Letter Rulings
Letter rulings are issued by the IRS in several different forms including private letter rulings, determination letters, and technical advice memoranda. The IRS does not publish these in any official collection but they are available from commercial sources.
Private Letter Rulings
The national office of the IRS issues private letter rulings in response to a taxpayer's request for the IRS's position on a specified tax issue. The content, format, and procedures that are used for revenue rulings apply with respect to private letter rulings. The taxpayer asks the IRS for their interpretation of the IRC, regulations, and pertinent court cases for a specific transaction the taxpayer describes. Private letter rulings typically deal with proposed transactions. Letter rulings can only be cited as precedence by the person requesting the ruling, and in no way binds the IRS to take a similar position when dealing with a different taxpayer. However, letter rulings are an important source of information since they indicate how the IRS may treat a similar transaction. The IRS does not publish its reply in the Internal Revenue Bulletin or Cumulative Bulletin, instead it sends its response only to the taxpayer who submitted the request. Instructions for requesting a ruling appear in a Revenue Procedure that is updated annually. Under current law payment of a user fee is required for requests. Common abbreviations the you may encounter for private letter rulings are PLR and LTR, both indicate the same item.
Determination Letters
A determination letter is similar in purpose and nature to a private letter ruling, except that it is issued by the office of the local IRS district director not the national office of the IRS. Determination letters usually relate to completed transactions rather than the proposed transactions that typically lead to the issuance of a private letter ruling. Determination letters are not included in any official IRS publication, but they may be available from other sources.
Technical Advice Memoranda
A Technical Advice Memorandum (TAM) is issued by the National office of the IRS, however, it deals with a completed transaction rather than a proposed transaction. A Technical Advice Memorandum is usually requested by a local office of the IRS as part of an ongoing audit. The TAM responds to a technical or procedural question on a specific set of facts arising out of an examination and involves the interpretation and proper application of tax law tax treaties, regulations, revenue rulings, or other precedents published by the national office. Similar to the Private Letter Ruling, a Technical Advice Memorandum only applies to the taxpayer for whose audit it was requested. A TAM is not binding on the IRS, however, the information contained in a TAM may be useful for the insight that it gives concerning the thinking of the IRS relative to a given problem area in taxation.
Private Letter Rulings, Determination Letters, and Technical Advice Memoranda are generically referred to as "letter rulings." The memoranda are not included in any official IRS publication, but they are open for public inspection. The IRS assigns a seven digit document numbering system to each written determination for identification purposes such as:
Private Letter Ruling 9450056
The first two digits indicate the year in which the ruling was issued, the next two numbers denote the week, and the last three digits indicate the number of the ruling for the week.