Revenue Administrative Bulletin 1989-34

Approved:  April 25, 1989

Issuance of Bulletins and Letter Rulings

(Replaces Revenue Administrative Bulletin 1987-2)

The Michigan Revenue Act empowers the Department of Treasury to periodically issue bulletins that index and explain state tax laws. (See MCL 205.3 (f)).

The purpose of this Bulletin is to establish the general procedures for issuing Bulletins and Letter Rulings as position statements of the Bureau of Revenue. These documents are to provide guidance to persons regarding the proper interpretation and application of Michigan tax laws administered by the Bureau of Revenue.

Revenue Administrative Bulletins

A Revenue Administrative Bulletin is a directive issued by the Commissioner of Revenue. Its purpose is to promote uniform application of tax laws throughout the State by the Bureau of Revenue personnel and provide information and guidance to taxpayers. A Revenue Administrative Bulletin states the official position of the Department, has the status of precedent in the disposition of cases unless and until revoked or modified, and may be relied on by taxpayers in situations where the facts, circumstances and issues presented are substantially similar to those set forth in the Bulletin. A taxpayer must consider the effects of subsequent legislation, regulations, court decisions, and Bulletins when relying on a Revenue Administrative Bulletin.

Information to prepare a Bulletin may be derived from the following sources, a list that is not all inclusive: law changes, judicial decisions, letter rulings, Attorney General Opinions, interpretation of rules, acquiescence and non-acquiescence in decisions of the Michigan Tax Tribunal, and announcements of tax and interest rates as required by law. All Revenue Administrative Bulletins are published in the Department's Quarterly Tax Advisor and are also available upon request.

Letter Rulings

A Letter Ruling is a formal document setting forth the position of the Commissioner of Revenue on specific tax matters. It is issued to taxpayers by the Commissioner of Revenue, or designee of the Commissioner, in response to a particular tax issue. Letter Rulings help to promote uniform application of tax laws throughout the State by Bureau of Revenue personnel and to provide guidance to taxpayers. A Letter Ruling is prospective in nature. It provides a taxpayer with assurance regarding the tax ramification of a future transaction. The Department is bound by a Letter Ruling only for the specific transaction and only for the tax period indicated. Letter Rulings are available to the public upon request.

Technical Advice Letters

A Technical Advice Letter is an informal document released by a Tax Division of the Bureau of Revenue. It is issued by designated personnel in response to an inquiry by a taxpayer for technical assistance. Technical Advice Letters are based upon statutes, administrative rules, regulations, and court decisions having precedential value. These documents are not published and may be relied upon only by the taxpayers requesting their issuance.

Obtaining a Letter Ruling or Technical Advice Letter

A taxpayer or the representative of the taxpayer shall submit a statement to the appropriate Tax Division containing a complete account of the facts relating to a particular tax issue. The taxpayer must document in writing that the issue in question is not being litigated or challenged in an informal hearing of the Department or any other tribunal or court in this State. From this statement, the Tax Division will determine whether a Letter Ruling is needed to clarify the issue. The Division will draft a proposed Ruling then submit it to the Hearings and Tax Research Division for further processing. The Hearings and Tax Research Division determines when a Letter Ruling will be issued.

A Letter Ruling will contain sufficient information to enable a Tax Division or the taxpayer requesting such advice to rely on the Ruling. The Ruling will identify the taxpayer by name, address, identification number and tax year or years involved. The Letter Ruling will contain the pertinent facts, the issue, controlling law, application of law to facts and a conclusion advising the taxpayer.

A Letter Ruling issued by the commissioner of Revenue, of the designee of the Commissioner, will be forward to the taxpayer and the Tax Division affected by the Ruling. A Letter Ruling may be published after deletion of any matter identifying the taxpayer.

Obsolescence of Letter Rulings and Revenue Administrative Bulletins

A Letter Ruling or Revenue Administrative Bulletin may become or be declared obsolete or revoked under the following conditions:

1. The statutory provision supporting the Letter Ruling or Revenue Administrative Bulletin is amended or repealed or authoritatively construed by an appellate court decision having precedential effect.
2. The substance of the Letter Ruling or Revenue Administrative Bulletin is incorporated in a statute or in the Department of Treasury Administrative Rules.
3. A court decision having precedential value renders the ruling invalid.
   When a Letter Ruling or Revenue Administrative Bulletin becomes obsolete, the Department may announce its obsolescence in a Revenue Administrative Bulletin. Subject to statutory authority, the Commissioner of Revenue is empowered to determine the retrospective application of rules and the effective date for applying changes, modification or nullification of Letter Rulings.

Acquiescence/Non-acquiescence by the Commissioner

The Commissioner of Revenue may announce acquiescence or non-acquiescence in decisions of the Michigan Tax Tribunal and the Court of Claims. Bureau of Revenue personnel shall rely upon any decision that the Commissioner has acquiesced as having precedential value in the disposition of other tax cases.

If the Commissioner acquiesces in an adverse Tax Tribunal or Court of Claims decision, any contrary Letter Ruling or Revenue Administrative Bulletin shall be promptly modified or revoked.