# SEQ 0107 JOB L36-001-005 PAGE-0003 COVER

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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95–6 superseded.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 Proc. 95–8 superseded.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 Proc. 95–4 superseded.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 Proc. 95–4 superseded.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95–5 superseded.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.

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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.

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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.

13

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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.

15

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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
dete

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Adec94c023204229b. Public record. Not legal advice.