What is a Private Letter Ruling When It Comes to Taxes?
A PLR is an official letter of advice…from the Internal Revenue Service (IRS). In the case of a PLR, it’s a piece of advice that you are highly advised to take! If you’ve received a PLR, it’s because you or your tax representative requested it. A PLR is just a written decision from the IRS that’s responding to your request for guidance. So if you’ve received a PLR in the mail, it shouldn’t come as a surprise to you.
Why Even Request a PLR?
PLRs are issued from an Associate Chief Counsel Office of the Office of Chief Council, or by the Tax Exempt and Government Entities Division. They determine what type of action you should take in regards to your own specific tax situation. This ruling is strongly based on the current tax laws. Oftentimes, the PLR is providing you and/or your tax representative with the right method of guidance to resolve any complex issues about your tax situation.
Always Seek Council about Tax Matters
Not everyone’s tax issues are the same. That’s why it’s advised to seek out a PLR so that you’re not blindly taking unnecessary steps to try to ease your financial situation. Doing so will only lead to delays and the possibility of missing your deadline which can result in late penalties and in short, money out of your pocket.
Having Proof of Council
Also, with a PLR you have written proof from the IRS regarding what course of action you need to take. So, if for some reason you’re somehow penalized for executing those steps, you’ll have documented proof that you took the steps advised by the Associate Chief Counsel Office. This is much better than taking a course of action based on your own presumptions.
What if Your Issue is With the IRS?
This is all the more reason to file for a PLR. If for some reason you have an issue with the IRS, before doing anything—even pay up—as a taxpayer, you have the right to have the IRS rule on that particular issue. One thing you absolutely do not want to do is assume that someone else’s PLR applies to your tax situation.
A PLR is only applicable between the IRS and the taxpayer who is requesting it. Unlike other lawful matters, a PLR cannot be used as evidence or cited upon for your own tax situation. In other words, the IRS is not bound to apply other rulings toward yours as each taxpayer’s tax issue differs.
How Do I Go About Getting a PLR?
Truthfully, the most efficient way of requesting a PLR is to go through a tax representative that knows how to set forth such a request. Remember, each PLR is different according to the tax laws and that particular situation. So if you aren’t accurately relaying your issue correctly to the IRS, they will put forth a ruling that you may not agree with.
Contact Success Tax Relief for a free consultation about the right way to file for a PLR. You can also call us at 1-877-825-1179.