IRS Hits The "Pause" Button On PTP Rulings

Recently it has become standard operating procedure for the Internal Revenue Service ("IRS") to declare moratoriums on the issuance of private letter rulings ("PLR") in certain areas. These temporary (or, in certain cases, more permanent¹) suspensions typically arise with respect to tax provisions that require further study or that seem to be moving faster than the IRS would like, given its limited resources and the myriad interpretive questions presented to it for ruling each year. The latest IRS action involves the rules governing "publicly traded partnerships" (or "PTPs") under Section 7704 of the Code.²

The PTP moratorium was not announced through a formal IRS pronouncement. Instead, at a March 28th conference in Washington, an IRS representative confirmed that the IRS is instituting a "pause," adding that "[w]e're regrouping. We're speaking with our counterparts at Treasury. We're trying to decide what the rules should be."³