PS 91(6.2)

Procedures in Handling Requests for Issuance of Rulings
This publication has been superseded by PS 2000(7)

PURPOSE: The purpose of this Policy Statement is to describe the current procedures with which a taxpayer or authorized representative must comply in requesting the issuance of a ruling and the current procedures that the Department of Revenue Services follows in issuing rulings. This Policy Statement revises the procedures that were described in Policy Statement 91(6.1).

WHAT DOCUMENTS ARE RULINGS: Although three types of documents (rulings, declaratory rulings and general information letters) are referred to colloquially as rulings, the Department considers only declaratory rulings and rulings to be "rulings."

Rulings: Based on a taxpayer's request, a ruling interprets Connecticut tax laws and regulations and applies them to a specific set of facts. It has precedential value and may be relied on generally 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 Information Letters: While not a 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 only general information is requested, or where the request does not meet all the requirements of "WHAT A RULING REQUEST MUST CONTAIN," below, and it is believed that general information will be of assistance.

The responsibility for handling requests for issuance of declaratory rulings and rulings has been assigned to the Director of the Legal Division.

WHEN A RULING WILL BE ISSUED: A ruling generally will be issued only with respect to prospective transactions. If a transaction has been consummated, a 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 ruling attached thereto, to the Director of the Audit Division.

WHEN A RULING WILL NOT BE ISSUED: A ruling will not be issued:

• 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;
• in response to inquiries concerning alternative plans of proposed transactions or concerning hypothetical situations;
• where the problem involved is inherently factual in nature;
• on only part of an integrated transaction;
• where reasonably thorough research would reveal that the issue is clearly and adequately addressed by a statute, regulation, decision of the Connecticut or federal courts, declaratory ruling, ruling, Special Notice, Policy Statement, Informational Publications, Announcements, or tax return instructions that have been issued by the Department;
• where the ruling is being requested by a business, or where a tax practitioner (e.g., a certified public accountant, public accountant, enrolled agent, or attorney) is requesting the ruling on behalf of a client (irrespective of whether the client is a business), and no analysis and conclusion have been provided as required by "WHAT A RULING REQUEST MUST CONTAIN," below;
• where other forms of written determination are deemed more appropriate; or
• wherever the Department, in its discretion, deems it inadvisable.

If, prior to the issuance of a ruling, a taxpayer is notified of a pending audit examination by the Department, the taxpayer must agree to notify the Legal Division and the revenue examiner at once of the pending request for issuance of such ruling.

WHAT A RULING REQUEST MUST CONTAIN: Each ruling request must be submitted in the form prescribed below. A properly completed ruling request contains (1) a Statement of Facts, (2) an Issue Statement, (3) an Analysis (in the case of requests by businesses or tax professionals) (4) a Document List (5) a Document Appendix, and (6) a properly completed Form LGL-006 (Request for Issuance of Ruling (Rev. 8/94)).

The Statement of Facts must contain all relevant facts relating to the transaction. Such facts include names, addresses, taxpayer registration numbers, and employer identification or social security numbers of all interested parties; a full and precise statement of the business reasons for the transaction; and a carefully detailed description of the transaction. Relevant facts reflected in the documents submitted (see below) must be included in the description of the transaction and not merely incorporated by reference.

The Issue Statement must contain a precise statement of the issue or issues sought to be resolved.

The Analysis for ruling requests made by businesses or by tax practitioners on behalf of a client, must contain a statement of law, an analysis of the law as applied to the issue, and a conclusion.

The statement of law must contain a detailed and complete statement of relevant law, including a discussion of the implications of any relevant legislation, court decisions, regulations, declaratory rulings, rulings, Special Notices, Policy Statements, Informational Publications or Announcements, that the taxpayer finds to be either in accord with or contrary to the position advanced. If the taxpayer determines that there are no contrary authorities, a statement to that effect must be made.

The analysis must contain a detailed and complete analysis of the bearing of the relevant facts and legal authorities upon the issue or issues sought to be resolved. The analysis must also contain a conclusion as to the taxpayer's views of the proper tax results of the transaction, including any relevant authority for such views.

The Document List must contain a list of all documents that are submitted with the ruling request.

Document Appendix: A true copy of all relevant documents, such as contracts, wills, deeds, agreements, instruments, etc., must be attached to the ruling request. Original documents should not be submitted because they become a part of the Department's file and will not be returned.

Form LGL-006: A properly completed Form LGL-006 must accompany the ruling request. A properly completed Form LGL-006 is signed by the taxpayer and contains a declaration, under penalties of false statement, stating, to the best of the knowledge or belief of the taxpayer:

• whether the request involves an issue identical to one (1) being considered by the Department in connection with an audit examination of such taxpayer, (2) being appealed to the Appellate Division of the Department by such taxpayer, (3) being litigated in the Connecticut courts by such taxpayer, or (4) being considered by the Department in connection with a claim for refund being made by such taxpayer;
• whether such taxpayer has been notified concerning a pending audit examination by the Department;
• whether such taxpayer has previously been issued a ruling on the same or a similar issue by the Department;
• whether 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, ruling, Special Notice, Policy Statement, or tax return instructions that have been issued by the Department; and
• whether the facts presented in the ruling request 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.

WHERE TO SEND A RULING REQUEST:All required documents must be sent to the Department of Revenue Services, 25 Sigourney St., Hartford, Connecticut 06106; Attention: Legal Division.

PROCESSING OF REQUESTS: The Department will acknowledge its receipt of a request for 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 by letter. The person requesting the ruling will have 30 days from the date of such letter to complete the ruling request.

Rulings will be mailed within 120 days of receipt of a properly completed ruling request. This 120-day period may be extended by the Legal Division, in which case the person requesting the ruling will be notified of the extension and the reason therefore. Any modification of the ruling request will begin anew the 120-day period within which the ruling will be issued.

BINDING EFFECT OF RULINGS: Except as discussed herein and until such time as a ruling is changed, as discussed in "NEWLY ISSUED RULINGS AFFECTING PREVIOUSLY ISSUED RULINGS," below, a ruling represents the position of, and is binding on, the Department with respect to (1) a particular transaction (and subsequent like transactions) involving the persons identified as interested parties in the request for issuance of the ruling and (2) other transactions involving persons other than those identified as interested parties in the request for issuance of the 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 ruling is based.

With respect to the taxpayer to which a ruling was originally issued or a person identified as an interested party in the request therefore, a ruling is not binding on the Department if:

• there has been a misstatement or omission of material facts,
• the facts subsequently developed are materially different from the facts on which the ruling was based,
• there has been a change in the applicable law or regulations,
• a decision on point has been issued by the Connecticut or federal courts,
• a declaratory ruling, ruling, Special Notice, Policy Statement or Announcement on point has been issued by the Department, or
• the ruling originally was issued with respect to a consummated transaction occurring in a tax period for which a tax return had been filed.

With respect to any other person, a ruling is not binding on the Department if the facts and circumstances involved in such other person's transactions are not substantially the same or are materially different from the facts and circumstances involved in the transaction on which a ruling is based, or if there has been:

• a change in the applicable law or regulations;
• a decision on point by the Connecticut or federal courts; or
• a declaratory ruling, ruling, Special Notice, Policy Statement or Announcement on point issued by the Department.

NEWLY ISSUED RULINGS AFFECTING PREVIOUSLY ISSUED RULINGS: A declaratory ruling or ruling found to be partially or wholly erroneous, incomplete, unclear, obsolete or otherwise not in accord with the current policy of the Department may be amplified, clarified, distinguished, modified, obsoleted, revoked, superseded, supplemented or suspended. When a declaratory ruling or ruling is issued that expressly so affects a previously issued declaratory ruling or ruling, it is the policy of the Department to give effect prospectively only to the newly issued declaratory ruling or ruling, whether or not the newly issued declaratory ruling or ruling has an adverse tax consequence for taxpayers, in order to ensure similar treatment of all similarly situated taxpayers. A previously issued declaratory ruling or ruling that is so affected by a newly issued declaratory ruling or ruling will afford no protection with respect to like transactions occurring after the date of issuance of a newly issued declaratory ruling or ruling.

Amplified. Where no change is being made in a position taken by a previously issued ruling, but the position is being extended to apply to a variation of the fact situation set forth therein by a newly issued ruling, the previously issued ruling is said to have been amplified. Thus, if a previously issued ruling held that a principle applied to A, and the newly issued ruling holds that the same principle also applies to B, the previously issued ruling is amplified. (Compare with "modified," below.)

Clarified. Where language in a previously issued ruling is being made clear by a newly issued ruling because the language has caused, or may cause, some confusion, the previously issued ruling is said to have been clarified. The term "clarified" is not used where a position in a previously issued ruling is being changed.

Distinguished. Where a newly issued ruling mentions a previously issued ruling in order to point out an essential difference between them, the previously issued ruling is said to have been distinguished.

Modified. Where the substance of a previously issued ruling is being changed in part and is continued without change in part by a newly issued ruling, the previously issued ruling is said to have been modified. Thus, if a previously issued ruling held that a principle applied to A but not to B, and the newly issued ruling holds that the principle applies to both A and B, the previously issued ruling is being modified by the newly issued ruling because the newly issued ruling changes in part, and continues without change in part, the substance of a previously issued ruling. (Compare with "amplified," "clarified," and "revoked.")

Obsoleted. Where a previously issued ruling is not considered determinative with respect to future transactions, frequently because of changes in the underlying law or because a position taken in the ruling has been incorporated in a subsequently promulgated regulation, the previously issued ruling is said to have been obsoleted.

Revoked. Where the substance of a previously issued ruling is wholly changed and no part thereof is continued without change in a newly issued ruling, the previously issued ruling is said to have been revoked.

Superseded. Where the newly issued ruling does nothing more than restate the substance of a previously issued ruling or rulings, the previously issued ruling or rulings are said to have been superseded. If the newly issued ruling does more than restate the substance of a previously issued ruling, a combination of terms is used. For example, where the substance of a previously issued ruling is being changed in part and is continued without change in part but the valid portion is being restated in a newly issued ruling that is self-contained, the previously issued ruling is said to have been "modified and superseded."

Supplemented. Where a list, such as a list of the names of countries, is published in a previously issued ruling and that list is expanded by adding more names in a newly issued ruling, the previously issued ruling is said to have been supplemented. Ultimately, the previously issued ruling and those that supplement it may be superseded by a newly issued ruling.

Suspended. Where the position taken in a previously issued ruling will not be applied pending some further action, such as the issuance of new or amended regulations or the outcome of cases in litigation, the previously issued ruling is said to have been suspended.

CONSEQUENCE OF AN ADVERSE RULING: A taxpayer to whom an adverse 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.

WITHDRAWAL OF REQUESTS: A taxpayer may withdraw a request for issuance of a 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.

DISCLOSURE OF RULINGS: Taxpayers requesting the issuance of rulings must do so on the basis that the text thereof will be open to public inspection, subject to the deletions set forth herein. Taxpayers requesting the issuance of rulings waive all copyrights, rights to privacy and similar rights to prevent disclosure of the text thereof, except such rights as are provided herein.

Before making any 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 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. (section symbol)12-15(a).

EFFECTIVE DATE OF RULINGS: Except as otherwise provided in "NEWLY ISSUED RULINGS AFFECTING PREVIOUSLY ISSUED RULINGS" (see above), and unless otherwise stated in the ruling, a ruling generally has retroactive effect because it interprets existing law.

EFFECT ON OTHER DOCUMENTS: Policy Statement 91(6.1) is modified and superseded and may not be relied upon on or after the date of issuance of this document.

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.

Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web site. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.

PS 91(6.2)
Issued: 8/22/94

SAMPLE FORMAT FOR RULING REQUEST

Date

Name of Taxpayer or Tax Practitioner Requesting Ruling

Firm, if appropriate

Address

Department of Revenue Services
Legal Division
25 Sigourney St.
Hartford, CT 06106

Dear Madam or Sir:

[Name of the taxpayer] (the Taxpayer) requests a ruling on the proper treatment of [subject matter] under Conn. Gen. Stat. § [number].

A. STATEMENT OF FACTS

1. Taxpayer Information

[Name, taxpayer registration number, employer identification or social security numbers, for example.]

2. Detailed Description of the Transaction

[The ruling request must include a detailed description of the transaction, including material facts in any accompanying documents, and the business reasons for the transaction.]

B. ISSUE STATEMENT

[The ruling request must contain a concise statement of the issue or issues sought to be resolved.]

C. ANALYSIS

1. Statement of Law

[The ruling request must contain a statement of the law in support of the taxpayer's view or conclusion, including any authorities believed to be contrary to the position advanced in the ruling request.]

2. Analysis

[The ruling request must analyze the application of the relevant legal authorities to the facts.]

3. Conclusion

[The ruling request should contain a statement of the taxpayer's conclusion and the basis therefore.]

Sincerely,

Name of Taxpayer or Tax Practitioner Requesting Ruling
Title
Telephone Number
Fax Number, if any

ATTACHMENTS TO RULING REQUEST

D. DOCUMENT LIST

[Attached to the ruling request should be a list of all documents submitted with the ruling request.]

E. DOCUMENT APPENDIX

[A true copy of all relevant documents, such as contracts, wills, deeds, agreements, instruments, etc., must be attached to the ruling request. Original documents should not be submitted, because they become a part of the Department's file and will not be returned.]

F. FORM LGL-006

[A properly completed Form LGL-006 must be attached to the ruling request.]