PS 2000(7)

Procedures in Handling Requests for Issuance of Rulings

This publication has been superseded by PS 2008(2)

PURPOSE: This Policy Statement describes the current procedures a taxpayer or authorized representative must use to request the issuance of a ruling and the current procedures that the Department of Revenue Services (DRS) follows in issuing rulings. It also modifies and supersedes procedures that were described in Policy Statement 91(6.2), Procedures in Handling Requests for Issuance of Rulings.

EFFECTIVE DATE: Effective when issued.

STATUTORY AUTHORITY: Conn. Gen. Stat. §12-2.

WHAT DOCUMENTS ARE RULINGS: Although rulings, declaratory rulings, and general information letters are all referred to colloquially as rulings, DRS considers only rulings and declaratory rulings be "rulings."

Rulings: Based on a taxpayer's request, a ruling interprets Connecticut tax laws and regulations and applies them to a specific set of facts. It has precedential value and may be relied on generally by all persons for subsequent like transactions.

Declaratory Rulings: Based on a taxpayer's petition, a declaratory ruling is issued under the Uniform Administrative Procedure Act (Conn. Gen. Stat. §4-176). The issuance of declaratory rulings is the subject of Conn. Agencies Regs. §12-2-4a.

General Information Letters: While not a ruling, a general information letter calls attention to an interpretation, or to a well-established principle, of tax law, without applying it to a specific set of facts. A general information letter may be issued where it appears that the taxpayer has requested only general information, or where the request does not meet all the requirements for issuance of a ruling, and DRS believes that general information will be helpful.

The Director of the Legal Division is responsible for handling requests for issuance of rulings and declaratory rulings.

WHEN DRS ISSUES A RULING: DRS generally issues a ruling only for prospective transactions. If a transaction has been consummated, DRS issues a ruling only if the taxpayer's tax return for the taxable period in which the transaction was consummated has not been filed and the taxpayer agrees to send a copy of the tax return, with the ruling attached, to the Director of the Audit Division.

WHEN DRS DOES NOT ISSUE A RULING: DRS does not issue a ruling:

• If the same or a similar issue is before DRS in connection with an audit examination of the same taxpayer for the same or any other prior taxable period. However, the taxpayer may request the issuance of a technical advice memorandum as detailed in Policy Statement 2000(8), Procedures in Handling Requests for Issuance of Technical Advice Memoranda.
• In response to inquiries about alternative plans of proposed transactions or about hypothetical situations;
• Where the problem involved is inherently factual in nature;
• On only part of an integrated transaction;
• Where reasonably thorough research would reveal that the issue is clearly and adequately addressed by a statute, regulation, decision of the Connecticut or federal courts, declaratory ruling, ruling, Special Notice, Policy Statement, Informational Publication, Announcement, or tax return instructions issued by DRS;
• Where a business makes a ruling request, or where a tax practitioner (such as a certified public accountant, public accountant, enrolled agent, or attorney) makes the ruling request on behalf of a client (irrespective of whether the client is a business), and no analysis and conclusion is provided as required (See WHAT A RULING REQUEST MUST CONTAIN below);
• Where other forms of written determination are deemed more appropriate; or
• Wherever DRS, in its discretion, deems it inadvisable.

If, before a ruling is issued, a taxpayer is notified of a pending audit examination by DRS, the taxpayer must agree to notify the Legal Division and the revenue examiner at once of the pending ruling request.

WHAT A RULING REQUEST MUST CONTAIN: A ruling request must be submitted in the form prescribed below. A properly completed ruling request contains: (1) a Statement of Facts, (2) an Issue Statement, (3) an Analysis (in the case of requests by businesses or tax professionals), (4) a Document List (5), a Document Appendix, and (6) a properly completed Form LGL-006, Request for Issuance of a Ruling (Rev. 9/97 or later).

• The Statement of Facts must contain all relevant facts about the transaction. Such facts include names, addresses, taxpayer registration numbers, and employer identification or social security numbers of all interested parties; a full and precise statement of the business reasons for the transaction; and a carefully detailed description of the transaction. Relevant facts reflected in the documents submitted must be included in the description of the transaction and not merely incorporated by reference.
• The Issue Statement must contain a precise statement of the issue or issues to be resolved.
• The Analysis made by businesses or by tax practitioners on behalf of a client, must contain a statement of law, an analysis of the law as applied to the issue, and a conclusion.
  
  The Statement of Law must contain a detailed and complete statement of relevant law. It should discuss the implications of any relevant legislation, court decisions, regulations, rulings, declaratory rulings, administrative pronouncements, or tax return instructions, that the taxpayer finds either in accord with or contrary to the position advanced. If the taxpayer determines that there are no contrary authorities, the taxpayer must make a statement to that effect.

• The Document List must contain a list of all documents submitted with the ruling request.
• Document Appendix: The taxpayer must attach a true copy of all relevant documents (such as contracts, wills, deeds, agreements, instruments) to the ruling request. Original documents should not be submitted because they become a part of DRS's file and are not returned.
• Form LGL-006: A properly completed Form LGL-006 must accompany the ruling request. It must be signed by an individual (but not by a tax practitioner, if any) who has personal knowledge of the facts and who must declare, under penalty of false statement, that to the best of the individual’s knowledge or belief:
  • The request involves a prospective (as opposed to consummated) transaction;
  • The request involves an issue that is the same or similar to one (1) being considered by DRS in an audit examination of the taxpayer, (2) being protested to the DRS Appellate Division by the taxpayer, (3) being litigated in the Connecticut courts by the taxpayer, or (4) being considered by DRS in a claim for refund made by the taxpayer;
  • The taxpayer is undergoing an audit examination by DRS on any issue or tax;
  • DRS has notified the taxpayer about a pending audit examination;
  • The request involves an issue that is clearly and adequately addressed by a statute, regulation or decision of the Connecticut or federal courts or by a declaratory ruling, ruling, Special Notice, Policy Statement, Informational Publication, Announcement, or tax return instructions issued by DRS;
  • DRS has previously issued a ruling on the same or a similar issue to the taxpayer; and
  • The facts presented in the ruling request are true, correct, and complete.

: A corporate officer who has legal authority to bind the taxpayer; a person designated by the board of directors or other governing body of the corporation; an officer or employee of the corporation upon written request signed by a principal officer of the corporation and attested by the secretary or other officer of the corporation; or a person who is authorized to receive or inspect the corporation’s return or return information under I.R.C. §6103(e)(1)(D). A member of the partnership or limited liability company during any part of the taxable period or periods to which the pertains. : A fiduciary of the trust or estate.

WHERE TO SEND A RULING REQUEST: Ruling requests should be mailed electronically to legal.division@po.state.ct.us whenever possible. In addition, a copy of all required documents must be mailed to the Department of Revenue Services, 25 Sigourney Street, Hartford, Connecticut 06106; Attention: Legal Division.

PROCESSING REQUESTS: DRS will acknowledge its receipt of a ruling request. If a request does not fully comply with the requirements set out in this policy statement, DRS will indicate by letter the requirements that have not been complied with. The person making the ruling request has 30 days from the date of the letter to complete the ruling request.

Rulings will be issued within 120 days of receipt of a properly completed ruling request. The Legal Division may extend the 120-day period, in which case the person requesting the ruling will be notified of the extension and the reason for the extension. Any modification of the ruling request restarts the 120-day period within which the ruling will be issued.

BINDING EFFECT OF RULINGS: Except as discussed in this document and until a ruling is changed, a ruling represents the position of, and is binding on, DRS for: (1) a particular transaction (and subsequent like transactions) involving the persons identified as interested parties in the request for the ruling; and (2) other transactions involving persons other than those identified as interested parties in the request for the ruling. The other persons have the burden of establishing that the facts and circumstances involved in their transactions are substantially the same and are not materially different from the facts and circumstances involved in the transaction on which the ruling is based.

For the taxpayer to which a ruling was originally issued or a person identified as an interested party in the request, a ruling is not binding on DRS if:

• There has been a misstatement or omission of material facts;
• The facts later developed are materially different from the facts on which the ruling was based;
• The applicable law or regulations have changed;
• A Connecticut or federal court has issued a decision on point;
• DRS has issued a declaratory ruling, ruling, administrative pronouncement, or return instruction on point; or
• The ruling originally was issued for a consummated transaction occurring in a taxable period for which a tax return had been filed.

For any other person, a ruling is not binding on DRS if the facts and circumstances involved in the other person's transactions are not substantially the same or are materially different from the facts and circumstances involved in the transaction on which a ruling is based.

EFFECT OF A NEW RULING, DECLARATORY RULING OR ADMINISTRATIVE PRONOUNCEMENT ON PREVIOUSLY ISSUED RULINGS:

A ruling or declaratory ruling found to be partially or wholly erroneous, incomplete, unclear, obsolete, or otherwise not in accord with current DRS policy may be amplified, clarified, distinguished, modified, obsoleted, revoked, superseded, supplemented, or suspended. When a newly issued ruling, declaratory ruling or administrative pronouncement expressly affects a previously issued ruling or declaratory ruling, it is DRS policy to give effect prospectively only to the newly issued ruling or declaratory ruling, whether or not the newly issued ruling, declaratory ruling or administrative pronouncement has an adverse tax consequence for taxpayers, to ensure similar treatment of all similarly situated taxpayers. A previously issued ruling or declaratory ruling that is affected by a newly issued ruling, declaratory ruling or administrative pronouncement affords no protection for like transactions occurring after the date a newly issued ruling, declaratory ruling or administrative pronouncement is issued.

A previously issued ruling or declaratory ruling may be:

Where no change is being made in a position taken by a previously issued ruling, but the position is being extended to apply to a variation of the fact situation set forth by a newly issued ruling or administrative pronouncement, the previously issued ruling has been amplified. Thus, if a previously issued ruling held that a principle applied to A, and the newly issued ruling holds that the same principle also applies to B, the previously issued ruling is amplified. (Compare with "modified," below.) Where language in a previously issued ruling is being made clear by a newly issued ruling or administrative pronouncement because the language has caused, or may cause, some confusion, the previously issued ruling has been clarified. The term "clarified" is not used where a position in a previously issued ruling is being changed. Where a newly issued ruling or administrative pronouncement mentions a previously issued ruling to point out an essential difference between them, the previously issued ruling has been distinguished. Where the substance of a previously issued ruling is being changed in part and is continued without change in part by a newly issued ruling or administrative pronouncement, the previously issued ruling has been modified. Thus, if a previously issued ruling held that a principle applied to A but not to B, and the newly issued ruling or administrative pronouncement holds that the principle applies to both A and B, the previously issued ruling is being modified by the newly issued ruling because the newly issued ruling or administrative pronouncement changes in part, and continues without change in part, the substance of a previously issued ruling. (Compare with "amplified," "clarified," and "revoked.") Where a previously issued ruling is not considered determinative for future transactions, frequently because of changes in the underlying law or because a position taken in the ruling has been incorporated in a subsequently promulgated regulation or administrative pronouncement, the previously issued ruling has been obsoleted. Where the substance of a previously issued ruling is wholly changed and no part of the ruling is continued without change in a newly issued ruling or administrative pronouncement, the previously issued ruling has been revoked. Where the newly issued ruling or administrative pronouncement does nothing more than restate the substance of a previously issued ruling, the previously issued ruling has been superseded. If the newly issued ruling or administrative pronouncement does more than restate the substance of a previously issued ruling, a combination of terms is used. For example, where the substance of a previously issued ruling is being changed in part and is continued without change in part but the valid portion is being restated in a newly issued ruling or administrative pronouncement that is self-contained, the previously issued ruling has been "modified and superseded." Where a previously issued ruling publishes a list, such as a list of the names of countries, and that list is expanded by adding more names in a newly issued ruling or administrative pronouncement, the previously issued ruling has been supplemented. Ultimately, a newly issued ruling or administrative pronouncement may supersede the previously issued ruling and those that supplement it. Where the position taken in a previously issued ruling will not be applied pending some further action, such as the issuance of new or amended regulations or the outcome of cases in litigation, the previously issued ruling has been suspended.

CONSEQUENCE OF AN ADVERSE RULING: A taxpayer to which an adverse ruling is issued is not considered to be aggrieved, as the term is used in pertinent sections of the Connecticut General Statutes. In contrast, a taxpayer to which an adverse declaratory ruling is issued may, as provided in the Uniform Administrative Procedure Act, begin an action for declaratory judgment in the Superior Court.

WITHDRAWAL OF REQUESTS: A taxpayer may withdraw a ruling request at any time before the ruling is issued. DRS keeps all correspondence and documents and may consider them in any subsequent audit examination of the taxpayer.

DISCLOSURE OF RULINGS: A taxpayer that makes a ruling request must do so on the basis that the ruling will be open to public inspection, subject to the deletions described below. A taxpayer that makes a ruling request waives all copyrights, rights to privacy, and similar rights to prevent disclosure of the text of the request, except those rights provided in this Policy Statement.

Before making any ruling available for public inspection, DRS exercises care to ensure the deletion of: (1) the names, addresses, and tax registration numbers of the taxpayer to whom the ruling pertains, and (2) information for which an adequate statutory or other basis for exemption from disclosure is established. DRS treats this information as return information, as defined in Conn. Gen. Stat. §12-15(h)(2), Disclosure of return information is prohibited by Conn. Gen. Stat. §12-15(a).

EFFECTIVE DATE OF RULINGS: Except as otherwise provided in this Policy Statement, and unless otherwise stated in the ruling, a ruling generally has retroactive effect because it interprets existing law.

EFFECT ON OTHER DOCUMENTS: Policy Statement 91(6.2) is modified and superseded and may not be relied upon on or after the date of issuance of this document.

EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth a current DRS position, policy or practice affecting the tax liability of taxpayers.

FOR FURTHER INFORMATION: Please call DRS during business hours, Monday through Friday:

• 1-800-382-9463 (toll-free within Connecticut), or
• 860-297-5962 (from anywhere)

TTY, TDD, and Text Telephone users only may transmit inquiries 24 hours a day by calling 860-297-4911.

FORMS AND PUBLICATIONS: Forms and publications are available all day, seven days a week:

• Internet: Preview and download forms and publications from the DRS Web site.
• Telephone: Call 860-297-4753 (from anywhere), or 1-800-382-9463 (toll-free within Connecticut) and select Option 2 from a touch-tone phone.

PS 2000(7)
Miscellaneous
Request for Rulings
Issued: 12/15/2000