A Private Letter Ruling (PLR) is a written determination issued by the Internal Revenue Service in response to a taxpayer's specific request about how the tax law applies to a proposed or completed transaction. PLRs provide guidance that is binding on the IRS and the requesting taxpayer for that fact pattern, but they are not precedential for other taxpayers. In the life insurance and estate planning arena, PLRs have clarified issues such as split-dollar arrangements, trust-owned policies, transfer-for-value scenarios, and valuation of policy interests. Practitioners study PLRs to understand the IRS's current thinking, even though each ruling is limited to its own facts and cannot be relied on as universal authority.

In advanced planning, tax attorneys and CPAs sometimes recommend seeking a Private Letter Ruling when a client contemplates a complex transaction with uncertain tax consequences, such as a novel premium financing structure or unusual trust arrangement involving life insurance. The process involves detailed submissions, fees, and waiting periods, so PLRs are typically reserved for large or high-risk cases. Advisors without legal credentials usually do not draft PLR requests themselves, but they may help assemble documentation and coordinate with counsel. In education and product design, life insurance wholesalers refer to key PLRs to explain how the IRS has analyzed specific structures in the past, while reminding clients that individual advice from tax professionals is essential. Awareness of relevant PLRs helps teams design strategies that are more likely to align with IRS views.