IRS Updates Fast-Track Program for Certain Corporate Tax Rulings
A new program offers rulings in 12 weeks, even absent a showing of business need.
Revenue Procedure 2023-26, issued July 26, 2023, in replacement of a popular 18-month pilot program under Revenue Procedure 2022-10, continues to allow fast-tracking of certain Internal Revenue Service ("IRS") ruling requests solely or primarily under the jurisdiction of the Office of Associate Chief Counsel (Corporate), including eligible rulings on spin-offs, corporate reorganizations, consolidated group issues, and the section 382 loss limitation rules. A taxpayer that does not seek fast-track or other expedited handling of its ruling request can often end up waiting six months or longer for a ruling.
The new fast-track program generally contains the same rules and requirements as the prior program, but clarifies that 12 weeks is the default timeline for a final ruling, and taxpayers will not need to provide business information demonstrating a need for that timing (though they must still provide a general rationale for seeking fast track). Taxpayers can still request a specific period of time other than 12 weeks for processing their requested ruling, and any request for processing in less than 12 weeks will still receive additional scrutiny and require a demonstrated business need.
Ruling requests involving one or more closing agreement issues are no longer eligible for fast track, which will be terminated if such an issue arises, and the ruling request will be processed under the standard procedures. As under the prior program, ruling requests with an application for extension of time to file an election or relief for late filings (section 9100 relief) are also excluded. These types of ruling requests generally are eligible for the traditional expedited handling process.
As under the prior program, taxpayers seeking fast track generally must: (i) seek a
pre-submission conference; (ii) provide a draft ruling and agree to provide additional information requested by the IRS within seven business days of the request; and (iii) follow special procedures in submitting the ruling request. Fast track ultimately is granted at the government's discretion, and neither admission to the program nor any particular timeline is guaranteed.
The new fast-track program does not have a specified end date and will apply to eligible ruling requests postmarked, or received by the IRS, after July 26, 2023.
