When and how does the Nebraska Department of Revenue publish its written responses to taxpayer inquiries, and what is the difference between a GIL, a revenue ruling, a taxpayer ruling, and a declaratory order?

Plain-English summary

This ruling is the Nebraska Department of Revenue's own rulebook for when it will publish a written answer to a taxpayer's question -- and it's useful background for anyone trying to understand the different kinds of guidance the Department issues.

The core tension: state law generally makes taxpayer information confidential (it's a Class I misdemeanor to disclose sales-tax business affairs under § 77-2711, and a felony to disclose income-tax return particulars under § 77-27,119), but Nebraska also has a strong public-records policy favoring disclosure (§ 84-712). The Department resolves this by publishing a response only when the public benefit outweighs the risk, and only after redacting anything that could identify the taxpayer.

The ruling's real value is that it defines the four types of responses the Department issues:

1. Correspondence -- ordinary written answers to a taxpayer. Usually contains confidential information, so it stays private and is never published. Most answers are correspondence.
2. General Information Letter (GIL) -- a published, general response that recites current law, cites the applicable statutes/regs, or describes a procedure. It contains no confidential information and never names the taxpayer who asked. Taxpayers may rely on a GIL until it is rescinded, superseded, or invalidated by statute or court decision. GILs are relatively informal.
3. Revenue ruling -- a formal, Department-initiated interpretation that applies the law to a situation, industry, or issue and is applicable to all taxpayers. Signed by the Tax Commissioner. The key difference from a GIL: a GIL only recites current law, while a revenue ruling interprets it and often addresses new situations. Only the Department can initiate one.
4. Taxpayer ruling -- a taxpayer-requested interpretation of the law applied to that taxpayer's specific facts. It is binding on the Department as to that taxpayer (if the facts are complete/correct and the law unchanged), and if the answer later proves wrong, the Department waives penalty and interest tied to the taxpayer's reliance. It's published in redacted form, usually within 60 days.

A declaratory order is different again: it's a contested-case proceeding (§ 84-912.01; Reg-34-001 to -007) that stays confidential and is not published.

The ruling supersedes two older rulings: 33-76-2 (requesting/issuing revenue rulings) and 99-81-1 (form letters and letter rulings).

What this means for you

If you want the Department's position on your specific facts

You can request a taxpayer ruling. You must provide: the requester's name/address/email; the taxpayer's name/address/email if different; the tax programs involved; a complete statement of facts; the issue(s) to resolve; a suggested answer/argument (optional); and when you'd like it issued. The normal turnaround is six months -- the Department generally will not issue a taxpayer ruling if you need a fast answer. It also won't issue one for unnamed taxpayers or hypothetical situations, or where confidential information can't be redacted to everyone's satisfaction; in those cases it may issue a revenue ruling or GIL instead.

If you're researching published Nebraska guidance

Understand what you're reading: a GIL recites current law; a revenue ruling is the Department's interpretation binding on the Department until changed; a taxpayer ruling was written for one taxpayer's facts (and, like a federal PLR, isn't authority for anyone else). This context helps you weigh how much a given document supports your position.

On confidentiality

If you request a taxpayer ruling, the published version is redacted, and the Department exchanges proposed redactions with you until you agree on what's removed. Your identifying details -- ID numbers, income, the nature/amount of your tax items -- are protected by law.

Common questions

Q: Does the Department publish every answer it gives taxpayers?
A: No. Most answers are "correspondence" and remain confidential. The Department publishes a redacted response only when the public benefit outweighs the risk of disclosing confidential taxpayer information.

Q: What's the difference between a GIL and a revenue ruling?
A: A GIL only recites current law (procedures, forms, applicable statutes). A revenue ruling interprets the law and often addresses new situations; it is more formal and signed by the Tax Commissioner. Only the Department can initiate a revenue ruling.

Q: Is a taxpayer ruling binding, and on whom?
A: It binds the Department with respect to the taxpayer who requested it, as long as the recited facts are correct and complete and the law is unchanged. If the answer later proves wrong, the Department waives penalty and interest associated with the taxpayer's reliance.

Q: How long does a taxpayer ruling take?
A: Normally about six months. If you need a faster response, the Department generally will not issue a taxpayer ruling.

Q: Will a declaratory order be published?
A: No. Declaratory order proceedings are contested cases; the petition, evidence, argument, and order remain confidential and are not published.

Citations and references

• Neb. Rev. Stat. §§ 77-376, 77-603, 77-801, 77-2711, 77-27,119 -- confidentiality of taxpayer information across tax types.
• Neb. Rev. Stat. § 77-2711 -- Class I misdemeanor to disclose sales-tax business affairs/operations.
• Neb. Rev. Stat. § 77-27,119 -- felony to disclose income-tax return particulars.
• Neb. Rev. Stat. § 84-712 -- public right to examine public records.
• Neb. Rev. Stat. § 84-912.01; Reg-34-001 through Reg-34-007 -- declaratory order proceedings.
• Supersedes Revenue Ruling 33-76-2 (requesting and issuing revenue rulings) and Revenue Ruling 99-81-1 (form letters and letter rulings).

Source

• Landing page: https://revenue.nebraska.gov/about/legal-information/revenue-rulings-issued-tax-commissioner
• Original PDF: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/rulings/rr991401_disclosure.pdf

Original ruling text

Revenue Ruling 99-14-1
All Nebraska Taxes

Supersedes Revenue Rulings 33-76-2 and 99-81-1

July 21, 2014

Disclosure of Department Responses to Taxpayers
Issue
This revenue ruling describes the circumstances and procedures the Nebraska Department of
Revenue (Department) will consider and use to publish responses to taxpayer inquiries about the
application of tax law (Nebraska statutes or regulations, the IRC, or federal regulations) to specific
transactions or situations.

Conclusion
While the statutes covering confidentiality of taxpayer information usually prohibit disclosure of
Department responses to taxpayer inquiries, there are instances where all taxpayers could benefit
from the publication of the Department’s position and analysis of the tax consequences of specific
transactions or situations. In these instances, the Department’s response will be published on its
website to serve as a reference and guide for other taxpayers. However, the confidentiality statutes
require the Department to avoid, redact, or eliminate any taxpayer-specific identifications, numbers,
or other information that may allow the public to identify the taxpayer, its business affairs, or
its operations.

Definitions
Confidential Taxpayer Information. Confidential taxpayer information is any information
regarding sales, income, or any details from any report, application, or return that comes into the
possession of the Department or its employees. Confidential taxpayer information includes, but is
not limited to: 1

1. A taxpayer’s ID number;
2. The nature, source, or amount of the taxpayer’s income, payments, receipts, deductions,
   exemptions, credits, assets, liabilities, net worth, tax liability, income tax withheld,
   deficiencies, assessments, or tax payments;
3. Whether the taxpayer’s return was, is being, or will be examined or subject to other
   investigation or processing;
4. Financial records of state and local subdivisions, persons, and corporations subject to the
   tax laws of this state that are obtained in an audit or examination;
5. Any other information received by, recorded by, prepared by, furnished to, or collected by
   the Department with respect to a return;
6. The determination of the existence or possible existence of liability or the amount of
   liability of any person for any tax, penalty, interest, fine, forfeiture, or other imposition
   or offense;

1

Neb. Rev. Stat. §§ 77-376, 77-603, 77-801, 77-2711, and 77-27,119

Nebraska Department of Revenue, PO Box 94818, Lincoln, Nebraska 68509-4818

Revenue Ruling 99-14-1

July 21, 2014

Page 2 of 5

7. Any part of any written determination or any background file document relating to a written
   determination (for example, the records from an audit);
8. Any information that identifies a person; or
9. Any information received from a public service company or railroad that is not available
   from any other public source.
   Correspondence. Correspondence is any written communication with a taxpayer or a taxpayer’s
   representative, whether by letter, fax, email or other electronic means, which: answers one or more
   questions posed by the taxpayer; describes the forms that must be completed or the steps that must
   be taken to comply with Nebraska law regarding taxation; or communicates the position of the
   Department on a particular issue. Correspondence often contains confidential taxpayer information
   and will remain unpublished and confidential.
   Declaratory Order. A declaratory order is the outcome of a proceeding initiated by a petitioner
   seeking a binding order by the Department as to the applicability of the law to specific circumstances
   or actions. Declaratory order proceedings are contested cases that involve oral arguments made to
   the Tax Commissioner or a hearing officer. They are authorized by Neb. Rev. Stat. § 84-912.01 and
   governed by Reg-34-001 through Reg-34-007. The petition, evidence, argument, and order remain
   confidential taxpayer information and will not be published by the Department.
   Department. Department means the Nebraska Department of Revenue.
   General Information Letter (GIL). A GIL is a written and published general response directed
   to one or more taxpayers that describes a procedure to follow, a form to be used, or cites interested
   parties to applicable statutes, regulations, or rulings. GILs may be issued in response to an inquiry
   from a particular taxpayer, but the GIL itself is prepared so that it does not contain any confidential
   taxpayer information.
   Published. Published means posted on the website of the Department and available for the public
   to read and apply to particular situations.
   Redacted. Redacted means that any confidential taxpayer information is removed, blacked out,
   or replaced by general or nondescriptive terms. Responses are redacted so that no confidential
   taxpayer information is contained in the publication.
   Revenue Ruling. A revenue ruling is a written and published statement initiated by the Department
   that interprets and applies tax law in general or to a specific set of facts.
   Taxpayer Ruling. A taxpayer ruling is a written and published statement of the Department that
   interprets and applies tax law to a specific set of facts relating to a specific taxpayer. Taxpayer
   rulings are initiated by the taxpayer or the taxpayer’s representative. Taxpayer rulings are produced
   in two versions, a private and a public version. The private version is provided only to the taxpayer
   and may contain confidential taxpayer information regarding that taxpayer. The public version
   contains the analysis and conclusions of the Department, but any confidential taxpayer information
   is redacted before it is published.

Analysis
The Department realizes that published information about the application of tax law to specific
factual situations may be extremely helpful to taxpayers and tax practitioners. Publishing responses
to taxpayers may also help with tax compliance by avoiding audits and protests. Approximately
35 states currently publish private letter rulings, usually on the website of their respective revenue

Revenue Ruling 99-14-1

July 21, 2014

Page 3 of 5

departments.2 The statutes of Nebraska provide that all interested persons have a right to examine
public records (see Neb. Rev. Stat. § 84-712) and the Legislature has expressed a strong public
policy in favor of disclosure.3 At least one state has faced litigation seeking disclosure of taxpayer
responses under its Freedom of Information Act.4
At the same time, the Department is prohibited from disclosing confidential taxpayer information.
It is a Class I misdemeanor for the Department or any of its employees to make known anything
about the business affairs, operations, or any information obtained from taxpayers on returns, or
from investigations or audits with regard to sales tax (Neb. Rev. Stat. § 77-2711). It is a felony for
the Department or any of its employees to make known the income or particulars disclosed in any
report or return with regard to income tax (Neb. Rev. Stat. § 77-27,119).
Addressing this issue involves balancing these two conflicting public policies.
The Department has determined that there are circumstances where the public may benefit from
disclosing the Department’s interpretation of the tax law in a particular situation, or reciting the law
that applies in the particular situation. In these instances, the response should be published. These
circumstances will be rare and most communications to taxpayer inquiries will be issued only as
correspondence. Correspondence, as defined in this revenue ruling, will remain confidential and
will not be published, disclosed, or otherwise made available to the public by the Department.
When the Department receives an inquiry where there may be a benefit to publishing the applicable
law or the Department’s interpretation of the law as applied to the particular circumstances, the
Department must decide if the response should be published before deciding how to respond.
The Department’s initial decision on publication will depend upon the public benefit derived
from publication as compared to the ability to draft a response that does not disclose confidential
taxpayer information. If, in the Department’s opinion, this balancing favors publishing the
response, the Department will publish the response as long as the response contains no confidential
taxpayer information.
Confidential taxpayer information may be protected by issuing one of three types of responses.

1. Issuing a GIL. The Department may issue a GIL when the specific taxpayer is unknown,
   or when the response that is required is general and provides either a procedure to follow
   or merely cites the applicable statutes, regulations, or rulings. This may be in response to
   a single inquiry, or a number of similar inquiries. GILs are relatively informal, and may
   answer a particular taxability question, list the forms or procedures required to comply with
   Nebraska tax law, or cite the law that applies to a set of facts. Every GIL will state that the
   GIL is the Department’s current policy and taxpayers may rely on the Department to follow
   the principles or procedures described in a GIL until it is rescinded, superseded, or made
   invalid by changes to the statutes or by court decisions. GILs do not contain confidential
   taxpayer information, and will not name or refer to the identity of the taxpayer who made
   the original inquiry.

2
Griffeth, Cara, Amy Hamilton, and Jennifer Carr, Transparency in State Taxation, Part 2: Legislative Process and
  Letter Rulings, State Tax Notes, April 30, 2012.
3
Evertson v. City of Kimball, 278 Neb. 1, 767 N.W.2d 751 (2009).
4
Koklanaris Maria, Tax Analysts Joins Kentucky Suit Seeking Release of DOR Rulings, State Tax Notes,
August 1, 2013. Carr, Jennifer, Kentucky Judge Expresses Skepticism Over DOR’s Refusal to Release Letter Rulings,
  State Tax Notes, December 18, 2013.

Revenue Ruling 99-14-1

July 21, 2014

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2. Issuing a revenue ruling. The Department may respond to an issue or a taxpayer inquiry
   with correspondence and then initiate and prepare a revenue ruling that will be published
   and applicable to all taxpayers. Revenue rulings interpret and apply the law to certain
   situations, industries, or issues. Revenue rulings may address general or multiple situations
   or issues and often give general guidance to taxpayers regarding new legislation, federal
   law or policy changes, or frequently asked questions. These are more formal than GILs and
   are signed by the Tax Commissioner. The difference between a GIL and a revenue ruling
   is that GILs only recite current law, while revenue rulings interpret the law and often deal
   with new situations.
   Revenue rulings are statements of the Department’s interpretation of the law; and taxpayers
   may rely on the Department to follow a revenue ruling until it is rescinded, superseded,
   or reversed by statutory changes or by court decisions. Like GILs, revenue rulings do
   not contain confidential taxpayer information. Only the Department may initiate a
   revenue ruling.
   Revenue Ruling 33-76-2, which deals with requesting and issuing revenue rulings, is
   hereby rescinded and superseded.
3. Issuing a taxpayer ruling. A taxpayer or the taxpayer’s representative may request a
   taxpayer ruling. Taxpayer rulings are issued by the Department in response to specific
   taxpayer inquiries concerning the application or interpretation of a tax statute or regulation
   to a particular fact situation. Taxpayer rulings are formal, signed by the Tax Commissioner,
   and may take some time to issue. Taxpayer rulings are different from, and should not be
   confused with, declaratory orders, which will not be published.
   To request a taxpayer ruling, the taxpayer (or representative) must provide:
   a. The name and address of the requester, including email;
   b. The name and address, or email of the taxpayer, if different than the requester;
   c. The tax programs involved (for example, sales tax, income tax, litter fee);
   d. A complete statement of facts;
   e. The issue or issues the requester is seeking to be resolved;
   f. A suggested answer and argument (if any); and
   g. An indication of when the taxpayer would like the taxpayer ruling to be issued. The
   normal time for issuing a taxpayer ruling is six months. If the taxpayer needs a faster
   response, the Department will generally not issue a taxpayer ruling.
   Taxpayer rulings will generally be published within 60 days after they are issued to the requester.
   Confidential taxpayer information will be redacted from the response. A proposed, redacted
   version will be prepared by the Department and sent to the requesting taxpayer or representative
   for comments.
   Proposals will be exchanged until agreement is reached on what information will be redacted in
   the published version.

Revenue Ruling 99-14-1

July 21, 2014

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A taxpayer ruling is binding on the Department with regard to the taxpayer who is the subject of
the request to the extent the facts recited in the taxpayer ruling are correct and complete and the
applicable law remains the same. If the answer provided in a taxpayer ruling later proves to be in
error, the Department will waive any penalty and interest associated with the taxpayer’s reliance
on the taxpayer ruling.
The Department will not issue a taxpayer ruling if:

1. The inquiry deals with unnamed taxpayers or hypothetical situations; or
2. Confidential taxpayer information cannot be redacted from the response to the satisfaction
   of the requester and the Department.
   When these situations occur, the Department may issue either a revenue ruling or a GIL.
   Revenue Ruling 99-81-1, which deals with form letters and letter rulings, is hereby rescinded
   and superseded.
   APPROVED:

Kim Conroy
Tax Commissioner
July 21, 2014