Private Letter ruling on a tax issue

The private letter ruling on a tax issue is only applicable to the tax situation and the corresponding taxpayer only. Such letters are usually not required for the taxpayers. But if large amounts of payment are included then one must consider in requesting a private letter so that the risks can be avoided. One should request for the IRS private letter if and only if he is going to do a transaction considering the IRS tax decision. If the person is not considering the IRS tax decision then he should not use such private letters as it would be a sheer waste of time and also senseless. This service should be used if you do not wish to take a chance of a tax audit. Also the amount involved in the transaction should be large. One can use the IRS private letter ruling if he/she intend to abide by the tax decision taken by the IRS. Also make sure that the taxable income is reported on the tax return form properly. If the person is under the tax examination, then he/she should submit the letter under section 4.02 of Revenue procedure. But if he/she is not under tax examination then the letter can be directly submitted to the Associate Chief Counsel of IRS.