Chapter 16 - Revenue Ruling would provide protection to Tom...

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Chapter 16 Private Rulings and Determination Letters 1. Answer: This question illustrates the difference between a Private Letter Ruling and a Revenue Ruling. A Revenue Ruling binds the IRS with respect to all taxpayers. However, a Private Letter Ruling binds the IRS only with respect to a particular taxpayer, the subject of the ruling. In this question, Tom may view the Private Letter Ruling as persuasive of the IRS’s position, but it is not authoritative and does not technically provide Tom with any protection. On the other hand, the
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Unformatted text preview: Revenue Ruling would provide protection to Tom. 2. Answer: You should advise J.P. to withdraw his Private Letter Ruling request. Even though it is not certain that the IRS will issue an unfavorable ruling, because it appears that J.P. will not receive a favorable ruling, J.P. runs the risk of having to attach an unfavorable ruling to his return. By withdrawing his Private letter Ruling request, J.P. may still enter the transaction, if he feels comfortable doing so, and not have to attach a ruling to his return....
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