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Bulletin No. 1996–1

January 2, 1996

HIGHLIGHTS

OF THIS ISSUE

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

INCOME TAX

401(a), 403(a), 409, and 4975 of the Code. Rev. Proc.

95–6 superseded.

Rev. Rul. 96–1, page 7.

Valuation of a remainder interest in property transferred to

a new pooled income fund under section 642(c)(5). The

deemed rate of return computed under section 7520 of

the Code is provided for transfers in calendar year

1996 to new pooled income funds that have been in

existence for less than 3 taxable years.

Rev. Proc. 96–8, page 187.

User fees for employee plans and exempt organizations.

Up-to-date guidance for complying with the user fee

program of the Service as it pertains to requests for

letter rulings, determination letters, etc., on matters

under the jurisdiction of the Assistant Commissioner

(Employee Plans and Exempt Organizations) is

provided. Rev. Proc. 95–8 superseded.

EMPLOYEE PLANS

EXEMPT ORGANIZATIONS

Rev. Proc. 96–4, page 94.

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 Proc. 95–4 superseded.

Rev. Proc. 96–4, page 94.

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 Proc. 95–4 superseded.

Rev. Proc. 96–5, page 129.

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 employees plans areas (including actuarial

matters) and exempt organizations areas. Rev. Proc.

95–5 superseded.

Rev. Proc. 96–5, page 129.

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 acturial

matters) and exempt organizations areas. Rev. Proc.

95–5 superseded.

Rev. Proc. 96–6, page 151.

Employee plans determination letters. Revised procedures

are provided for issuing determination letters on the

qualified status of employee plans under sections

Rev. Proc. 96–8, page 187.

User fees for employee plans and exempt organizations.

(Continued on page 4)

Cumulative List of Actions Relating to Decisions of the Tax Court published in the Bulletin from January through December 1995 begins on page 5.

Finding List of Revenue Rulings, Revenue Procedures, Treasury Decisions, etc., published in the Bulletin from July through December 1995 begins on

page 204.

Finding List of Previously Published Items currently mentioned in the Bulletin from July through December 1995 begins on page 206.

Cumulative List of Declaratory Judgment Proceedings Under Section 7428 begins on page 201.

Index of Items Published in the Bulletin from July through December 1995 begins on page 209.

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Mission of the Service

The purpose of the Internal Revenue Service is to

collect the proper amount of tax revenue at the least

cost; serve the public by continually improving the

quality of our products and services; and perform in a

manner warranting the highest degree of public

confidence in our integrity, efficiency and fairness.

Statement of Principles

of Internal Revenue

Tax Administration

The 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.

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

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.

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.

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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.

It is the policy of the Service to publish in the Bulletin

all substantive rulings necessary to promote a uniform

application of the tax laws, including all rulings that

supersede, revoke, modify, or amend any of those

previously published in the Bulletin. All published

rulings apply retroactively unless otherwise indicated.

Procedures relating solely to matters of internal

management are not published; however, statements of

internal practices and procedures that affect the rights

and duties of taxpayers are published.

Revenue rulings represent the conclusions of the

Service on the application of the law to the pivotal facts

stated in the revenue ruling. In those based on

positions taken in rulings to taxpayers or technical

advice to Service field offices, identifying details and

information of a confidential nature are deleted to

prevent unwarranted invasions of privacy and to comply

with statutory requirements.

Rulings and procedures reported in the Bulletin do not

have the force and effect of Treasury Department

Regulations, but they may be used as precedents.

Unpublished rulings will not be relied on, used, or cited

as precedents by Service personnel in the disposition of

other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be

considered, and Service personnel and others concerned are cautioned against reaching the same

conclusions in other cases unless the facts and

circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on

provisions of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows:

Subpart A, Tax Conventions, and Subpart B, Legislation

and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellanous.

To the extent practicable, pertinent cross references to

these subjects are contained in the other Parts and

Subparts. Also included in this part are Bank Secrecy

Act Administrative Rulings. Bank Secrecy Act Administrative Rulings are issued by the Department of the

Treasury’s Office of the Assistant Secretary

(Enforcement).

Part IV.—Items of General Interest.

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.

The first Bulletin for each month includes an index for

the matters published during the preceding month.

These monthly indexes are cumulated on a quarterly

and semiannual basis, and are published in the first

Bulletin of the succeeding quarterly and semi-annual

period, respectively.

The Bulletin Index-Digest System, a research and

reference service supplementing the Bulletin, may be

obtained from the Superintendent of Documents on a

subscription basis. It consists of four Services: Service

No. 1, Income Tax; Service No. 2, Estate and Gift

Taxes; Service No. 3, Employment Taxes; Service No.

4, Excise Taxes. Each Service consists of a basic

volume and a cumulative supplement that provides (1)

finding lists of items published in the Bulletin, (2)

digests of revenue rulings, revenue procedures, and

other published items, and (3) indexes of Public Laws,

Treasury Decisions, and Tax Conventions.

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

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

3

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HIGHLIGHTS

OF THIS ISSUE—Continued

EXEMPT ORGANIZATIONS—Continued

and Exempt Organizations), Associate Chief Counsel

(Enforcement Litigation), and Associate Chief Counsel

(International). Revised procedures are provided for

furnishing technical advice to the district directors and

chiefs, appeals offices, in areas under the jurisdiction

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

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

(International). Taxpayers’ rights when technical advice

has been requested also are provided. Rev. Proc. 95–2

superseded.

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. 95–8 superseded.

ADMINISTRATIVE

Rev. Proc. 96–1, page 8.

Letter rulings, determination letters, and information

letters issued by the Associate Chief Counsel (Domestic),

Associate Chief Counsel (Employee Benefits and Exempt

Organizations), Associate Chief Counsel (Enforcement

Litigation), and Associate Chief Counsel (International).

Revised procedures are provided for issuing letter

rulings, determination letters, and information letters

on specific issues under the jurisdiction of the

Associate Chief Counsel (Domestic), the Associate Chief

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

Litigation), and the Associate Chief Counsel (International). Rev. Proc. 95–1 superseded. Rev. Procs. 91–

22, 92–20, and 92–85 modified.

Rev. Proc. 96-3, page 82.

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. 95–3 and 95–50 superseded.

Rev. Proc. 96–7, page 185.

Areas in which advance rulings will not be issued:

Associate Chief Counsel (International). This procedure

lists the subject matters under the jurisdiction of the

Associate Chief Counsel (International) in which the

Service will not issue advance letter rulings or

determination letters. Rev. Proc. 95–7 superseded.

Rev. Proc. 96–2, page 60.

Technical advice to the district directors and chiefs,

appeals offices, from the Associate Chief Counsel

(Domestic), Associate Chief Counsel (Employee Benefits

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Cumulative List of Actions Relating to Court Decisions Published in the Internal

Revenue Bulletin from January 1, 1995 through December 31, 1995

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 ACQUIESCE in

the following decisions:

Baker, Willard K. & Irene L.,1 748

F.2d 1465 (11th Cir. 1984)

Kisling, Est. of,2 32 F.3d 1222 (8th

Cir. 1994)

Louisiana Land & Exploration Co.,3

102 T.C. 21 (1994)

National Semiconductor Corp. & Consolidated Subs. v. Commissioner,4 T.C.

Memo 1994–195

Seagate Technology, Inc. & Consolidated Subs.,5 102 T.C. 149 (1994)

Taisei Fire & Marine Inc. Co., Ltd., et

al. v. Commissioner,6 104 T.C. 535

(1995)

Trump Village v. Commissioner,7 T.C.

Memo 1995–281

The Commissioner does NOT ACQUIESCE in the following decisions:

Louisiana Land & Exploration Co.,8 90

T.C. 630 (1988)

Louisiana Land & Exploration Co.,9

102 T.C. 21 (1994)

Milligan, Robert E., v. Commissioner,10 38 F.3d 1094 (9th Cir.

1994)

1Acquiescence relating to whether Rev. Rul. 80–173, 1980–2 C.B. 60, should be applied retroactively to disallow a section 162(a) deduction for flight training

course expenses.

2Acquiescence relating to whether transfers of irrevocable fractional shares in a revocable trust to donees designated by decedent within the three-year period

preceding the death of decedent are includible in decedent’s gross estate pursuant to sections 2035(d)(2) and 2038(a)(1) of the Code.

3Acquiescence in the issue relating to whether costs related to acquiring, transporting and installing gas processing equipment and the offshore modules that house

such equipment are deductible as intangible drilling and development costs. Acquiescence in result in the issue relating to whether the Claus method used by

plaintiff to recover elemental sulphur from hydrogen sulfide produced from an oil or gas well qualified as a mining process for percentage depletion purposes.

Acquiescence ‘‘in result’’ means acceptance of the Court but disagreement with some or all the reasons assigned for the decision.

4Acquiescence in result relating to whether (i) prices paid by petitioner’s offshore Asian subsidiaries for silicon wafers manufactured by petitioner in the U.S., and

incorporated by the former into electronic products, and (ii) the prices that petitioner paid the subsidiaries for the completed products were arm’s length.

Acquiescence ‘‘in result’’ means acceptance of the Court but disagreement with some or all the reasons assigned for the decision.

5Acquiescence in result relating to whether certain royalties attributable to intangibles that petitioner transferred to its wholly-owned subsidiary, and the prices that

petitioner paid the subsidiary for products manufactured by the latter, were arm’s length. Acquiescence ‘‘in result’’ means acceptance of the Court but disagreement

with some or all the reasons assigned for the decision.

6Acquiescence relating to whether four Japanese reinsurance companies have agency permanent establishments in the U.S. because their U.S. agent was not ‘‘an

agent of independent status’’ under Article 9(5) of the U.S.-Japan Tax Treaty.

7Acquiescence relating to whether the limitations of section 277 apply to a cooperative housing corporation described in section 216, which is also subject to the

provisions of subchapter T of the Code.

5

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Cumulative List of Actions Relating to Court Decisions Published in the Internal

Revenue Bulletin from January 1, 1995 through December 31, 1995—Continued

Morganbesser, Marvin D., et al. v.

U.S.,11 984 F.2d 560 (2d Cir. 1993)

Placid Oil Co. v. IRS,12 988 F.2d 554

(5th Cir. 1993)

St. Jude Medical, Inc. v. Commis-

sioner,13 97 T.C. 457 (1991) (8th

Cir. 1994)

Sealy Power Ltd.,14 46 F.3d 382 (5th

Cir. 1995)

Security Bank Minnesota v. Commis-

sioner,15 994 F.2d 432 (8th Cir.

1993)

Vulcan Materials Co. & Subsidiaries v.

Commissioner,16 959 F.2d 973 (11th

Cir. 1992)

8Nonacquiescence relating to whether section 613A(e)(2) of the Code eliminates percentage depletion under section 613 for nonhydrocarbon minerals produced

from an oil or gas well.

9Nonacquiescence relating to whether all income from the sales of oil, gas and sulphur are to be combined when calculating the taxable income from the property

under section 613(a) of the Code, even though the oil and gas income is subject to a separate depletion regimen.

10Nonacquiescence realting to whether payments to a former insurance agent, which are based on the amount of compensation during the last twelve months as an

agent, derive from a trade or business carried on by the individual, so as to be subject to tax under the Self-Employment Contributions Act (SECA).

11Nonacquiescence relating to whether the Second Circuit Court of Appeals, in affirming the U.S. District Court for Connecticut, erred as a matter of law in

determining that a multiemployer pension trust was a labor organization exempt under section 501(c)(5) of the Code.

12Nonacquiescence relating to whether the U.S. or the taxpayer bears the ultimate burden of proof in bankruptcy proceedings in which the taxpayer challenges a

federal income tax claim arising from the disallowance ofdeductions.

13Nonacquiescence relating to whether section 1.861–8(e)(3) of the regulations is invalid as applied to DISC combined taxable income calculations.

14Nonacquiescence relating to whether an electrical generating facility that produced only de minimis amounts of electricity on a sporadic basis in 1984 due to

functional deficiencies in its equipment ‘‘placed in service’’ was within the meaning of sections 46 and 167 of the Code.

15Nonacquiescence relating to whether a cash method bank that makes short-term loans with a stated interest rate to customers in the ordinary course of its

business is subject to accrual of the interest on those loans under section 1281(a)(2) of the Code.

16Nonacquiescence relating to whether the term ‘‘accumulated profits’’ as used in the denominator of the section 902 deemed paid credit fraction before the Tax

Reform Act of 1986 means all of the foreign corporation’s accumulated profits for the taxable year.

6

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Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

Section 170.—Charitable, etc.,

Contributions and Gifts

26 CFR 1.170A–6: Charitable contributions in

trust.

During calendar year 1996, if a taxpayer

transfers property to a new pooled income fund

that has been in existence for less than 3 taxable

years, what deemed rate of return is used to

value the remainder interest? See Rev. Rul. 96–1,

below.

Section 642.—Special Rules for

Credits and Deductions

26 CFR 1.642(c)–6: Valuation of a remainder

interest in property transferred to a pooled

income fund.

(Also §§ 170, 2055, 2522, 7520; 1.170A–6,

20.2055–2, 25.2522(c)–3, 1.7520–1, 20.7520–1,

25.7520–1.)

Valuation of a remainder interest in

property transferred to a new pooled

income fund under section 642(c)(5).

The deemed rate of return computed

under section 7520 of the Code is

provided for transfers in calendar year

1996 to new pooled income funds that

have been in existence for less than 3

taxable years.

Rev. Rul. 96–1

This revenue ruling lists the calendar

year 1996 deemed rate of return computed under § 7520 of the Internal

Revenue Code for pooled income funds

(PIFs) described in § 642(c)(5) that

have been in existence for less than 3

years immediately preceding the 1996

taxable year in which a transfer is

made to the PIF.

Under § 7520, the value of annuities,

interests for life or terms of years, and

remainder or reversionary interests created after April 30, 1989, are determined by using (1) the interest rate

(rounded to the nearest 2/10ths of 1

percent) equal to 120 percent of the

applicable federal midterm rate under

§ 1274(d)(1) for the month in which

the valuation date falls, and (2) life

contingencies in mortality tables prescribed in the regulations.

Section 1.642(c)–6(e)(2) of the Income Tax Regulations provides that the

present value of an income interest in

property transferred to a PIF is computed on the basis of life contingencies

prescribed under § 20.2031–7(d)(6) of

the Estate Tax Regulations and an

interest rate equal to the highest yearly

rate of return of the PIF for the 3

taxable years immediately preceding

the taxable year in which the transfer

to the PIF is made. A deemed rate of

return must be used for any transfer to

a new PIF until the PIF has been in

existence for 3 taxable years and can

compute its highest rate of return for

the 3 taxable years immediately preceding the taxable year in which the

transfer to the PIF is made. See

§ 1.642(c)–6(e)(2)(ii).

If a transfer is made to a new PIF

after April 30, 1989, the deemed rate

of return is the interest rate (rounded to

the nearest 2/10ths of 1 percent) that is

1 percent less than the highest annual

average of the monthly § 7520 rates for

the 3 calendar years immediately preceding the calendar year in which the

transfer to the PIF is made. See

§ 1.642(c)–6(e)(3).

The deemed rate of return for

transfers to a new PIF during taxable

year 1996 is 7.2 percent.

The following Table lists the rate for

transfers to new PIFs in 1996 and the

rates for transfers to new PIFs in each

of the past 7 calendar years.

For further information regarding this

revenue ruling contact Mr. Blodgett on

(202) 622-3090 (not a toll-free call).

Section 2055.—Transfers for Public,

Charitable, and Religious Uses

26 CFR 20.2055–2: Transfers not exclusively

for charitable purposes.

During calendar year 1996, if a taxpayer

transfers property to a new pooled income fund

that has been in existence for less than 3 taxable

years, what deemed rate of return is used to

value the remainder interest? See Rev. Rul. 96–1,

this page.

Section 2522.—Charitable and

Similar Gifts

26 CFR 25.2522(c)–3: Transfers not

exclusively for charitable, etc., purposes in the

case of gifts made after July 31, 1969.

During calendar year 1996, if a taxpayer

transfers property to a new pooled income fund

that has been in existence for less than 3 taxable

years, what deemed rate of return is used to

value the remainder interest? See Rev. Rul. 96–1,

this page.

Section 7520.—Valuation Tables

26 CFR 1.7520–1: Valuation of annuities,

unitrust interests, interests for life or terms of

years, and remainder or reversionary interests.

Rev. Rul. 96–1 Table

Deemed Rates of Return for

Transfers to New Pooled

Income Funds

Deemed

Rate of

Return

Time of Transfer

1989 (Jan.–Apr.) . . . . . . . .

1989 (May–Dec.) . . . . . . .

1990 . . . . . . . . . . . . . . . . . .

1991 . . . . . . . . . . . . . . . . . .

1992 . . . . . . . . . . . . . . . . . .

1993 . . . . . . . . . . . . . . . . . .

1994 . . . . . . . . . . . . . . . . . .

1995 . . . . . . . . . . . . . . . . . .

1996 . . . . . . . . . . . . . . . . . .

9.0

9.4

9.8

9.8

9.8

9.4

8.4

6.8

7.2

During calendar year 1996, if a taxpayer

transfers property to a new pooled income fund

that has been in existence for less than 3 taxable

years, what deemed rate of return is used to

value the remainder interest? See Rev. Rul. 96–1,

this page.

26 CFR 20.7520–1: Valuation of annuities,

unitrust interests, interests for life or term of

years, and remainder or reversionary interests.

During calendar year 1996, if a taxpayer

transfers property to a new pooled income fund

that has been in existence for less than 3 taxable

years, what deemed rate of return is used to

value the remainder interest? See Rev. Rul. 96–1,

this page.

26 CFR 25.7520–1: Valuation of annuities,

unitrust interests, interests for life or term of

years, and remainder or reversionary interests.

DRAFTING INFORMATION

The principal author of this revenue

ruling is William L. Blodgett of the

Office of Assistant Chief Counsel

(Passthroughs and Special Industries).

7

During calendar year 1996, if a taxpayer

transfers property to a new pooled income fund

that has been in existence for less than 3 taxable

years, what deemed rate of return is used to

value the remainder interest? See Rev. Rul. 96–1,

this page.

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Part III. Administrative, Procedural, and Miscellaneous

26 CFR 601.201: Rulings and determination letters.

Rev. Proc. 96–1

TABLE OF CONTENTS

SECTION 1. WHAT IS THE

PURPOSE OF THIS REVENUE

PROCEDURE?

p. 12

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. 12

SECTION 3. ON WHAT ISSUES

MAY TAXPAYERS REQUEST

WRITTEN GUIDANCE UNDER

THIS PROCEDURE?

p. 14

.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

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

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

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

Products)

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

Accounting)

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

Industries)

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

Benefits and Exempt Organizations)

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

.04 Issues under the jurisdiction of the Associate Chief Counsel

(International)

SECTION 4. ON WHAT ISSUES

MUST WRITTEN GUIDANCE BE

REQUESTED UNDER DIFFERENT

PROCEDURES?

p. 15

SECTION 5. UNDER WHAT

CIRCUMSTANCES DOES THE

NATIONAL OFFICE ISSUE

LETTER RULINGS?

p. 15

.01 Alcohol, tobacco, and firearms taxes

.02 Employee plans and exempt organizations

.01 In income and gift tax matters

.02 Request for extension of time for making an election or for other relief

under § 301.9100–1 of the Procedure and Administration Regulations

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

.04 In matters involving § 367

.05 In estate tax matters

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

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

.08 In generation-skipping transfer tax matters

.09 In employment and excise tax matters

.10 In administrative provisions matters

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.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 adoption of regulations

SECTION 6. UNDER WHAT

CIRCUMSTANCES DO DISTRICT

DIRECTORS ISSUE

DETERMINATION LETTERS?

p. 19

.01 In income and gift tax matters

.02 In estate tax matters

.03 In generation-skipping transfer tax matters

.04 In employment and excise tax matters

.05 Circumstances under which determination letters are not issued by

district director

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

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

.08 Review of determination letters

SECTION 7. UNDER WHAT

CIRCUMSTANCES DOES THE

SERVICE HAVE DISCRETION TO

ISSUE LETTER RULINGS AND

DETERMINATION LETTERS?

p. 21

SECTION 8. WHAT ARE THE

GENERAL INSTRUCTIONS FOR

REQUESTING LETTER RULINGS

AND DETERMINATION LETTERS?

p. 21

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

.02 Not on alternative plans or hypothetical situations

.03 Ordinarily not on part of an integrated transaction

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

.01 Certain information required in all requests

(1) Complete statement of facts and other information

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

other documents

(3) Analysis of material facts

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

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

ruled on or requested, or is currently pending

(6) Statement of supporting authorities

(7) Statement of contrary authorities

(8) Statement identifying pending legislation

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

ruling or determination letter for public inspection

(10) Signature by taxpayer or authorized representative

(11) Authorized representatives

(12) Power of attorney and declaration of representative

(13) Penalties of perjury statement

(14) Number of copies of request to be submitted

(15) Sample format for a letter ruling request

(16) Checklist for letter ruling requests

.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

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(4) To request expeditious handling

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

facsimile transmission

(6) To request a conference

.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, SAFE HARBOR

REVENUE PROCEDURES, AND

AUTOMATIC CHANGE REVENUE

PROCEDURES AND NOTICES

APPLY TO CERTAIN REQUESTS?

p. 30

SECTION 10. HOW DOES THE

NATIONAL OFFICE HANDLE

LETTER RULING REQUESTS?

p. 34

.01 Checklists and guideline revenue procedures

.02 Safe harbor revenue procedures

.03 Automatic change revenue procedures and notices

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

to the Office of Associate Chief Counsel (International)

.02 Branch representative contacts taxpayer within 21 days

.03 Notifies taxpayer if any issues have been referred to other branches

.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 Schedules a conference if requested by taxpayer

.09 Permits taxpayer one conference of right

.10 Disallows verbatim recording of conferences

.11 Makes tentative recommendations on substantive issues

.12 May offer additional conferences

.13 Requires written confirmation of information presented at conference

.14 May schedule pre-submission conference

.15 May, under limited circumstances, schedule a conference to be held by

telephone

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

ruling process

.17 Advises the taxpayer of conclusions and, if the Service will rule

adversely, offers the taxpayer the opportunity to withdraw the letter

ruling request

SECTION 11. WHAT EFFECT WILL

A LETTER RULING HAVE?

p. 39

.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

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

.05 Not generally revoked or modified retroactively

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

transaction

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

action or series of actions

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

lease subject to excise tax

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

into before the issuance of the letter ruling

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

into after a change in material facts

.11 Taxpayer may request that retroactivity be limited

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

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

SECTION 12. WHAT EFFECT WILL

A DETERMINATION LETTER HAVE?

p. 42

.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 13. UNDER WHAT

CIRCUMSTANCES ARE MATTERS

REFERRED BETWEEN A DISTRICT

OFFICE AND THE NATIONAL

OFFICE?

p. 42

SECTION 14. WHAT ARE THE

USER FEE REQUIREMENTS FOR

REQUESTS FOR LETTER RULINGS

AND DETERMINATION LETTERS?

p. 43

.01 Requests for determination letters

.02 No-rule areas

.03 Requests for letter rulings

.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 Method of payment

.08 Effect of nonpayment or payment of incorrect amount

.09 Refunds of user fee

.10 Request for reconsideration of user fee

SECTION 15. WHAT SIGNIFICANT

CHANGES HAVE BEEN MADE TO

REV. PROC. 95–1?

p. 46

SECTION 16. WHAT IS THE

EFFECT OF THIS REVENUE

PROCEDURE ON OTHER

DOCUMENTS?

p. 47

SECTION 17. WHAT IS THE

EFFECTIVE DATE OF THIS

REVENUE PROCEDURE?

p. 47

DRAFTING INFORMATION

p. 48

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INDEX

p. 49

APPENDIX A—SCHEDULE OF

USER FEES

p. 52

APPENDIX B—SAMPLE FORMAT

FOR A LETTER RULING REQUEST

p. 55

APPENDIX C—CHECKLIST FOR A

LETTER RULING REQUEST

p. 57

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 word ‘‘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 word ‘‘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.

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 11 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.

Sec.

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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. 91–23, 1991–1 C.B. 534, as amplified by Rev. Proc. 91–22, 1991–1 C.B.

526, and as clarified by Rev. Proc. 91–26, 1991–1 C.B. 543.

Information letter

.04 An ‘‘information letter’’ is a statement issued either by the national office or by

a district director. It calls attention to a well-established interpretation or principle of

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

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

information or if the taxpayer’s request does not meet the requirements of this revenue

procedure and the Service thinks general information will help the taxpayer. The

taxpayer should provide a daytime telephone number with the taxpayer’s request for

an information letter. An information letter is advisory only and has no binding effect

on the Service.

Revenue ruling

.05 A ‘‘revenue ruling’’ is an interpretation by the Service that has been published

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

applied to a specific set of facts. Revenue rulings are issued only by the national

office and are published for the information and guidance of taxpayers, Service

personnel, and other interested parties.

Because each revenue ruling represents the conclusion of the Service regarding the

application of law to the entire statement of facts involved, taxpayers, Service

personnel, and other concerned parties are cautioned against reaching the same

conclusion in other cases unless the facts and circumstances are substantially the

same. They should consider the effect of subsequent legislation, regulations, court

decisions, revenue rulings, notices, and announcements. See Rev. Proc. 89–14, 1989–1

C.B. 814, which states the objectives of and standards for the publication of revenue

rulings and revenue procedures in the Internal Revenue Bulletin.

Oral guidance

.06

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

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

issue letter rulings or determination letters in response to oral requests from taxpayers.

However, Service employees ordinarily will discuss with taxpayers or their

representatives inquiries regarding whether the Service will rule on particular issues

and questions relating to procedural matters about submitting requests for letter rulings

or determination letters for a particular case.

(2) Discussion possible on substantive issues.

At the discretion of the Service and as time permits, substantive issues also may be

discussed. However, such a discussion will not be binding on the Service and cannot

be relied upon as a basis for obtaining retroactive relief under the provisions of

§ 7805(b).

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

or in litigation will not be discussed by Service employees not directly involved in the

examination, appeal, or litigation of the issues unless the discussion is coordinated

with those Service employees who are directly involved in the examination, appeal, or

litigation of the issues. The taxpayer or the taxpayer’s representative ordinarily will be

asked whether the oral request for guidance or information relates to a matter pending

before another office of the Service.

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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

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.

Sec.

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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. 91–22, 1991–1 C.B. 526, as corrected by Rev. Proc. 91–22A, 1991–1 C.B. 534,

and as modified by Rev. Proc. 96–1 (this revenue procedure) and Rev. Proc. 96–8,

this Bulletin.

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. 91–23. However, competent authority consideration for an

advance pricing agreement should be requested under Rev. Proc. 91–22.

SECTION 4. ON WHAT ISSUES

MUST WRITTEN GUIDANCE BE

REQUESTED UNDER DIFFERENT

PROCEDURES?

Alcohol, tobacco, and firearms

taxes

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

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

the Bureau of Alcohol, Tobacco and Firearms. (See 26 C.F.R. § 601.328 (1995)).

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. 96–4, this

Bulletin. See also Rev. Proc. 96–6, 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. 96–8.

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.

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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.

(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) Entity classifications. The national office generally does not issue a letter ruling

on the classification of an organization if a return has been filed for the organization

for an earlier period. However, the national office will consider letter ruling requests

concerning the classification of—

(a) an existing organization as a partnership. See Rev. Proc. 92–35, 1992–1 C.B.

790, as amplified by Rev. Proc. 94–46, 1994–2 C.B. 688; Rev. Proc. 89–12, 1989–1

C.B. 798, as supplemented by Rev. Proc. 92–33, 1992–1 C.B. 782, as modified by

Rev. Proc. 95–10, 1995–1 C.B. 501, and as amplified by Rev. Proc. 94–46 and Rev.

Proc. 91–13, 1991–1 C.B. 477 (checklist questionnaire); and Rev. Proc. 86–12, 1986–

1 C.B. 534; or

(b) a domestic or foreign limited liability company as a partnership for federal tax

purposes. See Rev. Proc. 95–10.

Request for extension of time

for making an election or for

other relief under § 301.9100–1

of the Procedure and

Administration Regulations

Sec.

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

an election or other application for relief under § 301.9100–1 of the Procedure and

Administration Regulations. Even if submitted after the return covering the issue

presented in the § 301.9100–1 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, a § 301.9100–1 request is a letter ruling request.

Therefore, the § 301.9100–1 request should be submitted pursuant to this revenue

procedure.

However, an election made pursuant to section 4 of Rev. Proc. 92–85, 1992–2 C.B.

490, as modified by Rev. Proc. 96–1 (this revenue procedure), and Rev. Proc. 93–28,

1993–2 C.B. 344, is not a letter ruling request and does not require payment of any

user fee. See section 14.03(1) of this revenue procedure. Such an election pertains to

an automatic extension of time under § 301.9100–1.

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

pursuant to section 4 of Rev. Proc. 92–85) 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 § 301.9100–1 request must—

(a) include the information required by Rev. Proc. 92–85; and

(b) state whether the taxpayer’s return covering the issue presented in the

§ 301.9100–1 request is being examined by a district director or whether the issues in

the return are being considered by an appeals office.

(2) Statuate of limitations. The running of any applicable period of limitations is

not suspended for the period during which a § 301.9100–1 request has been filed. If

the period of limitations on assessment under § 6501(a) for the year for which a

timely filed election would have been made or for any affected succeeding year will

expire before receipt of a § 301.9100–1 letter ruling, the Service ordinarily will not

issue a § 301.9100–1 ruling. See section 5.02(2) of Rev. Proc. 92–85. 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 § 301.9100–1 relief is granted, the Service

may require the taxpayer to consent to an extension of the period of limitations on

assessment. See section 8.02 of Rev. Proc. 92–85.

(3) Taxpayer must notify national office if examination of return begins while

request is pending. If an examination of any return covering the issue presented in the

§ 301.9100–1 request is started while a § 301.9100–1 request is pending, the taxpayer

must notify the national office. See section 8.04 of this revenue procedure.

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(4) National office will notify district office or appeals office of § 301.9100–1

request if return is being examined or is being considered by an appeals office. If

the taxpayer’s return covering the issue presented in the § 301.9100–1 request is being

examined by a district director or considered by an appeals office, the national office

will notify the appropriate district office or appeals office that a § 301.9100–1 request

has been submitted to the national office. The examining officer or the appeals officer

is not authorized to deny consideration of a § 301.9100–1 request. The letter ruling

will be mailed to the taxpayer and a copy will be sent to the appropriate district office

or appeals office.

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 generation-skipping transfer

tax matters

.08 In general, the national office issues letter rulings on proposed transactions that

affect the generation-skipping transfer tax and on completed transactions that occurred

before the return is filed. In the case of a generation-skipping trust or trust equivalent,

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

established. The national office will issue letter rulings on the application of the

effective date rules for generation-skipping transfer tax (§ 1433 of the Tax Reform

Act of 1986, 1986–3 (Vol. 1) C.B. 1, 648) to wills, trusts, and trust equivalents in

existence on October 22, 1986, and to generation-skipping transfers taking place on or

before October 22, 1986.

In employment and excise

tax matters

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

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

return is filed for those transactions. Requests regarding employment status (employer/

employee relationship) from federal agencies and instrumentalities should be

submitted directly to the national office. Requests from other taxpayers must first be

submitted to the taxpayer’s district office. 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;

(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.

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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 12.02 of

Rev. Proc. 91–23, 1991–1 C.B. at 542. 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 adoption of

regulations

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

Proc. 96–3, this Bulletin, or Rev. Proc. 96–7, this Bulletin, a letter ruling may be

issued before the adoption of regulations (either temporary or final) that interpret the

provisions of any act under the following conditions:

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

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

which the answer seems reasonably certain but not entirely free from doubt, a letter

ruling will be issued.

(2) Answer is not reasonably certain. The Service will consider all letter ruling

requests and use its best efforts to issue a letter ruling even if the answer does not

seem reasonably certain where the issuance of a letter ruling is in the best interests of

tax administration.

(3) Issue cannot be readily resolved before regulations are issued. A letter ruling

will not be issued if the letter ruling request presents an issue that cannot be readily

resolved before regulations are issued. However, when the Service has closed a

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

regulations project, the appropriate branch will consider all letter ruling requests

unless the issue is covered by section 7 of this revenue procedure, or by Rev. Proc.

96–3 or Rev. Proc. 96–7.

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.

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

consequences of proposed transactions. However, a district director may issue a

determination letter on the replacement, even though not yet made, of involuntarily

converted property under § 1033, if the taxpayer has filed an income tax return for the

year in which the property was involuntarily converted.

In estate tax matters

.02 In estate tax matters, district directors issue determination letters in response to

written requests affecting the estate tax returns over which the district directors have

examination jurisdiction. They do not issue determination letters on matters

concerning the application of the estate tax to the prospective estate of a living person.

In generation-skipping transfer

tax matters

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

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

returns over which the district directors have examination jurisdiction. They do not

issue determination letters on matters concerning the application of the generationskipping 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 district

office where the taxpayer resides and not directly to the national office. See also

section 5.09 of this revenue procedure.

Circumstances under which

determination letters are not

issued by district director

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

request if—

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

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

case in litigation or before an appeals office;

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

group; or

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

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

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

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

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

question if the specific question for the same taxpayer or a related taxpayer has been

or is being considered by the Central Office of the Social Security Administration or

the Railroad Retirement Board. A district director also will not issue a determination

letter on determining constructive sales price under § 4216(b) or § 4218(c), which

deal with special provisions applicable to the manufacturer’s excise tax. The national

office, however, will issue letter rulings in this area. See sections 6.04 and 7.04 of this

revenue procedure.

Requests concerning income,

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. 96–2, this Bulletin.

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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. 96–3 and Rev. Proc. 96–7 provide a list of these areas. This list is

not all-inclusive because the Service may decline to issue a letter ruling or a

determination letter when appropriate in the interest of sound tax administration or on

other grounds whenever warranted by the facts or circumstances of a particular case.

Instead of issuing a letter ruling or determination letter, the national office or a

district director may, when it is considered appropriate and in the best interests of the

Service, issue an information letter calling attention to well-established principles of

tax law.

Not on alternative plans or

hypothetical situations

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

of proposed transactions or on hypothetical situations.

Ordinarily not on part of an

integrated transaction

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

integrated transaction. If, however, a part of a transaction falls under a no-rule area, a

letter ruling on other parts of the transaction may be issued. Before preparing the

letter ruling request, a taxpayer should call the branch having jurisdiction for the

matters on which the taxpayer is seeking a letter ruling to discuss whether the national

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

If two or more items or sub-methods of accounting are interrelated, the national

office ordinarily will not issue a letter ruling on a change in accounting method

involving only one of the items or sub-methods.

On constructive sales price

under § 4216(b) or § 4218(c)

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

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

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

of a proposed transaction for tax purposes.

SECTION 8. WHAT ARE THE

GENERAL INSTRUCTIONS FOR

REQUESTING LETTER RULINGS

AND DETERMINATION LETTERS?

This section explains the general instructions for requesting letter rulings and

determination letters on all matters. Requests for letter rulings and determination

letters require the payment of the applicable user fee listed in Appendix A of this

revenue procedure. For additional user fee requirements, see section 14 of this revenue

procedure.

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

determination letters on certain matters. Those matters are listed in section 9 of this

revenue procedure followed by a reference (usually to another revenue procedure)

where more information can be obtained.

Certain information required in

all requests

Facts

.01

(1) Complete statement of facts and other information. Each request for a letter

ruling or a determination letter must contain a complete statement of all facts relating

to the transaction. These facts include—

(a) names, addresses, telephone numbers, and taxpayer identification numbers of all

interested parties. (The term ‘‘all interested parties’’ does not mean all shareholders of

a widely held corporation requesting a letter ruling relating to a reorganization or all

employees where a large number may be involved.);

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

accrual) for maintaining the accounting books and filing the federal income tax return,

of all interested parties;

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

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

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

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

(f) a detailed description of the transaction.

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

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

requested, the facts, circumstances, true copies of relevant documents, etc., relating to

the entire transaction must be submitted.

Documents

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

documents. True copies of all contracts, wills, deeds, agreements, instruments, trust

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

must be submitted with the request. The taxpayer must also submit certified English

translations of all applicable foreign laws and a copy of those laws with the request.

For guidelines on the acceptability of such documents, see Rev. Rul. 67–308, 1967–2

C.B. 254.

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

request in alphabetical sequence. Original documents, such as contracts, wills, etc.,

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

returned.

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

transaction, the corporate balance sheet and profit and loss statement should be

submitted. If the request relates to a prospective transaction, the most recent balance

sheet and profit and loss statement should be submitted.

Analysis of material facts

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

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

supplemental letters. These facts must be accompanied by an analysis of their bearing

on the issue or issues, specifying the provisions that apply.

Same issue in an earlier return

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

must state whether, to the best of the knowledge of both the taxpayer and the

taxpayer’s representatives, the same issue is in an earlier return of the taxpayer (or in

a return for any year of a related taxpayer within the meaning of § 267, or of a

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

meaning of § 1504).

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

(a) is being examined by a district director;

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

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

(c) has been examined, but a closing agreement covering the issue or liability has

not been entered into by a district director;

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

earlier period;

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

earlier period, but the statutory period of limitations has not expired for either

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

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

earlier period, but a closing agreement covering the issue or liability has not been

entered into by an appeals office; or

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

Same or similar issue previously

submitted or currently pending

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

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

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

(a) the Service previously ruled on the same or a similar issue for the taxpayer (or

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

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

(b) the taxpayer, a related taxpayer, a predecessor, or any representatives previously

submitted a request involving the same or a similar issue to the Service but withdrew

the request before a letter ruling or determination letter was issued;

(c) the taxpayer, a related taxpayer, or a predecessor previously submitted a request

involving the same or a similar issue that is currently pending with the Service; or

(d) at the same time as this request, the taxpayer or a related taxpayer is presently

submitting another request involving the same or a similar issue to the Service.

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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.

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.

Format of deletions statement

(a) 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.

Location of deletions statement

(b) 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.

Signature

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

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

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Additional information

(d) 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.

Taxpayer may protest deletions

not made

(e) 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.

Taxpayer may request delay of

public inspection

(f) After receiving the notice under § 6110(f)(1) of intention to disclose, but within

60 calendar days after the date of notice, the taxpayer may send a request for delay of

public inspection under either § 6110(g)(3) or (4). The request for delay must be sent

to the Service office indicated on the notice of intention to disclose. A request for

delay under § 6110(g)(3) must contain the date on which it is expected that the

underlying transaction will be completed. The request for delay under § 6110(g)(4)

must contain a statement from which the Commissioner of Internal Revenue may

determine that there are good reasons for the delay.

Signature on request

(10) Signature by taxpayer or authorized representative. The request for a letter

ruling or determination letter must be signed and dated by the taxpayer or the

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

Authorized representatives

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

in connection with the request, the representative must be:

Attorney

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

of any state, possession, territory, commonwealth, or the District of Columbia and

who is not currently under suspension or disbarment from practice before the Service.

He or she must file a written declaration with the Service showing current

qualification as an attorney and current authorization to represent the taxpayer;

Certified public accountant

(b) A certified public accountant who is duly qualified to practice in any state,

possession, territory, commonwealth, or the District of Columbia and who is not

currently under suspension or disbarment from practice before the Service. He or she

must file a written declaration with the Service showing current qualification as a

certified public accountant and current authorization to represent the taxpayer;

Enrolled agent

(c) An enrolled agent who is a person, other than an attorney or certified public

accountant, that is currently enrolled to practice before the Service and is not currently

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

a written declaration with the Service showing current enrollment and authorization to

represent the taxpayer. Either the enrollment number or the expiration date of the

enrollment card must be included in the declaration. For the rules on who may

practice before the Service, see Treasury Department Circular No. 230 (31 C.F.R. part

10 (1995));

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

Sec.

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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, 405, 412, 413, 414, 4971, 6057, 6058, 6059, 6652(e), 6652(f),

6692, 7805(b), and involving 29 U.S.C. § 1083; or

A person with a ‘‘Letter of

Authorization’’

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

‘‘Letter of Authorization’’ from the Director of Practice under section 10.7(d) of

Treasury Department Circular No. 230. A person may make a written request for a

‘‘Letter of Authorization’’ to: Office of Director of Practice, HR:DP, Internal Revenue

Service, 1111 Constitution Avenue, N.W., Washington, DC 20224. Section 10.7(d) of

Circular No. 230 authorizes the Commissioner to allow an individual who is not

otherwise eligible to practice before the Service to represent another person in a

particular matter.

Employee, general partner,

bona fide officer, administrator,

trustee, etc.

The above requirements do not apply to a regular full-time employee representing

his or her employer, to a general partner representing his or her partnership, to a bona

fide officer representing his or her corporation, association, or organized group, or to a

trustee, receiver, guardian, personal representative, administrator, or executor

representing a trust, receivership, guardianship, or estate. A preparer of a return (other

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

who is not a full-time employee, general partner, bona fide officer, or an

administrator, trustee, etc., may not represent a taxpayer in connection with a letter

ruling or a determination letter. See section 10.7(c) of Treasury Department Circular

No. 230.

Foreign representative

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.

§ 601.501–509 (1995)), 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 request for a letter ruling or determination

letter and any factual information or change in the request submitted at a later time

must be accompanied by the following declaration: ‘‘Under penalties of perjury, I

declare that I have examined this request, including accompanying documents, and

to the best of my knowledge and belief, the facts presented in support of the

requested letter ruling or determination letter are true, correct, and complete.’’ A

taxpayer who submits additional factual information on several occasions may provide

one declaration subsequent to all submissions that refers to all submissions.

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.

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The person signing for a trust or partnership must be a trustee or general partner

who has personal knowledge of the facts.

Number of copies of request to

be submitted

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

only to submit one copy of the request for a letter ruling or determination letter. If,

however, more than one issue is presented in the letter ruling request, the taxpayer is

encouraged to submit additional copies of the request.

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

required if—

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

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

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

numbers, as explained in section 8.01(9)(a) of this revenue procedure; 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

Sec.

(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. 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.

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Copies of letter ruling or

determination letter sent to

multiple representatives

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

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

determination letter to the first representative named on the most recent power of

attorney. If the taxpayer wants an additional copy of the letter ruling or determination

letter sent to the second representative listed in the power of attorney, the taxpayer

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

must state in the power of attorney that a copy of the letter ruling or determination

letter is to be sent to the second representative listed in the power of attorney. Copies

of the letter ruling or determination letter, however, will be sent to no more than two

representatives.

Original of letter ruling or

determination letter sent to

taxpayer’s representative

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

the original of the letter ruling or determination letter be sent to the taxpayer’s

representative. In this case, a copy of the letter ruling or determination letter will be

sent to the taxpayer.

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 10.16 of this revenue

procedure.

Expeditious handling

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

rulings and determination letters in order of the date received and as expeditiously as

possible. A taxpayer who has a compelling need to have a request processed ahead of

the regular order must request expeditious handling. This request must explain the

need for expeditious handling.

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

separate letter with, or soon after filing, the request for the letter ruling or

determination letter. If the request for expeditious handling is not made in a separate

letter, then the letter in which the letter ruling or determination letter request is made

should say, at the top of the first page: ‘‘Expeditious Handling Is Requested. See page

— of this letter.’’

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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 (fax) transmission

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

transmission. A letter ruling ordinarily is not sent by facsimile (fax) transmission.

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) of the Income Tax Regulations.

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).

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.

This section does not apply to the high volume requests submitted by taxpayers for

a change in accounting method or a change in accounting period.

Requesting a conference

Address to send the request

Requests for letter rulings

(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 10.08, 10.09, and 11.11(2) of this revenue procedure.

.03

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

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

Counsel (International), as appropriate, at the following address:

Internal Revenue Service

Attn: CC:DOM:CORP:T

P.O. Box 7604

Ben Franklin Station

Washington, DC 20044

The package should be marked: RULING REQUEST SUBMISSION. Requests may

also be hand delivered to the drop box at the 12th Street entrance of 1111 Constitution

Avenue, N.W., Washington, DC. No receipt will be given at the drop box.

Requests for determination letters

Sec.

(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 14 and Appendix A of this

revenue procedure.

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Pending letter ruling requests

Circumstances under which the

taxpayer must notify the national

office

.04

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—

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

been started by a district director;

(2) in the case of a § 301.9100–1 request, an examination of any return covering

the issue presented in the § 301.9100–1 request has been started by a district director.

See section 5.02(3) of this revenue procedure; or

(3) legislation that may affect the transaction is introduced. See section 8.01(8) of

this revenue procedure.

Must notify national office if

return is filed and must attach

request to return

In addition, 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 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

How to check on status of

request

Request may be withdrawn or

national office may decline to

issue letter ruling

.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.

.06

The taxpayer or the taxpayer’s authorized representative may obtain information

regarding the status of a request by calling the person whose name and telephone

number are shown on the acknowledgement of receipt of the request or the

appropriate branch representative who contacts the taxpayer as explained in section

10.02 of this revenue procedure.

.07

If a taxpayer withdraws a request for a letter ruling or if the national office declines

to issue a letter ruling, the national office 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. The 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.

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 14.09 of

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

Compliance with Treasury

Department Circular No. 230

.08

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

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

the Service. In those situations when the national office believes that the taxpayer’s

representative is not in compliance with Circular No. 230, the national office will

bring the matter to the attention of the Director of Practice.

For the requirement regarding compliance with the conference and practice

requirements, see section 8.01(12) of this revenue procedure.

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SECTION 9. WHAT OTHER

CHECKLISTS, GUIDELINE REVENUE

PROCEDURES, SAFE HARBOR

REVENUE PROCEDURES, AND

AUTOMATIC CHANGE REVENUE

PROCEDURES AND NOTICES

APPLY TO CERTAIN REQUESTS?

Specific revenue procedures and notices supplement the general instructions for

requests explained in section 8 of this revenue procedure and apply to requests for

letter rulings or determination letters regarding the Code sections and matters listed in

this section.

Checklists and guideline revenue

procedures

.01 For requests relating to the following Code sections and subject matters, see the

following checklists and guideline revenue procedures.

CODE OR REGULATION

SECTION

REVENUE PROCEDURE

103, 141–150, 7478, and 7871

Issuance of state or local

obligations

Rev. Proc. 88–32, 1988–1 C.B. 833 (for issuers); Rev. Proc. 88–33, 1988–1 C.B. 835

(for nonissuing parties and for outstanding obligations); Rev. Proc. 88–31, 1988–1

C.B. 832 (for approval of areas of chronic economic distress); and Rev. Proc. 82–26,

1982–1 C.B. 476 (for ‘‘on behalf of’’ and similar issuers). For approval of areas of

chronic economic distress, Rev. Proc. 88–31 explains how this approval must be

submitted to the Assistant Secretary for Housing/Federal Housing Commissioner of

the Department of Housing and Urban Development.

1.166–2(d)(3)

Uniform express determination

letter for making election

Rev. Proc. 92–84, 1992–2 C.B. 489.

Subchapter C—

Corporate Distributions and

Adjustments

Rev. Proc. 77–37, 1977–2 C.B. 568, as modified by Rev. Proc. 89–30, 1989–1 C.B.

895, and as amplified by Rev. Proc. 77–41, 1977–2 C.B. 574, Rev. Proc. 83–81,

1983–2 C.B. 598 (see also Rev. Proc. 96–3), Rev. Proc. 84–42, 1984–1 C.B. 521

(superseded as to no-rule areas by Rev. Proc. 85–22, 1985–1 C.B. 550), Rev. Proc.

86–42, 1986–2 C.B. 722, and Rev. Proc. 89–50, 1989–2 C.B. 631. But see Rev. Proc.

96–3, section 3.01(24) (mergers or consolidations under § 368(a)(1)(A)), section

3.01(25) (stock acquisitions under § 368(a)(1)(B)), and section 3.01(28) (corporate

changes under § 368(a)(1)(F)), which describe certain corporate reorganizations where

the Service will not issue advance letter rulings or determination letters.

301

Nonapplicability on sales of stock

of employer to defined

contribution plan

Rev. Proc. 87–22, 1987–1 C.B. 718.

302, 311

Checklist questionnaire

Rev. Proc. 86–18, 1986–1 C.B. 551; and Rev. Proc. 77–41, 1977–2 C.B. 574.

302(b)(4)

Checklist questionnaire

Rev. Proc. 81–42, 1981–2 C.B. 611.

331

Checklist questionnaire

Rev. Proc. 86–16, 1986–1 C.B. 546.

332

Checklist questionnaire

Rev. Proc. 90–52, 1990–2 C.B. 626.

351

Checklist questionnaire

Rev. Proc. 83–59, 1983–2 C.B. 575. But see section 3.01(22) of Rev. Proc. 96–3,

which describes certain transfers to controlled corporations where the Service will not

issue advance letter rulings or determination letters.

355

Checklist questionnaire

Rev. Proc. 86–41, 1986–2 C.B. 716, as modified by Rev. Proc. 91–62, 1991–2 C.B.

864, and Rev. Proc. 91–63, 1991–2 C.B. 865. But see section 3.01(23) of Rev. Proc.

96–3, which describes certain circumstances under which the Service will not issue

advance letter rulings or determination letters as to whether the corporate business

purpose requirement of § 1.355–2(b) is satisfied.

368(a)(1)(E)

Checklist questionnaire

Rev. Proc. 81–60, 1981–2 C.B. 680. But see section 3.01(27) of Rev. Proc. 96–3,

which describes circumstances under which the Service will not issue advance letter

rulings or determination letters as to whether a transaction constitutes a corporate

recapitalization within the meaning of § 368(a)(1)(E) (or a transaction that also

qualifies under § 1036).

482

Advance pricing agreements

Rev. Proc. 91–22, 1991–1 C.B. 526, as corrected by Rev. Proc. 91–22A, 1991–1 C.B.

534, and as modified by Rev. Proc. 96–1 (this revenue procedure) and Rev. Proc. 96–8.

Sec.

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521

Appeal procedure with regard to

adverse determination letters and

revocation or modification of

exemption letter rulings and

determination letters

1.817–5(a)(2)

Issuer of a variable contract

requesting relief

1.1502–75(c)(2)(i)

Consent to discontinue filing

consolidated returns

1.1502–76(a)(1)

Consent to file a consolidated

return where member(s) of the

affiliated group use a 52–53

week taxable year

1504(a)(3)(A) and (B)

Waiver of application of

§ 1504(a)(3)(A) for certain

corporations

1552

Consent to elect or change

method of allocating affiliated

group’s consolidated federal

income tax liability

4980B

301.9100–1

Granting extensions for making

elections

SUBJECT MATTERS

Accounting methods

Accounting periods; adopt, retain

or change for partnership, S

corporation, and personal service

corporation

Accounting periods; changes in

period

Classification of an organization

as a partnership

Rev. Proc. 90–27, 1990–1 C.B. 514, as modified by Rev. Proc. 96–8.

Rev. Proc. 92–25, 1992–1 C.B. 741.

Rev. Proc. 95–39, 1995–35 I.R.B. 17 (certain consolidated groups may submit an

application requesting consent to discontinue filing consolidated returns; this

application must be filed on or before June 30, 1996).

Rev. Proc. 89–56, 1989–2 C.B. 643.

Rev. Proc. 91–71, 1991–2 C.B. 900.

Rev. Proc. 90–39, 1990–2 C.B. 365, as clarified by Rev. Proc. 90–39A, 1990–2 C.B.

367.

Rev. Proc. 87–28, 1987–1 C.B. 770 (treating references to former § 162(k) as if they

were references to § 4980B).

Rev. Proc. 92–85, 1992–2 C.B. 490, as modified by Rev. Proc. 96–1 (this revenue

procedure), and Rev. Proc. 93–28, 1993–2 C.B. 344; and Rev. Proc. 92–20, 1992–1

C.B. 685, as modified by Rev. Proc. 96–1 (this revenue procedure), Rev. Proc. 96–8,

Rev. Proc. 92–90, 1992–2 C.B. 501, and Rev. Proc. 92–85. See also section 5.02 of

this revenue procedure and section 5 of Rev. Proc. 96–2.

REVENUE PROCEDURE

Rev. Proc. 92–20, 1992–1 C.B. 685, as modified by Rev. Proc. 96–1 (this revenue

procedure), Rev. Proc. 96–8, Rev. Proc. 92–90, and Rev. Proc. 92–85; and Rev. Proc.

96–1 (this revenue procedure) for which sections 1, 2.01, 2.02, 2.06, 3.01(2), 3.01(3),

3.01(4), 5.02, 5.12, 5.14, 7.01, 7.02, 7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5),

8.01(6), 8.01(7), 8.01(8), 8.01(11), 8.01(12), 8.02(2), 8.02(4), 8.02(6), 8.03(1), 8.04,

8.05, 8.06, 8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07(1), 10.07(2), 10.08, 10.09, 10.10,

10.11, 10.12, 10.13, 10.14, 10.15, 10.17, 11, 14, and Appendix A are applicable.

Rev. Proc. 87–32, 1987–2 C.B. 396, as modified by Rev. Proc. 92–85; and Rev. Proc.

96–1 (this revenue procedure) for which sections 1, 2.01, 2.02, 2.06, 3.01(3), 5.02,

5.12, 5.14, 7.01, 7.02, 7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6),

8.01(7), 8.01(8), 8.01(11), 8.01(12), 8.02(2), 8.02(4), 8.02(6), 8.03(1) (only for Forms

1128 filed under section 6.01 of Rev. Proc. 87–32), 8.04, 8.05, 8.06, 8.07, 8.08, 9,

10.01, 10.04, 10.05, 10.07(1), 10.07(2), 10.08, 10.09, 10.10, 10.11, 10.12, 10.13,

10.14, 10.15, 10.17, 11, 14, and Appendix A are applicable.

Rev. Proc. 92–13, 1992–1 C.B. 665, as modified and amplified by Rev. Proc. 92–13A,

1992–1 C.B. 668, and as modified by Rev. Proc. 94–12, 1994–1 C.B. 565; and Rev.

Proc. 96–1 (this revenue procedure) for which sections 1, 2.01, 2.02, 2.06, 3.01(3),

5.02, 5.12, 5.14, 7.01, 7.02, 7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6),

8.01(7), 8.01(8), 8.01(11), 8.01(12), 8.02(2), 8.02(4), 8.02(6), 8.03(1), 8.04, 8.05, 8.06,

8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07(1), 10.07(2), 10.08, 10.09, 10.10, 10.11,

10.12, 10.13, 10.14, 10.15, 10.17, 11, 14, and Appendix A are applicable.

Rev. Proc. 92–35, 1992–1 C.B. 790, as amplified by Rev. Proc. 94–46, 1994–2 C.B.

688; Rev. Proc. 89–12, 1989–1 C.B. 798, as supplemented by Rev. Proc. 92–33,

1992–1 C.B. 782, as modified by Rev. Proc. 95–10, 1995–1 C.B. 501, and as

amplified by Rev. Proc. 94–46 and Rev. Proc. 91–13, 1991–1 C.B. 477 (checklist

questionnaire); and Rev. Proc. 86–12, 1986–1 C.B. 534.

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Classification of a limited

liability company as a partnership

Rev. Proc. 95–10, 1995–1 C.B. 501.

Classification of liquidating trusts

Rev. Proc. 82–58, 1982–2 C.B. 847, as modified and amplified by Rev. Proc. 94–45,

1994–2 C.B. 684, and as amplified by Rev. Proc. 91–15, 1991–1 C.B. 484 (checklist

questionnaire), as modified and amplified by Rev. Proc. 94–45.

Earnings and profits

determinations

Rev. Proc. 75–17, 1975–1 C.B. 677; and Rev. Proc. 96–1 (this revenue procedure) for

which sections 2.06, 3.01(3), 8, 10.04, 10.06, and 10.12 are applicable.

Estate, gift, and generationskipping transfer tax issues

Rev. Proc. 91–14, 1991–1 C.B. 482 (checklist questionnaire).

Deferred intercompany

transactions; election not to defer

gain or loss

Rev. Proc. 82–36, 1982–1 C.B. 490.

Leveraged leasing

Rev. Proc. 75–21, 1975–1 C.B. 715, as modified by Rev. Proc. 76–30, 1976–2 C.B.

647, Rev. Proc. 79–48, 1979–2 C.B. 529, and Rev. Proc. 81–71, 1981–2 C.B. 731;

and Rev. Proc. 75–28, 1975–1 C.B. 752, as modified by Rev. Proc. 79–48 and Rev.

Proc. 81–71.

Rate orders; regulatory agency;

normalization

A letter ruling request that involves a question of whether a rate order that is proposed

or issued by a regulatory agency will meet the normalization requirements of

§ 168(f)(2) (pre-Tax Reform Act of 1986, § 168(e)(3)) and former §§ 46(f) and 167(l)

ordinarily will not be considered unless the taxpayer states in the letter ruling request

whether—

(1) the regulatory authority responsible for establishing or approving the taxpayer’s

rates has reviewed the request and believes that the request is adequate and complete;

and

(2) the taxpayer will permit the regulatory authority to participate in any national

office conference concerning the request.

If the taxpayer or the regulatory authority informs a consumer advocate of the request

for a letter ruling and the advocate wishes to communicate with the Service regarding

the request, any such communication should be sent to: Internal Revenue Service,

Associate Chief Counsel (Domestic), Attention CC:DOM:CORP:T, P.O. Box 7604,

Ben Franklin Station, Washington, DC 20044. These communications will be treated

as third party contacts for purposes of § 6110.

Unfunded deferred compensation

Rev. Proc. 71–19, 1971–1 C.B. 698, as amplified by Rev. Proc. 92–65, 1992–2 C.B.

428. See Rev. Proc. 92–64, 1992–2 C.B. 422, for the model trust for use in Rabbi

Trust Arrangements.

Safe harbor revenue procedures

.02 For requests relating to the following Code sections and subject matters, see the

following safe harbor revenue procedures.

CODE OR REGULATION

SECTION

REVENUE PROCEDURE

103 and 141–150

Issuance of state or local

obligations

Rev. Proc. 93–17, 1993–1 C.B. 507 (changes of use of proceeds); and Rev. Proc. 93–

19, 1993–1 C.B. 526 (management contracts).

280B

Certain structural modifications to

a building not treated as a

demolition

Rev. Proc. 95–27, 1995–1 C.B. 704.

355(a)(1)(B)

Transaction not violating the

device test

Rev. Proc. 91–63, 1991–2 C.B. 865.

584(a)

Qualification of a proposed

common trust fund plan

Rev. Proc. 92–51, 1992–1 C.B. 988.

642(c)(5)

Qualification of trusts as pooled

income funds

Rev. Proc. 88–53, 1988–2 C.B. 712.

Sec.

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664(d)(1)

Qualification of trusts as

charitable remainder annuity

trusts

Rev. Proc. 89–21, 1989–1 C.B. 842, as amplified by Rev. Proc. 90–32, 1990–1 C.B.

546.

664(d)(2)

Qualification of trusts as

charitable remainder unitrusts

Rev. Proc. 89–20, 1989–1 C.B. 841, as amplified by Rev. Proc. 90–30, 1990–1 C.B.

534.

664(d)(2) and (3)

Qualification of trusts as

charitable remainder unitrusts

Rev. Proc. 90–31, 1990–1 C.B. 539.

1286

Determination of reasonable

compensation under mortgage

service contracts

Rev. Proc. 91–50, 1991–2 C.B. 778.

1362(f)

Automatic inadvertent termination

relief to certain corporations

Rev. Proc. 94–23, 1994–1 C.B. 609.

301.7701–2

Classification of limited

partnerships as partnerships

Rev. Proc. 92–88, 1992–2 C.B. 496.

301.7701–2(b)(1)

Majority in interest

Rev. Proc. 94–46, 1994–2 C.B. 688.

1.7704–2(d)

New business activity of existing

partnership is closely related to

pre-existing business

Rev. Proc. 92–101, 1992–2 C.B. 579.

SUBJECT MATTERS

REVENUE PROCEDURE

Certain rent-to-own contracts

treated as leases

Rev. Proc. 95–38, 1995–34 I.R.B. 25.

Automatic change revenue

procedures and notices

.03 For requests to change an accounting period or accounting method, see the

following automatic change revenue procedures and notices published and in effect as

of December 31, 1995. A taxpayer complying timely with an automatic change

revenue procedure or notice will be deemed to have obtained the consent of the

Commissioner to change the taxpayer’s accounting period or accounting method, as

applicable.

CODE SECTION

REVENUE PROCEDURE

442

Changes in accounting periods

The automatic change revenue procedures for obtaining a change in annual accounting

period include: Rev. Proc. 92–13, 1992–1 C.B. 665, as modified by Rev. Proc. 94–12,

1994–1 C.B. 565, and as modified and amplified by Rev. Proc. 92–13A, 1992–1 C.B.

668 (certain corporations that have not changed their accounting period within the

prior 6 calendar years or other specified time); Rev. Proc. 87–32, 1987–2 C.B. 396, as

modified by Rev. Proc. 92–85 (partnership, S corporation, or personal service

corporation seeking a natural business year or an ownership taxable year); Rev. Proc.

68–41, 1968–2 C.B. 943, as modified by Rev. Proc. 81–40, 1981–2 C.B. 604 (trusts

held by certain fiduciaries needing a workload spread); and Rev. Proc. 66–50, 1966–2

C.B. 1260, as modified by Rev. Proc. 81–40 (individual seeking a calendar year).

446

Changes in accounting methods

The automatic change revenue procedures and notices for obtaining a change in

method of accounting include: Notice 95–57, 1995–45 I.R.B. 12 (cash method banks

in the Eighth Circuit seeking to change to the cash method of accounting for stated

interest on short-term loans made in the ordinary course of business); Rev. Proc. 95–

33, 1995–28 I.R.B. 7 (certain small resellers, formerly small resellers, or resellerproducers seeking to change their method of accounting for costs subject to § 263A);

Rev. Proc. 95–25, 1995–1 C.B. 701 (certain taxpayers seeking to elect a historic absorption ratio under § 263A for their first, second, or third taxable year beginning on

or after January 1, 1994); Rev. Proc. 95–19, 1995–1 C.B. 664 (taxpayers seeking to

change certain methods of accounting for interest costs subject to § 263A(f) for their

first or second taxable year beginning on or after January 1, 1994); Rev. Proc. 94–49,

1994–2 C.B. 705, as modified by Rev. Proc. 95–33 (certain taxpayers seeking to com-

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ply with the final regulations under § 263A; Rev. Proc. 94–49 generally applies to a

taxpayer’s first taxable year beginning on or after January 1, 1994); Rev. Proc. 94–30,

1994–1 C.B. 621 (certain taxpayers seeking to change method for original issue

discount for loans acquired before the applicable cut-off dates in Rev. Proc. 94–29 and

Rev. Proc. 94–28); Rev. Proc. 94–29, 1994–1 C.B. 616 (certain taxpayers seeking to

change to the principal-reduction method for loans acquired on or after a certain cutoff date); Rev. Proc. 94–28, 1994–1 C.B. 614 (certain taxpayers seeking to comply

with the final regulations dealing with original issue discount for loans acquired on or

after a certain cut-off date); Rev. Proc. 93–48, 1993–2 C.B. 580 (certain taxpayers

required to change method of accounting for notional principal contracts entered into

after December 12, 1993); Rev. Proc. 93–13, 1993–1 C.B. 482 (certain taxpayers

required to change method for deducting amounts owed to related foreign persons in

order to comply with § 267(a)(3)); Rev. Proc. 92–98, 1992–2 C.B. 512 (certain

accrual method taxpayers selling multi-year service warranty contracts seeking to elect

the service warranty income method); Rev. Proc. 92–75, 1992–2 C.B. 448 (certain

taxpayers, other than those required to use inventories, seeking to change to an accrual

method); Rev. Proc. 92–74, 1992–2 C.B. 442 (certain taxpayers, required to use

inventories, seeking to change to an accrual method); Rev. Proc. 92–67, 1992–2 C.B.

429 (certain taxpayers with one or more market discount bonds seeking to make a

constant interest rate election or seeking to make or revoke an election under

§ 1278(b)); Rev. Proc. 92–29, 1992–1 C.B. 748 (certain taxpayers seeking to use an

alternative method under § 461(h) for the inclusion of common improvement costs in

basis); Rev. Proc. 91–51, 1991–2 C.B. 779 (certain taxpayers that sell mortgages and

retain rights to service the mortgages); Rev. Proc. 91–49, 1991–2 C.B. 777 (holders of

certain mortgages that are stripped bonds); Rev. Proc. 91–31, 1991–1 C.B. 566

(certain utilities holding customer deposits); Rev. Proc. 90–63, 1990–2 C.B. 664

(certain taxpayers changing their accounting treatment of package design costs); Rev.

Proc. 90–37, 1990–2 C.B. 361 (certain taxpayers with interest income from short-term

loans); Rev. Proc. 89–46, 1989–2 C.B. 597 (cash basis taxpayers with certain United

States savings bonds); Rev. Proc. 88–15, 1988–1 C.B. 683 (certain taxpayers seeking

to discontinue LIFO inventory method); Rev. Proc. 85–8, 1985–1 C.B. 495 (certain

taxpayers seeking to change from specific charge-off method to reserve method for

bad debts); Rev. Proc. 84–76, 1984–2 C.B. 751 (taxpayers seeking to treat prepaid

subscription income under the provisions of § 455); Rev. Proc. 84–30, 1984–1 C.B.

482 (taxpayers who used the Rule of 78’s for interest on consumer loans); Rev. Proc.

84–29, 1984–1 C.B. 480 (individual borrowers who reported interest deductions in

accordance with the Rule of 78’s); and Rev. Proc. 74–11, 1974–1 C.B. 420 (taxpayers

seeking to change their method of depreciation accounting for property subject to

§ 167).

SECTION 10. HOW DOES THE

NATIONAL OFFICE HANDLE LETTER

RULING REQUESTS?

The national office will issue letter rulings on the matters and under the

circumstances explained in sections 3 and 5 of this revenue procedure and in the

manner explained in this section.

Controls request and refers it to

appropriate Assistant Chief

Counsel or to the Office of

Associate Chief Counsel

(International)

.01 All requests for letter rulings will be controlled by the Technical Services Staff

of the Assistant Chief Counsel (Corporate) (CC:DOM:CORP:T). That office will

examine the incoming documents for completeness, process the user fee, and forward

the file to the appropriate Assistant Chief Counsel or, for letter ruling requests under

the jurisdiction of the Associate Chief Counsel (International), to the Office of

Associate Chief Counsel (International). The Assistant Chief Counsel’s office or the

Office of Associate Chief Counsel (International), as appropriate, will assign the letter

ruling request to one of its branches.

Branch representative contacts

taxpayer within 21 days

.02 Within 21 calendar days after a letter ruling request has been received in the

branch having jurisdiction, a representative of the branch will discuss the procedural

issues in the letter ruling request with the taxpayer or, if the request includes a

properly executed power of attorney, with the authorized representative unless the

power of attorney provides otherwise. If the case is complex or a number of issues are

involved, it may not be possible for the branch representative to discuss the

substantive issues during this initial contact. However, when possible, for each issue

within the branch’s jurisdiction, the branch representative will tell the taxpayer—

(1) whether the branch representative will recommend that the Service rule as the

taxpayer requested, rule adversely on the matter, or not rule;

Sec.

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(2) whether the taxpayer should submit additional information to enable the Service

to rule on the matter; or

(3) whether, because of the nature of the transaction or the issue presented, a

tentative conclusion on the issue cannot be reached.

Except for cases involving a request for change in accounting method or

accounting period, the 21 calendar day procedure applies to: all matters within the

jurisdiction of the Assistant Chief Counsel (Corporate), the Assistant Chief Counsel

(Income Tax and Accounting), the Assistant Chief Counsel (Passthroughs and Special

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

Counsel (International); and all matters within the jurisdiction of the Assistant Chief

Counsel (Financial Institutions and Products), except cases concerning insurance

issues requiring actuarial computations.

Notifies taxpayer if any issues

have been referred to other

branches

.03 If the letter ruling request involves matters within the jurisdiction of more than

one branch, a representative of the branch that received the request will tell the

taxpayer within the initial 21 days—

(1) that the matters within the jurisdiction of another branch have been referred to

that branch for consideration; and

(2) that a representative of that branch will contact the taxpayer within 21 calendar

days after receiving the referral to discuss informally the procedural and, to the extent

possible, the substantive issues in the request.

Determines if transaction can be

modified to obtain favorable

letter ruling

.04 If a less than fully favorable letter ruling is indicated, the branch representative

will tell the taxpayer whether minor changes in the transaction or adherence to certain

published positions would bring about a favorable ruling. The branch representative

may also tell the taxpayer the facts that must be furnished in a document to comply

with Service requirements. However, the branch representative will not suggest precise

changes that would materially alter the form of the proposed transaction or materially

alter a taxpayer’s proposed accounting method or accounting period.

If, at the end of this discussion, the branch representative determines that a meeting

in the national office would be more helpful to develop or exchange information, a

meeting will be offered and an early meeting date arranged. When offered, this

meeting is in addition to the taxpayer’s conference of right that is described in section

10.09 of this revenue procedure.

Is not bound by informal

opinion expressed

.05 The Service will not be bound by the informal opinion expressed by the branch

representative or any other authorized Service representative, and such an opinion

cannot be relied upon as a basis for obtaining retroactive relief under the provisions of

§ 7805(b).

Tells taxpayer if request lacks

essential information during

initial contact

.06 If a request for a letter ruling or determination letter does not comply with all

the provisions of this revenue procedure, the branch representative will tell the

taxpayer during the initial contact which requirements have not been met.

Information must be submitted

within 21 calendar days

(1) If the request lacks essential information, which may include additional

information needed to satisfy the procedural requirements of this revenue procedure,

as well as substantive changes to transactions or documents needed from the taxpayer,

the branch representative will tell the taxpayer during the initial contact that the

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

calendar days unless an extension of time is granted. See sections 10.07(1) and (2) of

this revenue procedure for instructions on submissions of additional information.

21-day period will be extended

if justified and approved

(2) An extension of the 21-day period will be granted only if justified in writing by

the taxpayer and approved by the branch chief, senior technician reviewer (or senior

technical reviewer), or assistant to the branch chief (or assistant branch chief) of the

branch to which the case is assigned. A request for extension should be submitted

before the end of the 21-day period. If unusual circumstances close to the end of the

21-day period make a written request impractical, the taxpayer should notify the

national office within the 21-day period that there is a problem and that the written

request for extension will be coming soon. The taxpayer will be told promptly, and

later in writing, of the approval or denial of the requested extension. If the extension

request is denied, there is no right of appeal.

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Letter ruling request closed if

the taxpayer does not submit

information

(3) If the taxpayer does not submit the information requested during the initial

contact within the time provided, the letter ruling request will be closed and the

taxpayer will be notified in writing. If the information is received after the request is

closed, the request will be reopened and treated as a new request as of the date the

information is received. However, the taxpayer must pay another user fee before the

case can be reopened.

Letter ruling request mistakenly

sent to district director

(4) A request for a letter ruling sent to the district director that does not comply

with the provisions of this revenue procedure will be returned by the district director

so that the taxpayer can make corrections before sending it to the national office.

Requires prompt submission of

additional information requested

after initial contact

.07

(1) Material facts furnished to the Service by telephone or fax, or orally at a

conference, must be promptly confirmed by letter to the Service with a declaration

that the information is provided under penalties of perjury in the form described in

section 8.01(13) of this revenue procedure. This confirmation and any additional

information requested by the Service that is not part of the information requested

during the initial contact must be furnished within 21 calendar days to be considered

part of the request.

To facilitate prompt action on letter ruling requests, taxpayers are encouraged to

submit additional information by fax as soon as the information is available. The

Service representative who requests additional information can provide a telephone

number to which the information can be faxed. A copy of this information and a

signed perjury statement, however, must be mailed or delivered to the Service.

Address to send additional

information

(2) Additional information should be sent to:

Internal Revenue Service

ADDITIONAL INFORMATION

Attn: [Name, office symbols, and

room number of the Service

representative who requested

the information]

P.O. Box 7604

Ben Franklin Station

Washington, DC 20044

However, for cases involving a request for change in accounting method or period

under the jurisdiction of the Assistant Chief Counsel (Income Tax and Accounting),

and a request for an extension of time under § 301.9100–1 on such cases, the

additional information should be sent to:

Internal Revenue Service

ADDITIONAL INFORMATION

Attn: [Name, office symbols, and

room number of the Service

representative who requested

the information]

P.O. Box 14095

Ben Franklin Station

Washington, DC 20044

For all cases, the additional information should include the name, office symbols,

and room number of the Service representative who requested the information, and the

taxpayer’s name and the case control number, which the Service representative can

provide.

21-day period will be extended

if justified and approved

Sec.

(3) An extension of the 21-day period will be granted only if justified in writing by

the taxpayer and approved by the branch chief, senior technician reviewer (or senior

technical reviewer), or assistant to the branch chief (or assistant branch chief) of the

branch to which the case is assigned. A request for extension should be submitted

before the end of the 21-day period. If unusual circumstances close to the end of the

21-day period make a written request impractical, the taxpayer should notify the

national office within the 21-day period that there is a problem and that the written

request for extension will be coming soon. The taxpayer will be told promptly, and

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later in writing, of the approval or denial of the requested extension. If the extension

request is denied, there is no right of appeal.

If taxpayer does not submit

additional information

(4) If the taxpayer does not follow the instructions for submitting additional

information or requesting an extension within the time provided, a letter ruling will be

issued on the basis of the information on hand or, if appropriate, no letter ruling will

be issued. When the Service decides not to issue a letter ruling because essential

information is lacking, the case will be closed and the taxpayer notified in writing. If

the Service receives the information after the letter ruling request is closed, the

request may be reopened and treated as a new request. However, the taxpayer must

pay another user fee before the case can be reopened.

Schedules a conference if

requested by taxpayer

.08 A taxpayer may request a conference regarding a letter ruling request.

Normally, a conference is scheduled only when the national office considers it to be

helpful in deciding the case or when an adverse decision is indicated. If conferences

are being arranged for more than one request for a letter ruling involving the same

taxpayer, they will be scheduled so as to cause the least inconvenience to the

taxpayer. As stated in section 8.02(6) of this revenue procedure, a taxpayer who wants

to have a conference on the issue or issues involved should indicate this in writing

when, or soon after, filing the request.

If a conference has been requested, the taxpayer will be notified by telephone, if

possible, of the time and place of the conference, which must then be held within 21

calendar days after this contact. Instructions for requesting an extension of the 21-day

period and notifying the taxpayer or the taxpayer’s representative of the Service’s

approval or denial of the request for extension are the same as those explained in

section 10.07(3) of this revenue procedure regarding providing additional information.

Permits taxpayer one conference

of right

.09 A taxpayer is entitled, as a matter of right, to only one conference in the

national office, except as explained under section 10.12 of this revenue procedure.

This conference normally will be held at the branch level and will be attended by a

person who, at the time of the conference, has the authority to sign the letter ruling in

his or her own name or for the branch chief.

When more than one branch has taken an adverse position on an issue in a letter

ruling request or when the position ultimately adopted by one branch will affect that

adopted by another, a representative from each branch with the authority to sign in his

or her own name or for the branch chief will attend the conference. If more than one

subject is to be discussed at the conference, the discussion will constitute a conference

on each subject.

To have a thorough and informed discussion of the issues, the conference usually

will be held after the branch has had an opportunity to study the case. However, at the

request of the taxpayer, the conference of right may be held earlier.

No taxpayer has a right to appeal the action of a branch to an assistant chief

counsel or to any other official of the Service. But see section 10.12 of this revenue

procedure for situations in which the Service may offer additional conferences.

In employment tax matters, only the party entitled to the letter ruling is entitled to a

conference. See section 5.09 of this revenue procedure.

Disallows verbatim recording of

conferences

.10 Because conference procedures are informal, no tape, stenographic, or other

verbatim recording of a conference may be made by any party.

Makes tentative recommendations

on substantive issues

.11 The senior Service representative present at the conference ensures that the

taxpayer has the opportunity to present views on all the issues in question. A Service

representative explains the Service’s tentative decision on the substantive issues and

the reasons for that decision. If the taxpayer asks the Service to limit the retroactive

effect of any letter ruling or limit the revocation or modification of a prior letter

ruling, a Service representative will discuss the recommendation concerning this issue

and the reasons for the recommendation. The Service representatives will not make a

commitment regarding the conclusion that the Service will finally adopt.

May offer additional conferences

.12 The Service will offer the taxpayer an additional conference if, after the

conference of right, an adverse holding is proposed, but on a new issue, or on the

same issue but on different grounds from those discussed at the first conference. There

is no right to another conference when a proposed holding is reversed at a higher level

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with a result less favorable to the taxpayer, if the grounds or arguments on which the

reversal is based were discussed at the conference of right.

The limit on the number of conferences to which a taxpayer is entitled does not

prevent the Service from offering additional conferences, including conferences with

an official higher than the branch level, if the Service decides they are needed. Such

conferences are not offered as a matter of course simply because the branch has

reached an adverse decision. In general, conferences with higher level officials are

offered only if the Service determines that the case presents significant issues of tax

policy or tax administration and that the consideration of these issues would be

enhanced by additional conferences with the taxpayer.

Requires written confirmation of

information presented at

conference

.13 The taxpayer should furnish to the national office any additional data,

reasoning, precedents, etc., that were proposed by the taxpayer and discussed at the

conference but not previously or adequately presented in writing. The taxpayer must

furnish the additional information within 21 calendar days from the date of the

conference. See section 10.07 of this revenue procedure for instructions on submission

of additional information. If the additional information is not received within that

time, a letter ruling will be issued on the basis of the information on hand or, if

appropriate, no ruling will be issued.

Procedures for requesting an extension of the 21-day period and notifying the

taxpayer or the taxpayer’s representative of the Service’s approval or denial of the

requested extension are the same as those stated in section 10.07(3) of this revenue

procedure regarding submitting additional information.

May schedule pre-submission

conference

.14 Sometimes it will be advantageous to both the Service and the taxpayer to hold

a conference before the taxpayer submits the letter ruling request to discuss

substantive or procedural issues relating to a proposed transaction. Such conferences

are held only when the taxpayer actually intends to make a request and only on a

time-available basis. Generally, the taxpayer will be asked to provide a draft of the

letter ruling request or other detailed written description of the proposed transaction

before the pre-submission conference.

Any discussion of substantive issues at a pre-submission conference is advisory

only, is not binding on the Service, and cannot be relied upon as a basis for obtaining

retroactive relief under the provisions of § 7805(b). A letter ruling request submitted

following a pre-submission conference will not necessarily be assigned to the branch

that held the pre-submission conference.

May, under limited

circumstances, schedule a

conference to be held by

telephone

.15 Infrequently, taxpayers request that their conference of right be held by

telephone. This may occur, for example, when a taxpayer wants a conference of right

but believes that the issue involved does not warrant incurring the expense of

traveling to Washington, DC. If a taxpayer makes such a request, the branch chief,

senior technician reviewer (or senior technical reviewer), or assistant to the branch

chief (or assistant branch chief) of the branch to which the case is assigned will

decide if it is appropriate in the particular case to hold the conference of right by

telephone. If the request is approved, the taxpayer will be advised when to call the

Service representatives (not a toll-free call).

May request draft of proposed

letter ruling near the completion

of the ruling process

.16 To accelerate issuance of letter rulings, in appropriate cases near the completion

of the ruling process, the Service representative may request that the taxpayer or the

taxpayer’s representative submit a proposed draft of the letter ruling on the basis of

discussions of the issues. The taxpayer, however, is not required to prepare a draft

letter ruling to receive a letter ruling.

The format of the submission should be discussed with the Service representative

who requests the draft letter ruling. The representative usually can provide a sample

format o

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