It’s time to ditch the checkbook: taxpayers who request letter rulings, closing agreements, determination letters, advance pricing agreements, and certain other rulings from the Internal Revenue Service (IRS) will soon have to pay electronically. That’s the word from a 2017 IRS Revenue Procedure.

A letter ruling is a written determination issued to a taxpayer in response a written inquiry about how the law applies to a set of taxpayer-specific facts. You’d request a letter ruling before filing tax returns or reports that take a certain position – it’s kind of like asking IRS for their blessing. The IRS won’t typically issue a letter ruling if the issue is under exam, is being appealed or is otherwise in litigation. Since there’s a lot at stake, it’s not cheap: user fees can range from $200 to $28,300 (not a typo), depending upon the type of ruling. A letter ruling can be revoked or modified, depending on the circumstances.

Sometimes, a letter ruling may be issued with a closing agreement but a closing agreement can also be requested in lieu of a letter ruling. A closing agreement is typically final.

A determination letter is a written determination that applies established IRS principles and precedents to a specific set of facts. It’s issued based on existing laws, treaties, regulations, a conclusion in a revenue ruling, or an opinion or court decision that represents the position of the IRS. If you think you’ve heard a reference or two to a determination letter before, it’s likely tied to a charitable organization: determination letters are issued as evidence of tax-exempt status. As with letter rulings, the IRS won’t typically issue a determination letter if the issue is under exam, is being appealed or is otherwise in litigation; you also won’t get a determination letter if there’s a known issue or industry-wide question (questions involving cryptocurrency might apply here, for example).

An advance pricing agreement is an agreement between a taxpayer and IRS with respect to transfer pricing for international transactions. A parent company may set up a number of subsidiary companies all over the world and move goods, services, and assets from one to another; those transactions are supposed to be “arm’s length” meaning that the goods, services, and assets are transferred for the same price as they would have between unrelated parties – the transfer price. As you can imagine, those companies sometimes disagree with IRS about what the appropriate price should be. To resolve potential conflicts, taxpayers may enter into an agreement with IRS in advance of those transactions. (You can read more about transfer pricing and the IRS here.)

To pay user fees associated with those requests, you’ll need to head over to allows you to make secure electronic payments to federal government agencies using a credit card, debit card or via direct debit or electronic funds withdrawal from a checking or savings account.

Since this is a big change, to help with the transition, from June 15 to August 15, you can choose to pay using or by check or money order. Note, however, that after August 15, 2017, will become the only way to pay.

It’s the latest in a series of efforts meant to reduce processing times and encourage electronic payments. As of last year, the IRS announced that it would no longer accept checks larger than $99,999,999.00. is used for payments only: applications and requests are still delivered to the IRS. The difference is that now you’ll include a copy of your receipt in your application showing that you’ve paid.
For more details on requests and fees, you can check out Revenue Procedure 2017-1.

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Kelly Erb is a tax attorney, tax writer and podcaster.

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