Like a Private Letter Ruling (PLR), a Technical Advice Memorandum (TAM) is the IRS’ written interpretation of a tax law as it relates to the specific circumstances of a specific taxpayer. However, a TAM differs from a PLR in three important respects:
- It may only be requested by an IRS Division Commissioner or Appeals Area Director
- It is typically sought during an audit or other proceeding
- It seeks advice regarding an action completed in the past (whereas a Private Letter Ruling seeks advice regarding a proposed, future transaction)
A TAM is generally requested when a taxpayer or their representative claims that a proposed action by the IRS is not supported by statute, regulation or published IRS guidance. When issued, the TAM is the IRS’ final determination with respect to the issue at hand.
Contents of a Technical Advice Memorandum
A TAM is prepared by the IRS Associate Chief Counsel’s office. It reads like a judicial opinion and consists of:
- A restatement of the facts of the case;
- The case’s administrative history;
- A discussion of legal precedent, including how recent court decisions or other changes in the law have affected the issue;
- An analysis of the matter; and
- The recommended position to be taken by the IRS.
When published, all private information regarding the taxpayer is redacted.
IRS procedural requirements for Private Letter Rulings and Technical Advice Memoranda can be found in Internal Revenue Manual 126.96.36.199.10. These types of requests are usually given priority by the IRS and are processed within 60 calendar days of receipt (provided that both the taxpayer and the IRS quickly provide all of the necessary information). They are published on the IRS website and through commercial publishers.