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IRS Introduces New Pilot Program to Allow Some Taxpayers to Skip the Line for Letter Rulings

By Joel N. Crouch on January 19, 2021
In an early 2019 blog post (here), we discussed the what and how of requesting an IRS Letter Ruling. The process for obtaining a Letter Ruling can be slow and time consuming and that has been further slowed by the pandemic. In response to “numerous informal comments from taxpayers and practitioners regarding the time required to process letter ruling requests” on January 14th, the IRS issued Revenue Procedure 2022-10 , which immediately implements an 18-month pilot program that allows taxpayers to request fast-track processing (12 weeks) for letter ruling requests.

Although the IRS generally handles ruling requests in the order in which they are received, Rev. Proc. 2022-10 allows taxpayers who meet certain criteria to “cut in” at the front of the line on their ruling request. The criteria for taxpayers who want to skip the line are:

1. Request a pre-submission conference with the IRS; and
2. Submit a statement to the IRS before the conference that includes:
a. Reasons for the fast-track request;
b. Desired processing time, if other than 12 weeks;
c. Facts that could affect the feasibility of fast-track processing; and
d. Any issues in the request that are under the jurisdiction of an associate office other than Associate Chief Counsel (Corporate).

The requesting taxpayer must also show that fast-track processing is feasible. The IRS will consider the completeness of the taxpayer’s request and supporting documentation to determine feasibility. Requests seeking a letter ruling solely within the jurisdiction of the Office of Associate Chief Counsel (Corporate) “generally will be granted” if all procedural requirements are met. Requests that are not solely within the jurisdiction of the Office of Associate Chief Counsel (Corporate) must be agreed to by the other IRS office which has jurisdiction.

If the IRS agrees to the fast-track request, the taxpayer’s letter ruling request must state that the taxpayer agrees to provide any additional information requested by the IRS within seven (7) business days. In addition, the ruling request must include “a draft letter ruling in a form that includes a legend of defined terms, a description of relevant facts, representations, requested rulings, and administrative matters.”

There is one major carve out in Rev. Proc. 2022-10. “Fast-track processing is not available for requests for extension of time to make elections of other applications for relief under section 301.9100 of the Procedure and Administration Regulations (26 CFT part 301)(section 9100 relief). “ We discussed 9100 relief in a previous blog post (here) and requests for 9100 relief may still request expedited handling under Rev. Proc. 2022-1.

For questions regarding this blog post or any other civil or criminal tax related matter, please feel free to contact Joel Crouch at (214) 749-2456 or jcrouch@meadowscollier.com.