201301647R [Tax Type: General] [Document Type: Rule]

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Texas Comptroller of Public Accounts STAR System


201301647R
    




STATE OF TEXAS
COMPTROLLER OF PUBLIC ACCOUNTS

GENERAL RULES


Section 3.1  Private Letter Rulings and General Information Letters

(a)   Definitions.  The following terms, when used in this section, shall have 
the following meanings, unless the context clearly indicates otherwise.

(1)   General information letter--Information provided by the comptroller in 
response to any written inquiry about the taxability of an item or transaction, 
including a request for a private letter ruling that does not comply with the 
requirements necessary to request a private letter ruling.  

(2)   Private letter ruling--The comptroller's written determination on the 
application of relevant tax laws, rules, and policies to a specific set of 
facts submitted in a properly completed private letter ruling request.

(3)   Related person--A person, corporation, or other legal entity, including 
an entity that is treated as a pass-through or disregarded entity for purposes 
of federal taxation, in which one person, corporation, or entity, or set of 
related persons, corporations, or entities, directly or indirectly owns or 
controls a greater than 50% interest in another entity.  

(b)   General information letters.  

(1)   General information letters are advisory in nature and are not binding on 
the comptroller for purposes of detrimental reliance under sec. 3.10 of this 
title (relating to Taxpayer Bill of Rights).  

(2)   The comptroller will respond to a request for a general information 
letter by issuing a general information letter, by requesting additional 
information necessary to complete the general information letter, by directing 
the requestor to the relevant authorities such as agency rules, or by 
communicating that the comptroller declines to issue a response.

(c)   Private letter rulings.

(1)   A request for a private letter ruling must be in writing, must be clearly 
identified as such, and must contain:

(A)   identifying information for the person or entity to which the ruling 
request relates, to include the name, address, Texas taxpayer and federal 
employer identification numbers, and state of formation, as applicable.  The 
reporting entity of a combined group may request a private letter ruling 
related to franchise tax reporting on behalf of a combined group by including 
identification information for each member of the combined group that seeks to 
rely on the ruling and including identifying information for each member of the 
combined group that is a party to any transactions described in the ruling 
request. The signature of the person making the request; the signature of an 
authorized representative of the person making the request; or the signature of 
any third party authorized to represent the person before the comptroller, 
accompanied by a power of attorney, must also be included.  If a private letter 
ruling request does not contain the required identifying information, signature 
of the person making the request, signature of an authorized representative of 
the person making the request or a power of attorney if the request is 
submitted by a third party authorized to represent the taxpayer, the 
comptroller will still consider the request for a possible ruling; however, no 
detrimental reliance will be provided under sec. 3.10 of this title unless the 
identity of the person or entity to which the ruling request relates is 
revealed.  If the identity of the person or entity is revealed during the 
comptroller's review of the request, the comptroller may take any actions 
necessary to ensure that accurate taxability information is provided;

(B)   a detailed statement of all relevant facts relating to the request;

(C)   a true and correct copy of all relevant documents relating to the 
request.  Relevant facts in documents should be detailed in the request and not 
merely incorporated by reference in the detailed statement;

(D)   a statement disclosing whether or not the issue is under consideration by 
the comptroller in connection with an audit examination of any type, a refund 
request, a voluntary disclosure agreement, an administrative hearing, or 
litigation for the person or entity to which the ruling request relates or for 
a related person;

(E)   a statement disclosing whether or not a request on the same or a similar 
issue has been or will be submitted to a taxing jurisdiction of another state;

(F)   a statement of the private letter ruling requested from the comptroller;

(G)   a statement of authorities supporting the requested ruling, an 
explanation of the grounds for the ruling and the relevant authorities to 
support the ruling; and

(H)   a statement of authorities contrary to the requested ruling.  Each person 
is under an affirmative duty to identify any and all authorities contrary to 
the requested ruling.  If the requestor determines that there are no contrary 
authorities, or is unable to locate such authority, the request must include a 
statement that the requestor has identified all relevant authorities to the 
best of the requestor's knowledge.

(2)   The comptroller may request any additional information needed to issue a 
private letter ruling, including required information that was not provided in 
the original request.  The comptroller will not issue a private letter ruling 
if the requested information is not provided.  

(3)   The comptroller will not issue a private letter ruling if the request 
relates to the same or similar issue that is before the comptroller in the 
following actions or proceedings for the same person or a related person and 
for the same or any prior tax period:

(A)   an audit examination of any type;

(B)   a refund request;

(C)   a voluntary disclosure agreement;

(D)   an administrative hearing; or

(E)   litigation.

(4)   The comptroller will promptly acknowledge receipt of all private letter 
rulings. Subject to paragraph (3) of this subsection, the comptroller will 
respond in writing to a request for a private letter ruling by issuing a 
private letter ruling, by issuing a request for additional information, by 
issuing a letter that declines the request for private letter ruling, or by 
issuing a general information letter. As part of the process of evaluating the 
ruling request and determining whether to issue a private letter ruling, the 
comptroller will consider the extent to which the ruling will promote voluntary 
compliance by the greatest number of taxpayers and provide information to other 
persons who have an interest in the subject matter.  

(d)   Binding effect of private letter rulings.

(1)   A person who receives a private letter ruling may rely on it 
prospectively from the date that the private letter ruling is issued and with 
respect only to the particular issue and the person identified in the request 
for the private letter ruling, subject to the exception that, for purposes of 
the franchise tax, a member of a combined group may rely on a private letter 
ruling that is issued to the reporting entity of a combined group to the extent 
that the private letter ruling relates to that member.  Detrimental reliance 
applies to private letter rulings as provided by sec. 3.10 of this title and 
subsection (c)(1)(A) of this section.

(2)   Notwithstanding paragraph (1) of this subsection, a private letter ruling 
is not binding on the comptroller with respect to the person who requested the 
private letter ruling if:

(A)   there has been a misstatement or omission of material facts in the 
request; or

(B)   the facts subsequently developed are materially different from the facts 
on which the private letter ruling was based.

(3)   Notwithstanding paragraph (1) of this subsection, a private letter ruling 
is not binding on the comptroller on a prospective basis if:

(A)   there has been a change in the applicable laws, rules, or comptroller 
hearing decisions that the comptroller determines affects the validity of the 
ruling;

(B)   there has been a final, non-appealable decision issued in a contested 
case or by a Texas or federal court that the comptroller determines affects the 
validity of the ruling; or

(C)   the comptroller has modified or revoked the private letter ruling.

(e)   Modification or revocation of a private letter ruling.  

(1)   The comptroller may modify or revoke a private letter ruling if the 
ruling is found to be in error or not in accordance with laws or current 
comptroller policy or guidelines.  The revocation or modification of a private 
letter ruling shall not be applied retroactively to a person identified in 
subsection (d) of this section, concerning private letter rulings that are 
binding on the comptroller.

(2)   The comptroller will provide written notice by mail, and service by mail 
will be complete when the notice is deposited in a U.S. Post Office.  The 
comptroller will address the notice to the taxpayer or other person at the 
taxpayer's address as it appears in the records of the comptroller.  If there 
are no records of the comptroller for the person making the request or on whose 
behalf the request has been made, the comptroller will rely on the contact 
information provided in the private letter ruling request.  The comptroller is 
under no duty to otherwise notify the requestor of the modification or 
revocation.  

(3)   A ruling that is modified or revoked due to a change in federal or state 
law, a final decision of a court of law, or a change in agency rule is 
effective on the date of the event requiring the modification or revocation.  
If a ruling is modified or revoked due to a change in comptroller policy that 
is not reflected in an agency rule, the ruling is effective until the date of 
the written notice sent to the requestor or person for which the request was 
made.  

(f)   Confidentiality.  Information provided to the comptroller when requesting 
a general information letter or private letter ruling, and any general 
information letter or private letter ruling issued by the comptroller, remain 
confidential to the extent provided by the Public Information Act, Texas 
Government Code Ann., Chapter 552, and controlling interpretations as applied 
to the comptroller by the Attorney General's office and court decisions.  




Effective Date:  January 28, 2013.
Filed with Secretary of State:  January 8, 2013.


SUSAN COMBS
Comptroller of Public Accounts






ACCESSION NUMBER:  201301647R
SUPERSEDED:  N
DOCUMENT TYPE:  R
DATE:  01/28/2013
TAX TYPE:   GENERAL

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