New Schedule for User Fees Announced

WASHINGTON - The Internal Revenue Service today announced a new schedule of user fees for requests for private letter rulings and determination letters. Although some of the fees have been lowered, many of them are higher than the current ones.

The new fees are generally effective for ruling requests made after March 31, 1990. The fee increase for opinion and determination letter requests in the Employee Plans and Exempt Organizations areas have generally been delayed until Oct. 1, 1990.

The IRS began charging fees for rulings in 1988, as required by the Revenue Act of 1987. Under that law, user fees must take into account the average time for complying with ruling requests and the difficulty of the subject matter of the requests. The law also allows the IRS to establish exceptions and reduced fees in appropriate cases.

The fees announced today result from reviews the IRS conducted in 1989 of the direct and indirect costs and the time involved in preparing rulings and determination letters. The reviews showed that most of the existing user fees, which were published in Revenue Procedure 89-4, did not accurately reflect the complexity of the tax issues and the time required to answer the requests and that they should be raised. The IRS noted, however, that fees for certain categories of requests have not changed and some have been reduced.

• Under Revenue Procedure 90-17, which was released today, some of the following fees that have increased are:
• $200 for Chief Counsel ruling requests on accounting periods;
• $500 for Chief Counsel ruling requests for changes in accounting method;
• $2,500 for other Chief Counsel ruling requests;
• $1,250 for Employee Plans and Exempt Organizations National Office ruling requests, and
• $3,000 for employee plans submitted by one plan sponsor which will be used by 50 or more employers in the Employee Plans Master and Prototype program.
• Fees for the following categories of requests are unchanged:
• $50 for requests from retirees for calculating the tax treatment of retirement annuity payments, and
• $150 for determination letter requests from small exempt organizations.
• Fees for the following categories of requests were reduced:
• $375 for determination letter requests for certain employee plan terminations, reduced from $450, and
• $500 for certain opinion letter requests from sponsors of Individual Retirement Arrangements in the Employee Plans Master and Prototype program, reduced from $1,000.

The IRS said that lower fees apply for some ruling requests on behalf of taxpayers and exempt organizations with income or assets below certain dollar amounts. For example, a lower fee for a ruling request for an individual whose total income reported on a return is less than $150,000 will be $500 rather than $2,500.

As in the past, no fee will be charged for requests for general information letters on tax issues. A general information letter issued to a taxpayer sets forth principles of tax law without applying the tax law to the taxpayer's specific factual situation. The IRS also reminded retirees that they can avoid the fee for a request for calculating the tax treatment of retirement annuity payments by using a special simplified method explained in Publication 575, "Pension and Annuity Income," and Publication 721, "Comprehensive Tax Guide to U. S. Civil Service Retirement Benefits." Both publications can be ordered by calling the IRS toll-free at 1-800-424-3676.

Revenue Procedure 90-17, containing the new user fees, will be published in Internal Revenue Bulletin 1990-12 on March 19, 1990.

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