IRS revokes a prior revocation of an annuity ruling

Plain-English summary

The IRS had previously ruled that choosing a new variable-payment, term-certain
annuity option would not cause income inclusion before amounts were actually
paid. In 2024, it prospectively revoked that part of the earlier ruling for
contracts with applications signed after a specified date. The IRS then
reconsidered and concluded that its original position was correct. This letter
retroactively revokes the 2024 revocation, thereby reinstating the ruling that
no amount is included in gross income before actual payment under the annuity
option.

Ruling snapshot

• Question: Should the IRS's 2024 prospective revocation of the no-income-before-payment annuity ruling remain in effect?
• Outcome: Revocation of the prior revocation, with the original ruling reinstated
• Key authorities: IRC § 72

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202630002
Release Date: 7/24/2026
Index Number: 72.00-00

Third Party Communication: None
Date of Communication: Not Applicable

Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:FIP:B04
PLR-104852-26

Date:
April 28, 2026

Legend

Taxpayer = -----------------------------------------------------------------------------------
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Date = ----------------------

Dear ----------------:

This letter revokes PLR 202426001 (PLR-103975-24) issued to Taxpayer on April 3,
2024. This revocation applies retroactively.

In PLR 201424014 (PLR-138374-13), the Internal Revenue Service (“Service”) issued
two rulings with respect to a new term certain annuity option with variable payments (the
“New Annuity Option”) that Taxpayer intended to offer with non-qualified deferred
variable annuity contracts. In PLR 202426001, the Service revoked the second ruling,
that “[o]n and after the date an [o]wner elects the New Annuity Option, no amount will
be includible in gross income before it is actually paid under the New Annuity Option.”
This revocation applied prospectively only to contracts with applications signed after
Date.

The Service has reconsidered its position and has determined that the position taken in
PLR 201424014 was correct. Thus, the second ruling, that “[o]n and after the date an
[o]wner elects the New Annuity Option, no amount will be includible in gross income

PLR-104852-26
2

before it is actually paid under the New Annuity Option”, is reinstated by the revocation
of PLR 202426001.

This letter ruling is directed only to the taxpayer who requested it. Section 6110(k)(3) of
the Internal Revenue Code provides that a private letter ruling may not be used or cited
as precedent. In accordance with the power of attorney on file with this office, we are
sending a copy of this letter to the Taxpayer’s authorized representatives.

Sincerely,

Kathryn Sneade
Branch Chief, Branch 4
Office of Associate Chief Counsel
(Financial Institutions and Products)

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