Legal Definitions - ruling letter

A ruling letter is a document issued by the Internal Revenue Service (IRS) in response to a taxpayer's request. It provides an opinion about the tax implications of a particular transaction or situation. For example, a ruling letter may determine whether a nonprofit organization is eligible for tax-exempt status.

The ruling letter is also known as a determination letter.

Here are some examples of situations where a taxpayer may request a ruling letter:

• A business wants to know if a particular expense is tax-deductible
• An individual wants to know if they qualify for a certain tax credit
• A nonprofit organization wants to know if they are eligible for tax-exempt status

The ruling letter provides clarity and certainty for taxpayers, as it outlines the IRS's position on a particular tax issue.