How to read IRS Ruling

Revenue Ruling - The IRS written statements on how tax law applies to a set of facts or the IRS interpretation of a tax issue. Revenue rulings are issued by the National office and published in its internal Revenue Bulletin - Generally, it is a response to a request from an industry group or to express IRS agreement or disagreements with tax court decision, but Revenue Rulings come out only when it will be valuable to many taxpayers and IRS staffers use it only for a transaction involving the same facts and circumstances described in the ruling.

Determination Letter- Your IRS district office's interpretation of how an established area of tax law, applies to a completed transaction or existing condition request on only if your question can be "specifically answered by a statue, tax treaty, or regulation or by a conclusion stated in a revenue ruling opinion, or court decision published in the internal Revenue Bulletin" ( Rev. Proc.. 94-, sec.6, 1994-1 IRS21).

Information Letter - A general letter statement of well defined law without reference to a specific situation in response to a request by a taxpayer or congressional representative it is advisory only, not binding on the IRS.

Letter Ruling (or Private Letter Ruling) - The IRS national office's interpretation of tax law of new, unsettled, complicated or controversial situation and sometimes of proposed of completed transactions. Tax professionals request it if they think the tax treatment of a transaction is uncertain in light of IRS rules or regulations or court decision.

Opinion Letter - An IRS auditor opinion about audit findings, for example - an IRS auditor would review your employment records and decides a class of workers are really ICS nd send you an opinion letter. If the follow year the auditor are claiming something else you can cite the first opinion letter to show you are incompliance. If you are audited request an opinion letter from the IRS, Auditors rarely give them unless you ask.

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