These synopses are intended only as aids to the reader in
Agency decision
Ask Donna
What actually matters in this document.
Text
Bulletin No. 1997–1
January 6, 1997
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be relied
upon as authoritative interpretations.
INCOME TAX
Notice 97–3, page 8.
Accounting periods, small business corporations. Taxpayers are informed that the Service intends to waive
certain limitations on a corporation’s ability to expeditiously change its annual accounting period in order to
elect to be an S corporation effective for the taxable
year beginning January 1, 1997.
EMPLOYEE PLANS
Rev. Proc. 97–4, page 96.
Rulings and determination letters; issuance procedures. Revised procedures are provided for furnishing
ruling letters, information letters, etc., on matters relating to sections of the Code under the jurisdiction of the
Assistant Commissioner (Employee Plans and Exempt
Organizations). Rev. Proc. 96–4 superseded.
Rev. Proc. 97–5, page 132.
Technical advice. Revised procedures are provided for
furnishing technical advice to key district directors and
chiefs, appeals offices, by the Assistant Commissioner
(Employee Plans and Exempt Organizations) regarding
issues in the employee plans areas (including actuarial
matters) and exempt organizations areas. Rev. Proc.
96–5 superseded.
Rev. Proc. 97–6, page 153.
Employee plans determination letters. Revised procedures are provided for issuing determination letters on
the qualified status of employee plans under sections
401(a), 403(a), 409, and 4975 of the Code. Rev. Proc.
96–6 superseded.
Rev. Proc. 97–8, page 187.
User fees for employee plans and exempt organizations. Up-to-date guidance for complying with the user
fee program of the Service as it pertains to requests for
letter rulings, determination letters, etc., on matters
under the jurisdiction of the Assistant Commissioner
(Employee Plans and Exempt Organizations), is provided.
Rev. Proc. 96–8 superseded.
EXEMPT ORGANIZATIONS
Rev. Proc. 97–4, page 96.
Rulings and determination letters; issuance procedures. Revised procedures are provided for furnishing
ruling letters, information letters, etc., on matters relating to sections of the Code under the jurisdiction of the
Assistant Commissioner (Employee Plans and Exempt
Organizations). Rev. Proc. 96–4 superseded.
Rev. Proc. 97–5, page 132.
Technical advice. Revised procedures are provided for
furnishing technical advice to key district directors and
chiefs, appeals offices, by the Assistant Commissioner
(Employee Plans and Exempt Organizations) regarding
issues in the employee plans areas (including actuarial
matters) and exempt organizations areas. Rev. Proc.
96–5 superseded.
(Continued on page 4)
Cumulative List of Actions Relating to Decisions of the Tax Court published in the Bulletin from January through December 1996 begins on
page 5.
Announcement of Disbarments and Suspensions begins on page 204.
Finding List of Revenue Rulings, Revenue Procedures, Treasury Decisions, etc., published in the Bulletin from July through December 1996
begins on page 207.
Finding List of Previously Published Items currently mentioned in the Bulletin from July through December 1996 begins on page 209.
Cumulative List of Declaratory Judgment Proceedings Under Section 7428 begins on page 203.
Index of Items Published in the Bulletin from July through December 1996 begins on page 210.
HIGHLIGHTS
OF THIS ISSUE—Continued
EXEMPT ORGANIZATIONS—Continued
Rev. Proc. 97–2, page 64.
Technical advice to the district directors and chiefs,
appeals offices, from the Associate Chief Counsel
(Domestic), Associate Chief Counsel (Employee Benefits and Exempt Organizations), Associate Chief
Counsel (Enforcement Litigation), and Associate Chief
Counsel (International). Revised procedures are provided for furnishing technical advice to the district
directors and chiefs, appeals offices, in areas under the
jurisdiction of the Associate Chief Counsel (Domestic),
the Associate Chief Counsel (Employee Benefits and
Exempt Organizations), the Associate Chief Counsel
(Enforcement Litigation), and the Associate Chief Counsel (International). Taxpayers’ rights when technical advice has been requested also are provided. Rev. Proc.
96–2 superseded.
Rev. Proc. 97–8, page 187.
User fees for employee plans and exempt organizations. Up-to-date guidance for complying with the user
fee program of the Service as it pertains to requests for
letter rulings, determination letters, etc., on matters
under the jurisdiction of the Assistant Commissioner
(Employee Plans and Exempt Organizations), is provided.
Rev. Proc. 96–8 superseded.
ADMINISTRATIVE
Notice 97–7, page 8.
Environmental cleanup costs; letter rulings. Comments are requested on a proposed revenue procedure
that, when finalized, will provide special procedures for
requesting written guidance on the tax treatment under
sections 162 and 263 of the Code of environmental
cleanup costs incurred in transactions that span past
and future taxable years.
Rev. Proc. 97–3, page 84.
Areas in which advance rulings will not be issued;
Associate Chief Counsel (Domestic), Associate Chief
Counsel (Employee Benefits and Exempt Organizations). This procedure provides a revised list of those
provisions of the Code under the jurisdiction of the
Associate Chief Counsel (Domestic) and the Associate
Chief Counsel (Employee Benefits and Exempt Organizations), relating to matters where the Service will not
issue advance rulings or determination letters. Rev.
Procs. 96–3, 96–12, 96–22, 96–34, 96–39, 96–43,
and 96–56 superseded.
Rev. Proc. 97–1, page 11.
Letter rulings, determination letters, and information
letters issued by the Associate Chief Counsel (Domestic), Associate Chief Counsel (Employee Benefits
and Exempt Organizations), Associate Chief Counsel
(Enforcement Litigation), and Associate Chief Counsel
(International). Revised procedures are provided for
issuing letter rulings, determination letters, and information letters on specific issues under the jurisdiction of
the Associate Chief Counsel (Domestic), the Associate
Chief Counsel (Employee Benefits and Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel (International).
Rev. Procs. 96–1 and 92–90 superseded. Rev. Procs.
96–13 and 92–20 modified.
Rev. Proc. 97–7, page 185.
Areas in which advance rulings will not be issued:
Associate Chief Counsel (International). This procedure lists the subject matters under the jurisdiction of
the Associate Chief Counsel (International) in which the
Service will not issue advance letter rulings or determination letters. Rev. Proc. 96–7 superseded.
4
Mission of the Service
The purpose of the Internal Revenue Service is to
collect the proper amount of tax revenue at the least
cost; serve the public by continually improving the
quality of our products and services; and perform in a
manner warranting the highest degree of public
confidence in our integrity, efficiency and fairness.
Statement of Principles
of Internal Revenue
Tax Administration
The Service also has the responsibility of applying
and administering the law in a reasonable,
practical manner. Issues should only be raised by
examining of ficers when they have merit, never
arbitrarily or for trading purposes. At the same
time, the examining officer should never hesitate
to raise a meritorious issue. It is also important
that care be exercised not to raise an issue or to
ask a court to adopt a position inconsistent with
an established Service position.
The function of the Internal Revenue Service is to
administer the Internal Revenue Code. Tax policy
for raising revenue is determined by Congress.
With this in mind, it is the duty of the Service to
carry out that policy by correctly applying the laws
enacted by Congress; to determine the reasonable
meaning of various Code provisions in light of the
Congressional purpose in enacting them; and to
perform this work in a fair and impartial manner,
with neither a government nor a taxpayer point of view.
Administration should be both reasonable and
vigorous. It should be conducted with as little
delay as possible and with great cour tesy and
considerateness. It should never try to overreach,
and should be reasonable within the bounds of law
and sound administration. It should, however, be
vigorous in requiring compliance with law and it
should be relentless in its attack on unreal tax
devices and fraud.
At the heart of administration is interpretation of the
Code. It is the responsibility of each person in the
Service, charged with the duty of interpreting the
law, to try to find the true meaning of the statutory
provision and not to adopt a strained construction in
the belief that he or she is ‘‘protecting the revenue.’’
The revenue is properly protected only when we ascertain and apply the true meaning of the statute.
2
Introduction
The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for
announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation,
court decisions, and other items of general interest. It is
published weekly and may be obtained from the Superintendent of Documents on a subscription basis. Bulletin
contents of a permanent nature are consolidated semiannually into Cumulative Bulletins, which are sold on a
single-copy basis.
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.
It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform
application of the tax laws, including all rulings that
supersede, revoke, modify, or amend any of those
previously published in the Bulletin. All published rulings
apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management
are not published; however, statements of internal
practices and procedures that affect the rights and
duties of taxpayers are published.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows:
Subpart A, Tax Conventions, and Subpart B, Legislation
and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to
these subjects are contained in the other Parts and
Subparts. Also included in this part are Bank Secrecy
Act Administrative Rulings. Bank Secrecy Act Administrative Rulings are issued by the Department of the
Treasury’s Office of the Assistant Secretary (Enforcement).
Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts
stated in the revenue ruling. In those based on positions
taken in rulings to taxpayers or technical advice to
Service field offices, identifying details and information
of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory
requirements.
Part IV.—Items of General Interest.
With the exception of the Notice of Proposed Rulemaking and the disbarment and suspension list included in
this part, none of these announcements are consolidated in the Cumulative Bulletins.
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,
The first Bulletin for each month includes an index for
the matters published during the preceding month.
These monthly indexes are cumulated on a quarterly and
semiannual basis, and are published in the first Bulletin
of the succeeding quarterly and semi-annual period,
respectively.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents U.S. Government Printing Office, Washington, D.C. 20402.
3
Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 263.—Capital Expenditures
26 CFR 1.263(a)–1: Capital expenditures; in general.
Are special procedures available for requesting
written guidance on the tax treatment under sections 162 and 263 of the Code of environmental
cleanup costs incurred in transactions that span
past and future taxable years? See Notice 97–7,
page 8.
7
Part III. Administrative, Procedural, and Miscellaneous
Notice of Intent to Waive Certain
Limitations on Obtaining
Expeditious Consent to Change an
Accounting Period and Elect to be
an S Corporation Effective January
1, 1997
Notice 97–3
SUMMARY: The Internal Revenue Service will issue guidance shortly that will
waive certain limitations on a corporation’s ability to expeditiously (i.e., without the Commissioner’s prior written
approval) change its annual accounting
period under § 1.442–1(c) of the Income Tax Regulations or Rev. Proc.
92–13, 1992–1 C.B. 665, in order to
elect to be an S corporation under §
1362 of the Internal Revenue Code
effective for the taxable year beginning
January 1, 1997. The forthcoming guidance will provide specific procedures a
corporation must follow to request an
expeditious change of annual accounting
period, and subsequently elect to be an
S corporation.
BACKGROUND: Pursuant to § 1378, an
S corporation generally must have a calendar year. However, a corporation may
not expeditiously change its annual accounting period to a calendar year if it
attempts to elect to be an S corporation
effective for the taxable year immediately
following the short period required to
effect the change. See § 1.442–1(c)(2)(v);
Rev. Proc. 92–13, section 4.01(5). In
addition, a corporation is precluded under
§ 1.442–1(c)(2)(i) from expeditiously
changing its annual accounting period if
the corporation has changed it within the
last ten calendar years, and under Rev.
Proc. 92–13, section 4.01(2), if the corporation has changed it within the last six
calendar years.
The Small Business Job Protection
Act of 1996 (SBJPA), Pub. L. No.
104–188, 110 Stat. 1755, significantly
amended Subchapter S of the Code,
expanding eligibility to elect to be an S
corporation. These amendments, generally effective for taxable years beginning after December 31, 1996, were
intended to allow more corporations to
elect to be S corporations as of January
1, 1997.
WAIVER OF LIMITATIONS: Consistent with this intent, the Service will
issue further guidance shortly that will
waive the limitations of §§ 1.442–
1(c)(2)(i) and (c)(2)(v), and of sections
4.01(2) and 4.01(5) of Rev. Proc. 92–13,
on a corporation’s ability to expeditiously change its annual accounting
period to a calendar year effective for
the short period ending December 31,
1996, provided that the corporation:
(1) is otherwise eligible to change its
annual accounting period under either
§ 1.442–1(c) or Rev. Proc. 92–13;
(2) is a small business corporation (as
described in § 1361(b)) and timely
elects to be an S corporation effective
for the taxable year beginning on January 1, 1997; and
(3) follows the procedures to be provided in forthcoming guidance.
The forthcoming guidance will also
provide special procedures to allow a
corporation to request an expeditious
change of annual accounting period and
make the election to be an S corporation
effective January 1, 1997. Until that
guidance is issued, a corporation that
qualifies to expeditiously change its annual accounting period under either
§ 1.442–1(c) or Rev. Proc. 92–13 as a
result of this notice should not file the
statement required by § 1.442–1(c)(1),
Form 1128, Application to Adopt,
Change or Retain a Tax Year (required
by Rev. Proc. 92–13), or Form 2553,
Election by a Small Business Corporation. Moreover, such a corporation
should not submit a request to change
its annual accounting period under
§ 1.442–1(b) (which provides procedures to obtain the Commissioner’s
prior written approval). However, a corporation that does not otherwise qualify
to expeditiously change its annual accounting period may request permission
to change its annual accounting period
by following the procedures described in
§ 1.442–1(b).
DRAFTING
INFORMATION: The
principal author of this notice is Susie
K. Bird of the Office of Assistant Chief
Counsel (Income Tax and Accounting).
For further information, contact Ms.
Sandra Cheston at (202) 622–4840 (not
a toll-free call).
Environmental Cleanup Costs;
Private Letter Rulings
Notice 97–7
This notice provides a proposed revenue procedure that, when finalized, will
provide special procedures for requesting written guidance from the Internal
8
Revenue Service on the tax treatment of
environmental cleanup costs under
§§ 162 and 263 of the Internal Revenue
Code in transactions that span past and
future taxable years. These special procedures will be available to taxpayers
during a two-year trial period beginning
on the date that the proposed revenue
procedure is finalized.
The Service welcomes comments on
this proposed revenue procedure. In particular, the Service invites comments on
whether this proposed revenue procedure should be extended to other tax
issues besides the tax treatment of environmental cleanup costs. Comments
should be submitted by April 5, 1997
either to:
The Internal Revenue Service
P.O. Box 7604 Ben Franklin Station
Washington, D.C. 20044
Attn: CC:CORP:T:R (IT&A Branch
5), room 5228,
or electronically via the Service internet
site at: http://www.irs.ustreas.gov/prod/
tax_regs/comments.html.
Rev. Proc. 97–**
SECTION 1. PURPOSE
This revenue procedure provides special procedures for requesting written
guidance from the Internal Revenue Service on the tax treatment under §§ 162
and 263 of the Internal Revenue Code of
environmental cleanup costs incurred in
transactions that span several years, including future years and prior years
(whether or not under examination).
These special procedures are available
for letter ruling requests submitted during
the two-year period beginning on month,
day, year. The purpose of this revenue
procedure is to facilitate the resolution of
issues involving the capitalization or deduction of environmental cleanup costs
for both prior and future years of a
single environmental cleanup transaction.
SECTION 2. BACKGROUND
.01 Section 162(a) allows a deduction
for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or
business.
.02 Section 263 generally prohibits
deductions for capital expenditures. Section 263(a)(1) provides that no deduction is allowed for any amount paid out
for permanent improvements or betterments made to increase the value of any
property or estate. Under § 263(a)(2),
no deduction is allowed for any amount
expended in restoring property or in
making good the exhaustion thereof for
which an allowance is or has been
made.
.03 Rev. Proc. 97–1, 1997–1 I.R.B.
11 (Jan. 6, 1997), provides procedures
under which the Service issues letter
rulings, determination letters, and information letters on specific issues. Section
2.01 of Rev. Proc. 97–1 defines a ‘‘letter
ruling’’ as a written statement issued to
a taxpayer by the national office that
interprets and applies the tax laws to the
taxpayer’s specific set of facts. Ordinarily, the national office issues letter
rulings on income tax issues only on
prospective transactions or completed
transactions if the letter ruling request is
submitted before the return is filed for
the year in which the transaction was
completed. All references to Rev. Proc.
97–1 in this revenue procedure include
Rev. Proc. 97–1’s successors.
.04 Rev. Proc. 97–2, 1997–1 I.R.B.
64 (Jan. 6, 1997), provides procedures
under which the national office issues
technical advice to a district director or
a chief, appeals office. Section 2 of Rev.
Proc. 97–2 defines ‘‘technical advice’’ as
advice or guidance in the form of a
memorandum furnished by the national
office upon the request of a district
director or a chief, appeals office, submitted in accordance with Rev. Proc.
97–2 in response to any technical or
procedural question that develops during
a proceeding on the interpretation and
proper application of tax law, tax treaties, regulations, revenue rulings, notices, or other precedents published by
the national office, to a specific set of
facts. All references to Rev. Proc. 97–2
in this revenue procedure include Rev.
Proc. 97–2’s successors.
SECTION 3. SCOPE
.01 In general. Except as provided in
section 3.05 below, this revenue procedure applies to requests for guidance on
the deductibility (under § 162) or capitalization (under § 263) of environmental cleanup costs incurred in continuing
transactions (e.g., occurring over prior
and future taxable years). Taxpayers
may request a letter ruling under this
revenue procedure that will cover all tax
years in which costs are incurred under
the transaction (‘‘transaction years’’),
even if they include years for which a
return has been filed, and even if such
return is under examination or before an
appeals office.
.02 Environmental cleanup costs. For
purposes of this revenue procedure, environmental cleanup costs include, in
general, any costs associated with the
assessment, mitigation, or remediation
of environmental hazards, whether latent
or imminent, on the taxpayer’s property
or on the property of another. These
environmental hazards include, but are
not limited to, soil contamination, water
contamination, air pollution, leaking underground storage tanks, asbestos, and
lead paint.
.03 Factual nature of question. Section 7.01 of Rev. Proc. 97–1 provides
that the national office ordinarily will
not issue letter rulings in certain areas
because of the factual nature of the
problem. Although the question of
whether amounts are deductible or must
be capitalized is generally dependent
upon the taxpayer’s specific facts, only
in rare or unusual circumstances will the
national office decline to issue a letter
ruling under this revenue procedure
solely because of the factual nature of
the question.
.04 Alternative plans and hypothetical situations. Section 7.02 of Rev.
Proc. 97–1 provides that the national
office ordinarily will not issue a letter
ruling on alternative plans of proposed
transactions or hypothetical situations.
However, the national office will issue a
letter ruling under this revenue procedure on proposed parts of a continuing
plan of environmental cleanup provided
that the taxpayer provides all facts necessary for the Service to reach a determination. If the taxpayer’s plan changes
before the environmental cleanup transaction is completed, the taxpayer may
request that the national office modify
or supplement its letter ruling to address
the changes to the plan. See section 8 of
this revenue procedure.
.05 Excluded situations. Taxpayers
may not request guidance under this
revenue procedure in the following situations:
(1) The entire environmental
cleanup transaction is completed, and
the time for filing returns, with extensions, for all years covering the transaction has passed.
(2) The entire environmental
cleanup transaction is a proposed transaction, and the taxpayer may request a
letter ruling under Rev. Proc. 97–1.
(3) The identical environmental
cleanup issue is in the taxpayer’s return
9
for an earlier period and that issue is
pending in litigation in a case involving
the taxpayer (or a related taxpayer
within the meaning of § 267, or a
member of an affiliated group of which
the taxpayer is also a member within the
meaning of § 1504).
SECTION 4. REQUESTING A
LETTER RULING
.01 Taxpayers not under examination
or before appeals office. A taxpayer
requesting a letter ruling on the tax
treatment of environmental cleanup
costs may do so under this section 4.01
if no return for any transaction year is
under examination or before an appeals
office. Except as provided by this revenue procedure, a request under this
section 4.01 must meet the requirements
of Rev. Proc. 97–1 for a letter ruling
request. In addition, if a taxpayer submits a letter ruling request covering a
transaction year for which a return has
already been filed, a copy of the letter
ruling request must also be submitted to
the district office having jurisdiction
over the taxpayer’s return.
.02 Taxpayers under examination or
before appeals office. A taxpayer requesting a letter ruling on the tax treatment of environmental cleanup costs
incurred under a continuing transaction
must do so under this section 4.02 if
any transaction year is under examination or before an appeals office. Taxpayers may request a ruling under this
section even if, at the time the request is
submitted, the identical environmental
cleanup issue—
(1) is being examined by a district
director;
(2) is being considered by an appeals office;
(3) has been examined by the district director or considered by an appeals office and the statutory period of
limitations has not expired for assessment or for filing a claim for refund or
credit of tax; or
(4) has been examined by a district
director or considered by an appeals
office and no settlement or closing
agreement covering the issue or liability
has been entered into by a district
director or by an appeals office.
Except as provided in this revenue
procedure, a letter ruling request made
under this subsection must meet the
general requirements of Rev. Proc. 97–2
for a taxpayer-initiated request for technical advice. Once an environmental
cleanup issue is identified, all requests
for letter rulings should be made at the
earliest possible stage in any proceeding.
The taxpayer must submit its request
(and the applicable user fee) for each
letter ruling under this section 4.02 to
the district or appeals office having
jurisdiction over its return. The district
or appeals office will, in all cases,
forward the original request, and any
additional statements of the taxpayer
and the district or appeals office, to the
national office using Form 4463 (Request for Technical Advice), with the
following statement typed or printed at
the top of the form: ‘‘REQUESTED
UNDER REV. PROC. 97–**.’’
SECTION 5. PROCESSING THE
RULING REQUEST
.01 Taxpayers not under examination
or before appeals office. A letter ruling
request submitted under section 4.01 of
this revenue procedure generally will be
processed under the procedures set forth
in Rev. Proc. 97–1. Thus, the procedures
for requesting additional information,
conferences, withdrawal of requests, etc.
are the same as those provided in Rev.
Proc. 97–1. The original letter ruling
will be issued to the taxpayer that
requested it, and a copy of the letter
ruling, whether favorable or adverse,
will be sent to the district director that
has jurisdiction over the taxpayer’s return.
.02 Taxpayers under examination or
before appeals office. A letter ruling
request submitted under section 4.02 of
this revenue procedure generally will be
processed under the procedures set forth
in Rev. Proc. 97–2 for a taxpayerinitiated request for technical advice
except as provided in this section.
(1) Contacting the taxpayer. Usually, within 21 calendar days after the
national office receives a taxpayer’s letter ruling request, a Service representative will contact both the taxpayer (or
the taxpayer’s authorized representative)
and the examining or appeals officer to
discuss the substantive or procedural
issues in the letter ruling request and to
ask for any additional information necessary in order to process the request.
(2) Coordination with district and
appeals office. During the processing of
a taxpayer’s letter ruling request, the
national office will continuously coordinate the evaluation of the request with
the district or appeals office having
jurisdiction over the case. If the district
or appeals office either determines that
the national office should not consider
the taxpayer’s request or disagrees with
the taxpayer’s statement of facts and
issues, then the district or appeals office
will notify the taxpayer in writing. For
these purposes, the Service will follow
the procedures set forth in section 9.04
of Rev. Proc. 97–2, except that the
district or appeals office will, in all
cases, forward the taxpayer’s request,
with any additional statements, to the
national office as provided in section
4.02 of this revenue procedure.
(3) Withdrawing the ruling request.
The district director or chief, appeals
office, may not withdraw a request for a
letter ruling submitted under section
4.02 of this revenue procedure. However, a taxpayer may withdraw such a
request at any time before the letter
ruling is signed by the national office,
provided that the district director or the
chief, appeals office, consents to the
withdrawal. If the district director or the
chief, appeals office, consents to this
withdrawal, the national office will send
its views to the district director or the
chief, appeals office. If the district director or the chief, appeals office, does
not consent to the withdrawal, then the
letter ruling request will be processed as
a request for technical advice under Rev.
Proc. 97–2 and the scope of the technical advice memorandum will be limited
to years under examination. Pursuant to
the principles of Rev. Proc. 97–1, including but not limited to section 15.10
thereof, the user fee generally will not
be refunded if the taxpayer withdraws
its request for a letter ruling under this
section.
(4) Reply by national office. Replies to letter ruling requests issued
under section 4.02 are made in two
parts. Each part identifies the taxpayer
by name, address, taxpayer identification
number, and the years under examination by the district director or under
consideration by an appeals office. The
first part is a transmittal memorandum
addressed to the district or appeals office. The second part is a letter ruling as
defined in section 2.01 of Rev. Proc.
97–1 that covers the transaction years
addressed in the taxpayer’s request. The
national office will forward the transmittal memorandum and a copy of the
letter ruling to the district director or the
chief, appeals office, having jurisdiction
over the taxpayer’s return. At the same
time, the national office will issue the
original letter ruling to the taxpayer that
requested it.
.03 Coordination with industry specialization program. Prior to issuance of
10
a letter ruling to a taxpayer under this
revenue procedure, the national office
will coordinate review of the proposed
letter ruling with a representative of the
environmental cleanup costs issue specialization team.
.04 Disclosure. The text of a letter
ruling issued under this revenue procedure is open to public inspection under
§ 6110. The Service will make appropriate deletions from the text before it is
made available for inspection. To help
the Service make the deletions required
by § 6110, a request made under this
revenue procedure must be accompanied
by the statement described in section
8.01(9) of Rev. Proc. 97–1.
SECTION 6. EFFECT OF THE
LETTER RULING
.01 General rule. A taxpayer ordinarily may rely on a letter ruling issued
by the Service pursuant to this revenue
procedure subject to the conditions and
limitations described in section 12 of
Rev. Proc. 97–1. A letter ruling issued
on a specific environmental cleanup
transaction represents a holding by the
Service on that transaction only. It will
not apply to any transaction not specifically addressed in the letter ruling.
.02 Return previously filed. The conclusion in the letter ruling, whether
adverse or favorable to the taxpayer,
will generally be applied prospectively
to all future transaction years. In addition, if a letter ruling involves tax years
for which a return has already been
filed, it will generally apply retroactively to all open years unless the
Service exercises discretionary authority
under § 7805(b) to limit the retroactive
effect of the conclusion.
.03 Use in examining the taxpayer’s
return. If a taxpayer is under examination or is later selected for examination,
the letter ruling will be used by the
district director in examining the taxpayer’s returns for prior and future transaction years in the manner described in
section 12.03 of Rev. Proc. 97–1.
.04 Prior settlement or closing agreement. A letter ruling issued under this
revenue procedure will not affect any
taxable year(s) that are the subject of a
prior settlement or closing agreement
entered into with the district director or
an appeals office.
SECTION 7. REVOCATION OR
MODIFICATION
A letter ruling found to be in error or
not in accord with the current views of
the Service may be revoked or modified.
If a letter ruling under this revenue
procedure is revoked or modified, the
revocation or modification applies to all
open years under the statute of limitations unless the Service uses its discretionary authority under § 7805(b) to
limit the retroactive effect of the revocation or modification. The criteria and
procedures for revoking or modifying a
letter ruling issued under this revenue
procedure are the same as those provided in section 12 of Rev. Proc. 97–1.
In addition, the procedures for requesting § 7805(b) relief, and the criteria for
granting it, are the same as those provided in section 12.11 of Rev. Proc.
97–1.
SECTION 8. REQUESTING
SUPPLEMENTAL LETTER RULINGS
If the material facts underlying a
letter ruling issued under this revenue
procedure change after the letter ruling
is issued, the taxpayer may request that
the Service modify or supplement the
letter ruling. However, the request cannot be made after the transaction, as
revised, is completed, and the time for
filing returns, with extensions, for all
years covering the transaction has expired. For example, if the Service issues
a ruling allowing the taxpayer to deduct
costs incurred under one method of land
remediation, and the taxpayer later decides to use a different method of land
remediation, the taxpayer may request a
supplemental letter ruling addressing the
new method. However, the taxpayer
may not request the supplemental letter
ruling after the land remediation under
the new method is completed and the
time for filing its returns, with extensions, for all transaction years has
passed. The request must comply with
the requirements of sections 4.01 or
4.02 of this revenue procedure, whichever applies.
SECTION 9. CHANGE IN
ACCOUNTING METHOD
Under § 446(e), a taxpayer receiving
a letter ruling under this revenue procedure may be required to seek the Commissioner’s consent to change its
method of accounting, and § 481 may
be applicable. In these cases, the national office will inform the taxpayer of
the procedures for obtaining this consent.
SECTION 10. USER FEE
REQUIREMENTS
Except as provided in sections 15.03
and 15.04 of Rev. Proc. 97–1, all requests submitted under this revenue procedure (including supplemental letter
ruling requests under section 8 of this
revenue procedure) must be accompanied by a user fee. The appropriate user
fee is determined from the fee schedule
provided in Appendix A of Rev. Proc.
97–1.
SECTION 11. ADDRESS FOR
SUBMISSION
.01 Taxpayers not under examination
or before an appeals office. All requests
for letter rulings submitted under section
4.01 of this revenue procedure (including the applicable user fee) should be
sent to the Associate Chief Counsel
(Domestic) at the same address provided
in section 8.03(1) of Rev. Proc. 97–1.
.02 Taxpayers under examination or
before appeals office. All requests for
letter rulings submitted under section
4.02 of this revenue procedure (including the applicable user fee) should be
sent to the examining or appeals officer,
who must forward the request to the
national office using the same address
provided in section 8.03 of Rev. Proc.
97–2.
SECTION 12. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 97–1 is amplified. Rev.
Proc. 97–2 is amplified and modified.
SECTION 13. EFFECTIVE DATE
This revenue procedure is effective
for requests for letter rulings submitted
during the two-year period from month,
day, year to month, day, year.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Merrill D. Feldstein of the
Office of Assistant Chief Counsel (Income Tax & Accounting). For further
information regarding this revenue procedure, contact Ms. Feldstein on (202)
622–4950 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
Rev. Proc. 97–1
TABLE OF CONTENTS
SECTION 1. WHAT IS THE
PURPOSE OF THIS REVENUE
PROCEDURE?
p. 16
SECTION 2. IN WHAT FORM
p. 16
IS GUIDANCE PROVIDED BY
THE OFFICES OF ASSOCIATE
CHIEF COUNSEL (DOMESTIC),
ASSOCIATE CHIEF COUNSEL
(EMPLOYEE BENEFITS AND
EXEMPT ORGANIZATIONS),
ASSOCIATE CHIEF COUNSEL
(ENFORCEMENT LITIGATION),
AND ASSOCIATE CHIEF
COUNSEL (INTERNATIONAL)?
.01
Letter ruling
.02
Closing agreement
.03
Determination letter
.04
Information letter
.05
Revenue ruling
.06
Oral guidance
(1)
No oral rulings, and no written rulings in response to oral requests
(2)
Discussion possible on substantive issues
11
SECTION 3. ON WHAT
ISSUES MAY TAXPAYERS
REQUEST WRITTEN
GUIDANCE UNDER THIS
PROCEDURE?
p. 18
.01
Issues under the jurisdiction of the Associate Chief Counsel (Domestic)
(1) Issues under the Assistant Chief Counsel (Corporate)
(2) Issues under the Assistant Chief Counsel (Financial Institutions and
Products)
(3) Issues under the Assistant Chief Counsel (Income Tax and Accounting)
(4) Issues under the Assistant Chief Counsel (Passthroughs and Special
Industries)
SECTION 4. ON WHAT
ISSUES MUST WRITTEN
GUIDANCE BE REQUESTED
UNDER DIFFERENT
PROCEDURES?
p. 19
SECTION 5. UNDER WHAT
CIRCUMSTANCES DOES THE
NATIONAL OFFICE ISSUE
LETTER RULINGS?
p. 19
SECTION 6. UNDER WHAT
CIRCUMSTANCES DO
DISTRICT DIRECTORS ISSUE
DETERMINATION LETTERS?
p. 23
.02
Issues under the jurisdiction of the Associate Chief Counsel (Employee
Benefits and Exempt Organizations)
.03
Issues under the jurisdiction of the Associate Chief Counsel (Enforcement
Litigation)
.04
Issues under the jurisdiction of the Associate Chief Counsel (International)
.01
Alcohol, tobacco, and firearms taxes
.02
Employee plans and exempt organizations
.01
In income and gift tax matters
.02
Request for extension of time for making an election or for other relief
under § 301.9100–1T of the temporary Procedure and Administration
Regulations
.03
Determinations under § 999(d) of the Internal Revenue Code
.04
In matters involving § 367
.05
In estate tax matters
.06
In matters involving additional estate tax under § 2032A(c)
.07
In matters involving qualified domestic trusts under § 2056A
.08
In generation–skipping transfer tax matters
.09
In employment and excise tax matters
.10
In administrative provisions matters
.11
Generally not to business associations or groups
.12
Generally not to foreign governments
.13
Generally not on federal tax consequences of proposed legislation
.14
Issuance of a letter ruling before the issuance of a regulation or other
published guidance
.01
In income and gift tax matters
.02
In estate tax matters
.03
In generation-skipping transfer tax matters
.04
In employment and excise tax matters
.05
Circumstances under which determination letters are not issued by district
director
.06
Requests concerning income, estate, or gift tax returns
.07
Attach a copy of determination letter to taxpayer’s return
.08
Review of determination letters
12
SECTION 7. UNDER WHAT
CIRCUMSTANCES DOES THE
SERVICE HAVE DISCRETION
TO ISSUE LETTER RULINGS
AND DETERMINATION
LETTERS?
p. 24
SECTION 8. WHAT ARE THE
GENERAL INSTRUCTIONS
FOR REQUESTING LETTER
RULINGS AND
DETERMINATION LETTERS?
p. 25
.01
Ordinarily not in certain areas because of factual nature of the problem
.02
Not on alternative plans or hypothetical situations
.03
Ordinarily not on part of an integrated transaction
.04
On constructive sales price under § 4216(b) or § 4218(c)
.01
Certain information required in all requests
.02
.03
(1)
Complete statement of facts and other information
(2)
Copies of all contracts, wills, deeds, agreements, instruments, and
other documents
(3)
Analysis of material facts
(4)
Statement regarding whether same issue is in an earlier return
(5)
Statement regarding whether same or similar issue was previously
ruled on or requested, or is currently pending
(6)
Statement of supporting authorities
(7)
Statement of contrary authorities
(8)
Statement identifying pending legislation
(9)
Statement identifying information to be deleted from copy of letter
ruling or determination letter for public inspection
(10)
Signature by taxpayer or authorized representative
(11)
Authorized representatives
(12)
Power of attorney and declaration of representative
(13)
Penalties of perjury statement
(14)
Number of copies of request to be submitted
(15)
Sample format for a letter ruling request
(16)
Checklist for letter ruling requests
Additional information required in certain circumstances
(1)
To request separate letter rulings for multiple issues in a single
situation
(2)
To designate recipient of original or copy of letter ruling or
determination letter
(3)
To request a particular conclusion on a proposed transaction
(4)
To request expeditious handling
(5)
To receive a letter ruling or submit a request for a letter ruling by
facsimile transmission (fax)
(6)
To request a conference
(7)
To obtain the applicable user fee for substantially identical letter
rulings or identical accounting method changes
Address to send the request
(1)
Requests for letter rulings
(2)
Requests for determination letters
.04
Pending letter ruling requests
.05
When to attach letter ruling to return
.06
How to check on status of request
.07
Request may be withdrawn or national office may decline to issue letter
ruling
.08
Compliance with Treasury Department Circular No. 230
13
SECTION 9. WHAT OTHER
CHECKLISTS, GUIDELINE
REVENUE PROCEDURES,
SAFE HARBOR REVENUE
PROCEDURES, AND
AUTOMATIC CHANGE
REVENUE PROCEDURES AND
NOTICES APPLY TO CERTAIN
REQUESTS?
p. 33
SECTION 10. HOW DOES THE p. 38
NATIONAL OFFICE HANDLE
LETTER RULING REQUESTS?
SECTION 11. HOW ARE
p. 41
CONFERENCES SCHEDULED?
SECTION 12. WHAT EFFECT
WILL A LETTER RULING
HAVE?
p. 42
.01
Checklists and guideline revenue procedures and notices
.02
Safe harbor revenue procedures
.03
Automatic change revenue procedures and notices
.01
Controls request and refers it to appropriate Assistant Chief Counsel or to
the Office of Associate Chief Counsel (International)
.02
Branch representative contacts taxpayer within 21 days
.03
Notifies taxpayer if any issues have been referred to another branch or
office
.04
Determines if transaction can be modified to obtain favorable letter ruling
.05
Is not bound by informal opinion expressed
.06
Tells taxpayer if request lacks essential information during initial contact
.07
Requires prompt submission of additional information requested after initial
contact
.08
Near the completion of the ruling process, advises the taxpayer of
conclusions and, if the Service will rule adversely, offers the taxpayer the
opportunity to withdraw the letter ruling request
.09
May request draft of proposed letter ruling near the completion of the ruling
process
.10
Issues separate letter rulings for substantially identical letter rulings and
generally issues a single letter ruling for identical accounting method
changes
.11
Sends copy of letter ruling to district director
.01
Schedules a conference if requested by taxpayer
.02
Permits taxpayer one conference of right
.03
Disallows verbatim recording of conferences
.04
Makes tentative recommendations on substantive issues
.05
May offer additional conferences
.06
Requires written confirmation of information presented at conference
.07
May schedule a pre-submission conference
.08
Under limited circumstances, may schedule a conference to be held by
telephone
.01
May be relied on subject to limitations
.02
Will not apply to another taxpayer
.03
Will be used by a district director in examining the taxpayer’s return
.04
May be revoked or modified if found to be in error
.05
Not generally revoked or modified retroactively
.06
Retroactive effect of revocation or modification applied to a particular
transaction
.07
Retroactive effect of revocation or modification applied to a continuing
action or series of actions
.08
Generally not retroactively revoked or modified if related to sale or lease
subject to excise tax
14
SECTION 13. WHAT EFFECT
WILL A DETERMINATION
LETTER HAVE?
p. 45
.09
May be retroactively revoked or modified when transaction is entered into
before the issuance of the letter ruling
.10
May be retroactively revoked or modified when transaction is entered into
after a change in material facts
.11
Taxpayer may request that retroactivity be limited
(1)
Request for relief under § 7805(b) must be made in required format
(2)
Taxpayer may request a conference on application of § 7805(b)
.01
Has same effect as a letter ruling
.02
Taxpayer may request that retroactive effect of revocation or modification
be limited
(1)
Request for relief under § 7805(b ) must be made in required format
(2)
Taxpayer may request a conference on application of § 7805(b)
SECTION 14. UNDER WHAT
p. 46
CIRCUMSTANCES ARE
MATTERS REFERRED
BETWEEN A DISTRICT OFFICE
AND THE NATIONAL OFFICE?
.01
Requests for determination letters
.02
No-rule areas
.03
Requests for letter rulings
SECTION 15. WHAT ARE THE
USER FEE REQUIREMENTS
FOR REQUESTS FOR LETTER
RULINGS AND
DETERMINATION LETTERS?
.01
Legislation authorizing user fees
.02
Requests to which a user fee applies
.03
Requests to which a user fee does not apply
.04
Exemptions from the user fee requirements
.05
Fee schedule
.06
Applicable user fee for a request involving multiple offices, fee categories,
issues, transactions, or entities
.07
Applicable user fee for substantially identical letter rulings or identical
accounting method changes
.08
Method of payment
.09
Effect of nonpayment or payment of incorrect amount
.10
Refunds of user fee
.11
Request for reconsideration of user fee
p. 46
SECTION 16. WHAT
p. 51
SIGNIFICANT CHANGES HAVE
BEEN MADE TO REV. PROC.
96–1?
SECTION 17. WHAT IS THE
EFFECT OF THIS REVENUE
PROCEDURE ON OTHER
DOCUMENTS?
p. 52
SECTION 18. WHAT IS THE
EFFECTIVE DATE OF THIS
REVENUE PROCEDURE?
p. 52
SECTION 19. PAPERWORK
REDUCTION ACT
p. 53
DRAFTING INFORMATION
p. 53
INDEX
p. 54
APPENDIX A—SCHEDULE OF
USER FEES
p. 56
15
APPENDIX B—SAMPLE
FORMAT FOR A LETTER
RULING REQUEST
p. 59
APPENDIX C—CHECKLIST
FOR A LETTER RULING
REQUEST
SECTION 1. WHAT IS THE
PURPOSE OF THIS REVENUE
PROCEDURE?
p. 61
Description of terms used in
this revenue procedure
This revenue procedure explains how the Internal Revenue Service gives guidance to
taxpayers on issues under the jurisdiction of the Associate Chief Counsel (Domestic), the
Associate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate
Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel (International). It
explains the kinds of guidance and the manner in which guidance is requested by taxpayers
and provided by the Service. A sample format of a request for a letter ruling is provided in
Appendix B.
For purposes of this revenue procedure—
(1) any reference to district director or district office includes their respective offices or,
when appropriate, the Assistant Commissioner (International);
(2) the term ‘‘taxpayer’’ includes all persons subject to any provision of the Internal
Revenue Code (including issuers of § 103 obligations) and, when appropriate, their
representatives; and
(3) the term ‘‘national office’’ refers to the Office of Associate Chief Counsel (Domestic),
the Office of Associate Chief Counsel (Employee Benefits and Exempt Organizations), the
Office of Associate Chief Counsel (Enforcement Litigation), or the Office of Associate
Chief Counsel (International), as appropriate.
Updated annually
The revenue procedure is updated annually as the first revenue procedure of the year, but
may be modified or amplified during the year.
SECTION 2. IN WHAT FORM
The Service provides guidance in the form of letter rulings, closing agreements,
IS GUIDANCE PROVIDED BY
determination letters, information letters, revenue rulings, and oral advice.
THE OFFICES OF ASSOCIATE
CHIEF COUNSEL (DOMESTIC),
ASSOCIATE CHIEF COUNSEL
(EMPLOYEE BENEFITS AND
EXEMPT ORGANIZATIONS),
ASSOCIATE CHIEF COUNSEL
(ENFORCEMENT LITIGATION),
AND ASSOCIATE CHIEF
COUNSEL (INTERNATIONAL)?
Letter ruling
.01 A ‘‘letter ruling’’ is a written statement issued to a taxpayer by the national office
that interprets and applies the tax laws to the taxpayer’s specific set of facts. A letter ruling
includes the written permission or denial of permission by the national office to a request
for a change in a taxpayer’s accounting method or accounting period. Once issued, a letter
ruling may be revoked or modified for any number of reasons, as explained in section 12 of
this revenue procedure, unless it is accompanied by a ‘‘closing agreement.’’
Closing agreement
.02 A closing agreement is a final agreement between the Service and a taxpayer on a
specific issue or liability. It is entered into under the authority in § 7121 and is final unless
fraud, malfeasance, or misrepresentation of a material fact can be shown.
A closing agreement may be entered into when it is advantageous to have the matter
permanently and conclusively closed or when a taxpayer can show that there are good
reasons for an agreement and that making the agreement will not prejudice the interests of
the Government. In appropriate cases, a taxpayer may be asked to enter into a closing
agreement as a condition to the issuance of a letter ruling.
If, in a single case, a closing agreement is requested for each person in a class of
taxpayers, separate agreements are entered into only if the class consists of 25 or fewer
taxpayers. However, if the issue and holding are identical for the class and there are more
than 25 taxpayers in the class, a ‘‘mass closing agreement’’ will be entered into with the
taxpayer who is authorized by the others to represent the class.
Sec. 1
16
Determination letter
.03 A ‘‘determination letter’’ is a written statement issued by a district director that
applies the principles and precedents previously announced by the national office to a
specific set of facts. It is issued only when a determination can be made based on clearly
established rules in the statute, a tax treaty, or the regulations, or based on a conclusion in a
revenue ruling, opinion, or court decision published in the Internal Revenue Bulletin that
specifically answers the questions presented.
A determination letter does not include assistance provided by the U.S. competent
authority pursuant to the mutual agreement procedure in tax treaties as set forth in Rev.
Proc. 96–13, 1996–1 C.B. 616.
Information letter
.04 An ‘‘information letter’’ is a statement issued either by the national office or by a
district director. It calls attention to a well-established interpretation or principle of tax law
(including a tax treaty) without applying it to a specific set of facts. An information letter
may be issued if the taxpayer’s inquiry indicates a need for general information or if the
taxpayer’s request does not meet the requirements of this revenue procedure and the Service
thinks general information will help the taxpayer. The taxpayer should provide a daytime
telephone number with the taxpayer’s request for an information letter. An information letter
is advisory only and has no binding effect on the Service.
Revenue ruling
.05 A ‘‘revenue ruling’’ is an interpretation by the Service that has been published in the
Internal Revenue Bulletin. It is the conclusion of the Service on how the law is applied to a
specific set of facts. Revenue rulings are issued only by the national office and are
published for the information and guidance of taxpayers, Service personnel, and other
interested parties.
Because each revenue ruling represents the conclusion of the Service regarding the
application of law to the entire statement of facts involved, taxpayers, Service personnel,
and other concerned parties are cautioned against reaching the same conclusion in other
cases unless the facts and circumstances are substantially the same. They should consider
the effect of subsequent legislation, regulations, court decisions, revenue rulings, notices,
and announcements. See Rev. Proc. 89–14, 1989–1 C.B. 814, which states the objectives of,
and standards for, the publication of revenue rulings and revenue procedures in the Internal
Revenue Bulletin.
Oral guidance
.06
(1) No oral rulings, and no written rulings in response to oral requests.
The Service does not orally issue letter rulings or determination letters, nor does it issue
letter rulings or determination letters in response to oral requests from taxpayers. However,
Service employees ordinarily will discuss with taxpayers or their representatives inquiries
regarding whether the Service will rule on particular issues and questions relating to
procedural matters about submitting requests for letter rulings or determination letters for a
particular case.
(2) Discussion possible on substantive issues.
At the discretion of the Service and as time permits, substantive issues also may be
discussed. However, such a discussion will not be binding on the Service and cannot be
relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).
Substantive tax issues involving the taxpayer that are under examination, in appeals, or in
litigation will not be discussed by Service employees not directly involved in the
examination, appeal, or litigation of the issues unless the discussion is coordinated with
those Service employees who are directly involved in the examination, appeal, or litigation
of the issues. The taxpayer or the taxpayer’s representative ordinarily will be asked whether
the oral request for guidance or information relates to a matter pending before another
office of the Service.
If a tax issue is not under examination, in appeals, or in litigation, the tax issue may be
discussed even though the issue is affected by a nontax issue pending in litigation.
A taxpayer may seek oral technical guidance from a taxpayer service representative in a
district office or service center when preparing a return or report. Oral guidance is advisory
only, and the Service is not bound to recognize it, for example, in the examination of the
taxpayer’s return.
17
Sec. 2.06
The Service does not respond to letters seeking to confirm the substance of oral
discussions, and the absence of a response to such a letter is not confirmation of the
substance of the letter.
SECTION 3. ON WHAT
ISSUES MAY TAXPAYERS
REQUEST WRITTEN
GUIDANCE UNDER THIS
PROCEDURE?
Taxpayers may request letter rulings, information letters, and closing agreements under
this revenue procedure on issues within the jurisdiction of the Associate Chief Counsel
(Domestic), the Associate Chief Counsel (Employee Benefits and Exempt Organizations),
the Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel
(International). The national office issues letter rulings to answer written inquiries of
individuals and organizations about their status for tax purposes and the tax effects of their
acts or transactions when appropriate in the interest of sound tax administration.
Taxpayers also may request determination letters within the jurisdiction of the appropriate
district director offices that relate to the Code sections under the jurisdiction of the
Associate Chief Counsel (Domestic), the Associate Chief Counsel (Employee Benefits and
Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), or the
Associate Chief Counsel (International).
Issues under the jurisdiction
of the Associate Chief
Counsel (Domestic)
.01 Issues under the jurisdiction of the Associate Chief Counsel (Domestic) include all
issues under the jurisdiction of the various Assistant Chief Counsels as explained below.
Issues under the Assistant
Chief Counsel (Corporate)
(1) Issues under the Assistant Chief Counsel (Corporate) include those that involve
consolidated returns, corporate acquisitions, reorganizations, liquidations, redemptions,
spinoffs, transfers to controlled corporations, distributions to shareholders, corporate
bankruptcies, the effect of certain ownership changes on net operating loss carryovers and
other tax attributes, debt vs. equity determinations, allocation of income and deductions
among taxpayers, acquisitions made to evade or avoid income tax, and certain earnings and
profits questions.
Issues under the Assistant
Chief Counsel (Financial
Institutions and Products)
(2) Issues under the Assistant Chief Counsel (Financial Institutions and Products) include
those that involve income taxes and accounting method changes of banks, savings and loan
associations, real estate investment trusts (REITs), regulated investment companies (RICs),
real estate mortgage investment conduits (REMICs), tax-exempt obligations, mortgage credit
certificates (MCCs), insurance companies and products, and financial products.
Issues under the Assistant
Chief Counsel (Income Tax
and Accounting)
(3) Issues under the Assistant Chief Counsel (Income Tax and Accounting) include those
that involve recognition and timing of income and deductions of individuals and
corporations, sales and exchanges, capital gains and losses, installment sales, equipment
leasing, inventories, the alternative minimum tax, accounting method changes for these and
other miscellaneous issues, various administrative provisions, and accounting periods.
Issues under the Assistant
Chief Counsel (Passthroughs
and Special Industries)
(4) Issues under the Assistant Chief Counsel (Passthroughs and Special Industries)
include those that involve income taxes of S corporations (except accounting periods and
methods) and certain noncorporate taxpayers (including partnerships, common trust funds,
and trusts); entity classification; estate, gift, generation-skipping transfer, and certain excise
taxes; amortization, depreciation, depletion, and other engineering issues; accounting method
changes for depreciation and amortization; cooperative housing corporations; farmers’
cooperatives (under § 521); the low-income housing, disabled access, and qualified electric
vehicle credits; research and experimental expenditures; shipowners’ protection and
indemnity associations (under § 526); and certain homeowners associations (under § 528).
Issues under the jurisdiction
of the Associate Chief
Counsel (Employee Benefits
and Exempt Organizations)
.02 Issues under the jurisdiction of the Associate Chief Counsel (Employee Benefits and
Exempt Organizations) include those that involve income tax and other tax aspects of
executive compensation and employee benefit programs (other than those within the
jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations)),
employment taxes, and taxes on self-employment income.
Issues under the jurisdiction
of the Associate Chief
Counsel (Enforcement
Litigation)
.03 Issues under the jurisdiction of the Associate Chief Counsel (Enforcement Litigation)
include issues only under the jurisdiction of the Assistant Chief Counsel (General
Litigation). Issues under the Assistant Chief Counsel (General Litigation) include those that
involve collection.
Issues under the jurisdiction
of the Associate Chief
Counsel (International)
.04 Issues under the jurisdiction of the Associate Chief Counsel (International) include
the tax treatment of nonresident aliens and foreign corporations; withholding of tax on
nonresident aliens and foreign corporations; foreign tax credit; determination of sources of
income; income from sources without the United States; subpart F questions; domestic
Sec. 2.06
18
international sales corporations (DISCs); foreign sales corporations (FSCs); international
boycott determinations; treatment of certain passive foreign investment companies; and
income affected by treaty.
For the procedures to obtain advance pricing agreements under § 482, see Rev. Proc.
96–53, 1996–49 I.R.B. 9.
For the procedures concerning competent authority relief arising under the application and
interpretation of tax treaties between the United States and other countries, see Rev. Proc.
96–13. However, competent authority consideration for an advance pricing agreement
should be requested under Rev. Proc. 96–53.
SECTION 4. ON WHAT
ISSUES MUST WRITTEN
GUIDANCE BE REQUESTED
UNDER DIFFERENT
PROCEDURES?
Alcohol, tobacco, and
firearms taxes
.01 The procedures for obtaining letter rulings, etc., that apply to federal alcohol,
tobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction of the
Bureau of Alcohol, Tobacco and Firearms. (See 26 C.F.R. § 601.328 (1996)).
Employee plans and exempt
organizations
.02 The procedures for obtaining letter rulings, determination letters, etc., on employee
plans and exempt organizations are under the jurisdiction of the Assistant Commissioner
(Employee Plans and Exempt Organizations). See Rev. Proc. 97–4, this Bulletin. See also
Rev. Proc. 97–6, this Bulletin, for the procedures for issuing determination letters on the
qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock
ownership plans under §§ 401, 403(a), 409, and 4975(e)(7), and the status for exemption of
any related trusts or custodial accounts under § 501(a).
For the user fee requirements applicable to requests for letter rulings, determination
letters, etc., under the jurisdiction of the Assistant Commissioner (Employee Plans and
Exempt Organizations), see Rev. Proc. 97–8.
SECTION 5. UNDER WHAT
CIRCUMSTANCES DOES THE
NATIONAL OFFICE ISSUE
LETTER RULINGS?
In income and gift tax
matters
.01 In income and gift tax matters, the national office generally issues a letter ruling on a
proposed transaction and on a completed transaction if the letter ruling request is submitted
before the return is filed for the year in which the transaction that is the subject of the
request was completed.
(1) Circumstances under which a letter ruling is not ordinarily issued. The national
office ordinarily does not issue a letter ruling if, at the time the letter ruling is requested,
the identical issue is involved in the taxpayer’s return for an earlier period and that issue—
(a) is being examined by a district director;
(b) is being considered by an appeals office;
(c) is pending in litigation in a case involving the taxpayer or a related taxpayer;
(d) has been examined by a district director or considered by an appeals office and the
statutory period of limitations has not expired for assessment or for filing a claim for refund
or credit of tax; or
(e) has been examined by a district director or considered by an appeals office and a
closing agreement covering the issue or liability has not been entered into by a district
director or by an appeals office.
If a return dealing with an issue for a particular year is filed while a request for a letter
ruling on that issue is pending, the national office will issue the letter ruling unless it is
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 district director. See section 8.04 of
this revenue procedure. However, even if an examination has begun, the national office
ordinarily will issue the letter ruling if the district director agrees, by memorandum, to the
issuance of the letter ruling.
19
Sec. 5.01
(2) No letter ruling on a property conversion after return filed. The national office
does not issue a letter ruling on the replacement of involuntarily converted property,
whether or not the property has been replaced, if the taxpayer has already filed a return for
the taxable year in which the property was converted. However, the district director may
issue a determination letter in this case. See section 6.01 of this revenue procedure.
Request for extension of time
for making an election or for
other relief under
§ 301.9100–1T of the
temporary Procedure and
Administration Regulations
.02 The national office will consider a request for an extension of time for making an
election or other application for relief under § 301.9100–1T of the temporary Procedure and
Administration Regulations. Even if submitted after the return covering the issue presented
in the § 301.9100–1T request has been filed and even if submitted after an examination of
the return has begun or after the issues in the return are being considered by an appeals
office or a federal court, a § 301.9100–1T request is a letter ruling request. Therefore, the
§ 301.9100–1T request should be submitted pursuant to this revenue procedure.
However, an election made pursuant to § 301.9100–2T is not a letter ruling request and
does not require payment of any user fee. See § 301.9100–2T(d) and section 15.03(1) of
this revenue procedure. Such an election pertains to an automatic extension of time under
§ 301.9100–1T.
(1) Format of request. A § 301.9100–1T request (other than an election made pursuant
to § 301.9100–2T) must be in the general form of, and meet the general requirements for, a
letter ruling request. These requirements are given in section 8 of this revenue procedure. In
addition, the § 301.9100–1T request must include the information required by
§ 301.9100–3T(e).
(2) Statute of limitations. The running of any applicable period of limitations is not
suspended for the period during which a § 301.9100–1T request has been filed. See
§ 301.9100–3T(d)(2). If the period of limitations on assessment under § 6501(a) for the
taxable year in which an election should have been made or any taxable year that would
have been affected by the election had it been timely made will expire before receipt of a
§ 301.9100–1T letter ruling, the Service ordinarily will not issue a § 301.9100–1T ruling.
See § 301.9100–3T(c)(1)(ii). Therefore, the taxpayer must secure a consent under
§ 6501(c)(4) to extend the period of limitations on assessment. Note that the filing of a
claim for refund under § 6511 does not extend the period of limitations on assessment. If
§ 301.9100–1T relief is granted, the Service may require the taxpayer to consent to an
extension of the period of limitations on assessment. See § 301.9100–3T(d)(2).
(3) Taxpayer must notify national office if examination of return begins while
request is pending. If the Service starts an examination of the taxpayer’s return for the
taxable year in which an election should have been made or any taxable year that would
have been affected by the election had it been timely made while a § 301.9100–1T request
is pending, the taxpayer must notify the national office. See § 301.9100–3T(e)(4)(i) and
section 8.04(1)(b) of this revenue procedure.
(4) National office will notify district director, appeals officer, or government counsel
of § 301.9100–1T request if return is being examined or is being considered by an
appeals office or a federal court. If the taxpayer’s return for the taxable year in which an
election should have been made or any taxable year that would have been affected by the
election had it been timely made is being examined by a district office or considered by an
appeals office or a federal court, the national office will notify the appropriate district
director, appeals officer, or government counsel that a § 301.9100–1T request has been
submitted to the national office. The examining officer, appeals officer, or government
counsel is not authorized to deny consideration of a § 301.9100–1T request. The letter
ruling will be mailed to the taxpayer and a copy will be sent to the appropriate district
director, appeals officer, or government counsel.
Determinations under
§ 999(d) of the Internal
Revenue Code
Sec. 5.01
.03 Under Rev. Proc. 77–9, 1977–1 C.B. 542, the Office of Associate Chief Counsel
(International) issues determinations under § 999(d) that may deny certain benefits of the
foreign tax credit, deferral of earnings of foreign subsidiaries and domestic international
sales corporations (DISCs), and tax exemption for foreign trade income of a foreign sales
corporation or a small foreign sales corporation (FSC or small FSC) to a person, if that
person, a member of a controlled group (within the meaning of § 993(a)(3)) that includes
the person, or a foreign corporation of which a member of the controlled group is a United
States shareholder, agrees to participate in, or cooperate with, an international boycott.
Requests for determinations under Rev. Proc. 77–9 are letter ruling requests and, therefore,
20
should be submitted to the Associate Chief Counsel (International) pursuant to this revenue
procedure.
In matters involving § 367
.04 Unless the issue is covered by section 7 of this revenue procedure, the Office of
Associate Chief Counsel (International) may issue a letter ruling under § 367 even if the
taxpayer does not request a letter ruling as to the characterization of the transaction under
the reorganization provisions of the Code. The Office of Associate Chief Counsel
(International) will determine the § 367 consequences of a transaction based on the
taxpayer’s characterization of the transaction but will indicate in the letter ruling that it
expresses no opinion as to the characterization of the transaction under the reorganization.
However, the Office of Associate Chief Counsel (International) may decline to issue a
§ 367 ruling in situations in which the taxpayer inappropriately characterizes the transaction
under the reorganization provisions.
In estate tax matters
.05 In general, the national office issues prospective letter rulings on transactions
affecting the estate tax on the prospective estate of a living person and affecting the estate
tax on the estate of a decedent before the decedent’s estate tax return is filed. The national
office will not issue letter rulings for prospective estates on computations of tax, actuarial
factors, and factual matters.
If the taxpayer is requesting a letter ruling regarding a decedent’s estate tax and the estate
tax return is due to be filed before the letter ruling is expected to be issued, the taxpayer
should obtain an extension of time for filing the return and should notify the national 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 national office, the
taxpayer must disclose on the return that a letter ruling has been requested, attach a copy of
the pending letter ruling request to the return, and notify the national office that the return
has been filed. See section 8.04 of this revenue procedure. The national office will make
every effort to issue the letter ruling within 3 months of the date the return was filed.
If the letter ruling cannot be issued within that 3-month period, the national office will
notify the district director having jurisdiction over the return, who may, by memorandum to
the national office, grant an additional period for the issuance of the letter ruling.
In matters involving additional
.06 In matters involving additional estate tax under § 2032A(c), the national office issues
estate tax under § 2032A(c) letter rulings on proposed transactions and on completed transactions that occurred before
the return is filed.
In matters involving qualified
domestic trusts under
§ 2056A
.07 In matters involving qualified domestic trusts under § 2056A, the national office
issues letter rulings on proposed transactions and on completed transactions that occurred
before the return is filed.
In generation-skipping
transfer tax matters
.08 In general, the national office issues letter rulings on proposed transactions that affect
the generation-skipping transfer tax and on completed transactions that occurred before the
return is filed. In the case of a generation-skipping trust or trust equivalent, letter rulings are
issued either before or after the trust or trust equivalent has been established. The national
office will issue letter rulings on the application of the effective date rules for
generation-skipping transfer tax (§ 1433 of the Tax Reform Act of 1986, 1986–3 (Vol. 1)
C.B. 1, 648) to wills, trusts, and trust equivalents in existence on October 22, 1986, and to
generation-skipping transfers taking place on or before October 22, 1986.
In employment and excise tax
.09 In employment and excise tax matters, the national office issues letter rulings on
matters
proposed transactions and on completed transactions either before or after the return is filed
for those transactions. Requests regarding employment status (employer/employee
relationship) from federal agencies and instrumentalities should be submitted directly to the
national office. Requests from other taxpayers must first be submitted to the appropriate
Service office listed on the current Form SS–8 (Rev. July 1996). See section 6.04 of this
revenue procedure. Generally, the employer is the taxpayer and requests the letter ruling.
However, if the worker asks for the letter ruling, both the worker and the employer are
considered to be the taxpayer and both are entitled to the letter ruling.
The national office usually will not issue a letter ruling if, at the time the letter ruling is
requested, the identical issue is involved in the taxpayer’s return for an earlier period and
that issue—
(1) is being examined by a district director;
21
Sec. 5.09
(2) is being considered by an appeals office;
(3) is pending in litigation in a case involving the taxpayer or a related taxpayer;
(4) has been examined by a district director or considered by an appeals office and the
statutory period of limitations has not expired for assessment or for filing a claim for refund
or credit of tax; or
(5) has been examined by a district director or considered by an appeals office and a
closing agreement covering the issue or liability has not been entered into by a district
director or by an appeals office.
If a return involving an issue for a particular year is filed while a request for a letter
ruling on that issue is pending, the national office will issue the letter ruling unless it is
notified by the taxpayer or otherwise learns that an examination of that issue or an
examination of the identical issue on an earlier year’s return has been started by a district
director. See section 8.04 of this revenue procedure. However, even if an examination has
begun, the national office ordinarily will issue the letter ruling if the district director agrees,
by memorandum, to the issuance of the letter ruling.
In administrative provisions
matters
.10
(1) In general. The national office issues letter rulings on matters arising under the Code
and related statutes and regulations that involve—
(a) the time, place, manner, and procedures for reporting and paying taxes;
(b) the assessment and collection of taxes (including interest and penalties);
(c) the abatement, credit, or refund of an overassessment or overpayment of tax; or
(d) the filing of information returns.
(2) Circumstances under which a letter ruling is not ordinarily issued. The national
office ordinarily does not issue a letter ruling if, at the time the letter ruling is requested,
the identical issue is involved in the taxpayer’s return for an earlier period and that issue—
(a) is being examined by a district director;
(b) is being considered by an appeals office;
(c) is pending in litigation in a case involving the taxpayer or a related taxpayer;
(d) has been examined by a district director or considered by an appeals office and the
statutory period of limitations has not expired for assessment or for filing a claim for refund
or credit of tax; or
(e) has been examined by a district director or considered by an appeals office and a
closing agreement covering the issue or liability has not been entered into by a district
director or appeals office.
If a return involving an issue for a particular year is filed while a request for a letter
ruling on that issue is pending, the national office will issue the letter ruling unless it is
notified by the taxpayer or otherwise learns that an examination of that issue or an
examination of the identical issue on an earlier year’s return has been started by a district
director. See section 8.04 of this revenue procedure. But, even if an examination has begun,
the national office ordinarily will issue the letter ruling if the district director agrees, by
memorandum, to the issuance of the letter ruling.
Generally not to business
associations or groups
.11 The national office does not issue letter rulings to business, trade, or industrial
associations or to similar groups concerning the application of the tax laws to members of
the group. But groups and associations may submit suggestions of generic issues that would
be appropriately addressed in revenue rulings. See Rev. Proc. 89–14, which states the
objectives of, and standards for, the publication of revenue rulings and revenue procedures
in the Internal Revenue Bulletin.
The national office, however, may issue letter rulings to groups or associations on their
own tax status or liability if the request meets the requirements of this revenue procedure.
Sec. 5.09
22
Generally not to foreign
governments
.12 The national office does not issue letter rulings to foreign governments or their
political subdivisions about the U.S. tax effects of their laws. The national office also does
not issue letter rulings on the effect of a tax treaty on the tax laws of a treaty country for
purposes of determining the tax of the treaty country. See section 13.02 of Rev. Proc.
. However, the national office will continue to exchange
96–13, 1996–1 C.B. at
correspondence with treaty partners pursuant to the consultation provisions in tax treaties. In
addition, the national office may issue letter rulings to foreign governments or their political
subdivisions on their own tax status or liability under U.S. law if the request meets the
requirements of this revenue procedure.
Generally not on federal tax
consequences of proposed
legislation
.13 The national office does not issue letter rulings on a matter involving the federal tax
consequences of any proposed federal, state, local, municipal, or foreign legislation. The
national office, however, may provide general information in response to an inquiry.
Issuance of a letter ruling
before the issuance of a
regulation or other published
guidance
.14 Unless the issue is covered by section 7 of this revenue procedure, Rev. Proc. 97–3,
this Bulletin, or Rev. Proc. 97–7, this Bulletin, a letter ruling may be issued before the
issuance of a temporary or final regulation or other published guidance that interprets the
provisions of any act under the following conditions:
(1) Answer is clear or is reasonably certain. If the letter ruling request presents an
issue for which the answer seems clear by applying the statute to the facts or for which the
answer seems reasonably certain but not entirely free from doubt, a letter ruling will be
issued.
(2) Answer is not reasonably certain. The Service will consider all letter ruling requests
and use its best efforts to issue a letter ruling even if the answer does not seem reasonably
certain where the issuance of a letter ruling is in the best interests of tax administration.
(3) Issue cannot be readily resolved before a regulation or any other published
guidance is issued. A letter ruling will not be issued if the letter ruling request presents an
issue that cannot be readily resolved before a regulation or any other published guidance is
issued. However, when the Service has closed a regulation project or any other published
guidance project that might have answered the issue or decides not to open a regulation
project or any other published guidance project, the appropriate branch will consider all
letter ruling requests unless the issue is covered by section 7 of this revenue procedure, Rev.
Proc. 97–3, or Rev. Proc. 97–7.
SECTION 6. UNDER WHAT
CIRCUMSTANCES DO
DISTRICT DIRECTORS ISSUE
DETERMINATION LETTERS?
District directors issue determination letters only if the question presented is specifically
answered by a statute, tax treaty, or regulation, or by a conclusion stated in a revenue
ruling, opinion, or court decision published in the Internal Revenue Bulletin.
In income and gift tax
matters
.01 In income and gift tax matters, district directors issue determination letters in
response to taxpayers’ written requests on completed transactions that affect returns over
which they have examination jurisdiction. A determination letter usually is not issued for a
question concerning a return to be filed by the taxpayer if the same question is involved in
a return already filed.
Normally, district directors do not issue determination letters on the tax consequences of
proposed transactions. However, a district director may issue a determination letter on the
replacement, even though not yet made, of involuntarily converted property under § 1033,
if the taxpayer has filed an income tax return for the year in which the property was
involuntarily converted.
In estate tax matters
.02 In estate tax matters, district directors issue determination letters in response to
written requests affecting the estate tax returns over which the district directors have
examination jurisdiction. They do not issue determination letters on matters concerning the
application of the estate tax to the prospective estate of a living person.
In generation-skipping
transfer tax matters
.03 In generation-skipping transfer tax matters, district directors issue determination
letters in response to written requests affecting the generation-skipping transfer tax returns
over which the district directors have examination jurisdiction. They do not issue
determination letters on matters concerning the application of the generation-skipping
transfer tax before the distribution or termination takes place.
In employment and excise tax
.04 In employment and excise tax matters, district directors issue determination letters in
matters
response to written requests from taxpayers on completed transactions over which they have
examination jurisdiction.
23
Sec. 6.04
Requests for a determination of employment status (Form SS–8) from taxpayers (other
than federal agencies and instrumentalities) must be submitted to the appropriate Service
office listed on the current Form SS–8 (Rev. July 1996) and not directly to the national
office. See also section 5.09 of this revenue procedure.
Circumstances under which
determination letters are not
issued by district director
.05 A district director will not issue a determination letter in response to any request if—
(1) it appears that the taxpayer has directed a similar inquiry to the national office;
(2) the same issue involving the same taxpayer or a related taxpayer is pending in a case
in litigation or before an appeals office;
(3) the determination letter is requested by an industry, trade association, or similar
group; or
(4) the request involves an industry-wide problem.
Under no circumstances will a district director issue a determination letter unless it is
clearly shown that the request concerns a return that has been filed or is required to be filed
and over which the district director has, or will have, examination jurisdiction.
A district director will not issue a determination letter on an employment tax question if
the specific question for the same taxpayer or a related taxpayer has been, or is being,
considered by the Central Office of the Social Security Administration or the Railroad
Retirement Board. A district director also will not issue a determination letter on
determining constructive sales price under § 4216(b) or § 4218(c), which deal with special
provisions applicable to the manufacturer’s excise tax. The national office, however, will
issue letter rulings in this area. See sections 6.04 and 7.04 of this revenue procedure.
Requests concerning income,
.06 A request received by a district director on a question concerning an income, estate,
estate, or gift tax returns
or gift tax return already filed generally will be considered in connection with the
examination of the return. If a response is made to the request before the return is
examined, it will be considered a tentative finding in any later examination of that return.
Attach a copy of
determination letter to
taxpayer’s return
.07 A taxpayer who, before filing a return, receives a determination letter about any
transaction that has been consummated and that is relevant to the return being filed should
attach a copy of the determination letter to the return when it is filed.
Review of determination
letters
.08 Determination letters issued under sections 6.01 through 6.04 of this revenue
procedure are not reviewed by the national office before they are issued. If a taxpayer
believes that a determination letter of this type is in error, the taxpayer may ask the district
director to reconsider the matter or to request technical advice from the national office as
explained in Rev. Proc. 97–2, this Bulletin.
SECTION 7. UNDER WHAT
CIRCUMSTANCES DOES THE
SERVICE HAVE DISCRETION
TO ISSUE LETTER RULINGS
AND DETERMINATION
LETTERS?
Ordinarily not in certain areas
.01 The Service ordinarily will not issue letter rulings or determination letters in certain
because of factual nature of areas because of the factual nature of the problem involved or because of other reasons.
the problem
Rev. Proc. 97–3 and Rev. Proc. 97–7 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 or on other grounds
whenever warranted by the facts or circumstances of a particular case.
Instead of issuing a letter ruling or determination letter, the national office or a district
director may, when it is considered appropriate and in the best interests of the Service, issue
an information letter calling attention to well-established principles of tax law.
Not on alternative plans or
hypothetical situations
.02 A letter ruling or a determination letter will not be issued on alternative plans of
proposed transactions or on hypothetical situations.
Ordinarily not on part of an
integrated transaction
.03 The national office ordinarily will not issue a letter ruling on only part of an
integrated transaction. If, however, a part of a transaction falls under a no-rule area, a letter
ruling on other parts of the transaction may be issued. Before preparing the letter ruling
request, a taxpayer should call the branch having jurisdiction for the matters on which the
Sec. 6.04
24
taxpayer is seeking a letter ruling to discuss whether the national office will issue a letter
ruling on part of the transaction.
If two or more items or sub-methods of accounting are interrelated, the national office
ordinarily will not issue a letter ruling on a change in accounting method involving only
one of the items or sub-methods.
On constructive sales price
under § 4216(b) or
§ 4218(c)
.04 The national office will issue letter rulings in all cases on the determination of a
constructive sales price under § 4216(b) or § 4218(c) and in all other cases on prospective
transactions if the law or regulations require a determination of the effect of a proposed
transaction for tax purposes.
SECTION 8. WHAT ARE THE
GENERAL INSTRUCTIONS
FOR REQUESTING LETTER
RULINGS AND
DETERMINATION LETTERS?
This section explains the general instructions for requesting letter rulings and
determination letters on all matters. Requests for letter rulings and determination letters
require the payment of the applicable user fee listed in Appendix A of this revenue
procedure. For additional user fee requirements, see section 15 of this revenue procedure.
Certain information required
in all requests
Facts
Specific and additional instructions also apply to requests for letter rulings and
determination letters on certain matters. Those matters are listed in section 9 of this revenue
procedure followed by a reference (usually to another revenue procedure) where more
information can be obtained.
.01
(1) Complete statement of facts and other information. Each request for a letter ruling
or a determination letter must contain a complete statement of all facts relating to the
transaction. These facts include—
(a) names, addresses, telephone numbers, and taxpayer identification numbers of all
interested parties. (The term ‘‘all interested parties’’ does not mean all shareholders of a
widely held corporation requesting a letter ruling relating to a reorganization or all
employees where a large number may be involved.);
(b) the annual accounting period, and the overall method of accounting (cash or accrual)
for maintaining the accounting books and filing the federal income tax return, of all
interested parties;
(c) the location of the district office that has or will have examination jurisdiction over
the return (not the service center where the return is filed);
(d) a description of the taxpayer’s business operations;
(e) a complete statement of the business reasons for the transaction; and
(f) a detailed description of the transaction.
The Service will usually not rule on only one step of a larger integrated transaction. See
section 7.03 of this revenue procedure. However, if such a letter ruling is requested, the
facts, circumstances, true copies of relevant documents, etc., relating to the entire
transaction must be submitted.
Documents
(2) Copies of all contracts, wills, deeds, agreements, instruments, and other
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. The taxpayer must also submit certified English translations of
all applicable foreign laws and a copy of those laws with the request. For guidelines on the
acceptability of such documents, see Rev. Rul. 67–308, 1967–2 C.B. 254.
Each document, other than the request, should be labelled 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.
If the request concerns a corporate distribution, reorganization, or similar transaction, the
corporate balance sheet and profit and loss statement should be submitted. If the request
relates to a prospective transaction, the most recent balance sheet and profit and loss
statement should be submitted.
25
Sec. 8.01(2)
Analysis of material facts
(3) Analysis of material facts. All material facts in documents must be included, rather
than merely incorporated by reference, in the taxpayer’s initial request or in supplemental
letters. These facts must be accompanied by an analysis of their bearing on the issue or
issues, specifying the provisions that apply.
Same issue in an earlier
return
(4) Statement regarding whether same issue is in an earlier return. The request must
state whether, to the best of the knowledge of both the taxpayer and the taxpayer’s
representatives, the same issue is in an earlier return of the taxpayer (or in a return for any
year of a related taxpayer within the meaning of § 267, or of a member of an affiliated
group of which the taxpayer is also a member within the meaning of § 1504).
If the statement is affirmative, it must specify whether the issue—
(a) is being examined by a district director;
(b) has been examined, but the statutory period of limitations has not expired for either
assessing tax or filing a claim for refund or credit of tax;
(c) has been examined, but a closing agreement covering the issue or liability has not
been entered into by a district director;
(d) is being considered by an appeals office in connection with a return from an earlier
period;
(e) has been considered by an appeals office in connection with a return from an earlier
period, but the statutory period of limitations has not expired for either assessing tax or
filing a claim for refund or credit of tax;
(f) has been considered by an appeals office in connection with a return from an earlier
period, but a closing agreement covering the issue or liability has not been entered into by
an appeals office; or
(g) is pending in litigation in a case involving the taxpayer or a related taxpayer.
Same or similar issue
previously submitted or
currently pending
(5) Statement regarding whether same or similar issue was previously ruled on or
requested, or is currently pending. The request must also state whether, to the best of the
knowledge of both the taxpayer and the taxpayer’s representatives—
(a) the Service previously ruled on the same or a similar issue for the taxpayer (or a
related taxpayer within the meaning of § 267, or a member of an affiliated group of which
the taxpayer is also a member within the meaning of § 1504) or a predecessor;
(b) the taxpayer, a related taxpayer, a predecessor, or any representatives previously
submitted a request involving the same or a similar issue to the Service but withdrew the
request before a letter ruling or determination letter was issued;
(c) the taxpayer, a related taxpayer, or a predecessor previously submitted a request
involving the same or a similar issue that is currently pending with the Service; or
(d) at the same time as this request, the taxpayer or a related taxpayer is presently
submitting another request involving the same or a similar issue to the Service.
If the statement is affirmative for (a), (b), (c), or (d) of this section 8.01(5), the statement
must give the date the request was submitted, the date the request was withdrawn or ruled
on, if applicable, and other details of the Service’s consideration of the issue.
Statement of authorities
supporting taxpayer’s views
(6) Statement of supporting authorities. If the taxpayer advocates a particular
conclusion, an explanation of the grounds for that conclusion and the relevant authorities to
support it must be included. Even if not advocating a particular tax treatment of a proposed
transaction, the taxpayer must still furnish views on the tax results of the proposed
transaction and a statement of relevant authorities to support those views.
In all events, the request must include a statement of whether the law in connection with
the request is uncertain and whether the issue is adequately addressed by relevant
authorities.
Statement of authorities
contrary to taxpayer’s views
Sec. 8.01(3)
(7) Statement of contrary authorities. The taxpayer is also encouraged to inform the
Service about, and discuss the implications of, any authority believed to be contrary to the
position advanced, such as legislation (or pending legislation), tax treaties, court decisions,
regulations, notices, revenue rulings, revenue procedures, or announcements. If the taxpayer
26
determines that there are no contrary authorities, a statement in the request to this effect
would be helpful. If the taxpayer does not furnish either contrary authorities or a statement
that none exists, the Service in complex cases or those presenting difficult or novel issues
may request submission of contrary authorities or a statement that none exists. Failure to
comply with this request may result in the Service’s refusal to issue a letter ruling or
determination letter.
Identifying and discussing contrary authorities will generally enable Service personnel to
understand the issue and relevant authorities more quickly. When Service personnel receive
the request, they will have before them the taxpayer’s thinking on the effect and
applicability of contrary authorities. This information should make research easier and lead
to earlier action by the Service. If the taxpayer does not disclose and distinguish significant
contrary authorities, the Service may need to request additional information, which will
delay action on the request.
Statement identifying pending
(8) Statement identifying pending legislation. At the time of filing the request, the
legislation
taxpayer must identify any pending legislation that may affect the proposed transaction. In
addition, if legislation is introduced after the request is filed but before a letter ruling or
determination letter is issued, the taxpayer must notify the Service.
Deletions statement required
by § 6110
(9) Statement identifying information to be deleted from copy of letter ruling or
determination letter for public inspection. The text of letter rulings and determination
letters is open to public inspection under § 6110. The Service makes deletions from the text
before it is made available for inspection. To help the Service make the deletions required
by § 6110(c), a request for a letter ruling or determination letter must be accompanied by a
statement indicating the deletions desired (‘‘deletions statement’’). If the deletions statement
is not submitted with the request, a Service representative will tell the taxpayer that the
request will be closed if the Service does not receive the deletions statement within 21
calendar days. See section 10.06 of this revenue procedure.
(a) Format of deletions statement. A taxpayer who wants only names, addresses, and
identifying numbers to be deleted should state this in the deletions statement. If the taxpayer
wants more information deleted, the deletions statement must be accompanied by a copy of
the request and supporting documents on which the taxpayer should bracket the material to
be deleted. The deletions statement must indicate the statutory basis under § 6110(c) for
each proposed deletion.
If the taxpayer decides to ask for additional deletions before the letter ruling or
determination letter is issued, additional deletions statements may be submitted.
(b) Location of deletions statement. The deletions statement must not appear in the
request, but instead must be made in a separate document and placed on top of the request
for a letter ruling or determination letter.
(c) Signature. The deletions statement must be signed and dated by the taxpayer or the
taxpayer’s authorized representative. A stamped signature is not permitted.
(d) Additional information. The taxpayer should follow the same procedures above to
propose deletions from any additional information submitted after the initial request. An
additional deletions statement, however, is not required with each submission of additional
information if the taxpayer’s initial deletions statement requests that only names, addresses,
and identifying numbers are to be deleted and the taxpayer wants only the same information
deleted from the additional information.
(e) Taxpayer may protest deletions not made. After receiving from the Service the
notice under § 6110(f)(1) of intention to disclose the letter ruling or determination letter
(including a copy of the version proposed to be open to public inspection and notation of
third-party communications under § 6110(d)), the taxpayer may protest the disclosure of
certain information in the letter ruling or determination letter. The taxpayer must send a
written statement within 20 calendar days to the Service office indicated on the notice of
intention to disclose. The statement must identify those deletions that the Service has not
made and that the taxpayer believes should have been made. The taxpayer must also submit
a copy of the version of the letter ruling or determination letter and bracket the deletions
proposed that have not been made by the Service. Generally, the Service will not consider
deleting any material that the taxpayer did not propose to be deleted before the letter ruling
or determination letter was issued.
27
Sec. 8.01(9)
Within 20 calendar days after the Service receives the response to the notice under
§ 6110(f)(1), the Service will mail to the taxpayer its final administrative conclusion
regarding the deletions to be made. The taxpayer does not have the right to a conference to
resolve any disagreements concerning material to be deleted from the text of the letter
ruling or determination letter. However, these matters may be taken up at any conference
that is otherwise scheduled regarding the request.
(f) Taxpayer may request delay of public inspection. After receiving the notice under
§ 6110(f)(1) of intention to disclose, but within 60 calendar days after the date of notice,
the taxpayer may send a request for delay of public inspection under either § 6110(g)(3) or
(4). The request for delay must be sent to the Service office indicated on the notice of
intention to disclose. A request for delay under § 6110(g)(3) must contain the date on which
it is expected that the underlying transaction will be completed. The request for delay under
§ 6110(g)(4) must contain a statement from which the Commissioner of Internal Revenue
may determine that there are good reasons for the delay.
Signature on request
(10) Signature by taxpayer or authorized representative. The request for a letter
ruling or determination letter must be signed and dated by the taxpayer or the taxpayer’s
authorized representative. A stamped signature is not permitted.
Authorized representatives
(11) Authorized representatives. To sign the request or to appear before the Service in
connection with the request, the representative must be:
Attorney
(a) An attorney who is a member in good standing of the bar of the highest court of any
state, possession, territory, commonwealth, or the District of Columbia and who is not
currently under suspension or disbarment from practice before the Service. He or she must
file a written declaration with the Service showing current qualification as an attorney and
current authorization to represent the taxpayer;
Certified public accountant
(b) A certified public accountant who is duly qualified to practice in any state,
possession, territory, commonwealth, or the District of Columbia and who is not currently
under suspension or disbarment from practice before the Service. He or she must file a
written declaration with the Service showing current qualification as a certified public
accountant and current authorization to represent the taxpayer;
Enrolled agent
(c) An enrolled agent who is a person, other than an attorney or certified public
accountant, that is currently enrolled to practice before the Service and is not currently
under suspension or disbarment from practice before the Service. He or she must file a
written declaration with the Service showing current enrollment and authorization to
represent the taxpayer. Either the enrollment number or the expiration date of the enrollment
card must be included in the declaration. For the rules on who may practice before the
Service, see Treasury Department Circular No. 230 (31 C.F.R. part 10 (1996));
Enrolled actuary
(d) An enrolled actuary who is a person, other than an attorney or certified public
accountant, that is currently enrolled as an actuary by the Joint Board for the Enrollment of
Actuaries pursuant to 29 U.S.C. § 1242 and who is not currently under suspension or
disbarment from practice before the Service. He or she must file a written declaration with
the Service showing current qualification as an enrolled actuary and current authorization to
represent the taxpayer. Practice before the Service as an enrolled actuary is limited to
representation with respect to issues involving §§ 401, 403(a), 404, 412, 413, 414, 4971,
6057, 6058, 6059, 6652(e), 6652(f), 6692, 7805(b), former § 405, and involving 29 U.S.C.
§ 1083; or
A person with a ‘‘Letter of
Authorization’’
(e) Any other person, including a foreign representative, who has received a ‘‘Letter of
Authorization’’ from the Director of Practice under section 10.7(d) of Treasury Department
Circular No. 230. A person may make a written request for a ‘‘Letter of Authorization’’ to:
Office of Director of Practice, HR:DP, Internal Revenue Service, 1111 Constitution Avenue,
N.W., Washington, 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.
Employee, general partner,
bona fide officer,
administrator, trustee, etc.
(f) The above requirements do not apply to a regular full-time employee representing his
or her employer, to a general partner representing his or her partnership, to a bona fide
officer representing his or her corporation, association, or organized group, or to a trustee,
receiver, guardian, personal representative, administrator, or executor representing a trust,
Sec. 8.01(9)
28
receivership, guardianship, or estate. A preparer of a return (other than a person referred to
in paragraph (a), (b), (c), (d), or (e) of this section 8.01(11)) who is not a full-time
employee, general partner, bona fide officer, or an administrator, trustee, etc., may not
represent a taxpayer in connection with a letter ruling or a determination letter. See section
10.7(c) of Treasury Department Circular No. 230.
Foreign representative
(g) A foreign representative (other than a person referred to in paragraph (a), (b), (c), (d),
or (e) of this section 8.01(11)) is not authorized to practice before the Service and,
therefore, must withdraw from representing a taxpayer in a request for a letter ruling or a
determination letter. In this situation, the nonresident alien or foreign entity must submit the
request for a letter ruling or a determination letter on the individual’s or the entity’s own
behalf or through a person referred to in paragraph (a), (b), (c), (d), or (e) of this section
8.01(11).
Power of attorney and
declaration of representative
(12) Power of attorney and declaration of representative. Any authorized
representative, whether or not enrolled to practice, must also comply with the conference
and practice requirements of the Statement of Procedural Rules (26 C.F.R. § 601.501–
601.509 (1996)), which provide the rules for representing a taxpayer before the Service. It
is preferred that Form 2848, Power of Attorney and Declaration of Representative, be used
to provide the representative’s authorization (Part I of Form 2848, Power of Attorney) and
the representative’s qualification (Part II of Form 2848, Declaration of Representative). The
name of the person signing Part I of Form 2848 should also be typed or printed on this
form. A stamped signature is not permitted. For additional information regarding the power
of attorney form, see section 8.02(2) of this revenue procedure.
For the requirement regarding compliance with Treasury Department Circular No. 230,
see section 8.08 of this revenue procedure.
Penalties of perjury
statement
(13) Penalties of perjury statement.
(a) Format of penalties of perjury statement. A request for a letter ruling or
determination letter and any factual information or 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 this request, including accompanying documents, and, to
the best of my knowledge and belief, the request contains all the relevant facts relating
to the request, and such facts are true, correct, and complete.’’ A taxpayer who submits
additional factual information on several occasions may provide one declaration subsequent
to all submissions that refers to all submissions.
(b) Signature by taxpayer. The declaration must be signed and dated by the taxpayer,
not the taxpayer’s representative. A stamped signature is not permitted.
The person who signs for a corporate taxpayer must be an officer of the corporate
taxpayer who has personal knowledge of the facts and whose duties are not limited to
obtaining a letter ruling or determination letter from the Service. If the corporate taxpayer is
a member of an affiliated group filing consolidated returns, a penalties of perjury statement
must also be signed and submitted by an officer of the common parent of the group.
The person signing for a trust or partnership must be a trustee or general partner who has
personal knowledge of the facts.
Number of copies of request
to be submitted
(14) Number of copies of request to be submitted. Generally, a taxpayer needs only to
submit one copy of the request for a letter ruling or determination letter. If, however, more
than one issue is presented in the letter ruling request, the taxpayer is encouraged to submit
additional copies of the request.
Further, two copies of the request for a letter ruling or determination letter are required
if—
(a) the taxpayer is requesting separate letter rulings or determination letters on different
issues as explained later under section 8.02(1) of this revenue procedure;
(b) the taxpayer is requesting deletions other than names, addresses, and identifying
numbers, as explained in section 8.01(9)(a) of this revenue procedure. (One copy is the
request for the letter ruling or determination letter and the second copy is the deleted
version of such request.); or
(c) a closing agreement (as defined in section 2.02 of this revenue procedure) is being
requested on the issue presented.
29
Sec. 8.01(14)
Sample of a letter ruling
request
(15) Sample format for a letter ruling request. To assist a taxpayer or the taxpayer’s
representative in preparing a letter ruling request, a sample format for a letter ruling request
is provided in Appendix B. This format is not required to be used by the taxpayer or the
taxpayer’s representative. If the letter ruling request is not identical or similar to the format
in Appendix B, the different format will not defer consideration of the letter ruling request.
Checklist
(16) Checklist for letter ruling requests. The Service will be able to respond more
quickly to a taxpayer’s letter ruling request if the request is carefully prepared and
complete. The checklist in Appendix C of this revenue procedure is designed to assist
taxpayers in preparing a request by reminding them of the essential information and
documents to be furnished with the request. The checklist in Appendix C must be
completed to the extent required by the instructions in the checklist, signed and dated by the
taxpayer or the taxpayer’s representative, and placed on top of the letter ruling request. If
the checklist in Appendix C is not received, a branch representative will ask the taxpayer or
the taxpayer’s representative to submit the checklist, which may delay action on the letter
ruling request.
For letter ruling requests on certain matters, specific checklists supplement the checklist
in Appendix C. These checklists are listed in section 9.01 of this revenue procedure and
must also be completed and placed on top of the letter ruling request along with the
checklist in Appendix C.
Copies of the checklist in Appendix C can be obtained by calling (202) 622–7560 (not a
toll-free call). A photocopy of this checklist may be used.
Additional information
required in certain
circumstances
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 Service generally will issue a
single letter ruling covering all the issues. However, if the taxpayer requests separate letter
rulings on any of the issues (because, for example, one letter ruling is needed sooner than
another), the Service will usually comply with the request unless it is not feasible or not in
the best interests of the Service to do so. A taxpayer who wants separate letter rulings on
multiple issues should make this clear in the request and submit two copies of the request.
In issuing each letter ruling, the Service will state that it has issued separate letter rulings
or that requests for other letter rulings are pending.
Power of attorney
(2) To designate recipient of original or copy of letter ruling or determination letter.
Unless the power of attorney provides otherwise, the Service will send the original of the
letter ruling or determination letter to the taxpayer and a copy of the letter ruling or
determination letter to the taxpayer’s representative. In this case, the letter ruling or
determination letter is addressed to the taxpayer. It is preferred that Form 2848, Power of
Attorney and Declaration of Representative, be used to provide the representative’s
authorization. See section 8.01(12) of this revenue procedure.
Copies of letter ruling or
determination letter sent to
multiple representatives
(a) To have copies sent to multiple representatives. When a taxpayer has more than
one representative, the Service will send the copy of the letter ruling or determination letter
to the first representative named on the most recent power of attorney. If the taxpayer wants
an additional copy of the letter ruling or determination letter sent to the second
representative listed in the power of attorney, the taxpayer must check the appropriate box
on Form 2848. If this form is not used, the taxpayer must state in the power of attorney that
a copy of the letter ruling or determination letter is to be sent to the second representative
listed in the power of attorney. Copies of the letter ruling or determination letter, however,
will be sent to no more than two representatives.
Original of letter ruling or
determination letter sent to
taxpayer’s representative
(b) To have original sent to taxpayer’s representative. A taxpayer may request that the
original of the letter ruling or determination letter be sent to the taxpayer’s representative.
In this case, a copy of the letter ruling or determination letter will be sent to the taxpayer.
The letter ruling or determination letter is addressed to the taxpayer’s representative to
whom the original is sent.
If the taxpayer wants the original of the letter ruling or determination letter sent to the
taxpayer’s representative, the taxpayer must check the appropriate box on Form 2848. If this
Sec. 8.01(15)
30
form is not used, the taxpayer must state in the power of attorney that the original of the
letter ruling or determination letter is to be sent to the taxpayer’s representative. When a
taxpayer has more than one representative, the Service will send the original of the letter
ruling or determination letter to the first representative named in the most recent power of
attorney.
No copy of letter ruling or
determination letter sent to
taxpayer’s representative
(c) To have no copy sent to taxpayer’s representative. If a taxpayer does not want a
copy of the letter ruling or determination letter sent to any representative, the taxpayer must
check the appropriate box on Form 2848. If this form is not used, the taxpayer must state in
the power of attorney that a copy of the letter ruling or determination letter is not to be sent
to any representative.
‘‘Two-Part’’ letter ruling
requests
(3) To request a particular conclusion on a proposed transaction. A taxpayer who is
requesting a particular conclusion on a proposed transaction may make the request for a
letter ruling in two parts. This type of request is referred to as a ‘‘two-part’’ letter ruling
request. The first part must include the complete statement of facts and related documents
described in section 8.01 of this revenue procedure. The second part must include a
summary statement of the facts the taxpayer believes to be controlling in reaching the
conclusion requested.
If the Service accepts the taxpayer’s statement of controlling facts, it will base its letter
ruling on these facts. Ordinarily, this statement will be incorporated into the letter ruling.
However, the Service reserves the right to rule on the basis of a more complete statement of
the facts and to seek more information in developing the facts and restating them.
A taxpayer who chooses this two-part procedure has all the rights and responsibilities
provided in this revenue procedure.
Taxpayers may not use the two-part procedure if it is inconsistent with other procedures,
such as those dealing with requests for permission to change accounting methods or periods,
applications for recognition of exempt status under § 521, or rulings on employment tax
status.
After the Service has resolved the issues presented by a letter ruling request, the Service
representative may request that the taxpayer submit a proposed draft of the letter ruling to
expedite the issuance of the ruling. See section 10.09 of this revenue procedure.
Expeditious handling
(4) To request expeditious handling. The Service processes requests for letter rulings
and determination letters in order of the date received and as expeditiously as possible. A
taxpayer who has a compelling need to have a request processed ahead of the regular order
must request expeditious handling. This request must explain the need for expeditious
handling.
The request for expeditious handling must be made in writing, preferably in a separate
letter with, or soon after filing, the request for the letter ruling or determination letter. If the
request for expeditious handling is not made in a separate letter, then the letter in which the
letter ruling or determination letter request is made should say, at the top of the first page:
of this letter.’’
‘‘Expeditious Handling Is Requested. See page
A request for expeditious handling will not be forwarded to a rulings branch for action
until the check for the user fee is received.
The Service cannot give assurance that any letter ruling or determination letter will be
processed by the time requested. For example, the scheduling of a closing date for a
transaction or a meeting of the board of directors or shareholders of a corporation, without
regard for the time it may take to obtain a letter ruling or determination letter, will not be
considered a sufficient reason to process a request ahead of its regular order. Also, the
possible effect of fluctuation in the market price of stocks on a transaction will not be
considered a sufficient reason to process a request out of order. Accordingly, the Service
urges taxpayers to submit their requests well in advance of the contemplated transaction.
Facsimile transmission (fax)
(5) To receive a letter ruling or submit a request for a letter ruling by facsimile
transmission (fax).
(a) To receive a letter ruling by fax. A letter ruling ordinarily is not sent by fax.
However, if the taxpayer requests, a copy of a letter ruling may be faxed to the taxpayer or
the taxpayer’s authorized representative. A letter ruling, however, is not issued until the
ruling is mailed. See § 301.6110–2(h).
31
Sec. 8.02(5)
A request to fax a copy of the letter ruling to the taxpayer or the taxpayer’s authorized
representative must be made in writing, either as part of the original letter ruling request or
prior to the approval of the letter ruling. The request must contain the fax number of the
taxpayer or the taxpayer’s authorized representative to whom the letter ruling is to be faxed.
In addition, because of the nature of a fax transmission, a statement containing a waiver
of any disclosure violations resulting from the fax transmission must accompany the
request. Nevertheless, the national office will take certain precautions to protect confidential
information. For example, the national office will use a cover sheet that identifies the
intended recipient of the fax and the number of pages transmitted and that contains a
statement prohibiting unauthorized disclosure of the letter ruling if a recipient of the faxed
letter ruling is not the intended recipient of the fax. The letter ruling will be faxed by the
Communications Unit of the Technical Services Staff (CC:DOM:CORP:T:C).
(b) To submit a request for a letter ruling by fax. Original letter ruling requests by fax
are discouraged because such requests must be treated in the same manner as requests by
letter. For example, the faxed letter ruling request will not be forwarded to the rulings
branch for action until the check for the user fee is received.
Requests for a change in accounting method or a change in accounting period must not
be submitted by fax.
Requesting a conference
(6) To request a conference. A taxpayer who wants to have a conference on the issues
involved should indicate this in writing when, or soon after, filing the request. See also
sections 11.01, 11.02, and 12.11(2) of this revenue procedure.
Substantially identical letter
rulings or identical
accounting method changes
(7) To obtain the applicable user fee for substantially identical letter rulings or
identical accounting method changes. A taxpayer seeking the user fee provided in
paragraph (A)(5) of Appendix A of this revenue procedure for substantially identical letter
rulings or identical accounting method changes must provide the information required in
section 15.07 of this revenue procedure.
Address to send the request
Requests for letter rulings
.03
(1) Requests for letter rulings should be sent to the Associate Chief Counsel
(Domestic), the Associate Chief Counsel (Employee Benefits and Exempt Organizations),
the Associate Chief Counsel (Enforcement Litigation), or the Associate Chief Counsel
(International), as appropriate, at the following address:
Internal Revenue Service
Attn: CC:DOM:CORP:T
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
The package should be marked: RULING REQUEST SUBMISSION. Requests may also
be hand delivered to the drop box at the 12th Street entrance of 1111 Constitution Avenue,
N.W., Washington, DC. No receipt will be given at the drop box.
Requests for determination
letters
Pending letter ruling requests
(2) Requests for determination letters should be sent to the district director whose
office has or will have examination jurisdiction over the taxpayer’s return. For fees required
with determination letter requests, see section 15 and Appendix A of this revenue procedure.
.04
(1) Circumstances under which the taxpayer must notify the national office. The
taxpayer must notify the national office if, after the letter ruling request is filed but before a
letter ruling is issued, the taxpayer knows that—
(a) an examination of the issue or the identical issue on an earlier year’s return has been
started by a district director;
(b) in the case of a § 301.9100–1T request, an examination of the return for the taxable
year in which an election should have been made or any taxable year that would have been
affected by the election had it been timely made has been started by a district director. See
§ 301.9100–3T(e)(4)(i) and section 5.02(3) of this revenue procedure; or
(c) legislation that may affect the transaction is introduced. See section 8.01(8) of this
revenue procedure.
Sec. 8.02(5)
32
(2) Taxpayer must notify national office if return is filed and must attach request to
return. If the taxpayer files a return before a letter ruling is received from the national
office concerning the issue, the taxpayer must notify the national office that the return has
been filed. The taxpayer must also attach a copy of the letter ruling request to the return to
alert the district office and thereby avoid premature district action on the issue.
This section 8.04 also applies to pending requests for a closing agreement on a
transaction for which a letter ruling is not requested or issued, and for an advance pricing
agreement.
When to attach letter ruling to
return
.05
A taxpayer who receives a letter ruling before filing a return about any transaction that is
relevant to the return being filed must attach a copy of the letter ruling to the return when it
is filed.
How to check on status of
request
Request may be withdrawn or
national office may decline to
issue letter ruling
.06
The taxpayer or the taxpayer’s authorized representative may obtain information
regarding the status of a request by calling the person whose name and telephone number
are shown on the acknowledgement of receipt of the request or the appropriate branch
representative who contacts the taxpayer as explained in section 10.02 of this revenue
procedure.
.07
(1) In general. A taxpayer may withdraw a request for a letter ruling or determination
letter at any time before the letter ruling or determination letter is signed by the Service.
Correspondence and exhibits related to a request that is withdrawn or related to a letter
ruling request for which the national office declines to issue a letter ruling will not be
returned to the taxpayer. See section 8.01(2) of this revenue procedure. In appropriate cases,
the Service may publish its conclusions in a revenue ruling or revenue procedure.
(2) Notification of district director. If a taxpayer withdraws a request for a letter ruling
or if the national office declines to issue a letter ruling, the national office generally will
notify the appropriate district director and may give its views on the issues in the request to
the appropriate district director to consider in any later examination of the return. This
section 8.07(2) generally does not apply if the taxpayer withdraws a letter ruling request
(other than a request for a change in accounting method) and submits a written statement
that the transaction has been, or is being, abandoned and if the national office has not
formed an adverse opinion.
(3) Refunds of user fee. The user fee will not be returned for a letter ruling request that
is withdrawn. If the national office declines to issue a letter ruling on all of the issues in the
request, the user fee will be returned. If the national office, however, issues a letter ruling
on some, but not all, of the issues, the user fee will not be returned. See section 15.10 of
this revenue procedure for additional information regarding refunds of user fees.
Compliance with Treasury
Department Circular No. 230
.08
The taxpayer’s authorized representative, whether or not enrolled, must comply with
Treasury Department Circular No. 230, which provides the rules for practice before the
Service. In those situations when the national office believes that the taxpayer’s
representative is not in compliance with Circular No. 230, the national office will bring the
matter to the attention of the Director of Practice.
For the requirement regarding compliance with the conference and practice requirements,
see section 8.01(12) of this revenue procedure.
SECTION 9. WHAT OTHER
CHECKLISTS, GUIDELINE
REVENUE PROCEDURES,
SAFE HARBOR REVENUE
PROCEDURES, AND
AUTOMATIC CHANGE
REVENUE PROCEDURES AND
NOTICES APPLY TO CERTAIN
REQUESTS?
Specific revenue procedures and notices supplement the general instructions for requests
explained in section 8 of this revenue procedure and apply to requests for letter rulings or
determination letters regarding the Code sections and matters listed in this section.
33
Sec. 9
Checklists and guideline
revenue procedures and
notices
.01 For requests relating to the following Code sections and subject matters, see the
following checklists and guideline revenue procedures and notices.
CODE OR REGULATION SECTION REVENUE PROCEDURE AND NOTICE
103, 141–150, 7478, and 7871
Issuance of state or local
obligations
Rev. Proc. 96–16, 1996–1 C.B. 630 (for a reviewable ruling under § 7478 and a
nonreviewable ruling); Rev. Proc. 88–31, 1988–1 C.B. 832 (for approval of areas of chronic
economic distress); and Rev. Proc. 82–26, 1982–1 C.B. 476 (for ‘‘on behalf of’’ and similar
issuers). For approval of areas of chronic economic distress, Rev. Proc. 88–31 explains how
this approval must be submitted to the Assistant Secretary for Housing/Federal Housing
Commissioner of the Department of Housing and Urban Development.
1.166–2(d)(3)
Uniform express determination
letter for making election
Rev. Proc. 92–84, 1992–2 C.B. 489.
Subchapter C—Corporate
Distributions and Adjustments
Rev. Proc. 77–37, 1977–2 C.B. 568, as modified by Rev. Proc. 89–30, 1989–1 C.B. 895,
and as amplified by Rev. Proc. 77–41, 1977–2 C.B. 574, Rev. Proc. 83–81, 1983–2 C.B.
598 (see also Rev. Proc. 97–3), Rev. Proc. 84–42, 1984–1 C.B. 521 (superseded as to
no-rule areas by Rev. Proc. 85–22, 1985–1 C.B. 550), Rev. Proc. 86–42, 1986–2 C.B. 722,
and Rev. Proc. 89–50, 1989–2 C.B. 631. But see Rev. Proc. 97–3, section 3.01(23) (certain
combining reorganizations under § 368), section 3.01(24) (mergers or consolidations under
§ 368(a)(1)(A)), section 3.01(25) (stock acquisitions under § 368(a)(1)(B)), and section
3.01(28) (corporate changes under § 368(a)(1)(F)), which describe certain corporate
reorganizations where the Service will not issue advance letter rulings or determination
letters.
301
Rev. Proc. 87–22, 1987–1 C.B. 718.
Nonapplicability on sales of stock
of employer to defined
contribution plan
302, 311
Checklist questionnaire
Rev. Proc. 86–18, 1986–1 C.B. 551; and Rev. Proc. 77–41, 1977–2 C.B. 574.
302(b)(4)
Checklist questionnaire
Rev. Proc. 81–42, 1981–2 C.B. 611.
331
Checklist questionnaire
Rev. Proc. 86–16, 1986–1 C.B. 546.
332
Checklist questionnaire
Rev. Proc. 90–52, 1990–2 C.B. 626.
351
Checklist questionnaire
Rev. Proc. 83–59, 1983–2 C.B. 575. But see section 3.01(22) of Rev. Proc. 97–3, which
describes certain transfers to controlled corporations where the Service will not issue
advance letter rulings or determination letters.
355
Checklist questionnaire
Rev. Proc. 96–30, 1996–1 C.B. 696.
368(a)(1)(E)
Checklist questionnaire
Rev. Proc. 81–60, 1981–2 C.B. 680. But see section 3.01(27) of Rev. Proc. 97–3, which
describes circumstances under which the Service will not issue advance letter rulings or
determination letters as to whether a transaction constitutes a corporate recapitalization
within the meaning of § 368(a)(1)(E) (or a transaction that also qualifies under § 1036).
482
Advance pricing agreements
Rev. Proc. 96–53, 1996–49 I.R.B. 9.
521
Appeal procedure with regard to
adverse determination letters and
revocation or modification of
exemption letter rulings and
determination letters
Rev. Proc. 90–27, 1990–1 C.B. 514.
1.817–5(a)(2)
Issuer of a variable contract
requesting relief
Rev. Proc. 92–25, 1992–1 C.B. 741.
Sec. 9.01
34
1.1502–76(a)(1)
Rev. Proc. 89–56, 1989–2 C.B. 643.
Consent to file a consolidated
return where member(s) of the
affiliated group use a 52–53 week
taxable year
1504(a)(3)(A) and (B)
Waiver of application of
§ 1504(a)(3)(A) for certain
corporations
Rev. Proc. 91–71, 1991–2 C.B. 900.
1552
Consent to elect or change
method of allocating affiliated
group’s consolidated federal
income tax liability
Rev. Proc. 90–39, 1990–2 C.B. 365, as clarified by Rev. Proc. 90–39A, 1990–2 C.B. 367.
4980B
Rev. Proc. 87–28, 1987–1 C.B. 770 (treating references to former § 162(k) as if they were
references to § 4980B).
SUBJECT MATTERS
REVENUE PROCEDURE
Accounting methods
Rev. Proc. 92–20, 1992–1 C.B. 685, as modified by Rev. Proc. 97–1 (this revenue
procedure), and T.D. 8680, 1996–33 I.R.B. 5; and Rev. Proc. 97–1 (this revenue procedure)
for which sections 1, 2.01, 2.02, 2.06, 3.01(2), 3.01(3), 3.01(4), 5.02, 5.12, 5.14, 7.01, 7.02,
7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6), 8.01(7), 8.01(8), 8.01(11), 8.01(12),
8.01(13), 8.01(14), 8.02(2), 8.02(4), 8.02(5)(a), 8.02(6), 8.02(7), 8.03(1), 8.04, 8.05, 8.06,
8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07, 10.08, 10.10(2), 10.11, 11, 12, 15, and Appendix A
are applicable.
Accounting periods; adopt, retain
or change for partnership, S
corporation, and personal service
corporation
Rev. Proc. 87–32, 1987–2 C.B. 396, as modified by T.D. 8680, 1996–33 I.R.B. 5; and Rev.
Proc. 97–1 (this revenue procedure) for which sections 1, 2.01, 2.02, 2.06, 3.01(3), 5.02,
5.12, 5.14, 7.01, 7.02, 7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6), 8.01(7),
8.01(8), 8.01(11), 8.01(12), 8.01(13), 8.01(14), 8.02(2), 8.02(4), 8.02(5)(a), 8.02(6), 8.03(1)
(only for Forms 1128 filed under section 6.01 of Rev. Proc. 87–32), 8.04, 8.05, 8.06, 8.07,
8.08, 9, 10.01, 10.04, 10.05, 10.07, 10.08, 11, 12, 15, and Appendix A are applicable.
Accounting periods; changes in
period
Rev. Proc. 92–13, 1992–1 C.B. 665, as modified and amplified by Rev. Proc. 92–13A,
1992–1 C.B. 668, and as modified by Rev. Proc. 94–12, 1994–1 C.B. 565; and Rev. Proc.
97–1 (this revenue procedure) for which sections 1, 2.01, 2.02, 2.06, 3.01(3), 5.02, 5.12,
5.14, 7.01, 7.02, 7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6), 8.01(7), 8.01(8),
8.01(11), 8.01(12), 8.01(13), 8.01(14), 8.02(2), 8.02(4), 8.02(5)(a), 8.02(6), 8.03(1), 8.04,
8.05, 8.06, 8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07, 10.08, 11, 12, 15, and Appendix A are
applicable.
Classification of liquidating trusts Rev. Proc. 82–58, 1982–2 C.B. 847, as modified and amplified by Rev. Proc. 94–45,
1994–2 C.B. 684, and as amplified by Rev. Proc. 91–15, 1991–1 C.B. 484 (checklist
questionnaire), as modified and amplified by Rev. Proc. 94–45.
Earnings and profits
determinations
Rev. Proc. 75–17, 1975–1 C.B. 677; and Rev. Proc. 97–1 (this revenue procedure) for
which sections 2.06, 3.01(3), 8, 10.04, 10.06, and 11.05 are applicable.
Estate, gift, and
generation-skipping transfer tax
issues
Rev. Proc. 91–14, 1991–1 C.B. 482 (checklist questionnaire).
Deferred intercompany
transactions; election not to defer
gain or loss
Rev. Proc. 82–36, 1982–1 C.B. 490.
Leveraged leasing
Rev. Proc. 75–21, 1975–1 C.B. 715, as modified by Rev. Proc. 76–30, 1976–2 C.B. 647,
Rev. Proc. 79–48, 1979–2 C.B. 529, and Rev. Proc. 81–71, 1981–2 C.B. 731; and Rev.
Proc. 75–28, 1975–1 C.B. 752, as modified by Rev. Proc. 79–48 and Rev. Proc. 81–71.
Rate orders; regulatory agency;
normalization
A letter ruling request that involves a question of whether a rate order that is proposed or
issued by a regulatory agency will meet the normalization requirements of § 168(f)(2)
(pre-tax Reform Act of 1986, § 168(e)(3)) and former §§ 46(f) and 167(l) ordinarily will
not be considered unless the taxpayer states in the letter ruling request whether—
35
Sec. 9.01
(1) the regulatory authority responsible for establishing or approving the taxpayer’s rates
has reviewed the request and believes that the request is adequate and complete; and
(2) the taxpayer will permit the regulatory authority to participate in any national office
conference concerning the request.
If the taxpayer or the regulatory authority informs a consumer advocate of the request for a
letter ruling and the advocate wishes to communicate with the Service regarding the request,
any such communication should be sent to: Internal Revenue Service, Associate Chief
Counsel (Domestic), Attention CC:DOM:CORP:T, P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044. These communications will be treated as third party contacts for
purposes of § 6110.
Unfunded deferred compensation
Rev. Proc. 71–19, 1971–1 C.B. 698, as amplified by Rev. Proc. 92–65, 1992–2 C.B. 428.
See Rev. Proc. 92–64, 1992–2 C.B. 422, for the model trust for use in Rabbi Trust
Arrangements.
Safe harbor revenue procedures
.02 For requests relating to the following Code sections and subject matters, see the
following safe harbor revenue procedures.
CODE OR REGULATION
SECTION
REVENUE PROCEDURE
103 and 141–150
Issuance of state or local
obligations
Rev. Proc. 93–17, 1993–1 C.B. 507 (changes of use of proceeds); and Rev. Proc. 93–19,
1993–1 C.B. 526 (management contracts).
280B
Rev. Proc. 95–27, 1995–1 C.B. 704.
Certain structural modifications to
a building not treated as a
demolition
.
355(a)(1)(B)
Transaction not violating the
device test
Section 4.05(1)(b) of Rev. Proc. 96–30, 1996–1 C.B. at
584(a)
Qualification of a proposed
common trust fund plan
Rev. Proc. 92–51, 1992–1 C.B. 988.
642(c)(5)
Qualification of trusts as pooled
income funds
Rev. Proc. 88–53, 1988–2 C.B. 712.
664(d)(1)
Qualification of trusts as
charitable remainder annuity
trusts
Rev. Proc. 89–21, 1989–1 C.B. 842, as amplified by Rev. Proc. 90–32, 1990–1 C.B. 546.
664(d)(2)
Qualification of trusts as
charitable remainder unitrusts
Rev. Proc. 89–20, 1989–1 C.B. 841, as amplified by Rev. Proc. 90–30, 1990–1 C.B. 534.
664(d)(2) and (3)
Qualification of trusts as
charitable remainder unitrusts
Rev. Proc. 90–31, 1990–1 C.B. 539.
1286
Determination of reasonable
compensation under mortgage
service contracts
Rev. Proc. 91–50, 1991–2 C.B. 778.
1362(f)
Rev. Proc. 94–23, 1994–1 C.B. 609.
Automatic inadvertent termination
relief to certain corporations
20.2056A–2(d)(1)(i) and (d)(1)(ii) Rev. Proc. 96–54, 1996–50 I.R.B. 9.
Sample trust language
Sec. 9.01
36
1.7704–2(d)
New business activity of existing
partnership is closely related to
pre-existing business
Rev. Proc. 92–101, 1992–2 C.B. 579.
SUBJECT MATTERS
REVENUE PROCEDURE
Certain rent-to-own contracts
treated as leases
Rev. Proc. 95–38, 1995–2 C.B. 397.
Automatic change revenue
procedures and notices
.03 For requests to change an accounting period or accounting method, see the following
automatic change revenue procedures and notices published and in effect as of December
31, 1996. A taxpayer complying timely with an automatic change revenue procedure or
notice will be deemed to have obtained the consent of the Commissioner to change the
taxpayer’s accounting period or accounting method, as applicable.
CODE SECTION
REVENUE PROCEDURE
442
Changes in accounting periods
The automatic change revenue procedures for obtaining a change in annual accounting
period include: Rev. Proc. 92–13, 1992–1 C.B. 665, as modified by Rev. Proc. 94–12,
1994–1 C.B. 565, and as modified and amplified by Rev. Proc. 92–13A, 1992–1 C.B. 668
(certain corporations that have not changed their accounting period within the prior 6
calendar years or other specified time); Rev. Proc. 87–32, 1987–2 C.B. 396, as modified by
T.D. 8680, 1996–33 I.R.B. 5 (partnership, S corporation, or personal service corporation
seeking a natural business year or an ownership taxable year); Rev. Proc. 68–41, 1968–2
C.B. 943, as modified by Rev. Proc. 81–40, 1981–2 C.B. 604 (trusts held by certain
fiduciaries needing a workload spread); and Rev. Proc. 66–50, 1966–2 C.B. 1260, as
modified by Rev. Proc. 81–40 (individual seeking a calendar year).
446
Changes in accounting methods
The automatic change revenue procedures and notices for obtaining a change in method of
accounting include: Rev. Proc. 96–31, 1996–1 C.B. 714 (certain taxpayers seeking to
change depreciation or amortization for certain depreciable or amortizable property); Notice
95–57, 1995–2 C.B. 337 (cash method banks in the Eighth Circuit seeking to change to the
cash method of accounting for stated interest on short-term loans made in the ordinary
course of business); Rev. Proc. 95–33, 1995–2 C.B. 380 (certain small resellers, formerly
small resellers, or reseller-producers seeking to change their method of accounting for costs
subject to § 263A); Rev. Proc. 95–25, 1995–1 C.B. 701 (certain taxpayers seeking to elect
a historic absorption ratio under § 263A for their first, second, or third taxable year
beginning on or after January 1, 1994); Rev. Proc. 95–19, 1995–1 C.B. 664 (taxpayers
seeking to change certain methods of accounting for interest costs subject to § 263A(f) for
their first or second taxable year beginning on or after January 1, 1994); Rev. Proc. 94–29,
1994–1 C.B. 616 (certain taxpayers seeking to change to the principal-reduction method for
loans acquired on or after a certain cut-off date); Rev. Proc. 93–13, 1993–1 C.B. 482
(certain taxpayers required to change method for deducting amounts owed to related foreign
persons in order to comply with § 267(a)(3)); Rev. Proc. 92–98, 1992–2 C.B. 512 (certain
accrual method taxpayers selling multi-year service warranty contracts seeking to elect the
service warranty income method); Rev. Proc. 92–75, 1992–2 C.B. 448 (certain taxpayers,
other than those required to use inventories, seeking to change to an accrual method); Rev.
Proc. 92–74, 1992–2 C.B. 442 (certain taxpayers, required to use inventories, seeking to
change to an accrual method); Rev. Proc. 92–67, 1992–2 C.B. 429 (certain taxpayers with
one or more market discount bonds seeking to make a constant interest rate election or
revoke an election under § 1278(b)); Rev. Proc. 92–29, 1992–1 C.B. 748 (certain taxpayers
seeking to use an alternative method under § 461(h) for the inclusion of common
improvement costs in basis); Rev. Proc. 91–51, 1991–2 C.B. 779 (certain taxpayers that sell
mortgages and retain rights to service the mortgages); Rev. Proc. 91–49, 1991–2 C.B. 777
(holders of certain mortgages that are stripped bonds); Rev. Proc. 91–31, 1991–1 C.B. 566
(certain utilities holding customer deposits); Rev. Proc. 90–63, 1990–2 C.B. 664 (certain
taxpayers changing their accounting treatment of package design costs); Rev. Proc. 90–37,
1990–2 C.B. 361 (certain taxpayers with interest income from short-term loans); Rev. Proc.
89–46, 1989–2 C.B. 597 (cash basis taxpayers with certain United States savings bonds);
Rev. Proc. 88–15, 1988–1 C.B. 683 (certain taxpayers seeking to discontinue LIFO
inventory method); Rev. Proc. 85–8, 1985–1 C.B. 495 (certain taxpayers seeking to change
from specific charge-off method to reserve method for bad debts); Rev. Proc. 84–76,
1984–2 C.B. 751 (taxpayers seeking to treat prepaid subscription income under the
provisions of § 455); Rev. Proc. 84–30, 1984–1 C.B. 482 (taxpayers who used the Rule of
37
Sec. 9.03
78’s for interest on consumer loans); Rev. Proc. 84–29, 1984–1 C.B. 480 (individual
borrowers who reported interest deductions in accordance with the Rule of 78’s); and Rev.
Proc. 74–11, 1974–1 C.B. 420 (taxpayers seeking to change their method of depreciation
accounting for property subject to § 167).
SECTION 10. HOW DOES THE
The national office will issue letter rulings on the matters and under the circumstances
NATIONAL OFFICE HANDLE
explained in sections 3 and 5 of this revenue procedure and in the manner explained in this
LETTER RULING REQUESTS? section and section 11 of this revenue procedure.
Controls request and refers it
to appropriate Assistant Chief
Counsel or to the Office of
Associate Chief Counsel
(International)
.01 All requests for letter rulings will be controlled by the Technical Services Staff of the
Assistant Chief Counsel (Corporate) (CC:DOM:CORP:T). That office will examine the
incoming documents for completeness, process the user fee, and forward the file to the
appropriate Assistant Chief Counsel or, for letter ruling requests under the jurisdiction of the
Associate Chief Counsel (International), to the Office of Associate Chief Counsel
(International). The Assistant Chief Counsel’s office or the Office of Associate Chief
Counsel (International), as appropriate, will assign the letter ruling request to one of its
branches.
Branch representative
contacts taxpayer within 21
days
.02 Within 21 calendar days after a letter ruling request has been received in the branch
having jurisdiction, a representative of the branch will discuss the procedural issues in the
letter ruling request with the taxpayer or, if the request includes a properly executed power
of attorney, with the authorized representative unless the power of attorney provides
otherwise. If the case is complex or a number of issues are involved, it may not be possible
for the branch representative to discuss the substantive issues during this initial contact.
However, when possible, for each issue within the branch’s jurisdiction, the branch
representative will tell the taxpayer—
(1) whether the branch representative will recommend that the Service rule as the
taxpayer requested, rule adversely on the matter, or not rule;
(2) whether the taxpayer should submit additional information to enable the Service to
rule on the matter; or
(3) whether, because of the nature of the transaction or the issue presented, a tentative
conclusion on the issue cannot be reached.
Except for cases involving a request for change in accounting method or accounting
period, the 21 calendar day procedure applies to: all matters within the jurisdiction of
the Assistant Chief Counsel (Corporate), the Assistant Chief Counsel (Income Tax and
Accounting), the Assistant Chief Counsel (Passthroughs and Special Industries), the
Associate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate
Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel
(International); and all matters within the jurisdiction of the Assistant Chief Counsel
(Financial Institutions and Products), except cases concerning insurance issues
requiring actuarial computations.
Notifies taxpayer if any issues
.03 If the letter ruling request involves matters within the jurisdiction of more than one
have been referred to
branch or office, a representative of the branch that received the original request will tell
another branch or office
the taxpayer within the initial 21 days—
(1) that the matters within the jurisdiction of another branch or office have been referred
to that branch or office for consideration; and
(2) that a representative of that branch or office will contact the taxpayer within 21
calendar days after receiving the referral to discuss informally the procedural and, to the
extent possible, the substantive issues in the request.
Determines if transaction can
.04 If a less than fully favorable letter ruling is indicated, the branch representative will
be modified to obtain
tell the taxpayer whether minor changes in the transaction or adherence to certain published
favorable letter ruling
positions would bring about a favorable ruling. The branch representative may also tell the
taxpayer the facts that must be furnished in a document to comply with Service
requirements. However, the branch representative will not suggest precise changes that
would materially alter the form of the proposed transaction or materially alter a taxpayer’s
proposed accounting method or accounting period.
If, at the end of this discussion, the branch representative determines that a meeting in the
national office would be more helpful to develop or exchange information, a meeting will
Sec. 9.03
38
be offered and an early meeting date arranged. When offered, this meeting is in addition to
the taxpayer’s conference of right that is described in section 11.02 of this revenue
procedure.
Is not bound by informal
opinion expressed
.05 The Service will not be bound by the informal opinion expressed by the branch
representative or any other authorized Service representative, and such an opinion cannot be
relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).
Tells taxpayer if request lacks
.06 If a request for a letter ruling or determination letter does not comply with all the
essential information during
provisions of this revenue procedure, the branch representative will tell the taxpayer during
initial contact
the initial contact which requirements have not been met.
Information must be
submitted within 21 calendar
days
(1) If the request lacks essential information, which may include additional information
needed to satisfy the procedural requirements of this revenue procedure, as well as
substantive changes to transactions or documents needed from the taxpayer, the branch
representative will tell the taxpayer during the initial contact that the request will be closed
if the Service does not receive the information within 21 calendar days unless an extension
of time is granted. See sections 10.07(1), (2), and (3) of this revenue procedure for
instructions on submissions of additional information.
21-day period will be
extended if justified and
approved
(2) An extension of the 21-day period will be granted only if justified in writing by the
taxpayer and approved by the branch chief, senior technician reviewer (or senior technical
reviewer), or assistant to the branch chief (or assistant branch chief) of the branch to which
the case is assigned. A request for extension should be submitted before the end of the
21-day period. If unusual circumstances close to the end of the 21-day period make a
written request impractical, the taxpayer should notify the national office within the 21-day
period that there is a problem and that the written request for extension will be coming
soon. The taxpayer will be told promptly, and later in writing, of the approval or denial of
the requested extension. If the extension request is denied, there is no right of appeal.
Letter ruling request closed if
(3) If the taxpayer does not submit the information requested during the initial contact
the taxpayer does not submit within the time provided, the letter ruling request will be closed and the taxpayer will be
information
notified in writing. If the information is received after the request is closed, the request
will be reopened and treated as a new request as of the date the information is
received. However, the taxpayer must pay another user fee before the case can be
reopened.
Letter ruling request
mistakenly sent to district
director
Requires prompt submission
of additional information
requested after initial contact
(4) A request for a letter ruling sent to the district director that does not comply with the
provisions of this revenue procedure will be returned by the district director so that the
taxpayer can make corrections before sending it to the national office.
.07
(1) Material facts furnished to the Service by telephone or fax, or orally at a conference,
must be promptly confirmed by letter to the Service with a declaration that the information
is provided under penalties of perjury in the form described in section 8.01(13) of this
revenue procedure. This confirmation and any additional information requested by the
Service that is not part of the information requested during the initial contact must be
furnished within 21 calendar days to be considered part of the request.
To facilitate prompt action on letter ruling requests, taxpayers are encouraged to submit
additional information by fax as soon as the information is available. The Service
representative who requests additional information can provide a telephone number to which
the information can be faxed. A copy of this information and a signed perjury statement,
however, must be mailed or delivered to the Service.
Address to send additional
information
(2) Additional information should be sent to:
Internal Revenue Service
ADDITIONAL INFORMATION
Attn: [Name, office symbols, and room number of the Service representative who
requested the information]
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
39
Sec. 10.07
However, for cases involving a request for change in accounting method or period under
the jurisdiction of the Assistant Chief Counsel (Income Tax and Accounting), and a request
for an extension of time under § 301.9100–1T on such cases, the additional information
should be sent to:
Internal Revenue Service
ADDITIONAL INFORMATION
Attn: [Name, office symbols, and room number of the Service representative who
requested the information]
P.O. Box 14095
Ben Franklin Station
Washington, DC 20044
For all cases, the additional information should include the name, office symbols, and
room number of the Service representative who requested the information, and the
taxpayer’s name and the case control number, which the Service representative can provide.
Number of copies of
additional information to be
submitted
(3) Generally, a taxpayer needs only to submit one copy of the additional information.
However, in appropriate cases, the national office may request additional copies of the
information.
21-day period will be
extended if justified and
approved
(4) An extension of the 21-day period will be granted only if justified in writing by the
taxpayer and approved by the branch chief, senior technician reviewer (or senior technical
reviewer), or assistant to the branch chief (or assistant branch chief) of the branch to which
the case is assigned. A request for extension should be submitted before the end of the
21-day period. If unusual circumstances close to the end of the 21-day period make a
written request impractical, the taxpayer should notify the national office within the 21-day
period that there is a problem and that the written request for extension will be coming
soon. The taxpayer will be told promptly, and later in writing, of the approval or denial of
the requested extension. If the extension request is denied, there is no right of appeal.
If taxpayer does not submit
additional information
(5) If the taxpayer does not follow the instructions for submitting additional information
or requesting an extension within the time provided, a letter ruling will be issued on the
basis of the information on hand or, if appropriate, no letter ruling will be issued. When the
Service decides not to issue a letter ruling because essential information is lacking, the case
will be closed and the taxpayer notified in writing.
If the Service receives the information after the letter ruling request is closed, the
request may be reopened and treated as a new request. However, the taxpayer must
pay another user fee before the case can be reopened. This paragraph does not apply to
cases involving a request for change in accounting method.
Near the completion of the
.08 Generally, after the conference of right is held but before the letter ruling is issued,
ruling process, advises the
the branch representative will inform the taxpayer or the taxpayer’s representative of the
taxpayer of conclusions and, Service’s conclusions. If the Service is going to rule adversely, the taxpayer will be offered
if the Service will rule
the opportunity to withdraw the letter ruling request. If the taxpayer or the taxpayer’s
adversely, offers the taxpayer representative does not promptly notify the branch representative of a decision to withdraw
the opportunity to withdraw
the ruling request, the adverse letter ruling will be issued. The user fee will not be refunded
the letter ruling request
for a letter ruling request that is withdrawn. See section 8.07 of this revenue procedure.
May request draft of
proposed letter ruling near
the completion of the ruling
process
.09 To accelerate issuance of letter rulings, in appropriate cases near the completion of
the ruling process, the Service representative may request that the taxpayer or the taxpayer’s
representative submit a proposed draft of the letter ruling on the basis of discussions of the
issues. The taxpayer, however, is not required to prepare a draft letter ruling to receive a
letter ruling.
The format of the submission should be discussed with the Service representative who
requests the draft letter ruling. The representative usually can provide a sample format of a
letter ruling and will discuss the facts, analysis, and letter ruling language to be included.
Taxpayer may also submit
draft on a word processing
disk
Sec. 10.07
In addition to a typed draft, taxpayers are encouraged to submit this draft on a disk in a
word processing format. The typed draft will become part of the permanent files of the
national office, and the word processing disk will not be returned. If the Service
representative requesting the draft letter ruling cannot answer specific questions about the
format of the word processing disk, the questions can be directed to Wayne Thomas at
202–622–7560 or Roberta Hardaker at 202–622–4015 (not toll-free calls).
40
The proposed letter ruling (both typed draft and word processing disk) should be sent to
the same address as any additional information and contain in the transmittal the
information that should be included with any additional information (for example, a
penalties of perjury statement is required). See section 10.07 of this revenue procedure.
Issues separate letter rulings
for substantially identical
letter rulings and generally
issues a single letter ruling
for identical accounting
method changes
.10
(1) Substantially identical letter rulings. For letter ruling requests qualifying for the
user fee provided in paragraph (A)(5)(a) of Appendix A of this revenue procedure for
substantially identical letter rulings, a separate letter ruling will be issued for each entity
with a common member or sponsor, or for each member of a common entity.
(2) Identical accounting method changes and related § 301.9100–1T letter rulings.
For letter ruling requests qualifying for the user fee provided in paragraphs (A)(5)(b) and
(c) of Appendix A of this revenue procedure for identical accounting method changes and
related § 301.9100–1T letter rulings, a single letter ruling generally will be issued on behalf
of all members of a consolidated group that file a Form 3115, Application for Change in
Accounting Method, or that request an extension of time to file a Form 3115 under
§ 301.9100–1T. If, however, different spread periods for the § 481(a) adjustment or
different terms and conditions are required, separate letter rulings may be issued for certain
members or groups of members within a consolidated group. Each letter ruling will include
an attachment listing the § 481(a) adjustment for each member to which the letter ruling
applies.
Sends copy of letter ruling to
district director
.11 The national office will send a copy of the letter ruling, whether favorable or
adverse, to the district director who has examination jurisdiction of the taxpayer’s tax
return.
SECTION 11. HOW ARE
CONFERENCES SCHEDULED?
Schedules a conference if
requested by taxpayer
.01 A taxpayer may request a conference regarding a letter ruling request. Normally, a
conference is scheduled only when the national office considers it to be helpful in deciding
the case or when an adverse decision is indicated. If conferences are being arranged for
more than one request for a letter ruling involving the same taxpayer, they will be
scheduled so as to cause the least inconvenience to the taxpayer. As stated in section 8.02(6)
of this revenue procedure, a taxpayer who wants to have a conference on the issue or issues
involved should indicate this in writing when, or soon after, filing the request.
If a conference has been requested, the taxpayer will be notified by telephone, if possible,
of the time and place of the conference, which must then be held within 21 calendar days
after this contact. Instructions for requesting an extension of the 21-day period and notifying
the taxpayer or the taxpayer’s representative of the Service’s approval or denial of the
request for extension are the same as those explained in section 10.07(4) of this revenue
procedure regarding providing additional information.
Permits taxpayer one
conference o
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.