This Policy Statement has been superseded by PS 91(6.1)
Procedures in Handling Requests for
Issuance of Letter Rulings
The purpose of this Policy Statement is to describe the procedures with which a taxpayer or authorized representative must comply in requesting the issuance of a Letter Ruling and the procedures that the Department of Revenue Services follows in issuing Letter Rulings.
II. What documents are rulings.
Three types of documents (Letter Rulings, Declaratory Rulings and General Information Letters) are colloquially referred to as rulings. Only Declaratory Rulings and Letter Rulings are considered by the Department to be rulings.
Letter Rulings: Based on a taxpayer's request, a Letter Ruling interprets Connecticut tax laws and regulations and applies them to a specific set of facts. It has precedential value and may be generally relied on by all persons with respect to 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 Informational Letters: While not a Letter 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 general information only is requested, or where the request does not meet all the requirements of paragraph IV, infra, and it is believed that general information will be of assistance.
The responsibility for the issuance of Declaratory Rulings and Letter Rulings has been delegated to the Director of the Legal Division.
III. Whether a Letter Ruling will be issued.
A. A Letter Ruling will generally be issued only with respect to prospective transactions. If a transaction has been consummated, a Letter Ruling will be issued only if the taxpayer's tax return for the tax period in which the transaction was consummated has not been filed and the taxpayer agrees to send a copy of the tax return, with such Letter Ruling attached thereto, to the Director, Audit Division.
B. A Letter Ruling will not be issued (1) if the same or a similar issue is before the Department in connection with an audit examination of the same taxpayer for the same or any other prior tax period; (2) in response to inquiries concerning alternative plans of proposed transactions or concerning hypothetical situations; (3) where the problem involved is of an inherently factual in nature; (4) where other forms of written determination are deemed more appropriate; (5) on only part of an integrated transaction; (6) where the issue is clearly and adequately addressed by a statute, regulation or decision of the Connecticut or federal courts or by a Declaratory Ruling, Letter Ruling, special notice, policy statement that has been issued by the Department or (7) wherever the Department, in its sole discretion, deems it inadvisable.
C. If, prior to the issuance of a Letter Ruling, a taxpayer is notified of a pending audit examination by the Department, the taxpayer must agree to notify the Legal Division forthwith and to notify the revenue examiner forthwith of the pending request for issuance of such Ruling.
IV. What a request must contain.
A. Each request must contain a complete statement of all relevant facts relating to the transaction. Such facts include (1) names, addresses, taxpayer registration numbers, and employer identification or social security numbers of all interested parties; (2) a full and precise statement of the business reasons for the transaction; and (3) a carefully detailed description of the transaction. A true copy of all relevant documents, such as contracts, wills, deed, agreements, instruments, etc. must be submitted as part of the request. Original documents should be submitted, because they become a part of the Department's file and will not be returned. Relevant facts reflected in the submitted documents must be included in the description of the transaction (and not merely incorporated by reference) and must be accompanied by an analysis of their bearing on the issue or issues, with pertinent provisions specified.
B. The request must be accompanied by a Form LGL-006 (Request for Issuance of Letter Ruling) which is signed by the taxpayer and which contains a declaration, under penalties of false statement, whether, to the best of the knowledge or belief of the taxpayer, (1) the request involves an issue identical to one (i) being considered by the Department in connection with an audit examination of such taxpayer or (ii) being appealed to the Appellate Division of the Department by such taxpayer or (iii) being litigated in the Connecticut courts by such taxpayer; (2) such taxpayer has been notified concerning a pending audit examination by the Department; (3) such taxpayer has previously been issued a Letter Ruling on the same or a similar issue by the Department; (4) the request involves an issue that is not clearly and adequately addressed by a statute, regulation or decision of the Connecticut or federal courts or by a Declaratory Ruling, Letter Ruling, special notice or policy statement that has been issued by the Department and (5) the facts presented in support of the requested Letter Ruling are true, correct and complete.
The individual who must sign the Form LGL-006 for a taxpayer that is a corporation, trust or partnership must be a corporate officer, trustee or general partner, respectively, who has personal knowledge of the facts.
V. What a request should contain.
Wherever possible, the request should include a statement of the taxpayer's views as to the tax results of the transaction, including any relevant authority for such views, and a statement of the Letter Ruling requested. In addition, the request should discuss the implications of any legislation, court decisions, regulations, Declaratory Rulings, Letter Rulings, special notices or policy statements that the taxpayer determines to be contrary to the position advanced. If the taxpayer determines that there are no contrary authorities, a statement to that effect should be made.
VI. Where a request is to be sent.
Form LGL-006 and all accompanying documents must be addressed to the Department of Revenue Services, 25 Sigourney Street, Hartford, Connecticut 06106; Attention: Legal Division, Rulings Unit.
VII. Processing of requests.
The Department will acknowledge its receipt of a request for Letter Ruling. If a request does not fully comply with the requirements set out in this document, the requirements that have not been complied with will be indicated.
VIII. Reliance on Letter Rulings.
If there has been no enactment of legislation, promulgation of a regulation or decision by the Connecticut or federal courts and no issuance of a Declaratory Ruling, Letter Ruling, special notice or policy statement by the Department impliedly revoking or modifying a Letter Ruling, then a Letter Ruling, until revoked or modified by the Department, represents the position of, and is binding on, the Department with respect to (1) a particular transaction (and on subsequent like transactions) involving the persons identified as interested parties in the request for issuance of the Letter Ruling and (2) other transactions involving persons other than those identified as interested parties in the request for issuance of the Letter Ruling, but such 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 Letter Ruling is based.
IX. Revocation or modification of Letter Rulings.
A. A Letter Ruling found to be in error or not in accord with the current policy of the Department may be revoked or modified. If revoked or modified, a Letter Ruling will afford no protection with respect to like transactions occurring after notice of revocation or modification of the Letter Ruling is given. Notice of revocation or modification is generally given in an Announcement.
B. With respect to the taxpayer to which the Letter Ruling was originally issued or a person identified as an interested party in the request therefore, the revocation or modification of a Letter Ruling will not be applied retroactively if (1) there has been no misstatement or omission of material facts, (2) the facts subsequently developed are not materially different from the facts on which the Letter Ruling was based , (3) there has been no change in the applicable law or regulations, no decision on point by the Connecticut or federal courts, and no issuance of an applicable Declaratory Ruling, Letter Ruling, special notice or policy statement by the Department, (4) the Letter Ruling was originally issued with respect to a prospective transaction and (5) there was good faith reliance upon the Letter Ruling and the retroactive revocation or modification would be detrimental.
C. With respect to any other person, the revocation or modification of a Letter Ruling will not be applied retroactively if (1) there has been no change in the applicable law or regulations, no decision on point by the Connecticut or federal courts, and no issuance of an applicable Declaratory Ruling, Letter Ruling, special notice or policy statement by the Department, and (2) such person acted in good faith reliance on the Letter Ruling and the retroaction or modification would be to the detriment of that person.
X. Consequence of an adverse Letter Ruling.
A taxpayer to whom an adverse Letter 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 whom an adverse Declaratory Ruling is issued may, as provided in the Uniform Administrative Procedure Act, commence an action for declaratory judgment in the superior court.
XI. Withdrawal of requests.
A taxpayer may withdraw a request for issuance of a Letter Ruling at any time prior to the issuance thereof. The Department will retain all correspondence and documents and may consider them in any subsequent audit examination of such taxpayer.
XII. Disclosure of Letter Rulings.
A. Taxpayers requesting the issuance of Letter Rulings must do so on the basis that the text thereof will be open to public inspection, subject to the deletions set forth under this paragraph. Taxpayers requesting the issuance of Letter Rulings waive all copyrights, rights to privacy and similar rights to prevent disclosure of the text thereof, except such rights as are provided in paragraph XII (B).
B. Before making any Letter Ruling available for public inspection, the Department shall exercise care to ensure the deletion of (1) the names, addresses and tax registration numbers of the taxpayer to whom the Letter Ruling pertains, and (2) information for which an adequate statutory or other basis for exemption from disclosure is established. It is the policy of the Department to treat information deleted hereunder as return information, as defined in Conn. Gen. Stat. §12-15(d)(2), the disclosure of which is prohibited by Conn. Gen. Stat. §12-15(a).
EFFECT ON OTHER DOCUMENTS: No documents are affected.
PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.
FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.
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