As standard practice, the IRS annually updates its revenue procedures that outline areas for which it will not issue letter rulings or determination letters to address taxpayers’ questions. For such areas within the jurisdiction of the Associate Chief Counsel (International) in 2026, the agency recently released Revenue Procedure 2026-7, also called the “International No-Rule List,” which updates and supersedes Revenue Procedure 2025-7.
Rev. Proc. 2026-7 provides lists of areas in which the IRS will not or ordinarily will not provide advice, but it also shows the agency’s willingness this year to respond to taxpayer queries dealing with imported goods and customs. Taxpayers with questions regarding complex international tax issues should understand the updated procedures before seeking guidance from the IRS.
Overview: International Tax No-Rule List
On December 29, 2025, the IRS released Revenue Procedure 2026-1, 2026-1 I.R.B. 1, which contains revised procedures for 2026 letter rulings and information letters issued by the various Associate Chief Counsel of the IRS, including the Associate Chief Counsel (International). A week later, the agency released Rev. Proc. 2026-7, 2026-2 I.R.B. 316, which provides a list of the areas under the jurisdiction of the Associate Chief Counsel (International) regarding which letter rulings or determination letters will not be issued.
This article briefly describes Rev. Proc. 2026-7 and includes examples of the international tax areas of the Internal Revenue Code (IRC) relating to matters on which such rulings or letters will not be issued by the IRS.
A Closer Look: Rev. Proc. 2026-7
Effective January 5, 2026, Rev. Proc. 2026-7 supersedes Rev. Proc. 2025-7, 2025-1 I.R.B. 301, and comprises seven sections:
- Section 1 describes the purpose and changes to Rev. Proc. 2025-7
- Section 2 provides background and scope of application
- Section 3 lists 14 areas (seven specific and seven general) in which letter rulings and determination letters will not be issued under any circumstances
- Section 4 lists 35 areas (28 specific and seven general) in which letter rulings and determination letters ordinarily will not be issued unless “unique and compelling reasons” exist that justify the issuance of such advice
- Sections 5-7 include the effect on previous revenue procedures, the effective date, and drafting information, respectively
The revenue procedure explicitly states that the lists of areas are not all-inclusive and are subject to modification by the IRS in future revenue procedures.
Interestingly, in this era of expanded tariffs, the IRS has removed from the No-Rule list questions about whether Internal Revenue Code (IRC) §1059A will not limit a taxpayer’s basis in property imported from a foreign related party due to differences between the customs value and the tax value of the imported property. This update means the IRS apparently will now answer taxpayer questions on the subject, and in fact, the agency has already done so.
Select Examples: International Tax No-Rule Areas
Section 3
The specific areas listed in Section 3, in which letter rulings and determination letters will not be issued under any circumstances, include these and others:
- whether a resident of a foreign country is entitled to benefits under an income tax treaty between that foreign country and the U.S.
- the effective rate of tax that a foreign country will impose on income
- whether a Controlled Foreign Corporation makes a substantial contribution through the activities of its employees to the manufacture, production, or construction of personal property sold within the meaning of Reg. § 1.954-3(a)(4)(iv)
Section 3 also includes general areas, in which letter rulings and determination letters will not be issued under any circumstances, including these four and other areas:
- whether reasonable cause exists under IRC Subtitle F (Procedure and Administration)
- whether a proposed transaction would subject a taxpayer to criminal penalties
- where the same issue is the subject of the taxpayer’s pending request for competent authority assistance under a U.S. income tax treaty
- frivolous issues as defined in § 6.10 of Rev. Proc. 2026-1
Section 4
Several examples of specific areas listed in Section 4, in which letter rulings or determination letters will not ordinarily be issued absent “unique and compelling reasons,” are related to whether
- a transferred corporation subject to a gain recognition agreement under Reg. § 1.367(a)-8 has disposed of substantially all of its assets
- a taxpayer is engaged in a trade or business within the U.S.
- income is effectively connected with the conduct of a U.S. trade or business
- a taxpayer has a permanent establishment in the U.S. for purposes of any income tax treaty, and income is attributable to such permanent establishment
- a foreign levy meets the requirements of a creditable tax under IRC § 901
- a product is manufactured or produced for purposes of IRC §§ 954(d)
- a taxpayer, withholding agent, or intermediary properly applied the requirements of IRC Chapter 4 (“FATCA”) or an applicable intergovernmental agreement to implement FATCA
Three of the general areas listed in Section 4, in which letter rulings or determination letters will not ordinarily be issued absent “unique and compelling reasons,” are these:
- whether a taxpayer has a business purpose for a transaction or arrangement
- whether a taxpayer uses a correct North American Industry Classification System (NAICS) code or Standard Industrial Classification (SIC) code
- how to interpret foreign law or foreign documents (unless the IRS, in its sole discretion, decides to rule on such matter)
Key Takeaways
While Rev. Proc. 2026-1 explains how the IRS provides advice to taxpayers as well as the forms/manner to request and provide such advice (e.g., letter rulings, closing agreements, determination letters, information letters, and oral advice), Rev. Proc. 2026-7 outlines the international tax areas regarding which advice will not be issued due to the factual nature of the matter involved or for other reasons.
Before seeking international tax guidance from the IRS, taxpayers should understand Rev. Proc. 2026-7, which, fittingly in this time of significantly increased tariffs, signals a shift in the agency’s willingness to answer questions regarding potential IRC § 1059A limitations.
Rev. Proc. 2026-7, however, is not all-inclusive, and the IRS might decline to issue advice in other areas when appropriate in the interest of sound tax administration (including, for example, due to resource constraints) or on other grounds as warranted by facts or circumstances.
PYA Can Help
PYA’s International Tax team helps clients navigate complex tax laws, and our experts can help taxpayers determine whether to request guidance from the IRS and provide assistance to do so.
