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Bulletin No. 1998–1
January 5, 1998

Internal Revenue

bulletin
HIGHLIGHTS
OF THIS ISSUE

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

EMPLOYEE PLANS

EXEMPT ORGANIZATIONS

Rev. Proc. 98–4, page 113.

Rev. Proc. 98–4, page 113.

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Proc. 97–4 superseded.

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Proc. 97–4 superseded.

Rev. Proc. 98–5, page 155.
Rev. Proc. 98–5, page 155.
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 Proc. 97–5 superseded.

Technical advise. 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 Proc. 97–5 superseded.

Rev. Proc. 98–8, page 225.

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 Proc. 97–6 superseded.

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 Proc. 97–8 superseded.

Rev. Proc. 98–8, page 225.

ADMINISTRATIVE

Rev. Proc. 98–6, page 183.

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. 97–8 superseded.

Rev. Proc. 98–1, page 7.
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
Continued on page 4

Cumulative List of Actions Relating to Decisions of the Tax Court published in the Bulletin from January through December
1997 begins on page 5.
Finding List of Revenue Rulings, Revenue Procedures, Treasury Decisions, etc., published in the Bulletin from July through
December 1997 begins on page 239.
Finding List of Previously Published Items currently mentioned in the Bulletin from July through December 1997 begins on
page 241.
Cumulative List of Declaratory Judgment Proceedings Under Section 7428 begins on page 237.
Index of Items Published in the Bulletin from July through December 1997 begins on page 242.

Department of the Treasury
Internal Revenue Service

Mission of the Service
ucts and services; and perform in a manner warranting
the highest degree of public confidence in our integrity, efficiency, and fairness.

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 prod-

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 officers 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 courtesy 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.

dures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances
are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements
of internal practices and procedures that affect the rights
and duties of taxpayers are published.

Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions, and Subpart B, Legislation and Related
Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to
these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Administrative Rulings
are issued by the Department of the Treasury’s Office of the
Assistant Secretary (Enforcement).

Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings
to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature
are deleted to prevent unwarranted invasions of privacy and
to comply with statutory requirements.

Part IV.—Items of General Interest.
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, court decisions, rulings, and proce-

The first Bulletin for each month includes a cumulative index
for the matters published during the preceding months.
These monthly indexes are cumulated on a quarterly and
semiannual basis, and are published in the first Bulletin of the
succeeding quarterly and semiannual period, respectively.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

3

HIGHLIGHTS
OF THIS ISSUE—Continued
ADMINISTRATIVE—Continued

Associate Chief Counsel (International). Taxpayers’ rights
when technical advice has been requested also are provided.
Rev. Procs. 97–2 and 97–21 superseded.

Counsel (International). Revised procedures are provided
for issuing letter rulings, determination letters, and information letters on specific issues under the jurisdiction of the
Associate Chief Counsel (Domestic), the Associate Chief
Counsel (Employee Benefits and Exempt Organizations), the
Associate Chief Counsel (Enforcement Litigation), and the
Associate Chief Counsel (International). Rev. Proc. 97–1
superseded.

Rev. Proc. 98–3, page 100.
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. 97–3 and 97–53 superseded.

Rev. Proc. 98–2, page 74.
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

January 5, 1998

Rev. Proc. 98–7, page 222.
Areas in which advance rulings will not be issued; Associate Chief Counsel (International). This procedure
lists the Code provisions under the jurisdiction of the Associate Chief Counsel (International) that advance letter rulings
or determination letters will not be issued. Rev. Proc. 97–7
superseded.

4

1998–1 I.R.B.

Cumulative List of Actions Relating to Court Decisions Published in the
Internal Revenue Bulletin From January 1997 through December 1997
It is the policy of the Internal Revenue
Service to announce at an early date
whether it will follow the holdings in certain cases. An Action on Decision is the
document making such an announcement.
An Action on Decision will be issued at
the discretion of the Service only on unappealed issues decided adverse to the
government. Generally, an Action on Decision is issued where its guidance would
be helpful to Service personnel working
with the same or similar issues. Unlike a
Treasury Regulation or a Revenue Ruling,
an Action on Decision is not an affirmative statement of Service position. It is not
intended to serve as public guidance and
may not be cited as precedent.
Actions on Decisions shall be relied
upon within the Service only as conclusions applying the law to the facts in the
particular case at the time the Action on
Decision was issued. Caution should be
exercised in extending the recommendation of the Action on Decision to similar
cases where the facts are different. Moreover, the recommendation in the Action
on Decision may be superseded by new
legislation, regulations, rulings, cases, or
Actions on Decisions.
Prior to 1991, the Service published acquiescence or nonacquiescence only in
certain regular Tax Court opinions. The
Service has expanded its acquiescence
program to include other civil tax cases
where guidance is determined to be helpful. Accordingly, the Service now may acquiesce or nonacquiesce in the holdings
of memorandum Tax Court opinions, as
well as those of the United States District
Courts, Claims Court, and Circuit Courts
of Appeal. Regardless of the court deciding the case, the recommendation of any
Action on Decision will be published in
the Internal Revenue Bulletin.
The recommendation in every Action

on Decision will be summarized as acquiescence, acquiescence in result only,
or nonacquiescence. Both “acquiescence” and “acquiescence in result only”
mean that the Service accepts the holding
of the court in a case and that the Service
will follow it in disposing of cases with
the same controlling facts. However, “acquiescence” indicates neither approval
nor disapproval of the reasons assigned
by the court for its conclusions; whereas,
“acquiescence in result only” indicates
disagreement or concern with some or all
of those reasons. Nonacquiescence signifies that, although no further review was
sought, the Service does not agree with
the holding of the court and, generally,
will not follow the decision in disposing
of cases involving other taxpayers. In reference to an opinion of a circuit court of
appeals, a nonacquiescence indicates that
the Service will not follow the holding on
a nationwide basis. However, the Service
will recognize the precedential impact of
the opinion on cases arising within the
venue of the deciding circuit.
The announcements published in the
weekly Internal Revenue Bulletins are
consolidated semiannually and annually.
The semiannual consolidation appears in
the first Bulletin for July and in the Cumulative Bulletin for the first half of the
year, and the annual consolidation appears in the first Bulletin for the following January and in the Cumulative Bulletin for the last half of the year.
The Commissioner ACQUIESCES in
the following decisions:

Cheng C. and Susan L. Kao v. United
States,3
81 F.3d 114 (9th Cir. 1996)
The Edna Louise Dunn Trust, Morgan
Guaranty Trust Company, Trustee v.
Commissioner,4
86 T.C. 745 (1986)
The May Department Stores Co. v.
United States,5
36 Fed. C1. 680 (1996)
Sun Microsystems, Inc. v. Commissioner,6
T.C.M. 1995–69
Royal Caribbean Cruises, Ltd. v.
United States,7
108 F.3d 290 (11th Cir. 1997)
Pacific Enterprises and Subsidiaries v.
Commissioner,8
101 T.C. 1 (1993)
William R. Jackson v. Commissioner,9
108 T.C. 130
The Commissioner does not ACQUIESCE in the following decisions:
Xerox Corporation v. United States,10
41 F.3d 647 (Fed. Cir. 1994)
Charles E. Hurt v. United States, 11
70 F.3d 1261, 76 AFTR2d 95–7815 (4th
Cir. 1995)
Robert B. and Eleanor Risman v. Commissioner,12
100 T.C. 191 (1993)

Buckeye Countrymark v. Commissioner,1
103 T.C. 547 (1994)

Trans City Life Insurance Company v.
Commissioner,13
106 T.C. 274 (1996)

Robert E. and Geneva U. Duncan v.
United States,2
Docket No. 95–338

Transwestern Pipeline Co. v. United
States,14
639 F.2d 679 (Ct.Cl. 1980)

1 Acquiescence relating to whether section 277 of the Internal Revenue Code applies to nonexempt cooperatives subject to subchapter T of the Code.
2 Acquiescence relating to whether disability benefits paid to taxpayer from the Policemen and Firefighter’s Retirement Fund of the Lexington-Fayette Urban County

Government can be excluded from gross income under Internal Revenue Code section 104(a)(1) as benefits paid under a statute in the nature of a workmen’s compensation act.
3 Acquiescence in result only relating to whether the Service can issue summonses to compel a taxpayer to sign consent directives which authorize the release of
records from unidentified domestic and foreign banks, consistent with the requirements of Internal Revenue Code section 7609.
4 Acquiescence in result only relating to whether a portion of the stock of a subsidiary distributed to petitoner in a spinoff constituted taxable “other property” under
section 355(a)(3)(B) of the Internal Revenue Code.
5 Acquiescence relating to whether interest accrued on the taxpayers’ underpayments of tax for 1983 and 1984 from the due date of the first or third estimated tax
payment for the next succeeding years.

1998–1 I.R.B.

5

January 5, 1998

6 Acquiescence relating to whether the spread income realized from a disqualifying disposition of stock purchased through the taxpayer’s incentive stock option
(“ISO”) plan constitutes wages under section 41(b)(2)(D) in determining whether certain qualified research expenses qualify for the credit for increasing research
activities under section 41.
7 Acquiescence relating to whether section 4471 of the Internal Revenue Code which imposes a one-time excise tax of $3 for each passenger who “embarks” or “disembarks” a commercial vessel in the United States, applies where the voyage begins and ends outside the United States, but make intermediate stops in the United
States, where passengers temporarily leave the ship.
8 Acquiescence relating to whether the cost of recoverable cushion gas and recoverable line pack gas, the gas used to maintain adequate pressure in a gas storage
facility and a pipeline, respectively, is properly treated as (i) merchandise and thus included in inventory; (ii) a depreciable capital asset; or (iii) a nondepreciable capital asset.
9 Acquiescence in result only relating to whether Termination Payments from an insurance company to a former insurance agent constitute net earnings from selfemployment within the meeting of section 1402(a) of the Internal Revenue Code (the Code) so as to be subject to tax under the Self-Employment Contributions Act
(SECA).
10 Nonacquiescence relating to whether, under Article 23(1)(c) of the U.S.–U.K. Income Tax Treaty, a U.S. corporation is entitled to continue to treat U.K. Advance
Corporation Tax (ACT) as a creditable tax paid by a U.K. subsidiary in computing the allowable credit for foreign taxes deemed paid under section 902(a) of the
Internal Revenue Code for the year in which the ACT was paid, when the subsidiary subsequently surrenders all or part of the ACT to lower-tier U.K. subsidiaries
for use to satisfy their U.K. corporate tax liabilities.
11 Nonacquiescence relating to whether the Service was entitled to assess and collect statutory interest on the amount of tax and additions to tax embodied in a Tax
Court decision that resulted from a settlement agreement entered into by the taxpayers and the Service.
12 Continued nonacquiescence, but that this action on decision be substituted for the action on decision reported at Risman v. Commissioner, AOD CC–1996–003
(March 4, 1996), relating to whether a remittance forwarded to the Service with a Form 4868, Application for Automatic Extension of Time to File U.S. Individual
Income Tax Return, constitutes a payment of tax or a deposit in the nature of a cash bond for purposes of the period of limitations for seeking a refund of such remittance.
13 Nonacquiescence relating to whether the Commissioner committed an abuse of discretion in determining that certain reinsurance agreements between unrelated
parties had a “significant tax avoidance effect” within the meaning of Internal Revenue Code section 845(b).
14 Nonacquiescence relating to whether the cost of recoverable line pack gas, the gas used to charge and operate an interstate natural gas pipeline system, is properly treated as (i) merchandise and thus included in inventory; (ii) a depreciable capital asset, or (iii) a nondepreciable capital asset.

January 5, 1998

6

1998–1 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
26 CFR 601.201: Rulings and determination letters.

Rev. Proc. 98–1
TABLE OF CONTENTS

SECTION 1. WHAT IS
THE PURPOSE OF THIS
REVENUE PROCEDURE?
SECTION 2. IN WHAT
FORM IS GUIDANCE
PROVIDED BY THE
OFFICES OF ASSOCIATE
CHIEF COUNSEL
(DOMESTIC), ASSOCIATE
CHIEF COUNSEL
(EMPLOYEE BENEFITS
AND EXEMPT
ORGANIZATIONS),
ASSOCIATE CHIEF
COUNSEL (ENFORCEMENT
LITIGATION), AND
ASSOCIATE CHIEF
COUNSEL
(INTERNATIONAL)?

p. 13

p. 13
.01 Letter ruling
.02 Closing agreement
.03 Determination letter
.04 Information letter
.05 Revenue ruling
.06 Oral guidance
(1) No oral rulings, and no written rulings in response to oral requests
(2) Discussion possible on substantive issues

SECTION 3. ON WHAT
ISSUES MAY TAXPAYERS
REQUEST WRITTEN
GUIDANCE UNDER THIS
PROCEDURE?

p. 15
.01 Issues under the jurisdiction of the Associate Chief Counsel (Domestic)

(1) Issues under the Assistant Chief Counsel (Corporate)
(2) Issues under the Assistant Chief Counsel (Financial Institutions and
Products)
(3) Issues under the Assistant Chief Counsel (Income Tax and Accounting)
(4) Issues under the Assistant Chief Counsel (Passthroughs and Special
Industries)
.02 Issues under the jurisdiction of the Associate Chief Counsel (Employee
Benefits and Exempt Organizations)
.03 Issues under the jurisdiction of the Associate Chief Counsel (Enforcement
Litigation)
.04 Issues under the jurisdiction of the Associate Chief Counsel (International)
SECTION 4. ON WHAT
ISSUES MUST WRITTEN
GUIDANCE BE REQUESTED

1998–1 I.R.B.

p. 17
.01 Alcohol, tobacco, and firearms taxes

7

January 5, 1998

UNDER DIFFERENT
PROCEDURES?
SECTION 5. UNDER WHAT
CIRCUMSTANCES DOES
THE NATIONAL OFFICE
ISSUE LETTER RULINGS?

.02 Employee plans and exempt organizations
p. 17
.01 In income and gift tax matters
.02 A § 301.9100 request for extension of time for making an election or for
other relief
.03 Determinations under § 999(d) of the Internal Revenue Code
.04 In matters involving § 367
.05 In estate tax matters
.06 In matters involving additional estate tax under § 2032A(c)
.07 In matters involving qualified domestic trusts under § 2056A
.08 In generation-skipping transfer tax matters
.09 In employment and excise tax matters
.10 In administrative provisions matters
.11 Generally not to business associations or groups
.12 Generally not to foreign governments
.13 Generally not on federal tax consequences of proposed legislation
.14 Issuance of a letter ruling before the issuance of a regulation or other
published guidance

SECTION 6. UNDER WHAT
CIRCUMSTANCES DO
DISTRICT DIRECTORS
ISSUE DETERMINATION
LETTERS?

p. 22
.01 In income and gift tax matters
.02 In estate tax matters
.03 In generation-skipping transfer tax matters
.04 In employment and excise tax matters
.05 Circumstances under which determination letters are not issued by district
director
.06 Requests concerning income, estate, or gift tax returns
.07 Attach a copy of determination letter to taxpayer’s return
.08 Review of determination letters

SECTION 7. UNDER WHAT
CIRCUMSTANCES DOES
THE SERVICE HAVE
DISCRETION TO ISSUE
LETTER RULINGS AND

January 5, 1998

p. 23
.01 Ordinarily not in certain areas because of factual nature of the problem
.02 Not on alternative plans or hypothetical situations

8

1998–1 I.R.B.

DETERMINATION
LETTERS?

.03 Ordinarily not on part of an integrated transaction
.04 Ordinarily not on questions involving the validity of the federal income tax
or similar matters
.05 On constructive sales price under § 4216(b) or § 4218(c)

SECTION 8. WHAT ARE
THE GENERAL
INSTRUCTIONS FOR
REQUESTING LETTER
RULINGS AND
DETERMINATION
LETTERS?

p. 24
.01 Certain information required in all requests
(1) Complete statement of facts and other information
(2) Copies of all contracts, wills, deeds, agreements, instruments, other
documents, and foreign laws
(3) Analysis of material facts
(4) Statement regarding whether same issue is in an earlier return
(5) Statement regarding whether same or similar issue was previously ruled
on or requested, or is currently pending
(6) Statement of supporting authorities
(7) Statement of contrary authorities
(8) Statement identifying pending legislation
(9) Statement identifying information to be deleted from copy of letter
ruling or determination letter for public inspection
(10) Signature by taxpayer or authorized representative
(11) Authorized representatives
12) Power of attorney and declaration of representative
(13) Penalties of perjury statement
(14) Number of copies of request to be submitted
(15) Sample format for a letter ruling request
(16) Checklist for letter ruling requests
.02 Additional information required in certain circumstances
(1) To request separate letter rulings for multiple issues in a single situation
(2) To designate recipient of original or copy of letter ruling or determination
letter
(3) To request a particular conclusion on a proposed transaction
(4) To request expeditious handling
(5) To receive a letter ruling or submit a request for a letter ruling by
facsimile transmission (fax)

1998–1 I.R.B.

9

January 5, 1998

(6) To request a conference
(7) To obtain the applicable user fee for substantially identical letter rulings
or identical accounting method changes
.03 Address to send the request
(1) Requests for letter rulings
(2) Requests for determination letters
.04 Pending letter ruling requests
.05 When to attach letter ruling to return
.06 How to check on status of request
.07 Request may be withdrawn or national office may decline to issue letter
ruling
.08 Compliance with Treasury Department Circular No. 230
SECTION 9. WHAT OTHER
CHECKLISTS, GUIDELINE
REVENUE PROCEDURES,
NOTICES, SAFE HARBOR
REVENUE PROCEDURES,
AND AUTOMATIC CHANGE
REVENUE PROCEDURES
APPLY TO CERTAIN
REQUESTS?

p. 36

SECTION 10. HOW DOES
THE NATIONAL OFFICE
HANDLE LETTER RULING
REQUESTS?

p. 41

.01 Checklists and guideline revenue procedures and notices
.02 Safe harbor revenue procedures
.03 Automatic change revenue procedures

.01 Controls request and refers it to appropriate Assistant Chief Counsel or to
the Office of Associate Chief Counsel (International)
.02 Branch representative contacts taxpayer within 21 days
.03 Notifies taxpayer if any issues have been referred to another branch or office
.04 Determines if transaction can be modified to obtain favorable letter ruling
.05 Is not bound by informal opinion expressed
.06 Tells taxpayer if request lacks essential information during initial contact
.07 Requires prompt submission of additional information requested after initial
contact
.08 Near the completion of the ruling process, advises the taxpayer of conclusions and, if the Service will rule adversely, offers the taxpayer the opportunity to withdraw the letter ruling request
.09 May request draft of proposed letter ruling near the completion of the ruling
process

January 5, 1998

10

1998–1 I.R.B.

.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
SECTION 11. HOW ARE
CONFERENCES
SCHEDULED?

p. 45

.01 Schedules a conference if requested by taxpayer
.02 Permits taxpayer one conference of right
.03 Disallows verbatim recording of conferences
.04 Makes tentative recommendations on substantive issues
.05 May offer additional conferences
.06 Requires written confirmation of information presented at conference
.07 May schedule a pre-submission conference
.08 Under limited circumstances, may schedule a conference to be held by
telephone
SECTION 12. WHAT
EFFECT WILL A LETTER
RULING HAVE?

p. 47
.01 May be relied on subject to limitations
.02 Will not apply to another taxpayer
.03 Will be used by a district director in examining the taxpayer’s return
.04 May be revoked or modified if found to be in error
.05 Not generally revoked or modified retroactively
.06 Retroactive effect of revocation or modification applied to a particular
transaction
.07 Retroactive effect of revocation or modification applied to a continuing
action or series of actions
.08 Generally not retroactively revoked or modified if related to sale or lease
subject to excise tax
.09 May be retroactively revoked or modified when transaction is entered into
before the issuance of the letter ruling
.10 May be retroactively revoked or modified when transaction is entered into
after a change in material facts
.11 Taxpayer may request that retroactivity be limited
(1) Request for relief under § 7805(b) must be made in required format
(2) Taxpayer may request a conference on application of § 7805(b)

1998–1 I.R.B.

11

January 5, 1998

SECTION 13. WHAT
EFFECT WILL A
DETERMINATION LETTER
HAVE?

p. 50
.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 CIRCUMSTANCES
ARE MATTERS REFERRED
BETWEEN A DISTRICT
OFFICE AND THE
NATIONAL OFFICE?

p. 51
.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?

p. 51
.01 Legislation authorizing user fees
.02 Requests to which a user fee applies
.03 Requests to which a user fee does not apply
.04 Exemptions from the user fee requirements
.05 Fee schedule
.06 Applicable user fee for a request involving multiple offices, fee categories,
issues, transactions, or entities
.07 Applicable user fee for substantially identical letter rulings or identical
accounting method changes
.08 Method of payment
.09 Effect of nonpayment or payment of incorrect amount
.10 Refunds of user fee
.11 Request for reconsideration of user fee

SECTION 16. WHAT
SIGNIFICANT CHANGES
HAVE BEEN MADE TO
REV. PROC. 97–1?

p. 57

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

p. 58

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

p. 58

January 5, 1998

12

1998–1 I.R.B.

SECTION 19. PAPERWORK
REDUCTION ACT

p. 58

DRAFTING INFORMATION

p. 59

INDEX

p. 60

APPENDIX A—SCHEDULE
OF USER FEES

p. 63

APPENDIX B—SAMPLE
FORMAT FOR A LETTER
RULING REQUEST

p. 67

APPENDIX C—CHECKLIST
FOR A LETTER RULING
REQUEST

p. 70

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

This revenue procedure explains how the Internal Revenue Service gives guidance to
taxpayers on issues under the jurisdiction of the Associate Chief Counsel (Domestic), the
Associate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate
Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel (International).
It explains the kinds of guidance and the manner in which guidance is requested by
taxpayers and provided by the Service. A sample format of a request for a letter ruling is
provided in Appendix B.

Description of terms
used in this revenue
procedure

For purposes of this revenue procedure—
(1) any reference to district director or district office includes their respective offices
or, when appropriate, the Assistant Commissioner (International);
(2) the term “taxpayer” includes all persons subject to any provision of the Internal Revenue Code (including issuers of § 103 obligations) and, when appropriate, their representatives; and
(3) the term “national office” refers to the Office of Associate Chief Counsel (Domestic),
the Office of Associate Chief Counsel (Employee Benefits and Exempt Organizations), the
Office of Associate Chief Counsel (Enforcement Litigation), or the Office of Associate
Chief Counsel (International), as appropriate.

Updated annually

The revenue procedure is updated annually as the first revenue procedure of the year,
but may be modified or amplified during the year.

SECTION 2. IN WHAT
FORM IS GUIDANCE
PROVIDED BY THE
OFFICES OF ASSOCIATE
CHIEF COUNSEL
(DOMESTIC), ASSOCIATE
CHIEF COUNSEL
EMPLOYEE BENEFITS
AND EXEMPT
ORGANIZATIONS),
ASSOCIATE CHIEF
COUNSEL (ENFORCEMENT
LITIGATION), AND
ASSOCIATE CHIEF
COUNSEL
(INTERNATIONAL)?

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

1998–1 I.R.B.

13

January 5, 1998

Letter ruling

.01 A “letter ruling” is a written statement issued to a taxpayer by the national office
that interprets and applies the tax laws to the taxpayer’s specific set of facts. A letter
ruling includes the written permission or denial of permission by the national office to a
request for a change in a taxpayer’s accounting method or accounting period. Once
issued, a letter ruling may be revoked or modified for any number of reasons, as explained
in section 12 of this revenue procedure, unless it is accompanied by a “closing
agreement.”

Closing agreement

.02 A closing agreement is a final agreement between the Service and a taxpayer on a
specific issue or liability. It is entered into under the authority in § 7121 and is final
unless fraud, malfeasance, or misrepresentation of a material fact can be shown.
A closing agreement may be entered into when it is advantageous to have the matter permanently and conclusively closed or when a taxpayer can show that there are good reasons
for an agreement and that making the agreement will not prejudice the interests of the Government. In appropriate cases, a taxpayer may be asked to enter into a closing agreement
as a condition to the issuance of a letter ruling.
If, in a single case, a closing agreement is requested for each person in a class of taxpayers, separate agreements are entered into only if the class consists of 25 or fewer taxpayers.
However, if the issue and holding are identical for the class and there are more than 25 taxpayers in the class, a “mass closing agreement” will be entered into with the taxpayer who
is authorized by the others to represent the class.

Determination letter

.03 A “determination letter” is a written statement issued by a district director that
applies the principles and precedents previously announced by the national office to a
specific set of facts. It is issued only when a determination can be made based on clearly
established rules in the statute, a tax treaty, or the regulations, or based on a conclusion in
a revenue ruling, opinion, or court decision published in the Internal Revenue Bulletin that
specifically answers the questions presented.
A determination letter does not include assistance provided by the U.S. competent
authority pursuant to the mutual agreement procedure in tax treaties as set forth in Rev.
Proc. 96–13, 1996–1 C.B. 616.

Information letter

.04 An “information letter” is a statement issued either by the national office or by a
district director. It calls attention to a well-established interpretation or principle of tax
law (including a tax treaty) without applying it to a specific set of facts. An information
letter may be issued if the taxpayer’s inquiry indicates a need for general information or if
the taxpayer’s request does not meet the requirements of this revenue procedure and the
Service thinks general information will help the taxpayer. The taxpayer should provide a
daytime telephone number with the taxpayer’s request for an information letter. An
information letter is advisory only and has no binding effect on the Service.

Revenue ruling

.05 A “revenue ruling” is an interpretation by the Service that has been published in the
Internal Revenue Bulletin. It is the conclusion of the Service on how the law is applied to
a specific set of facts. Revenue rulings are issued only by the national office and are
published for the information and guidance of taxpayers, Service personnel, and other
interested parties.
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–G1 C.B. 814, which states the objectives of,
and standards for, the publication of revenue rulings and revenue procedures in the Internal
Revenue Bulletin.

Sec. 2.01

January 5, 1998

14

1998–1 I.R.B.

Oral guidance

.06
(1) No oral rulings, and no written rulings in response to oral requests.
The Service does not orally issue letter rulings or determination letters, nor does it issue
letter rulings or determination letters in response to oral requests from taxpayers. However, Service employees ordinarily will discuss with taxpayers or their representatives inquiries regarding whether the Service will rule on particular issues and questions relating to
procedural matters about submitting requests for letter rulings or determination letters for a
particular case.
(2) Discussion possible on substantive issues.
At the discretion of the Service and as time permits, substantive issues also may be discussed. However, such a discussion will not be binding on the Service in general or on the
Office of Chief Counsel in particular and cannot be relied upon as a basis for obtaining
retroactive relief under the provisions of § 7805(b).
Substantive tax issues involving the taxpayer that are under examination, in appeals, or
in litigation will not be discussed by Service employees not directly involved in the examination, appeal, or litigation of the issues unless the discussion is coordinated with those
Service employees who are directly involved in the examination, appeal, or litigation of the
issues. The taxpayer or the taxpayer’s representative ordinarily will be asked whether the
oral request for guidance or information relates to a matter pending before another office of
the Service.
If a tax issue is not under examination, in appeals, or in litigation, the tax issue may be
discussed even though the issue is affected by a nontax issue pending in litigation.
A taxpayer may seek oral technical guidance from a taxpayer service representative in a
district office or service center when preparing a return or report. Oral guidance is advisory only, and the Service is not bound to recognize it, for example, in the examination of
the taxpayer’s return.
The Service does not respond to letters seeking to confirm the substance of oral discussions, and the absence of a response to such a letter is not confirmation of the substance of
the letter.

SECTION 3. ON WHAT
ISSUES MAY TAXPAYERS
REQUEST WRITTEN
GUIDANCE UNDER THIS
PROCEDURE?

Taxpayers may request letter rulings, information letters, and closing agreements under
this revenue procedure on issues within the jurisdiction of the Associate Chief Counsel
(Domestic), the Associate Chief Counsel (Employee Benefits and Exempt Organizations),
the Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel
(International). The national office issues letter rulings to answer written inquiries of
individuals and organizations about their status for tax purposes and the tax effects of their
acts or transactions when appropriate in the interest of sound tax administration.
Taxpayers also may request determination letters within the jurisdiction of the appropriate district director offices that relate to the Code sections under the jurisdiction of the
Associate Chief Counsel (Domestic), the Associate Chief Counsel (Employee Benefits and
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
Sec. 3.01

1998–1 I.R.B.

15

January 5, 1998

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
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, 1996–2 C.B. 375.
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.

Sec. 3.01

January 5, 1998

16

1998–1 I.R.B.

SECTION 4. ON WHAT
ISSUES MUST WRITTEN
GUIDANCE BE REQUESTED
UNDER DIFFERENT
PROCEDURES?
Alcohol, tobacco, and
firearms taxes

.01 The procedures for obtaining letter rulings, etc., that apply to federal alcohol,
tobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction of the
Bureau of Alcohol, Tobacco and Firearms.

Employee plans and
exempt organizations

.02 The procedures for obtaining letter rulings, determination letters, etc., on employee
plans and exempt organizations are under the jurisdiction of the Assistant Commissioner
(Employee Plans and Exempt Organizations). See Rev. Proc. 98–4, this Bulletin. See also
Rev. Proc. 98-6, 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. 98-8.

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.

Sec. 5.01

1998–1 I.R.B.

17

January 5, 1998

(2) No letter ruling on a property conversion after return filed. The national office
does not issue a letter ruling on the replacement of involuntarily converted property,
whether or not the property has been replaced, if the taxpayer has already filed a return for
the taxable year in which the property was converted. However, the district director may
issue a determination letter in this case. See section 6.01 of this revenue procedure.
(3) Certain late S corporation elections. In lieu of requesting a letter ruling under this
revenue procedure, a taxpayer may obtain relief under § 1362(b)(5) for certain late S
corporation elections by following the procedures in Rev. Proc. 97–40, 1997–33 I.R.B. 50,
or Rev. Proc. 97–48, 1997–43 I.R.B. 19. A request made pursuant to Rev. Proc. 97–40 or
Rev. Proc. 97–48 does not require payment of any user fee. See section 3 of Rev. Proc.
97–40 or Rev. Proc. 97–48 and section 15.03(2) of this revenue procedure.
A § 301.9100 request
for extension of time
for making an
election or for other
relief

.02 The national office will consider a request for an extension of time for making an
election or other application for relief under § 301.9100–3 of the Procedure and Administration Regulations. Even if submitted after the return covering the issue presented in the
§ 301.9100 request has been filed and even if submitted after an examination of the return
has begun or after the issues in the return are being considered by an appeals office or a
federal court, a § 301.9100 request is a letter ruling request. Therefore, the § 301.9100
request should be submitted pursuant to this revenue procedure.
However, an election made pursuant to § 301.9100–2 is not a letter ruling request and
does not require payment of any user fee. See § 301.9100–2(d) and section 15.03(1) of this
revenue procedure. Such an election pertains to an automatic extension of time.
(1) Format of request. A § 301.9100 request (other than an election made pursuant to
§ 301.9100–2) must be in the general form of, and meet the general requirements for, a letter ruling request. These requirements are given in section 8 of this revenue procedure. In
addition, the § 301.9100 request must include the information required by
§ 301.9100–3(e).
(2) Statute of limitations. The running of any applicable period of limitations is not
suspended for the period during which a § 301.9100 request has been filed. See
§ 301.9100–3(d)(2). If the period of limitations on assessment under § 6501(a) for the taxable year in which an election should have been made or any taxable year that would have
been affected by the election had it been timely made will expire before receipt of a
§ 301.9100 letter ruling, the Service ordinarily will not issue a § 301.9100 ruling. See
§ 301.9100–3(c)(1)(ii). Therefore, the taxpayer must secure a consent under § 6501(c)(4)
to extend the period of limitations on assessment. Note that the filing of a claim for refund
under § 6511 does not extend the period of limitations on assessment. If § 301.9100 relief
is granted, the Service may require the taxpayer to consent to an extension of the period of
limitations on assessment. See § 301.9100–3(d)(2).
(3) Taxpayer must notify national office if examination of return begins while request is pending. If the Service starts an examination of the taxpayer’s return for the taxable year in which an election should have been made or any taxable year that would have
been affected by the election had it been timely made while a § 301.9100 request is pending, the taxpayer must notify the national office. See § 301.9100–3(e)(4)(i) and section
8.04(1)(b) of this revenue procedure.
(4) National office will notify district director, appeals officer, or government counsel of a § 301.9100 request if return is being examined or is being considered by an
appeals office or a federal court. If the taxpayer’s return for the taxable year in which an
election should have been made or any taxable year that would have been affected by the
election had it been timely made is being examined by a district office or considered by an
appeals office or a federal court, the national office will notify the appropriate district
director, appeals officer, or government counsel that a § 301.9100 request has been submitted to the national office. The examining officer, appeals officer, or government counsel is

Sec. 5.01

January 5, 1998

18

1998–1 I.R.B.

not authorized to deny consideration of a § 301.9100 request. The letter ruling will be
mailed to the taxpayer and a copy will be sent to the appropriate district director, appeals
officer, or government counsel.
Determinations under
§ 999(d) of the
Internal Revenue Code

.03 Under Rev. Proc. 77–9, 1977–1 C.B. 542, the Office of Associate Chief Counsel
(International) issues determinations under § 999(d) that may deny certain benefits of the
foreign tax credit, deferral of earnings of foreign subsidiaries and domestic international
sales corporations (DISCs), and tax exemption for foreign trade income of a foreign sales
corporation or a small foreign sales corporation (FSC or small FSC) to a person, if that
person, a member of a controlled group (within the meaning of § 993(a)(3)) that includes
the person, or a foreign corporation of which a member of the controlled group is a United
States shareholder, agrees to participate in, or cooperate with, an international boycott.
Requests for determinations under Rev. Proc. 77-9 are letter ruling requests and, therefore,
should be submitted to the Associate Chief Counsel (International) pursuant to this
revenue procedure.

In matters involving
§ 367

.04 Unless the issue is covered by section 7 of this revenue procedure, the Office of
Associate Chief Counsel (International) may issue a letter ruling under § 367 even if the
taxpayer does not request a letter ruling as to the characterization of the transaction under
the reorganization provisions of the Code. The Office of Associate Chief Counsel
(International) will determine the § 367 consequences of a transaction based on the
taxpayer’s characterization of the transaction but will indicate in the letter ruling that it
expresses no opinion as to the characterization of the transaction under the reorganization.
However, the Office of Associate Chief Counsel (International) may decline to issue a
§ 367 ruling in situations in which the taxpayer inappropriately characterizes the
transaction under the reorganization provisions.

In estate tax matters

.05 In general, the national office issues prospective letter rulings on transactions affecting the estate tax on the prospective estate of a living person and affecting the estate tax on
the estate of a decedent before the decedent’s estate tax return is filed. The national office
will not issue letter rulings for prospective estates on computations of tax, actuarial factors,
and factual matters.
If the taxpayer is requesting a letter ruling regarding a decedent’s estate tax and the
estate tax return is due to be filed before the letter ruling is expected to be issued, the taxpayer should obtain an extension of time for filing the return and should notify the national
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 estate tax
under § 2032A(c)

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

In matters involving
qualified domestic
trusts under § 2056A

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

In generationskipping 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
Sec. 5.08

1998–1 I.R.B.

19

January 5, 1998

established. The national office will issue letter rulings on the application of the effective
date rules for generation-skipping transfer tax (§ 1433 of the Tax Reform Act of 1986,
1986–3 (Vol. 1) C.B. 1, 648) to wills, trusts, and trust equivalents in existence on October
22, 1986, and to generation-skipping transfers taking place on or before October 22, 1986.
In employment and
excise tax matters

.09 In employment and excise tax matters, the national office issues letter rulings on proposed transactions and on completed transactions either before or after the return is filed
for those transactions.
Requests regarding employment status (employer/employee relationship) from federal
agencies and instrumentalities should be submitted directly to the national office. Requests
regarding employment status from other taxpayers must first be submitted to the appropriate Service office listed on the current Form SS–8 (Rev. June 1997). See section 6.04 of
this revenue procedure. Generally, the employer is the taxpayer and requests the letter ruling. However, if the worker asks for the letter ruling, both the worker and the employer are
considered to be the taxpayer and both are entitled to the letter ruling.
The national office usually will not issue a letter ruling if, at the time the letter ruling is
requested, the identical issue is involved in the taxpayer’s return for an earlier period and
that issue—
(1) is being examined by a district director;
(2) is being considered by an appeals office;
(3) is pending in litigation in a case involving the taxpayer or a related taxpayer;
(4) has been examined by a district director or considered by an appeals office and the
statutory period of limitations has not expired for assessment or for filing a claim for
refund or credit of tax; or
(5) has been examined by a district director or considered by an appeals office and a
closing agreement covering the issue or liability has not been entered into by a district
director or by an appeals office.
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;

Sec. 5.08

January 5, 1998

20

1998–1 I.R.B.

(b) is being considered by an appeals office;
(c) is pending in litigation in a case involving the taxpayer or a related taxpayer;
(d) has been examined by a district director or considered by an appeals office and the
statutory period of limitations has not expired for assessment or for filing a claim for
refund or credit of tax; or
(e) has been examined by a district director or considered by an appeals office and a
closing agreement covering the issue or liability has not been entered into by a district
director or appeals office.
If a return involving an issue for a particular year is filed while a request for a letter
ruling on that issue is pending, the national office will issue the letter ruling unless it is
notified by the taxpayer or otherwise learns that an examination of that issue or an examination of the identical issue on an earlier year’s return has been started by a district director. See section 8.04 of this revenue procedure. But, even if an examination has begun, the
national office ordinarily will issue the letter ruling if the district director agrees, by memorandum, to the issuance of the letter ruling.
Generally not to
business associations
or groups

.11 The national office does not issue letter rulings to business, trade, or industrial
associations or to similar groups concerning the application of the tax laws to members of
the group. But groups and associations may submit suggestions of generic issues that
would be appropriately addressed in revenue rulings. See Rev. Proc. 89–14, which states
the objectives of, and standards for, the publication of revenue rulings and revenue
procedures in the Internal Revenue Bulletin.
The national office, however, may issue letter rulings to groups or associations on their
own tax status or liability if the request meets the requirements of this revenue procedure.

Generally not to
foreign governments

.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.
96–13, 1996–1 C.B. at 626. However, the national office will continue to exchange
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. 98–3,
this Bulletin, or Rev. Proc. 98–7, 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.
Sec. 5.14

1998–1 I.R.B.

21

January 5, 1998

(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. 98–3, or Rev. Proc. 98–7.
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 generationskipping transfer tax
matters

.03 In generation-skipping transfer tax matters, district directors issue determination
letters in response to written requests affecting the generation-skipping transfer tax returns
over which the district directors have examination jurisdiction. They do not issue
determination letters on matters concerning the application of the generation-skipping
transfer tax before the distribution or termination takes place.

In employment and
excise tax matters

.04 In employment and excise tax matters, district directors issue determination letters in
response to written requests from taxpayers on completed transactions over which they
have examination jurisdiction.
Requests for a determination of employment status (Form SS–8) from taxpayers (other
than federal agencies and instrumentalities) must be submitted to the appropriate Service
office listed on the current Form SS–8 (Rev. June 1997) and not directly to the national
office. See also section 5.09 of this revenue procedure.

Circumstances under
which determination
letters are not
issued by district
director

.05 A district director will not issue a determination letter in response to any request if—
(1) it appears that the taxpayer has directed a similar inquiry to the national office;
(2) the same issue involving the same taxpayer or a related taxpayer is pending in a case
in litigation or before an appeals office;
(3) the determination letter is requested by an industry, trade association, or similar
group; or
(4) the request involves an industry-wide problem.

Sec. 5.14

January 5, 1998

22

1998–1 I.R.B.

Under no circumstances will a district director issue a determination letter unless it is
clearly shown that the request concerns a return that has been filed or is required to be filed
and over which the district director has, or will have, examination jurisdiction.
A district director will not issue a determination letter on an employment tax question if
the specific question for the same taxpayer or a related taxpayer has been, or is being,
considered by the Central Office of the Social Security Administration or the Railroad
Retirement Board.
A district director also will not issue a determination letter on determining constructive
sales price under § 4216(b) or § 4218(c), which deal with special provisions applicable to
the manufacturer’s excise tax. The national office, however, will issue letter rulings in this
area. See section 7.04 of this revenue procedure.
Requests concerning
income, estate, or
gift tax returns

.06 A request received by a district director on a question concerning an income, estate,
or gift tax return already filed generally will be considered in connection with the
examination of the return. If a response is made to the request before the return is
examined, it will be considered a tentative finding in any later examination of that return.

Attach a copy of
determination letter
to taxpayer’s return

.07 A taxpayer who, before filing a return, receives a determination letter about any
transaction that has been consummated and that is relevant to the return being filed should
attach a copy of the determination letter to the return when it is filed.

Review of
determination letters

.08 Determination letters issued under sections 6.01 through 6.04 of this revenue 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. 98–2, this Bulletin.

SECTION 7. UNDER WHAT
CIRCUMSTANCES DOES
THE SERVICE HAVE
DISCRETION TO ISSUE
LETTER RULINGS AND
DETERMINATION
LETTERS?
Ordinarily not in
certain areas because
of factual nature of
the problem

.01 The Service ordinarily will not issue letter rulings or determination letters in certain
areas because of the factual nature of the problem involved or because of other reasons.
Rev. Proc. 98–3 and Rev. Proc. 98–7 provide a list of these areas. This list is not allinclusive because the Service may decline to issue a letter ruling or a determination letter
when appropriate in the interest of sound tax administration or on other grounds whenever
warranted by the facts or circumstances of a particular case.
Instead of issuing a letter ruling or determination letter, the national office or a district
director may, when it is considered appropriate and in the best interests of the Service,
issue an information letter calling attention to well-established principles of tax law.

Not on alternative
plans or hypothetical
situations

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

Ordinarily not on
part of an integrated
transaction

.03 The national office ordinarily will not issue a letter ruling on only part of an
integrated transaction. If, however, a part of a transaction falls under a no-rule area, a
letter uling on other parts of the transaction may be issued. Before preparing the letter
ruling request, a taxpayer should call the branch having jurisdiction for the matters on
which the taxpayer is seeking a letter ruling to discuss whether the national office will
issue a letter ruling on part of the transaction.
If two or more items or sub-methods of accounting are interrelated, the national office
ordinarily will not issue a letter ruling on a change in accounting method involving only
one of the items or sub-methods.
Sec. 7.03

1998–1 I.R.B.

23

January 5, 1998

Ordinarily not on
questions involving
the validity of the
federal income tax or
siimilar matters

.04 A letter ruling or determination letter ordinarily will not be issued on questions involving the validity of the federal income tax and other taxes set forth in the Code, questions on the authority or jurisdiction of the Service to enforce the Code or collect informa
tion, or similar matters.

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

.05 The national office will issue letter rulings in all cases on the determination of a constructive sales price under § 4216(b) or § 4218(c) and in all other cases on prospective
transactions if the law or regulations require a determination of the effect of a proposed
transaction for tax purposes.

SECTION 8. WHAT ARE
THE GENERAL
INSTRUCTIONS FOR
REQUESTING LETTER
RULINGS AND
DETERMINATION
LETTERS?

This section explains the general instructions for requesting letter rulings and determination letters on all matters. Requests for letter rulings and determination letters require the
payment of the applicable user fee listed in Appendix A of this revenue procedure. For
additional user fee requirements, see section 15 of this revenue procedure.

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 and foreign
laws

(2) Copies of all contracts, wills, deeds, agreements, instruments, other documents,
and foreign laws.
(a) Documents. True copies of all contracts, wills, deeds, agreements, instruments, trust
documents, proposed disclaimers, and other documents pertinent to the transaction must be
submitted with the request.

Sec. 7.04

January 5, 1998

24

1998–1 I.R.B.

If the request concerns a corporate distribution, reorganization, or similar transaction,
the corporate balance sheet and profit and loss statement should also be submitted. If the
request relates to a prospective transaction, the most recent balance sheet and profit and
loss statement should be submitted.
If any document, including any balance sheet and profit and loss statement, is in a language other than English, the taxpayer must also submit a certified English translation of
the document, along with a true copy of the document. For guidelines on the acceptability
of such documents, see paragraph (c) of this section 8.01(2).
Each document, other than the request, should be 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.
(b) Foreign laws. The taxpayer must also submit with the request a copy of all applicable foreign laws and, if English is not the official language of the foreign country involved,
certified English translations of all applicable foreign laws. For guidelines on the acceptability of such documents, see paragraph (c) of this section 8.01(2).
(c) Standards for acceptability of submissions of foreign laws and documents in a
language other than English. The following standards govern the acceptability of submissions of foreign laws and documents in a language other than English for purposes of
this section 8.01(2).
(i) Foreign laws in cases where English is the official language of the foreign country
involved. In cases involving foreign law where English is the official language of the foreign country involved, the document submitted must be in the English language and must
be: (A) an official publication of the foreign government involved or of its designated official printer that contains, verbatim, the pertinent provisions of the foreign law as enacted;
(B) a copy or reproduction of this official publication, or pertinent excerpts therefrom,
properly attested to; (C) an accurate and complete reprint of the law as enacted, or pertinent
excerpts therefrom, properly attested to; (D) a copy or reproduction of the reprint, or pertinent excerpts therefrom, properly attested to with respect to the copy or reproduction; (E)
verbatim excerpts of the pertinent provisions of the foreign law as enacted, properly attested to by an official of the department or office of the foreign government that administers the law; (F) verbatim excerpts of the pertinent provisions of the foreign law as enacted,
properly attested to by an accredited diplomatic representative of the foreign country involved; or (G) such other official documents, properly attested to, originating in the foreign
country involved and containing matters that, in the opinion of the Service, are of sufficient
scope and quality to enable it to make the determination in question.
Attestations referred to in this section 8.01(2)(c)(i) must: (H) establish that the material
offered is an exact copy of the material as it appears in the document from which it was obtained; (I) contain a statement as to the period covered by the law presented; (J) contain the
name and address of the person attesting; (K) contain the official title, if any, of the person
attesting and a statement as to that person’s qualifications and knowledge regarding income
tax matters; and (L) contain a statement as to whether or not the attestant has been admitted
to practice before the Treasury Department of the United States Government.
In addition, the taxpayer or the taxpayer’s representative must represent that, to the best
of the taxpayer’s or the representative’s knowledge, the document submitted is accurate
and complete with respect to the pertinent provisions of the relevant foreign law or laws
and that the taxpayer or the taxpayer’s representative knows of no judicial interpretation of
the statutory provisions adverse to the letter ruling request.
(ii) Foreign laws in cases where English is not the official language of the foreign
country involved. In cases involving foreign law where English is not the official language
of the foreign country involved, the foreign laws submitted must be in the official language
Sec. 8.01(2)

1998–1 I.R.B.

25

January 5, 1998

of the country involved and must be of the same scope and quality as listed in paragraphs
(c)(i)(A) through (G) of this section 8.01(2). Attestation thereto, in the official language of
the country involved, must contain the same information listed in paragraphs (c)(i)(H)
through (L) of this section 8.01(2). All submissions of foreign laws in cases where English is
not the official language of the country involved, as well as the attestations thereto, must be
accompanied by certified English translations, as described in section 8.01(2)(c)(iii) below.
In addition, the taxpayer or the taxpayer’s representative must make the same representation stated in the last paragraph of section 8.01(2)(c)(i) of this revenue procedure.
(iii) Certified English translations. In cases involving contracts, wills, deeds, agreements, instruments, trust documents, proposed disclaimers, or other documents in a language other than English, or in cases involving foreign law where English is not the official
language of the foreign country involved, an accurate and complete translation, in the English language, of the document or law submitted and the attestation thereto is required.
This translation must be that of a qualified translator and must be attested to by the translator. The attestation must contain: (A) a statement that the translation submitted is a true
and accurate translation of the document or law submitted in the foreign language; (B) a
statement as to the attestant’s qualifications as a translator and as to that attestant’s qualifications and knowledge regarding income tax matters; (C) the attestant’s name and address;
and (D) a statement as to whether or not the attestant has been admitted to practice before
the Treasury Department of the United States Government.
(iv) Penalties of perjury statement is required. The taxpayer must make the same representation regarding the accuracy and completeness of the material submitted as is required for any letter ruling request. See section 8.01(13) of this revenue procedure.
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.

Sec. 8.01(2)

January 5, 1998

26

1998–1 I.R.B.

Same or similar issue
previously submitted
or currently pending

(5) Statement regarding whether same or similar issue was previously ruled on or
requested, or is currently pending. The request must also state whether, to the best of the
knowledge of both the taxpayer and the taxpayer’s representatives—
(a) the Service previously ruled on the same or a similar issue for the taxpayer (or a related taxpayer within the meaning of § 267 or a member of an affiliated group of which the
taxpayer is also a member within the meaning of § 1504) or a predecessor;
(b) the taxpayer, a related taxpayer, a predecessor, or any representatives previously submitted a request (including an application for change in accounting method) involving the
same or a similar issue to the Service but withdrew the request before a letter ruling or determination letter was issued;
(c) the taxpayer, a related taxpayer, or a predecessor previously submitted a request (including an application for change in accounting method) involving the same or a similar
issue that is currently pending with the Service; or
(d) at the same time as this request, the taxpayer or a related taxpayer is presently submitting another request (including an application for change in accounting method) involving the same or a similar issue to the Service.
If the statement is affirmative for (a), (b), (c), or (d) of this section 8.01(5), the statement
must give the date the request was submitted, the date the request was withdrawn or ruled
on, if applicable, and other details of the Service’s consideration of the issue.

Statement of authorities
supporting taxpayer’s views

(6) Statement of supporting authorities. If the taxpayer advocates a particular conclusion, an explanation of the grounds for that conclusion and the relevant authorities to support it must be included. Even if not advocating a particular tax treatment of a proposed
transaction, the taxpayer must still furnish views on the tax results of the proposed
transaction and a statement of relevant authorities to support those views.
In all events, the request must include a statement of whether the law in connection with
the request is uncertain and whether the issue is adequately addressed by relevant authorities.

Statement of authorities
contrary to taxpayer’s views

(7) Statement of contrary authorities. The taxpayer is also encouraged to inform the
Service about, and discuss the implications of, any authority believed to be contrary to the
position advanced, such as legislation (or pending legislation), tax treaties, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements. If the
taxpayer determines that there are no contrary authorities, a statement in the request to this
effect would be helpful. If the taxpayer does not furnish either contrary authorities or a
statement that none exists, the Service in complex cases or those presenting difficult or
novel issues may request submission of contrary authorities or a statement that none
exists. Failure to comply with this request may result in the Service’s refusal to issue a
letter ruling or determination letter.
Identifying and discussing contrary authorities will generally enable Service personnel
to understand the issue and relevant authorities more quickly. When Service personnel receive the request, they will have before them the taxpayer’s thinking on the effect and applicability of contrary authorities. This information should make research easier and lead
to earlier action by the Service. If the taxpayer does not disclose and distinguish significant contrary authorities, the Service may need to request additional information, which
will delay action on the request.

Statement identifying
pending legislation

(8) Statement identifying pending legislation. At the time of filing the request, the
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.
Sec. 8.01(8)

1998–1 I.R.B.

27

January 5, 1998

Deletions statement
required by § 6110

(9) Statement identifying information to be deleted from copy of letter ruling or determination letter for public inspection. The text of letter rulings and determination
letters is open to public inspection under § 6110. The Service makes deletions from the
text before it is made available for inspection. To help the Service make the deletions
required by § 6110(c), a request for a letter ruling or determination letter must be
accompanied by a statement indicating the deletions desired (“deletions statement”). If
the deletions statement is not submitted with the request, a Service representative will tell
the taxpayer that the request will be closed if the Service does not receive the deletions
statement within 21 calendar days. See section 10.06 of this revenue procedure.
(a) Format of deletions statement. A taxpayer who wants only names, addresses, and
identifying numbers to be deleted should state this in the deletions statement. If the taxpayer wants more information deleted, the deletions statement must be accompanied by a
copy of the request and supporting documents on which the taxpayer should bracket the
material to be deleted. The deletions statement must indicate the statutory basis under
§ 6110(c) for each proposed deletion.
If the taxpayer decides to ask for additional deletions before the letter ruling or determination letter is issued, additional deletions statements may be submitted.
(b) Location of deletions statement. The deletions statement must not appear in the request, but instead must be made in a separate document and placed on top of the request for
a letter ruling or determination letter.
(c) Signature. The deletions statement must be signed and dated by the taxpayer or the
taxpayer’s authorized representative. A stamped signature is not permitted.
(d) Additional information. The taxpayer should follow the same procedures above to
propose deletions from any additional information submitted after the initial request. An
additional deletions statement, however, is not required with each submission of additional
information if the taxpayer’s initial deletions statement requests that only names, addresses, and identifying numbers are to be deleted and the taxpayer wants only the same information deleted from the additional information.
(e) Taxpayer may protest deletions not made. After receiving from the Service the notice under § 6110(f)(1) of intention to disclose the letter ruling or determination letter (including a copy of the version proposed to be open to public inspection and notation of
third-party communications under § 6110(d)), the taxpayer may protest the disclosure of
certain information in the letter ruling or determination letter. The taxpayer must send a
written statement within 20 calendar days to the Service office indicated on the notice of
intention to disclose. The statement must identify those deletions that the Service has not
made and that the taxpayer believes should have been made. The taxpayer must also submit a copy of the version of the letter ruling or determination letter and bracket the deletions proposed that have not been made by the Service. Generally, the Service will not
consider deleting any material that the taxpayer did not propose to be deleted before the
letter ruling or determination letter was issued.
Within 20 calendar days after the Service receives the response to the notice under §
6110(f)(1), the Service will mail to the taxpayer its final administrative conclusion regarding the deletions to be made. The taxpayer does not have the right to a conference to resolve any disagreements concerning material to be deleted from the text of the letter ruling
or determination letter. However, these matters may be taken up at any conference that is
otherwise scheduled regarding the request.
(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 in-

Sec. 8.01(9)

January 5, 1998

28

1998–1 I.R.B.

tention 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 (1997));

Enrolled actuary

(d) An enrolled actuary who is a person, other than an attorney or certified public
accountant, that is currently enrolled as an actuary by the Joint Board for the Enrollment
of Actuaries pursuant to 29 U.S.C. § 1242 and who is not currently under suspension or
disbarment from practice before the Service. He or she must file a written declaration
with the Service showing current qualification as an enrolled actuary and current
authorization to represent the taxpayer. Practice before the Service as an enrolled actuary
is limited to representation with respect to issues involving §§ 401, 403(a), 404, 412, 413,
414, 4971, 6057, 6058, 6059, 6652(e), 6652(f), 6692, and 7805(b); former § 405; and 29
U.S.C. § 1083; or

A person with a
“Letter of Authorization”

(e) Any other person, including a foreign representative, who has received a “Letter of
Authorization” from the Director of Practice under section 10.7(d) of Treasury
Department Circular No. 230. A person may make a written request for a “Letter of
Authorization” to: Office of Director of Practice, HR:DP, Internal Revenue Service, 1111
Constitution Avenue, N.W., Washington, 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; to a trustee,
receiver, guardian, personal representative, administrator, or executor representing a trust,
receivership, guardianship, or estate; or to an individual representing his or her immediate
family. A preparer of a return (other than a person referred to in paragraph (a), (b), (c),
(d), or (e) of this section 8.01(11)) who is not a full-time employee, general partner, bona
fide officer, an administrator, a trustee, etc., or an individual representing his or her
immediate family 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.
Sec. 8.01(11)

1998–1 I.R.B.

29

January 5, 1998

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
(1997)), 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 change in the request submitted at a later time must be accompanied
by the following declaration: “Under penalties of perjury, I declare that I have examined
[Insert, as appropriate: this request or this modification to the request], including accompanying documents, and, to the best of my knowledge and belief, [Insert, as appropriate: the
request or the modification] contains all the relevant facts relating to the request, and such
facts are true, correct, and complete.”
See section 10.07(1) of this revenue procedure for the penalties of perjury statement applicable for submissions of additional information.
(b) Signature by taxpayer. The declaration must be signed and dated by the taxpayer,
not the taxpayer’s representative. A stamped signature is not permitted.
The person who signs for a corporate taxpayer must be an officer of the corporate taxpayer who has personal knowledge of the facts and whose duties are not limited to obtaining a letter ruling or determination letter from the Service. If the corporate taxpayer is a
member of an affiliated group filing consolidated returns, a penalties of perjury statement
must also be signed and submitted by an officer of the common parent of the group.
The person signing for a trust, a state law partnership, or a limited liability company
must be, respectively, a trustee, general partner, or member-manager who has personal
knowledge of the facts.

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 re-

Sec. 8.01(11)

January 5, 1998

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1998–1 I.R.B.

quest for the letter ruling or determination letter and the second copy is the deleted version
of such request.); or
(c) a closing agreement (as defined in section 2.02 of this revenue procedure) is being requested on the issue presented.
Sample of a letter
ruling request

(15) Sample format for a letter ruling request. To assist a taxpayer or the taxpayer’s
representative in preparing a letter ruling request, a sample format for a letter ruling
request is provided in Appendix B. This format is not required to be used by the taxpayer
or the taxpayer’s representative. If the letter ruling request is not identical or similar to the
format in Appendix B, the different format will not defer consideration of the letter ruling
request.

Checklist

(16) Checklist for letter ruling requests. The Service will be able to respond more
quickly to a taxpayer’s letter ruling request if the request is carefully prepared and
complete. The checklist in Appendix C of this revenue procedure is designed to assist
taxpayers in preparing a request by reminding them of the essential information and
documents to be furnished with the request. The checklist in Appendix C must be
completed to the extent required by the instructions in the checklist, signed and dated by
the taxpayer or the taxpayer’s representative, and placed on top of the letter ruling request.
If the checklist in Appendix C is not received, a branch representative will ask the
taxpayer or the taxpayer’s representative to submit the checklist, which may delay action
on the letter ruling request.
For letter ruling requests on certain matters, specific checklists supplement the checklist
in Appendix C. These checklists are listed in section 9.01 of this revenue procedure and
must also be completed and placed on top of the letter ruling request along with the checklist in Appendix C.
Copies of the checklist in Appendix C can be obtained by calling (202) 622-7560 (not a
toll-free call). A photocopy of this checklist may be used.

Additional information
required in certain
circumstances
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
Sec. 8.02(2)

1998–1 I.R.B.

31

January 5, 1998

second representative listed in the power of attorney, the taxpayer must check the
appropriate box on Form 2848. If this form is not used, the taxpayer must state in the
power of attorney that a copy of the letter ruling or determination letter is to be sent to the
second representative listed in the power of attorney. Copies of the letter ruling or
determination letter, however, will be sent to no more than two representatives.
Original of letter ruling
or determination letter
sent to taxpayer’s
representative

(b) To have original sent to taxpayer’s representative. A taxpayer may request that
the original of the letter ruling or determination letter be sent to the taxpayer’s representative. In this case, a copy of the letter ruling or determination letter will be sent to the taxpayer. The letter ruling or determination letter is addressed to the taxpayer’s
representative to whom the original is sent.
If the taxpayer wants the original of the letter ruling or determination letter sent to the
taxpayer’s representative, the taxpayer must check the appropriate box on Form 2848. If
this form is not used, the taxpayer must state in the power of attorney that the original of
the letter ruling or determination letter is to be sent to the taxpayer’s representative. When
a taxpayer has more than one representative, the Service will send the original of the letter
ruling or determination letter to the first representative named in the most recent power of
attorney.

No copy of letter ruling
or determination letter sent
to taxpayer’s representative

(c) To have no copy sent to taxpayer’s representative. If a taxpayer does not want a
copy of the letter ruling or determination letter sent to any representative, the taxpayer
must check the appropriate box on Form 2848. If this form is not used, the taxpayer must
state in the power of attorney that a copy of the letter ruling or determination letter is not
to be sent to any representative.

“Two-Part” letter
ruling requests

(3) To request a particular conclusion on a proposed transaction. A taxpayer who is
requesting a particular conclusion on a proposed transaction may make the request for a
letter ruling in two parts. This type of request is referred to as a “two-part” letter ruling
request. The first part must include the complete statement of facts and related documents
described in section 8.01 of this revenue procedure. The second part must include a
summary statement of the facts the taxpayer believes to be controlling in reaching the
conclusion requested.
If the Service accepts the taxpayer’s statement of controlling facts, it will base its letter
ruling on these facts. Ordinarily, this statement will be incorporated into the letter ruling.
However, the Service reserves the right to rule on the basis of a more complete statement of
the facts and to seek more information in developing the facts and restating them.
A taxpayer who chooses this two-part procedure has all the rights and responsibilities
provided in this revenue procedure.
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

Sec. 8.02(2)

January 5, 1998

32

1998–1 I.R.B.

the letter ruling or determination letter request is made should say, at the top of the first
page: “Expeditious Handling Is Requested. See page ___ of this letter.”
A request for expeditious handling will not be forwarded to a rulings branch for action
until the check for the user fee is received.
The Service cannot give assurance that any letter ruling or determination letter will be
processed by the time requested. For example, the scheduling of a closing date for a transaction or a meeting of the board of directors or shareholders of a corporation, without regard for the time it may take to obtain a letter ruling or determination letter, will not be
considered a sufficient reason to process a request ahead of its regular order. Also, the possible effect of fluctuation in the market price of stocks on a transaction will not be considered a sufficient reason to process a request out of order. Accordingly, the Service urges
taxpayers to submit their requests well in advance of the contemplated transaction.
Facsimile
transmission (fax)

(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).
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 AsSec. 8.03(1)

1998–1 I.R.B.

33

January 5, 1998

sociate Chief Counsel (Enforcement Litigation), or the Associate Chief Counsel (International), as appropriate. The package should be marked: RULING REQUEST SUBMISSION.
(a) Requests for letter rulings should be sent to the following address:
Internal Revenue Service
Attn: CC:DOM:CORP:T
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
However, if a private delivery service is used, the address is:
Internal Revenue Service
Attn: CC:DOM:CORP:T
1111 Constitution Avenue, N.W.
Washington, DC 20224
(b) Requests for letter rulings may also be hand delivered:
(i) To the drop box at the 12th Street entrance of 1111 Constitution Avenue, N.W., Washington, DC. No receipt will be given at the drop box; or
(ii) Between the hours of 8:15 a.m. and 5:00 p.m. to:
Courier’s Desk
Internal Revenue Service
Attn: CC:DOM:CORP:T
1111 Constitution Avenue, N.W.
Washington, DC
A receipt will be given at the courier’s desk.
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 request, an examination of the return for the taxable year
in which an election should have been made or any taxable year that would have been affected by the election had it been timely made has been started by a district director. See
§ 301.9100–3(e)(4)(i) and section 5.02(3) of this revenue procedure;
(c) legislation that may affect the transaction has been introduced. See section 8.01(8) of
this revenue procedure; or
(d) another letter ruling request (including an application for change in accounting
method) has been submitted by the taxpayer (or a related party within the meaning of § 267

Sec. 8.03(1)

January 5, 1998

34

1998–1 I.R.B.

or a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504) involving the same or similar issue that is currently pending with the Service.
(2) Taxpayer must notify national office if return is filed and must attach request to
return. If the taxpayer files a return before a letter ruling is received from the national office concerning the issue, the taxpayer must notify the national office that the return has
been filed. The taxpayer must also attach a copy of the letter ruling request to the return to
alert the district office and thereby avoid premature district action on the issue.
This section 8.04 also applies to pending requests for a closing agreement on a transaction for which a letter ruling is not requested or issued, and for an advance pricing
agreement.
When to attach letter
ruling to return

.05
A taxpayer who receives a letter ruling before filing a return about any transaction that is
relevant to the return being filed must attach a copy of the letter ruling to the return when it
is filed.

How to check on
status of request

.06
The taxpayer or the taxpayer’s authorized representative may obtain information regarding the status of a request by calling the person whose name and telephone number are
shown on the 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.

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

.07
(1) In general. A taxpayer may withdraw a request for a letter ruling or determination
letter at any time before the letter ruling or determination letter is signed by the Service.
Correspondence and exhibits related to a request that is withdrawn or related to a letter
ruling request for which the national office declines to issue a letter ruling will not be
returned to the taxpayer. See section 8.01(2) of this revenue procedure. In appropriate
cases, the Service may publish its conclusions in a revenue ruling or revenue procedure.
(2) Notification of district director.
(a) Request to change an accounting method. If a taxpayer withdraws or the national
office declines to grant (for any reason) a request to change from or to adopt an improper
method of accounting, the national office will notify the appropriate district director and
the Change in Method Issue Specialist, and may give its views on the issues in the request
to the appropriate district director to consider in any later examination of the return.
(b) All other letter ruling requests. If a taxpayer withdraws a letter ruling request
(other than a request to change from or to adopt an improper method of accounting) or if
the national office declines to issue a letter ruling (other than a letter ruling pertaining to a
request to change from or to adopt an improper method of accounting), the national office
generally will notify the appropriate district director and may give its views on the issues in
the request to the appropriate district director to consider in any later examination of the return. This section 8.07(2)(b) generally does not apply if the taxpayer withdraws the letter
ruling request and submits a written statement that the transaction has been, or is being,
abandoned and if the national office has not formed an adverse opinion.
(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 inform

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Abafa59743c4d8f2d. Public record. Not legal advice.