Academic journal article Journal of Accountancy
New Procedures for Private Letter Ruling Requests
The Internal Revenue Service has announced new procedures for private letter rulings, which often are requested by issuers and holders of tax-exempt bonds. Revenue procedure 96-16 says requests for reviewable and nonreviewable rulings can be submitted only by the issuer or the bondholder. Conduit borrowers, underwriters, trustees or any other party with material interest in a bond issue are no longer permitted to submit rulings requests themselves. However, they may join an issuer in requesting a private letter ruling.
"These new procedures will affect CPAs working for 501 (c)(3) organizations such as hospitals," said Timothy L. Jones in the IRS office of assistant chief counsel. Jones said these entities now have to get the local government jurisdiction that issues bonds for them to submit a request. "In the past we would receive rulings requests directly from the hospitals" said Jones.
The new procedures require state and local governments to approve a resolution before a request is submitted authorizing a specific issue of obligations. For example, the resolution may say the issuance is contingent on a favorable IRS or Tax Court ruling. …