IRS Permits Digital Letter Ruling Requests

The revised policy, instituted in response to the coronavirus pandemic, will remain in effect until the revenue procedure is modified or superseded.

The Internal Revenue Service (IRS) has issued a new revenue procedure that modifies procedures established at the beginning of 2020 in Revenue Procedures 2020-01 and 2020-1 IRB.

Through the new Revenue Procedure 2020-29, the IRS will temporarily allow the electronic submission of requests for letter rulings, closing agreements, determination letters and information letters submitted under the jurisdiction of its Office of Chief Counsel.

The new procedures also apply for determination letters issued by the IRS Large Business and International Division (LB&I). In the new Revenue Procedure 2020-29, the IRS establishes that, until the agency makes further modifications, both paper and electronic requests for determination advice will be accepted.

The now-modified Revenue Procedure 2020-1 provides detailed information on how taxpayers can request advice from the IRS in the form of letter rulings, including non-automatic requests for changes in methods of accounting, non-automatic requests for changes in accounting periods, closing agreements, determination letters and information letters. Revenue Procedure 2020-1 generally requires taxpayers to submit paper copies of written materials with “wet signatures.”

While Revenue Procedure 2020-29 remains effective, the IRS will accept electronic submissions only “if the submissions are transmitted by facsimile or compressed and encrypted email attachments using the electronic submission procedures described in section four of this revenue procedure” and are “signed using the electronic signature procedures described in section five of this revenue procedure.”

The IRS will also continue to accept printed requests for advice as provided in Revenue Procedure 2020-1, although it expects to have limited personnel available, which will likely delay for some period of time the processing of requests that are submitted in paper copies through the mail and private delivery services. Electronic submission in accordance with the new revenue procedure will allow for more expeditious processing than paper submission, the IRS says.

Notably, the new Revenue Procedure 2020-29 does not modify procedures for determination letters issued by the IRS’s Small Business/Self Employed Division, Wage and Investment Division, or Tax Exempt and Government Entities Division.