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PLR TAM Comparison | IRS International Tax Lawyer & Attorney

The IRS Private Letter Rulings (“PLR”) and the IRS Technical Advice Memoranda (“TAM”) often get confused by non-practitioners. In this small essay, I will engage in a brief PLR TAM comparison in order to clarify the similarities and differences between both types of IRS administrative guidance.

PLR TAM Comparison: Similarities

Let’s begin our PLR TAM comparison with the similarities. The similarities are great between both types of the IRS administrative guidance; this is why so many taxpayers cannot tell the difference between PLR and TAM. Both, PLR and TAM are written determinations issued by the IRS National Office. Also, PLR and TAM both interpret and apply US tax law to a taxpayer’s specific set of facts. Finally, both PLR and TAM are written IRS determinations which are binding on the IRS only in relation to the taxpayer who requested them.

PLR TAM Comparison: Differences

The differences between PLR & TAM are more nuanced but highly important. The two main differences are: (a) the requesting party and (b) timing of the request.

PLR is requested by a taxpayer; i.e. the IRS issues its opinion to the taxpayer, based on the taxpayer’s pattern of facts and at his request. The request for TAM, however, is made by a district IRS office. Oftentimes, though, the district IRS office makes this request at the urging of a taxpayer to seek technical advice from the IRS National Office.

With respect to the timing of the request, a taxpayer requests a PLR before he files his tax return. The taxpayer wishes to know the IRS position (or he is seeking IRS permission to do something, like a late election) in order to prevent the imposition of IRS penalties by filing an incorrect or late return.

TAM, however, deals with refund claims and examination issues after a tax return has been filed. In fact, oftentimes, a TAM is issued in response to a question concerning a specific set of facts uncovered during an IRS audit.

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