IRS aims to fast-track private letter rulings

The Internal Revenue Service is offering a program to speed up processing of requests for letter rulings from its associate chief counsel, mostly on behalf of corporations.

In Revenue Procedure 2023-26, the agency detailed a program Wednesday to provide an opportunity for fast-track processing of certain requests for letter rulings solely or primarily under the jurisdiction of the associate chief counsel (corporate). The program replaces a pilot program that the IRS began testing last year (see story). It will mainly apply to private letter ruling requests from corporations.

One notable change to the pilot program outlined in a revenue procedure last year, however, is that fast-track processing won't be granted if the letter ruling includes a closing agreement involving an issue under the jurisdiction of the associate chief counsel (corporate) or another associate office.

In addition, if the inclusion of a closing agreement occurs during the fast-track processing of a letter ruling request, the fast-track processing will be terminated, and the IRS will continue to process the letter ruling request under the procedures of section 7 of Rev. Proc. 2023-1. Expedited handling will still be available for such requests in line with that guidance, though. 

Samuel Corum/Bloomberg

Another change to the pilot program in the new revenue procedure clarifies that while a statement providing one or more of the taxpayer's reasons for requesting fast-track processing is required, the taxpayer isn't required to demonstrate a business need unless the taxpayer is requesting a ruling in less than 12 weeks. The stated reason or reasons will be used as one factor the IRS associate counsel will consider when deciding whether to grant a request for fast-track processing, and for how long a period of time.