Indiana Law Journal

Document Type


Publication Date

Spring 2022

Publication Citation

97 Indiana Law Journal 523 (2022)


When a taxpayer plans to undertake a transaction and its tax consequences are unclear, the taxpayer can request a letter ruling from the IRS. The IRS issues numerous letter rulings each year. In 2020, for instance, the IRS issued 777 letter rulings. The IRS refrains from issuing letter rulings on certain topics. At the beginning of each year, the IRS publishes an updated list of the topics on which it will not rule. Many of the topics on which it will not rule arise in areas of tax law governed by standards where the tax outcome depends heavily on each transaction’s specific facts. This pattern is consistent with the IRS’s stated position that it ordinarily does not rule in certain areas because of the factual nature of the matter involved.

This Article suggests that a policy against ruling on fact-specific topics sacrifices an opportunity to rule on many of the very topics for which a letter ruling could be particularly useful. Because the fact-specific nature of a topic makes it ill-suited for generally applicable guidance, such a topic is a particularly good candidate for a letter ruling.

Existing literature contains very little examination of the reasons for the IRS’s policy against ruling on fact-specific topics. This Article begins to fill that gap and suggests eight potential concerns that might underlie the IRS’s reticence. This Article analyzes whether each concern could be addressed by means other than simply not issuing rulings. To gauge the validity of some of the concerns, this Article examines letter rulings that the IRS did, in fact, issue on several fact-specific topics prior to adding them to the no ruling list. The previously issued letter rulings illustrate that many of the concerns do not inevitably arise in the case of all letter rulings on fact-specific topics. Some of the previously issued letter rulings also demonstrate steps that the IRS should take, or avoid, in order to mitigate some of the concerns if it does rule on fact-specific topics.