Bulletin No. 2016 –1

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HIGHLIGHTS

OF THIS ISSUE

Bulletin No. 2016 –1

January 4, 2016

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.

INCOME TAX

EXEMPT ORGANIZATIONS

Rev. Proc. 2016 –7, page 239.

Rev. Proc. 2016 – 4, page 142.

Areas in which rulings will not be issued, Associate Chief

Counsel (International).

Revised procedures are provided for furnishing guidance to

taxpayers on issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division.

EMPLOYEE PLANS

Rev. Proc. 2016 –5, page 188.

Revised procedures are provided for furnishing guidance to

taxpayers on issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division.

This revenue procedure updates and merges Rev. Proc.

2015–5, 2015–1 I.R.B. 186 and Rev. Proc. 2015–9, 2015–1

I.R.B. 249 into one annual revenue procedure and provides the

procedures for issuing determination letters on the exempt

status of organizations under § 501 and 521 of the Internal

Revenue Code.

Rev. Proc. 2016 – 6, page 200.

Rev. Proc. 2016 – 8, page 243.

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. 2015– 6

is superseded.

Current guidance for complying with the user fee program of

the Service as it pertains to requests for employee plans letter

rulings, determination letters, advisory letters and Voluntary

Correction Program (VCP) submissions and for determination

letters submitted by or on behalf of exempt organizations on

matters under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. Rev. Proc. 2015– 8 is

superseded.

Rev. Proc. 2016 – 4, page 142.

Rev. Proc. 2016 – 8, page 243.

Current guidance for complying with the user fee program of

the Service as it pertains to requests for employee plans letter

rulings, determination letters, advisory letters and Voluntary

Correction Program (VCP) submissions and for determination

letters submitted by or on behalf of exempt organiz1ations on

matters under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. Rev. Proc. 2015– 8 is

superseded.

Finding Lists begin on page ii.

(Continued on the next page)

ADMINISTRATIVE

Rev. Proc. 2016 –1, page 1.

This procedure contains revised procedures for letter rulings

and information letters issued by the Associate Chief Counsel

(Corporate), Associate Chief Counsel (Financial Institutions and

Products), Associate Chief Counsel (Income Tax and Accounting), Associate Chief Counsel (International), Associate Chief

Counsel (Passthroughs and Special Industries), Associate Chief

Counsel (Procedure and Administration), and Associate Chief

Counsel (Tax Exempt and Government Entities). This procedure

also contains revised procedures for determination letters issued by the Large Business and International Division, Small

Business/Self Employed Division, Wage and Investment Division, and Tax Exempt and Government Entities Division. Rev.

Proc. 2015–1 superseded.

Rev. Proc. 2016 –2, page 102.

This procedure explains when and how the Associate Chief

Counsel (Corporate), Associate Chief Counsel (Financial Institutions and Products), Associate Chief Counsel (Income Tax

and Accounting), Associate Chief Counsel (International), Associate Chief Counsel (Passthroughs and Special Industries), Associate Chief Counsel (Procedure and Administration), and

Associate Chief Counsel (Tax Exempt and Government Entities)

provide technical advice memoranda (TAMs) to a Director or an

Area Director. It also explains the rights that a taxpayer has

when a field office requests a TAM regarding a tax matter. Rev.

Proc. 2015–2 superseded.

Rev. Proc. 2016 –3, page 126.

This revenue procedure provides a revised list of areas of the

Code under the jurisdiction of the Associate Chief Counsel

(Corporate), the Associate Chief Counsel (Financial Institutions

and Products), the Associate Chief Counsel (Income Tax and

Accounting), the Associate Chief Counsel (Passthroughs and

Special Industries), the Associate Chief Counsel (Procedure

and Administration), and the Associate Chief Counsel (Tax

Exempt and Government Entities) relating to matters on which

the Service will not issue letter rulings or determination letters.

Rev. Proc. 2015–3, 2015–1 I.R.B. 129, is superseded.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

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.

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.

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.

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 procedures 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.

Part II.—Treaties and Tax Legislation.

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

Conventions and Other Related Items, 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).

Part IV.—Items of General Interest.

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

The last 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 last Bulletin of each semiannual period.

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.

January 4, 2016

Bulletin No. 2016 –1

Part III. Administrative, Procedural, and Miscellaneous

26 CFR § 601.201: Rulings and determination letters.

Rev. Proc. 2016 –1

TABLE OF CONTENTS

SECTION 1. WHAT IS THE PURPOSE OF THIS REVENUE PROCEDURE? ...............................................................................................6

.01 Description of terms used in this revenue procedure ............................................................................................................7

.02 Updated annually .....................................................................................................................................................................7

SECTION 2. WHAT ARE THE FORMS IN WHICH THE SERVICE PROVIDES ADVICE TO TAXPAYERS? .....................................8

.01 Letter ruling .............................................................................................................................................................................8

.02 Closing agreement ...................................................................................................................................................................8

.03 Determination letter .................................................................................................................................................................8

.04 Information letter .....................................................................................................................................................................8

.05 Oral advice...............................................................................................................................................................................9

(1) No oral rulings and no written rulings in response to oral requests ...............................................................................9

(2) Discussion possible on substantive issues ........................................................................................................................9

(3) Oral guidance is advisory only, and the Service is not bound by it. ............................................................................10

SECTION 3. ON WHAT ISSUES MAY TAXPAYERS REQUEST WRITTEN ADVICE UNDER THIS

REVENUE PROCEDURE?................................................................................................................................................................10

.01 Issues under the jurisdiction of the Associate Chief Counsel (Corporate) .........................................................................10

.02 Issues under the jurisdiction of the Associate Chief Counsel (Financial Institutions and Products).................................10

.03 Issues under the jurisdiction of the Associate Chief Counsel (Income Tax and Accounting)...........................................10

.04 Issues under the jurisdiction of the Associate Chief Counsel (International).....................................................................10

.05 Issues under the jurisdiction of the Associate Chief Counsel (Passthroughs and Special Industries)...............................11

.06 Issues under the jurisdiction of the Associate Chief Counsel (Procedure and Administration) ........................................11

.07 Issues under the jurisdiction of the Associate Chief Counsel (Tax Exempt and Government Entities) ...........................11

SECTION 4. ON WHAT ISSUES MUST WRITTEN ADVICE BE REQUESTED UNDER DIFFERENT PROCEDURES?...................11

.01 Issues involving alcohol, tobacco, and firearms taxes .........................................................................................................11

.02 Certain issues involving employee plans, individual retirement accounts (IRAs), and exempt organizations .................12

SECTION 5. UNDER WHAT CIRCUMSTANCES DO THE ASSOCIATE OFFICES ISSUE LETTER RULINGS?...............................12

.01 In income and gift tax matters..............................................................................................................................................12

.02 Special relief for late S corporation and related elections in lieu of letter ruling process.................................................12

.03 A § 301.9100 request for extension of time for making an election or for other relief ....................................................12

(1) Format of request.............................................................................................................................................................12

(2) Period of limitation ..........................................................................................................................................................13

(3) Taxpayer must notify the Associate office if examination of its return begins while the request is pending ............13

(4) Associate office will notify the examination agent, appeals officer, or attorney of a § 301.9100 request if the

taxpayer’s return is being examined by a Field office or is being considered by an Appeals office or a Federal court ...............13

(5) Inclusion of statement required by section 4.04 of Rev. Proc. 2009 – 41 .....................................................................13

(6) Relief for late initial classification election ....................................................................................................................14

.04 Determinations under § 999(d) ...........................................................................................................................................14

.05 In matters involving § 367..................................................................................................................................................14

.06 In estate tax matters ............................................................................................................................................................14

.07 In matters involving additional estate tax under § 2032A(c) ............................................................................................15

.08 In matters involving qualified domestic trusts under § 2056A .........................................................................................15

.09 In generation-skipping transfer tax matters ........................................................................................................................15

.10 In employment and excise tax matters ...............................................................................................................................15

.11 In procedural and administrative matters ...........................................................................................................................15

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January 4, 2016

.12 In Indian tribal government matters ...................................................................................................................................15

(1) Definition of Indian tribal government .........................................................................................................................15

(2) Inclusion in list of tribal governments ..........................................................................................................................16

.13 On constructive sales price under § 4216(b) or § 4218(c)................................................................................................16

.14 In exempt organizations matters .........................................................................................................................................16

.15 In qualified retirement plan and IRA matters ....................................................................................................................16

.16 A request to revoke an election ..........................................................................................................................................17

.17 Under some circumstances before the issuance of a regulation or other published guidance .........................................17

(1) Answer is clear or is reasonably certain.......................................................................................................................17

(2) Answer is not reasonably certain ..................................................................................................................................17

SECTION 6. UNDER WHAT CIRCUMSTANCES DOES THE SERVICE NOT ISSUE

LETTER RULINGS OR DETERMINATION LETTERS?...........................................................................................................17

.01 Ordinarily not if the request involves an issue under examination or consideration or in litigation ................................17

.02 Ordinarily not in certain areas because of factual nature of the problem or for other reasons .........................................18

.03 Ordinarily not on part of an integrated transaction..............................................................................................................18

.04 Ordinarily not on which of two entities is a common law employer .................................................................................19

.05 Ordinarily not to business associations or groups................................................................................................................19

.06 Ordinarily not where the request does not address the tax status, liability, or reporting obligations of the requester.....20

.07 Ordinarily not to foreign governments .................................................................................................................................20

.08 Ordinarily not on Federal tax consequences of proposed legislation..................................................................................20

.09 Ordinarily not before issuance of a regulation or other published guidance......................................................................20

.10 Not on frivolous issues..........................................................................................................................................................20

.11 No “comfort” letter rulings ...................................................................................................................................................21

.12 Not on alternative plans or hypothetical situations..............................................................................................................21

.13 Not on property conversions after return filed .....................................................................................................................21

.14 Circumstances under which determination letters are not issued by a Director.................................................................21

SECTION 7. WHAT ARE THE GENERAL INSTRUCTIONS FOR REQUESTING LETTER RULINGS

AND DETERMINATION LETTERS? .............................................................................................................................................22

.01 Documents and information required in all requests ...........................................................................................................22

(1) Complete statement of facts and other information .......................................................................................................22

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

pertinent to the transaction, and foreign laws ................................................................................................................23

(3) Analysis of material facts ................................................................................................................................................23

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

information required for § 301.9100 requests ................................................................................................................24

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

ruled on or whether a request involving it was submitted or is currently pending ......................................................24

(6) Statement regarding interpretation of a substantive provision of an income or estate tax treaty ................................25

(7) Letter from Bureau of Indian Affairs relating to a letter ruling request for recognition of Indian

tribal government status or status as a political subdivision of an Indian tribal government. .....................................25

(8) Statement of supporting authorities.................................................................................................................................25

(9) Statement of contrary authorities ....................................................................................................................................25

(10) Statement identifying pending legislation.....................................................................................................................26

(11) Statement identifying information to be deleted from the public inspection copy of letter ruling

or determination letter ...................................................................................................................................................26

(12) Signature by taxpayer or authorized representative .....................................................................................................28

(13) Authorized representatives.............................................................................................................................................28

(14) Power of attorney and declaration of representative ....................................................................................................29

(15) Penalties of perjury statement .......................................................................................................................................29

(16) Number of copies of request to be submitted ..............................................................................................................30

(17) Sample format for a letter ruling request .....................................................................................................................30

(18) Checklist for letter ruling requests ................................................................................................................................30

January 4, 2016

Bulletin No. 2016 –1

.02 Additional procedural information required with request....................................................................................................31

(1) To request separate letter rulings for multiple issues in a single situation ...................................................................31

(2) Power of attorney used to indicate recipient of a copy or copies

of a letter ruling or a determination letter ......................................................................................................................31

(3) To request a particular conclusion on a proposed transaction.......................................................................................31

(4) To request expedited handling ........................................................................................................................................32

(5) To request the receipt of any document related to letter ruling request by fax............................................................33

(6) To request a conference...................................................................................................................................................33

.03 Additional information required in letter ruling requests involving welfare benefit funds (including voluntary

employees’ beneficiary associations (VEBAs))....................................................................................................................33

(1) Request for letter rulings on the tax consequences of a proposed transaction involving a welfare benefit fund .......33

(2) Code sections to consider ................................................................................................................................................33

.04 Address to which to send request for letter ruling or determination letter.........................................................................34

(1) Request for letter ruling...................................................................................................................................................34

(2) Request for determination letter ......................................................................................................................................35

.05 Pending letter ruling requests................................................................................................................................................35

(1) Circumstances under which the taxpayer with a pending letter ruling request must notify the Associate office.......35

(2) Taxpayer must notify the Associate office if a return is filed and must attach the request to the return ...................35

.06 When to attach letter ruling or determination letter to return .............................................................................................36

.07 How to check on status of request for letter ruling or determination letter .......................................................................36

.08 Request for letter ruling or determination letter may be withdrawn or Associate office may decline to issue letter ruling...............36

(1) In general .........................................................................................................................................................................36

(2) Notification of appropriate Service official.....................................................................................................................36

(3) Refund of user fee ...........................................................................................................................................................37

SECTION 8. HOW DO THE ASSOCIATE OFFICES HANDLE LETTER RULING REQUESTS? ...........................................................37

.01 Docket, Records, and User Fee Branch receives, initially controls, and refers the requests

to the appropriate Associate office .......................................................................................................................................37

.02 Branch representative of the Associate office contacts taxpayer within 21 calendar days ................................................37

.03 Determines if transaction can be modified to obtain favorable letter ruling ......................................................................38

.04 Not bound by informal opinion expressed ...........................................................................................................................38

.05 May request additional information......................................................................................................................................38

(1) Additional information must be submitted within 21 calendar days.............................................................................38

(2) Extension of reply period if justified and approved.......................................................................................................39

(3) Letter ruling request closed if the taxpayer does not submit additional information ...................................................39

(4) Penalties of perjury statement .........................................................................................................................................39

(5) Faxing request and additional information .....................................................................................................................39

(6) Address to which to send additional information...........................................................................................................39

(7) Identifying information ....................................................................................................................................................40

(8) Number of copies.............................................................................................................................................................40

.06 Near the completion of the ruling process, advises the taxpayer of conclusions and, if the

Associate offices will rule adversely, offers the taxpayer the opportunity to withdraw the letter ruling request.............40

.07 May request that taxpayer submit draft proposed letter ruling near the completion of the ruling process.......................40

.08 Issues separate letter rulings for substantially identical letter rulings, but generally issues a single letter

ruling for related § 301.9100 letter rulings ..........................................................................................................................40

(1) Substantially identical letter rulings ................................................................................................................................41

(2) Related § 301.9100 letter rulings ....................................................................................................................................41

.09 Sends a copy of the letter ruling to appropriate Service official.........................................................................................41

SECTION 9. WHAT ARE THE SPECIFIC AND ADDITIONAL PROCEDURES FOR A REQUEST FOR A

CHANGE IN METHOD OF ACCOUNTING FROM THE ASSOCIATE OFFICES?.............................................................41

.01 Automatic and non-automatic change in method of accounting requests...........................................................................41

(1) Automatic change in method of accounting ...................................................................................................................41

(2) Non-automatic change in method of accounting ............................................................................................................42

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January 4, 2016

.02 Ordinarily only one change in method of accounting on a Form 3115, Application for Change in Accounting

Method, and a separate Form 3115 for each taxpayer and for each separate and distinct trade or business ...................42

.03 Information required with a Form 3115 ...............................................................................................................................42

(1) Facts and other information requested on Form 3115 and in applicable revenue procedures .....................................42

(2) Statement of contrary authorities ....................................................................................................................................43

(3) Copies of all contracts, agreements, and other documents ............................................................................................43

(4) Analysis of material facts ................................................................................................................................................43

(5) Information regarding whether same issue is in an earlier return .................................................................................43

(6) Statement regarding prior requests for a change in method of accounting and other pending requests .....................43

(7) Statement identifying pending legislation.......................................................................................................................44

(8) Authorized representatives...............................................................................................................................................44

(9) Power of attorney and declaration of representative ......................................................................................................44

(10) Tax Information Authorization......................................................................................................................................44

(11) Penalties of perjury statement .......................................................................................................................................44

.04 Additional procedural information required in certain circumstances.................................................................................45

(1) Recipients of original and copy of change in method of accounting correspondence .................................................45

(2) To request expedited handling ........................................................................................................................................45

(3) To receive the change in method of accounting letter ruling or any other correspondence

related to Form 3115 by fax ...........................................................................................................................................45

(4) To request a conference...................................................................................................................................................46

.05 Addresses to which to send Forms 3115..............................................................................................................................46

(1) Non-automatic Form 3115...............................................................................................................................................46

(2) Automatic change request ...............................................................................................................................................46

.06 A Form 3115 must not be submitted by fax........................................................................................................................47

.07 Docket, Records, and User Fee Branch receives, initially controls, and refers

the Form 3115 to the appropriate Associate office..............................................................................................................47

.08 Additional information ..........................................................................................................................................................47

(1) Reply period.....................................................................................................................................................................47

(2) Request for extension of reply period.............................................................................................................................47

(3) Penalties of perjury statement for additional information..............................................................................................48

(4) Identifying information included in additional information...........................................................................................48

(5) Faxing information request and additional information .................................................................................................48

(6) Address to which to send additional information to an Associate office......................................................................48

(7) Failure to timely submit additional information to an Associate office ........................................................................49

.09 Circumstances in which the taxpayer must notify the Associate office..............................................................................49

.10 Determines if proposed method of accounting can be modified to obtain favorable letter ruling ....................................49

.11 Near the completion of processing the Form 3115, advises the taxpayer if the Associate

office will rule adversely and offers the taxpayer the opportunity to withdraw Form 3115 .............................................50

.12 Non-automatic Form 3115 may be withdrawn or Associate office may decline to issue

a change in method of accounting letter ruling ...................................................................................................................50

(1) In general .........................................................................................................................................................................50

(2) Notification of appropriate Service official.....................................................................................................................50

(3) Refund of user fee. ..........................................................................................................................................................50

.13 How to check status of a pending non-automatic Form 3115 ............................................................................................50

.14 Service is not bound by informal opinion............................................................................................................................50

.15 Single letter ruling issued to a taxpayer or consolidated group for qualifying identical change in method

of accounting............................................................................................................................................................................................................50

.16 Letter ruling ordinarily not issued for one of two or more interrelated items or submethods ..........................................51

.17 Consent Agreement ...............................................................................................................................................................51

.18 A copy of the change in method of accounting letter ruling is sent to appropriate Service official.................................51

.19 Consent to change a method of accounting may be relied on subject to limitations.........................................................52

.20 Change in method of accounting letter ruling does not apply to another taxpayer ...........................................................52

.21 Associate office discretion to permit requested change in method of accounting..............................................................52

January 4, 2016

Bulletin No. 2016 –1

.22 List of automatic change in method of accounting request procedures..............................................................................52

.23 Other sections of this revenue procedure that are applicable to Form 3115 ......................................................................53

SECTION 10. HOW ARE CONFERENCES FOR LETTER RULINGS SCHEDULED? ...............................................................................55

.01 Schedules a conference if requested by taxpayer ................................................................................................................55

.02 Permits taxpayer one conference of right.............................................................................................................................55

.03 Disallows verbatim recording of conferences ......................................................................................................................56

.04 Makes tentative recommendations on substantive issues ....................................................................................................56

.05 May offer additional conferences .........................................................................................................................................56

.06 Requires written confirmation of information presented at conference ..............................................................................56

.07 May schedule a pre-submission conference .........................................................................................................................57

(1) Taxpayer may request a pre-submission conference in writing or by telephone..........................................................57

(2) Pre-submission conference held in person or by telephone...........................................................................................58

(3) Certain information required to be submitted to the Associate office prior to the pre-submission conference ..........58

(4) Discussion of substantive issues not binding on the Service.........................................................................................58

.08 May schedule a conference to be held by telephone ...........................................................................................................58

SECTION 11. WHAT EFFECT WILL A LETTER RULING HAVE?..............................................................................................................58

.01 May be relied on subject to limitations................................................................................................................................58

.02 Will not apply to another taxpayer .......................................................................................................................................58

.03 Will be used by a Field office in examining the taxpayer’s return.....................................................................................58

.04 May be revoked or modified if found to be in error or there has been a change in law ..................................................59

.05 Letter ruling revoked or modified based on material change in facts applied retroactively..............................................60

.06 Not otherwise generally revoked or modified retroactively ................................................................................................60

.07 Retroactive effect of revocation or modification applied to a particular transaction .........................................................60

.08 Retroactive effect of revocation or modification applied to a continuing action or series of actions ...............................61

.09 Generally not retroactively revoked or modified if related to sale or lease subject to excise tax.....................................61

.10 May be retroactively revoked or modified when transaction is entered into before the issuance of the letter ruling.......................61

.11 Taxpayer may request that retroactivity be limited .............................................................................................................61

(1) Request for relief under § 7805(b) must be made in required format ..........................................................................61

(2) Taxpayer may request a conference on application of § 7805(b) ................................................................................62

SECTION 12. UNDER WHAT CIRCUMSTANCES DO DIRECTORS ISSUE DETERMINATION LETTERS? .....................................62

.01 In income and gift tax matters..............................................................................................................................................63

.02 In estate tax matters ..............................................................................................................................................................63

.03 In generation-skipping transfer tax matters ..........................................................................................................................63

.04 In employment and excise tax matters .................................................................................................................................63

.05 Requests concerning income, estate, or gift tax returns ......................................................................................................63

.06 Review of determination letters ............................................................................................................................................63

SECTION 13. WHAT EFFECT WILL A DETERMINATION LETTER HAVE?...........................................................................................64

.01 Has same effect as a letter ruling .........................................................................................................................................64

.02 Taxpayer may request that retroactive effect of revocation or modification be limited ....................................................64

(1) Request for relief under § 7805(b) must be made in required format ..........................................................................64

(2) Taxpayer may request a conference on application of § 7805(b) .................................................................................64

SECTION 14. UNDER WHAT CIRCUMSTANCES ARE MATTERS REFERRED BETWEEN A DIRECTOR

AND AN ASSOCIATE OFFICE? ...................................................................................................................................................65

.01 Requests for determination letters ........................................................................................................................................65

.02 No-rule areas..........................................................................................................................................................................65

.03 Requests for letter rulings .....................................................................................................................................................65

.04 Letter ruling request mistakenly sent to a Director .............................................................................................................65

SECTION 15. WHAT ARE THE USER FEE REQUIREMENTS FOR REQUESTS FOR LETTER

RULINGS AND DETERMINATION LETTERS? .......................................................................................................................65

.01 Legislation authorizing user fees ..........................................................................................................................................65

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January 4, 2016

.02 Requests to which a user fee applies....................................................................................................................................66

.03 Requests to which a user fee does not apply .......................................................................................................................66

.04 Exemptions from the user fee requirements.........................................................................................................................67

.05 Fee schedule ..........................................................................................................................................................................67

.06 Applicable user fee for a request involving multiple offices, fee categories, issues, transactions, or entities..................67

(1) Requests involving several offices ..................................................................................................................................67

(2) Requests involving several fee categories ......................................................................................................................67

(3) Requests involving several issues ...................................................................................................................................67

(4) Requests involving several unrelated transactions .........................................................................................................67

(5) Requests involving several entities .................................................................................................................................68

(6) Requests made by married taxpayers who file jointly ...................................................................................................68

.07 Applicable user fee for requests for substantially identical letter rulings or identical changes in method of accounting.........68

(1) In general .........................................................................................................................................................................68

(2) Substantially identical letter rulings ................................................................................................................................68

(3) Substantially identical plans under § 25(c)(2)(B)...........................................................................................................69

(4) Identical changes in method of accounting and related § 301.9100 letter rulings .......................................................69

.08 Method of payment ...............................................................................................................................................................70

.09 Effect of nonpayment or payment of incorrect amount.......................................................................................................70

.10 Refunds of user fee ...............................................................................................................................................................71

.11 Request for reconsideration of user fee................................................................................................................................72

SECTION 16. WHAT SIGNIFICANT CHANGES HAVE BEEN MADE TO REVENUE PROCEDURE 2015–1? ...................................74

SECTION 17. WHAT IS THE EFFECT OF THIS REVENUE PROCEDURE ON OTHER DOCUMENTS? ...........................................74

SECTION 18. WHAT IS THE EFFECTIVE DATE OF THIS REVENUE PROCEDURE? ..........................................................................74

SECTION 19. PAPERWORK REDUCTION ACT................................................................................................................................................74

DRAFTING INFORMATION ...................................................................................................................................................................................75

INDEX...........................................................................................................................................................................................................................76

APPENDIX A—SCHEDULE OF USER FEES ......................................................................................................................................................79

APPENDIX B—SAMPLE FORMAT FOR A LETTER RULING REQUEST..................................................................................................83

APPENDIX C—CHECKLIST FOR A LETTER RULING REQUEST..............................................................................................................86

APPENDIX D—ADDITIONAL CHECKLIST FOR GOVERNMENT PICK-UP PLAN RULING REQUESTS.........................................90

APPENDIX E—ADDITIONAL CHECKLIST FOR CHURCH PLAN RULING REQUESTS.......................................................................91

APPENDIX F—LIST OF SMALL BUSINESS/SELF-EMPLOYED OPERATING DIVISION (SB/SE) OFFICES TO

WHICH TO SEND REQUESTS FOR DETERMINATION LETTERS.................................................................................92

APPENDIX G—CHECKLISTS, GUIDELINE REVENUE PROCEDURES, NOTICES, SAFE HARBOR REVENUE

PROCEDURES, AND AUTOMATIC CHANGE REVENUE PROCEDURES.....................................................................93

.01 Checklists, guideline revenue procedures, and notices ........................................................................................................93

.02 Safe harbor revenue procedures............................................................................................................................................98

.03 Automatic change in accounting period revenue procedures ............................................................................................101

SECTION 1. WHAT IS

THE PURPOSE OF THIS

REVENUE

PROCEDURE?

Sec. 1.

January 4, 2016

This revenue procedure explains how the Service provides advice to taxpayers on issues under

the jurisdiction of the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the

Associate Chief Counsel (International), the Associate Chief Counsel (Passthroughs and Special

Industries), the Associate Chief Counsel (Procedure and Administration), and the Associate Chief

Counsel (Tax Exempt and Government Entities). It explains the forms of advice and the manner

in which advice is requested by taxpayers and provided by the Service. A sample format for a

letter ruling request is provided in Appendix B. See section 4 of this revenue procedure for

information on certain issues outside the scope of this revenue procedure on which advice may

be requested under a different revenue procedure.

Bulletin No. 2016 –1

Description of terms used

in this revenue procedure

.01 For purposes of this revenue procedure—

(1) the term “Service” includes the four operating divisions of the Internal Revenue Service and

the Associate offices. The four operating divisions are:

(a) Large Business & International Division (LB&I), which generally serves corporations,

including S corporations, and partnerships, with assets in excess of $10 million;

(b) Small Business/Self-Employed Division (SB/SE), which generally serves corporations,

including S corporations, and partnerships, with assets less than or equal to $10 million; filers of

gift, estate, excise, employment and fiduciary returns; individuals filing an individual Federal

income tax return with accompanying Schedule C (Profit or Loss From Business (Sole Proprietorship)), Schedule E (Supplemental Income and Loss), Schedule F (Profit or Loss From

Farming), Form 2106, Employee Business Expenses, or Form 2106 –EZ, Unreimbursed Employee

Business Expenses;

investment income only (and with no international tax returns) filing an individual Federal income

tax return without accompanying Schedule C, E, or F, or Form 2106 or Form 2106 –EZ; and

(d) Tax Exempt and Government Entities Division (TE/GE), which serves three distinct

taxpayer segments: employee plans (including IRAs), exempt organizations, and government

entities.

(2) the term “Associate office” refers to the Office of Associate Chief Counsel (Corporate), the

Office of Associate Chief Counsel (Financial Institutions and Products), the Office of Associate

Chief Counsel (Income Tax and Accounting), the Office of Associate Chief Counsel (International), the Office of Associate Chief Counsel (Passthroughs and Special Industries), the Office

of Associate Chief Counsel (Procedure and Administration), or the Office of Associate Chief

Counsel (Tax Exempt and Government Entities), as appropriate.

(3) the term “Director” refers to the Director, Field Operations, LB&I; Director, Field

Examination, SB/SE; Director, Specialty Examination Policy, SB/SE; Program Manager,

Estate & Gift Tax Policy, SB/SE; Program Manager, Employment Tax Policy, SB/SE;

Program Manager, Excise Tax Policy, SB/SE; Director, Compliance, W&I; Director, Employee Plans; Director, Employee Plans, Rulings and Agreements; Director, Employee Plans

Examinations; Director, Exempt Organizations; Director, Exempt Organizations, Rulings and

Agreements; Director, Exempt Organizations Examinations; Director, Federal, State & Local

Governments; Director, Tax Exempt Bonds; or Director, Indian Tribal Governments, as

appropriate.

(4) the term “Field office” refers to the respective offices of the Directors, as appropriate.

(5) the term “taxpayer” includes all persons subject to any provision of the Internal Revenue

Code and, when appropriate, their representatives. More specifically, the term includes taxexempt organizations, as well as issuers of tax-exempt obligations, mortgage credit certificates,

and tax credit bonds.

Updated annually

Bulletin No. 2016 –1

.02 This revenue procedure is updated annually as the first revenue procedure of the year, but

it may be modified, amplified or clarified during the year.

Sec. 1.02

January 4, 2016

SECTION 2. WHAT ARE

THE FORMS IN WHICH

THE SERVICE

PROVIDES ADVICE TO

TAXPAYERS?

The Service provides advice in the form of letter rulings, closing agreements, determination

letters, information letters, and oral advice.

Letter ruling

.01 A “letter ruling” is a written determination issued to a taxpayer by an Associate office in

response to the taxpayer’s written inquiry, filed prior to the filing of returns or reports that are

required by the tax laws, about its status for tax purposes or the tax effects of its acts or

transactions. A letter ruling interprets the tax laws and applies them to the taxpayer’s specific set

of facts. A letter ruling is issued when appropriate in the interest of sound tax administration. One

type of letter ruling is an Associate office’s response granting or denying a request for a change

in a taxpayer’s method of accounting or accounting period. Once issued, a letter ruling may be

revoked or modified for a number of reasons. See section 11 of this revenue procedure. A letter

ruling may be issued with a closing agreement, however, and a closing agreement is final unless

fraud, malfeasance, or misrepresentation of a material fact can be shown. See section 2.02 of this

revenue procedure.

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 it is final unless fraud,

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

A taxpayer may request a closing agreement with a letter ruling or in lieu of a letter ruling, with

respect to a transaction that would be eligible for a letter ruling. In such situations, the Associate Chief

Counsel with subject matter jurisdiction signs the closing agreement on behalf of the Service.

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 for

the issuance of a letter ruling.

If, in a single case, a closing agreement is requested for each person or entity in a class of

taxpayers, separate agreements are entered into only if the class consists of 25 or fewer taxpayers.

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 determination issued by a Director that applies the

principles and precedents previously announced by the Service to a specific set of facts. It is

issued only when a determination can be made based on clearly established rules in a statute, a

tax treaty, the regulations, a conclusion in a revenue ruling, or an opinion or court decision that

represents the position of the Service.

Information letter

.04 An “information letter” is a statement issued by an Associate office or Director that 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 concludes that general information will

help the taxpayer. An information letter is advisory only and has no binding effect on the Service.

If the Associate office issues an information letter in response to a request for a letter ruling that

does not meet the requirements of this revenue procedure, the information letter is not a substitute

for a letter ruling. The taxpayer should provide a daytime telephone number with the taxpayer’s

request for an information letter.

Sec. 2.04

January 4, 2016

Bulletin No. 2016 –1

Information letters that are issued by the Associate offices to members of the public are made

available to the public. Information letters that are issued by the Field offices are generally not

made available to the public.

Because information letters do not constitute written determinations as defined in § 6110, they

are not subject to public inspection under § 6110. The Service makes the information letters

available to the public under the Freedom of Information Act (the “FOIA”). Before any

information letter is made available to the public, an Associate office will redact any information

exempt from disclosure under the FOIA. See, e.g., 5 U.S.C. § 552(b)(6) (exemption for information the disclosure of which would constitute a clearly unwarranted invasion of personal

privacy); 5 U.S.C. § 552(b)(3) in conjunction with § 6103 (exemption for returns and return

information as defined in § 6103(b)).

The following documents also will not be available for public inspection as part of this process:

(1) transmittal letters in which the Service furnishes publications or other publicly available

material to taxpayers, without any significant legal discussion;

(2) responses to taxpayer or third party contacts that are inquiries with respect to a pending

request for a letter ruling, technical advice memorandum, or Chief Counsel Advice (which are

subject to public inspection under § 6110 after their issuance); and

(3) responses to taxpayer or third party communications with respect to any investigation,

audit, litigation, or other enforcement action.

Oral Advice

.05

(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. Service employees ordinarily will

discuss with taxpayers or their representatives inquiries about whether the Service will rule on

particular issues and about procedural matters regarding the submission of 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, Service employees may also discuss substantive issues with taxpayers or their representatives. Such a discussion will not bind the Service or the Office of Chief Counsel, and it cannot

be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

Service employees who are not directly involved in the examination, appeal, or litigation of

particular substantive tax issues will not discuss those issues with taxpayers or their representatives unless the discussion is coordinated with Service employees who are directly involved. The

taxpayer or the taxpayer’s representative ordinarily will be asked whether an oral request for

advice or information relates to a matter pending before another office of the Service or before

a Federal court.

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 Field

office or Service Center when preparing a return or report.

Bulletin No. 2016 –1

Sec. 2.05

January 4, 2016

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 a confirmation.

(3) Oral guidance is advisory only, and the Service is not bound by it. Oral guidance is

advisory only, and the Service is not bound by it, for example, when examining the taxpayer’s

return.

SECTION 3. ON WHAT

ISSUES MAY

TAXPAYERS REQUEST

WRITTEN ADVICE

UNDER THIS REVENUE

PROCEDURE?

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

revenue procedure on issues within the jurisdiction of the Associate offices. Taxpayers uncertain

as to whether an Associate office has jurisdiction with regard to a specific factual situation may

call the telephone number for the Associate office listed in section 10.07(1) of this revenue

procedure.

Except as provided in section 6.14 of this revenue procedure, taxpayers also may request

determination letters from the Director in the appropriate operating division. See sections 7 and

12 of this revenue procedure. For determination letters from TE/GE, see Rev. Proc. 2016 – 4, Rev.

Proc. 2016 –5, and Rev. Proc. 2016 – 6, this Bulletin; Rev. Proc. 2016 –10, next Bulletin.

Issues under the

jurisdiction of the

Associate Chief Counsel

(Corporate)

.01 Issues under the jurisdiction of the Associate 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

jurisdiction of the

Associate Chief Counsel

(Financial Institutions and

Products)

.02 Issues under the jurisdiction of the Associate Chief Counsel (Financial Institutions and

Products) include those that involve income taxes and changes in method of accounting of banks,

savings and loan associations, real estate investment trusts (REITs), regulated investment companies (RICs), real estate mortgage investment conduits (REMICs), insurance companies and

products, tax-exempt obligations, mortgage credit certificates, tax credit bonds (including specified tax credit bonds), build America bonds, and financial products.

For the procedures to obtain private letter rulings involving tax-exempt state and local

obligations, see Rev. Proc. 96 –16, 1996 –1 C.B. 630.

Issues under the

jurisdiction of the

Associate Chief Counsel

(Income Tax and

Accounting)

.03 Issues under the jurisdiction of the Associate 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,

long-term contracts, inventories, amortization, depreciation, the alternative minimum tax, net

operating losses generally, including changes in method of accounting for these issues, and

accounting periods. (Note that certain issues involving individual retirement accounts (IRAs) are

under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. See

section 4.02, this revenue procedure).

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 outside the United States, subpart F questions, domestic international sales corporations

(DISCs), foreign sales corporations (FSCs), exclusions under § 114 for extraterritorial income

(ETI), international boycott determinations, treatment of certain passive foreign investment

companies, income affected by treaty, U.S. possessions, and other matters relating to the activities

of non-U.S. persons within the United States or U.S.-related persons outside the United States,

and changes in method of accounting for these persons.

Sec. 3.04

January 4, 2016

Bulletin No. 2016 –1

For the procedures to obtain advance pricing agreements under § 482, see Rev. Proc. 2015– 41,

2015–35 I.R.B. 263.

For competent authority procedures related to bilateral and multilateral advance pricing

agreements, see Rev. Proc. 2015– 40, 2015–35 I.R.B. 236.

Issues under the

jurisdiction of the

Associate Chief Counsel

(Passthroughs and Special

Industries)

.05 Issues under the jurisdiction of the Associate 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 (excluding § 6166), gift, generation-skipping transfer, and

certain excise taxes, depletion, and other engineering issues, 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

(Procedure and

Administration)

.06 Issues under the jurisdiction of the Associate Chief Counsel (Procedure and Administration) include those that involve Federal tax procedure and administration, disclosure and privacy

law, reporting and paying taxes (including payment of taxes under § 6166), assessing and

collecting taxes (including interest and penalties), abating, crediting, or refunding overassessments or overpayments of tax, and filing information returns.

Issues under the

jurisdiction of the

Associate Chief Counsel

(Tax Exempt and

Government Entities)

.07 Issues under the jurisdiction of the Associate Chief Counsel (Tax Exempt and Government

Entities) include those that involve the application of employment taxes and taxes on selfemployment income, exemption requirements for tax-exempt organizations, tax treatment (including application of the unrelated business income tax) of tax-exempt organizations (including

federal, state, local, and Indian tribal governments), political organizations described in § 527,

qualified tuition programs described in § 529, qualified ABLE programs described in § 529A,

trusts described in § 4947(a), certain excise taxes, disclosure obligations and information return

requirements of tax-exempt organizations, employee benefit programs (including executive

compensation arrangements, qualified retirement plans, deferred compensation plans, and health

and welfare benefit programs) and IRAs, issues integrally related to employee benefit programs

and IRAs (such as, for example, the sale of stock to employee stock ownership plans or eligible

worker-owned cooperatives under § 1042), and changes in method of accounting associated with

employee benefit programs.

Note that certain issues involving exempt organizations, employee plans, and government

entities fall under the jurisdiction of the Commissioner, Tax Exempt and Government Entities

Division of the Internal Revenue Service. See Rev. Proc. 2016 – 4, Rev. Proc. 2016 –5, and Rev.

Proc. 2016 – 6, this Bulletin; and Rev. Proc. 2016 –10, next Bulletin.

SECTION 4. ON WHAT

ISSUES MUST WRITTEN

ADVICE BE

REQUESTED UNDER

DIFFERENT

PROCEDURES?

Issues involving alcohol,

tobacco, and firearms taxes

Bulletin No. 2016 –1

.01 The procedures for obtaining letter rulings, closing agreements, determination letters,

information letters, and oral advice that apply to Federal alcohol, tobacco, and firearms taxes

under subtitle E of the Code are under the jurisdiction of the Alcohol and Tobacco Tax and Trade

Bureau of the Department of the Treasury.

Sec. 4.01

January 4, 2016

Certain issues involving

qualified retirement plans,

individual retirement

accounts (IRAs), and

exempt organizations

.02 The procedures for obtaining certain letter rulings, closing agreements, determination

letters, information letters, and oral advice on qualified retirement plans, IRAs, and exempt

organizations that are under the jurisdiction of the Commissioner, Tax Exempt and Government

Entities Division are provided in Rev. Proc. 2016 – 4, this Bulletin. See also Rev. Proc. 2016 – 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). See also Rev. Proc. 2016 –5, this Bulletin, and Rev. Proc. 2016 –10, next Bulletin, for

the procedures for issuing determination letters on the tax-exempt status of organizations under

§ 501 and § 521, the foundation status of organizations described in § 501(c)(3) and the

foundation status of nonexempt charitable trusts described in § 4947(a)(1).

For the user fee requirements applicable to requests under the jurisdiction of the Commissioner,

Tax Exempt and Government Entities Division, see Rev. Proc. 2016 – 8, this Bulletin.

SECTION 5. UNDER

WHAT

CIRCUMSTANCES DO

THE ASSOCIATE

OFFICES ISSUE LETTER

RULINGS?

In income and gift tax

matters

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

proposed transaction or on a completed transaction if the letter ruling request is submitted before

the return is filed for the year in which the transaction is completed. An Associate office will not

ordinarily issue a letter ruling on a completed transaction if the letter ruling request is submitted

after the return is filed for the year in which the transaction is completed. “Not ordinarily” means

that unique and compelling reasons must be demonstrated to justify the issuance of a letter ruling

submitted after the return is filed for the year in which the transaction is completed. The taxpayer

must contact the Field office having audit jurisdiction over their return and obtain the Field’s

consent to the issuance of such a letter ruling.

Special relief for late S

corporation and related

elections in lieu of letter

ruling process

.02 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 procedure in Rev. Proc.

2013–30, 2013–36 I.R.B. 173. This procedure is in lieu of the letter ruling process and does not

require payment of any user fee. See section 3.01 of Rev. Proc. 2013–30, and section 15.03(3) of

this revenue procedure.

A § 301.9100 request for

extension of time for

making an election or for

other relief

.03 An Associate 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 Treasury Regulations, even if submitted

after the return covering the issue presented in the § 301.9100 request has been filed, an

examination of the return has begun, or the issues in the return are being considered by Appeals

or a Federal court. Except for certain requests pertaining to applications for recognition of tax

exemption under the jurisdiction of the Commissioner, Tax Exempt and Government Entities

Division, a § 301.9100 request is a letter ruling request. Therefore, the § 301.9100 request should

be submitted pursuant to this revenue procedure. However, a § 301.9100 request involving

recharacterization of an IRA (see § 1.408A–5, Q&A– 6) should be submitted pursuant to Rev.

Proc. 2016 – 4. An election made pursuant to § 301.9100 –2 for an automatic extension of time 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.

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

§ 301.9100 –2 and certain requests pertaining to applications for recognition of tax exemption

under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division) must

Sec. 5.03

January 4, 2016

Bulletin No. 2016 –1

be in the general form of, and meet the general requirements for, a letter ruling request. These

requirements are given in section 7 of this revenue procedure. A § 301.9100 request must include

an affidavit and declaration from the taxpayer and other parties having knowledge or information

about the events that led to the failure to make a valid regulatory election and to the discovery of

the failure. See §§ 301.9100 –3(e)(2) and (e)(3). In addition, a § 301.9100 request must include

the information required by § 301.9100 –3(e)(4).

(2) Period of limitation. The filing of a request for relief under § 301.9100 does not suspend

the running of any applicable period of limitation. See § 301.9100 –3(d)(2). The Associate office

ordinarily will not issue a § 301.9100 ruling if the period of limitation on assessment under

§ 6501(a) for the taxable year in which an election should have been made, or for any taxable

years that would have been affected by the election had it been timely made, will expire before

receipt of a § 301.9100 letter ruling. See § 301.9100 –3(c)(1)(ii). If, however, the taxpayer

consents to extend the period of limitation on assessment under § 6501(c)(4) for the taxable year

in which the election should have been made and for any taxable years that would have been

affected by the election had it been timely made, the Associate office may issue the letter ruling.

See § 301.9100 –3(d)(2). Note that the filing of a claim for refund under § 6511 does not extend

the period of limitation on assessment. If § 301.9100 –3 relief is granted, the Associate office may

require the taxpayer to consent to an extension of the period of limitation on assessment. See

§ 301.9100 –3(d)(2).

(3) Taxpayer must notify the Associate office if examination of its return begins while the

request is pending. The taxpayer must notify the Associate office if the Service begins an

examination of the taxpayer’s return for the taxable year in which an election should have been

made, or for any taxable years that would have been affected by the election had it been timely

made, while a § 301.9100 –3 request is pending. This notification must include the name and

telephone number of the examining agent. See § 301.9100 –3(e)(4)(i) and section 7.05(1)(b) of

this revenue procedure.

(4) Associate office will notify examination agent, appeals officer, or attorney of a

§ 301.9100 request if the taxpayer’s return is being examined by a Field office 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 for any taxable years that would have been

affected by the election had it been timely made, is being examined by a Field office or considered

by an Appeals office or a Federal court, the Associate office will notify the appropriate

examination agent, appeals officer, or attorney that a § 301.9100 request has been submitted to

the Associate office. The examination agent, appeals officer, or attorney 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 appeals officer, attorney, or appropriate Service official in the operating

division that has examination jurisdiction over the taxpayer’s tax return.

(5) Inclusion of statement required by section 4.04 of Rev. Proc. 2009 – 41. Eligible

entities requesting a letter ruling because they do not meet all of the eligibility requirements

of section 4.01 of Rev. Proc. 2009 – 41, 2009 –39 I.R.B. 439, must include either the

following representation as part of the entity’s request for a letter ruling or an explanation

regarding why they do not qualify to do so: “All required U.S. tax and information returns

of the entity (or, if the entity was not required to file any such returns under the desired

classification, then all required U.S. tax and information returns of each affected person as

defined in Section 4.02 of Rev. Proc. 2009 – 41) were filed timely or within 6 months of the

due date of the respective return (excluding extensions) as if the entity classification election

had been in effect on the requested date. No U.S. tax or information returns were filed

inconsistently with those described in the prior sentence.”

Bulletin No. 2016 –1

Sec. 5.03

January 4, 2016

(6) Relief for late initial classification election. In lieu of requesting a letter ruling under

§ 301.9100 –1 through § 301.9100 –3 and this revenue procedure, entities that satisfy the requirements

set forth in section 4.01 of Rev. Proc. 2009 – 41, 2009 –39 I.R.B. 439, may apply for late classification

election relief under Rev. Proc. 2009 – 41. Requests for such relief are not subject to user fees. See

section 3.01 of Rev. Proc. 2009 – 41 and section 15.03(2) of this revenue procedure.

Determinations under

§ 999(d)

.04 As provided in Rev. Proc. 77–9, 1977–1 C.B. 542, the Associate Chief Counsel (International) issues determinations under § 999(d) that a particular operation of a person, or of a

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

a foreign corporation of which a member of the controlled group is a U.S. shareholder, constitutes

participation in or cooperation with an international boycott. The effect of that determination is

to deny certain benefits of the foreign tax credit and the deferral of earnings of foreign subsidiaries

and domestic international sales corporations (DISCs) to that person. The same principles shall

apply with respect to exclusions under § 114 for exterritorial income (ETI). Requests for

determinations under Rev. Proc. 77–9 are letter ruling requests and should be submitted to the

Associate office pursuant to this revenue procedure.

In matters involving § 367

.05 Unless the issue is covered by section 6 of this revenue procedure, the 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

Associate office will determine the § 367 consequences of a transaction but may indicate in the letter

ruling that it expresses no opinion as to the characterization of the transaction under the reorganization.

The Associate office 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

.06 In general, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter

rulings on transactions affecting the estate tax on the prospective estate of a living person. The

Associate office will not issue letter rulings for prospective estates on computations of tax,

actuarial factors, or factual matters. With respect to the transactions affecting the estate tax of the

decedent’s estate, generally the Associate office issues letter rulings before the decedent’s estate

tax return is filed.

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 Associate office 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 Associate 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 Associate office that the return has been filed. See

section 7.05(2) of this revenue procedure. The Associate office will make every effort to issue the

letter ruling within 3 months of the date the return was filed.

If the taxpayer requests a letter ruling after the return is filed, but before the return is examined, the

taxpayer must notify the Field office having jurisdiction over the return that a letter ruling has been

requested, attach a copy of the pending letter ruling request, and notify the Associate office that a

return has been filed. See section 7.05(2) of this revenue procedure. The Associate office will make

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

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

the Field office having jurisdiction over the return, which may, by memorandum to the Associate

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

Sec. 5.06

January 4, 2016

Bulletin No. 2016 –1

In matters involving

additional estate tax under

§ 2032A(c)

.07 In matters involving additional estate tax under § 2032A(c), the Associate Chief Counsel

(Passthroughs and Special Industries) 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

.08 In matters involving qualified domestic trusts under § 2056A, the Associate Chief Counsel

(Passthroughs and Special Industries) issues letter rulings on proposed transactions and on

completed transactions that occurred before the return is filed.

In generation-skipping

transfer tax matters

.09 In general, the Associate Chief Counsel (Passthroughs and Special Industries) 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.

In employment and excise

tax matters

.10 In employment and excise tax matters, the Associate offices issue letter rulings on proposed

transactions and on completed transactions either before or after the return is filed for those

transactions.

Letter ruling requests regarding employment status (employer/employee relationship) from Federal

agencies and instrumentalities or their workers must be submitted to the Internal Revenue Service at

the address set forth on the current Form SS– 8, Determination of Worker Status for Purposes of

Federal Employment Taxes and Income Tax Withholding. If the Federal agency or instrumentality

service recipient (the firm) makes the request, the firm will receive any issued letter ruling. A copy will

also be sent to any identified workers. If the worker makes the request and the firm has been contacted

for information, both the worker and the firm will receive any issued letter ruling. The letter ruling will

apply to any individuals engaged by the firm under substantially similar circumstances. See section

12.04 of this revenue procedure for requests regarding employment status made by taxpayers other

than Federal agencies and instrumentalities or their workers.

In procedural and

administrative matters

.11 The Associate Chief Counsel (Procedure and Administration) issues letter rulings on

matters arising under the Code and related statutes and regulations that involve the time, place,

manner, and procedures for reporting and paying taxes; or the filing of information returns.

In Indian tribal

government matters

.12 Pursuant to Rev. Proc. 84 –37, 1984 –1 C.B. 513, as modified by Rev. Proc. 86 –17, 1986 –1 C.B.

550, and this revenue procedure, the Office of Associate Chief Counsel (Tax Exempt and Government

Entities) issues determinations recognizing a tribal entity as an Indian tribal government within the

meaning of § 7701(a)(40) or as a political subdivision of an Indian tribal government under § 7871(d)

if it determines, after consultation with the Secretary of the Interior, that the entity satisfies the statutory

definition of an Indian tribal government or has been delegated governmental functions of an Indian

tribal government. Requests for determinations under Rev. Proc. 84 –37 are letter ruling requests, and,

therefore, should be submitted to the Office of Associate Chief Counsel (Tax Exempt and Government

Entities) pursuant to this revenue procedure.

(1) Definition of Indian tribal government. The term “Indian tribal government” is defined

under § 7701(a)(40) to mean the governing body of any tribe, band, community, village, or group

of Indians, or (if applicable) Alaska Natives, which is determined by the Secretary of the

Treasury, after consultation with the Secretary of the Interior, to exercise governmental functions.

Section 7871(d) provides that, for purposes of § 7871(a), a subdivision of an Indian tribal

government shall be treated as a political subdivision of a state if the Secretary of the Treasury

determines, after consultation with the Secretary of the Interior, that the subdivision has been

delegated the right to exercise one or more of the substantial governmental functions of the Indian

tribal government.

Bulletin No. 2016 –1

Sec. 5.12

January 4, 2016

(2) Inclusion in list of tribal governments. Rev. Proc. 2008 –55, 2008 –2 C.B. 768, designates

the Indian tribal entities that appear on the current or future lists of federally recognized Indian

tribes published annually by the Department of the Interior, Bureau of Indian Affairs, as Indian

tribal governments that are treated similarly to states for certain Federal tax purposes. Rev. Proc.

84 –36, 1984 –1 C.B. 510, as modified by Rev. Proc. 86 –17, 1986 –1 C.B. 550, provides a list of

political subdivisions of Indian tribal governments that are treated as political subdivisions of

states for certain Federal tax purposes. Under Rev. Proc. 84 –37, as modified by Rev. Proc. 86 –17,

tribal governments or subdivisions recognized under § 7701(a)(40) or § 7871(d) will be included

in the list of recognized tribal government entities in future lists of federally recognized Indian

tribes published annually by the Department of the Interior, Bureau of Indian Affairs, or revised

versions of Rev. Proc. 84 –36.

On constructive sales price

under § 4216(b) or

§ 4218(c)

.13 The Associate Chief Counsel (Passthroughs and Special Industries) 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 Federal tax purposes. See section 6.14(5) of this revenue

procedure.

In exempt organizations

matters

.14 In exempt organizations matters, the Associate Chief Counsel (Tax Exempt and Government Entities) generally issues letter rulings on proposed transactions or on completed transactions if the letter ruling request is submitted before the return is filed for the year in which the

transaction is completed. The Associate Chief Counsel (Tax Exempt and Government Entities)

will not ordinarily issue a letter ruling on a completed transaction if the letter ruling request is

submitted after the return is filed for the year in which the transaction is completed. “Not

ordinarily” means that unique and compelling reasons must be demonstrated to justify the

issuance of a letter ruling submitted after the return is filed for the year in which the transaction

is completed. The taxpayer must contact the Field office having audit jurisdiction over their return

and obtain the Field’s consent to the issuance of such a letter ruling.

See Rev. Proc. 2016 –5, this Bulletin, and Rev. Proc. 2016 –10, next Bulletin, for the procedures

for issuing determination letters on the tax-exempt status of organizations under § 501 and § 521,

the foundation status of organizations described in § 501(c)(3), and the foundation status of

nonexempt charitable trusts described in § 4947(a)(1).

In qualified retirement

plan and IRA matters

.15 In qualified retirement plan and IRA matters, (other than those listed in Rev. Proc. 2016 – 4),

the Associate Chief Counsel (Tax Exempt and Government Entities) will generally issue letter

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

is filed, including those involving:

(1) §§ 72 (other than the computation of the exclusion ratio), 219, 381(c)(11), 402, 403(b)

(except with respect to whether the form of a plan satisfies the requirements of § 403(b) as

provided in Rev. Proc. 2016 – 4, this Bulletin), 404, 408, 408A, 412, 414(e), 511 through 514,

4971(b) and (g), 4972, 4973, 4974, 4978, 4979, and 4980;

(2) Waiver of the minimum funding standard (see Rev. Proc. 2004 –15, 2004 –1 C.B. 490);

(3) Waiver under § 4980F(c)(4) of all or part of the excise tax imposed for failure to satisfy the

notice requirements described in § 4980F(e);

(4) Whether a plan amendment is reasonable and provides for only de minimis increases in plan

liabilities in accordance with §§ 401(a)(33) and 412(c)(7)(B)(i) of the Code (see Rev. Proc.

79 – 62, 1979 –2 C.B. 576);

Sec. 5.15

January 4, 2016

Bulletin No. 2016 –1

(5) With respect to employee stock ownership plans and tax credit employee stock ownership

plans, §§ 409, 1042, 4975(d)(3) and 4975(e)(7). Qualification issues arising under these sections

are generally within the jurisdiction of Employee Plans Determinations. However, see Rev. Proc.

2016 –3, section 4.02(12);

(6) Abatement of first tier excise taxes under § 4962;

(7) Relief under § 301.9100 –1 that is not related to Roth IRA recharacterizations; and

(8) Grants of extensions of time other than pursuant to § 301.9100 –1.

A request to revoke an

election

.16 If a taxpayer is required to file a letter ruling request to obtain consent to revoke an election

made on a return, an Associate office will consider the request, even if an examination of the

return has begun or the issues in the return are being considered by Appeals or a Federal court.

The procedures in this revenue procedure applicable to a § 301.9100 request apply to a letter

ruling request to revoke the election.

Under some circumstances

before the issuance of a

regulation or other

published guidance

.17 In general, the Service will not issue a letter ruling or determination letter on an issue that

it cannot readily resolve before the promulgation of a regulation or other published guidance. See

section 6.09 of this revenue procedure.

However, an Associate office may issue letter rulings 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, regulations, and applicable case law to the

facts or for which the answer seems reasonably certain but not entirely free from doubt.

(2) Answer is not reasonably certain. If the letter ruling request presents an issue for which

the answer does not seem reasonably certain, the Associate office may issue the letter ruling,

using its best efforts to arrive at a determination, if it is in the best interest of tax administration.

SECTION 6. UNDER

WHAT

CIRCUMSTANCES DOES

THE SERVICE NOT

ISSUE LETTER

RULINGS OR

DETERMINATION

LETTERS?

Ordinarily not if the

request involves an issue

under examination or

consideration or in

litigation

.01 The Service ordinarily does not issue a letter ruling or a determination letter if, at the time

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

issue—

(1) is being examined by a Field office;

(2) is being considered by Appeals;

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

Bulletin No. 2016 –1

Sec. 6.01

January 4, 2016

(4) has been examined by a Field office or considered by Appeals and the statutory period of

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

(5) has been examined by a Field office or considered by Appeals and a closing agreement

covering the issue or liability has not been entered into by a Field office or by Appeals.

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, an Associate office will issue the letter ruling unless it is notified 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 Field office. See section 7.05 of this revenue procedure. In

income and gift tax matters, as well as in qualified retirement plan, IRA, and exempt organizations

matters, even if an examination has begun, an Associate office ordinarily will issue the letter

ruling if the Field office agrees by memorandum to the issuance of the letter ruling.

Ordinarily not in certain

areas because of factual

nature of the problem or

for other reasons

.02 The Service ordinarily does not issue letter rulings or determination letters in certain areas

because of the factual nature of the matter involved or for other reasons. Rev. Proc. 2016 –3, this

Bulletin, and Rev. Proc. 2016 –7, this Bulletin, provide a list of these areas. This list is not

all-inclusive because the Service may decline to issue a letter ruling or a determination letter when

appropriate in the interest of sound tax administration, including due to resource constraints, 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 Service may, when it is considered

appropriate and in the interest of sound tax administration, issue an information letter calling

attention to well-established principles of tax law.

If the Service determines that it is not in the interest of sound tax administration to issue a letter

ruling or determination letter due to resource constraints, it will adopt a consistent approach with

respect to taxpayers that request a ruling on the same issue. The Service will also consider adding the

issue to the no rule list at the first opportunity. See sections 2.01 and 3.02 of Rev. Proc. 2016–3, this Bulletin.

Ordinarily not on part of

an integrated transaction

.03 An Associate office ordinarily will not issue a letter ruling on only part of an integrated

transaction. If 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 a

branch having jurisdiction for the matters on which the taxpayer is seeking a letter ruling to

discuss whether the Associate office will issue a letter ruling on part of the transaction.

In addition, the Service will not rule on the qualification of any transaction under § 332, § 351,

§ 355, or § 1036, or on whether a transaction constitutes a reorganization within the meaning of

§ 368, regardless of whether such transaction is part of an integrated transaction (see section

3.01(50) of Rev. Proc. 2016 –3, this Bulletin). Instead, the Associate Chief Counsel (Corporate)

will only issue a letter ruling on significant issues (within the meaning of section 3.01(50) of Rev.

Proc. 2016 –3) presented in a transaction described in § 332, § 351, § 355, § 368, or § 1036. For

example, the Service may rule on significant issues under § 1.368 –1(d) (continuity of business

enterprise) and § 1.368 –1(e) (continuity of interest). Letter rulings requested under this section

6.03 are subject to the no-rule policies of Rev. Proc. 2016 –3. In addition, the Service will not rule

on the tax consequences that result from the application of § 332, § 351, § 355, § 368, or § 1036

(including nonrecognition and basis) except to the extent of a significant issue and only to the

extent consistent with the no-rule policies of Rev. Proc. 2016 –3.

Before preparing a letter ruling request under this section involving significant issues presented

in a transaction described in § 332, § 351, § 355, § 368, or § 1036, a taxpayer is encouraged to

call the Office of Associate Chief Counsel (Corporate) at the telephone number provided in

section 10.07(1)(a) of this revenue procedure to discuss whether the Service will entertain a letter

Sec. 6.03

January 4, 2016

Bulletin No. 2016 –1

ruling request under this section 6.03. The Service reserves the right to rule on any other aspect

of the transaction (including ruling adversely) to the extent the Service believes it is in the best

interests of tax administration. Cf. section 2.01 of Rev. Proc. 2016 –3.

Taxpayers may request rulings on one or more significant issues in a single letter ruling request.

Letter ruling requests under this section 6.03 must include the following for each significant issue:

(1) A narrative description of the transaction that puts the issue in context;

(2) A statement identifying the issue;

(3) An analysis of the relevant law, which should set forth the authorities most closely related to the

issue and explain why these authorities do not resolve the issue, and an explanation concerning why

the issue is significant within the meaning of section 3.01(50) of Rev. Proc. 2016 –3;

(4) Information and representations relevant to the issue. Taxpayers should consult other

published authorities (see, for example, Appendix G of this revenue procedure, which identifies

certain checklist and guideline revenue procedures), including those modified by Rev. Proc.

2013–32, 2013–28 I.R.B. 55 (e.g., Rev. Proc. 96 –30, 1996 –1 C.B. 696), and other authorities

(e.g., Rev. Rul. 73–234, 1973–1 C.B. 180 (applying § 355(b) to the activities performed by

employees of a corporation engaged in a farming business)), to identify information or representations but only to the extent that they relate to the issue; and

(5) The precise ruling(s) requested.

If the Service issues a letter ruling on a significant issue under this revenue procedure, then the

letter ruling will state that no opinion is expressed as to any issue or step not specifically addressed

by the letter. In addition, letter rulings issued under this revenue procedure will contain the

following (or similar) language:

This letter is issued pursuant to section 6.03 of Rev. Proc. 2016 –1, 2016 –1 I.R.B. 1,

regarding one or more significant issues under § 332, § 351, § 355, § 368, or § 1036. The

ruling[s] contained in this letter only address[es] one or more discrete legal issues involved

in the transaction. This Office expresses no opinion as to the overall tax consequences of the

transactions described in this letter or as to any issue not specifically addressed by the

ruling[s] below.

Ordinarily not on which of

two entities is a common

law employer

.04 The Service ordinarily does not issue a letter ruling or a determination letter on which of

two entities, under common law rules applicable in determining the employer-employee relationship, is the employer, when one entity is treating the worker as an employee.

Ordinarily not to business

associations or groups

.05 The Service ordinarily does not issue letter rulings or determination letters to business,

trade, or industrial associations or to similar groups concerning the application of the tax laws to

members of the group. Groups and associations, however, may submit suggestions of generic

issues that could be appropriately addressed in revenue rulings. 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.

The Service may issue letter rulings or determination letters to groups or associations on their

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

Bulletin No. 2016 –1

Sec. 6.05

January 4, 2016

Ordinarily not where the

request does not address

the tax status, liability, or

reporting obligations of the

requester

.06 The Service ordinarily does not issue letter rulings or determination letters regarding the tax

consequences of a transaction for taxpayers who are not directly involved in the request if the

requested letter ruling or determination letter would not address the tax status, liability, or

reporting obligations of the requester. For example, a taxpayer may not request a letter ruling

relating to the tax consequences of a transaction to a customer or client, if the tax status, liability,

or reporting obligations of the taxpayer would not be addressed in the ruling, because the

customer or client is not directly involved in the letter ruling request. The tax liability of each

shareholder is, however, directly involved in a letter ruling on the reorganization of a corporation.

Accordingly, a corporate taxpayer could request a letter ruling that solely addressed the tax

consequences to its shareholders of a proposed reorganization.

Rev. Proc. 96 –16, 1996 –1 C.B. 630, sets forth rules for letter ruling requests involving

tax-exempt state and local government obligations.

Ordinarily not to foreign

governments

.07 The Service ordinarily does not issue letter rulings or determination letters to foreign

governments or their political subdivisions about the U.S. tax effects of their laws. The Associate

offices also do 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.

2015– 40, 2015–35 I.R.B. 236. Treaty partners can continue to address matters such as these under

the provisions of the applicable tax treaty. In addition, the Associate offices 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.

Ordinarily not on Federal

tax consequences of

proposed legislation

.08 The Associate offices ordinarily do not issue letter rulings on a matter involving the Federal

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

Office of Associate Chief Counsel (Tax Exempt and Government Entities) may issue letter rulings

regarding the effect of proposed state, local, or municipal legislation upon an eligible deferred

compensation plan under § 457(b) provided that the letter ruling request relating to the plan

complies with the other requirements of this revenue procedure. The Associate offices also may

provide general information in response to an inquiry.

Ordinarily not before

issuance of a regulation or

other published guidance

.09 Generally, the Service will not issue a letter ruling or a determination letter if the request

presents an issue that cannot be readily resolved before a regulation or any other published

guidance is issued. When the Service has closed a regulation project or any other published

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

or any other published guidance project, the Associate offices may consider all letter ruling

requests unless the issue is covered by section 6 of this revenue procedure, Rev. Proc. 2016 –3,

this Bulletin, or Rev. Proc. 2016 –7, this Bulletin.

Not on frivolous issues

.10 The Service will not issue a letter ruling or a determination letter on frivolous issues. A

“frivolous issue” is one without basis in fact or law or one that asserts a position that courts have

held frivolous or groundless. Examples of frivolous or groundless issues include, but are not

limited to:

(1) frivolous “constitutional” claims, such as claims that the requirement to file tax returns and

pay taxes constitutes an unreasonable search barred by the Fourth Amendment, violates Fifth and

Fourteenth Amendment protections of due process, violates Thirteenth Amendment protections

against involuntary servitude, or is unenforceable because the Sixteenth Amendment does not

authorize nonapportioned direct taxes or was never ratified;

(2) claims that income taxes are voluntary, that the term “income” is not defined in the Internal

Revenue Code, or that preparation and filing of Federal income tax returns violates the Paperwork

Reduction Act;

Sec. 6.10

January 4, 2016

Bulletin No. 2016 –1

(3) claims that tax may be imposed only on coins minted under a gold or silver standard or that

receipt of Federal Reserve Notes does not cause an accretion to wealth;

(4) claims that a person’s income is not taxable because he or she falls within a class entitled

to “reparation claims” or an extra-statutory class of individuals exempt from tax, e.g., “free-born”

individuals;

(5) claims that a taxpayer can refuse to pay taxes on the basis of opposition to certain

Governmental expenditures;

(6) claims that taxes apply only to Federal employees; only to residents of Puerto Rico, Guam,

the U.S. Virgin Islands, the District of Columbia, or “Federal enclaves;” or that §§ 861 through

865 or any other provision of the Code imposes taxes on U.S. citizens and residents only on

income derived from foreign based activities;

(7) claims that wages or personal service income are “not income”, are “nontaxable receipts”,

or are a “nontaxable exchange for labor;”

(8) claims that income tax withholding by an employer on wages is optional; or

(9) other claims that the courts have characterized as frivolous or groundless.

Additional examples of frivolous or groundless issues may be found in IRS publications and

other guidance (including, but not limited to, Notice 2010 –33, Frivolous Positions, and I.R.M.

4.10.12.1.1, Frivolous Arguments).

No “comfort” letter rulings

.11 A letter ruling will not be issued with respect to an issue that is clearly and adequately

addressed by statute, regulations, decision of a court, revenue rulings, revenue procedures,

notices, or other authority published in the Internal Revenue Bulletin (Comfort Ruling). However,

except with respect to issues under § 332, § 351, § 355, § 368, or § 1036 and the tax consequences

resulting from the application of such Code sections (see generally section 6.03), the Associate

office may, in its discretion, decide to issue a Comfort Ruling if the Associate office is otherwise

issuing a letter ruling to the taxpayer on another issue arising in the same transaction.

Not on alternative plans or

hypothetical situations

.12 The Service will not issue a letter ruling or a determination letter on alternative plans of

proposed transactions or on hypothetical situations.

Not on property conversion

after return filed

.13 An Associate office will 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 Federal tax return for the taxable year in which the property was converted. A Director may

issue a determination letter in this case. See section 12.01 of this revenue procedure.

Circumstances under

which determination letters

are not issued by a

Director

.14 A Director will not issue a determination letter if—

(1) the taxpayer has directed a similar inquiry to an Associate office;

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

litigation or before Appeals;

Bulletin No. 2016 –1

Sec. 6.14

January 4, 2016

(3) the request involves an industry-wide problem;

(4) the specific employment tax question at issue in the request has been, or is being, considered

by the Central Office of the Social Security Administration or the Railroad Retirement Board for

the same taxpayer or a related taxpayer; or

(5) the request is for a determination of constructive sales price under § 4216(b) or § 4218(c),

which deal with special provisions applicable to the manufacturers excise tax. The Associate

Chief Counsel (Passthroughs and Special Industries) will, in certain circumstances, issue letter

rulings in this area. See section 5.13 of this revenue procedure.

SECTION 7. WHAT ARE

THE GENERAL

INSTRUCTIONS FOR

REQUESTING LETTER

RULINGS AND

DETERMINATION

LETTERS?

This section provides the general instructions for requesting letter rulings and determination

letters. See section 9 of this revenue procedure for the specific and additional procedures for

requesting a change in method of accounting.

Requests for letter rulings, closing agreements, and determination letters require the payment

of the applicable user fee listed in Appendix A of this revenue procedure. Certain changes in

method of accounting under the automatic change request procedures (see section 9.01(1) of this

revenue procedure) and certain changes in accounting periods made under automatic change

request procedures do not require payment of a user fee (see Appendix G of this revenue

procedure). For additional user fee requirements, see section 15 of this revenue procedure.

Specific and additional instructions also apply to requests for letter rulings and determination

letters on certain matters. Those matters are listed in Appendix G of this revenue procedure with

a reference (usually to another revenue procedure) where more information can be obtained.

Documents and

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;

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

(e) a detailed description of the transaction; and

(f) all other facts relating to the transaction or to the taxpayer’s requested tax treatment thereof.

Sec. 7.01

January 4, 2016

Bulletin No. 2016 –1

Documents and foreign

laws

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

pertinent to the transaction, 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 7.01(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 language of the country

involved and must be copied from an official publication of the foreign government or another

widely available and 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 7.01(2).

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

available and generally accepted publication that the taxpayer (or the taxpayer’s qualified

translator) uses as a source for the relevant parts of the foreign law.

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, and other documents pertinent to the transaction that are 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 and 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 tax matters or foreign law if the law is not a

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

Analysis of material facts

Bulletin No. 2016 –1

(3) Analysis of material facts. The request must be accompanied by an analysis of facts and

their bearing on the issue or issues. If documents attached to a request contain material facts, they

must be included in the taxpayer’s analysis of facts in the request rather than merely incorporated

by reference.

Sec. 7.01

January 4, 2016

Same issue in an earlier

return under Examination,

before Appeals, before a

Federal Court, or being

Considered by the Pension

Benefit Guaranty

Corporation, by the

Department of Labor, or

by the Department of

Health and Human

Services

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

information required for § 301.9100 requests. The request must state whether, to the best of the

knowledge of both the taxpayer and the taxpayer’s representatives, the same issue is addressed in

any return of the taxpayer, 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, or any

predecessor that(a) is currently under examination, before Appeals, or before a Federal court;

(b) was previously under examination, before Appeals, or before a Federal court;

Corporation or the Department of Labor; or

(d) in health care matters, is being considered by the Department of Labor or the Department

of Health and Human Services.

The Service will not ordinarily issue a letter ruling or determination letter if, at the time of the

request, the identical issue is under examination or consideration or in litigation. See section 6.01

in this revenue procedure. A limited exception to the above rule is made for a § 301.9100 request.

See section 5.03 in this revenue procedure.

If a § 301.9100 request involves a tax year that is currently under examination, before Appeals,

or before a Federal court, the taxpayer must notify the Service, as outlined above. This notification

must include the name and telephone number of the examining agent or appeals officer.

Same or similar issue in a

request previously

submitted or currently

pending

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

whether a request involving it was submitted or is currently pending. The request must 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, 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 of their representatives previously

submitted a request (including an application for change in method of accounting) involving the

same or a similar issue but no letter ruling or determination letter was issued;

an application for change in method of accounting) involving the same or a similar issue that is

currently pending with the Service;

(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 method of accounting) involving the same

or a similar issue; or

(e) the taxpayer or a related taxpayer had, or has scheduled, a pre-submission conference

involving the same or a similar issue.

Sec. 7.01

January 4, 2016

Bulletin No. 2016 –1

If the statement is affirmative for (a), (b), (c), (d), or (e) of this section 7.01(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.

Interpretation of a

substantive provision of an

income or estate tax treaty

(6) Statement regarding interpretation of a substantive provision of an income or estate

tax treaty. If the request involves the interpretation of a substantive provision of an income or

estate tax treaty, the request must state whether—

(a) the tax authority of the treaty jurisdiction has issued a ruling on the same or similar issue

for the taxpayer, 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 any predecessor;

(b) the same or similar issue for the taxpayer, a related taxpayer, or any predecessor is being

examined or has been settled by the tax authority of the treaty jurisdiction or is otherwise the

subject of a closing agreement in that jurisdiction; and

considered by the competent authority of the treaty jurisdiction.

Letter from Bureau of

Indian Affairs relating to

certain letter ruling

requests

(7) Letter from Bureau of Indian Affairs relating to a letter ruling request for recognition

of Indian tribal government status or status as a political subdivision of an Indian tribal

government. To facilitate prompt action on a letter ruling request for recognition of Indian tribal

government status or status as a political subdivision of an Indian tribal government, the taxpayer

must submit with the letter ruling request a letter from the Department of the Interior, Bureau of

Indian Affairs (“BIA”), verifying that the tribe is recognized by BIA as an Indian tribe and that

the tribal government exercises governmental functions or that the political subdivision of the

Indian tribal government has been delegated substantial governmental functions. A letter ruling

request that does not contain this letter from BIA cannot be resolved until the Service obtains a

letter from BIA regarding the tribe’s status.

The taxpayer should send a request to verify tribal status to the following address:

Branch of General Indian Legal Activity

Division of Indian Affairs

Office of the Solicitor

U.S. Department of the Interior

1849 C Street, NW

Washington, DC 20240

Statement of authorities

supporting taxpayer’s

views

(8) Statement of supporting authorities. If the taxpayer advocates a particular conclusion, the

taxpayer must include an explanation of the grounds for that conclusion and the relevant

authorities to support it. Even if the taxpayer is not advocating a particular tax treatment of a

proposed transaction, the taxpayer must 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

Bulletin No. 2016 –1

(9) Statement of contrary authorities. To avoid a delay in the ruling process, contrary

authorities should be brought to the attention of the Service at the earliest possible opportunity.

If there are significant contrary authorities, it is usually helpful to discuss them in a pre-

Sec. 7.01

January 4, 2016

submission conference prior to submitting the ruling request. See section 10.07 of this revenue

procedure regarding pre-submission conferences. The taxpayer is strongly encouraged to inform

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

position advanced, such as 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 should be included. If the taxpayer

does not furnish either contrary authorities or a statement that none exist, the Service in complex

cases or those presenting difficult or novel issues may request submission of contrary authorities

or a statement that none exist. Failure to comply with this request may result in the Service’s

refusal to issue a letter ruling or determination letter.

The taxpayer’s identification of and discussion of contrary authorities will generally enable

Service personnel to more quickly understand the issue and relevant authorities. Having this

information should make research more efficient 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

pending legislation

(10) Statement identifying pending legislation. When filing the request, the taxpayer must

identify any pending legislation that may affect the proposed transaction. In addition, the taxpayer

must notify the Service if any such legislation is introduced after the request is filed but before

a letter ruling or determination letter is issued.

Deletion statement

required by § 6110

(11) Statement identifying information to be deleted from the public inspection copy of

letter ruling or determination letter. 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, except where a letter ruling or determination letter is open to public inspection

under § 6104. If the deletion 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 deletion

statement within 21 calendar days. See section 8.05 of this revenue procedure.

Section 6110(l)(1) provides that § 6110 disclosure provisions do not apply to any matter to

which § 6104 applies. Therefore, letter rulings, determination letters, technical advice memoranda, and related background file documents dealing with the following matters (covered by

§ 6104) are not subject to § 6110 disclosure provisions—

(i) An approved application for exemption under § 501(a) as an organization described in

§ 501(c) or (d), or notice of status as a political organization under § 527, together with any papers

submitted in support of such application or notice;

(ii) An application for exemption under § 501(a) with respect to the qualification of a pension,

profit sharing or stock bonus plan, or an individual retirement account described in § 408 or

§ 408A, or any application for exemption under § 501(a) by an organization forming part of such

a plan or account;

(iii) Any document issued by the Internal Revenue Service in which the qualification or exempt

status of a plan or account is granted, denied, or revoked or the portion of any document in which

technical advice with respect thereto is given;

(iv) Any application filed and any document issued by the Internal Revenue Service with

respect to the qualification or status of master and prototype retirement plans; and

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January 4, 2016

Bulletin No. 2016 –1

(v) The portion of any document issued by the Internal Revenue Service with respect to the

qualification or exempt status of a retirement plan or account of a proposed transaction by such

plan or account.

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

identifying numbers to be deleted should state this in the deletion statement. If the taxpayer wants

more information deleted, the deletion 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

deletion statement must include 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 deletion statements may be submitted.

(b) Location of deletion statement. The deletion statement must be made in a separate

document from the request for a letter ruling or determination letter and must be placed on top

of the request.

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

(d) Additional information. The taxpayer should follow the same procedures of this section

7.01(11) to propose deletions from any additional information submitted after the initial request.

An additional deletion statement is not required with each submission of additional information

if the taxpayer’s initial deletion 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 to the Service office indicated on the

notice of intention to disclose, within 20 calendar days of the date the notice of intention to disclose

is mailed to the taxpayer. 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 proposed deletions 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. These matters may, however, be

taken up at any conference that is otherwise scheduled regarding the request.

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

disclose under § 6110(f)(1), but no later than 60 calendar days after the date of the notice, the taxpayer

may send a written 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 whether there are good reasons for the

continued delay.

Bulletin No. 2016 –1

Sec. 7.01

January 4, 2016

Signature on request

Authorized representatives

(12) 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 or faxed signature is not permitted.

(13) Authorized representatives.

(a) To sign the request or to appear before the Service in connection with the request, the

taxpayer’s authorized representative must be (for rules on who may practice before the Service,

see Treasury Department Circular No. 230, 31 C.F.R. part 10):

(1) 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;

(2) 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;

(3) An enrolled agent is a person who is currently enrolled as an agent to practice before the Service

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 enrollment and authorization to

represent the taxpayer. The enrollment number must be included in the declaration;

(4) An enrolled actuary is an individual 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, 419,

419A, 420, 4971, 4972, 4976, 4980, 6057, 6058, 6059, 6652(e), 6652(f), 6692, and 7805(b);

former § 405; and 29 U.S.C. § 1083;

(5) An enrolled retirement plan agent is an individual currently enrolled as a retirement plan agent

who is not currently under suspension or disbarment from practice before the Service. He or she must

file a written declaration as an enrolled retirement plan agent and current authorization to represent the

taxpayer. Practice before the Service as an enrolled retirement plan agent is limited to representation

with respect to issues involving the following programs: Employee Plans Determination Letter

program; Employee Plans Compliance Resolution System; and Employee Plans Master and Prototype

and Volume Submitter program. Enrolled retirement plan agents also are generally permitted to

represent taxpayers with respect to IRS forms under the 5300 and 5500 series, which are filed by

retirement plans and plans sponsors, but not with respect to actuarial forms and schedules; or

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

Authorization” from the Director of the Office of Professional Responsibility 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 Professional Responsibility, SE:OPR, Internal Revenue

Service, 1111 Constitution Ave., NW, Washington, DC 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.

Sec. 7.01

January 4, 2016

Bulletin No. 2016 –1

(b) A regular full-time employee representing his or her employer; a general partner representing his or her partnership; a bona fide officer representing his or her corporation, association,

or organized group; a trustee, receiver, guardian, personal representative, administrator, executor,

or regular full-time employee representing a trust, receivership, guardianship, or estate; or an

individual representing an immediate family member may sign the request or appear before the

Service in connection with the request if the individual provides current authorization to represent

the taxpayer. See section 7.01(14) of this revenue procedure.

A taxpayer may be required to file a Form 8821, Tax Information Authorization, for certain

employees not authorized to represent the taxpayer to receive taxpayer information from the

Service.

subsections (a) and (b) of this section may not sign the request, appear before the Service, or

represent a taxpayer in connection with a request for a letter ruling or a determination letter. See

section 10.3(f)(3) of Treasury Department Circular No. 230.

(d) A foreign representative, other than a person referred to in subsections (a) and (b) of this

section, is not authorized to practice before the Service within the United States and 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 subsections (a) and (b) of this section.

Power of attorney and

declaration of

representative

(14) Power of attorney and declaration of representative. Form 2848, Power of Attorney

and Declaration of Representative, should be used to provide the representative’s authority (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 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 7.02(2) of this revenue

procedure.

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

situations where the Service believes that the taxpayer’s representative is not in compliance with

Circular 230, the Service will bring the matter to the attention of the Office of Professional

Responsibility.

Penalties of perjury

statement

(15) 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 8.05(4) of this revenue procedure for the penalties of perjury statement applicable

for submissions of additional information.

Bulletin No. 2016 –1

Sec. 7.01

January 4, 2016

(b) Signature by taxpayer. The declaration must be signed and dated by the taxpayer, not the

taxpayer’s representative. A stamped signature or faxed 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.

Number of copies of

request to be submitted

(16) Number of copies of request to be submitted. Generally, a taxpayer needs to submit the

original and one copy of the request for a letter ruling or determination letter. If more than one

issue is presented in the letter ruling request, the taxpayer is encouraged to submit additional

copies of the request.

Further, the original and 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 multiple issues

as explained later under section 7.02(1) of this revenue procedure;

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

as explained in section 7.01(11)(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

on the issue presented.

Sample format for a letter

ruling request

(17) 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 of this revenue procedure. This format is not required to be used.

Checklist

(18) Checklist for letter ruling requests. An Associate office 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; this

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 in Appendix D, Appendix E, or are listed in section 1 of

Appendix G 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.

Sec. 7.01

January 4, 2016

Bulletin No. 2016 –1

Taxpayers can obtain copies of the checklist in Appendix C by calling (202) 317-5221 (not a

toll-free call) or by accessing this revenue procedure in Internal Revenue Bulletin 2016 –1 on the IRS

web site at www.irs.gov. Taxpayers can access this revenue procedure on the website by following the

“News” link, the “IRS Guidance” link, and the “Internal Revenue Bulletins (after June 2003)” link to

obtain Internal Revenue Bulletin 2016 –1. A copy of this checklist may be used.

Additional procedural

information required with

request

Multiple issues

.02

(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 Associate office generally will issue a

single letter ruling covering all the issues. If the taxpayer requests separate letter rulings on any

of the issues (because, for example, one letter ruling is needed sooner than another), the Associate

office usually will comply with the request unless doing so is not feasible or not in the best interest

of the Service. A taxpayer who wants separate letter rulings on multiple issues should make this

clear in the request and submit the original and two copies of the request. See section 15.06(3)

regarding whether a single user fee will be charged.

In issuing each letter ruling, the Associate office will state that it has issued separate letter

rulings or that requests for other letter rulings are pending.

Power of attorney used to

indicate recipient of a copy

or copies of a letter ruling

or a determination letter

(2) Power of attorney used to indicate recipient or recipients of a copy or copies of a letter

ruling or a determination letter. Once the Service signs the letter ruling or determination letter,

it will send the original to the taxpayer. The Service will not send the original letter ruling or

determination letter to the taxpayer’s representative.

At the taxpayer’s request, the Service will send one copy of the letter ruling or determination

letter to up to two authorized representatives. At the discretion of the Service, the Service may

provide a copy of the letter ruling or determination letter to up to two authorized representatives,

even though the taxpayer did not request that the Service send a copy of notices and communications to the taxpayer’s representatives. Taxpayers that use Form 2848, Power of Attorney and

Declaration of Representative, to designate representatives, may request that copies of notices

and communications be sent to the representatives listed at Line 2 by checking the corresponding

box on Line 2. Taxpayers may use Line 5 of Form 2848 to advise the Service that a copy of the

letter ruling or determination letter should not be sent to the taxpayer’s representative(s). If no box

is checked on Line 2 and the taxpayer does not indicate otherwise on Line 5, the Service may in

its discretion provide a copy of the letter ruling or determination letter to up to two authorized

representatives.

“Two-part” letter ruling

requests

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

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 7.01 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 Associate office 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. The

Associate office 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.

Bulletin No. 2016 –1

Sec. 7.02

January 4, 2016

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 § 501(a) or § 521, or requests for rulings on employment tax status.

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

Associate office representative may request that the taxpayer submit a proposed draft of the letter

ruling to expedite the issuance of the ruling. See section 8.07 of this revenue procedure.

Expedited handling

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

and determination letters in order of the date received. Expedited handling means that a request

is processed ahead of requests received before it. Expedited handling is granted only in rare and

unusual cases, both out of fairness to other taxpayers and because the Service seeks to process all

requests as expeditiously as possible and to give appropriate deference to normal business

exigencies in all cases not involving expedited handling.

A taxpayer with a compelling need to have a request processed ahead of requests received

before it may request expedited handling. This request must explain in detail the need for

expedited handling. The request for expedited handling must be made in writing, preferably in a

separate letter included with the request for the letter ruling or determination letter or provided

soon after its filing. If the request for expedited handling is contained in the letter requesting the

letter ruling or determination letter, the letter should state at the top of the first page “Expedited

Handling Is Requested. See page ___ of this letter.”

A request for expedited handling will not be forwarded to a branch for action until the check

for the user fee is received.

Whether a request for expedited handling will be granted is within the Service’s discretion. The

Service may grant the request when a factor outside a taxpayer’s control creates a real business need

to obtain a letter ruling or determination letter before a certain date to avoid serious business

consequences. Examples include situations in which a court or governmental agency has imposed a

specific deadline for the completion of a transaction, or where a transaction must be completed

expeditiously to avoid an imminent business emergency (such as the hostile takeover of a corporate

taxpayer), provided that the taxpayer can demonstrate that the deadline or business emergency, and the

need for expedited handling, resulted from circumstances that could not reasonably have been

anticipated or controlled by the taxpayer. To qualify for expedited handling in such situations, the

taxpayer must also demonstrate that the taxpayer submitted the request as promptly as possible after

becoming aware of the deadline or emergency. The extent to which the letter ruling or determination

letter request complies with all of the applicable requirements of this revenue procedure, and fully and

clearly presents the issues, is a factor in determining whether expedited treatment will be granted.

When the Service agrees to process a request out of order, it cannot give assurance that any letter ruling

or determination letter will be processed by the date requested.

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.

Because most requests for letter rulings and determination letters cannot be processed out of

order, the Service urges all taxpayers to submit their requests well in advance of the contemplated

transaction. In addition, to facilitate prompt action on letter ruling requests, taxpayers are

encouraged to ensure that their initial submissions comply with all of the requirements of this

Sec. 7.02

January 4, 2016

Bulletin No. 2016 –1

revenue procedure (including the requirements of other applicable guidelines set forth in Appendix G of this revenue procedure), to prepare “two-part” requests described in section 7.02(3) of

this revenue procedure when possible, and to promptly provide any additional information

requested by the Service.

Fax to taxpayer or

taxpayer’s authorized

representative of any

document related to letter

ruling request

(5) To request the receipt of any document related to letter ruling request by fax. If the

taxpayer so requests, the Associate office may fax to the taxpayer or the taxpayer’s authorized

representative a copy of any document related to the letter ruling request (for example, the letter

ruling itself or a request for additional information).

A request to fax to the taxpayer or the taxpayer’s authorized representative a copy of any document

related to the letter ruling request must be made in writing, preferably as part of the original request

for the letter ruling. The request may be submitted at a later date, but such a request will only be

respected prospectively with respect to documents generated after it is received, and must be received

prior to the signing of the letter ruling. The request must contain the fax number of the taxpayer or the

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

A document other than the letter ruling will be faxed by a branch representative. The copy of

the letter ruling may be faxed by either a branch representative or the Disclosure and Litigation

Support Branch of the Legal Processing Division of the Office of Associate Chief Counsel

(Procedure and Administration) (CC:PA:LPD:DLS). For purposes of § 301.6110 –2(h), however,

a letter ruling is not issued until the ruling is mailed.

Requesting a conference

Additional information

required in letter ruling

requests involving welfare

benefit funds (including

voluntary employees’

beneficiary associations

(VEBAs))

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

involved in a request for a letter ruling should indicate this in writing when filing the request or

soon thereafter. See sections 10.01, 10.02, and 11.11(2) of this revenue procedure.

.03

Requests for letter rulings

on the tax consequences of

a proposed transaction

involving a welfare benefit

fund

(1) Requests for letter rulings on the tax consequences of a proposed transaction involving

a welfare benefit fund. If a letter ruling is sought on the tax consequences to both the welfare

benefit fund and an employer that contributed to the fund, each taxpayer (the fund and each

contributing employer) must submit a separate letter ruling request and pay the applicable user fee

listed in Appendix A of this revenue procedure.

Code sections to consider

(2) Code sections to consider. In addition to any other applicable Code sections, taxpayers

should consider whether there are tax consequences under the following Code sections—

(a) For taxpayers that are VEBAs. VEBAs requesting a letter ruling on a proposed

transaction involving the use or transfer of VEBA assets should consider the tax consequences

under §§ 501(c)(9), 505, 511, and 512, and should also include with the request a copy of the

VEBA’s most recent letter addressing its status under § 501(c)(9).

(b) For taxpayers that are contributing employers. Contributing employers requesting a

letter ruling on a proposed transaction involving the disposition of fund assets should consider the

tax consequences under §§ 61, 111, 419, 419A, and 4976.

(i) Special considerations for § 4976 rulings.

Bulletin No. 2016 –1

Sec. 7.03

January 4, 2016

(A) Tax Benefit Rule. A contributing employer that deducted contributions to a welfare benefit

fund and requests a letter ruling as to the tax consequences under § 4976 must either (1) address

why no amount should be included in income under the tax benefit rule, or (2) represent that it

is including in income amounts that are subject to the tax benefit rule.

(B) Standing. In the case of a trade association (an organization described in § 501(c)(6)) that

sponsors a welfare benefit fund, the association does not have standing to request a ruling under § 4976

on behalf of employers who contributed to the fund. However, a trade association generally has

standing to request a ruling under § 4976 on its own behalf as an employer if the trade association

contributed to the fund and the fund provided benefits to the trade association’s own employees.

welfare benefit funds. If the proposed transaction involves either an additional use of welfare

benefit fund assets (for example, providing benefits to a new group of employees or providing a

new type of benefit) or a transfer of assets between or among two or more welfare benefit funds,

the application should state whether the employer has an obligation, in the current or any future

year, to provide the benefits. For situations in which a use or transfer of assets would involve

assets or benefits subject to one or more collective bargaining agreements, the application should

include a copy of each applicable collective bargaining agreement. For a transfer of assets, the

application should also address whether the welfare benefit funds could be merged.

Address to which to send

request for letter ruling or

determination letter

Request for letter ruling

.04

(1) Request for letter ruling. Original letter ruling requests must be sent to the appropriate

Associate office. The packages should be marked RULING REQUEST SUBMISSION.

(a) If a private delivery service is not used, requests for letter rulings should be sent to the

following address:

Internal Revenue Service

Attn: CC:PA:LPD:DRU

P.O. Box 7604

Ben Franklin Station

Washington, DC 20044

If a private delivery service is used, the address is:

Internal Revenue Service

Attn: CC:PA:LPD:DRU, Room 5336

1111 Constitution Ave., NW

Washington, DC 20224

(b) Requests for letter rulings may also be hand delivered between the hours of 8:00 a.m. and

4:00 p.m. to the courier’s desk at the loading

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