Rev. Proc. 2021-40: New no-rule area for private letter rulings on self-dealing

Areas of the Code relating to issues on which the IRS will not issue letter rulings or determination letters

New no-rule area for private letter rulings on self-dealing

The IRS today released an advance version of Rev. Proc. 2021-40 that sets forth areas of the Code relating to issues on which the IRS will not issue letter rulings or determination letters.

Rev. Proc. 2021-40 [PDF 52 KB] announces that the IRS will no longer issue letter rulings on whether certain transactions are self-dealing within the meaning of section 4941(d).  Specifically, the IRS will not issue rulings on whether an act of self-dealing occurs when a private foundation (or other entity subject to section 4941) owns or receives an interest in a limited liability company or other entity that owns a promissory note issued by a disqualified person. The IRS has previously issued numerous rulings involving such transactions, including, for example, PLRs 202101002, 202037009, 201907004, 201723005, and 200635017. The revenue procedure states that the IRS is currently reviewing its prior ruling position on such transactions.

The revenue procedure applies to all ruling requests pending in or received by the IRS on or after September 3, 2021. 


For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 | ruthmadrigal@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com

Carrie Garber Siegrist | +1 202 533 3056 | carriesiegrist@kpmg.com