private letter ruling
- An interpretation issued by the Internal Revenue Service in response to an individual taxpayer's inquiry about how tax laws apply to their specific circumstance or planned activity
- The businessman sought a private letter ruling to understand his tax obligations for his proposed business expansion.
- To minimize potential legal risks, the company requested a private letter ruling from the IRS before proceeding with the transaction.
- Applying for a private letter ruling can provide taxpayers with greater certainty about their tax liabilities for certain activities.