These synopses are intended only as aids to the reader in

Internal Revenue

bulletin

Bulletin No. 2000–1

January 3, 2000

HIGHLIGHTS

OF THIS ISSUE

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

EMPLOYEE PLANS

Rev. Proc. 2000–4, page 115.

Rulings and information letters; issuance procedures. Revised procedures are provided for furnishing ruling letters, information letters, etc., on matters relating to

sections of the Code currently under the jurisdiction of the

Office of the Commissioner, Tax Exempt and Government

Entities Division. Rev. Proc. 99–4 superseded.

Rev. Proc. 2000–5 page 158.

Technical advice. Revised procedures, in conformance

with the Internal Revenue Service Restructuring and Reform

Act of 1998, are provided for furnishing technical advice to

area managers, determinations managers, and appeals office chiefs by the Office of the Commissioner, Tax Exempt

and Government Entities Division, regarding issues in the

employee plans area (including actuarial matters) and exempt organizations area. Rev. Proc. 99–5 superseded.

Rev. Proc. 2000–6, page 187.

Employee plans determination letters. Revised procedures are provided for issuing determination letters on the

qualified status of employee plans under sections 401(a),

403(a), 409, and 4975 of the Code. Rev. Proc. 99–6 superseded.

Rev. Proc. 2000–8, page 230.

User fees for employee plans and exempt organizations. Up-to-date guidance for complying with the user fee

program of the Service as it pertains to requests for letter

rulings, determination letters, etc., on matters under the ju-

risdiction of the Office of the Commissioner, Tax Exempt and

Government Entities Division, is provided. Rev. Proc. 99–8

superseded.

EXEMPT ORGANIZATIONS

Rev. Proc. 2000–4, page 115.

Rulings and information letters; issuance procedures.

Revised procedures are provided for furnishing ruling letters,

information letters, etc., on matters relating to sections of

the Code currently under the jurisdiction of the Office of the

Commissioner, Tax Exempt and Government Entities Division. Rev. Proc. 99–4 superseded.

Rev. Proc. 2000–5, page 158.

Technical advice. Revised procedures, in conformance

with the Internal Revenue Service Restructuring and Reform

Act of 1998, are provided for furnishing technical advice to

area managers, determinations managers, and appeals office chiefs by the Office of the Commissioner, Tax Exempt

and Government Entities Division, regarding issues in the

employee plans area (including actuarial matters) and exempt organizations area. Rev. Proc. 99–5 superseded.

Rev. Proc. 2000–8, page 230.

User fees for employee plans and exempt organizations. Up-to-date guidance for complying with the user fee

program of the Service as it pertains to requests for letter

rulings, determination letters, etc., on matters under the jurisdiction of the Office of the Commissioner, Tax Exempt and

Government Entities Division, is provided. Rev. Proc. 99–8

superseded.

(Continued on page 3)

Numerical Finding List of Revenue Rulings, Revenue Procedures, Treasury Decisions, etc., published in the Bulletin from July

through December 1999 begins on page ii.

Finding List of Previously Published Items published in the Bulletin from July through December 1999 begins on page iii.

Cumulative List of Declaratory Judgment Proceedings Under Section 7428 for 1999 begins on page 242.

Index of items published in the Bulletin from July through December 1999 begins on page v.

Department of the Treasury

Internal Revenue Service

The IRS Mission

and by applying the tax law with integrity and fairness to

all.

Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly and may be obtained

from the Superintendent of Documents on a subscription

basis. Bulletin contents are consolidated semiannually into

Cumulative Bulletins, which are sold on a single-copy basis.

dures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances

are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements

of internal practices and procedures that affect the rights

and duties of taxpayers are published.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions, and Subpart B, Legislation and Related

Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to

these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Administrative Rulings

are issued by the Department of the Treasury’s Office of the

Assistant Secretary (Enforcement).

Revenue rulings represent the conclusions of the Service on

the application of the law to the pivotal facts stated in the

revenue ruling. In those based on positions taken in rulings

to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature

are deleted to prevent unwarranted invasions of privacy and

to comply with statutory requirements.

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

Rulings and procedures reported in the Bulletin do not have

the force and effect of Treasury Department Regulations,

but they may be used as precedents. Unpublished rulings

will not be relied on, used, or cited as precedents by Service

personnel in the disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and proce-

The first Bulletin for each month includes a cumulative index

for the matters published during the preceding months.

These monthly indexes are cumulated on a semiannual basis,

and are published in the first Bulletin of the succeeding semiannual period, respectively.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

2

HIGHLIGHTS

OF THIS ISSUE—Continued

ADMINISTRATIVE

appeals offices, in areas under the jurisdiction of the Associate Chief Counsel (Domestic), the Associate Chief Counsel

(Employee Benefits and Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel (International). Rev. Proc. 99–2 superseded.

Rev. Proc. 2000–1, page 4.

Letter rulings, determination letters, and information

letters issued by the Associate Chief Counsel (Domestic), Associate Chief Counsel (Employee Benefits and

Exempt Organizations), Associate Chief Counsel

(Enforcement Litigation), and Associate Chief Counsel

(International). Revised procedures are provided for issuing letter rulings, determination letters, and information letters on specific issues under the jurisdiction of the Associate

Chief Counsel (Domestic), the Associate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate

Chief Counsel (Enforcement Litigation), and the Associate

Chief Counsel (International). Rev. Proc. 99–1 superseded;

Notice 97-19 and Rev. Proc. 96-13 modified.

Rev. Proc. 2000–3, page 103.

Areas in which advance rulings will not be issued; Associate Chief Counsel (Domestic), Associate Chief Counsel (Employee Benefits and Exempt Organizations). This

procedure provides a revised list of those provisions of the

Code under the jurisdiction of the Associate Chief Counsel

(Domestic) and the Associate Chief Counsel (Employee Benefits and Exempt Organizations) relating to matters where the

Service will not issue advance rulings or determination letters.

Rev. Procs. 99–3 and 99–51 superseded.

Rev. Proc. 2000–2, page 73.

Rev. Proc. 2000–7, page 227.

Technical advice to the district directors and chiefs,

appeals offices, from the Associate Chief Counsel (Domestic), Associate Chief Counsel (Employee Benefits

and Exempt Organizations), Associate Chief Counsel

(Enforcement Litigation), and Associate Chief Counsel

(International). Revised procedures are provided for furnishing technical advice to the district directors and chiefs,

Areas in which advance rulings will not be issued; Associate Chief Counsel (International). This procedure revises the list of those provisions of the Code under the jurisdiction of the Associate Chief Counsel (International) relating

to matters where the Service will not issue advance rulings

or determination letters. Rev. Proc. 99–7 superseded.

3

Part III. Administrative, Procedural, and Miscellaneous

26 CFR 601.201: Rulings and determination letters.

Rev. Proc. 2000–1

TABLE OF CONTENTS

SECTION 1. WHAT IS THE

PURPOSE OF THIS REVENUE

PROCEDURE?

SECTION 2. IN WHAT FORM

IS GUIDANCE PROVIDED BY

THE OFFICES OF ASSOCIATE

CHIEF COUNSEL (DOMESTIC),

ASSOCIATE CHIEF COUNSEL

(EMPLOYEE BENEFITS AND

EXEMPT ORGANIZATIONS),

ASSOCIATE CHIEF COUNSEL

(ENFORCEMENT LITIGATION),

AND ASSOCIATE CHIEF

COUNSEL (INTERNATIONAL)?

p. 10

p. 10

.01 Letter ruling

.02 Closing agreement

.03 Determination letter

.04 Information letter

.05 Revenue ruling

.06 Oral guidance

(1) No oral rulings, and no written rulings in response to oral requests

(2) Discussion possible on substantive issues

SECTION 3. ON WHAT ISSUES

MAY TAXPAYERS REQUEST

WRITTEN GUIDANCE UNDER

THIS PROCEDURE?

p. 12

.01 Issues under the jurisdiction of the Associate Chief Counsel (Domestic)

(1) Issues under the Assistant Chief Counsel (Corporate)

(2) Issues under the Assistant Chief Counsel (Financial Institutions and Products)

(3) Issues under the Assistant Chief Counsel (Income Tax and Accounting)

(4) Issues under the Assistant Chief Counsel (Passthroughs and Special Industries)

.02 Issues under the jurisdiction of the Associate Chief Counsel (Employee

Benefits and Exempt Organizations)

.03 Issues under the jurisdiction of the Associate Chief Counsel (Enforcement

Litigation)

.04 Issues under the jurisdiction of the Associate Chief Counsel (International)

SECTION 4. ON WHAT ISSUES

MUST WRITTEN GUIDANCE

BE REQUESTED UNDER

DIFFERENT PROCEDURES?

p.14

.01 Alcohol, tobacco, and firearms taxes

.02 Employee plans and exempt organizations

January 3, 2000

4

2000–1 I.R.B.

SECTION 5. UNDER WHAT

CIRCUMSTANCES DOES

THE NATIONAL OFFICE

ISSUE LETTER RULINGS?

p. 14

.01 In income and gift tax matters

.02 A § 301.9100 request for extension of time for making an election or for

other relief

.03 Determinations under § 999(d) of the Internal Revenue Code

.04 In matters involving § 367

.05 In estate tax matters

.06 In matters involving additional estate tax under § 2032A(c)

.07 In matters involving qualified domestic trusts under § 2056A

.08 In generation-skipping transfer tax matters

.09 In employment and excise tax matters

.10 In administrative provisions matters

.11 Generally not to business associations or groups

.12 Generally not to foreign governments

.13 Generally not on federal tax consequences of proposed legislation

.14 Issuance of a letter ruling before the issuance of a regulation or other published guidance

SECTION 6. UNDER WHAT

CIRCUMSTANCES DO

DISTRICT DIRECTORS

ISSUE DETERMINATION

LETTERS?

p. 19

.01 In income and gift tax matters

.02 In estate tax matters

.03 In generation-skipping transfer tax matters

.04 In employment and excise tax matters

.05 Circumstances under which determination letters are not issued by district

director

.06 Requests concerning income, estate, or gift tax returns

.07 Attach a copy of determination letter to taxpayer’s return

.08 Review of determination letters

SECTION 7. UNDER WHAT

CIRCUMSTANCES DOES

THE SERVICE HAVE

DISCRETION TO ISSUE

LETTER RULINGS AND

DETERMINATION LETTERS?

p. 21

.01 Ordinarily not in certain areas because of factual nature of the problem

.02 Not on alternative plans or hypothetical situations

.03 Ordinarily not on part of an integrated transaction

2000–1 I.R.B.

5

January 3, 2000

.04 Ordinarily not on questions involving the validity of the federal income tax

or similar matters

.05 On constructive sales price under § 4216(b) or § 4218(c)

SECTION 8. WHAT ARE THE

GENERAL INSTRUCTIONS

FOR REQUESTING LETTER

RULINGS AND

DETERMINATION LETTERS?

p. 21

.01 Certain information required in all requests

(1) Complete statement of facts and other information

(2) Copies of all contracts, wills, deeds, agreements, instruments, other documents, and foreign laws

(3) Analysis of material facts

(4) Statement regarding whether same issue is in an earlier return

(5) Statement regarding whether same or similar issue was previously ruled

on or requested, or is currently pending

(6) Statement of supporting authorities

(7) Statement of contrary authorities

(8) Statement identifying pending legislation

(9) Statement identifying information to be deleted from copy of letter ruling

or determination letter for public inspection

(10) Signature by taxpayer or authorized representative

(11) Authorized representatives

(12) Power of attorney and declaration of representative

(13) Penalties of perjury statement

(14) Number of copies of request to be submitted

(15) Sample format for a letter ruling request

(16) Checklist for letter ruling requests

.02 Additional information required in certain circumstances

(1) To request separate letter rulings for multiple issues in a single situation

(2) To designate recipient of original or copy of letter ruling or determination letter

(3) To request a particular conclusion on a proposed transaction

(4) To request expeditious handling

(5) To receive any document related to the letter ruling request by facsimile

transmission (fax)

(6) To submit a request for a letter ruling by fax

January 3, 2000

6

2000–1 I.R.B.

(7) To request a conference

(8) To obtain the applicable user fee for substantially identical letter rulings

or identical accounting method changes

.03 Address to send the request

(1) Requests for letter rulings

(2) Requests for determination letters

.04 Pending letter ruling requests

.05 When to attach letter ruling to return

.06 How to check on status of request

.07 Request may be withdrawn or national office may decline to issue letter ruling

.08 Compliance with Treasury Department Circular No. 230

SECTION 9. WHAT OTHER

CHECKLISTS, GUIDELINE

REVENUE PROCEDURES,

NOTICES, SAFE HARBOR

REVENUE PROCEDURES,

AND AUTOMATIC CHANGE

REVENUE PROCEDURES

APPLY TO CERTAIN

REQUESTS?

p. 33

SECTION 10. HOW DOES THE

NATIONAL OFFICE HANDLE

LETTER RULING REQUESTS?

p. 39

.01 Checklists and guideline revenue procedures and notices

.02 Safe harbor revenue procedures

.03 Automatic change revenue procedures

.01 Controls request and refers it to appropriate Assistant Chief Counsel or to

the Office of Associate Chief Counsel (International)

.02 Branch representative contacts taxpayer within 21 days

.03 Notifies taxpayer if any issues have been referred to another branch or office

.04 Determines if transaction can be modified to obtain favorable letter ruling

.05 Is not bound by informal opinion expressed

.06 Tells taxpayer if request lacks essential information during initial contact

.07 Requires prompt submission of additional information requested after initial

contact

.08 Near the completion of the ruling process, advises the taxpayer of conclusions and, if the Service will rule adversely, offers the taxpayer the opportunity to withdraw the letter ruling request

.09 May request draft of proposed letter ruling near the completion of the ruling

process

.10 Issues separate letter rulings for substantially identical letter rulings and

generally issues a single letter ruling for identical accounting method

changes

2000–1 I.R.B.

7

January 3, 2000

.11 Sends copy of letter ruling to district director

SECTION 11. HOW ARE

CONFERENCES

SCHEDULED?

p. 43

.01 Schedules a conference if requested by taxpayer

.02 Permits taxpayer one conference of right

.03 Disallows verbatim recording of conferences

.04 Makes tentative recommendations on substantive issues

.05 May offer additional conferences

.06 Requires written confirmation of information presented at conference

.07 May schedule a pre-submission conference

.08 Under limited circumstances, may schedule a conference to be held by telephone

SECTION 12. WHAT EFFECT

WILL A LETTER RULING

HAVE?

p. 46

.01 May be relied on subject to limitations

.02 Will not apply to another taxpayer

.03 Will be used by a district director in examining the taxpayer’s return

.04 May be revoked or modified if found to be in error

.05 Not generally revoked or modified retroactively

.06 Retroactive effect of revocation or modification applied to a particular transaction

.07 Retroactive effect of revocation or modification applied to a continuing action or series of actions

.08 Generally not retroactively revoked or modified if related to sale or lease

subject to excise tax

.09 May be retroactively revoked or modified when transaction is entered into

before the issuance of the letter ruling

.10 May be retroactively revoked or modified when transaction is entered into

after a change in material facts

.11 Taxpayer may request that retroactivity be limited

(1) Request for relief under § 7805(b) must be made in required format

(2) Taxpayer may request a conference on application of § 7805(b)

SECTION 13. WHAT EFFECT

WILL A DETERMINATION

LETTER HAVE?

p. 49

.01 Has same effect as a letter ruling

.02 Taxpayer may request that retroactive effect of revocation or modification

be limited

January 3, 2000

8

2000–1 I.R.B.

(1) Request for relief under § 7805(b) must be made in required format

(2) Taxpayer may request a conference on application of § 7805(b)

SECTION 14. UNDER WHAT

CIRCUMSTANCES ARE

MATTERS REFERRED

BETWEEN A DISTRICT

OFFICE AND THE NATIONAL

OFFICE?

p. 50

.01 Requests for determination letters

.02 No-rule areas

.03 Requests for letter rulings

SECTION 15. WHAT ARE THE

p. 50

USER FEE REQUIREMENTS

FOR REQUESTS FOR LETTER

RULINGS AND DETERMINATION

LETTERS?

.01 Legislation authorizing user fees

.02 Requests to which a user fee applies

.03 Requests to which a user fee does not apply

.04 Exemptions from the user fee requirements

.05 Fee schedule

.06 Applicable user fee for a request involving multiple offices, fee categories,

issues, transactions, or entities

.07 Applicable user fee for substantially identical letter rulings or identical accounting method changes

.08 Method of payment

.09 Effect of nonpayment or payment of incorrect amount

.10 Refunds of user fee

.11 Request for reconsideration of user fee

SECTION 16. WHAT

ARE THE GENERAL

PROCEDURES APPLICABLE

TO INFORMATION LETTERS

ISSUED BY THE

NATIONAL OFFICE?

p. 56

.01 Will be made available to the public

.02 Deletions made under the Freedom of Information Act

.03 Effect of information letters

SECTION 17. WHAT

SIGNIFICANT CHANGES

HAVE BEEN MADE TO

REV. PROC. 99–1?

p. 57

SECTION 18. WHAT IS THE

EFFECT OF THIS REVENUE

PROCEDURE ON OTHER

DOCUMENTS?

p. 57

2000–1 I.R.B.

9

January 3, 2000

SECTION 19. WHAT IS THE

EFFECTIVE DATE OF THIS

REVENUE PROCEDURE?

p. 57

SECTION 20. PAPERWORK

REDUCTION ACT

p. 58

DRAFTING INFORMATION

p. 58

INDEX

p. 59

APPENDIX A—SCHEDULE

OF USER FEES

p. 62

APPENDIX B—SAMPLE

FORMAT FOR A LETTER

RULING REQUEST

p. 66

APPENDIX C—CHECKLIST

FOR A LETTER RULING

REQUEST

p. 69

SECTION 1. WHAT IS THE

PURPOSE OF THIS REVENUE

PROCEDURE?

This revenue procedure explains how the Internal Revenue Service gives guidance to

taxpayers on issues under the jurisdiction of the Associate Chief Counsel (Domestic),

the Associate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel (International). It explains the kinds of guidance and the manner in which guidance is requested

by taxpayers and provided by the Service. A sample format of a request for a letter ruling

is provided in Appendix B.

Description of terms used in

this revenue procedure

For purposes of this revenue procedure—

(1) any reference to district director or district office includes their respective offices or,

when appropriate, the Assistant Commissioner (International);

(2) the term “taxpayer” includes all persons subject to any provision of the Internal Revenue Code (including issuers of § 103 obligations) and, when appropriate, their representatives; and

(3) the term “national office” refers to the Office of Associate Chief Counsel (Domestic),

the Office of Associate Chief Counsel (Employee Benefits and Exempt Organizations),

the Office of Associate Chief Counsel (Enforcement Litigation), or the Office of Associate

Chief Counsel (International), as appropriate.

The offices and titles in this revenue procedure are based on the current organization of

the Service. We anticipate that these offices and titles will change as the reorganization of

the Service is implemented.

Updated annually

The revenue procedure is updated annually as the first revenue procedure of the year, but

may be modified or amplified during the year.

SECTION 2. IN WHAT FORM

IS GUIDANCE PROVIDED BY

THE OFFICES OF ASSOCIATE

CHIEF COUNSEL (DOMESTIC),

ASSOCIATE CHIEF COUNSEL

The Service provides guidance in the form of letter rulings, closing agreements, determination letters, information letters, revenue rulings, and oral advice.

Sec. 1

January 3, 2000

10

2000–1 I.R.B.

(EMPLOYEE BENEFITS AND

EXEMPT ORGANIZATIONS),

ASSOCIATE CHIEF

COUNSEL (ENFORCEMENT

LITIGATION), AND ASSOCIATE

CHIEF COUNSEL

(INTERNATIONAL)?

The Service provides guidance in the form of letter rulings, closing agreements, determination letters, information letters, revenue rulings, and oral advice

Letter ruling

.01 A “letter ruling” is a written statement issued to a taxpayer by the national office that

interprets and applies the tax laws to the taxpayer’s specific set of facts. A letter ruling includes the written permission or denial of permission by the national office to a request for

a change in a taxpayer’s accounting method or accounting period. Once issued, a letter

ruling may be revoked or modified for any number of reasons, as explained in section 12

of this revenue procedure, unless it is accompanied by a “closing agreement.”

Closing agreement

.02 A closing agreement is a final agreement between the Service and a taxpayer on a

specific issue or liability. It is entered into under the authority in § 7121 and is final unless

fraud, malfeasance, or misrepresentation of a material fact can be shown.

A closing agreement may be entered into when it is advantageous to have the matter permanently and conclusively closed or when a taxpayer can show that there are good reasons for an agreement and that making the agreement will not prejudice the interests of the

Government. In appropriate cases, a taxpayer may be asked to enter into a closing agreement as a condition to the issuance of a letter ruling.

If, in a single case, a closing agreement is requested for each person in a class of taxpayers, separate agreements are entered into only if the class consists of 25 or fewer taxpayers. However, if the issue and holding are identical for the class and there are more than 25

taxpayers in the class, a “mass closing agreement” will be entered into with the taxpayer

who is authorized by the others to represent the class.

Determination letter

.03 A “determination letter” is a written statement issued by a district director that applies the principles and precedents previously announced by the national office to a specific set of facts. It is issued only when a determination can be made based on clearly established rules in the statute, a tax treaty, or the regulations, or based on a conclusion in a

revenue ruling, opinion, or court decision published in the Internal Revenue Bulletin that

specifically answers the questions presented.

A determination letter does not include assistance provided by the U.S. competent authority pursuant to the mutual agreement procedure in tax treaties as set forth in Rev. Proc.

96–13, 1996–1 C.B. 616.

Information letter

.04 An “information letter” is a statement issued either by the national office or by a district director. It calls attention to a well-established interpretation or principle of tax law

(including a tax treaty) without applying it to a specific set of facts. An information letter

may be issued if the taxpayer’s inquiry indicates a need for general information or if the

taxpayer’s request does not meet the requirements of this revenue procedure and the Service thinks general information will help the taxpayer. The taxpayer should provide a daytime telephone number with the taxpayer’s request for an information letter. An information letter is advisory only and has no binding effect on the Service.

Revenue ruling

.05 A “revenue ruling” is an interpretation by the Service that has been published in the

Internal Revenue Bulletin. It is the conclusion of the Service on how the law is applied to

a specific set of facts. Revenue rulings are issued only by the national office and are published for the information and guidance of taxpayers, Service personnel, and other interested parties.

2000–1 I.R.B.

11

Sec. 2.05

January 3, 2000

Because each revenue ruling represents the conclusion of the Service regarding the application of law to the entire statement of facts involved, taxpayers, Service personnel, and

other concerned parties are cautioned against reaching the same conclusion in other cases

unless the facts and circumstances are substantially the same. They should consider the

effect of subsequent legislation, regulations, court decisions, revenue rulings, notices, and

announcements. See Rev. Proc. 89–14, 1989–1 C.B. 814, which states the objectives of,

and standards for, the publication of revenue rulings and revenue procedures in the Internal Revenue Bulletin.

Oral guidance

.06

(1) No oral rulings, and no written rulings in response to oral requests.

The Service does not orally issue letter rulings or determination letters, nor does it issue

letter rulings or determination letters in response to oral requests from taxpayers. However, Service employees ordinarily will discuss with taxpayers or their representatives inquiries regarding whether the Service will rule on particular issues and questions relating

to procedural matters about submitting requests for letter rulings or determination letters

for a particular case.

(2) Discussion possible on substantive issues.

At the discretion of the Service and as time permits, substantive issues also may be discussed. However, such a discussion will not be binding on the Service in general or on the

Office of Chief Counsel in particular and cannot be relied upon as a basis for obtaining

retroactive relief under the provisions of § 7805(b).

Substantive tax issues involving the taxpayer that are under examination, in appeals, or in

litigation will not be discussed by Service employees not directly involved in the examination, appeal, or litigation of the issues unless the discussion is coordinated with those Service employees who are directly involved in the examination, appeal, or litigation of the

issues. The taxpayer or the taxpayer’s representative ordinarily will be asked whether the

oral request for guidance or information relates to a matter pending before another office

of the Service.

If a tax issue is not under examination, in appeals, or in litigation, the tax issue may be

discussed even though the issue is affected by a nontax issue pending in litigation.

A taxpayer may seek oral technical guidance from a taxpayer service representative in a

district office or service center when preparing a return or report. Oral guidance is advisory only, and the Service is not bound to recognize it, for example, in the examination of

the taxpayer’s return.

The Service does not respond to letters seeking to confirm the substance of oral discussions, and the absence of a response to such a letter is not confirmation of the substance of

the letter.

SECTION 3. ON WHAT

ISSUES MAY TAXPAYERS

REQUEST WRITTEN

GUIDANCE UNDER THIS

PROCEDURE?

Taxpayers may request letter rulings, information letters, and closing agreements under

this revenue procedure on issues within the jurisdiction of the Associate Chief Counsel

(Domestic), the Associate Chief Counsel (Employee Benefits and Exempt Organizations),

the Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel

(International). The national office issues letter rulings to answer written inquiries of individuals and organizations about their status for tax purposes and the tax effects of their

acts or transactions when appropriate in the interest of sound tax administration.

Taxpayers also may request determination letters within the jurisdiction of the appropriate district director offices that relate to the Code sections under the jurisdiction of the Associate Chief Counsel (Domestic), the Associate Chief Counsel (Employee Benefits and

Sec. 2.05

January 3, 2000

12

2000–1 I.R.B.

Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), or the Associate Chief Counsel (International).

Issues under the jurisdiction

of the Associate Chief Counsel

(Domestic)

.01 Issues under the jurisdiction of the Associate Chief Counsel (Domestic) include

all issues under the jurisdiction of the various Assistant Chief Counsels as explained

below.

Issues under the Assistant

Chief Counsel (Corporate)

(1) Issues under the Assistant Chief Counsel (Corporate) include those that involve consolidated returns, corporate acquisitions, reorganizations, liquidations, redemptions, spinoffs, transfers to controlled corporations, distributions to shareholders, corporate bankruptcies, the effect of certain ownership changes on net operating loss carryovers and

other tax attributes, debt vs. equity determinations, allocation of income and deductions

among taxpayers, acquisitions made to evade or avoid income tax, and certain earnings

and profits questions.

Issues under the Assistant Chief

Counsel (Financial Institutions

and Products)

(2) Issues under the Assistant Chief Counsel (Financial Institutions and Products) include those that involve income taxes and accounting method changes of banks, savings

and loan associations, real estate investment trusts (REITs), regulated investment companies (RICs), real estate mortgage investment conduits (REMICs), tax-exempt obligations,

mortgage credit certificates (MCCs), insurance companies and products, and financial

products.

Issues under the Assistant

Chief Counsel (Income Tax

and Accounting)

(3) Issues under the Assistant Chief Counsel (Income Tax and Accounting) include

those that involve recognition and timing of income and deductions of individuals and

corporations, sales and exchanges, capital gains and losses, installment sales, equipment

leasing, inventories, the alternative minimum tax, accounting method changes for these

and other miscellaneous issues, various administrative provisions, and accounting periods.

Issues under the Assistant

Chief Counsel (Passthroughs

and Special Industries)

(4) Issues under the Assistant Chief Counsel (Passthroughs and Special Industries) include those that involve income taxes of S corporations (except accounting periods and

methods) and certain noncorporate taxpayers (including partnerships, common trust

funds, and trusts); entity classification; estate, gift, generation-skipping transfer, and certain excise taxes; amortization, depreciation, depletion, and other engineering issues; accounting method changes for depreciation and amortization; cooperative housing corporations; farmers’ cooperatives (under § 521); the low-income housing, disabled access, and

qualified electric vehicle credits; research and experimental expenditures; shipowners’

protection and indemnity associations (under § 526); and certain homeowners associations

(under § 528).

Issues under the jurisdiction

of the Associate Chief Counsel

(Employee Benefits and Exempt

Organizations)

.02 Issues under the jurisdiction of the Associate Chief Counsel (Employee Benefits

and Exempt Organizations) include those that involve income tax and other tax aspects of

executive compensation and employee benefit programs (other than those within the jurisdiction of the Commissioner (Tax Exempt and Government Entities Division), employment taxes, and taxes on self-employment income.

Issues under the jurisdiction

of the Associate Chief Counsel

(Enforcement Litigation)

.03 Issues under the jurisdiction of the Associate Chief Counsel (Enforcement Litigation) include issues only under the jurisdiction of the Assistant Chief Counsel (General

Litigation). Issues under the Assistant Chief Counsel (General Litigation) include those

that involve collection.

Issues under the jurisdiction of

the Associate Chief Counsel

(International)

.04 Issues under the jurisdiction of the Associate Chief Counsel (International) include

the tax treatment of nonresident aliens and foreign corporations; withholding of tax on

nonresident aliens and foreign corporations; foreign tax credit; determination of sources of

income; income from sources without the United States; subpart F questions; domestic international sales corporations (DISCs); foreign sales corporations (FSCs); international

boycott determinations; treatment of certain passive foreign investment companies; and

income affected by treaty.

2000–1 I.R.B.

13

Sec. 3.04

January 3, 2000

For the procedures to obtain advance pricing agreements under § 482, see Rev. Proc.

96–53, 1996–2 C.B. 375, as modified by Notice 98–65, 1998–2 C.B. 803.

For the procedures concerning competent authority relief arising under the application

and interpretation of tax treaties between the United States and other countries, see Rev.

Proc. 96–13. However, competent authority consideration for an advance pricing agreement should be requested under Rev. Proc. 96–53.

SECTION 4. ON WHAT ISSUES

MUST WRITTEN GUIDANCE

BE REQUESTED UNDER

DIFFERENT PROCEDURES?

Alcohol, tobacco, and

firearms taxes

.01 The procedures for obtaining letter rulings, etc., that apply to federal alcohol,

tobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction of the

Bureau of Alcohol, Tobacco and Firearms.

Employee plans and

exempt organizations

.02 The procedures for obtaining letter rulings, determination letters, etc., on employee

plans and exempt organizations are under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. See Rev. Proc. 2000–4, this Bulletin. See also

Rev. Proc. 2000–6, this Bulletin, for the procedures for issuing determination letters on the

qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under §§ 401, 403(a), 409, and 4975(e)(7), and the status for exemption of

any related trusts or custodial accounts under § 501(a).

For the user fee requirements applicable to requests for letter rulings, determination letters, etc., under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, see Rev. Proc. 2000–8.

SECTION 5. UNDER WHAT

CIRCUMSTANCES DOES

THE NATIONAL OFFICE

ISSUE LETTER RULINGS?

In income and gift

tax matters

.01 In income and gift tax matters, the national office generally issues a letter ruling on

a proposed transaction and on a completed transaction if the letter ruling request is submitted before the return is filed for the year in which the transaction that is the subject of

the request was completed.

(1) Circumstances under which a letter ruling is not ordinarily issued. The national

office ordinarily does not issue a letter ruling if, at the time the letter ruling is requested,

the identical issue is involved in the taxpayer’s return for an earlier period and that issue—

(a) is being examined by a district director;

(b) is being considered by an appeals office;

(c) is pending in litigation in a case involving the taxpayer or a related taxpayer;

(d) has been examined by a district director or considered by an appeals office and the

statutory period of limitations has not expired for assessment or for filing a claim for refund or credit of tax; or

(e) has been examined by a district director or considered by an appeals office and a

closing agreement covering the issue or liability has not been entered into by a district director or by an appeals office.

If a return dealing with an issue for a particular year is filed while a request for a letter

ruling on that issue is pending, the national office will issue the letter ruling unless it is no-

Sec. 3.04

January 3, 2000

14

2000–1 I.R.B.

tified by the taxpayer or otherwise learns that an examination of that issue or the identical

issue on an earlier year’s return has been started by a district director. See section 8.04 of

this revenue procedure. However, even if an examination has begun, the national office

ordinarily will issue the letter ruling if the district director agrees, by memorandum, to the

issuance of the letter ruling.

(2) No letter ruling on a property conversion after return filed. The national office

does not issue a letter ruling on the replacement of involuntarily converted property,

whether or not the property has been replaced, if the taxpayer has already filed a return for

the taxable year in which the property was converted. However, the district director may

issue a determination letter in this case. See section 6.01 of this revenue procedure.

(3) Certain late S corporation and related elections. In lieu of requesting a letter ruling under this revenue procedure, a taxpayer may obtain relief for certain late S corporation and related elections by following the procedures in Rev. Proc. 98–55, 1998–2 C.B.

645, or Rev. Proc. 97–48, 1997–2 C.B. 521. A request made pursuant to Rev. Proc. 98–55

or Rev. Proc. 97–48 does not require payment of any user fee. See section 3.05 of Rev.

Proc. 98–55, section 3 of Rev. Proc. 97–48, and section 15.03(2) of this revenue procedure.

(4) Treatment of environmental cleanup costs. A request initiated by a taxpayer for

written guidance on the tax treatment under §§ 162, 165, 198, or 263 of environmental

cleanup costs incurred in projects that span several taxable years, including prior and future taxable years, is a letter ruling request even if the request is submitted after the return

for the project year is filed, after an examination of any project year has begun, or after the

issues in the return for any project year are being considered by an appeals office. However, if a taxpayer-initiated request is submitted after the return for the project year is filed,

after an examination on any project year has begun, or after the issues in the return for any

project year are being considered by an appeals office, then the request must be submitted

in accordance with the procedures in Rev. Proc. 98–17, 1998–1 C.B. 405, unless such request is more appropriately made under Rev. Proc. 2000–2. The procedures in Rev. Proc.

98–17 are available for a taxpayer-initiated request submitted during the two-year period

beginning on February 2, 1998.

A § 301.9100 request for

extension of time for making an

election or for other relief

.02 The national office will consider a request for an extension of time for making an

election or other application for relief under § 301.9100–3 of the Procedure and Administration Regulations. Even if submitted after the return covering the issue presented in the

§ 301.9100 request has been filed and even if submitted after an examination of the return

has begun or after the issues in the return are being considered by an appeals office or a

federal court, a § 301.9100 request is a letter ruling request. Therefore, the § 301.9100 request should be submitted pursuant to this revenue procedure.

However, an election made pursuant to § 301.9100–2 is not a letter ruling request and

does not require payment of any user fee. See § 301.9100–2(d) and section 15.03(1) of

this revenue procedure. Such an election pertains to an automatic extension of time.

(1) Format of request. A § 301.9100 request (other than an election made pursuant to

§ 301.9100–2) must be in the general form of, and meet the general requirements for, a letter ruling request. These requirements are given in section 8 of this revenue procedure. In

addition, the § 301.9100 request must include the information required by § 301.9100–

3(e).

(2) Statute of limitations. The running of any applicable period of limitations is not

suspended for the period during which a § 301.9100 request has been filed. See

§ 301.9100–3(d)(2). If the period of limitations on assessment under § 6501(a) for the

taxable year in which an election should have been made or any taxable year that would

have been affected by the election had it been timely made will expire before receipt of a

§ 301.9100 letter ruling, the Service ordinarily will not issue a § 301.9100 ruling. See

2000–1 I.R.B.

15

Sec. 5.02

January 3, 2000

§ 301.9100–3(c)(1)(ii). Therefore, the taxpayer must secure a consent under § 6501(c)(4)

to extend the period of limitations on assessment. Note that the filing of a claim for refund

under § 6511 does not extend the period of limitations on assessment. If § 301.9100 relief

is granted, the Service may require the taxpayer to consent to an extension of the period of

limitations on assessment. See § 301.9100–3(d)(2).

(3) Taxpayer must notify national office if examination of return begins while request is pending. If the Service starts an examination of the taxpayer’s return for the taxable year in which an election should have been made or any taxable year that would have

been affected by the election had it been timely made while a § 301.9100 request is pending, the taxpayer must notify the national office. See § 301.9100–3(e)(4)(i) and section

8.04(1)(b) of this revenue procedure.

(4) National office will notify district director, appeals officer, or government counsel of a § 301.9100 request if return is being examined or is being considered by an

appeals office or a federal court. If the taxpayer’s return for the taxable year in which an

election should have been made or any taxable year that would have been affected by the

election had it been timely made is being examined by a district office or considered by an

appeals office or a federal court, the national office will notify the appropriate district director, appeals officer, or government counsel that a § 301.9100 request has been submitted to the national office. The examining officer, appeals officer, or government counsel is

not authorized to deny consideration of a § 301.9100 request. The letter ruling will be

mailed to the taxpayer and a copy will be sent to the appropriate district director, appeals

officer, or government counsel.

Determinations under § 999(d)

of the Internal Revenue Code

.03 Under Rev. Proc. 77–9, 1977–1 C.B. 542, the Office of Associate Chief Counsel

(International) issues determinations under § 999(d) that may deny certain benefits of the

foreign tax credit, deferral of earnings of foreign subsidiaries and domestic international

sales corporations (DISCs), and tax exemption for foreign trade income of a foreign sales

corporation or a small foreign sales corporation (FSC or small FSC) to a person, if that

person, a member of a controlled group (within the meaning of § 993(a)(3)) that includes

the person, or a foreign corporation of which a member of the controlled group is a United

States shareholder, agrees to participate in, or cooperate with, an international boycott.

Requests for determinations under Rev. Proc. 77–9 are letter ruling requests and, therefore, should be submitted to the Associate Chief Counsel (International) pursuant to this

revenue procedure.

In matters involving § 367

.04 Unless the issue is covered by section 7 of this revenue procedure, the Office of Associate Chief Counsel (International) may issue a letter ruling under § 367 even if the taxpayer does not request a letter ruling as to the characterization of the transaction under the

reorganization provisions of the Code. The Office of Associate Chief Counsel (International) will determine the § 367 consequences of a transaction based on the taxpayer’s

characterization of the transaction but will indicate in the letter ruling that it expresses no

opinion as to the characterization of the transaction under the reorganization. However,

the Office of Associate Chief Counsel (International) may decline to issue a § 367 ruling

in situations in which the taxpayer inappropriately characterizes the transaction under the

reorganization provisions.

In estate tax matters

.05 In general, the national office issues prospective letter rulings on transactions affecting the estate tax on the prospective estate of a living person and affecting the estate tax on

the estate of a decedent before the decedent’s estate tax return is filed. The national office

will not issue letter rulings for prospective estates on computations of tax, actuarial factors, and factual matters.

If the taxpayer is requesting a letter ruling regarding a decedent’s estate tax and the estate

tax return is due to be filed before the letter ruling is expected to be issued, the taxpayer

should obtain an extension of time for filing the return and should notify the national of-

Sec. 5.02

January 3, 2000

16

2000–1 I.R.B.

fice branch considering the letter ruling request that an extension has been obtained.

If the return is filed before the letter ruling is received from the national office, the taxpayer must disclose on the return that a letter ruling has been requested, attach a copy of

the pending letter ruling request to the return, and notify the national office that the return

has been filed. See section 8.04 of this revenue procedure. The national office will make

every effort to issue the letter ruling within 3 months of the date the return was filed.

If the letter ruling cannot be issued within that 3-month period, the national office will

notify the district director having jurisdiction over the return, who may, by memorandum

to the national office, grant an additional period for the issuance of the letter ruling.

In matters involving additional

estate tax under § 2032A(c)

.06 In matters involving additional estate tax under § 2032A(c), the national office issues letter rulings on proposed transactions and on completed transactions that occurred

before the return is filed.

In matters involving qualified

domestic trusts under § 2056A

.07 In matters involving qualified domestic trusts under § 2056A, the national office issues letter rulings on proposed transactions and on completed transactions that occurred

before the return is filed.

In generation-skipping

transfer tax matters

.08 In general, the national office issues letter rulings on proposed transactions that affect the generation-skipping transfer tax and on completed transactions that occurred before the return is filed. In the case of a generation-skipping trust or trust equivalent, letter

rulings are issued either before or after the trust or trust equivalent has been established.

The national office will issue letter rulings on the application of the effective date rules for

generation-skipping transfer tax (§ 1433 of the Tax Reform Act of 1986, 1986–3 (Vol. 1)

C.B. 1, 648) to wills, trusts, and trust equivalents in existence on October 22, 1986, and to

generation-skipping transfers taking place on or before October 22, 1986.

In employment and

excise tax matters

.09 In employment and excise tax matters, the national office issues letter rulings on

proposed transactions and on completed transactions either before or after the return is

filed for those transactions.

Requests regarding employment status (employer/employee relationship) from federal

agencies and instrumentalities should be submitted directly to the national office. Requests regarding employment status from other taxpayers must first be submitted to the

appropriate Service office listed on the current Form SS–8 (Rev. June 1997). See section

6.04 of this revenue procedure. Generally, the employer is the taxpayer and requests the

letter ruling. However, if the worker asks for the letter ruling, both the worker and the employer are considered to be the taxpayer and both are entitled to the letter ruling.

The national office usually will not issue a letter ruling if, at the time the letter ruling is

requested, the identical issue is involved in the taxpayer’s return for an earlier period and

that issue—

(1) is being examined by a district director;

(2) is being considered by an appeals office;

(3) is pending in litigation in a case involving the taxpayer or a related taxpayer;

(4) has been examined by a district director or considered by an appeals office and the

statutory period of limitations has not expired for assessment or for filing a claim for refund or credit of tax; or

(5) has been examined by a district director or considered by an appeals office and a

closing agreement covering the issue or liability has not been entered into by a district director or by an appeals office.

2000–1 I.R.B.

17

Sec. 5.09

January 3, 2000

If a return involving an issue for a particular year is filed while a request for a letter ruling on that issue is pending, the national office will issue the letter ruling unless it is notified by the taxpayer or otherwise learns that an examination of that issue or an examination of the identical issue on an earlier year’s return has been started by a district director.

See section 8.04 of this revenue procedure. However, even if an examination has begun,

the national office ordinarily will issue the letter ruling if the district director agrees, by

memorandum, to the issuance of the letter ruling.

In administrative

provisions matters

.10

(1) In general. The national office issues letter rulings on matters arising under the Code

and related statutes and regulations that involve—

(a) the time, place, manner, and procedures for reporting and paying taxes;

(b) the assessment and collection of taxes (including interest and penalties);

(c) the abatement, credit, or refund of an overassessment or overpayment of tax; or

(d) the filing of information returns.

(2) Circumstances under which a letter ruling is not ordinarily issued. The national

office ordinarily does not issue a letter ruling if, at the time the letter ruling is requested,

the identical issue is involved in the taxpayer’s return for an earlier period and that issue—

(a) is being examined by a district director;

(b) is being considered by an appeals office;

(c) is pending in litigation in a case involving the taxpayer or a related taxpayer;

(d) has been examined by a district director or considered by an appeals office and the

statutory period of limitations has not expired for assessment or for filing a claim for refund or credit of tax; or

(e) has been examined by a district director or considered by an appeals office and a

closing agreement covering the issue or liability has not been entered into by a district director or appeals office.

If a return involving an issue for a particular year is filed while a request for a letter ruling on that issue is pending, the national office will issue the letter ruling unless it is notified by the taxpayer or otherwise learns that an examination of that issue or an examination of the identical issue on an earlier year’s return has been started by a district director.

See section 8.04 of this revenue procedure. But, even if an examination has begun, the national office ordinarily will issue the letter ruling if the district director agrees, by memorandum, to the issuance of the letter ruling.

Generally not to business

associations or groups

.11 The national office does not issue letter rulings to business, trade, or industrial

associations or to similar groups concerning the application of the tax laws to members of

the group. But groups and associations may submit suggestions of generic issues that

would be appropriately addressed in revenue rulings. See Rev. Proc. 89–14, which states

the objectives of, and standards for, the publication of revenue rulings and revenue procedures in the Internal Revenue Bulletin.

The national office, however, may issue letter rulings to groups or associations on their

own tax status or liability if the request meets the requirements of this revenue procedure.

Generally not to foreign

governments

Sec. 5.09

January 3, 2000

.12 The national office does not issue letter rulings to foreign governments or their

political subdivisions about the U.S. tax effects of their laws. The national office also

18

2000–1 I.R.B.

does not issue letter rulings on the effect of a tax treaty on the tax laws of a treaty country

for purposes of determining the tax of the treaty country. See section 13.02 of Rev. Proc.

96–13, 1996–1 C.B. at 626. However, treaty partners can continue to address matters such

as these under the provisions of the applicable tax treaty. In addition, the national office

may issue letter rulings to foreign governments or their political subdivisions on their own

tax status or liability under U.S. law if the request meets the requirements of this revenue

procedure.

Generally not on federal tax

consequences of proposed

legislation

.13 The national office does not issue letter rulings on a matter involving the federal tax

consequences of any proposed federal, state, local, municipal, or foreign legislation. The

national office, however, may provide general information in response to an inquiry.

Issuance of a letter ruling before

the issuance of a regulation

or other published guidance

.14 Unless the issue is covered by section 7 of this revenue procedure, Rev. Proc.

2000–3, this Bulletin, or Rev. Proc. 2000–7, this Bulletin, a letter ruling may be issued before

the issuance of a temporary or final regulation or other published guidance that interprets

the provisions of any act under the following conditions:

(1) Answer is clear or is reasonably certain. If the letter ruling request presents an

issue for which the answer seems clear by applying the statute to the facts or for which the

answer seems reasonably certain but not entirely free from doubt, a letter ruling will be issued.

(2) Answer is not reasonably certain. The Service will consider all letter ruling requests and use its best efforts to issue a letter ruling even if the answer does not seem reasonably certain where the issuance of a letter ruling is in the best interests of tax administration.

(3) Issue cannot be readily resolved before a regulation or any other published

guidance is issued. A letter ruling will not be issued if the letter ruling request presents an

issue that cannot be readily resolved before a regulation or any other published guidance is

issued. However, when the Service has closed a regulation project or any other published

guidance project that might have answered the issue or decides not to open a regulation

project or any other published guidance project, the appropriate branch will consider all

letter ruling requests unless the issue is covered by section 7 of this revenue procedure,

Rev. Proc. 2000–3, or Rev. Proc. 2000–7.

SECTION 6. UNDER WHAT

CIRCUMSTANCES DO

DISTRICT DIRECTORS

ISSUE DETERMINATION

LETTERS?

District directors issue determination letters only if the question presented is specifically

answered by a statute, tax treaty, or regulation, or by a conclusion stated in a revenue ruling, opinion, or court decision published in the Internal Revenue Bulletin.

In income and gift tax matters

.01 In income and gift tax matters, district directors issue determination letters in response to taxpayers’ written requests on completed transactions that affect returns over

which they have examination jurisdiction. A determination letter usually is not issued for

a question concerning a return to be filed by the taxpayer if the same question is involved

in a return already filed.

Normally, district directors do not issue determination letters on the tax consequences of

proposed transactions. However, a district director may issue a determination letter on the

replacement, even though not yet made, of involuntarily converted property under § 1033,

if the taxpayer has filed an income tax return for the year in which the property was involuntarily converted.

2000–1 I.R.B.

19

Sec. 6.02

January 3, 2000

In estate tax matters

.02 In estate tax matters, district directors issue determination letters in response to written requests affecting the estate tax returns over which the district directors have examination jurisdiction. They do not issue determination letters on matters concerning the application of the estate tax to the prospective estate of a living person.

In generation-skipping

transfer tax matters

.03 In generation-skipping transfer tax matters, district directors issue determination

letters in response to written requests affecting the generation-skipping transfer tax returns

over which the district directors have examination jurisdiction. They do not issue determination letters on matters concerning the application of the generation-skipping transfer tax

before the distribution or termination takes place.

In employment and

excise tax matters

.04 In employment and excise tax matters, district directors issue determination letters

in response to written requests from taxpayers on completed transactions over which they

have examination jurisdiction.

Requests for a determination of employment status (Form SS–8) from taxpayers (other

than federal agencies and instrumentalities) must be submitted to the appropriate Service

office listed on the current Form SS–8 (Rev. June 1997) and not directly to the national office. See also section 5.09 of this revenue procedure.

Circumstances under which

determination letters are not

issued by district director

.05 A district director will not issue a determination letter in response to any request

if—

(1) it appears that the taxpayer has directed a similar inquiry to the national office;

(2) the same issue involving the same taxpayer or a related taxpayer is pending in a case

in litigation or before an appeals office;

(3) the determination letter is requested by an industry, trade association, or similar

group; or

(4) the request involves an industry-wide problem.

Under no circumstances will a district director issue a determination letter unless it is

clearly shown that the request concerns a return that has been filed or is required to be

filed and over which the district director has, or will have, examination jurisdiction.

A district director will not issue a determination letter on an employment tax question if

the specific question for the same taxpayer or a related taxpayer has been, or is being, considered by the Central Office of the Social Security Administration or the Railroad Retirement Board.

A district director also will not issue a determination letter on determining constructive

sales price under § 4216(b) or § 4218(c), which deal with special provisions applicable to

the manufacturer’s excise tax. The national office, however, will issue letter rulings in this

area. See section 7.05 of this revenue procedure.

Requests concerning income,

estate, or gift tax returns

.06 A request received by a district director on a question concerning an income, estate,

or gift tax return already filed generally will be considered in connection with the examination of the return. If a response is made to the request before the return is examined, it

will be considered a tentative finding in any later examination of that return.

Attach a copy of determination

letter to taxpayer’s return

.07 A taxpayer who, before filing a return, receives a determination letter about any

transaction that has been consummated and that is relevant to the return being filed should

attach a copy of the determination letter to the return when it is filed.

Review of determination letters

.08 Determination letters issued under sections 6.01 through 6.04 of this revenue proce-

Sec. 6.03

January 3, 2000

20

2000–1 I.R.B.

dure are not reviewed by the national office before they are issued. If a taxpayer believes

that a determination letter of this type is in error, the taxpayer may ask the district director

to reconsider the matter or to request technical advice from the national office as explained in Rev. Proc. 2000–2, this Bulletin.

SECTION 7. UNDER WHAT

CIRCUMSTANCES DOES THE

SERVICE HAVE DISCRETION

TO ISSUE LETTER RULINGS

AND DETERMINATION

LETTERS?

Ordinarily not in certain areas

because of factual nature

of the problem

.01 The Service ordinarily will not issue letter rulings or determination letters in certain

areas because of the factual nature of the problem involved or because of other reasons.

Rev. Proc. 2000–3 and Rev. Proc. 2000–7 provide a list of these areas. This list is not allinclusive because the Service may decline to issue a letter ruling or a determination letter

when appropriate in the interest of sound tax administration or on other grounds whenever

warranted by the facts or circumstances of a particular case.

Instead of issuing a letter ruling or determination letter, the national office or a district director may, when it is considered appropriate and in the best interests of the Service, issue

an information letter calling attention to well-established principles of tax law.

Not on alternative plans or

hypothetical situations

.02 A letter ruling or a determination letter will not be issued on alternative plans of

proposed transactions or on hypothetical situations.

Ordinarily not on part of an

integrated transaction

.03 The national office ordinarily will not issue a letter ruling on only part of an

integrated transaction. If, however, a part of a transaction falls under a no-rule area, a letter ruling on other parts of the transaction may be issued. Before preparing the letter ruling request, a taxpayer should call the branch having jurisdiction for the matters on which

the taxpayer is seeking a letter ruling to discuss whether the national office will issue a letter ruling on part of the transaction.

If two or more items or sub-methods of accounting are interrelated, the national office ordinarily will not issue a letter ruling on a change in accounting method involving only one

of the items or sub-methods.

Ordinarily not on questions

involving the validity of the

federal income tax or similar

matters

.04 A letter ruling or determination letter ordinarily will not be issued on questions

involving the validity of the federal income tax and other taxes set forth in the Code,

questions on the authority or jurisdiction of the Service to enforce the Code or collect

information, or similar matters.

On constructive sales price under

§ 4216(b) or § 4218(c)

.05 The national office will issue letter rulings in all cases on the determination of a

constructive sales price under § 4216(b) or § 4218(c) and in all other cases on prospective

transactions if the law or regulations require a determination of the effect of a proposed

transaction for tax purposes.

SECTION 8. WHAT ARE THE

GENERAL INSTRUCTIONS

FOR REQUESTING LETTER

RULINGS AND

DETERMINATION

LETTERS?

This section explains the general instructions for requesting letter rulings and determination letters on all matters. Requests for letter rulings and determination letters require the

payment of the applicable user fee listed in Appendix A of this revenue procedure. For additional user fee requirements, see section 15 of this revenue procedure.

2000–1 I.R.B.

21

Sec. 8.01

January 3, 2000

Specific and additional instructions also apply to requests for letter rulings and determination letters on certain matters. Those matters are listed in section 9 of this revenue procedure followed by a reference (usually to another revenue procedure) where more information can be obtained.

Certain information

required in all requests

Facts

.01

(1) Complete statement of facts and other information. Each request for a letter ruling or a determination letter must contain a complete statement of all facts relating to the

transaction. These facts include—

(a) names, addresses, telephone numbers, and taxpayer identification numbers of all interested parties. (The term “all interested parties” does not mean all shareholders of a

widely held corporation requesting a letter ruling relating to a reorganization or all employees where a large number may be involved.);

(b) the annual accounting period, and the overall method of accounting (cash or accrual)

for maintaining the accounting books and filing the federal income tax return, of all interested parties;

(c) the location of the district office that has or will have examination jurisdiction over

the return (not the service center where the return is filed);

(d) a description of the taxpayer’s business operations;

(e) a complete statement of the business reasons for the transaction; and

(f) a detailed description of the transaction.

The Service will usually not rule on only one step of a larger integrated transaction. See

section 7.03 of this revenue procedure. However, if such a letter ruling is requested, the

facts, circumstances, true copies of relevant documents, etc., relating to the entire transaction must be submitted.

Documents and foreign laws

(2) Copies of all contracts, wills, deeds, agreements, instruments, other documents,

and foreign laws.

(a) Documents. True copies of all contracts, wills, deeds, agreements, instruments, trust

documents, proposed disclaimers, and other documents pertinent to the transaction must

be submitted with the request.

If the request concerns a corporate distribution, reorganization, or similar transaction, the

corporate balance sheet and profit and loss statement should also be submitted. If the request relates to a prospective transaction, the most recent balance sheet and profit and loss

statement should be submitted.

If any document, including any balance sheet and profit and loss statement, is in a language other than English, the taxpayer must also submit a certified English translation of

the document, along with a true copy of the document. For guidelines on the acceptability

of such documents, see paragraph (c) of this section 8.01(2).

Each document, other than the request, should be labeled and attached to the request in

alphabetical sequence. Original documents, such as contracts, wills, etc., should not be

submitted because they become part of the Service’s file and will not be returned.

(b) Foreign laws. The taxpayer must submit with the request a copy of the relevant parts

of all foreign laws, including statutes, regulations, administrative pronouncements, and

any other relevant legal authority. The documents submitted must be in the official lan-

Sec. 8.01(1)

January 3, 2000

22

2000–1 I.R.B.

guage of the country involved and must be copied from an official publication of the foreign government or another widely available, generally accepted publication. If English is

not the official language of the country involved, the taxpayer must also submit a copy of

an English language version of the relevant parts of all foreign laws. This translation must

be: (i) from an official publication of the foreign government or another widely available,

generally accepted publication; or (ii) a certified English translation submitted in accordance with paragraph (c) of this section 8.01(2).

The taxpayer must identify the title and date of publication, including updates, of any

widely available, generally accepted publication that the taxpayer (or the taxpayer’s qualified translator) uses as a source for the relevant parts of the foreign law.

(c) Standards for acceptability of submissions of documents in a language other

than English and certified English translations of laws in a language other than English. The taxpayer must submit with the request an accurate and complete certified English translation of the relevant parts of all contracts, wills, deeds, agreements, instruments,

trust documents, proposed disclaimers, or other documents in a language other than English. If the taxpayer chooses to submit certified English translations of foreign laws, those

translations must be based on an official publication of the foreign government or another

widely available, generally accepted publication. In either case, the translation must be

that of a qualified translator and must be attested to by the translator. The attestation must

contain: (i) a statement that the translation submitted is a true and accurate translation of

the foreign language document or law; (ii) a statement as to the attestant’s qualifications as

a translator and as to that attestant’s qualifications and knowledge regarding income tax

matters; and (iii) the attestant’s name and address.

Analysis of material facts

(3) Analysis of material facts. All material facts in documents must be included, rather

than merely incorporated by reference, in the taxpayer’s initial request or in supplemental

letters. These facts must be accompanied by an analysis of their bearing on the issue or issues, specifying the provisions that apply.

Same issue in an earlier return

(4) Statement regarding whether same issue is in an earlier return. The request must

state whether, to the best of the knowledge of both the taxpayer and the taxpayer’s representatives, the same issue is in an earlier return of the taxpayer (or in a return for any year

of a related taxpayer within the meaning of § 267 or of a member of an affiliated group of

which the taxpayer is also a member within the meaning of § 1504).

If the statement is affirmative, it must specify whether the issue–

(a) is being examined by a district director;

(b) has been examined, but the statutory period of limitations has not expired for either

assessing tax or filing a claim for refund or credit of tax;

(c) has been examined, but a closing agreement covering the issue or liability has not

been entered into by a district director;

(d) is being considered by an appeals office in connection with a return from an earlier

period;

(e) has been considered by an appeals office in connection with a return from an earlier

period, but the statutory period of limitations has not expired for either assessing tax or filing a claim for refund or credit of tax;

(f) has been considered by an appeals office in connection with a return from an earlier

period, but a closing agreement covering the issue or liability has not been entered into by

an appeals office; or

2000–1 I.R.B.

23

Sec. 8.01(5)

January 3, 2000

(g) is pending in litigation in a case involving the taxpayer or a related taxpayer.

Same or similar issue previously

submitted or currently pending

(5) Statement regarding whether same or similar issue was previously ruled on or

requested, or is currently pending. The request must also state whether, to the best of

the knowledge of both the taxpayer and the taxpayer’s representatives–

(a) the Service previously ruled on the same or a similar issue for the taxpayer (or a related taxpayer within the meaning of § 267 or a member of an affiliated group of which

the taxpayer is also a member within the meaning of § 1504) or a predecessor;

(b) the taxpayer, a related taxpayer, a predecessor, or any representatives previously submitted a request (including an application for change in accounting method) involving the

same or a similar issue to the Service but withdrew the request before a letter ruling or determination letter was issued;

(c) the taxpayer, a related taxpayer, or a predecessor previously submitted a request (including an application for change in accounting method) involving the same or a similar

issue that is currently pending with the Service; or

(d) at the same time as this request, the taxpayer or a related taxpayer is presently submitting another request (including an application for change in accounting method) involving the same or a similar issue to the Service.

If the statement is affirmative for (a), (b), (c), or (d) of this section 8.01(5), the statement

must give the date the request was submitted, the date the request was withdrawn or ruled

on, if applicable, and other details of the Service’s consideration of the issue.

Statement of authorities

supporting taxpayer’s views

(6) Statement of supporting authorities. If the taxpayer advocates a particular conclusion, an explanation of the grounds for that conclusion and the relevant authorities to

support it must be included. Even if not advocating a particular tax treatment of a proposed transaction, the taxpayer must still furnish views on the tax results of the proposed

transaction and a statement of relevant authorities to support those views.

In all events, the request must include a statement of whether the law in connection with

the request is uncertain and whether the issue is adequately addressed by relevant authorities.

Statement of authorities

contrary to taxpayer’s views

(7) Statement of contrary authorities. The taxpayer is also encouraged to inform the

Service about, and discuss the implications of, any authority believed to be contrary to the

position advanced, such as legislation (or pending legislation), tax treaties, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements. If the

taxpayer determines that there are no contrary authorities, a statement in the request to this

effect would be helpful. If the taxpayer does not furnish either contrary authorities or a

statement that none exists, the Service in complex cases or those presenting difficult or

novel issues may request submission of contrary authorities or a statement that none exists. Failure to comply with this request may result in the Service’s refusal to issue a letter

ruling or determination letter.

Identifying and discussing contrary authorities will generally enable Service personnel to

understand the issue and relevant authorities more quickly. When Service personnel receive the request, they will have before them the taxpayer’s thinking on the effect and applicability of contrary authorities. This information should make research easier and lead

to earlier action by the Service. If the taxpayer does not disclose and distinguish significant contrary authorities, the Service may need to request additional information, which

will delay action on the request.

Statement identifying

Sec. 8.01(5)

January 3, 2000

(8) Statement identifying pending legislation. At the time of filing the request, the

24

2000–1 I.R.B.

pending legislation

taxpayer must identify any pending legislation that may affect the proposed transaction.

In addition, if legislation is introduced after the request is filed but before a letter ruling or

determination letter is issued, the taxpayer must notify the Service.

Deletions statement

required by § 6110

(9) Statement identifying information to be deleted from copy of letter ruling or determination letter for public inspection. The text of letter rulings and determination letters is open to public inspection under § 6110. The Service makes deletions from the text

before it is made available for inspection. To help the Service make the deletions required

by § 6110(c), a request for a letter ruling or determination letter must be accompanied by a

statement indicating the deletions desired (“deletions statement”). If the deletions statement is not submitted with the request, a Service representative will tell the taxpayer that

the request will be closed if the Service does not receive the deletions statement within 21

calendar days. See section 10.06 of this revenue procedure.

(a) Format of deletions statement. A taxpayer who wants only names, addresses, and

identifying numbers to be deleted should state this in the deletions statement. If the taxpayer wants more information deleted, the deletions statement must be accompanied by a

copy of the request and supporting documents on which the taxpayer should bracket the

material to be deleted. The deletions statement must indicate the statutory basis under §

6110(c) for each proposed deletion.

If the taxpayer decides to ask for additional deletions before the letter ruling or determination letter is issued, additional deletions statements may be submitted.

(b) Location of deletions statement. The deletions statement must not appear in the request, but instead must be made in a separate document and placed on top of the request

for a letter ruling or determination letter.

(c) Signature. The deletions statement must be signed and dated by the taxpayer or the

taxpayer’s authorized representative. A stamped signature is not permitted.

(d) Additional information. The taxpayer should follow the same procedures above to

propose deletions from any additional information submitted after the initial request. An

additional deletions statement, however, is not required with each submission of additional information if the taxpayer’s initial deletions statement requests that only names,

addresses, and identifying numbers are to be deleted and the taxpayer wants only the same

information deleted from the additional information.

(e) Taxpayer may protest deletions not made. After receiving from the Service the notice under § 6110(f)(1) of intention to disclose the letter ruling or determination letter (including a copy of the version proposed to be open to public inspection and notation of

third-party communications under § 6110(d)), the taxpayer may protest the disclosure of

certain information in the letter ruling or determination letter. The taxpayer must send a

written statement within 20 calendar days to the Service office indicated on the notice of

intention to disclose. The statement must identify those deletions that the Service has not

made and that the taxpayer believes should have been made. The taxpayer must also submit a copy of the version of the letter ruling or determination letter and bracket the deletions proposed that have not been made by the Service. Generally, the Service will not

consider deleting any material that the taxpayer did not propose to be deleted before the

letter ruling or determination letter was issued.

Within 20 calendar days after the Service receives the response to the notice under

§ 6110(f)(1), the Service will mail to the taxpayer its final administrative conclusion regarding the deletions to be made. The taxpayer does not have the right to a conference to

resolve any disagreements concerning material to be deleted from the text of the letter ruling or determination letter. However, these matters may be taken up at any conference

that is otherwise scheduled regarding the request.

2000–1 I.R.B.

25

Sec. 8.01(9)

January 3, 2000

(f) Taxpayer may request delay of public inspection. After receiving the notice under

§ 6110(f)(1) of intention to disclose, but within 60 calendar days after the date of notice,

the taxpayer may send a request for delay of public inspection under either § 6110(g)(3) or

(4). The request for delay must be sent to the Service office indicated on the notice of intention to disclose. A request for delay under § 6110(g)(3) must contain the date on which

it is expected that the underlying transaction will be completed. The request for delay

under § 6110(g)(4) must contain a statement from which the Commissioner of Internal

Revenue may determine that there are good reasons for the delay.

Signature on request

(10) Signature by taxpayer or authorized representative. The request for a letter ruling or determination letter must be signed and dated by the taxpayer or the taxpayer’s authorized representative. A stamped signature is not permitted.

Authorized representatives

(11) Authorized representatives. To sign the request or to appear before the Service in

connection with the request, the representative must be:

Attorney

(a) An attorney who is a member in good standing of the bar of the highest court of any

state, possession, territory, commonwealth, or the District of Columbia and who is not currently under suspension or disbarment from practice before the Service. He or she must

file a written declaration with the Service showing current qualification as an attorney and

current authorization to represent the taxpayer;

Certified public accountant

(b) A certified public accountant who is duly qualified to practice in any state, possession, territory, commonwealth, or the District of Columbia and who is not currently under

suspension or disbarment from practice before the Service. He or she must file a written

declaration with the Service showing current qualification as a certified public accountant

and current authorization to represent the taxpayer;

Enrolled agent

(c) An enrolled agent who is a person, other than an attorney or certified public accountant, that is currently enrolled to practice before the Service and is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration with the Service showing current enrollment and authorization to represent the

taxpayer. Either the enrollment number or the expiration date of the enrollment card must

be included in the declaration. For the rules on who may practice before the Service, see

Treasury Department Circular No. 230 (31 C.F.R. part 10 (1999));

Enrolled actuary

(d) An enrolled actuary who is a person, other than an attorney or certified public accountant, that is currently enrolled as an actuary by the Joint Board for the Enrollment of

Actuaries pursuant to 29 U.S.C. § 1242 and who is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration with

the Service showing current qualification as an enrolled actuary and current authorization

to represent the taxpayer. Practice before the Service as an enrolled actuary is limited to

representation with respect to issues involving §§ 401, 403(a), 404, 412, 413, 414, 4971,

6057, 6058, 6059, 6652(e), 6652(f), 6692, and 7805(b); former § 405; and 29 U.S.C.

§ 1083; or

A person with a “Letter of

Authorization”

(e) Any other person, including a foreign representative, who has received a “Letter of

Authorization” from the Director of Practice under section 10.7(d) of Treasury Department Circular No. 230. A person may make a written request for a “Letter of Authorization” to: Office of Director of Practice, HR:DP, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, D.C. 20224. Section 10.7(d) of Circular No. 230

authorizes the Commissioner to allow an individual who is not otherwise eligible to practice before the Service to represent another person in a particular matter.

Employee, general partner,

bona fide officer, administrator,

trustee, etc.

(f) The above requirements do not apply to a regular full-time employee representing his

or her employer; to a general partner representing his or her partnership; to a bona fide

officer representing his or her corporation, association, or organized group; to a trustee, receiver, guardian, personal representative, administrator, or executor representing a trust,

Sec. 8.01(9)

January 3, 2000

26

2000–1 I.R.B.

receivership, guardianship, or estate; or to an individual representing his or her immediate

family. A preparer of a return (other than a person referred to in paragraph (a), (b), (c), (d),

or (e) of this section 8.01(11)) who is not a full-time employee, general partner, bona fide

officer, an administrator, a trustee, etc., or an individual representing his or her immediate

family. A preparer of a return (other than a person referred to in paragraph (a), (b), (c), (d),

or (e) of this section 8.01(11)) who is not a full-time employee, general partner, bona fide

officer, an administrator, a trustee, etc., or an individual representing his or her immediate

family may not represent a taxpayer in connection with a letter ruling or a determination

letter. See section 10.7(c) of Treasury Department Circular No. 230.

Foreign representative

(g) A foreign representative (other than a person referred to in paragraph (a), (b), (c), (d), or

(e) of this section 8.01(11)) is not authorized to practice before the Service and, therefore,

must withdraw from representing a taxpayer in a request for a letter ruling or a determination

letter. In this situation, the nonresident alien or foreign entity must submit the request for a

letter ruling or a determination letter on the individual’s or the entity’s own behalf or through

a person referred to in paragraph (a), (b), (c), (d), or (e) of this section 8.01(11).

Power of attorney and

declaration of representative

(12) Power of attorney and declaration of representative. Any authorized representative, whether or not enrolled to practice, must also comply with the conference and practice requirements of the Statement of Procedural Rules (26 C.F.R. § 601.501–601.509

(1999)), which provide the rules for representing a taxpayer before the Service. It is preferred that Form 2848, Power of Attorney and Declaration of Representative, be used to

provide the representative’s authorization (Part I of Form 2848, Power of Attorney) and

the representative’s qualification (Part II of Form 2848, Declaration of Representative).

The name of the person signing Part I of Form 2848 should also be typed or printed on this

form. A stamped signature is not permitted. An original, a copy, or a facsimile transmission (fax) of the power of attorney is acceptable so long as its authenticity is not reasonably disputed. For additional information regarding the power of attorney form, see section 8.02(2) of this revenue procedure.

For the requirement regarding compliance with Treasury Department Circular No. 230,

see section 8.08 of this revenue procedure.

Penalties of perjury statement

(13) Penalties of perjury statement.

(a) Format of penalties of perjury statement. A request for a letter ruling or determination letter and any change in the request submitted at a later time must be accompanied

by the following declaration: “Under penalties of perjury, I declare that I have examined [Insert, as appropriate: this request or this modification to the request], including accompanying documents, and, to the best of my knowledge and belief, [Insert, as

appropriate: the request or the modification] contains all the relevant facts relating

to the request, and such facts are true, correct, and complete.”

See section 10.07(1) of this revenue procedure for the penalties of perjury statement applicable for submissions of additional information.

(b) Signature by taxpayer. The declaration must be signed and dated by the taxpayer,

not the taxpayer’s representative. A stamped signature is not permitted.

The person who signs for a corporate taxpayer must be an officer of the corporate taxpayer who has personal knowledge of the facts and whose duties are not limited to obtaining a letter ruling or determination letter from the Service. If the corporate taxpayer is a

member of an affiliated group filing consolidated returns, a penalties of perjury statement

must also be signed and submitted by an officer of the common parent of the group.

The person signing for a trust, a state law partnership, or a limited liability company must

be, respectively, a trustee, general partner, or member-manager who has personal knowledge of the facts.

2000–1 I.R.B.

27

Sec. 8.01 (14)

January 3, 2000

Number of copies of request

to be submitted

(14) Number of copies of request to be submitted. Generally, a taxpayer needs only to

submit one copy of the request for a letter ruling or determination letter. If, however, more

than one issue is presented in the letter ruling request, the taxpayer is encouraged to submit additional copies of the request.

Further, two copies of the request for a letter ruling or determination letter are required

if—

(a) the taxpayer is requesting separate letter rulings or determination letters on different

issues as explained later under section 8.02(1) of this revenue procedure;

(b) the taxpayer is requesting deletions other than names, addresses, and identifying

numbers, as explained in section 8.01(9)(a) of this revenue procedure. (One copy is the

request for the letter ruling or determination letter and the second copy is the deleted version of such request.); or

(c) a closing agreement (as defined in section 2.02 of this revenue procedure) is being requested on the issue presented.

Sample of a letter ruling request

(15) Sample format for a letter ruling request. To assist a taxpayer or the taxpayer’s

representative in preparing a letter ruling request, a sample format for a letter ruling request is provided in Appendix B. This format is not required to be used by the taxpayer or

the taxpayer’s representative. If the letter ruling request is not identical or similar to the

format in Appendix B, the different format will not defer consideration of the letter ruling

request.

Checklist

(16) Checklist for letter ruling requests. The Service will be able to respond more

quickly to a taxpayer’s letter ruling request if the request is carefully prepared and complete. The checklist in Appendix C of this revenue procedure is designed to assist taxpayers in preparing a request by reminding them of the essential information and documents

to be furnished with the request. The checklist in Appendix C must be completed to the

extent required by the instructions in the checklist, signed and dated by the taxpayer or the

taxpayer’s representative, and placed on top of the letter ruling request. If the checklist in

Appendix C is not received, a branch representative will ask the taxpayer or the taxpayer’s

representative to submit the checklist, which may delay action on the letter ruling request.

For letter ruling requests on certain matters, specific checklists supplement the checklist

in Appendix C. These checklists are listed in section 9.01 of this revenue procedure and

must also be completed and placed on top of the letter ruling request along with the checklist in Appendix C.

Copies of the checklist in Appendix C can be obtained by calling (202) 622-7560 (not a

toll-free call). A photocopy of this checklist may be used.

Additional information

required in certain circumstances

.02

Multiple issues

(1) To request separate letter rulings for multiple issues in a single situation. If

more than one issue is presented in a request for a letter ruling, the Service generally will

issue a single letter ruling covering all the issues. However, if the taxpayer requests separate letter rulings on any of the issues (because, for example, one letter ruling is needed

sooner than another), the Service will usually comply with the request unless it is not feasible or not in the best interests of the Service to do so. A taxpayer who wants separate letter rulings on multiple issues should make this clear in the request and submit two copies

of the request.

Sec. 8.01(14)

January 3, 2000

28

2000–1 I.R.B.

In issuing each letter ruling, the Service will state that it has issued separate letter rulings

or that requests for other letter rulings are pending.

Power of attorney

(2) To designate recipient of original or copy of letter ruling or determination letter.

Unless the power of attorney provides otherwise, the Service will send the original of the

letter ruling or determination letter to the taxpayer and a copy of the letter ruling or determination letter to the taxpayer’s representative. In this case, the letter ruling or determination letter is addressed to the taxpayer. It is preferred that Form 2848, Power of Attorney

and Declaration of Representative, be used to provide the representative’s authorization.

See section 8.01(12) of this revenue procedure.

Copies of letter ruling or

determination letter sent to

multiple representatives

(a) To have copies sent to multiple representatives. When a taxpayer has more than

one representative, the Service will send the copy of the letter ruling or determination

letter to the first representative named on the most recent power of attorney. If the taxpayer wants an additional copy of the letter ruling or determination letter sent to the second representative listed in the power of attorney, the taxpayer must check the appropriate

box on Form 2848. If this form is not used, the taxpayer must state in the power of attorney that a copy of the letter ruling or determination letter is to be sent to the second representative listed in the power of attorney. Copies of the letter ruling or determination letter,

however, will be sent to no more than two representatives.

Original of letter ruling or

determination letter sent to

taxpayer’s representative

(b) To have original sent to taxpayer’s representative. A taxpayer may request that

the original of the letter ruling or determination letter be sent to the taxpayer’s representative. In this case, a copy of the letter ruling or determination letter will be sent to the taxpayer. The letter ruling or determination letter is addressed to the taxpayer’s representative to whom the original is sent.

If the taxpayer wants the original of the letter ruling or determination letter sent to the

taxpayer’s representative, the taxpayer must check the appropriate box on Form 2848. If

this form is not used, the taxpayer must state in the power of attorney that the original of

the letter ruling or determination letter is to be sent to the taxpayer’s representative. When

a taxpayer has more than one representative, the Service will send the original of the letter

ruling or determination letter to the first representative named in the most recent power of

attorney.

No copy of letter ruling or

determination letter sent to

taxpayer’s representative

(c) To have no copy sent to taxpayer’s representative. If a taxpayer does not want a

copy of the letter ruling or determination letter sent to any representative, the taxpayer

must check the appropriate box on Form 2848. If this form is not used, the taxpayer must

state in the power of attorney that a copy of the letter ruling or determination letter is not

to be sent to any representative.

“Two-Part” letter ruling requests

(3) To request a particular conclusion on a proposed transaction. A taxpayer who is

requesting a particular conclusion on a proposed transaction may make the request for a

letter ruling in two parts. This type of request is referred to as a “two-part” letter ruling request. The first part must include the complete statement of facts and related documents

described in section 8.01 of this revenue procedure. The second part must include a summary statement of the facts the taxpayer believes to be controlling in reaching the conclusion requested.

If the Service accepts the taxpayer’s statement of controlling facts, it will base its letter

ruling on these facts. Ordinarily, this statement will be incorporated into the letter ruling.

However, the Service reserves the right to rule on the basis of a more complete statement

of the facts and to seek more information in developing the facts and restating them.

A taxpayer who chooses this two-part procedure has all the rights and responsibilities

provided in this revenue procedure.

2000–1 I.R.B.

29

Sec. 8.02(4)

January 3, 2000

Taxpayers may not use the two-part procedure if it is inconsistent with other procedures,

such as those dealing with requests for permission to change accounting methods or periods, applications for recognition of exempt status under § 521, or rulings on employment

tax status.

After the Service has resolved the issues presented by a letter ruling request, the Service

representative may request that the taxpayer submit a proposed draft of the letter ruling to

expedite the issuance of the ruling. See section 10.09 of this revenue procedure.

Expeditious handling

(4) To request expeditious handling. The Service processes requests for letter rulings

and determination letters in order of the date received and as expeditiously as possible. A

taxpayer who has a compelling need to have a request processed ahead of the regular order

must request expeditious handling. This request must explain the need for expeditious

handling.

The request for expeditious handling must be made in writing, preferably in a separate

letter with, or soon after filing, the request for the letter ruling or determination letter. If

the request for expeditious handling is not made in a separate letter, then the letter in

which the letter ruling or determination letter request is made should say, at the top of the

first page: “Expeditious Handling Is Requested. See page ___ of this letter.”

A request for expeditious handling will not be forwarded to a rulings branch for action

until the check for the user fee is received.

The Service cannot give assurance that any letter ruling or determination letter will be

processed by the time requested. For example, the scheduling of a closing date for a transaction or a meeting of the board of directors or shareholders of a corporation, without regard for the time it may take to obtain a letter ruling or determination letter, will not be

considered a sufficient reason to process a request ahead of its regular order. Also, the

possible effect of fluctuation in the market price of stocks on a transaction will not be considered a sufficient reason to process a request out of order. Accordingly, the Service

urges taxpayers to submit their requests well in advance of the contemplated transaction.

Facsimile transmission (fax)

of any document related

letter ruling request

(5) To receive a letter ruling or submit a request for a letter ruling by facsimile

transmission (fax). If the taxpayer requests, a copy of any document related to the to the

letter ruling request may be faxed to the taxpayer or the taxpayer’s authorized representative (for example, a request for additional information or the letter ruling). A letter ruling,

however, is not issued until the ruling is mailed. See § 301.6110–2(h).

A request to fax a copy of any document related to the letter ruling request to the taxpayer

or the taxpayer’s authorized representative must be made in writing, either as part of the

original letter ruling request or prior to the mailing or, with respect to the letter ruling, approval of the document. The request must contain the fax number of the taxpayer or the

taxpayer’s authorized representative to whom the document is to be faxed.

Because of the unsecured nature of a fax transmission, the national office will take certain precautions to protect confidential information. For example, the national office will

use a cover sheet that identifies the intended recipient of the fax and the number of pages

transmitted, that does not identify the taxpayer by name or identifying number, and that

contains a statement prohibiting unauthorized disclosure of the document if a recipient of

the faxed document is not the intended recipient of the fax. Also, for example, the cover

sheet should be faxed in an order in which it will become the first page covering the faxed

document.

Except for the letter ruling, the document will be faxed by a branch representative. The

letter ruling will be faxed by either a representative of the branch issuing the letter ruling

or the Communications, Records and User Fee Unit of the Technical Services Staff

(CC:DOM:CORP:TSS:CRU).

Sec. 8.02(4)

January 3, 2000

30

2000–1 I.R.B.

Fax of a letter ruling request

(6) To submit a request for a letter ruling by fax. Original letter ruling requests by fax

are discouraged because such requests must be treated in the same manner as requests by

letter. For example, the faxed letter ruling request will not be forwarded to the rulings

branch for action until the check for the user fee is received.

Requests for a change in accounting method or a change in accounting period must not

be submitted by fax.

Requesting a conference

(7) To request a conference. A taxpayer who wants to have a conference on the issues

involved should indicate this in writing when, or soon after, filing the request. See also

sections 11.01, 11.02, and 12.11(2) of this revenue procedure.

Substantially identical letter

rulings or identical accounting

method changes

(8) To obtain the applicable user fee for substantially identical letter rulings or

identical accounting method changes. A taxpayer seeking the user fee provided in

paragraph (A)(5) of Appendix A of this revenue procedure for substantially identical letter

rulings or identical accounting method changes must provide the information required in

section 15.07 of this revenue procedure.

Address to send the request

.03

Requests for letter rulings

(1) Requests for letter rulings should be sent to the Associate Chief Counsel (Domestic),

the Associate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate

Chief Counsel (Enforcement Litigation), or the Associate Chief Counsel (International), as

appropriate. The package should be marked: RULING REQUEST SUBMISSION.

(a) Requests for letter rulings should be sent to the following address:

Internal Revenue Service

Attn: CC:DOM:CORP:TSS

P.O. Box 7604

Ben Franklin Station

Washington, D.C. 20044

However, if a private delivery service is used, the address is:

Internal Revenue Service

Attn: CC:DOM:CORP:TSS, Room 6561

1111 Constitution Avenue, N.W.

Washington, D.C. 20224

(b) Requests for letter rulings may also be hand delivered:

(i) To the drop box at the 12th Street entrance of 1111 Constitution Avenue, N.W., Washington, D.C.. No receipt will be given at the drop box. The package should be addressed to:

Internal Revenue Service

Attn: CC:DOM:CORP:TSS, Room 6561

1111 Constitution Avenue, N.W.

Washington, D.C. 20224; or

(ii) Between the hours of 8:15 a.m. and 5:00 p.m. to the courier’s desk at the main entrance of 1111 Constitution Avenue, N.W., Washington, D.C.. A receipt will be given at

the courier’s desk. The package should be addressed to:

Courier’s Desk

Internal Revenue Service

Attn: CC:DOM:CORP:TSS, Room 6561

1111 Constitution Avenue, N.W.

Washington, D.C. 20224

Sec. 8.03(1)

2000–1 I.R.B.

31

January 3, 2000

Requests for

determination letters

(2) Requests for determination letters should be sent to the district director whose

office has or will have examination jurisdiction over the taxpayer’s return. For fees required with determination letter requests, see section 15 and Appendix A of this revenue

procedure.

Pending letter ruling requests

.04

(1) Circumstances under which the taxpayer must notify the national office. The

taxpayer must notify the national office if, after the letter ruling request is filed but before

a letter ruling is issued, the taxpayer knows that—

(a) an examination of the issue or the identical issue on an earlier year’s return has been

started by a district director;

(b) in the case of a § 301.9100 request, an examination of the return for the taxable year

in which an election should have been made or any taxable year that would have been affected by the election had it been timely made has been started by a district director. See

§ 301.9100–3(e)(4)(i) and section 5.02(3) of this revenue procedure;

(c) legislation that may affect the transaction has been introduced. See section 8.01(8) of

this revenue procedure; or

(d) another letter ruling request (including an application for change in accounting

method) has been submitted by the taxpayer (or a related party within the meaning of §

267 or a member of an affiliated group of which the taxpayer is also a member within the

meaning of § 1504) involving the same or similar issue that is currently pending with the

Service.

(2) Taxpayer must notify national office if return is filed and must attach request to

return. If the taxpayer files a return before a letter ruling is received from the national office concerning the issue, the taxpayer must notify the national office that the return has

been filed. The taxpayer must also attach a copy of the letter ruling request to the return to

alert the district office and thereby avoid premature district action on the issue.

This section 8.04 also applies to pending requests for a closing agreement on a transaction for which a letter ruling is not requested or issued, and for an advance pricing agreement.

When to attach letter

ruling to return

.05

A taxpayer who receives a letter ruling before filing a return about any transaction that is

relevant to the return being filed must attach a copy of the letter ruling to the return when

it is filed.

How to check on status of request

.06

The taxpayer or the taxpayer’s authorized representative may obtain information regarding the status of a request by calling the person whose name and telephone number are

shown on the acknowledgment of receipt of the request or the appropriate branch representative who contacts the taxpayer as explained in section 10.02 of this revenue procedure.

Request may be withdrawn or

national office may decline to

issue letter ruling

.07

(1) In general. A taxpayer may withdraw a request for a letter ruling or determination

letter at any time before the letter ruling or determination letter is signed by the Service.

Correspondence and exhibits related to a request that is withdrawn or related to a letter

Sec. 8.03(1)

January 3, 2000

32

2000–1 I.R.B.

ruling request for which the national office declines to issue a letter ruling will not be returned to the taxpayer. See section 8.01(2) of this revenue procedure. In appropriate

cases, the Service may publish its conclusions in a revenue ruling or revenue procedure.

(2) Notification of district director.

(a) Request to change an accounting method. If a taxpayer withdraws or the national

office declines to grant (for any reason) a request to change from or to adopt an improper

method of accounting, the national office will notify, by memorandum, the appropriate

district director and the Change in Method Issue Specialist, and may give its views on the

issues in the request to the appropriate district director to consider in any later examination

of the return.

(b) All other letter ruling requests. If a taxpayer withdraws a letter ruling request (other

than a request to change from or to adopt an improper method of accounting) or if the national office declines to issue a letter ruling (other than a letter ruling pertaining to a request

to change from or to adopt an improper method of accounting), the national office generally

will notify, by memorandum, the appropriate district director and may give its views on the

issues in the request to the appropriate district director to consider in any later examination

of the return. This section 8.07(2)(b) generally does not apply if the taxpayer withdraws the

letter ruling request and submits a written statement that the transaction has been, or is

being, abandoned and if the national office has not formed an adverse opinion.

(c) Notification of district director may constitute Chief Counsel Advice. If the

memorandum to the district director referred to in paragraphs (a) and (b) of this section

8.07(2) provides more than the fact that the request was withdrawn and the national office

was tentatively adverse, or that the national office declines to grant a change in method of

accounting or issue a letter ruling, the memorandum would constitute Chief Counsel Advice, as defined in § 6110(i)(1), subject to disclosure under § 6110. For example, if the

memorandum explains the national office’s reasoning for its tentatively adverse position

on the issues in the request, the memorandum would constitute Chief Counsel Advice.

(3) Refunds of user fee. The user fee will not be returned for a letter ruling request that

is withdrawn. If the national office declines to issue a letter ruling on all of the issues in

the request, the user fee will be returned. If the national office, however, issues a letter

ruling on some, but not all, of the issues, the user fee will not be returned. See section

15.10 of this revenue procedure for additional information regarding refunds of user fees.

Compliance with Treasury

Department Circular No. 230

.08

The taxpayer’s authorized representative, whether or not enrolled, must comply with

Treasury Department Circular No. 230, which provides the rules for practice before the

Service. In those situations when the national office believes that the taxpayer’s representative is not in compliance with Circular No. 230, the national office will bring the matter

to the attention of the Director of Practice.

For the requirement regarding compliance with the conference and practice requirements, see section 8.01(12) of this revenue procedure.

SECTION 9. WHAT OTHER

CHECKLISTS, GUIDELINE

REVENUE PROCEDURES,

NOTICES, SAFE HARBOR

REVENUE PROCEDURES,

AND AUTOMATIC CHANGE

REVENUE PROCEDURES

APPLY TO CERTAIN

REQUESTS?

2000–1 I.R.B.

33

Sec. 9

January 3, 2000

Specific revenue procedures and notices supplement the general instructions for requests

explained in section 8 of this revenue procedure and apply to requests for letter rulings or

determination letters regarding the Code sections and matters listed in this section.

Checklists and guideline

revenue procedures and notices

.01 For requests relating to the following Code sections and subject matters, see the

following checklists and guideline revenue procedures and notices.

CODE OR REGULATION

SECTION

REVENUE PROCEDURE AND NOTICE

103, 141–150, 7478, and 7871

Issuance of state or local obligations

Rev. Proc. 96–16, 1996–1 C.B. 630 (for a reviewable ruling under § 7478 and a nonreviewable ruling); Rev. Proc. 88–31, 1988–1 C.B. 832 (for approval of areas of chronic

economic distress); and Rev. Proc. 82–26, 1982–1 C.B. 476 (for “on behalf of” and similar

issuers). For approval of areas of chronic economic distress, Rev. Proc. 88–31 explains

how this approval must be submitted to the Assistant Secretary for Housing/Federal Housing Commissioner of the Department of Housing and Urban Development.

162, 165, 198, and 263

Treatment of environmental

cleanup costs

Rev. Proc. 98–17, 1998–1 C.B. 405.

1.166–2(d)(3)

Uniform express determination

letter for making election

Rev. Proc. 92–84, 1992–2 C.B. 489.

Subchapter C–Corporate

Distributions and Adjustments

Rev. Proc. 77–37, 1977–2 C.B. 568, as modified by Rev. Proc. 89–30, 1989–1 C.B.

895, and as amplified by Rev. Proc. 77–41, 1977–2 C.B. 574, Rev. Proc. 83–81, 1983–2

C.B. 598 (see also Rev. Proc. 2000–3), Rev. Proc. 84–42, 1984–1 C.B. 521 (superseded as to

no-rule areas by Rev. Proc. 85–22, 1985–1 C.B. 550), Rev. Proc. 86–42, 1986–2 C.B. 722,

and Rev. Proc. 89–50, 1989–2 C.B. 631. But see Rev. Proc. 2000–3, section 3.01(23) (mergers or consolidations under § 368(a)(1)(A)), section 3.01(24) (stock acquisitions under

§ 368(a)(1)(B)), and section 3.01(27) (corporate changes under § 368(a)(1)(F)), which describe certain corporate reorganizations where the Service will not issue advance letter rulings or determination letters.

301

Nonapplicability on sales of

stock of employer to defined

contribution plan

Rev. Proc. 87–22, 1987–1 C.B. 718.

302, 311

Checklist questionnaire

Rev. Proc. 86–18, 1986–1 C.B. 551; and Rev. Proc. 77–41, 1977–2 C.B. 574.

302(b)(4)

Checklist questionnaire

Rev. Proc. 81–42, 1981–2 C.B. 611.

331

Checklist questionnaire

Rev. Proc. 86–16, 1986–1 C.B. 546.

332

Checklist questionnaire

Rev. Proc. 90–52, 1990–2 C.B. 626.

351

Checklist questionnaire

Rev. Proc. 83–59, 1983–2 C.B. 575. But see section 3.01(22) of Rev. Proc. 2000–3,

which describes certain transfers to controlled corporations where the Service will not

issue advance letter rulings or determination letters.

355

Checklist questionnaire

Rev. Proc. 96–30, 1996–1 C.B. 696.

Sec. 9.01

January 3, 2000

34

2000–1 I.R.B.

368(a)(1)(E)

Checklist questionnaire

Rev. Proc. 81–60, 1981–2 C.B. 680. But see section 3.01(26) of Rev. Proc. 2000–3, which

describes circumstances under which the Service will not issue advance letter rulings or

determination letters as to whether a transaction constitutes a corporate recapitalization

within the meaning of § 368(a)(1)(E) (or a transaction that also qualifies under § 1036).

461(h)

Alternative method for the

inclusion of common improvement

costs in basis

Rev. Proc. 92–29, 1992–1 C.B. 748.

482

Advance pricing agreements

Rev. Proc. 96–53, 1996–2 C.B. 375, as modified by Notice 98–65, 1998–2 C.B. 803.

521

Appeal procedure with regard

to adverse determination letters

and revocation or modification

of exemption letter rulings and

determination letters

Rev. Proc. 90–27, 1990–1 C.B. 514.

1.817–5(a)(2)

Issuer of a variable contract

requesting relief

Rev. Proc. 92–25, 1992–1 C.B. 741.

877, 2107, and 2501(a)(3)

Individuals who lose U.S.

citizenship or cease to be taxed

as long-term U.S. residents with a

principal purpose to avoid U.S. taxes

Notice 97–19, 1997–1 C.B. 394, as modified by Notice 98–34, 1998–2 C.B. 29.

1362(b)(5) and 1362(f)

Relief for late S corporation and

related elections under certain

circumstances

Rev. Proc. 98–55, 1998–2 C.B. 645; Rev. Proc. 97–48, 1997–2 C.B. 521.

1.1502–13(e)(3)

Consent to treat intercompany

transactions on a separate entity

basis and revocation of this consent

Rev. Proc. 97–49, 1997–2 C.B. 523.

1.1502–76(a)(1)

Consent to file a consolidated

return where member(s) of the

affiliated group use a 52–53

week taxable year

Rev. Proc. 89–56, 1989–2 C.B. 643.

1504(a)(3)(A) and (B)

Waiver of application of

§ 1504(a)(3)(A) for certain

corporations

Rev. Proc. 91–71, 1991–2 C.B. 900.

1552

Consent to elect or change method

of allocating affiliated group’s

consolidated federal income

tax liability

Rev. Proc. 90–39, 1990–2 C.B. 365, as clarified by Rev. Proc. 90–39A, 1990–2 C.B. 367.

2000–1 I.R.B.

35

Sec. 9.01

January 3, 2000

4980B

Rev. Proc. 87–28, 1987–1 C.B. 770 (treating references to former § 162(k) as if they were

references to § 4980B).

7702A

Relief for inadvertent

non-egregious failure to

comply with modified

endowment contract rules

Rev. Proc. 99–27, 1999–23 I.R.B. 7 (this revenue procedure is available only for requests

for relief received on or before May 31, 2001).

7704(g)

Revocation of election

Notice 98–3, 1998–1 C.B. 333.

SUBJECT MATTERS

REVENUE PROCEDURE

Accounting methods; obtaining

consent to changes in method

Rev. Proc. 97–27, 1997–1 C.B. 680; and Rev. Proc. 2000–1 (this revenue procedure) for

which sections 1, 2.01, 2.02, 2.06, 3.01(2), 3.01(3), 3.01(4), 5.02, 5.12, 5.14, 7.01, 7.02,

7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6), 8.01(7), 8.01(8), 8.01(11),

8.01(12), 8.01(13), 8.01(14), 8.02(2), 8.02(4), 8.02(5), 8.02(7), 8.02(8), 8.03(1), 8.04,

8.05, 8.06, 8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07, 10.08, 10.10(2), 10.11, 11, 12.01,

12.02, 12.06–12.11, 15, and Appendix A are applicable.

Accounting periods; adopt, retain

or change for partnership,

S corporation, and personal

service corporation

Rev. Proc. 87–32, 1987–2 C.B. 396, as modified by T.D. 8680, 1996–2 C.B. 194; and

Rev. Proc. 2000–1 (this revenue procedure) for which sections 1, 2.01, 2.02, 2.06, 3.01(3),

5.02, 5.12, 5.14, 7.01, 7.02, 7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6),

8.01(7), 8.01(8), 8.01(11), 8.01(12), 8.01(13), 8.01(14), 8.02(2), 8.02(4), 8.02(5), 8.02(7),

8.03(1) (only for Forms 1128 filed under section 6.01 of Rev. Proc. 87–32), 8.04, 8.05, 8.06,

8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07, 10.08, 11, 12, 15, and Appendix A are applicable.

Accounting periods;

changes in periods

Rev. Proc. 92–13, 1992–1 C.B. 665, as modified and amplified by Rev. Proc. 92–13A,

1992–1 C.B. 668, and as modified by Rev. Proc. 94–12, 1994–1 C.B. 565; and Rev. Proc.

2000–1 (this revenue procedure) for which sections 1, 2.01, 2.02, 2.06, 3.01(3), 5.02, 5.12,

5.14, 7.01, 7.02, 7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6), 8.01(7), 8.01(8),

8.01(11), 8.01(12), 8.01(13), 8.01(14), 8.02(2), 8.02(4), 8.02(5), 8.02(7), 8.03(1), 8.04,

8.05, 8.06, 8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07, 10.08, 11, 12, 15, and Appendix A are

applicable.

Classification of liquidating trusts

Rev. Proc. 82–58, 1982–2 C.B. 847, as modified and amplified by Rev. Proc. 94–45,

1994–2 C.B. 684, and as amplified by Rev. Proc. 91–15, 1991–1 C.B. 484 (checklist questionnaire), as modified and amplified by Rev. Proc. 94–45.

Earnings and profits determinations

Rev. Proc. 75–17, 1975–1 C.B. 677; and Rev. Proc. 2000–1 (this revenue procedure) for

which sections 2.06, 3.01(3), 8, 10.04, 10.06, and 11.05 are applicable.

Estate, gift, and generation-skipping

transfer tax issues

Rev. Proc. 91–14, 1991–1 C.B. 482 (checklist questionnaire).

Deferred intercompany

transactions; election not to defer

gain or loss

Rev. Proc. 82–36, 1982–1 C.B. 490.

Leveraged leasing

Rev. Proc. 75–21, 1975–1 C.B. 715, as modified by Rev. Proc. 76–30, 1976–2 C.B. 647,

Rev. Proc. 79–48, 1979–2 C.B. 529, and Rev. Proc. 81–71, 1981–2 C.B. 731; and Rev.

Proc. 75–28, 1975–1 C.B. 752, as modified by Rev. Proc. 79–48 and Rev. Proc. 81–71.

Rate orders; regulatory agency;

normalization

A letter ruling request that involves a question of whether a rate order that is proposed

or issued by a regulatory agency will meet the normalization requirements of § 168(f)(2)

(pre-Tax Reform Act of 1986, § 168(e)(3)) and former §§ 46(f) and 167(l) ordinarily will

not be considered unless the taxpayer states in the letter ruling request whether—

Sec. 9.01

January 3, 2000

36

2000–1 I.R.B.

(1) the regulatory authority responsible for establishing or approving the taxpayer’s

rates has reviewed the request and believes that the request is adequate and complete; and

(2) the taxpayer will permit the regulatory authority to participate in any national office

conference concerning the request.

If the taxpayer or the regulatory authority informs a consumer advocate of the request for

a letter ruling and the advocate wishes to communicate with the Service regarding the request, any such communication should be sent to: Internal Revenue Service, Associate

Chief Counsel (Domestic), Attention CC:DOM:CORP:TSS, P.O. Box 7604, Ben Franklin

Station, Washington, D.C. 20044 (or, if a private delivery service is used: Internal Revenue Service, Associate Chief Counsel (Domestic), Attention CC:DOM:CORP:TSS,

Room 6561, 1111 Constitution Avenue, N.W., Washington, D.C. 20224). These communications will be treated as third party contacts for purposes of § 6110.

Unfunded deferred compensation

Rev. Proc. 71–19, 1971–1 C.B. 698, as amplified by Rev. Proc. 92–65, 1992–2 C.B. 428.

See Rev. Proc. 92–64, 1992–2 C.B. 422, for the model trust for use in Rabbi Trust

Arrangements.

Safe harbor revenue procedures

.02 For requests relating to the following Code sections and subject matters, see the following safe harbor revenue procedures.

CODE OR REGULATION SECTION

REVENUE PROCEDURE

103 and 141–150

Issuance of state or local obligations

Rev. Proc. 93–17, 1993–1 C.B. 507 (changes of use of proceeds); and Rev. Proc. 93–19,

1993–1 C.B. 526 (management contracts).

280B

Certain structural modifications

to a building not treated as a

demolition

Rev. Proc. 95–27, 1995–1 C.B. 704.

355(a)(1)(B)

Transaction not violating the

device test

Section 4.05(1)(b) of Rev. Proc. 96–30, 1996–1 C.B. at 705.

584(a)

Qualification of a proposed

common trust fund plan

Rev. Proc. 92–51, 1992–1 C.B. 988.

642(c)(5)

Qualification of trusts as

pooled income funds

Rev. Proc. 88–53, 1988–2 C.B. 712.

664(d)(1)

Qualification of trusts as charitable

remainder annuity trusts

Rev. Proc. 89–21, 1989–1 C.B. 842, as amplified by Rev. Proc. 90–32, 1990–1 C.B. 546.

664(d)(2)

Qualification of trusts as charitable

remainder unitrusts

Rev. Proc. 89–20, 1989–1 C.B. 841, as amplified by Rev. Proc. 90–30, 1990–1 C.B. 534.

664(d)(2) and (3)

Qualification of trusts as charitable

remainder unitrusts

Rev. Proc. 90–31, 1990–1 C.B. 539.

2000–1 I.R.B.

37

Sec. 9.02

January 3, 2000

1286

Determination of reasonable

compensation under mortgage

servicing contracts

Rev. Proc. 91–50, 1991–2 C.B. 778.

1362(f)

Automatic inadvertent termination

relief to certain corporations

Rev. Proc. 98–55, 1998–2 C.B. 645.

20.2056A–2(d)(1)(i) and (d)(1)(ii)

Sample trust language

Rev. Proc. 96–54, 1996–2 C.B. 386.

1.7704–2(d)

New business activity of existing

partnership is closely related to

pre-existing business

Rev. Proc. 92–101, 1992–2 C.B. 579.

SUBJECT MATTERS

REVENUE PROCEDURE

Certain rent-to-own

contracts treated as leases

Rev. Proc. 95–38, 1995–2 C.B. 397.

Automatic change

revenue procedures

.03 For requests to change an accounting period or accounting method, see the following

automatic change revenue procedures published and in effect as of December 31, 1999. A

taxpayer complying timely with an automatic change revenue procedure will be deemed

to have obtained the consent of the Commissioner to change the taxpayer’s accounting period or accounting method, as applicable.

CODE SECTION

REVENUE PROCEDURE

442

Changes in accounting periods

The automatic change revenue procedures for obtaining a change in annual accounting

period include: Rev. Proc. 92–13, 1992–1 C.B. 665, as modified by Rev. Proc. 94–12,

1994–1 C.B. 565, and as modified and amplified by Rev. Proc. 92–13A, 1992–1 C.B. 668

(certain corporations that have not changed their accounting period within the prior 6 calendar years or other specified time); Rev. Proc. 87–32, 1987–2 C.B. 396, as modified by

§ 301.9100–3 (partnership, S corporation, or personal service corporation seeking a natural business year or an ownership taxable year); Rev. Proc. 68–41, 1968–2 C.B. 943, as

modified by Rev. Proc. 81–40, 1981–2 C.B. 605 (trusts held by certain fiduciaries needing

a workload spread); and Rev. Proc. 66–50, 1966–2 C.B. 1260, as modified by Rev. Proc.

81–40 (individual seeking a calendar year).

446

Changes in accounting methods

The automatic change revenue procedures for obtaining a change in method of accounting

include: Rev. Proc. 99–49, 1999–52 I.R.B. 725 (applies to the changes in methods of accounting that are described in the Appendix of Rev. Proc. 99–49 involving §§ 56, 162,

167, 168, 171, 174, 197, 263, 263A, 404, 446, 451, 454, 455, 461, 467, 471, 472, 475,

585, 1272, 1273, 1278, and 1281, and former § 168); Rev. Proc. 98–58, 1998–2 C.B. 712

(certain taxpayers seeking to change to the installment method of accounting under § 453

for alternative minimum tax purposes for certain deferred payment sales contracts relating

to property used or produced in the trade or business of farming); Rev. Proc. 97–43,

1997–2 C.B. 494 (certain taxpayers required to change their method of accounting as a result of making elections out of certain exemptions from dealer status for purposes of §

475); Rev. Proc. 92–67, 1992–2 C.B. 429 (certain taxpayers with one or more market discount bonds seeking to make a § 1278(b) election or a constant interest rate election); Rev.

Proc. 92–29, 1992–1 C.B. 748 (certain taxpayers seeking to use an alternative method

under § 461(h) for including common improvement costs in basis); and Rev. Proc. 91–51,

1991–2 C.B. 779 (certain taxpayers under examination that sell mortgages and retain

rights to service the mortgages).

Sec. 9.02

January 3, 2000

38

2000–1 I.R.B.

SECTION 10. HOW DOES THE

NATIONAL OFFICE HANDLE

LETTER RULING REQUESTS?

The national office will issue letter rulings on the matters and under the circumstances

explained in sections 3 and 5 of this revenue procedure and in the manner explained in this

section and section 11 of this revenue procedure.

Controls request and refers it to

appropriate Assistant Chief

Counsel or to the Office of

Associate Chief Counsel

(International)

.01 All requests for letter rulings will be controlled by the Technical Services Staff of

the Assistant Chief Counsel (Corporate) (CC:DOM:CORP:TSS). That office will

examine the incoming documents for completeness, process the user fee, and forward the

file to the appropriate Assistant Chief Counsel or, for letter ruling requests under the

jurisdiction of the Associate Chief Counsel (International), to the Office of Associate

Chief Counsel (International). The Assistant Chief Counsel’s office or the Office of Associate Chief Counsel (International), as appropriate, will assign the letter ruling request to

one of its branches.

Branch representative

contacts taxpayer within 21 days

.02 Within 21 calendar days after a letter ruling request has been received in the branch

having jurisdiction, a representative of the branch will discuss the procedural issues in the

letter ruling request with the taxpayer or, if the request includes a properly executed power

of attorney, with the authorized representative unless the power of attorney provides otherwise. If the case is complex or a number of issues are involved, it may not be possible for

the branch representative to discuss the substantive issues during this initial contact.

However, when possible, for each issue within the branch’s jurisdiction, the branch representative will tell the taxpayer—

(1) whether the branch representative will recommend that the Service rule as the taxpayer requested, rule adversely on the matter, or not rule;

(2) whether the taxpayer should submit additional information to enable the Service to

rule on the matter; or

(3) whether, because of the nature of the transaction or the issue presented, a tentative

conclusion on the issue cannot be reached.

Except for cases involving a request for change in accounting method or accounting

period, the 21 calendar day procedure applies to: all matters within the jurisdiction

of the Assistant Chief Counsel (Corporate), the Assistant Chief Counsel (Income Tax

and Accounting), the Assistant Chief Counsel (Passthroughs and Special Industries),

the Associate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel (International); and all matters within the jurisdiction of the Assistant Chief Counsel

(Financial Institutions and Products), except cases concerning insurance issues requiring actuarial computations.

Notifies taxpayer if any issues

have been referred to another

branch or office

.03 If the letter ruling request involves matters within the jurisdiction of more than one

branch or office, a representative of the branch that received the original request will tell

the taxpayer within the initial 21 days—

(1) that the matters within the jurisdiction of another branch or office have been referred

to that branch or office for consideration; and

(2) that a representative of that branch or office will contact the taxpayer within 21 calendar days after receiving the referral to discuss informally the procedural and, to the extent possible, the substantive issues in the request.

Determines if transaction can be

modified to obtain favorable

2000–1 I.R.B.

.04 If a less than fully favorable letter ruling is indicated, the branch representative will

tell the taxpayer whether minor changes in the transaction or adherence to certain

39

Sec. 10.03

January 3, 2000

letter ruling

published positions would bring about a favorable ruling. The branch representative may

also tell the taxpayer the facts that must be furnished in a document to comply with Service requirements. However, the branch representative will not suggest precise changes

that would materially alter the form of the proposed transaction or materially alter a taxpayer’s proposed accounting method or accounting period.

If, at the end of this discussion, the branch representative determines that a meeting in the

national office would be more helpful to develop or exchange information, a meeting will

be offered and an early meeting date arranged. When offered, this meeting is in addition

to the taxpayer’s conference of right that is described in section 11.02 of this revenue procedure.

Is not bound by informal

opinion expressed

.05 The Service will not be bound by the informal opinion expressed by the branch

representative or any other authorized Service representative, and such an opinion cannot

be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

Tells taxpayer if request lacks

essential information during

initial contact

.06 If a request for a letter ruling or determination letter does not comply with all the

provisions of this revenue procedure, the branch representative will tell the taxpayer

during the initial contact which requirements have not been met.

Information must be submitted

within 21 calendar days

(1) If the request lacks essential information, which may include additional information

needed to satisfy the procedural requirements of this revenue procedure, as well as substantive changes to transactions or documents needed from the taxpayer, the branch representative will tell the taxpayer during the initial contact that the request will be closed if

the Service does not receive the information within 21 calendar days unless an extension

of time is granted. See sections 10.07(1), (2), and (3) of this revenue procedure for instructions on submissions of additional information. To facilitate prompt action on letter

ruling requests, taxpayers are encouraged to request that the Service request additional information by fax. See section 8.02(5) of this revenue procedure.

21-day period will be extended

if justified and approved

(2) An extension of the 21-day period will be granted only if justified in writing by the

taxpayer and approved by the branch chief, senior technician reviewer (or senior technical

reviewer), or assistant to the branch chief (or assistant branch chief) of the branch to which

the case is assigned. A request for extension should be submitted before the end of the 21day period. If unusual circumstances close to the end of the 21-day period make a written

request impractical, the taxpayer should notify the national office within the 21-day period

that there is a problem and that the written request for extension will be coming soon. The

taxpayer will be told promptly, and later in writing, of the approval or denial of the requested extension. If the extension request is denied, there is no right of appeal.

Letter ruling request closed if

the taxpayer does not submit

information

(3) If the taxpayer does not submit the information requested during the initial contact

within the time provided, the letter ruling request will be closed and the taxpayer will be

notified in writing. If the information is received after the request is closed, the request will be reopened and treated as a new request as of the date the information is

received. However, the taxpayer must pay another user fee before the case can be reopened.

Letter ruling request mistakenly

sent to district director

(4) A request for a letter ruling sent to the district director that does not comply with the

provisions of this revenue procedure will be returned by the district director so that the

taxpayer can make corrections before sending it to the national office.

Requires prompt submission

of additional information

requested after initial contact

.07

Sec. 10.03

January 3, 2000

(1) Material facts furnished to the Service by telephone or fax, or orally at a conference,

must be promptly confirmed by letter to the Service. This confirmation and any additional information requested by the Service that is not part of the information requested during the initial contact must be furnished within 21 calendar days to be considered part of the request.

40

2000–1 I.R.B.

Additional information submitted to the Service must be accompanied by the following

declaration: “Under penalties of perjury, I declare that I have examined this information, including accompanying documents, and, to the best of my knowledge and belief, the information contains all the relevant facts relating to the request for the information, and such facts are true, correct, and complete.” This declaration must be

signed in accordance with the requirements in section 8.01(13)(b) of this revenue procedure. A taxpayer who submits additional factual information on several occasions may

provide one declaration subsequent to all submissions that refers to all submissions.

To facilitate prompt action on letter ruling requests, taxpayers are encouraged to request

that the Service request additional information by fax. See section 8.02 (5) of this revenue

procedure. Taxpayers also are encouraged to submit additional information by fax as soon

as the information is available. The Service representative who requests additional information can provide a telephone number to which the information can be faxed. A copy of

this information and a signed perjury statement, however, must be mailed or delivered to

the Service.

Address to send additional

information

(2)(a) If a private delivery service is not used, the additional information should be

sent to:

Internal Revenue Service

ADDITIONAL INFORMATION

Attn: [Name, office symbols, and

room number of the Service

representative who requested

the information]

P.O. Box 7604

Ben Franklin Station

Washington, D.C. 20044

However, for cases involving a request for change in accounting method or period under

the jurisdiction of the Assistant Chief Counsel (Income Tax and Accounting), and a §

301.9100 request for an extension of time on such cases, the additional information should

be sent to:

Internal Revenue Service

ADDITIONAL INFORMATION

Attn: [Name, office symbols, and

room number of the Service

representative who requested

the information]

P.O. Box 14095

Ben Franklin Station

Washington, D.C. 20044

(b) If a private delivery service is used, the additional information for all cases should be

sent to:

Internal Revenue Service

ADDITIONAL INFORMATION

Attn: [Name, office symbols, and

room number of the Service

representative who requested

the information]

1111 Constitution Avenue, N.W.

Washington, D.C. 20224

(c) For all cases, the additional information should include the name, office symbols, and

2000–1 I.R.B.

41

Sec. 10.07(2)

January 3, 2000

room number of the Service representative who requested the information, and the taxpayer’s name and the case control number, which the Service representative can provide.

Number of copies of additional

information to be submitted

(3) Generally, a taxpayer needs only to submit one copy of the additional information.

However, in appropriate cases, the national office may request additional copies of the information.

21-day period will be extended

if justified and approved

(4) An extension of the 21-day period will be granted only if justified in writing by the

taxpayer and approved by the branch chief, senior technician reviewer (or senior technical reviewer), or assistant to the branch chief (or assistant branch chief) of the branch

to which the case is assigned. A request for extension should be submitted before the

end of the 21-day period. If unusual circumstances close to the end of the 21-day period make a written request impractical, the taxpayer should notify the national office

within the 21-day period that there is a problem and that the written request for extension will be coming soon. The taxpayer will be told promptly, and later in writing, of

the approval or denial of the requested extension. If the extension request is denied,

there is no right of appeal.

If taxpayer does not submit

additional information

(5) If the taxpayer does not follow the instructions for submitting additional information

or requesting an extension within the time provided, a letter ruling will be issued on the

basis of the information on hand or, if appropriate, no letter ruling will be issued.

When the Service decides not to issue a letter ruling because additional information was

not timely submitted, the case will be closed and the taxpayer notified in writing. If the

Service receives the information after the letter ruling request is closed, the request

may be reopened and treated as a new request. However, the taxpayer must pay another user fee before the case can be reopened.

Near the completion of the

ruling process, advises the

taxpayer of conclusions and,

if the Service will rule adversely,

offers the taxpayer the

opportunity to withdraw the

letter ruling request

.08 Generally, after the conference of right is held but before the letter ruling is issued,

the branch representative will inform the taxpayer or the taxpayer’s representative of the

Service’s conclusions. If the Service is going to rule adversely, the taxpayer will be

offered the opportunity to withdraw the letter ruling request. If the taxpayer or the

taxpayer’s representative does not promptly notify the branch representative of a decision

to withdraw the ruling request, the adverse letter ruling will be issued. The user fee will

not be refunded for a letter ruling request that is withdrawn. See section 8.07 of this revenue procedure.

May request draft of proposed

letter ruling near the completion

of the ruling process

.09 To accelerate issuance of letter rulings, in appropriate cases near the completion of

the ruling process, the Service representative may request that the taxpayer or the

taxpayer’s representative submit a proposed draft of the letter ruling on the basis of discussions of the issues. The taxpayer, however, is not required to prepare a draft letter ruling to receive a letter ruling.

The format of the submission should be discussed with the Service representative who

requests the draft letter ruling. The representative usually can provide a sample format of

a letter ruling and will discuss the facts, analysis, and letter ruling language to be included.

Taxpayer may also submit

draft on a computer disk in a

word processing format

In addition to a typed draft, taxpayers are encouraged to submit this draft on a computer

disk in a word processing format acceptable to the Service. The typed draft will become

part of the permanent files of the national office, and the computer disk will not be returned. If the Service representative requesting the draft letter ruling cannot answer specific questions about the word processing format, the questions can be directed to Wayne

Thomas at 202-622-7560 (not a toll-free call).

The proposed letter ruling (both typed draft and computer disk) should be sent to the

same address as any additional information and contain in the transmittal the information

that should be included with any additional information (for example, a penalties of perjury statement is required). See section 10.07 of this revenue procedure.

Sec. 10.07(2)

January 3, 2000

42

2000–1 I.R.B.

Issues separate letter rulings

for substantially identical letter

rulings and generally issues a

single letter ruling for identical

accounting method changes

.10

(1) Substantially identical letter rulings. For letter ruling requests qualifying for the

user fee provided in paragraph (A)(5)(a) of Appendix A of this revenue procedure for substantially identical letter rulings, a separate letter ruling will be issued for each entity with

a common member or sponsor, or for each member of a common entity.

(2) Identical accounting method changes and related § 301.9100 letter rulings. For

letter ruling requests qualifying for the user fee provided in paragraphs (A)(5)(b) and (c)

of Appendix A of this revenue procedure for identical accounting method changes and related § 301.9100 letter rulings, a single letter ruling generally will be issued on behalf of

all members of a consolidated group that file a Form 3115, Application for Change in Accounting Method, or that file a § 301.9100 request for an extension of time to file a Form

3115. However, the branch to which the case is assigned may, at its discretion, issue separate letter rulings for certain members or groups of members within a consolidated group.

For example, separate letter rulings may be issued if different terms and conditions are required. Each letter ruling will include an attachment listing the § 481(a) adjustment for

each member to which the letter ruling applies.

Sends copy of letter ruling

to district director

.11 The national office will send a copy of the letter ruling, whether favorable or adverse,

to the district director who has examination jurisdiction of the taxpayer’s tax return.

SECTION 11. HOW ARE

CONFERENCES SCHEDULED?

Schedules a conference if

requested by taxpayer

.01 A taxpayer may request a conference regarding a letter ruling request. Normally, a

conference is scheduled only when the national office considers it to be helpful in deciding the case or when an adverse decision is indicated. If conferences are being arranged

for more than one request for a letter ruling involving the same taxpayer, they will be

scheduled so as to cause the least inconvenience to the taxpayer. As stated in section

8.02(7) of this revenue procedure, a taxpayer who wants to have a conference on the issue

or issues involved should indicate this in writing when, or soon after, filing the request.

If a conference has been requested, the taxpayer will be notified by telephone, if possible,

of the time and place of the conference, which must then be held within 21 calendar days

after this contact. Instructions for requesting an extension of the 21-day period and notifying the taxpayer or the taxpayer’s representative of the Service’s approval or denial of the

request for extension are the same as those explained in section 10.07(4) of this revenue

procedure regarding providing additional information.

Permits taxpayer one

conference of right

.02 A taxpayer is entitled, as a matter of right, to only one conference in the national

office, except as explained under section 11.05 of this revenue procedure. This conference is

normally held at the branch level and is attended by a person who, at the time of the conference, has the authority to sign the letter ruling in his or her own name or for the branch chief.

When more than one branch has taken an adverse position on an issue in a letter ruling

request or when the position ultimately adopted by one branch will affect that adopted by

another, a representative from each branch with the authority to sign in his or her own

name or for the branch chief will attend the conference. If more than one subject is to be

discussed at the conference, the discussion will constitute a conference on each subject.

To have a thorough and informed discussion of the issues, the conference usually will be

held after the branch has had an opportunity to study the case. However, at the request of

the taxpayer, the conference of right may be held earlier.

No taxpayer has a right to appeal the action of a branch to an assistant chief counsel or to

any other official of the Service. But see section 11.05 of this revenue procedure for situations in which the Service may offer additional conferences.

2000–1 I.R.B.

43

Sec. 11.02

January 3, 2000

In employment tax matters, only the party entitled to the letter ruling is entitled to a conference. See section 5.09 of this revenue procedure.

Disallows verbatim

recording of conferences

.03 Because conference procedures are informal, no tape, stenographic, or other

verbatim recording of a conference may be made by any party.

Makes tentative

recommendations on

substantive issues

.04 The senior Service representative present at the conference ensures that the taxpayer

has the opportunity to present views on all the issues in question. A Service representative

explains the Service’s tentative decision on the substantive issues and the reasons for that

decision. If the taxpayer asks the Service to limit the retroactive effect of any letter ruling

or limit the revocation or modification of a prior letter ruling, a Service representative will

discuss the recommendation concerning this issue and the reasons for the recommendation. The Service representatives will not make a commitment regarding the conclusion

that the Service will finally adopt.

May offer additional

conferences

.05 The Service will offer the taxpayer an additional conference if, after the conference

of right, an adverse holding is proposed, but on a new issue, or on the same issue but on

different grounds from those discussed at the first conference. There is no right to another

conference when a proposed holding is reversed at a higher level with a result less favorable to the taxpayer, if the grounds or arguments on which the reversal is based were discussed at the conference of right.

The limit on the number of conferences to which a taxpayer is entitled does not prevent

the Service from offering additional conferences, including conferences with an official

higher than the branch level, if the Service decides they are needed. Such conferences are

not offered as a matter of course simply because the branch has reached an adverse decision. In general, conferences with higher level officials are offered only if the Service determines that the case presents significant issues of tax policy or tax administration and

that the consideration of these issues would be enhanced by additional conferences with

the taxpayer.

Requires written confirmation

of information presented

at conference

.06 The taxpayer should furnish to the national office any additional data, reasoning,

precedents, etc., that were proposed by the taxpayer and discussed at the conference but

not previously or adequately presented in writing. The taxpayer must furnish the additional information within 21 calendar days from the date of the conference. See section

10.07 of this revenue procedure for instructions on submission of additional information.

If the additional information is not received within that time, a letter ruling will be issued

on the basis of the information on hand or, if appropriate, no ruling will be issued.

Procedures for requesting an extension of the 21-day period and notifying the taxpayer or

the taxpayer’s representative of the Service’s approval or denial of the requested extension

are the same as those stated in section 10.07(4) of this revenue procedure regarding submitting additional information.

May schedule a pre-submission

conference

.07 Sometimes it will be advantageous to both the Service and the taxpayer to hold

a conference before the taxpayer submits the letter ruling request to discuss substantive or

procedural issues relating to a proposed transaction. Such conferences are held only if the

taxpayer actually intends to make a request, only if the request involves a matter on which

a letter ruling is ordinarily issued, and only at the discretion of the Service and as time permits. For example, a pre-submission conference will not be held on an income tax issue

if, at the time the pre-submission conference is requested, the identical issue is involved in

the taxpayer’s return for an earlier period and that issue is being examined by a district director. See section 5.01(1) of this revenue procedure. A letter ruling request submitted

following a pre-submission conference will not necessarily be assigned to the branch that

held the pre-submission conference.

(1) Taxpayer may request a pre-submission conference in writing or by telephone.

A taxpayer may request a pre-submission conference in writing or by telephone. If sub-

Sec. 11.02

January 3, 2000

44

2000–1 I.R.B.

mitted in writing, the request should identify the associate or assistant chief counsel office

expected to have jurisdiction over the request for a letter ruling and include a brief explanation of the primary issue so that an assignment to the appropriate branch can be made.

A written request for a pre-submission conference should be sent to the appropriate address listed in section 8.03(1) of this revenue procedure.

To request a pre-submission conference by telephone, call:

(a) (202) 622-7710 (not a toll-free call) for matters under the jurisdiction of the Assistant Chief Counsel (Corporate);

(b) (202) 622-3900 (not a toll-free call) for matters under the jurisdiction of the Assistant Chief Counsel (Financial Institutions and Products);

(c) (202) 622-4800 (not a toll-free call) for matters under the jurisdiction of the Assistant Chief Counsel (Income Tax and Accounting);

(d) (202) 622-3000 (not a toll-free call) for matters under the jurisdiction of the Assistant Chief Counsel (Passthroughs and Special Industries);

(e) (202) 622-6000 (not a toll-free call) for matters under the jurisdiction of the Office

of the Associate Chief Counsel (Employee Benefits and Exempt Organizations);

(f) (202) 622-3600 (not a toll-free call) for matters under the jurisdiction of the Office

of the Associate Chief Counsel (Enforcement Litigation); or

(g) (202) 622-3800 (not a toll-free call) for matters under the jurisdiction of the Office

of the Associate Chief Counsel (International).

(2) Pre-submission conferences generally held in person. Pre-submission conferences

generally will be held in person at the national office. However, if the taxpayer is unable

to attend the conference, the conference may be conducted by telephone.

(3) Certain information required to be submitted to the national office prior to the presubmission conference. Generally, the taxpayer will be asked to provide at least 3 business

days before the scheduled pre-submission conference a statement of whether the issue is an

issue on which a letter ruling is ordinarily issued and a draft of the letter ruling request or

other detailed written statement of the proposed transaction, issue, and legal analysis. If the

taxpayer’s authorized representative will attend the pre-submission conference, a power of attorney form is required. It is preferred that Form 2848, Power of Attorney and Declaration of

Representative, be used to provide the representative’s authorization. If multiple taxpayers

and/or their authorized representatives will attend the pre-submission conference, cross powers of attorney (or tax information authorizations) are required.

(4) Discussion of substantive issues is not binding on the Service. Any discussion of

substantive issues at a pre-submission conference is advisory only, is not binding on the

Service in general or on the Office of Chief Counsel in particular, and cannot be relied

upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

Under limited circumstances,

may schedule a conference

to be held by telephone

2000–1 I.R.B.

.08 Infrequently, taxpayers request that their conference of right be held by telephone.

This request may occur, for example, when a taxpayer wants a conference of right but

believes that the issue involved does not warrant incurring the expense of traveling to

Washington, D.C.. If a taxpayer makes such a request, the branch chief, senior technician

reviewer (or senior technical reviewer), or assistant to the branch chief (or assistant branch

chief) of the branch to which the case is assigned will decide if it is appropriate in the particular case to hold the conference of right by telephone. If the request is approved, the

taxpayer will be advised when to call the Service representatives (not a toll-free call).

45

Sec. 11.07

January 3, 2000

SECTION 12. WHAT EFFECT

WILL A LETTER RULING

HAVE?

May be relied on subject

to limitations

.01 A taxpayer ordinarily may rely on a letter ruling received from the Service subject

to the conditions and limitations described in this section.

Will not apply to

another taxpayer

.02 A taxpayer may not rely on a letter ruling issued to another taxpayer. See

§ 6110(k)(3).

Will be used by a district

director in examining the

taxpayer’s return

.03 When determining a taxpayer’s liability, the district director must ascertain

whether—

(1) the conclusions stated in the letter ruling are properly reflected in the return;

(2) the representations upon which the letter ruling was based reflected an accurate statement of the material facts;

(3) the transaction was carried out substantially as proposed; and

(4) there has been any change in the law that applies to the period during which the

transaction or continuing series of transactions were consummated.

If, when determining the liability, the district director finds that a letter ruling should be

revoked or modified, the findings and recommendations of the district director will be forwarded to the national office for consideration before further action is taken by the district

director. Such a referral to the national office will be treated as a request for technical advice and the provisions of Rev. Proc. 2000–2 will be followed. Otherwise, the letter ruling

is to be applied by the district director in the determination of the taxpayer’s liability. Appropriate coordination with the national office will be undertaken if any field official having jurisdiction over a return or other matter proposes to reach a conclusion contrary to a

letter ruling previously issued to the taxpayer.

May be revoked or modified

if found to be in error

.04 Unless it was part of a closing agreement as described in section 2.02 of this revenue

procedure, a letter ruling found to be in error or not in accord with the current views of the Service

may be revoked or modified. If a letter ruling is revoked or modified, the revocation or modification applies to all years open under the statute of limitations unless the Service uses its discretionary authority under § 7805(b) to limit the retroactive effect of the revocation or modification.

A letter ruling may be revoked or modified due to—

(1) a notice to the taxpayer to whom the letter ruling was issued;

(2) the enactment of legislation or ratification of a tax treaty;

(3) a decision of the United States Supreme Court;

(4) the issuance of temporary or final regulations; or

(5) the issuance of a revenue ruling, revenue procedure, notice, or other statement published in the Internal Revenue Bulletin.

Consistent with these provisions, if a letter ruling relates to a continuing action or a series

of actions, it ordinarily will be applied until any one of the events described above occurs

or until it is specifically withdrawn.

Publication of a notice of proposed rulemaking will not affect the application of any letter ruling issued under this revenue procedure.

Sec. 11.07

January 3, 2000

46

2000–1 I.R.B.

Not generally revoked or

modified retroactively

.05 Except in rare or unusual circumstances, the revocation or modification of a letter

ruling will not be applied retroactively to the taxpayer for whom the letter ruling was issued or to a taxpayer whose tax liability was directly involved in the letter ruling provided

that—

(1) there has been no misstatement or omission of material facts;

(2) the facts at the time of the transaction are not materially different from the facts on

which the letter ruling was based;

(3) there has been no change in the applicable law;

(4) the letter ruling was originally issued for a proposed transaction; and

(5) the taxpayer directly involved in the letter ruling acted in good faith in relying on the

letter ruling, and revoking or modifying the letter ruling retroactively would be to the taxpayer’s detriment. For example, the tax liability of each shareholder is directly involved

in a letter ruling on the reorganization of a corporation. However, the tax liability of a

member of an industry is not directly involved in a letter ruling issued to another member

and, therefore, the holding in a revocation or modification of a letter ruling to one member

of an industry may be retroactively applied to other members of the industry. By the same

reasoning, a tax practitioner may not extend to one client the non-retroactive application

of a revocation or modification of a letter ruling previously issued to another client.

If a letter ruling is revoked or modified by letter with retroactive effect, the letter will, except in fraud cases, state the grounds on which the letter ruling is being revoked or modified and explain the reasons why it is being revoked or modified retroactively.

Retroactive effect of revocation

or modification applied to a

particular transaction

.06 A letter ruling issued on a particular transaction represents a holding of the Service

on that transaction only. It will not apply to a similar transaction in the same year or any

other year. And, except in unusual circumstances, the application of that letter ruling to

the transaction will not be affected by the later issuance of regulations (either temporary or

final) if conditions (1) through (5) in section 12.05 of this revenue procedure are met.

However, if a letter ruling on a transaction is later found to be in error or no longer in accord with the position of the Service, it will not protect a similar transaction of the taxpayer in the same year or later year.

Retroactive effect of revocation

or modification applied to a

continuing action or series

of actions

.07 If a letter ruling is issued covering a continuing action or series of actions and the

letter ruling is later found to be in error or no longer in accord with the position of the

Service, the Associate Chief Counsel (Domestic), the Associate Chief Counsel (Employee

Benefits and Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), or the Associate Chief Counsel (International), as appropriate, ordinarily will limit

the retroactive effect of the revocation or modification to a date that is not earlier than that

on which the letter ruling is revoked or modified. For example, the retroactive effect of

the revocation or modification of a letter ruling covering a continuing action or series of

actions ordinarily would be limited in the following situations when the letter ruling is in

error or no longer in accord with the position of the Service:

(1) A taxpayer received a letter ruling that certain payments are excludable from gross

income for federal income tax purposes. However, the taxpayer ordinarily would be protected only for the payment received after the letter ruling was issued and before the revocation or modification of the letter ruling.

(2) A taxpayer rendered a service or provided a facility that is subject to the excise tax on

services or facilities and, in relying on a letter ruling received, did not pass the tax on to

the user of the service or the facility.

2000–1 I.R.B.

47

Sec. 12.07

January 3, 2000

(3) An employer incurred liability under the Federal Insurance Contributions Act but, i

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