the one in Step 7, and any others the procedure specifies),
The signed Form 2848 (Power of Attorney), if you’re having a representative correspond with the IRS for you,
Copies of any supporting documents that are relevant to your request.

Prepare a neat packet with your letter and all attachments. It helps to label attachments as Exhibits (A, B, C…) and refer to them in your letter where appropriate. For example, “See attached Exhibit A for a diagram of the transaction.” Make sure everything is organized and easy for the IRS reviewer to navigate; a well-prepared submission makes a good impression and reduces the need for back-and-forth requests for more information.

Step 9: Pay the Required User Fee

Requesting a private letter ruling isn’t free. The IRS charges a user fee that must accompany your request, and it can be substantial. The exact amount depends on your situation (primarily your income or the type of ruling). As of the latest guidance, a typical PLR fee for a business is in the tens of thousands of dollars (around $40,000+ for large corporations), with reduced rates for smaller entities or individuals (perhaps a few thousand dollars if your income is below a certain threshold). Always check the current fee schedule in the revenue procedure’s appendix to know your exact fee.

You’ll usually pay the fee by sending a check or money order (payable to “U.S. Treasury”) along with your request. Make sure the payment is for the correct amount – if you underpay (or overpay), the IRS will return your request or delay processing. For clarity, include a brief cover note or write on the check’s memo line that it’s the PLR user fee for your ruling request, and place the check at the front of your submission (or as the Rev. Proc. instructs) so it’s easy to spot. Once the IRS cashes your check, they will begin processing your ruling request.

Step 10: Submit to the IRS and Wait for Your Ruling

Double-check everything one more time, then send your request to the IRS. The revenue procedure will tell you exactly where to mail your packet (usually an IRS office in Washington, D.C.). It’s wise to send it via a trackable courier or certified mail so you have proof of delivery.

In some cases, the IRS requires multiple copies of the request – if so, include them as instructed. Once mailed, be prepared to wait: a typical PLR takes around 3 to 6 months (sometimes longer). The IRS might send you an acknowledgment letter with a case number, but this isn’t always immediate.

During the waiting period, be responsive to any IRS inquiries. It’s not uncommon for the assigned IRS attorney to reach out with follow-up questions or requests for more information. Answer promptly and thoroughly – delays on your end can stall the process. In complex cases, the IRS might invite you to a conference call to discuss the issue.

Be aware that if the IRS is leaning toward an adverse ruling (an unfavorable answer), they typically give you a chance to withdraw your request instead of issuing a formal denial. You might forfeit part of your fee by withdrawing, but it can be better than having an official denial on record.

If all goes well, you will eventually receive a ruling letter signed by the IRS Office of Chief Counsel, stating their conclusions. Keep this letter in your permanent records and follow its guidance. The IRS will also publish a redacted version of the ruling in a public database (your personal details will be removed). With that ruling in hand, you can move forward confidently on the issue, knowing the IRS has blessed your approach.

What to Include and What to Avoid in Your PLR Request

What to Include:

Complete facts: Provide all pertinent details of your situation (who, what, when, amounts, etc.) so the IRS isn’t left guessing.
Specific ruling question: Clearly state the exact tax question you need answered (e.g., “Whether X is taxable under section Y”).
Relevant law references: Mention key tax code sections, regulations, or rulings that relate to your issue to show you’ve done your research.
Required statements: Include all declarations the IRS asks for (like the perjury statement and any other certifications from the Rev. Proc.).
Organized attachments: Attach any contracts, diagrams, or documents that support your facts, and label them clearly (Exhibit A, B, C…).

What to Avoid:

Vague requests: Don’t ask broad questions or for “any tax advice.” Be precise about the ruling you want.
Omitting facts: Never hide or omit a fact that could be relevant. The IRS needs the full picture (and leaving something out could invalidate your ruling).
Informal tone or format: This is an official request, not a casual email. Avoid slang, and follow formal letter conventions and the IRS’s formatting guidelines.
Questions on no-rule topics: If the IRS has said it won’t rule on an issue (per their no-rule list), don’t bother asking – they’ll reject it.
Waiting until the last minute: PLRs take time. Don’t submit a request right before a transaction has to close, or you might not get an answer in time.

Examples: Private Letter Rulings in Action

Individual example – Inherited IRA: Scenario: Jane Doe inherited a retirement account with some complex conditions. She wasn’t sure if rolling it over a certain way would trigger taxes. PLR Request: Jane submitted a PLR asking if her proposed rollover qualified as tax-free. Outcome: The IRS issued a private letter ruling confirming that her rollover strategy would not be taxed. With the ruling in hand, Jane proceeded confidently, avoiding what could have been a costly mistake.
Business example – Tax-free merger: Scenario: ABC Corp wanted to merge with a competitor in a way that would normally trigger a huge gain on its assets. The tax law was unclear if their planned merger structure qualified as tax-free reorganization. PLR Request: ABC Corp’s attorneys requested a ruling to confirm the merger met the requirements of a tax-free reorganization under the tax code. Outcome: The IRS responded with a favorable PLR, outlining that as long as ABC followed the steps described, the merger would be non-taxable. This allowed the companies to move forward with confidence, knowing the tax consequences upfront.

PLR vs Other Tax Guidance: Pros, Cons, and Alternatives

A Private Letter Ruling is just one approach to handling an unclear tax issue. It’s important to know how it stacks up against other options:

Approach	Pros & Cons
Request a PLR from IRS	Pros: Binding assurance for your specific case; prevents future penalties if you follow it. Cons: Very costly; takes time (months); only applies to you (not general precedent).
Rely on IRS published guidance (like Revenue Rulings, regulations, FAQs)	Pros: Free and readily available; applies broadly to all taxpayers. Cons: May not address your exact fact pattern; not personalized to your situation.
Get a professional tax opinion (from a CPA or tax attorney)	Pros: Faster and cheaper than a PLR; can provide a defensible position if audited (shows good faith effort). Cons: Not binding on the IRS – they can disagree with the opinion; quality depends on the expertise of the advisor.
Do nothing (take your best guess)	Pros: No upfront cost or effort. Cons: High risk – if you’re wrong, you could face back taxes, interest, and penalties later; uncertainty may linger for years until the statute of limitations passes.

Key Terms and Entities to Know

Internal Revenue Service (IRS): The U.S. federal tax authority. The IRS is the agency that issues private letter rulings for federal tax questions.
Treasury Department: The U.S. Department of the Treasury oversees the IRS. The IRS’s ability to issue rulings comes from authority delegated by the Treasury.
Taxpayer: The person or business requesting the ruling. A PLR applies only to the taxpayer who asked for it.
Private Letter Ruling (PLR): A written decision by the IRS interpreting how tax law applies to a specific set of facts for one taxpayer. It’s requested in advance and is binding on the IRS for that taxpayer.
Revenue Procedure (Rev. Proc.): An official IRS publication that outlines procedures (like how to request a ruling). For example, Rev. Proc. 2025-1 details the rules for requesting PLRs in 2025.
User fee: The required fee that must be paid to the IRS to process certain requests (including PLRs). The amount varies by type of request and the taxpayer’s size.
Power of Attorney (Form 2848): A form that authorizes someone (like a lawyer or CPA) to represent you and communicate with the IRS on your behalf. If your representative signs the PLR request for you, this form must be submitted.
Revenue Ruling: Public guidance issued by the IRS on how the law applies to a generalized set of facts. Unlike a PLR, a revenue ruling is applicable to all taxpayers (but you cannot request the IRS to issue one for your specific situation).
Determination Letter: A written decision by the IRS that usually concerns status issues (e.g., determining if an organization is tax-exempt or if a retirement plan meets requirements). These are different from PLRs but also involve IRS rulings on specific cases.
Technical Advice Memorandum (TAM): Advice issued by the IRS National Office upon request of an IRS agent or appeals officer during an audit. It’s similar to a ruling but initiated internally when a question arises in an examination of a taxpayer.
State private letter rulings: Many state tax departments offer their own version of letter rulings for state tax issues. The rules and fees differ by state, and these rulings only apply to the state’s tax laws.

FAQ: Frequently Asked Questions about Private Letter Rulings

Q: Is a private letter ruling legally binding on the IRS?
A: Yes. A PLR is binding on the IRS for the specific taxpayer who requested it (as long as the facts and conditions in the ruling are followed).

Q: Are private letter rulings made public?
A: Yes. After removing identifying details, the IRS publishes PLRs. They’re available to the public, but only as information – no one else can rely on your PLR for their taxes.

Q: Can I rely on someone else’s PLR for my own taxes?
A: No. A PLR applies only to the taxpayer who requested it. You can read others’ PLRs for insight, but you cannot cite them as legal authority for your situation.

Q: Will a PLR protect me from an audit or penalties?
A: It can protect you from penalties on that specific issue if you follow the ruling. However, it doesn’t prevent the IRS from auditing you on other issues.

Q: Can anyone request a private letter ruling on any tax question?
A: Generally yes, as long as the issue isn’t on the IRS’s no-rule list and isn’t already being examined in your case. Some topics are off-limits for PLRs.

Q: Do I need a lawyer or CPA to request a PLR?
A: No. You can request one yourself. But given the complexity, many taxpayers hire a tax professional to prepare the request.

Q: How long does it take to get a PLR from the IRS?
A: Usually several months. Standard cases often take around 3–6 months. Complex rulings can take longer, though the IRS has pilot programs to expedite certain requests.

Q: How much does a private letter ruling cost?
A: It depends on the situation. Fees range from about $3,000 for individuals/small entities to over $40,000 for large business requests. Check the current IRS fee schedule.

Q: Do I get a refund if my PLR request is denied or withdrawn?
A: Sometimes. If the IRS declines to rule on your request upfront (because it’s on the no-rule list, for example), they generally refund the fee. Withdrawals may receive partial refunds depending on timing.

Q: Can I withdraw a PLR request?
A: Yes. You can withdraw your request before the IRS issues a ruling. Taxpayers often do this if they suspect the IRS’s answer will be unfavorable.