- 39 -
None of the above rulings have been revoked or modified,24
and the Commissioner has relied on these rulings in issuing
private letter rulings regarding the deductible portion of
monthly service fees.25 Indeed, the Commissioner in private
letter rulings has cited the above revenue rulings and sanctioned
use of the percentage method. See, e.g., Priv. Ltr. Rul. 86-30-
005 (Apr. 4, 1986), which states in relevant part:
The proper allocation of medical to total fees may
be determined by dividing all directly related medical
expenses by total expenses. To the extent that they
can be substantiated and are allocable to medical care
facilities, medically related expenses may include,
24Although Rev. Rul. 76-481, supra, was clarified by Rev.
Rul. 93-72, 1993-2 C.B. 77, the clarification does not affect the
issue in the instant case. It is unclear whether the
Commissioner has considered the issue of the deductibility of
monthly service fees since 1993. See Rev. Proc. 93-43, 1993-2
C.B. 544 (stating that no further rulings will be issued on the
issue of whether amounts paid for medical care extending
substantially beyond the taxable year may be deducted under
section 213); see also Rev. Proc. 99-3, 1999-1 C.B. 103
(designating the issue stated in Rev. Proc. 93-43, supra as an
area under extensive study in which rulings or determination
letters will not be issued until the Service resolves the issue
through publication of a revenue ruling, revenue procedure,
regulations, or otherwise). We note that the monthly service
fees in this case relate to current medical care.
25See, e.g., Priv. Ltr. Rul. 86-51-028 (Sept. 19, 1986);
Priv. Ltr. Rul. 86-41-037 (July 11, 1986); Priv. Ltr. Rul. 86-30-
005 (Apr. 4, 1986); Priv. Ltr. Rul. 82-13-102 (Dec. 30, 1981).
Private letter rulings are not regarded as precedent in this
Court and may not be relied on by the public. Sec. 6110(j)(3);
Alumax, Inc. v. Commissioner, 109 T.C. at 163 n.12. However,
private letter rulings may be cited to show the practice of the
Commissioner. Rowan Cos., Inc. v. United States, 452 U.S. 247,
261 n.17 (1981); Hanover Bank v. Commissioner, 369 U.S. 672, 686-
687 (1962); Rauenhorst v. Commissioner, 119 T.C. at 170 n.8;
Estate of Cristofani v. Commissioner, 97 T.C. 74, 84 n.5 (1991).
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