INSIGHTS AND RESOURCES

New fast-track program for corporate PLRs cuts process time in half

TAX ALERT  | 

Authored by RSM US LLP


Executive summary

Effective immediately, IRS has initiated under Rev. Proc. 2022-10 a pilot program providing for “fast-track” processing of private letter rulings (PLR) relating to corporate transactions.1 This pilot program was created to reduce the time it takes for taxpayers to receive a PLR. Under this program, IRS is aiming to process corporate PLR requests in 12 weeks’ time, roughly half the time heretofore required to receive a PLR. The pilot program will run for 18 months and then presumably will be reevaluated. 

In general

Rev. Proc. 2022-1 provides general instructions and procedures for requesting PLRs. Rev. Proc. 2022-10 amplifies Rev. Proc. 2022-1 by permitting taxpayers to “fast-track” their corporate PLR requests. Generally, to participate in this program, the taxpayer must first request a pre-submission conference and, at the conference, explain to IRS the substance of the PLR request and the reasons for requesting fast-track processing. Next, the taxpayer would draft its PLR request, generally fulfilling normal PLR request requirements. While taxpayers must explain the reasons for requesting fast-track processing, IRS has indicated informally that this inquiry should not be read as implying that there is a requirement of a special need or compelling case.2

Fast-track processing 

In general, under Rev. Proc. 2022-1, IRS processes PLRs on a first-come first-served basis in order of the date the request is received; only in “rare and unusual cases” will IRS grant a request for expedited handling of a PLR request. In the case of corporate PLR requests, however, Rev. Proc. 2022-10 overrides this somewhat rigid standard and generally permits a fast-track processing of such PLRs in 12 weeks, much faster than the traditional six-month process.3

Pre-submission conference required

As stated above, in order to qualify for fast-track processing, the taxpayer must request a pre-submission conference where the taxpayer will be expected to highlight the substantive issues of the request as well as to discuss the taxpayer's reasons for fast-track processing. Prior to the pre-submission conference with IRS, the taxpayer will generally need to provide a memorandum covering the same.  

Fast-track PLR request

After the pre-submission conference, the taxpayer would then submit its PLR request pursuant to Rev. Proc. 2022-1 (and any other applicable revenue procedure, e.g., Rev. Proc. 2017-53, relating to spin-offs). As with the pre-submission conference, the taxpayer would again include its reasons for requesting fast-track processing. The taxpayer must agree to provide any additional information requested within seven business days of such request, as well as a draft of the actual PLR being sought (a so-called “two-part.”)

Considerations for fast-track requests

In determining whether the fast-track process is feasible for a particular PLR, IRS will consider the complexity of the proposed transaction, issues presented and other obligations of the attorneys assigned to process the request. IRS also will look to see whether the PLR request adequately describes and analyzes the relevant issues. Additionally, while there may be opportunities for reconsideration, a taxpayer generally does not have the right to appeal.4 That said, IRS has indicated that it expects such requests generally will be granted, subject to compliance with the revenue procedures.5

Key deadlines

The pilot program under Rev. Proc. 2022-10 is effective immediately. 

Key takeaway

IRS has created this pilot fast-track program to allow most corporate PLR requests to be processed in approximately 12 weeks. Taxpayers can qualify for this program so long as they and their advisors work with IRS in an expeditious manner, providing any additional requested information promptly and by analyzing the issues presented in a thorough manner.

 

1The PLR request must be solely or primarily under the Associate Chief Counsel (Corporate), e.g., spin-offs, tax-free reorganizations, consolidated return matters, etc.)

2IRS informal comments at NYSBA annual meeting on Jan. 19th, 2022. See 174 Tax Notes Federal 549 (Jan. 24, 2022). 

3Exceptions may be made for requests for extension of time to make elections or other applications for relief under section 301.9100 of the Procedure and Administration Regulations.

4See section 10.02 of Rev. Proc. 2022-1.

5See 174 Tax Notes Federal 531 (Jan. 24, 2022). 

Let's Talk!

Call us at +1 213.873.1700, email us at solutions@vasquezcpa.com or fill out the form below and we'll contact you to discuss your specific situation.

  • Topic Name:
  • Should be Empty:

This article was written by Mark Schneider, Nate Meyers and originally appeared on 2022-01-27.
2021 RSM US LLP. All rights reserved.
https://rsmus.com/what-we-do/services/tax/federal-tax/tax-mergers-and-acquisitions/new-fast-track-program-for-corporate-plrs-cuts-process-time-in-h.html

The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.

​Vasquez & Company LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.

For more information on how ​Vasquez & Company LLP can assist you, please call +1 213.873.1700.

Subscribe to receive important updates from our Insights and Resources.

  • Should be Empty: