New Jersey Division of Taxation Now Issuing Letter Rulings

The New Jersey Division of Taxation recently announced that it will implement new procedures for taxpayers to obtain letter rulings. Similar to letter rulings issued by the Internal Revenue Service with regard to federal tax issues, letter rulings issued by the Division will be limited to the facts set forth in the taxpayer’s request for a letter ruling and be binding on the Division and the taxpayer requesting the ruling. A letter ruling may not be used as precedent by other taxpayers.

While letter rulings will not be issued on an anonymous basis, a taxpayer may initially approach the Division anonymously to seek informal guidance on an issue and later make a formal letter ruling request providing the identity of the taxpayer.

Letter rulings are published by the Division. However, the Division would redact all identifying taxpayer information. Rulings can be found at: http://www.state.nj.us/treasury/taxation/pub_letter_index.shtml

A taxpayer may withdraw a letter ruling request if not satisfied with the conclusion reached by the Division. However, Division representatives have indicated that the Division may publish guidance on issues raised in withdrawn letter ruling requests.

The Division has indicated that it will attempt to respond to letter ruling requests within 30 days of receipt.

A letter ruling request must satisfy the following requirements:
•Identify the request as a “Request for Letter Ruling”
•Identify the taxpayer about whom the request relates
•Provide a contact name and email address for the party requesting the Letter Ruling that the Division may contact for questions regarding the request or for redaction confirmation
•Disclose any ongoing New Jersey tax matter, such as audit, refund or appeal with the Division’s Conferences and Appeals Section. The requesting taxpayer must provide provide the case number or other identifying information of any ongoing matter
•State the issue
•Include all relevant and necessary facts relating to the request

Optionally, the ruling request can cite legal authorities relevant to the request and proivde the taxpayer’s analysis.

The new letter ruling program is a welcome development for taxpayers seeking comfort regarding New Jersey tax issues that they face. Further, the quick response time indicated by the Division will enable taxpayers to resolve issues in real time, making the letter ruling program a practical tool for taxpayers.

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