PLR's as Precedent?

[Guest JD Colville]

Previously PLR's carried a statement at the end of the ruling that the ruling could not be cited as precedent. The more recent PLR's do not carry that statment (at least as reported by CCH or RIA). They also seem to be released as TAM's as well as PLR's.IRC Section 6110(k)(3) indicates that a written determination may not be cited as precedent. IRC Section 6110(B)(1) provides that a "written determination" means a ruling, determination letter, technical advice memorandum or chief counsel memorandum.

Could anyone help me to understand the status of PLR's being cited as precedent, and the technical/practical effect of also issuing the PLR as a TAM. Thanks for your assistance

JD Colville

[Guest ezollars]

They still are not precedent, since they are only binding on the IRS in the case in question.

A TAM is a ruling issued during an examination with a "request for technical advice" while PLRs that aren't so flagged are based on a taxpayer initiated request outside of an examination context. I've heard a few practictioners argue that TAMs tend to be more respected by examining agents, largely because they are the National Office's guidance issued during a real examination. But, officially, they stand on the same authority (or lack of it) as do PLRs.

However, it is important to note that even though a PLR may not be precedent, there's nothing that says you cannot use the analysis in the PLR (which will cite to useful material) in laying out your own position. Also, a string of PLRs/TAMs that come to the same conclusion is a relatively solid indicator of the IRS position on an issue (or at least the position they want to take in public).

[This message has been edited by ezollars (edited 05-18-99).]

[Guest PeterGulia]

Although a letter ruling is not precedent, in the absence of anything else on point it may help set up a "substantial authority" tax position. See the regulations under IRC 6662.