Grant Thornton Insight: The IRS is suffering from significant processing delays due to COVID-19—however, the speed of PLR processing does not seem to have been significantly affected, and actually may have improved with the introduction of electronic submissions due to COVID-19. Generally, the PLR process takes approximately six months after submission. By using fast-track processing, corporate taxpayers could see this time cut to about three months. Additionally, the revenue procedure extends the electronic filing of all PLRs for another 18 months, indicating that this may become a permanent feature.
The IRS recently issued Rev. Proc. 2022-10, which establishes an 18-month pilot program to provide fast-track processing of certain requests for private letter rulings (PLRs) under the jurisdiction of the Associate Chief Counsel, Corporate (“Corporate”). The pilot program applies to qualifying ruling requests postmarked or received by the IRS after Jan. 14, 2022, and will expire on the earlier of July 14, 2023, or the date that a superseding revenue procedure is released. This program is an addition to existing procedures for requesting an expedited letter ruling.
Under Rev. Proc. 2022-10, a taxpayer may request fast-track processing for a ruling request solely or primarily under the jurisdiction of Corporate. A request for the fast-track processing for a ruling solely under the jurisdiction of Corporate will be granted if the branch reviewer determines that fast-track processing is feasible and the following requirements are met:
The requirements listed in Rev. Proc. 2022-10 include:
- The taxpayer must request a pre-submission conference to address the substantive issues
- The ruling request must satisfy requirements of Rev. Proc. 2022-1 and any other applicable procedures
- The ruling request must include a required statement, required information and an agreement regarding additional information
- The taxpayer must provide a draft letter ruling including a legend of defined terms, relevant facts, representations, rulings and administrative matters
- The ruling request must be submitted to the IRS in the manner specified in Rev. Proc. 2022-10
- The IRS also strongly recommends submitting the request via encrypted e-mail
If a ruling request is primarily under the jurisdiction of the Corporate but also includes a request for a ruling on an issue under the jurisdiction of another associate office, fast-track processing will be granted only if the other associate office agrees to process the request in accordance with Rev. Proc. 2022-10. If no ruling with respect to such other issue is requested, fast-track processing will be granted only if no other associate office with jurisdiction objects to the ruling request being processed in accordance with the revenue procedure.
Once the qualification requirements have been met, the branch reviewer will determine if the fast-track processing is feasible. The taxpayer must submit its PLR within seven business days of being notified of receipt and request granted for fast-track processing. Generally, if a ruling request for fast-track processing is granted, the IRS will endeavor to complete processing of the ruling request within 12 weeks, unless a shorter or longer period is requested and granted.
Fast-track processing is not available for requests for extension of time to make elections under Treas. Reg. sec. 301-9100.
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Jeff Borghino is a partner in the corporate tax group of Grant Thornton’s Washington National Tax Office in Washington, D.C. He focuses primarily on the taxation of corporate and financial transactions, including taxable and tax-free acquisitions, general corporate tax matters, recapitalizations and debt workouts, and financial instruments. Prior to joining the Washington National Tax Office, Borghino worked in Grant Thornton’s San Francisco office as part of the federal tax group.
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