The Office of Revenue Legal Counsel at the Department of Finance and Administration has substantially restricted its opinion letter practice and is currently only accepting opinion requests that meet its interpretation of Rule GR-75. Income tax opinion requests or requests for opinions for undisclosed taxpayers may not be accepted. Taxpayers and their representatives should consider whether Revenue Legal Counsel is likely to accept an opinion request under this new approach before preparing and submitting a request.
Historically, Revenue Legal Counsel has had a relatively broad practice of accepting and responding to legal opinion requests. For sales tax opinions, Rule GR-75 governs. Opinion letters have also been issued for income taxes or other taxes on a similar basis. And Taxpayers have been able to use representatives or trade associations to request legal opinions without disclosing taxpayer identities, although such opinions are not binding on the Department.
Due to workload concerns, Revenue Legal Counsel is now limiting its opinions to those within its interpretation of Rule GR-75, thus primarily sales tax opinions. There is no analogous rule authorizing income tax opinions, and so it appears unlikely that income tax opinions will be accepted generally. Additionally, Revenue Legal Counsel appears to be interpreting the requirement that the request "must specifically describe the person claiming an exemption," GR-75(A), as requiring the disclosure of the relevant taxpayer's identity, thus ending opinions for undisclosed taxpayers.
Taxpayers and taxpayer representatives who are interested in seeking opinions should evaluate the applicability of Rule GR-75 and, if it is uncertain whether Revenue Legal Counsel will accept the opinion request, may wish to seek assurances from Revenue Legal Counsel about whether an opinion request will be accepted before going to the time and expense of preparing such a request.
The new, restricted practice appears to have taken effect recently. There has been no public announcement, and taxpayers are just being directed to the text of Rule GR-75. We may still see some DFA opinions come out that were accepted before Revenue Legal Counsel narrowed the scope of its opinion practice, and perhaps Revenue Legal Counsel may subsequently change or allow exceptions to this narrowing of when it will issue legal opinions.