How To Request A Private Letter Ruling

When seeking an answer to a tax question from the Texas Comptroller, how you go about asking the question is important. In most cases, the Comptroller issues a general information letter that refers a taxpayer to resources — an agency FAQ page or publication or the administrative rule.

A private letter ruling differs from these general information letters. A private letter ruling allows a taxpayer to get a written determination from the agency of how relevant tax laws, rules and policies apply in a certain situation. The Comptroller is also bound by this determination.

At Brown, PC, a boutique tax law firm with offices in the Dallas-Fort Worth Metroplex, we can explain the benefit of a private letter ruling in efficiently resolving complex tax disputes. Our attorneys assist business clients across the state with Texas sales and use tax issues.

Exacting Texas Administrative Code Requirements

To properly request a private letter ruling, the code lists out eight — (A) through (H) — detailed requirements. Some key considerations are who is requesting the private letter ruling. It can only be relied on by the person requesting it prospectively from its issuance. This means if a combined group of LLCs and/or organization representing different members must carefully determine who is included on the request.

The statement of the facts and relevant documentation can also impact the request. To rely upon the ruling, it is crucial to include all material facts. Even the misstatement of what seemed a minor detail can limit the binding effect of a ruling. Changes in laws can also affect whether a ruling remains binding.

What Happens To A Private Letter Ruling?

After identifying information has been redacted, these are published through the Comptroller's State Tax Automated Research system. A review of past rulings may point to an answer, but it may still be necessary to request a unique ruling related to slightly different facts for the binding effect that only extends to the party requesting the ruling.

Learn How We Can Assist At Any Stage

When dealing with any administrative agency, you may have heard the adage: win early and often. This is no different with the Texas Comptroller. At the first sign of an audit, seek experienced legal counsel.

But even if you decided to handle the audit on your own, we can quickly step in to assist you in reaching a positive resolution. Do not go any further into the administrative process without speaking to a lawyer. Schedule a confidential consultation by calling 888-870-0025 or sending us an email.

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