# Appendix — Fostvedt v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1993
- **Citation:** 507 U.S. 988

## Text

APPENDIX A .-i-

Judgment in accordance with the o

pinion of the court in 91-
1334, Fostvedt v.

USA (Lower docket: 91-C-488) was entered

on November 3, 1992.

net 2° lla Bel i

BD REBEL RAS gb. Se Hid Hpk Tk Oe OOTP

APPENDIX A-1

PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

No. 91-1334

ROBERT J. FOSTVEDT
Petitioner,

VS.

UNITED STATES OF AMERICA, INTERNAL REVENUE
SERVICE OF THE UNITED STATES: NICHOLAS F.
BRADY, Secretary of the Treasury; FRED GOLDBERG, JR..
Commissioner of the Internal Revenue Service; G.F.
SWANSON, IRS District Director, BETTY L. MOSES, IRS
Special Agent; DAVID ROMERO, IRS Agent; KIM SAVAGE,
IRS Agent; SUSIE SUTTER, IRS Group Manager; BETSY
SALAS, IRS Agent; CLAY CARPENTER, IRS Special Agent;
and other respondents not known,

Respondents-Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 91-C-488)

Submitted on the briefs:

APPENDIX A-2

Robert J. Fostvedt, pro se.

James A. Bruton, Acting Assistant Attorney General, Gary R.
Allen, Ann B. Dumey, and Mary Frances Clark, Tax Division,
Department of Justice, Washington, D.C. (Michael J. Norton,
United States Attomey, Denver, Colorado, of Counsel) for Re-
spondents-Appellees.

Before McKAY, Chief Judge, and BARRETT, Circuit Judge,
and BRIMMER, ** District Judge.

**Honorable Clarence A. Brimmer, District Judge, United States
District Court for the District of Wyoming, sitting by designa-
tion.

McKAY, Chief Judge.

Petitioner Robert J. Fostvedt commenced this suit seek-
ing judicial review of certain actions and decisions of the Inter-
nal Revenue Service and its agents with respect to the agency's
pre-assessment procedures for his unpaid income taxes for the
years 1982, 1984, and 1985. Petitioner alleges that Respon-
dents violated his constitutional rights by (1) failing to timely
respond to his request for technical advice, (2) denying him an
appeals conference, (3) failing to publish its field organization
and final delegations of authority in the Federal Register and (4)
keeping records classifying him an "illegal tax protester" in vio-
lation of the Privacy Act.

In his petition for review, Petitioner seeks to have the
Court compel the IRS to submit his request for technical advice,
abate the notice of deficiency, and hold an appeal conference.
In addition, he asks that the court declare the actions of the
agency to be arbitrary, capricious, an abuse of discretion and
unconstitutional, and enjoin the agency from further action
against Petitioner until it has complied with his requests.

Respondents moved for dismissal pursuant to Fed. R.
Civ. P. 12(b)(1) for lack of subject matter jurisdiction, or in the

APPENDIX A-3

alternative, pursuant to Fed. R. Civ. P. 12(b)(6) for failure to
state a claim upon which relief can be granted. The district
court granted Respondents’ motion and dismissed Petitioner's ac-
tion for lack of subject matter jurisdiction. We review the ques-
tion of a district court's subject matter jurisdiction de novo,
Redmon ex rel. Redmon v. United States, 934 F.2d 1151, 1155
(10th Cir. 1991), and we affirm.'
I. Jurisdiction

The United States may not be sued without its consent.
United States v. Dalm, 494 U.S. 596, 608 (1990). Such a
waiver of sovereign immunity must be strictly construed in fa-
vor of the sovereign and may not be extended beyond the ex-
plicit language of the statute. Ruckelshaus v. Sierra Club, 463
U.S. 680, 685 (1983). "It long has been established, . . . that
the United States, as sovereign, 'is immune from suit save as it
consents to be sued . . . and the terms of its consent to be sued
in any court define that court's jurisdiction to entertain the suit."
United States v. Testan, 424 U.S. 392, 399 (1976) (quoting
United States v. Sehrwood, 312 U.S. 584, 586 (1941)). A
waiver of sovereign immunity cannot be implied, but must be
explicitly expressed. United States v. King, 395 U.S. 1, 4
(1969).

Petitioner asserts that the court has subject matter juris-
diction pursuant to 18 U.S.C. §§ 1331 (federal question juris-
diction), 1340 (jurisdiction over actions arising under the Inter-
nal Revenue Code), and 1361 (jurisdiction of actions in the na-
ture of mandamus). Lonsdale v. United States, 919 F.2d 1440,
1444 (10th Cir. 1990). These are statutes conferring general
jurisdictional and "[sJovereign immunity is not waived by gen-
eral jurisdictional statutes." Jd. ?

' After examining the briefs and appellate record, this
panel has determined unanimously that oral argument would not
materially assist the determination of this appeal. See Fed. R.
App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore or-
dered submitted without oral argument.

: Subject matter jurisdiction over internal revenue actions
is provided by 28 U.S.C. § 1340. However, this grant does
not constitute a waiver of sovereign immunity. Guthrie v. Saw-
yer, 970 F2d 733, 735 (10th Cir. 1992).

ee
APPENDIX A-4

The burden is on the taxpayer to find and prove an "ex-
plicit waiver of sovereign immunity." Lonsdale, 919 F.2d at
1444. Petitioner contends that the right of judicial review pro-
vision of the Administrative Procedure Act, 5 U.S.C. § 702,
when coupled with a grant of general jurisdiction, creates a
waiver of sovereign immunity in this case. We do not agree.
First, the APA does not create an independent grant of juris-
diction for the review of agency actions. Eagle-Picher Indus.,
Inc. v. United States, 901 F.2d 1530, 1532 (10th Cir. 1990).
Second, § 702 clearly disclaims any effect on existing limita-
tions on the court's power to grant relief.

Section 702 reads in pertinent part:

A person suffering legal wrong because of
agency action, or adversely affected or aggrieved

by agency action within the meaning of a rel-

evant statute, is entitled to judicial review thereof.

An action in a court of the United States seek-

ing relief other than money damages and stating

a claim that an agency or an officer or employee

thereof acted or failed to act in an official capac-

ity or under color of legal authority shall not be

dismissed nor relief therin be denied on the

ground that it is against the United States o1 that

the United States an indispensable party. .. .

Nothing herein (1) affects other limitations on ju-

dicial review or the power or duty of the court

to dismiss any action or deny relief on any other

appropriate legal or equitable ground; or (2) con-

fers authority to grant relief if any other statute

that grants consent to suit expressly or impliedly

forbids the relief which is sought.

Although disguised as a procedural challenge, the essence of
Petitioner's action is an attempt to delay and/or prevent the IRS
from assessing and collecting the income tax deficiencies and
penalties due because of Petitioner's failure to file income tax
retums for the years in question. James v. United States, 970
F.2d 750, 753-54 (10th Cir. 1992).3

, We note that in Petitioner's complaint, he claims to have

APPENDIX A-5

-Actions in the nature of Petitioner's suit are prohibited
by the Anti-Injunction Act. 26 U.S.C. § 7421(a), and the tax
exception provision of the Declaratory Judgment Act, 28 U.S.C.
§ 2201. Section 7421(a) provides that no suit to restrain the
assessment or collection of any tax shall be maintained. In ad-
dition, the Declaratory Judgment Act specifically prohibits de-
claratory judgments in matters relating to federal taxes. See 28
U.S.C. § 2201; Flora v. United States, 362 U.S. 145, 164
(1960).4

Contrary to petitioner's assertions, § 702 of the APA
does not override the limitations of the Anti-Injunction Act and
the Declaratory Judgment Act. See McCarty v. United States,
929 F.24 1085, 1088 (Sth Cir. 1991). It is clear that the Anti-
Injunction Act and the Declaratory Judgment Act are part of a
specific statutory framework intended by Congress as limitations
not negated by the APA. See Lonsdale, 919 F.2d at 1444 (§
702 does not provide authority to grant relief where other stat-
utes forbid the relief sought). The legislative history of the
1976 amendment to § 702 specifically states that the revision is
to have no affect on the limitations and prohibitions of the
Anti-Injunction and Declaratory Judgment Acts. H.R. Rep. No.
1656, 94th Cong., 2d Sess. 12, reprinted in 1976 U.S.C.C.A.N.
6121, 6132-33. Therefore, because we agree that Petitioner has

Footnote 3 continued.

no ties whatsoever, with the United States. R. Vol. I, doc. 20
at 2-3. He claims that he is a "Citizen of the State of Texas,"
and that the hospital he was born in is located on land which
was never deeded to the United States. Jd. at 2.

: There are statutory and judicial exception to the prohi-
bition of both statutes. See, eg., 26 U.S.C. § § 6212(c)(1) and
6213(a); 26 U.S.C. § 7428; Enochs v. Williams Packing &
Navigation Co., 370 U.S. 1 (1962). However, Petitioner has
failed to bring himself within any of the exceptions, and thus,
none are applicable here. The district court must dismiss, for
lack of subject matter jurisdiction, any suit that does not fall
within one of the exceptions. Alexander v. "Americans
United.” Inc., 416 U.S. 752, 757-58 (1974).

reo enn OSE ar Ce eR ST eM eR RE EIT OF ea

APPENDIXA-6

failed to find and prove an explicit waiver of sovereign immu-
nity in this case, we conclude that the district court was correct
in dismissing Petitioner's action for lack of subject matter juris-
diction. °
II. Sanctions

Respondents have requested sanctions be imposed on
Petitioner for a frivolous appeal pursuant to 28 U.S.C. § 1912
and Fed. R. App. P. 38. See Casper v. Commissioner, 805 F.2d
902, 906 (10th Cir. 1986). Petitioner has had an opportunity
to respond in his reply brief. See Braley v. Campbell, 832 F.2d
1504, 1510 (10th Cir. 1987). Although Petitioner has a history
of appeals in this court in which he has raised tax collection
issues, we decline to impose sanctions in this case. However,
in the event Petitioner should attempt to raise these same issues
again sanctions may be considered proper.

The Judgment of the United States District Court for the
District of Colorado is AFFIRMED.

: Because we agree that the district court lacked subject
matter jurisdiction, we do not reach the merits of Petitioner's
additional claims.

APPENDIX B-1

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF COLORADO

CASE No. 91-C-488

ROBERT J. FOSTVEDT,
Plaintiff,
vs.

UNITED STATES OF AMERICA, et al.,
Defendants.

ORDER

CARRIGAN, J.

Petitioner, Robert J. Fostvedt, commenced this action al-
leging that the Internal Revenue Service (IRS) violated his con-
stitutional rights by denying him an appeals conference, deny-
ing his request for technical assistance, and failing to publish its
field organization and final delegations of authority in the Fed-
eral Register. Respondents are the IRS and nine federal em-
ployees, each named in his or her official capacity. On June
25, 1991, the respondents moved to dismiss. Petitioner initially
was ordered to respond to the motions no later than July 10,
1991, but he requested and was granted an extension until July
29, 1991. Rather than responding, the petitioner apparently tried
to overcome the defects highlighted by the respondents’ motions
by filing an amended petition.

Respondents assert that his court lacks subject matter ju-
risdiction. A suit against a federal agency is deemed to be a
Suit against the United States “if judgment would expend itself
on the public treasury or domain. .. ." Dugan et al. v. Rank
et al., 372 U.S. 609, 620. In addition, an action against a gov-
ernment official in his or her official capacity is a suit against
the United States. Jd. at 620. Therefore, this action must be

APPENDIX B-2

construed as a suit against the United States.

As sovereign, the United States is immune from suit un-
less it expressly has consented to be sued. The terms of its
consent to be sued define the court's jurisdiction to entertain the
action. United States v. Testan, 424 U.S. 392, 399 (1976); As-
cot Dinner Theatre Ltd. v. Small Business Administration, 887
F.2d 1024, 1027 (10th Cir. 1989). It follows that the petitioner
is barred except to the extent that the United States may have
waived sovereign immunity.

Waiver of sovereign immunity can not be implied, but
must be unequivocally expressed. Testan, 424 U.S. at 399;
Ascot, 887 F.2d at 1027. In his amended petition, the petitioner
asserts that the United States has waived sovereign immunity
pursuant to 5 U.S.C. §§ 551(13), 552a(e), 701, 702, 703, 704,
705 and 706 (the Administrative Procedure Act) and 26 U.S.C.
§ 7805. Absent a clear waiver of sovereign immunity in one
of the statutes relied on to support jurisdiction, the petition must
be denied.

In Lonsdale v. United States, 919 F.2d 1440, 1444 (i0th
Cir. 1990), the Tenth Circuit stated that "[t]he Administrative pro-
cedure Act itself is not a grant of jurisdiction for the review of
agency actions." Thus, none of the act's provisions relied
upon by the petitioner waives sovereign immunity. Jd.

Section 7805 of Title 26 does not deal with either fed-
eral court jurisdiction or sovereign immunity. It is difficult to
understand how the petitioner could argue that that section could
be construed as an explicit waiver of sovereign immunity. |
conclude that it is not such a waiver.

Because the United States has not waived its sovereign
immunity, the Petition must be dismissed.

Accordingly IT IS ORDERED that the respondents’ mo-
tions to dismiss are granted and the petition is dismissed for
each of lack of subject matter jurisdiction.

Dated at Denver, Colorado July 30, 1991.

BY THE COURT:

/S/

JIM R. CARRIGAN

UNITED STATES DISTRICT JUDGE

——E

APPENDIX C-]

26 CODE OF FEDERAL REGULATIONS § 601.105(b)(5)

(5) Technical advice from the National Office - (i)
Definition and nature of technical advice. (a) As used in this
subparagraph, "technical advice" means advice or guidance as to
the interpretation and proper application of internal revenue laws,
related statutes, and regulations, to a specific set of facts, fur-
nished by the National Office upon request of a district office
in connection with the examination of a taxpayer's return or
consideration of a taxpayer's return claim for refund or credit.
It is furnished as a means of assisting Service personnel in clos-
ing cases and establishing and maintaining consistent holdings in
the several districts. It does not include memorandums on mat-
ters of general technical application furnished to district offices
where the issues are not raised in connection with the exami-
nation of a return of a specific taxpayer.

(b) The consideration or examination of the facts relat-
ing to a request for a determination letter is considered to be in
connection with the examination or consideration of a return of
the taxpayer. Thus, a district director may, in his discretion,
request technical advice with respect to the consideration of a
request for a determination letter.

(c) If a district director is of the opinion that a ruling
letter previously issued to a taxpayer should be modified or re-
voked, and requests the National Office to reconsider the ruling,
the reference of the matter to the National Office is treated as
a request for technical advice and the procedures specified in
subdivision (iii) of this subparagraph should be followed in or-
der that the National Office may consider the district director's
recommendation. Only the National Office can revoke a ruling
letter. Before referral to the National Office, the district direc-
tor should inform the taxpayer of his opinion that the ruling let-
ter should be revoked. The district director, after development
of the facts and consideration of the taxpayer's arguments, will
decide whether to recommend revocation of the ruling to the
National Office. For procedures related to a request for a mul-
ing, see § 601.201.

(d) The Assistant Commissioner (Technical), acting un-
der a delegation of authority from the Commissioner of Internal

APPENDIX C-2

Revenue, is exclusively responsible for providing technical ad-
vice in any issue involving the establishment of basic principles
and rules for the uniform interpretation and application of tax
laws other than those which are under the jurisdiction of the
Bureau of Alcohol, Tobacco and Firearms. This authority has
been largely redelegated to subordinate officials.

(e) The provisions of this subparagraph apply only to
a case under the jurisdiction of a district director but do not
apply to an Employee Plans case under the jurisdiction of a key
district director as provided in § 601.201(0) or to an Exempt
Organization case under the jurisdiction of a key district direc-
tor as provided in § 601.201(n). The technical advice provi-
sions applicable to Employee Plans and Exempt Organization
cases are set forth in § 601.201(n)(9). The provisions of this
subparagraph do not apply to a case under the jurisdiction of
the Bureau of Alcohol, tobacco, and Fire arms. They also do
not apply to a case under the jurisdiction of an Appeals office,
including a case previously considered by Appeals. The tech-
nical advice provisions applicable to a case under the jurisdic-
tion of an Appeal office, other than Employee Plans and Ex-
empt Organizations cases, are set forth in § 601.106(f)(10). A
case remains under the jurisdiction of the district director even
though an Appeals office has the identical issue under consid-
eration in the case of another taxpayer (not related within the
meaning of section 267 of the Code) in’ an entirely different
transaction. Technical advice may not be requested with respect
to a taxable period if a prior Appeals disposition of the same
taxable period of the same taxpayer's case based on mutual con-
cessions (ordinarily with a Form 870-AD, Offer of Waiver of
Restrictions on Assessment and Collection of Deficiency in Tax
and of Acceptance of Overassessment). However, technical ad-
vice may be requested by a district director on issues previously
considered in a prior Appeals disposition, not based on mutual
consessions, of the same taxable periods of the same taxpayer
with the concurrance of the Appeals office that had the case.

(ii) Areas in which technical advice may be requested.
(a) District directors may request technical advice on any tech-
nical or procedural question that develops during the audit or
examination of a return, or claim for refund or credit, of a tax-

APPENDIX C-3

payer. These procedures are applicable as provided in subdi-
vision (i) of this subparagraph.

(b) District directors are encouraged to request techni-
cal advice on any technical or procedural question arising in
connection with any case of the type described in subdivision
(i) of this subparagraph, which cannot be resolved on the ba-
sis of law, regulations or a clearly applicable revenue ruling or
other precedent issued by the National Office. This request
should be made at the earliest possible state of the examination
process.

(iii) requesting technical advice. (a) It is the responsi-
bility of the district office to determine whether technical advice
is to be requested on any issue before that office. However,
while the case is under the jurisdiction of the district director,
a taxpayer or his/her representative may request that an issue be
referred to the National Office for technical advice on the
grounds that a lack of uniformity exists as to the disposition of
the issue, or that the issue is so unusual or complex as to war-
rant consideration by the National Office. This request should
be made at the earliest possible state of the examination process.
While taxpayers are encouraged to make written requests setting
forth the facts, law, and argument with respect to the issue, and
reason for requesting National Office advice, a taxpayer may
make the request orally. If, after considering the taxpayers re-
quest, the examiner is of the opinion’ that the circumstances do
not warrant referral of the case to the National Office, he/she
will so advise the taxpayer. (See subdivision (iv) of this
subparagraph for taxpayer's appeal rights where the examiner
declines to request technical advice.)

(b) When technical advice is to be requested, whether
or not upon the request of the taxpayer, the taxpayer will be so
advised, except as noted in (g) of this subdivision. If the ex-
aminer initiates the action, the taxpayer will be furnished a copy
of the statement of the pertinent facts and the question or ques-
tions proposed for submission to the National Office. The re-
quest for advice submitted by the district director should be so
worded as to avoid possible misunderstanding, in the National
Office, of the facts or of the specific point or points at issue.

(c) After receipt of the statement of facts and specific

APPENDIX C-4

questions from the district office, the taxpayer will be given 10
calendar days in which to indicate in writing the extent, if any,
to which he may not be in complete agreement. An extension
of time must be justified by the taxpayer in writing and ap-
proved by the Chief, Examination Division. Every effort shou!d
be made to reach agreement as to the facts and specific point
at issue. If agreement cannot be reached, the taxpayer may
submit, within 10 calendar days after receipt of notice from the
dismict office, a statement of his understanding as to the specific
point or points at issue which will be forwarded to the National
Office with the request for advice. An extension of time must
be justified by the taxpayer in writing and approved by the
Chief, Examination Division.

(d) If the taxpayer initiates the action to request advice,
and his statement of the facts and point or points at issue are
not wholly acceptable to the district officials, the taxpayer will
be advised in writing as to the areas of disagreement. The tax-
payer will be given 10 calendar days after receipt of the writ-
ten notice to reply to the district official's letter. An extension |
of time must be justified by the taxpayer in writing and ap-
proved by the Chief, Examination Division. If agreement can-
not be reached, both the statements of the taxpayer and the dis-
trict official will be forwarded to the National Office.

(e)(1) In the case of requests for technical advice the
taxpayer must also submit, within the 10-day period referred to
in (c) and (d) of this subdivision, whichever applicable (relating
to agreement by the taxpayer with the statement of facts sub-
mitted in connection with the request for technical advice), the
statement described in (f) of this subdivision of proposed dele-
tions pursuant to section 6110(c) of the Code. If the state-
ment is not submitted, the taxpayer will be informed by the dis-
trict director that such a statement is required. If the district
director does not receive the statement within 10 days after the
taxpayer has been informed of the need for such statement, the
district director may decline to submit the request for technical
advice. If the district director decides ta request technical ad-
vice in a case where the taxpayer has not submitted that state-
ment of proposed deletions, the National Office will make those
deletions which in the judgment of the Commissioner are re-

a

APPENDIX C-5

quired by section 6110(c) of the Code.

(2) The requirements included in § 601.105(b)(5) with
respect to submissions of statements and other material with re-
spect to proposed deletions to be made from technical advice
memoranda before public inspection is permitted to take place
do not apply to requests made by the district director before
November 1, 1976, or request for any document to which sec-
tion 6104 of the Code applies.

() In order to assisi the Internal Revenue Service in
making the deletions, required by section 6110(c) of the Code,
from the text of technical advice memoranda which are open to
public inspection pursuant to section 6110(a) of the Code, there
must accompany requests for such technical advice either a
statement of the deletions proposed by the taxpayer and the
statutory basis for each proposed deletion, or a statement that
no information other than names, addresses and taxpayer iden-
tifying number need be deleted. Such statements shall be made
in a separate document. The statement of proposed deletions
shall be accompanied by a copy of all statements which are sub-
mitted to the National Office pursuant to (c) or (d) of this sub-
division, on which shall be indicated, by the use of brackets,
the material which the taxpayer indicated should be deleted pur-
suant to section 6110(c) of the Code. The statement of pro-
posed deletions shall indicate the statutory basis, under section
6110(c) of the Code, for each proposed deletion. The statement
of proposed deletions shall not appear or be referred to any-
where in the request for technical advice. If the taxpayer de-
cides to request additional deletions pursuant to section 6110(c)
of the Code prior to the time the National Office replies to the
request for technical advice, additional statements may be sub-
mitted.

(g) If the taxpayer has not already done so, the tax-
payer may submit a statement explaining the taxpayer's position
on the issues, citing precedents which the taxpayer believes will
bear on the case. This statement will be forwarded to the Na-
tional Office with the request for advice. If it is received at a
later date, it will be forwarded for association with the case file.

(h) At the time the taxpayer is informed that the matter
is being referred to the National Office, the taxpayer will also

APPENDIX C-6

be informed of the taxpayer's mght to a conference in the Na-
tional Office in the event an adverse decision is indicated, and
will be asked to indicate whether such a conference is desired.

(i) Generally, prior to replying to the request for tech-
nical advice the National Office shall inform the taxpayer orally
or in writing of the material likely to appear in the technical
advice memorandum which the taxpayer proposed be deleted
but which the Internal Revenue Service determined should not
be deleted. If so informed the taxpayer may submit within 10
days any further information, arguments or other material in sup-
port of the position that such material be deleted. The Internal
Revenue Service will attempt, if feasible, to resolve all disagree-
ments with respect to proposed deletions prior to the time the
National Office replies to the request for technical advice. How-
ever, in no event shall the taxpayer have the nght to a confer-
ence with respect to resolution of any disagreements concerning
material to be deleted from the text of the technical advice
memorandum, but such matters may be considered at any con-
ference otherwise scheduled with respect to the request.

(j) The provisions of (a) through (i) of this subdivision,
relating to the referral of issues upon request of the taxpayer,
advising taxpayers of the referral of issues, the submission of
proposed deletions, and the granting of conferences in the Na-
tional Office, are not applicable to technical advice memoranda
described in section 611(g)(5)(A) of the Code, relating to cases
involving criminal or civil fraud investigation and jeopardy or
termination assessments. However, in such cases the taxpayer
shall be allowed to provide the statement of proposed deletions
to the National Office upon completion of all proceedings with
respect to the investigations or assessments, but prior to the date
on which the Commissioner mails the notice pursuant to section
6110(f)(1) of the Code of intention to disclose the technical ad-
vice memorandum.

(k) Form 4463, Request for Technical Advice, should
be used for transmitting requests for technical advice to the Na-
tional Office.

(iv) Appeal by taxpayers of determination not to seek
technical advice. (a) If the taxpayer has requested referral of
an issue before a district office to the National Office for tech-

APPENDIX C-7

nical advice, and after consideration of the request the examiner
is of the opinion that the circumstances do not warrant such re-
ferral, he will so advise the taxpayer.

(b) The taxpayer may appeal the decision of the exam-
ining officer not to request technical advice by submitting to that
official, within 10 calendar days after being advised of the de-
cision, a statement of the facts, law, and arguments with respect
to the issue, and the reasons why he believes the matter should
be referred to the National Office for advice. An extension of
time must be justified by the taxpayer in writing and approved
by the Chief, Examination Division.

(c) The examining officer will submit the statement of
the taxpayer through channels to the Chief, Examination Divi-
sion, accompanied by a statement of his reasons why the issue
should not be referred to the National Office. The Chief, Ex-
amination Division, will determine, on the basis of the statements
submitted, whether technical advice will be requested. If he de-
termines that technical advice is not warranted, he will inform
the taxpayer in writing that he proposes to deny the request. In
the letter to the taxpayer the Chief, Examination Division, will
(except in unusual situations where such action would be preju-
dicial tc the best interests of the Government) state specifically
the reasons for the proposed denial. The taxpayer will be given
15 calendar days after receipt of the letter in which to notify
the Chief, Examination Division, whether he agrees with the pro-
posed denial. The taxpayer may not appeal the decision of the
Chief, Examination Division, not to request technical advice from
the National Office. However, if he does not agree with the
proposed denial all data relating to the issue for which techni-
cal advice has been sought, including taxpayer's written request
and statements, will be submitted to the National Office, Atten-
tion: Director, Examination Division, for review. After review
in the National Office, the district office will be notified whether
the proposed denial is approved or disapproved.

(d) While the matter is being reviewed in the National
Office, the district office will suspend action on the issue (ex-
cept where the delay would prejudice the Government's interest)
until it is notified of the National Office decision. This notifi-
cation will be made 30 days after receipt of the data in the

APPENDIX C-8

National Office. The review will be solely on the basis of the
written record and no conference will be held in the National
Office.

(v) Conference in the National Office. (a) If, after a
study of the technical advice request, it appears that advice ad-
verse to the taxpayer should be given and a conference has
been requested, the taxpayer will be notified of the time and
place of the conference. If conferences are being arranged with
respect to more than one request for advice involving the same
taxpayer, they will be so scheduled as to cause the least incon-
venience to the taxpayer. The conference will be arranged by
telephone, if possible, and must be held within 21 calendar days
after contact has been made. Extensions of time will be granted
only if justified in writing by the taxpayer and approved by the
appropriate Technical branch chief.

(b) A taxpayer is entitled, as a matter of right to only
one conference in the National Office unless one of the circum-
stances discussed in (c) of this subdivision exists. This confer-
ence will usually be held at the branch level in the appropriate
division (Corporation Tax Division or Individual Tax division) in
the office of the Assistant Commissioner (Technical), and will
usually be attended by a person who has authority to act for
the branch chief. In appropriate cases the examining officer may
also attend the conference to clarify the facts in the case. If
more than one subject is discussed at the conference, the dis-
cussion constitutes a conference with respect to each subject.
At the request of the taxpayer or his representative, the confer-
ence may be held at an earlier state in the consideration of the
case than the Service would ordinarily designate. A taxpayer
has no "right" of appeal from an action of a branch to the di-
rector of a division or to any other National Office official.

(c) In the process of review of a holding proposed by
a branch, it may appear that the final answer will involve a re-
versal of the branch proposal with a result less favorable to the
taxpayer. Or it may appear that the adverse holding proposed
- by a branch will be approved, but on a new or different issue
or on different grounds than those on which the branch decided
the case. Under either of these circumstances, the taxpayer or
his representative will be invited to another conference. The

APPENDIX C-9

provisions of this subparagraph limiting the number of confer-
ences to which a taxpayer is entitled will not foreclose inviting
a taxpayer to attend further conferences when, in the opinion of
National Office personnel, such need arises. All additional con-
ferences of this type discussed are held only at the invitation of
the Service.

(d) It is the responsibility of the taxpayer to furnish to
the National Office, within 21 calendar days after the confer-
ence, a written record of the conference, a written record of any
additional data, line of reasoning, precedents, etc., that were pro-
posed by the taxpayer and discussed at the conference but were
not previously or adequately presented in writing. Extensions of
time will be granted only if justified in writing by the taxpayer
and approved by the appropriate Technical branch chief. Any
additional material and a copy thereof should be addressed to
and sent to the National Office which will forward the copy to
the appropriate district director. The district director will be re-
quested to give the matter his prompt attention. He may verify
the additional facts and data and comment upon it to the ex-
tent he deems it appropriate.

(e) A taxpayer or a tax payer's representative desiring
to obtain information as to the status of the case may do so by
contacting the following offices with respect to matters in the
areas of their responsibility:

Official Telephone numbers, (Area

Code 202)
Director Corporation Tax Division 566-4504 or 566-4505
Director Individual Tax Division 566-3767 or 566-3788

(vi) Preparation of technical advice memorandum by
the National Office. (a) Immediately upon receipt in the National
Office, the technical employee to whom the case is assigned
will analyze the file to ascertain whether it meets the require-
ments of subdivision (iii) of this subparagraph. If the case is
not complete with respect to any requirement in subdivisions
(iii)(a) through (d) of this subparagraph, appropriate steps will
be taken to complete the file. If any request for technical ad-
vice does not comply with the requirements of subdivision

APPENDIX C-10

(iii)(e) of this subparagraph, relating to the statement of proposed
deletions, the National Office will make those deletions from the
technical advice memorandum which in the judgment of the
Commissioner are required by section 61210(c) of the Code.

(b) If the taxpayer has requested a conference in the
National Office the procedures in subdivision (v) of this
subparagraph will be followed.

(c) Replies to request for technical advice will be ad-
dressed to the district director and will be drafted in two parts.
Each part will identify the taxpayer by name, address, identifi-
cation number, and the year or years involved. The first part :
(hereafter called the "Technical Advice Memorandum") will
contain (J) a recitation of the pertinent facts having a bearing :
on the issue; (2) a discussion of the facts, precedents, and rea- |
soning of the National Office; and (3) the conclusions of the |
National Office. The conclusions will give direct answers, when-
ever possible, to the specific questions of the district office. |
The discussion of the issues will be in such detail that the dis-
trict officials are appraised of the reasoning underlying the con-
clusion. There shall accompany the technical advice memoran-
dum a notice pursuant to section 6110(f)(1) of the Code of in-
tention to disclose the technical advice memorandum (including |
a copy of the version proposed to be open to public inspection
and notations of third party communications pursuant to section
6110(d) of the Code) which the district director shall forward
to the taxpayer at such time that the district director furnishes
a copy of the technical advice memorandum to the taxpayer
pursuant to (e) of the subsection.

(d) The second part of the reply will consist of a trans-
mittal memorandum. In the unusual cases it will serve as a
vehicle for providing the district office administrative information
or other information which, under the nondisclosure statutes, or
for other reasons, may not be discussed with the taxpayer.

(e) It is the general practice of the Service to furnish
a copy of the technical advice memorandum to the taxpayer
after it has been adopted by the district director. However, in
the case of a technical advice memoranda described in section
6119(g)(5)(A) of the Code, relating to cases involving criminal
or civil fraud investigations and jeopardy or termination assess-

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APPENDIX C-11

ments, a copy of the technical advice memorandum shali not be
furnished the taxpayer until all proceedings with respect to the
investigations or assessments are completed.

(f) After receiving the notice pursuant to section
6110(f)(1) of the Code of intention to disclose the technical ad-
vice memorandum, if the taxpayer desires to protest the disclo-
sure of certain information in the technical advice memorandum,
the taxpayer must within 20 days after the notice is mailed sub-
mit a written statement identifying those deletions not made by
the Internal Revenue Service which the taxpayer believes should
have been made. The taxpayer shall also submit a copy of the
version of the technical advice memorandum proposed to be
open to public inspection on which the taxpayer indicates, by
the use of brackets, the deletions proposed by the taxpayer but
which have not been made by the Internal Revenue Service.
Generally the internal Revenue Service will not consider the
deletion under this subparagraph of any material which the tax-
payer did not, prior to the time when the National Office sent
its reply to the request for technical advice to the district direc-
tor, propose be deleted. The Internal Revenue Service shall,
within 20 days after receipt of the response by the taxpayer to
the notice pursuant to section 6110(f)(1) of the Code, mai! to
the taxpayer its final administrative conclusion with respect to
the deletions to be made.

(vii) Action on technical advice in district offices. (a)
Unless the district director feels that the conclusions reached by
the National Office in a technical advice memorandum should
be reconsidered and promptly requests such reconsideration, his
office will proceed to process the taxpayer's case on the basis
of the conclusions expressed in the technical advice memoran-
dum.

(b) The district director will furnish the taxpayer a
copy of the technical advice memorandum described in subdi-
vision (vi)(c) of this subparagraph and the notice pursuant to
section 6110(f)(1) of the Code of intention to disclose the tech-
nical advice memorandum (including a copy of the version pro-
posed to be open to public inspection and notations of third
party communications pursuant to section 6110(d) of the Code).
The preceding sentence shall not apply to technical advice

APPENDIX C-12

memoranda involving civil fraud or criminal investigation, or
jeopardy or termination assessments, as described in subdivision
(iii)(j) of this subparagraph or to documents to which section
6104 of the Code applies.

(c) In those cases in which the National Office advises
the district director that he should not furnish a copy of the
technical memorandum to the taxpayer, the district director will
so inform the taxpayer if he requests a copy.

(viii) Effect of technical advice. (a) A technical advice
memorandum represents an expression of the views of the Ser-
vice as to the application of law, regulations, and precedents to
the facts of a specific case, and is issued primarily as a means
of assisting district official in the examination and closing of the
case involved. '

(b) Except in rare or unusual circumstances, a holding
in a technical advice memorandum that is favorable to the tax-
payer is applied retroactively. Moreover, since technical advice,
as described in subdivision (i) of this subparagraph, is issued
only on closed transactions, a holding in a technical advice |
memorandum that is adverse to the taxpayer is also applied ret- |
roactively uniess the Assistant Commissioner (Technical) exer-
cises the discretionary authority under section 7805(b) of the
Code to limit the retroactive effect of the holding. Likewise, a |
holding in a technical advice memorandum that modifies or re- |
vokes a holding in a prior technical advice memorandum will |
also be applied retroactively, with one exception. If the new
holding is less favorable to the taxpayer, it will generally not be |
applied to the period in which the taxpayer relied on the prior
holding in situations involving continuing transactions of the
type described in §§ 601.201(1)(7) and 601.601(d)(2)(v).

(d) A district director may raise an issue in any taxable
period, even though he or she may have asked for and been
furnished technical advice with regard to the same or a similar
issue in any other taxable period.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_2121%3A2. Public record. Not legal advice.