| (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 §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 §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 §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
Cont'd... |
