What Is an IRS Private Letter Ruling?


In this episode of our podcast, Parental Advisory, we discuss the advantages and disadvantages of the curious tax procedure know as an IRS private letter ruling.



What is a private letter ruling?


A taxpayer requested private letter ruling (PLR), per the IRS, is "a written statement issued to a taxpayer that interprets and applies tax laws to the taxpayer’s represented set of facts. A PLR is issued in response to a written request submitted by a taxpayer." A private letter ruling binds only the IRS and the requesting taxpayer. A private ruling may not be cited or relied upon as precedent by other taxpayers.


If a problem is common enough, the IRS can redact the personal content of a private ruling and instead issue it as a revenue ruling, which becomes binding for all taxpayers and for the IRS.  Click here to view all PLRs ever issued !

Cost of a Private Letter Ruling


The IRS fees for a PLR range from $250-$50,000, depending on which program is used. Legal fees experience a similar variance. Some issues are entirely straight-forward, while others may include all the moving parts of both the proposed transaction and tax laws, regulations, and revenue rulings.

If you have a tax issue that you need assistance with, contact us here. Whether it's a state or federal tax issue, foreign or domestic – we can help.