The Internal Revenue Service has added some types of grantor trusts to the list of areas in which it does not plan to issue letter rulings or determination letters.
Revenue Procedure 2015-37 informs taxpayers that the IRS will not issue letter rulings or determination letters regarding whether the assets in a grantor trust receive a section 1014 basis adjustment at the death of the deemed owner of the trust for income tax purposes when those assets are not includible in the gross estate of that owner under chapter 11 of subtitle B of the Internal Revenue Code. Revenue Procedure 2015-37 will be published in Internal Revenue Bulletin 2015-26 on June 29, 2015.
The revenue procedure amplifies Rev. Proc. 2015-3, 2015-1 I.R.B. 129, which sets forth areas of the Internal Revenue Code in which the Internal Revenue Service will not issue letter rulings or determination letters.
The IRS noted in Rev. Proc. 2015-3 earlier this year that whenever appropriate in the interest of sound tax administration, it is the policy of the IRS to answer inquiries of individuals and organizations regarding their status for tax purposes and the tax effects of their acts or transactions, prior to the filing of returns or reports that are required by the revenue laws. There are, however, certain areas in which, because of the inherently factual nature of the problems involved, or for other reasons, the Service will not issue rulings or determination letters.
The earlier revenue procedure contains a long list of such areas, for example, in terms of gifts and inheritances, the question of whether a transfer is a gift within the meaning of Section 102(a), and in terms of the rental value of parsonages, whether an individual is a “minister of the gospel” for federal tax purposes.
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