IRS updates letter ruling procedures, modifies user fees

The IRS recently issued its annual revenue procedure updating the procedures for requesting private letter rulings (PLRs) and extensions of time for missed elections from the IRS Office of Chief Counsel.  

Rev. Proc. 2017-1, released on Jan. 3, makes minor changes to the procedures, which cover requests by taxpayers to obtain PLRs, including relief under Treas. Reg. Sec. 301.9100 (so-called 9100 relief). Appendix A of the Rev. Proc. also states the various user fees for certain types of requests. The cost to obtain a PLR is unchanged from 2016 at $28,300. The user fee for obtaining 9100 relief has increased slightly from $9,100 to $10,000. Requests for non-automatic Forms 3115, “Application for Change in Accounting Method,” have also increased from $8,600 to $9,500. The new user fees are effective for requests submitted after Feb. 1, 2017.

The IRS has also issued an update to its guidance that covers areas in which the Office of Chief Counsel will not issue rulings. Rev. Proc. 2017-3, which was also released on Jan. 3, makes nine changes from Rev. Proc. 2016-3. Notably, Rev. Proc. 2017-3 removes from this no-rule list certain transactions under Section 355, which relate to spinoffs, pursuant to prior guidance issued by the IRS under Rev. Procs. 2016-40 and 2016-45. The IRS has also added certain issues to this list, on which it will not grant rulings. This includes certain transactions under Section 118, and only “significant issues” pertaining to transactions under Sections 332, 351, 355, 368 and 1036.

The IRS will also refrain from issuing a ruling pertaining to whether a captive insurance arrangement through which an employer provides health insurance to current or retired employees is a welfare benefit fund under Section 419(e), or for certain issues involving regulated investment companies under Section 851.

Contact David Auclair
Principal, Washington National Tax Office
+1 202 521 1515

Shamik Trivedi
Experience Manager, Washington National Tax Office
+1 202 521 1511

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