For purposes of this revenue procedure—

(1) the term “Service” includes the Internal Revenue Service, the four operating divisions of the Internal Revenue Service that are responsible for meeting the needs of the taxpayers they serve, and the Associate offices. The four operating divisions are:

(a) Large and Mid-Size Business Division (LMSB), which generally serves corporations, including S corporations, and partnerships, with assets in excess of $10 million;

(b) Small Business/Self-Employed Division (SB/SE), which generally serves corporations, including S corporations, and partnerships, with assets less than or equal to $10 million; estates and trusts; individuals filing an individual federal income tax return with accompanying Schedule C (Profit or Loss From Business (Sole Proprietorship)), Schedule E (Supplemental Income and Loss), Schedule F (Profit or Loss From Farming), Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses; and individuals with international tax returns;

(c) Wage and Investment Division (W&I), which generally serves individuals with wage and investment income only (and with no international tax returns) filing an individual federal income tax return without accompanying Schedule C, E, or F, or Form 2106 or Form 2106-EZ; and

(d) Tax Exempt and Government Entities Division (TE/GE), which serves three distinct taxpayer segments: employee plans, exempt organizations, and government entities.

(2) the term “Associate office” refers to the Office of Associate Chief Counsel (Corporate), the Office of Associate Chief Counsel (Financial Institutions and Products), the Office of Associate Chief Counsel (Income Tax and Accounting), the Office of Associate Chief Counsel (International), the Office of Associate Chief Counsel (Passthroughs and Special Industries), the Office of Associate Chief Counsel (Procedure and Administration), or the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities), as appropriate.

(3) the term “Director” refers to the Director, Field Operations, LMSB; the Area Director, Field Examination, SB/SE; Chief, SB/SE International Field & Policy; Chief, Estate & Gift Tax Operations, SB/SE; Chief, Employment Tax Operations, SB/SE; Chief, Excise Tax Operations, SB/SE; or the Director, Compliance, W&I; the Director, International, LMSB; the Director, Employee Plans Examinations; the Director, Exempt Organizations Examinations; the Director, Federal, State & Local Governments; the Director, Tax Exempt Bonds; or the Director, Indian Tribal Governments, as appropriate.

(4) the term “field office” refers to the respective offices of the Directors, as appropriate.

(5) the term “taxpayer” includes all persons subject to any provision of the Internal Revenue Code (including issuers of § 103 obligations) and, when appropriate, their representatives.

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

A “letter ruling” is a written determination issued to a taxpayer by an Associate office in response to a written inquiry from an individual or an organization about its status for tax purposes or the tax effects of its acts or transactions, prior to the filing of returns or reports that are required by the revenue laws. A letter ruling interprets and applies the tax laws to the taxpayer’s specific set of facts and is given when appropriate in the interest of sound tax administration. A letter ruling includes the written permission or denial of permission by an Associate 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 (section 9.19 for a change in accounting method letter ruling) of this revenue procedure, unless it is accompanied by a “closing agreement.”

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 taxpayer may request a closing agreement with the letter ruling, or in lieu of a letter ruling, with respect to a transaction that would be eligible for a letter ruling. In such situations, the Associate Chief Counsel with subject matter jurisdiction signs the closing agreement on behalf of the Service.

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 for the issuance of a letter ruling.

If, in a single case, a closing agreement is requested for each person or entity in a class of taxpayers, separate agreements are entered into only if the class consists of 25 or fewer taxpayers. 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.

A “determination letter” is a written determination issued by a Director that applies the principles and precedents previously announced by the Service to a specific set of facts. It is issued only when a determination can be made based on clearly established rules in a statute, a tax treaty, the regulations, a conclusion in a revenue ruling, or an opinion or court decision that represents the position of the Service.

An “information letter” is a statement issued either by an Associate office or by a 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 that general information will help the taxpayer. An information letter is advisory only and has no binding effect on the Service. If the Associate office issues an information letter in response to a request for a letter ruling that does not meet the requirements of this revenue procedure, the information letter is not a substitute for a letter ruling. The taxpayer should provide a daytime telephone number with the taxpayer’s request for an information letter.

Information letters requests to Associate offices mailed on or after February 1, 2006, will be subject to a user fee. See Appendix A.

Information letters that are issued by the Associate offices to members of the public are made available to the public. Information letters that are issued by the field offices are not made available to the public.

Because information letters do not constitute written determinations as defined in § 6110, they are not subject to public inspection under § 6110. The Service makes the information letters available to the public under the Freedom of Information Act (“FOIA”). Before any information letter is made available to the public, an Associate office will delete any name, address, and other identifying information as appropriate under the FOIA (for example, FOIA personal privacy exemption of 5 U.S.C. § 552(b)(6) and tax details exempt pursuant to § 6103, as incorporated into FOIA by 5 U.S.C. § 552(b)(3)).

The following documents also will not be available for public inspection as part of this process:

(1) transmittal letters in which the Service furnishes publications or other publicly available material to taxpayers, without any significant legal discussion;

(2) responses to taxpayer or third party contacts that are inquiries with respect to a pending request for: a letter ruling, technical advice memorandum, or Chief Counsel Advice (which are subject to public inspection under § 6110 after their issuance); and

(3) responses to taxpayer or third party communications with respect to any investigation, audit, litigation, or other enforcement action.

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Issues under the jurisdiction of the Associate 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 jurisdiction of the Associate 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), insurance companies and products, and financial products.

Issues under the jurisdiction of the Associate 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, long-term contracts, inventories, the alternative minimum tax, net operating losses generally, including accounting method changes for these issues, and accounting periods.

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), exclusions under § 114 for extraterritorial income (ETI) pursuant to § 941(a)(5)(A), international boycott determinations, treatment of certain passive foreign investment companies, income affected by treaty, and other matters relating to the activities of non-U.S. persons within the United States or U.S.-related persons outside the United States, and accounting method changes.

For the procedures to obtain advance pricing agreements under § 482, see Rev. Proc. 2004-40, 2004-2 C.B. 50 (or successor).

For competent authority procedures related to bilateral and multilateral advance pricing agreements, see Rev. Proc. 2002-52, 2002-2 C.B. 242.

Issues under the jurisdiction of the Associate 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 (Procedure and Administration) include those that involve federal tax procedure and administration, disclosure and privacy law, reporting and paying taxes, assessing and collecting taxes (including interest and penalties), abating, crediting, or refunding overassessments or overpayments of tax, and filing information returns.

Issues under the jurisdiction of the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) include those that involve income tax and other tax aspects of executive compensation and employee benefit programs, including accounting method changes for these issues (other than those within the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division), section 457 arrangements, employment taxes, taxes on self-employment income, tax-exempt obligations, mortgage credit certificates, qualified zone academy bonds (QZABS), and federal, state, local, and Indian tribal governments.

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 Alcohol and Tobacco Tax and Trade Bureau of the Department of the Treasury.

The procedures for obtaining letter rulings, determination letters, etc., on employee plans and exempt organizations are under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. See Rev. Proc. 2006-4, this Bulletin. See also Rev. Proc. 2006-6, 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 Commissioner, Tax Exempt and Government Entities Division, see Rev. Proc. 2006-8, this Bulletin.

In income and gift tax matters, an Associate office generally issues a letter ruling on a proposed transaction or on a completed transaction if the letter ruling request is submitted before the return is filed for the year in which the transaction is completed.

In lieu of requesting a letter ruling under this revenue procedure, a taxpayer may obtain relief for certain late S corporation and related elections by following the procedures in Rev. Proc. 2004-49, 2004-2 C.B. 210; Rev. Proc. 2004-48, 2004-2 C.B. 172; Rev. Proc. 2003-43, 2003-1 C.B. 998, or Rev. Proc. 97-48, 1997-2 C.B. 521. These procedures, which are in lieu of the letter ruling process, do not require payment of any user fee. See section 4.04 of Rev. Proc. 2004-49, section 3.01 of Rev. Proc. 2004-48, section 3.01 of Rev. Proc. 2003-43, section 3 of Rev. Proc. 97-48, and section 15.03(3) of this revenue procedure.

An Associate office will consider a request for an extension of time for making an election or other application for relief under § 301.9100-3 of the Regulations on Procedure and Administration, even if submitted after the return covering the issue presented in the § 301.9100 request has been filed, an examination of the return has begun, or the issues in the return are being considered by Appeals or a federal court. A § 301.9100 request is a letter ruling request. Therefore, the § 301.9100 request should be submitted pursuant to this revenue procedure. An election made pursuant to § 301.9100-2 for an automatic extension of time is not a letter ruling request and does not require payment of any user fee. See § 301.9100-2(d) and section 15.03(1) of this revenue procedure.

(1) Format of request. A § 301.9100 request (other than an election made pursuant to § 301.9100-2) must be in the general form of, and meet the general requirements for, a letter ruling request. These requirements are given in section 7 of this revenue procedure. In addition, a § 301.9100 request must include the information required by § 301.9100-3(e).

(2) Period of limitations. The running of any applicable period of limitations is not suspended for the period during which a § 301.9100 request has been filed. See § 301.9100-3(d)(2). If the period of limitation on assessment under § 6501(a) for the taxable year in which an election should have been made or any taxable year that would have been affected by the election had it been timely made will expire before receipt of a § 301.9100 letter ruling, the Associate office ordinarily will not issue a § 301.9100 ruling. See § 301.9100-3(c)(1)(ii). If, however, the taxpayer secures consent to extend the period of limitations on assessment under § 6501(c)(4), the Associate office may issue the letter ruling. Note that the filing of a claim for refund under § 6511 does not extend the period of limitation on assessment. If § 301.9100 relief is granted, the Associate office may require the taxpayer to consent to an extension of the period of limitation on assessment. See § 301.9100-3(d)(2).

(3) Taxpayer must notify the Associate office if examination of its return begins while the request is pending. If the Service starts an examination of the taxpayer’s return for the taxable year in which an election should have been made or any taxable year that would have been affected by the election had it been timely made while a § 301.9100 request is pending, the taxpayer must notify the Associate office. This notification must include the name and telephone number of the examining agent. See § 301.9100-3(e)(4)(i) and section 7.04(1)(b) of this revenue procedure.

(4) Associate office will notify examination agents, appeals officer, or government counsel of a § 301.9100 request if the taxpayer’s return is being examined by a field office or is being considered by Appeals or a federal court. If the taxpayer’s return for the taxable year in which an election should have been made or any taxable year that would have been affected by the election had it been timely made is being examined by a field office or considered by Appeals or a federal court, the Associate office will notify the appropriate examining agent, appeals officer, or government counsel that a § 301.9100 request has been submitted to the Associate office. The examining officer, appeals officer, or government counsel is not authorized to deny consideration of a § 301.9100 request. The letter ruling will be mailed to the taxpayer and a copy will be sent to the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return, appeals officer, or government counsel.

(5) Relief for late initial classification election. In lieu of requesting a letter ruling under § 301.9100-1 through § 301.9100-3 and this revenue procedure, an entity newly formed under local law may apply for late classification election relief under Rev. Proc. 2002-59, 2002-2 C.B. 615. Requests for such relief are not subject to user fees. See section 3 of Rev. Proc. 2002-59 and section 15.03(2) of this revenue procedure.

As provided in Rev. Proc. 77-9, 1977-1 C.B. 542, the 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) to a person, if that person, is 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. The same principles shall apply with respect to exclusions under § 114 for exterritorial income (ETI) pursuant to § 941(a)(5)(A). Requests for determinations under Rev. Proc. 77-9 are letter ruling requests and, therefore, should be submitted to the Associate office pursuant to this revenue procedure.

Unless the issue is covered by section 6 of this revenue procedure, the 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 Associate office 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. The Associate office may decline to issue a § 367 ruling in situations in which the taxpayer inappropriately characterizes the transaction under the reorganization provisions.

In general, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on transactions affecting the estate tax on the prospective estate of a living person. The Associate office will not issue letter rulings for prospective estates on computations of tax, actuarial factors, and factual matters. With respect to the transactions affecting the estate tax of the decedent’s estate, generally, the Associate office issues letter rulings before the decedent’s estate tax return is filed.

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 Associate 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 Associate 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 Associate office that the return has been filed. See section 7.04 of this revenue procedure. The Associate office will make every effort to issue the letter ruling within 3 months of the date the return was filed.

If the taxpayer requests a letter ruling after the return is filed, but before the return is examined, the taxpayer must notify the field office having jurisdiction over the return, that a letter ruling has been requested, attach a copy of the pending letter ruling request, and notify the Associate office that a return has been filed. See section 7.04 of this revenue procedure. The Associate office will make every effort to issue the letter ruling within 3 months of the date the return has been filed.

If the letter ruling cannot be issued within that 3-month period, the Associate office will notify the field office having jurisdiction over the return, who may, by memorandum to the Associate office, grant an additional period for the issuance of the letter ruling.

In matters involving additional estate tax under § 2032A(c), the Associate Chief Counsel (Passthroughs and Special Industries) 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, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on proposed transactions and on completed transactions that occurred before the return is filed.

In general, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on proposed transactions that affect the generation-skipping transfer tax and on completed transactions that occurred before the return is filed. In the case of a generation-skipping trust or trust equivalent, letter rulings are issued either before or after the trust or trust equivalent has been established.

In employment and excise tax matters, the Associate offices issue 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 Associate Chief Counsel (Tax Exempt and Government Entities). Requests regarding employment status from other taxpayers must first be submitted to the appropriate Service office listed on the current Form SS-8 (Rev. June 2003). See section 12.04 of this revenue procedure. Generally, the employer is the taxpayer and requests the letter ruling. 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 Associate Chief Counsel (Procedure and Administration) issues letter rulings on matters arising under the Code and related statutes and regulations that involve—

(1) the time, place, manner, and procedures for reporting and paying taxes; or

(2) the filing of information returns.

Pursuant to Rev. Proc. 84-37, 1984-1 C.B. 513, as modified by Rev. Proc. 86-17, 1986-1 C.B. 550, and Rev. Proc. 2006-1, this revenue procedure, the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) issues determinations recognizing a tribal entity as an Indian tribal government within the meaning of § 7701(a)(40) or as a political subdivision of an Indian tribal government under § 7871(d) if it determines, after consultation with the Secretary of the Interior, that the entity satisfies the statutory definition of an Indian tribal government or has been delegated governmental functions of an Indian tribal government. Requests for determinations under Rev. Proc. 84-37 are letter ruling requests, and, therefore, should be submitted to the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) pursuant to this revenue procedure.

(1) Definition of Indian tribal government. The term “Indian tribal government” is defined under § 7701(a)(40) to mean the governing body of any tribe, band, community, village or group of Indians, or (if applicable) Alaska Natives, that is determined by the Secretary of the Treasury, after consultation with the Secretary of the Interior, to exercise governmental functions. Section 7871(d) provides that, for purposes of § 7871, a subdivision of an Indian tribal government shall be treated as a political subdivision of a state if the Secretary of the Treasury determines, after consultation with the Secretary of the Interior, that the subdivision has been delegated the right to exercise one or more of the substantial governmental functions of the Indian tribal government.

(2) Inclusion in list of tribal governments. Rev. Proc. 2002-64, 2002-2 C.B. 717, provides a list of Indian tribal governments that are treated similarly to states for certain federal tax purposes. Rev. Proc. 84-36, 1984-1 C.B. 510, as modified by Rev. Proc. 86-17, provides a list of political subdivisions of Indian tribal governments that are treated as political subdivisions of states for certain federal tax purposes. Under Rev. Proc. 84-37, tribal governments or subdivisions recognized under § 7701(a)(40) or § 7871(d) will be included in the list of recognized tribal government entities in revised versions of Rev. Proc. 2002-64 or Rev. Proc. 84-36.

The Associate Chief Counsel (Passthroughs and Special Industries) 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.

Unless the issue is covered by section 6 of this revenue procedure, Rev. Proc. 2006-3, this Bulletin, or Rev. Proc. 2006-7, this Bulletin, a letter ruling may be issued before the issuance of a temporary or final regulation or other published guidance that interprets the provisions of any act.

In such situations, an Associate office may issue letter rulings 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.

(2) Answer is not reasonably certain. If the letter ruling request presents an issue for which the answer does not seem reasonably certain, the Associate office may issue the letter ruling, using its best efforts to arrive at a determination, if it is in the best interests of tax administration. But see section 6.09 of this revenue procedure.

The Service ordinarily does not issue a letter ruling or a determination letter if, at the time of the request the identical issue is involved in the taxpayer’s return for an earlier period and that issue—

(1) is being examined by a field office;

(2) is being considered by Appeals;

(3) is pending in litigation in a case involving the taxpayer or a related taxpayer;

(4) has been examined by a field office or considered by Appeals and the statutory period of limitations on assessment or on filing a claim for refund or credit of tax has not expired; or

(5) has been examined by a field office or considered by Appeals and a closing agreement covering the issue or liability has not been entered into by a field office or by Appeals.

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, an Associate 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 field office. See section 7.04 of this revenue procedure. In income and gift tax matters, even if an examination has begun, an Associate office ordinarily will issue the letter ruling if the field office agrees, by memorandum, to the issuance of the letter ruling.

The Service ordinarily does 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. 2006-3, this Bulletin, and Rev. Proc. 2006-7, this Bulletin, 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 Service 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.

An Associate office ordinarily will not issue a letter ruling on only part of an integrated transaction. If 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 a branch having jurisdiction for the matters on which the taxpayer is seeking a letter ruling to discuss whether the Associate office will issue a letter ruling on part of the transaction.

The Service does not ordinarily issue a letter ruling or a determination letter on which of two entities, under common law rules applicable in determining the employer-employee relationship, is the employer, when one entity is treating the worker as an employee.

The Service does not issue letter rulings or determination letters 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 could be appropriately addressed in revenue rulings. 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.

The Service may issue letter rulings or determination letters to groups or associations on their own tax status or liability if the request meets the requirements of this revenue procedure.

The Service generally does not issue letter rulings or determination letters regarding the tax consequences of a transaction for taxpayers who are not directly involved in the request if the requested letter ruling or determination letter would not address the tax status, liability, or reporting obligations of the requester. For example, a taxpayer may not request a letter ruling relating to the tax consequences of a transaction to a customer or client, if the tax status, liability or reporting obligations of the taxpayer would not be addressed in the ruling, because the customer or client is not directly involved in the letter ruling request. The tax liability of each shareholder is, however, directly involved in a letter ruling on the reorganization of a corporation. Accordingly a corporate taxpayer could request a letter ruling that solely addressed the tax consequences to its shareholders of a proposed reorganization.

Revenue Procedure 96-16, 1996-1 C.B. 630, sets forth rules for letter ruling requests involving state and local government obligations.

The Service does not issue letter rulings or determination letters to foreign governments or their political subdivisions about the U.S. tax effects of their laws. The Associate offices also do not issue letter rulings on the effect of a tax treaty on the tax laws of a treaty country for purposes of determining the tax of the treaty country. See section 13.02 of Rev. Proc. 2002-52, 2002-2 C.B. 242 at 252. Treaty partners can continue to address matters such as these under the provisions of the applicable tax treaty. In addition, the Associate offices 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.

The Associate offices ordinarily do not issue letter rulings on a matter involving the federal tax consequences of any proposed federal, state, local, municipal, or foreign legislation. The Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) may issue letter rulings regarding the effect of proposed state, local, or municipal legislation upon an eligible deferred compensation plan under § 457(b) provided that the letter ruling request relating to the plan complies with the other requirements of this revenue procedure. The Associate offices also may provide general information in response to an inquiry.

The Service will not issue a letter ruling or a determination letter if the request presents an issue that cannot be readily resolved before a regulation or any other published guidance is issued. When the Service has closed a regulation project or any other published guidance project that might have answered the issue or decides not to open a regulation project or any other published guidance project, the Associate offices may consider all letter ruling requests unless the issue is covered by section 6 of this revenue procedure, Rev. Proc. 2006-3, this Bulletin, or Rev. Proc. 2006-7, this Bulletin.

The Service will not issue a letter ruling or a determination letter on frivolous issues. A “frivolous issue” is one without basis in fact or law, or that espouses a position which has been held by the courts to be frivolous or groundless. Examples of frivolous or groundless issues include, but are not limited to:

(1) frivolous “constitutional” claims, such as claims that the requirement to file tax returns and pay taxes constitutes an unreasonable search barred by the Fourth Amendment; violates Fifth and Fourteenth Amendment protections of due process; violates Thirteenth Amendment protections against involuntary servitude; or is unenforceable because the Sixteenth Amendment does not authorize nonapportioned direct taxes or because it was never ratified;

(2) claims that income taxes are voluntary, that the term “income” is not defined in the Internal Revenue Code, or that preparation and filing of income tax returns violates the Paperwork Reduction Act;

(3) claims that tax may be imposed only on coins minted under a gold or silver standard or that receipt of Federal Reserve Notes does not cause an accretion to wealth;

(4) claims that a person is not taxable on income because he or she falls within a class entitled to “reparation claims” or an extra-statutory class of individuals exempt from tax, e.g., “free-born” individuals;

(5) claims that a taxpayer can refuse to pay taxes on the basis of opposition to certain governmental expenditures;

(6) claims that taxes apply only to federal employees; only to residents of Puerto Rico, Guam, the U.S. Virgin Islands, the District of Columbia, or “federal enclaves”; or that sections 861 through 865 or any other provision of the Internal Revenue Code imposes taxes on U.S. citizens and residents only on income derived from foreign based activities;

(7) claims that wages or personal service income are not “income,” are “nontaxable receipts,” or are a “nontaxable exchange for labor;”

(8) claims that income tax withholding by an employer on wages is optional; or

(9) other claims that the courts have characterized as frivolous or groundless.

Except as otherwise provided in Rev. Proc. 2006-3, this Bulletin, (e.g., under section 3.01(33), where the Associate office already is ruling on a significant issue in the same transaction), a letter ruling will not be issued with respect to an issue that is clearly and adequately addressed by statute, regulations, decisions of a court, revenue rulings, revenue procedures, notices, or other authority published in the Internal Revenue Bulletin. The Associate office may in its discretion determine to issue a letter ruling on such an issue if the Associate office is otherwise issuing a ruling to the taxpayer on another issue arising in the same transaction.

The Service will not issue a letter ruling or a determination letter on alternative plans of proposed transactions or on hypothetical situations.

An Associate office will 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. A Director may issue a determination letter in this case. See section 12.01 of this revenue procedure.

A Director will not issue a determination letter if—

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

(2) the same issue, involving the same taxpayer or a related taxpayer, is pending in a case in litigation or before Appeals;

(3) the request involves an industry-wide problem;

(4) the specific employment tax question at issue in the request has been, or is being, considered by the Central Office of the Social Security Administration or the Railroad Retirement Board for the same taxpayer or a related taxpayer; or

(5) the request is for a determination of constructive sales price under § 4216(b) or § 4218(c), which deal with special provisions applicable to the manufacturers excise tax. The Associate Chief Counsel (Passthroughs and Special Industries) will, in certain circumstances, issue letter rulings in this area. See section 5.13 of this revenue procedure.

Original letter ruling requests must be sent to the appropriate Associate office. The package should be marked: RULING REQUEST SUBMISSION.

(1) Requests for letter rulings should be sent to the following address:

If a private delivery service is used, the address is:

(2) Requests for letter rulings may also be hand delivered between the hours of 8:00 a.m. and 4:00 p.m. to the courier’s desk at the loading dock (behind the 12^th Street security station) of 1111 Constitution Avenue, NW, Washington, DC. A receipt will be given at the courier’s desk. The package should be addressed to:

(3) Requests for letter rulings must not be submitted by fax. (But see section 7.02(4), above, regarding submissions of an initial fax in certain situations where expedited handling is requested.)

(1) Circumstances under which the taxpayer must notify the Associate office. The taxpayer must notify the Associate office if, after the letter ruling request is filed but before a letter ruling is issued, the taxpayer knows that—

(a) an examination of the issue or the identical issue on an earlier year’s return has been started by a field office;

(b) in the case of a § 301.9100 request, an examination of the return for the taxable year in which an election should have been made or any taxable year that would have been affected by the election had it been timely made, has been started by a field office. See § 301.9100-3(e)(4)(i) and section 5.03(3) of this revenue procedure;

(c) legislation that may affect the transaction has been introduced. See section 7.01(10) of this revenue procedure; or

(d) another letter ruling request (including an application for change in accounting method) has been submitted by the taxpayer (or a related party within the meaning of § 267 or a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504) involving the same or similar issue that is currently pending with the Service.

(2) Taxpayer must notify the Associate office if a return is filed and must attach the request to the return. If the taxpayer files a return before a letter ruling is received from the Associate office concerning an issue in the return, the taxpayer must notify the Associate 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 field office and thereby avoid premature field action on the issue. Alternatively, taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date of the letter ruling request and control number of the letter ruling.

If, under the limited circumstances permitted in section 5 of this revenue procedure, the taxpayer requests a letter ruling after the return is filed, but before the return is examined, the taxpayer must notify the Associate office that the return has been filed. The taxpayer must also notify the field office having jurisdiction over the return and attach a copy of the letter ruling request to the notification to alert the field office and thereby avoid premature field action on the issue.

This section 7.04 also applies to pending requests for a closing agreement on a transaction for which a letter ruling is not requested or issued.

For purposes of this section 7.04, the term “return” includes the original return, amended return, and claim for refund.

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. Alternatively, taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter ruling.

For purposes of this section 7.05, the term “return” includes the original return, amended return, and claim for refund.

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 acknowledgment of receipt of the request or the appropriate branch representative who contacts the taxpayer as explained in section 8.02 of this revenue procedure.

(1) In general. A taxpayer may withdraw a request for a letter ruling or determination letter at any time before the letter ruling or determination letter is signed by the Service. Correspondence and exhibits related to a request that is withdrawn or related to a letter ruling request for which an Associate office declines to issue a letter ruling will not be returned to the taxpayer. See section 7.01(2) of this revenue procedure. In appropriate cases, an Associate office may publish its conclusions in a revenue ruling or revenue procedure.

(2) Notification of appropriate Service official.

(a) Letter ruling requests. If a taxpayer withdraws a letter ruling request or if the Associate office declines to issue a letter ruling, the Associate office generally will notify, by memorandum, the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return and may give its views on the issues in the request to the Service official to consider in any later examination of the return. This section 7.07(2)(a) generally does not apply if the taxpayer withdraws the letter ruling request and submits a written statement that the transaction has been, or is being, abandoned and if the Associate office has not already formed an adverse opinion. See, in appropriate cases, section 7.07(1) above.

(b) Notification of Service official may constitute Chief Counsel Advice. If the memorandum to the Service official referred to in paragraph (a) of this section 7.07(2) provides more than the fact that the request was withdrawn and the Associate office was tentatively adverse, or that the Associate office declines to issue a letter ruling, the memorandum may constitute Chief Counsel Advice, as defined in § 6110(i)(1), subject to disclosure under § 6110.

(3) Refund of user fee. Ordinarily, the user fee will not be returned for a letter ruling request that is withdrawn. If the Associate office declines to issue a letter ruling on all of the issues in the request, the user fee will be returned. If the Associate office issues a letter ruling on some, but not all, of the issues, the user fee will not be returned. See section 15.10 of this revenue procedure for additional information regarding the refunds of user fees.

All requests for letter rulings will be received and initially controlled by the Docket, Records, and User Fee Branch of the Legal Processing Division of the Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DRU). That office will process the incoming documents and the user fee, and will forward the file to the appropriate Associate office for assignment to a branch that has jurisdiction over the specific issue involved in the request.

Within 21 calendar days after a letter ruling request has been received in the branch of the Associate office that has jurisdiction over the issue, a representative of the branch will discuss the procedural issues in the letter ruling request with the taxpayer or, if the request includes a properly executed power of attorney, with the authorized representative unless the power of attorney provides otherwise. If the case is complex or a number of issues are involved, it may not be possible for the branch representative to discuss the substantive issues during this initial contact. When possible, for each issue within the branch’s jurisdiction, the branch representative will tell the taxpayer—

(1) whether the branch representative will recommend that the Associate office rule as the taxpayer requested, rule adversely on the matter, or not rule;

(2) whether the taxpayer should submit additional information to enable the Associate office to rule on the matter;

(3) whether the letter ruling complies with all of the provisions of this revenue procedure, and if not, which requirements have not been met; or

(4) whether, because of the nature of the transaction or the issue presented, a tentative conclusion on the issue cannot be reached.

If the letter ruling request involves matters within the jurisdiction of more than one branch or Associate office, a representative of the branch that received the original request will tell the taxpayer within the initial 21 days—

(1) that the matters within the jurisdiction of another branch or Associate office have been referred to that branch or Associate office for consideration, and the date the referral was made, and

(2) that a representative of that branch or Associate office will contact the taxpayer within 21 calendar days after receiving the referral to discuss informally the procedural and, to the extent possible, the substantive issues in the request.

This section 8.02 applies to all matters except for cases involving a request for change in accounting method or accounting period and cases within the jurisdiction of the Associate Chief Counsel (Financial Institutions and Products) concerning insurance issues requiring actuarial computations.

If less than a fully favorable letter ruling is indicated, the branch representative will tell the taxpayer whether minor changes in the transaction or adherence to certain published positions would bring about a favorable ruling. The branch representative may also tell the taxpayer the facts that must be furnished in a document to comply with Service requirements. The branch representative will not suggest precise changes that would materially alter the form of the proposed transaction or materially alter a taxpayer’s proposed accounting period.

If, at the end of this discussion, the branch representative determines that a meeting in the Associate office would be more helpful to develop or exchange information, a meeting will be offered and an early meeting date arranged. When offered, this meeting is in addition to the taxpayer’s conference of right that is described in section 10.02 of this revenue procedure.

The Service will not be bound by the informal opinion expressed by the branch representative or any other Service representative, and such an opinion cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

Generally, after the conference of right as discussed in section 10 of this revenue procedure is held but before the letter ruling is issued, the branch representative will orally inform the taxpayer or the taxpayer’s representative of the Associate office’s conclusions. If the Associate office is going to rule adversely, the taxpayer will be offered the opportunity to withdraw the letter ruling request. Unless an extension is granted, if the taxpayer or the taxpayer’s representative does not notify the branch representative of a decision to withdraw the ruling request within 10 days of the notification, the adverse letter ruling will be issued. The user fee will not be refunded for a letter ruling request that is withdrawn. See section 15.10(1)(a) of this revenue procedure.

To accelerate the issuance of letter rulings, in appropriate cases near the completion of the ruling process, the Associate office representative may request that the taxpayer or the taxpayer’s representative submit a proposed draft of the letter ruling on the basis of discussions of the issues. The taxpayer is not required to prepare a draft letter ruling to receive a letter ruling.

The format of the submission should be discussed with the Associate office representative who requests the draft letter ruling. The representative usually can provide a sample format of a letter ruling and will discuss the facts, analysis, and letter ruling language to be included.

(1) Substantially identical letter rulings. For letter ruling requests qualifying for the user fee provided in paragraph (A)(5)(a) of Appendix A of this revenue procedure for substantially identical letter rulings, a separate letter ruling generally will be issued for each entity with a common member or sponsor, or for each member of a common entity.

(2) Related § 301.9100 letter rulings. For a § 301.9100 letter ruling request for an extension of time to file Form 3115 requesting an identical accounting method change for multiple separate and distinct trades or businesses (including a qualified subchapter S subsidiary or a single-member limited liability company of a taxpayer, multiple members of a consolidated group, or multiple eligible CFCs qualifying under section 15.07(4) for the user fee provided in paragraph (A)(5)(d) of Appendix A of this revenue procedure, the Associate office generally will issue a single letter on behalf of all separate and distinct trades or businesses of the taxpayer, all members of the consolidated group, or all eligible CFCs that are the subject of the request.

The Associate office will send a copy of the letter ruling, whether favorable or adverse, to the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return.

Ordinarily, a taxpayer may request only one change in accounting method on a Form 3115. If the taxpayer wants to request a change in accounting method for more than one unrelated item or submethod of accounting, the taxpayer must submit a separate Form 3115 for each unrelated item or submethod, except in certain situations in which the Service specifically permits certain unrelated changes to be included on a single Form 3115 (for example, see section 5.05 in the Appendix of Rev. Proc. 2002-9, 2002-1 C.B. 327, or its successor).

Further, a separate Form 3115 (and, therefore, a separate user fee pursuant to section 15 and Appendix A of this revenue procedure) must be submitted for each taxpayer and each separate trade or business of a taxpayer, including a qualified S subsidiary (QSUB) or a single-member limited liability company (single member LLC), requesting a change in accounting method, except as specifically permitted or required in guidance published by the Service. See, for example, section 15.07(4) of this revenue procedure.

Associate office address to send Forms 3115. Submit the original Form 3115, in the case of an advance consent Form 3115, or the national office copy of the Form 3115, in the case of an automatic change request, as follows:

(a) Associate office mailing address if private delivery service is not used. If a private delivery service is not used, a taxpayer, other than an exempt organization, must send the original completed Form 3115 and the required user fee (in the case of an advance consent Form 3115) or the national office copy of the completed Form 3115 (in the case of an automatic change request) to:

An exempt organization must send the original completed Form 3115 and the required user fee (in the case of an advance consent Form 3115) or the national office copy of the completed Form 3115 (in the case of an automatic change Form 3115) to:

See Rev. Proc. 2006-8, this Bulletin, for the applicable user fee for exempt organization Forms 3115.

(b) Mailing address if private delivery service is used. If a private delivery service is used, a taxpayer, other than an exempt organization, must send the original completed Form 3115 and the required user fee (in the case of an advance consent Form 3115) or the national office copy of the completed Form 3115 (in the case of an automatic change request) to:

If a private delivery service is used, an exempt organization must send the original completed Form 3115 and the required user fee (in the case of an advance consent Form 3115) or the national office copy of the completed Form 3115 (in the case of an automatic change request) to:

See Rev. Proc. 2006-8, this Bulletin, for the applicable user fee for exempt organization Forms 3115.

(c) Address if hand-delivered to the IRS Courier’s desk. For taxpayers other than an exempt organization, the original completed Form 3115 and the required user fee (in the case of an advance consent Form 3115) or the national office copy of the completed Form 3115 (in the case of an automatic change request), may be hand delivered between the hours of 8:00 a.m. and 4:00 p.m. to the courier’s desk at the loading dock (located behind the 12^th Street security station) of 1111 Constitution Ave., NW, Washington, DC. A receipt will be given at the courier’s desk. The package should be addressed to:

A completed Form 3115 must not be submitted by fax.

An advance consent Form 3115 is received and controlled by the Docket, Records, and User Fee Branch, Legal Processing Division of the Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DRU) if the required user fee is submitted with the Form 3115. Once controlled, the Form 3115 is forwarded to the appropriate Associate office for assignment and processing.

For an advance consent Form 3115, the taxpayer must promptly notify the Associate office if, after the Form 3115 is filed but before a change in accounting method letter ruling is issued, the taxpayer knows that —

(1) an examination of the present or proposed accounting method has been started by a field office;

(2) an examination of the proposed year of change has been started by a field office;

(3) legislation that may affect the change in accounting method has been introduced, see section 9.03(7) of this revenue procedure; or

(4) another letter ruling request (including another Form 3115) has been submitted by the taxpayer (or a related party within the meaning of § 267 or a member of an affiliated group of which the taxpayer is a member within the meaning of §1504).

If a less than fully favorable change in accounting method letter ruling is indicated, the branch representative will tell the taxpayer whether minor changes in the proposed accounting method would bring about a favorable ruling. The branch representative will not suggest precise changes that materially alter a taxpayer’s proposed accounting.

Generally, after the conference of right is held (or offered, in the event no conference is held) and before issuing any change in accounting method letter ruling that is adverse to the requested change in accounting method, the taxpayer will be offered the opportunity to withdraw the Form 3115. See section 9.12 of this revenue procedure. Unless an extension is granted, if the taxpayer or the taxpayer’s representative does not notify the branch representative of a decision to withdraw the Form 3115 within 10 days of the notification, the adverse change in accounting method letter ruling will be issued. Ordinarily, the user fee (in the case of an advance consent Form 3115) will not be refunded for a Form 3115 that is withdrawn.

(1) In general. A taxpayer may withdraw an advance consent Form 3115 at any time before the change in accounting method letter ruling is signed by the Associate office. The Form 3115, correspondence, and any documents relating to the Form 3115 that is withdrawn or for which the Associate office declines to issue a letter ruling will not be returned to the taxpayer. See section 9.03(3) of this revenue procedure. In appropriate cases, the Service may publish its conclusions in a revenue ruling or revenue procedure.

(2) Notification of appropriate Service official. If a taxpayer withdraws or the Associate office declines to grant (for any reason) a request to change from or to an improper accounting method, the Associate office will notify, by memorandum, the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return and the Change in Method of Accounting Technical Advisor, and may give its views on the issues in the request to the Service official to consider in any later examination of the return.

If the memorandum to the Service official provides more than the fact that the request was withdrawn and the Associate office was tentatively adverse, or that the Associate office declines to grant a change in accounting method, the memorandum may constitute Chief Counsel Advice, as defined in § 6110(i)(1), subject to disclosure under § 6110.

(3) Refund of user fee. Ordinarily, the user fee will not be returned for an advance consent Form 3115 that is withdrawn. See section 15.10 of this revenue procedure for information regarding refunds of user fees.

The taxpayer or the taxpayer’s authorized representative may obtain information regarding the status of an advance consent Form 3115 by calling the person whose name and telephone number are shown on the acknowledgement of receipt of the Form 3115.

The Service will not be bound by any informal opinion expressed by the branch representative or any other Service representative, and such an opinion cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

For an advance consent Form 3115 qualifying under section 15.07(4) for the user fee provided in paragraph (A)(5)(b) of Appendix A of this revenue procedure for identical accounting method changes, the Associate office generally will issue a single letter ruling on behalf of all affected separate and distinct trades or businesses of a taxpayer, all affected members of the consolidated group, or all eligible and affected CFCs.

If two or more items or submethods of accounting are interrelated, the Associate office ordinarily will not issue a letter ruling on a change in accounting method involving only one of the items or submethods.

Ordinarily, for an advance consent Form 3115, the Commissioner’s permission to change a taxpayer’s accounting method is set forth in a letter ruling (original and a Consent Agreement copy). If the taxpayer agrees to the terms and conditions contained in the change in accounting method letter ruling, the taxpayer must sign and date the Consent Agreement copy of the letter ruling in the appropriate space. The Consent Agreement copy must not be signed by the taxpayer’s representative. The signed copy of the letter ruling will constitute an agreement (Consent Agreement) within the meaning of § 1.481-4(b) of the regulations. The signed Consent Agreement copy of the letter ruling must be returned to the Associate office within 45 days. In addition, a photocopy of the signed Consent Agreement copy of the letter ruling must be attached to the taxpayer’s income tax return for the year of change. See section 8.11 of Rev. Proc. 97-27. If the taxpayer has filed its income tax return for the year of change before the ruling has been received and the Consent Agreement has been signed and returned, the photocopy of the signed Consent Agreement copy of the letter ruling should be attached to the amended return for the year of change that the taxpayer files to implement the change in accounting method.

A taxpayer may not take an advance consent change in accounting method into account in any federal income tax return until the taxpayer receives the letter ruling from the Associate office granting permission to make the accounting method change and the taxpayer signs and returns the Consent Agreement copy of that letter ruling. Reg. section 1.446-1(e)(2)(i).

The Associate office will send a copy of each change in accounting method letter ruling, whether favorable or adverse, to the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return.

A taxpayer may rely on a change in accounting method letter ruling received from the Associate office, subject to certain conditions and limitations. See sections 9, 10, and 11 of Rev. Proc. 97-27, as modified and amplified by Rev. Proc. 2002-19.

A qualifying taxpayer complying timely with an automatic change request procedure may rely on the consent of the Commissioner as provided in the automatic change request procedure to change the taxpayer’s accounting method, subject to certain conditions and limitations. See, in general, sections 6.01, 7 and 8 of Rev. Proc. 2002-9, as modified and amplified by Rev. Proc. 2002-19. An Associate office may review a Form 3115 filed under an automatic change request procedure and will notify the taxpayer if additional information is needed or if consent is not granted to the taxpayer for the requested change. See section 10 of Rev. Proc. 2002-9. Further, the field office that has jurisdiction over the taxpayer’s return may review the Form 3115. See section 9 of Rev. Proc. 2002-9.

A taxpayer may not rely on a change in accounting method letter ruling issued to another taxpayer. See § 6110(k)(3).

The Associate office reserves the right to decline to process any advance consent Form 3115 in situations in which it would not be in the best interest of sound tax administration to permit the requested change. In this regard, the Associate office will consider whether the change in method of accounting would clearly and directly frustrate compliance efforts of the Service in administering the income tax laws. See section 8.01 of Rev. Proc. 97-27.

For procedures regarding requests for an automatic change in accounting method, refer to the following published automatic change request procedures. The Commissioner’s consent to an otherwise qualifying automatic change in accounting method is granted only if the taxpayer complies timely with the applicable automatic change request procedure.

The automatic change request procedures for obtaining a change in accounting method include:

(1) Rev. Proc. 2002-9, 2002-1 C.B. 327, as modified and clarified by Announcement 2002-17, 2002-1 C.B. 561, as modified and amplified by Rev. Proc. 2002-19, 2002-1 C.B. 696, as amplified, clarified and modified by Rev. Proc. 2002-54, 2002-2 C.B. 432, and as modified by Rev. Proc. 2003-45, 2003-2 C.B. 11, which, for most (but not all) types of changes provided therein, requires a completed Form 3115. Rev. Proc. 2002-9 applies to the accounting method changes described in the Appendix of Rev. Proc. 2002-9 involving §§ 56, 61, 77, 162, 166, 167, 168, 171, 174, 197, 263, 263A, 267, 404, 446, 448, 451, 454, 455, 458, 460, 461, 471, 472, 475, 585, 832, 846, 861, 985, 1272, 1273, 1278, 1281, 1286, and former § 168.

(2) The following automatic change request procedures modify and amplify Rev. Proc. 2002-9 in that they add the following changes to the list of accounting method changes listed in the Appendix of Rev. Proc. 2002-9 or require certain automatic changes to be made using the provisions of Rev. Proc. 2002-9:

(3) The following automatic change request procedures, which require a completed Form 3115, provide both the type of accounting method change that may be made automatically and the procedures under which such change must be made:

(4) The following automatic change request procedures, which do not require a completed Form 3115, provide the type of accounting method change that may be made automatically and also provide the procedures under which such change must be made:

(5) See Appendix E for the list of revenue procedures for automatic changes in accounting period.

In addition to this section 9, the following sections of this revenue procedure are applicable to Forms 3115:

A taxpayer may request a conference regarding a letter ruling request. Normally, a conference is scheduled only when the Associate office considers it to be helpful in deciding the case or when an adverse decision is indicated. If conferences are being arranged for more than one request for a letter ruling involving the same taxpayer, they will be scheduled so as to cause the least inconvenience to the taxpayer. As stated in sections 7.02(6) and 9.04(4) of this revenue procedure, a taxpayer who wants to have a conference on the issue or issues involved should indicate this in writing when, or soon after, filing the request.

If a conference has been requested, the taxpayer or the taxpayer’s representative will be notified by telephone, if possible, of the time and place of the conference, which must then be held within 21 calendar days after this contact. Instructions for requesting an extension of the 21-day period and notifying the taxpayer or the taxpayer’s representative of the Associate office’s approval or denial of the request for extension are the same as those explained in section 8.05(2) (section 9.08(2)(a) for a change in accounting method request) of this revenue procedure regarding providing additional information.

A taxpayer is entitled, as a matter of right, to only one conference in the Associate office, except as explained under section 10.05 of this revenue procedure. This conference is normally held at the branch level and is attended by a person who has the authority to sign the letter ruling in his or her own name or for the branch chief.

When more than one branch has taken an adverse position on an issue in a letter ruling request or when the position ultimately adopted by one branch will affect that adopted by another, a representative from each branch with the authority to sign in his or her own name or for the branch chief will attend the conference. If more than one subject is to be discussed at the conference, the discussion will constitute a conference on each subject.

To have a thorough and informed discussion of the issues, the conference usually will be held after the branch has had an opportunity to study the case. At the request of the taxpayer, the conference of right may be held earlier.

No taxpayer has a right to appeal the action of a branch to an Associate Chief Counsel or to any other official of the Service. But see section 10.05 of this revenue procedure for situations in which the Associate office may offer additional conferences.

In employment tax matters, only the party entitled to the letter ruling is entitled to a conference. See section 5.10 of this revenue procedure.

Because conference procedures are informal, no tape, stenographic, or other verbatim recording of a conference may be made by any party.

The senior Associate office representative present at the conference ensures that the taxpayer has the opportunity to present views on all the issues in question. An Associate office representative explains the Associate office’s tentative decision on the substantive issues and the reasons for that decision. If the taxpayer asks the Associate office to limit the retroactive effect of any letter ruling or limit the revocation or modification of a prior letter ruling, an Associate office representative will discuss the recommendation concerning this issue and the reasons for the recommendation. The Associate office representatives will not make a commitment regarding the conclusion that the Associate office will finally adopt.

The Associate office will offer the taxpayer an additional conference if, after the conference of right, an adverse holding is proposed, but on a new issue, or on the same issue but on different grounds from those discussed at the first conference. There is no right to another conference when a proposed holding is reversed at a higher level with a result less favorable to the taxpayer, if the grounds or arguments on which the reversal is based were discussed at the conference of right.

The limit on the number of conferences to which a taxpayer is entitled does not prevent the Associate office from offering additional conferences, including conferences with an official higher than the branch level, if the Associate office decides they are needed. These conferences are not offered as a matter of course simply because the branch has reached an adverse decision. In general, conferences with higher level officials are offered only if the Associate office determines that the case presents significant issues of tax policy or tax administration and that the consideration of these issues would be enhanced by additional conferences with the taxpayer.

The taxpayer should furnish to the Associate office any additional data, reasoning, precedents, etc., that were proposed by the taxpayer and discussed at the conference but not previously or adequately presented in writing. The taxpayer must furnish the additional information within 21 calendar days from the date of the conference. If the additional information is not received within that time, a letter ruling will be issued on the basis of the information on hand or, if appropriate, no ruling will be issued. See section 8.05 of this revenue procedure for instructions on submission of additional information for a letter ruling request other than a change in accounting method request. See section 9.08 of this revenue procedure for instructions on submitting additional information for a change in accounting method request.

Sometimes it will be advantageous to both the Associate office and the taxpayer to hold a conference before the taxpayer submits the letter ruling request to discuss substantive or procedural issues relating to a proposed transaction. These conferences are held only if the identity of the taxpayer is provided to the Associate office, only if the taxpayer actually intends to make a request, only if the request involves a matter on which a letter ruling is ordinarily issued, and only at the discretion of the Associate office and as time permits. For example, a pre-submission conference will not be held on an income tax issue if, at the time the pre-submission conference is requested, the identical issue is involved in the taxpayer’s return for an earlier period and that issue is being examined by a field office. See section 6.01(1) of this revenue procedure. A letter ruling request submitted following a pre-submission conference will not necessarily be assigned to the branch that held the pre-submission conference. Also, when a letter ruling request is not submitted following a pre-submission conference, the Associate office may notify, by memorandum, the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return and may give its views on the issues raised during the pre-submission conference. This memorandum may constitute Chief Counsel Advice, as defined in § 6110(i), subject to disclosure under § 6110.

(1) Taxpayer may request a pre-submission conference in writing or by telephone. A taxpayer or the taxpayer’s representative may request a pre-submission conference in writing or by telephone. If the taxpayer’s representative is requesting the pre-submission conference, a power of attorney is required. It is preferred that Form 2848, Power of Attorney and Declaration of Representative, be used to provide the representative’s authority. If multiple taxpayers and/or their authorized representatives will attend or participate in the pre-submission conference, cross powers of attorney (or tax information authorizations) are required. If the taxpayer’s representative is requesting the pre-submission conference by telephone, the Associate office’s representative (see list of phone numbers below) will provide the fax number to send the power of attorney prior to scheduling the pre-submission conference.

The request should identify the taxpayer and include a brief explanation of the primary issue so that an assignment to the appropriate branch can be made. If submitted in writing, the request should also identify the Associate office expected to have jurisdiction over the request for a letter ruling. A written request for a pre-submission conference should be sent to the appropriate address listed in section 7.03 of this revenue procedure.

To request a pre-submission conference by telephone, call:

(a) (202) 622-7700 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Corporate);

(b) (202) 622-3900 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Financial Institutions and Products);

(c) (202) 622-4800 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Income Tax and Accounting);

(d) (202) 622-3800 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (International);

(e) (202) 622-3000 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Passthroughs and Special Industries);

(f) (202) 622-3400 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Procedure and Administration); or

(g) (202) 622-6000 (not a toll-free call) for matters under the jurisdiction of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities).

(2) Pre-submission conferences held in person or by telephone. Depending on the circumstances, pre-submission conferences may be held in person at the Associate office or may be conducted by telephone.

(3) Certain information required to be submitted to the Associate office prior to the pre-submission conference. Generally, the taxpayer will be asked to provide, at least three business days before the scheduled pre-submission conference, a statement of whether the issue is an issue on which a letter ruling is ordinarily issued, a draft of the letter ruling request or other detailed written statement of the proposed transaction, issue, and legal analysis. If the taxpayer’s authorized representative will attend or participate in the pre-submission conference, a power of attorney is required.

(4) Discussion of substantive issues is not binding on the Service. Any discussion of substantive issues at a pre-submission conference is advisory only, is not binding on the Service in general or on the Office of Chief Counsel in particular, and cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

Depending on the circumstances, conferences, including conferences of right and pre-submission conferences, may be held by telephone. This may occur, for example, when a taxpayer wants a conference of right but believes that the issue involved does not warrant incurring the expense of traveling to Washington, DC, or if it is believed that scheduling an in person conference of right will substantially delay the ruling process. If a taxpayer makes such a request, the branch reviewer will decide if it is appropriate in the particular case to hold a conference by telephone. If the request is approved, the taxpayer will be advised when to call the Associate office representatives (not a toll-free call).

A taxpayer ordinarily may rely on a letter ruling received from the Associate office subject to the conditions and limitations described in this section.

A taxpayer may not rely on a letter ruling issued to another taxpayer. See § 6110(k)(3).

When determining a taxpayer’s liability, the field office must ascertain whether—

(1) the conclusions stated in the letter ruling are properly reflected in the return;

(2) the representations upon which the letter ruling was based reflected an accurate statement of the controlling facts;

(3) the transaction was carried out substantially as proposed; and

(4) there has been any change in the law that applies to the period during which the transaction or continuing series of transactions were consummated.

If, when determining the liability, the field office finds that a letter ruling should be revoked or modified, the findings and recommendations of the field office will be forwarded through the appropriate Director to the Associate office for consideration before further action is taken by the field office. Such a referral to the Associate office will be treated as a request for technical expedited advice (TEAM) and the provisions of Rev. Proc. 2006-2, this Bulletin, relating to requests for technical expedited advice will be followed, except that no consensus among field office, taxpayer and Associate office will be required to make the request subject to TEAM procedures. Otherwise, the letter ruling is to be applied by the field office in the determination of the taxpayer’s liability. Appropriate coordination with the Associate office must be undertaken if any field office having jurisdiction over a return or other matter proposes to reach a conclusion contrary to a letter ruling previously issued to the taxpayer.

Unless it was part of a closing agreement as described in section 2.02 of this revenue procedure, a letter ruling found to be in error or not in accord with the current views of the Service may be revoked or modified. If a letter ruling is revoked or modified, the revocation or modification applies to all years open under the period of limitations unless the Service uses its discretionary authority under § 7805(b) to limit the retroactive effect of the revocation or modification.

A letter ruling may be revoked or modified by —

(1) a letter giving notice of revocation or modification to the taxpayer to whom the letter ruling was issued;

(2) the enactment of legislation or ratification of a tax treaty;

(3) a decision of the United States Supreme Court;

(4) the issuance of temporary or final regulations; or

(5) the issuance of a revenue ruling, revenue procedure, notice, or other statement published in the Internal Revenue Bulletin.

Consistent with these provisions, if a letter ruling relates to a continuing action or a series of actions, it ordinarily will be applied until any one of the events described above occurs or until it is specifically withdrawn.

Publication of a notice of proposed rulemaking will not affect the application of any letter ruling issued under this revenue procedure.

Where a letter ruling is revoked or modified by a letter to the taxpayer, the letter will state whether the revocation or modification is retroactive. Where a letter ruling is revoked or modified by the issuance of final or temporary regulations or by the publication of a revenue ruling, revenue procedure, notice or other statement in the Internal Revenue Bulletin, the document may contain a statement as to its retroactive effect on letter rulings.

An Associate office will revoke or modify a letter ruling and apply the revocation retroactively to the taxpayer for whom the letter ruling was issued or to a taxpayer whose tax liability was directly involved in the letter ruling if—

(1) there has been a misstatement or omission of controlling facts; or

(2) the facts at the time of the transaction are materially different from the controlling facts on which the letter ruling was based; or

(3) if the transaction involves a continuing action or series of actions, the controlling facts change during the course of the transaction.

Where the revocation or modification of a letter ruling is for reasons other than a change in facts as described in section 11.05 of this revenue procedure, it will generally not be applied retroactively to the taxpayer for whom the letter ruling was issued or to a taxpayer whose tax liability was directly involved in the letter ruling provided that—

(1) there has been no change in the applicable law;

(2) the letter ruling was originally issued for a proposed transaction; and

(3) the taxpayer directly involved in the letter ruling acted in good faith in relying on the letter ruling, and revoking or modifying the letter ruling retroactively would be to the taxpayer’s detriment. For example, the tax liability of each shareholder is directly involved in a letter ruling on the reorganization of a corporation. The shareholders’ reliance on the letter ruling may, depending on all facts and circumstances, be in good faith. The tax liability of a member of an industry, however, is not directly involved in a letter ruling issued to another member of the same industry and, therefore, a nonretroactive revocation or modification of a letter ruling to one member of an industry will not extend to other members of the industry who have not received letter rulings. By the same reasoning, a tax practitioner may not extend to one client the non-retroactive application of a revocation or modification of a letter ruling previously issued to another client.

If a letter ruling is revoked or modified by a letter with retroactive effect, the letter will, except in fraud cases, state the grounds on which the letter ruling is being revoked or modified and explain the reasons why it is being revoked or modified retroactively.

A letter ruling issued on a particular transaction represents a holding of the Service on that transaction only. It will not apply to a similar transaction in the same year or any other year. And, except in unusual circumstances, the application of that letter ruling to the transaction will not be affected by the later issuance of regulations (either temporary or final) if conditions (1) through (3) in section 11.06 of this revenue procedure are met.

If a letter ruling on a transaction is later found to be in error or no longer in accord with the position of the Service, it will not protect a similar transaction of the taxpayer in the same year or later year.

If a letter ruling is issued covering a continuing action or series of actions and the letter ruling is later found to be in error or no longer in accord with the position of the Service, the appropriate Associate Chief Counsel or Division Counsel/Associate Chief Counsel ordinarily will limit the retroactive effect of the revocation or modification to a date that is not earlier than that on which the letter ruling is revoked or modified. For example, the retroactive effect of the revocation or modification of a letter ruling covering a continuing action or series of actions ordinarily would be limited in the following situations when the letter ruling is in error or no longer in accord with the position of the Service:

(1) A taxpayer received a letter ruling that certain payments are excludable from gross income for federal income tax purposes. The taxpayer ordinarily would be protected only for the payment received after the letter ruling was issued and before the revocation or modification of the letter ruling.

(2) A taxpayer rendered a service or provided a facility that is subject to the excise tax on services or facilities and, in relying on a letter ruling received, did not pass the tax on to the user of the service or the facility.

(3) An employer incurred liability under the Federal Insurance Contributions Act but, in relying on a letter ruling received, neither collected the employee tax nor paid the employee and employer taxes under the Federal Insurance Contributions Act. The retroactive effect would be limited for both the employer and employee tax. The limitation would be conditioned on the employer furnishing wage data, as may be required by § 31.6011(a)-1 of the Employment Tax Regulations.

A letter ruling holding that the sale or lease of a particular article is subject to the manufacturer’s excise tax or the retailer’s excise tax may not retroactively revoke or modify an earlier letter ruling holding that the sale or lease of such an article was not taxable if the taxpayer to whom the letter ruling was issued, in relying on the earlier letter ruling, gave up possession or ownership of the article without passing the tax on to the customer. (Section 1108(b), Revenue Act of 1926.)

A taxpayer is not protected against retroactive revocation or modification of a letter ruling involving a transaction completed before the issuance of the letter ruling or involving a continuing action or series of actions occurring before the issuance of the letter ruling because the taxpayer did not enter into the transaction relying on a letter ruling.

Under § 7805(b), the Service may prescribe any extent to which a revocation or modification of a letter ruling will be applied without retroactive effect.

A taxpayer to whom a letter ruling has been issued may request that the appropriate Associate Chief Counsel limit the retroactive effect of any revocation or modification of the letter ruling.

In income and gift tax matters, Directors issue determination letters in response to taxpayers’ written requests on completed transactions that affect returns over which they have examination jurisdiction. A determination letter usually is not issued for a question concerning a return to be filed by the taxpayer if the same question is involved in a return already filed.

Normally, Directors do not issue determination letters on the tax consequences of proposed transactions. A 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, Directors issue determination letters in response to written requests affecting the estate tax returns over which they 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, Directors issue determination letters in response to written requests affecting the generation-skipping transfer tax returns over which they have examination jurisdiction. They do not issue determination letters on matters concerning the application of the generation-skipping transfer tax before the distribution or termination takes place.

In employment and excise tax matters, Directors issue determination letters in response to taxpayers’ written requests on completed transactions over which they have examination jurisdiction. See also section 5.10 of this revenue procedure.

A request received by a 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.

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.

Determination letters issued under sections 12.01 through 12.04 of this revenue procedure are not reviewed by the Associate offices before they are issued. If a taxpayer believes that a determination letter of this type is in error, the taxpayer may ask the Director to reconsider the matter or to request technical advice from an Associate office as explained in Rev. Proc. 2006-2, this Bulletin.

(a) For taxpayers under the jurisdiction of LMSB, send a request for a determination letter to the following address:

Internal Revenue Service Attn: Manager, Office of Pre-Filing and Technical Services Large and Mid-Size Business Division SE:LM:PFT:PFTS Mint Building, 3rd Floor 1111 Constitution Ave., NW Washington, DC 20224

(b) SB/SE and W&I taxpayers should send requests for determination letters to the appropriate SB/SE office listed in Appendix D.

(c) For a determination letter under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, see Rev. Proc. 2006-4, this Bulletin.

(d) For fees required with determination letter requests, see section 15 and Appendix A of this revenue procedure.

A determination letter issued by a Director has the same effect as a letter ruling issued to a taxpayer under section 11 of this revenue procedure.

If a field office proposes to reach a conclusion contrary to that expressed in a determination letter, that office need not refer the matter to the Associate office as is required for a letter ruling found to be in error. The field office must, however, refer the matter to the Associate office through the appropriate Director, if it desires to have the revocation or modification of the determination letter limited under § 7805(b).

Under § 7805(b), the Service may prescribe the extent to which a revocation or modification of a determination letter will be applied without retroactive effect. A Director does not have authority under § 7805(b) to limit the revocation or modification of the determination letter. Therefore, if the field office proposes to revoke or modify a determination letter, the taxpayer may request limitation of the retroactive effect of the revocation or modification by asking the Director that issued the determination letter to seek technical advice from the Associate office. See section 16.03 of Rev. Proc. 2006-2, this Bulletin.

Requests for determination letters received by a Director with respect to which it may not issue a determination letter, under the provisions of this revenue procedure, will be forwarded to an Associate office for reply. The field office will notify the taxpayer that the matter has been referred.

Directors will also refer to an Associate office any request for a determination letter that in their judgment should have the attention of the Associate office.

If the request involves an issue on which the Service will not issue a letter ruling or determination letter, the request will not be forwarded to an Associate office. The Director will notify the taxpayer that the Service will not issue a letter ruling or a determination letter on the issue. See section 6 of this revenue procedure for a description of no-rule areas.

Requests for a letter ruling received by an Associate office that, under section 6 of this revenue procedure, may not be acted upon by the Associate office will be forwarded to the field office that has examination jurisdiction over the taxpayer’s return. The taxpayer will be notified of this action. If the request is on an issue or in an area of the type discussed in section 6 of this revenue procedure and the Service decides not to issue a letter ruling or a determination letter, the Associate office will notify the taxpayer and will then forward the request to the appropriate field office for association with the related return.

A request for a letter ruling mistakenly sent to a Director will be returned by the Director to the taxpayer so that the taxpayer can send it to an Associate office.

Section 7528 of the Internal Revenue Code provides that the Secretary of the Treasury or delegate (the “Secretary”) shall establish a program requiring the payment of user fees for requests to the Service for letter rulings, opinion letters, determination letters, and similar requests. The fees apply to requests made through September 30, 2014. The fees charged under the program are to: (1) vary according to categories or subcategories established by the Secretary; (2) be determined after taking into account the average time for, and difficulty of, complying with requests in each category and subcategory; and (3) be payable in advance. The Secretary is to provide for exemptions and reduced fees under the program as the Secretary determines to be appropriate, but the average fee applicable to each category must not be less than the amount specified in § 7528.

In general, user fees apply to all requests for—

(1) letter rulings (including advance consent Forms 3115), determination letters, information letters and advance pricing agreements;

(2) closing agreements described in paragraph (A)(3)(d) of Appendix A of this revenue procedure and pre-filing agreements described in Rev. Proc. 2005-12, 2005-2 I.R.B. 311;

(3) renewal of advance pricing agreements; and

(4) reconsideration of letter rulings or determination letters.

Requests to which a user fee applies must be accompanied by the appropriate fee as determined from the fee schedule provided in Appendix A of this revenue procedure. The fee may be refunded as provided in section 15.10 of this revenue procedure.

User fees do not apply to—

(1) elections made pursuant to § 301.9100-2, pertaining to automatic extensions of time (see section 5.03 of this revenue procedure);

(2) late initial classification elections made pursuant to Rev. Proc. 2002-59 (see section 5.03(5) of this revenue procedure);

(3) late S corporation and related elections made pursuant to Rev. Proc. 2004-49, Rev. Proc. 2004-48, Rev. Proc. 2003-43 or Rev. Proc. 97-48 (see section 5.02 of this revenue procedure); or

(4) requests for a change in accounting period or accounting method permitted to be made by a published automatic change revenue procedure (see section 9.01(1) of this revenue procedure).

The user fee requirements do not apply to—

(1) departments, agencies, or instrumentalities of the United States if they certify that they are seeking a letter ruling or determination letter on behalf of a program or activity funded by federal appropriations. The fact that a user fee is not charged does not have any bearing on whether an applicant is treated as an agency or instrumentality of the United States for purposes of any provision of the Code; or

(2) requests as to whether a worker is an employee for federal employment taxes and income tax withholding purposes (Subtitle C of the Code) submitted on Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, or its equivalent.

The schedule of user fees is provided in Appendix A of this revenue procedure. For the user fee requirements applicable to—

(1) requests for advance pricing agreements or renewals of advance pricing agreements, see section 4.12 of Rev. Proc. 2004-40, 2004-2 C.B. 50; or 5.14 of Rev. Proc. 96-53, 1996-2 C.B. at 379; or

(2) requests for letter rulings, determination letters, etc., under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, see Rev. Proc. 2006-8, this Bulletin.

(1) Requests involving several offices. If a request dealing with only one transaction involves more than one of the offices within the Service (for example, one issue is under the jurisdiction of the Associate Chief Counsel (Passthroughs and Special Industries) and another issue is under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division), only one fee applies, namely the highest fee that otherwise would apply to each of the offices involved. See Rev. Proc. 2006-8, this Bulletin for the user fees applicable to issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division.

(2) Requests involving several fee categories. If a request dealing with only one transaction involves more than one fee category, only one fee applies, namely the highest fee that otherwise would apply to each of the categories involved.

(3) Requests involving several issues. If a request dealing with only one transaction involves several issues, a request for a change in accounting method dealing with only one item or submethod of accounting involves several issues, or a request for a change in accounting period dealing with only one item involves several issues, the request is treated as one request. Therefore, only one fee applies, namely the fee that applies to the particular category or subcategory involved. The addition of a new issue relating to the same transaction, item, or submethod will not result in an additional fee, unless the issue places the transaction, item, or submethod in a higher fee category.

(4) Requests involving several unrelated transactions. If a request involves several unrelated transactions, a request for a change in accounting method involves several unrelated items or submethods of accounting, or a request for a change in accounting period involves several unrelated items, each transaction or item is treated as a separate request. As a result, a separate fee will apply for each unrelated transaction, item, or submethod. An additional fee will apply if the request is changed by the addition of an unrelated transaction, item, or submethod not contained in the initial request. An example of a request involving unrelated transactions is a request involving relief under § 301.9100-3 and the underlying issue.

(5) Requests involving several entities. Each entity involved in a transaction (for example, a reorganization) that desires a separate letter ruling in its own name must pay a separate fee regardless of whether the transaction or transactions may be viewed as related. But see section 15.07 of this revenue procedure.

(1) In general. The user fees provided in paragraph (A)(5) of Appendix A of this revenue procedure apply to the situations described in sections 15.07(2) and 15.07(4) of this revenue procedure. To assist in the processing of these user fee requests, all letter ruling requests submitted under this section 15.07 should—

(a) Except for advance consent Forms 3115, type or print at the top of the letter ruling request: “REQUEST FOR USER FEE UNDER SECTION 15.07 OF REV. PROC. 2006-1”;

(b) List on the first page of the submission all taxpayers and entities, and separate and distinct trades or businesses, including qualified subchapter S subsidiaries (QSUBs) or single member limited liability companies (single member LLCs), requesting a letter ruling (including the taxpayer identification number, and the amount of user fee submitted, for each taxpayer, entity, or separate and distinct trade or business); and

(c) Submit one check to cover all user fees.

If the Service determines that the letter ruling requests do not qualify for the user fee provided in paragraph (A)(5) of Appendix A of this revenue procedure, the Service will request the proper fee. See section 15.09 of this revenue procedure.

(2) Substantially identical letter rulings. The user fee provided in paragraph (A)(5)(a) of Appendix A of this revenue procedure applies to a taxpayer that requests substantially identical letter rulings (including accounting period, accounting method, and earnings and profits requests other than those submitted on Forms 1128, 2553, 3115, and 5452) for either multiple entities with a common member or sponsor, or multiple members of a common entity. To qualify for this user fee, all information and underlying documents must be substantially identical and all letter ruling requests must be submitted at the same time. In addition, the letter ruling requests must—

(a) State that the letter ruling requests, and all information and underlying documents, are substantially identical; and

(b) Specifically identify the extent to which the letter ruling requests, information, and underlying documents are not identical.

(3) Substantially identical plans under section 25(c)(2)(B). The user fee provided in paragraph (A)(5)(b) of Appendix A of this revenue procedure shall apply to a taxpayer that submits substantially identical plans for administering the 95-percent requirement of section 143(d)(1) following the submission and approval of an initial plan for administering the requirement. The request for subsequent approvals of substantially identical plans must: (1) state that a prior plan was submitted and approved and include a copy of the prior plan and approval; (2) state that the subsequent plan is substantially identical to the approved plan; and (3) describe any differences between the approved plans and the subsequent plan.

(4) Identical accounting method changes and related § 301.9100 letter rulings. The following situations are eligible for the user fees provided in paragraphs (A)(5)(b) and (d) of Appendix A of this revenue procedure:

(i) A taxpayer requests an identical accounting method change on a single Form 3115, or an extension of time to file Form 3115 under § 301.9100-3 for the identical accounting method change, for two or more separate and distinct trades or businesses (for purposes of § 1.446-1(d)) of that taxpayer, including QSUBs and single member LLCs;

(ii) A common parent requests the identical accounting method change on a single Form 3115, or an extension of time to file Form 3115 under § 301.9100-3 for the identical accounting method change, on behalf of two or more members of the consolidated group;

(iii) A common parent requests the identical accounting method change on a single Form 3115, or an extension of time to file Form 3115 under § 301.9100-3 for the identical accounting method change, on behalf of two or more controlled foreign corporations (CFCs) that do not engage in a trade or business within the United States where all controlling U.S. shareholders of the CFCs are members of the consolidated group; or

(iv) A taxpayer requests an identical accounting method change on a single Form 3115, or an extension of time to file Form 3115 under § 301.9100-3 for the identical accounting method change, on behalf of two or more CFCs that do not engage in a trade or business within the United States for which the taxpayer is the sole controlling U.S. shareholder of the CFCs.

To qualify as an identical accounting method change the multiple separate and distinct trades or businesses of a taxpayer, including QSUBs and single member LLCs, the multiple members of a consolidated group, or the multiple eligible CFCs must request to change from an identical present method of accounting to an identical proposed method of accounting. All aspects of the requested accounting method change, including the present and proposed methods, the underlying facts and the authority for the request, must be identical, except for the § 481(a) adjustments for the year of change. If the Associate office determines that the requested accounting method changes are not identical, additional user fees will be required before any letter ruling is issued.

The taxpayer or common parent must, for each separate and distinct trade or business (including a QSUB or single-member LLC) member of a consolidated group, or eligible CFC for which the accounting method change is being requested, attach to the Form 3115 a schedule providing the name, employer identification number (where applicable), and § 481(a) adjustment for the year of change. If the request is on behalf of eligible CFCs, the taxpayer or common parent must attach a statement that “[a]ll controlling U.S. shareholders (as defined in § 1.964-1(c)(5)) of all the CFCs to which the request relates are members of the common parent’s consolidated group” or that “[t]he taxpayer filing the request is the sole controlling U.S. shareholder (as defined in § 1.964-1(c)(5)) of the CFCs to which the request relates,” as applicable.

In the case of a § 301.9100 request for an extension of time to file a Form 3115 requesting an identical accounting method change for multiple separate and distinct trades or businesses of a taxpayer (including QSUBs or single-member LLCs) multiple members of the consolidated group or multiple eligible CFCs, the taxpayer or common parent must submit the information required in the preceding paragraph in addition to the information required by section 5.03 of this revenue procedure.

Each request to the Service for a letter ruling, determination letter, information letter, advance pricing agreement, closing agreement described in paragraph (A)(3)(d) of Appendix A of this revenue procedure, or reconsideration of a letter ruling or determination letter must be accompanied by a check or money order in U.S. dollars, payable to the Internal Revenue Service, in the appropriate amount. (The user fee check or money order should not be attached to the Form 2553, Election by a Small Business Corporation, when it is filed at the Service Center. If on the Form 2553 an electing S corporation requests a ruling to use a fiscal year under section 6.03 of Rev. Proc. 2002-39, 2002-1 C.B. 1046, the Service Center will forward the request to the Associate office. When the Associate office receives the Form 2553 from the Service Center, it will notify the taxpayer that the fee is due.) Taxpayers should not send cash.

If a request is not accompanied by a properly completed check or money order or is accompanied by a check or money order for less than the correct amount, the respective office within the Service that is responsible for issuing the letter ruling, determination letter, information letter, advance pricing agreement, closing agreement, or reconsideration of a letter ruling or determination letter generally will exercise discretion in deciding whether to return immediately the request. If a request is not immediately returned, the taxpayer will be contacted and given a reasonable amount of time to submit the proper fee. If the proper fee is not received within a reasonable amount of time, the entire request will then be returned. The Service will usually defer substantive consideration of a request until proper payment has been received. The return of a request to the taxpayer may adversely affect substantive rights if the request is not perfected and resubmitted to the Service within 30 days of the date of the cover letter returning the request.

If a request is accompanied by a check or money order for more than the correct amount, the request will be accepted and the amount of the excess payment will be returned to the taxpayer.

In general, the user fee will not be refunded unless the Service declines to rule on all issues for which a ruling is requested.

(1) The following situations are examples of situations in which the user fee will not be refunded:

(a) The request for a letter ruling, determination letter, etc., is withdrawn at any time subsequent to its receipt by the Service, unless the only reason for withdrawal is that the Service has advised the taxpayer that a higher user fee than was sent with the request is applicable and the taxpayer is unwilling to pay the higher fee.

(b) The request is procedurally deficient, although accompanied by the proper fee or an overpayment, and is not timely perfected. When there is a failure to perfect timely the request, the case will be considered closed and the failure to perfect will be treated as a withdrawal for purposes of this revenue procedure. See section 8.05(3) of this revenue procedure.

(c) The Associate office notifies the taxpayer that the Associate office will not issue the letter ruling and has closed the case as a result of the taxpayer’s failure to submit timely the additional information requested by the Associate office. The failure to submit the additional information will be treated as a withdrawal for purposes of this revenue procedure. See section 8.05(3) of this revenue procedure (section 9.08(7) for a request for a change in accounting method).

(d) A letter ruling, determination letter, etc., is revoked in whole or in part at the initiative of the Service. The fee paid at the time the original letter ruling, determination letter, etc., was requested will not be refunded.

(e) The request contains several issues, and the Service rules on some, but not all, of the issues. The highest fee applicable to the issues on which the Service rules will not be refunded.

(f) The taxpayer asserts that a letter ruling the taxpayer received covering a single issue is erroneous or not responsive (other than an issue on which the Associate office has declined to rule) and requests reconsideration. The Associate office, upon reconsideration, does not agree that the letter ruling is erroneous or is not responsive. The fee accompanying the request for reconsideration will not be refunded.

(g) The situation is the same as described in paragraph (f) of this section 15.10(1) except that the letter ruling covered several unrelated transactions. The Associate office, upon reconsideration, does not agree with the taxpayer that the letter ruling is erroneous or is not responsive for all of the transactions, but does agree that it is erroneous as to one transaction. The fee accompanying the request for reconsideration will not be refunded except to the extent applicable to the transaction for which the Associate office agrees the letter ruling was in error.

(h) The request is for a supplemental letter ruling, determination letter, etc., concerning a change in facts (whether significant or not) relating to the transaction on which the Service ruled.

(i) The request is for reconsideration of an adverse or partially adverse letter ruling or a final adverse determination letter, and the taxpayer submits arguments and authorities not submitted before the original letter ruling or determination letter was issued.

(2) The following situations are examples of situations in which the user fee will be refunded:

(a) In a situation to which section 15.10(1)(i) of this revenue procedure does not apply, the taxpayer asserts that a letter ruling the taxpayer received covering a single issue is erroneous or is not responsive (other than an issue on which the Associate office declined to rule) and requests reconsideration. The Associate office agrees, upon reconsideration, that the letter ruling is erroneous or is not responsive. The fee accompanying the taxpayer’s request for reconsideration will be refunded.

(b) In a situation to which section 15.10(1)(i) of this revenue procedure does not apply, the taxpayer requests a supplemental letter ruling, determination letter, etc., to correct a mistake that the Service agrees it made in the original letter ruling, determination letter, etc., such as a mistake in the statement of facts or in the citation of a Code section. Once the Service agrees that it made a mistake, the fee accompanying the request for the supplemental letter ruling, determination letter, etc., will be refunded.

(c) The taxpayer requests and is granted relief under § 7805(b) in connection with the revocation in whole or in part, of a previously issued letter ruling, determination letter, etc. The fee accompanying the request for relief will be refunded.

(d) In a situation to which section 15.10(1)(e) of this revenue procedure applies, the taxpayer requests reconsideration of the Service’s decision not to rule on an issue. Once the Service agrees to rule on the issue, the fee accompanying the request for reconsideration will be refunded.

(e) The letter ruling is not issued and taking into account all the facts and circumstances, including the Service’s resources devoted to the request, the responsible Associate Chief Counsel in his or her sole discretion decides a refund is appropriate.

A taxpayer that believes the user fee charged by the Service for its request for a letter ruling, determination letter, advance pricing agreement, or closing agreement is either inapplicable or incorrect and wishes to receive a refund of all or part of the amount paid (see section 15.10 of this revenue procedure) may request reconsideration and, if desired, the opportunity for an oral discussion by sending a letter to the Service at the appropriate address given in section 7.03 in this revenue procedure. Both the incoming envelope and the letter requesting such reconsideration should be prominently marked “USER FEE RECONSIDERATION REQUEST.” No user fee is required for these requests. The request should be marked for the attention of:

.01 For requests relating to the following Code sections and subject matters, refer to the following checklists, guideline revenue procedures, and notices.

.02 For requests relating to the following Code sections and subject matters, refer to the following safe harbor revenue procedures.

.03 For requests for an automatic change in accounting period, refer to the following automatic change revenue procedures published and/or in effect as of December 31, 2004:

Rev. Proc. 2002-37, 2002-1 C.B. 1030, as clarified and modified by Notice 2002-72, 2002-2 C.B. 843, and as modified by Rev. Proc. 2003-34, 2003-1 C.B. 856 (certain corporations); Rev. Proc. 2002-38, 2002-2 C.B. 1037, as clarified and modified by Notice 2002-72, 2002-2 C.B. 843 (certain partnerships, S corporations, electing S corporations, or personal service corporations); and Rev. Proc. 2003-62, 2003-2 C.B. 299 (individual seeking a calendar year).

The Commissioner’s consent to an otherwise qualifying automatic change in accounting period is granted only if the taxpayer timely complies with the applicable automatic change revenue procedure.

Rev. Proc. 2006-1, 2006-1 I.R.B. 1.

The Internal Revenue Service includes four operating divisions that are responsible for meeting the needs of taxpayers:

(1) Large and Mid-Size Business Division (LMSB), which generally serves corporations, including S corporations, and partnerships with assets in excess of $10 million;

(2) Small Business/Self-Employed Division (SB/SE), which generally serves corporations, including S corporations, and partnerships with assets less than or equal to $10 million; estates and trusts; individuals filing an individual federal income tax return with an accompanying Schedule C (Profit or Loss From Business (Sole Proprietorship)), Schedule E (Supplemental Income and Loss), or Schedule F (Profit or Loss From Farming), or Form 2106 (Employee Business Expenses) or Form 2106-EZ (Unreimbursed Employee Business Expenses); and individuals with international tax returns;

(3) Wage and Investment Division (W&I), which generally serves individuals with wage and investment income only and with no international tax returns; and individuals filing an individual federal income tax return without an accompanying Schedule C, E, or F, or Form 2106 or Form 2106-EZ; and

(4) Tax Exempt and Government Entities Division (TE/GE), which generally serves three distinct taxpayer segments: employee plans, exempt organizations, and government entities.

A TAM or a TEAM should be requested when there is a lack of uniformity regarding the disposition of an issue or when an issue is unusual or complex enough to warrant consideration by an Associate office. This revenue procedure applies only to a case under the jurisdiction of a director or an Appeals area director. A TAM or a TEAM may also be requested on issues considered in a prior Appeals disposition, not based on mutual concessions for the same tax period of the same taxpayer, if the field office that had the case concurs with the request. Once an issue is identified, all requests for a TAM or a TEAM should be made at the earliest possible stage in any proceeding. The fact that the issue is raised late in the examination or appeals process should not influence the field office’s decision to request a TAM or a TEAM.

Although taxpayer participation during all stages of the process is preferred, it is not required in order to request technical advice. In the event that multiple taxpayers will be affected by the advice (e.g., subject matter of the request involves a transaction between multiple taxpayers), the Associate office can issue a single TAM or TEAM, but only if each taxpayer agrees to participate in the process. In the event that a taxpayer chooses not to participate in a request for a TEAM, the request will usually be treated as a request for a TAM. In general, all parties must agree that the TEAM procedures are appropriate, with the following two exceptions:

(1) Any request in which the Associate office considers whether a letter ruling should be revoked or modified because the field office has determined that there are material differences from the controlling facts on which the original ruling was based will be treated and processed as a request for a TEAM without the need for consensus among the field office, taxpayer, and Associate office. See section 11.03 of Rev. Proc. 2006-1. The taxpayer’s views will be considered if submitted.

(2) Any request for a TEAM that involves, as described in § 6110(g)(5)(A), a matter that is the subject of, or is otherwise closely related to, a criminal or civil fraud investigation, or a jeopardy or termination assessment may be treated and processed as a TEAM without telling the taxpayer about the referral of issues, providing copies of the arguments submitted, or requesting the participation of the taxpayer.

The provisions of this revenue procedure are applicable in situations in which the authority normally exercised by the director or the Appeals area director has been properly delegated to another official.

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

The procedures for obtaining a TAM or a TEAM specifically applicable to federal alcohol, tobacco, and firearms taxes under subtitle E of the Code are currently under the jurisdiction of the Alcohol and Tobacco Tax and Trade Bureau of the Treasury Department.

The procedures for obtaining a TAM or a TEAM specifically on issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, are found in Rev. Proc. 2006-5, this Bulletin. The procedures under Rev. Proc. 2006-2 (this revenue procedure) must be followed to obtain a TAM or a TEAM on issues pertaining to tax-exempt bonds, Indian tribal governments, federal, state, or local governments, mortgage credit certificates, and deferred compensation plans under § 457.

Even though the Associate Chief Counsel (Passthroughs and Special Industries) has jurisdiction for issuing TAMs and TEAMs under § 521, the procedures under Rev. Proc. 2006-5, this Bulletin, and Rev. Proc. 90-27, 1990-1 C.B. 514, must be followed.

.01 A request for an extension of time for making an election or other application for relief under § 301.9100-3 of the Procedure and Administration Regulations is not submitted as a request for a TAM or a TEAM; instead, the request is submitted as a letter ruling request even if the request is submitted after the examination of the taxpayer’s return has begun or after the issues in the return are being considered in Appeals or a federal court. Therefore, a § 301.9100 request should be submitted pursuant to Rev. Proc. 2006-1 (including the payment of the applicable user fee listed in Appendix A of Rev. Proc. 2006-1).

For purposes of this revenue procedure, a “frivolous issue” is one without basis in fact or law, or that espouses a position that has been held by the courts to be frivolous or groundless. Examples of frivolous or groundless issues include, but are not limited to:

(1) frivolous “constitutional” claims, such as claims that the requirement to file tax returns and pay taxes constitutes an unreasonable search barred by the Fourth Amendment; violates Fifth and Fourteenth Amendment protections of due process; violates Thirteenth Amendment protections against involuntary servitude; or is unenforceable because the Sixteenth Amendment does not authorize nonapportioned direct taxes or was never ratified;

(2) claims that income taxes are voluntary, that the term “income” is not defined in the Internal Revenue Code, or that the preparation and filing of income tax returns violates the Paperwork Reduction Act;

(3) claims that tax may be imposed only on coins minted under a gold or silver standard or that receipt of Federal Reserve Notes does not cause an accretion to wealth;

(4) claims that a person is not taxable on income because he or she falls within a class entitled to “reparation claims” or an extra-statutory class of individuals exempt from tax (for example, “free-born” individuals);

(5) claims that a taxpayer can refuse to pay taxes on the basis of opposition to certain governmental expenditures;

(6) claims that taxes apply only to federal employees; only to residents of Puerto Rico, Guam, the U.S. Virgin Islands, the District of Columbia, or “federal enclaves” ; or that §§ 861 through 865 or any other provision of the Internal Revenue Code imposes taxes on U.S. citizens and residents only on income derived from foreign-based activities;

(7) claims that wages or personal service income are not “income,” are “nontaxable receipts,” or “are a nontaxable exchange for labor” ;

(8) claims that income tax withholding by an employer on wages is optional; or

(9) other claims the courts have characterized as frivolous or groundless.

A case remains under the jurisdiction of the director even though Appeals has the identical issue under consideration in the case of another taxpayer (not related within the meaning of § 267 or a member of an affiliated group of which the taxpayer is not also a member within the meaning of § 1504) in a different transaction. With respect to the same taxpayer or the same transaction, when the issue is under the jurisdiction of Appeals and the applicability of more than one kind of federal tax is dependent upon the resolution of that issue, a director may not request a TAM or a TEAM on the applicability of any of the taxes involved.

A field office may not request a TAM or a TEAM on an issue if the same issue of the same taxpayer (or of 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) is in a docketed case for any taxable year. If a case is docketed for an estate tax issue of a taxpayer while a request for a TAM or a TEAM on the same issue of the same taxpayer is pending, the Associate office may issue the TAM or the TEAM only if the appropriate Appeals officer and field counsel agree, by memorandum, to the issuance of the TAM or the TEAM.

A field office may not request a TAM or a TEAM on an issue if the same issue is involved in a docketed case for the same or related taxpayer for any taxable year.

The Associate Chief Counsel (Procedure and Administration) does not issue TAMs or TEAMs on matters arising under the Internal Revenue Code and related statutes and regulations that involve the collection of taxes (including interest and penalties).

The assigned Associate office attorney and reviewer should consider whether a TAM or a TEAM is the best format for the legal advice. In some cases, drafting a lengthy written analysis may delay delivery of the conclusion. In addition, in some cases, published general guidance may be appropriate. See section 10.04 of this revenue procedure.

The field office determines whether to request a TAM or a TEAM on an issue. Requests generally originate with the examining agent or Appeals officer assigned to the case, are submitted through the supervisory chain, and must be approved in writing by the director or equivalent official in the respective operating divisions or by the Appeals area director (or by someone with the delegated authority to approve on their behalf) before submission to the Associate office. Exam or Appeals personnel, however, should also request advice from field counsel on issues involved in cases under their jurisdiction prior to requesting a TAM or a TEAM. If, during the discussion of an issue with an examining agent or Appeals officer, field counsel believes that an issue warrants consideration as a TAM or a TEAM, field counsel may make a written or oral request to the examining agent or Appeals officer that the issue be referred to the Associate office for a TAM or a TEAM. If, after considering a request that an issue be submitted for a TAM or a TEAM, the examining agent or Appeals officer disagrees with the request, the field counsel may request reconsideration of the denial through the appropriate supervisory chain.

Prior to making a final determination regarding whether to request a TAM or a TEAM, and prior to the pre-submission conference, the field office must coordinate with, and request advice from, field counsel.

Before submission of a TAM or a TEAM request to the Associate office, and before the pre-submission conference, the field office should submit the TAM or the TEAM request to an Associate Area Counsel for the Associate Area Counsel to provide his or her views in order to help determine whether to submit the TAM or the TEAM request to the Associate office.

As discussed in section 1.03 of this revenue procedure, if a director or Appeals area director requests a TAM, taxpayer cooperation is not required. Accordingly, the taxpayer cannot appeal the decision to seek a TAM. In contrast, as discussed in section 8.02 of this revenue procedure, if a director or Appeals area director requests a TEAM, the field office, the taxpayer, and the Associate office must all agree that the TEAM procedures are appropriate, except for the two situations discussed above in section 1.03 of this revenue procedure. Thus, in general, if a taxpayer does not want an issue to be referred to the Associate office for a TEAM, the request for advice will be treated as a request for a TAM for which taxpayer agreement is not required.

While a case is under the jurisdiction of a director or Appeals area director, a taxpayer may request that an issue be referred to the Associate office for a TAM or a TEAM. The request may be oral or written and should be directed to the examining agent or Appeals officer.

If the examining agent or Appeals officer concludes that a taxpayer’s request for referral of an issue to the Associate office for a TAM or a TEAM does not warrant referral, the examining agent or Appeals officer will notify the taxpayer. A taxpayer’s request for such a referral will not be denied merely because the Associate office provided legal advice, other than advice furnished pursuant to this revenue procedure, to the field office on the matter. The taxpayer may appeal the decision of the examining agent or Appeals officer not to request a TAM or a TEAM. To do so, the taxpayer must submit to that officer, within ten calendar days after being notified of the decision, a written statement of the facts, law, and arguments on the issue and the reasons why the taxpayer believes the matter should be referred to the Associate office for a TAM or a TEAM. A taxpayer who needs more than ten calendar days must justify in writing the request for an extension of time. The extension is subject to the approval of the territory manager or the Appeals area director.

The examining agent or Appeals officer submits the taxpayer’s statement through appropriate channels to the territory manager or the Appeals area director along with the examining agent’s or Appeals officer’s statement of why the issue should not be referred to the Associate office. The territory manager or the Appeals area director determines on the basis of the statements whether a TAM or a TEAM will be requested.

If the territory manager or the Appeals area director determines that a TAM or a TEAM is not warranted and proposes to deny the request, the taxpayer is told in writing about the determination. In the letter to the taxpayer, the territory manager or the Appeals area director states the reasons for the proposed denial (except in unusual situations when doing so would be prejudicial to the best interests of the Government). The taxpayer has ten calendar days after receiving the letter to notify the territory manager or the Appeals area director of agreement or disagreement with the proposed denial. If the taxpayer does not respond within ten calendar days after receiving the letter, the lack of response will be deemed as agreement with the proposed denial.

The taxpayer may not appeal the decision of the territory manager or the Appeals area director not to request a TAM or a TEAM. If the taxpayer does not agree with the proposed denial, all data on the issue for which a TAM or a TEAM has been sought, including the taxpayer’s written request and statements, will be submitted for review to the Industry Director, LMSB; the Examination Area Director, SB/SE; the Director, Compliance, W&I; the Director, International, LMSB; the Director, Federal, State & Local Governments; the Director, Tax Exempt Bonds; the Director, Indian Tribal Governments; or the Appeals Director, Technical Services, as appropriate.

Review of the proposed denial will be based solely on the written record; no conference will be held with the taxpayer or the taxpayer’s representative. The party responsible for review may consult with the Associate office, if necessary, and will notify the field office within 45 calendar days of receiving all the data regarding the request for a TAM or a TEAM whether the proposed denial is approved or disapproved. The field office will then notify the taxpayer.

While the matter is being reviewed, the field office will suspend action on the issue (except when the delay would prejudice the Government’s interests).

If the request for a TAM or a TEAM concerns a “frivolous issue,” as described in section 6.02 of this revenue procedure, a TAM or a TEAM will not be given, and the examining agent or Appeals officer will deny the taxpayer’s request for referral. The taxpayer may appeal the decision of the examining agent or Appeals officer. If the territory manager or the Appeals area director determines that no TAM or TEAM will be sought, an expedited review procedure will be followed. This expedited review procedure will consist of the following:

(1) the territory manager or the Appeals area director will inform the appropriate official (the Industry Director, LMSB; the Examination Area Director, SB/SE; the Director, Compliance, W&I; the Director, International, LMSB; the Director, Federal, State, and Local Governments; the Director, Tax Exempt Bonds; the Director, Indian Tribal Governments; the Appeals Director, Technical Services; the Chief, Employment Tax Examination, SB/SE; the Chief, Estate and Gift Tax Examination, SB/SE; the Chief, Excise Tax Examination, SB/SE; or the Chief, International Examination, SB/SE) of the request for review and the basis for the denial, but will not forward the taxpayer’s written request and statements, unless requested to do so by the official;

(2) the field office will not suspend action on the issue;

(3) within 15 calendar days, the official will notify the territory manager or Appeals area director whether the proposed denial is approved or disapproved. The official may also determine that the expedited process is not warranted and request all of the information supplied by the taxpayer and allow suspension of action on the item while the denial is reviewed; and

(4) the field office will notify the taxpayer in writing of the result of the review of the denial.

In an effort to promote expeditious processing of a request for a TAM or a TEAM, a pre-submission conference is mandatory. The Associate office must confer with the field office and field counsel (and in some cases the taxpayer) prior to the time a request for a TAM or a TEAM is submitted to the Associate office. If a request for a TAM or a TEAM is submitted without first holding a pre-submission conference, the request for advice will be returned to the requesting party. A request for a pre-submission conference should be made only after the field office determines that it likely will request a TAM or a TEAM. Before requesting a pre-submission conference, the field office must contact the taxpayer and afford the taxpayer an opportunity to participate in the process by permitting the taxpayer to prepare a statement in accordance with section 8.04 of this revenue procedure. Although taxpayer participation in the conference is not required for a TAM, it is required for a TEAM (except for the two situations described in section 1.03 of this revenue procedure where taxpayer agreement is not a prerequisite for a TEAM). If the request for a TAM or a TEAM will include issues requiring the involvement of more than one Associate office, representatives from each Associate office involved must participate in the pre-submission conference.

A pre-submission conference is intended to facilitate agreement between the parties as to the appropriate scope of the request for a TAM or a TEAM, the factual information and documents to be included in the request, any collateral issues that either should or should not be included in the request, and any other substantive or procedural considerations that will allow the Associate office to provide the parties with a TAM or a TEAM as expeditiously as possible. A pre-submission conference is not intended to create an alternative procedure for determining the merits of the substantive positions advocated by the field office or by the taxpayer.

During the pre-submission conference, the parties should determine whether the issue(s) is appropriate for a TEAM. The parties should discuss the framing of the issue(s), what background information and documents are required and when the request for TAM or TEAM will be submitted to the Associate office. Where more than one Associate office will be involved in responding to a proposed TEAM, each must agree that the request is suitable for TEAM procedures and that the necessary coordination can be provided within the TEAM time frames.

If the parties do not agree that the TEAM procedures are appropriate, then the request will be processed subject to the procedures in this revenue procedure for a TAM, except that taxpayer agreement is not required for the two situations described in section 1.03 of this revenue procedure.

A request for a pre-submission conference for a TAM or a TEAM must be submitted in writing by the field office. The request should identify the Associate office expected to have jurisdiction over the request for a TAM or a TEAM. The request should include a brief explanation of the primary issue so that an assignment to the appropriate branch of an Associate office can be made. The field office is required to coordinate with field counsel regarding all pre-submission conferences, regardless of whether a TAM or a TEAM is being requested. If the request is submitted by Appeals, field counsel assignments will be subject to the ex parte rules set forth in section 1001(a)(4) of the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, and Rev. Proc. 2000-43, 2000-2 C.B. 404. If the request involves a designated issue, an issue under the office of the Director, ATAT Examination, SB/SE, an issue under the office of the Director, OTSA, LMSB, or an industry issue under the Office of Pre-Filing and Technical Guidance, LMSB, the field office and field counsel are strongly encouraged to coordinate with the technical advisor and field counsel contact. If the request is from Appeals and involves a coordinated issue or emerging issue under the Appeals Industry Specialization Program (ISP) or Appeals Coordinated Issue (ACI) Program, the Appeals officer must coordinate with the Appeals ISP/ACI Coordinator.

The field office requests pre-submission conferences for both TAMs and TEAMs by having their field counsel transmit the request by email to the TSS4510 email box. Counsel must send this request to take advantage of the firewall protection for interoffice email within Chief Counsel. The TSS4510 email box cannot accept encrypted mail. Alternatively, the request may be sent by fax to the Technical Services Support Branch at 202-622-4817; the director or Appeals area director must also confirm the request in writing to the Technical Services Support Branch. Email or fax may be used to confirm the request. The Associate office will confirm receipt of the fax within one working day after receiving the fax.

Prior to the scheduled pre-submission conference, the field office and the taxpayer must share proposed statements of the pertinent facts (including any facts in dispute); statements of the issues that the parties would like to discuss; and any legal analysis, authorities, or background documents that the parties believe would facilitate the Associate office’s understanding of the issues to be discussed at the conference. After drafting the statements of the issues and facts, and prior to the scheduled pre-submission conference, the field office and the taxpayer must submit to the Associate office the statements of the pertinent facts and the statements of the issues that the parties would like to discuss. The legal analysis provided for the pre-submission conference need not be as fully developed as the analysis that ultimately will accompany the request for a TAM or a TEAM, but it should allow the Associate office to become reasonably informed regarding the subject matter prior to the conference. The field office or the taxpayer should ensure that the Associate office receives a copy of any required power of attorney, preferably on Form 2848, Power of Attorney and Declaration of Representative (Rev. March 2004).

If the pre-submission conference pertains to a request for a TAM, the assigned branch of the Associate office must receive the pre-submission materials at least ten working days prior to the conference.

If the pre-submission conference pertains to a request for a TEAM, the assigned branch of the Associate office must receive the pre-submission materials at least five calendar days before the conference. Failure to timely submit pre-submission materials will result in the case being processed as a TAM rather than a TEAM.

Regardless of whether the pre-submission conference pertains to a request for a TAM or a TEAM, in order to obtain the protection of taxpayer information offered by the Chief Counsel Intranet “firewall,” the pre-submission materials must be electronically transmitted by field counsel to TSS4510. Thus, the field office must work with field counsel to submit the required materials via email to TSS4510. TSS4510 will make sure the pre-submission materials get delivered to the Associate office assigned to the request for a pre-submission conference. Copies of the taxpayer statement of deletions, penalties of perjury statement and Form 2848, Power of Attorney and Declaration of Representative (Rev. March 2004), if not electronically available, should be transmitted by fax to the Associate office attorney assigned to the case.

The field office should send the original of the materials sent by fax, and any supporting materials that cannot reasonably be transmitted electronically, to the Associate office attorney assigned to the case by express mail or private delivery service in order to avoid any delays in regular mail.

If a TEAM is requested, the branch of the Associate office assigned responsibility for conducting the pre-submission conference will contact the field office and field counsel within two working days of receiving the request to schedule the conference. The conference will be held within 15 calendar days of the assigned branch’s call to the field. Because taxpayer participation in the pre-submission conference is required, the field office is responsible for coordinating with the taxpayer as well as any other Service personnel whose participation in the conference the field office believes would be appropriate.

If a TAM is requested, or if it is unclear whether the request is for a TAM or a TEAM, the branch of the Associate office assigned responsibility for conducting the pre-submission conference will contact the field office and field counsel within five working days after it receives the request to arrange a mutually convenient time for the parties to participate in the conference. The conference generally should be held within 30 calendar days after the field office is contacted.

Generally, pre-submission conferences for TAMs and TEAMs will be held by telephone, unless the parties specifically request a meeting in person. In no event will a request for an in-person pre-submission conference on a TEAM be allowed to delay the conference beyond the 15-day period set forth above in section 8.06 of this revenue procedure.

Because pre-submission conference procedures are informal, no tape, stenographic, or other verbatim recording of a conference may be made by any party.

Any discussion of substantive issues at a pre-submission conference is advisory only, is not binding on the Service in general or on the Office of Chief Counsel in particular, and cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b). During the pre-submission conference, the Office of Chief Counsel may raise new issues or reach an answer without addressing any of the issues submitted by the agent and the taxpayer.

Whether initiated by the taxpayer or by a field office, a request for a TAM or a TEAM must include the facts and the issues for which advice is requested; a written statement clearly stating the applicable law and the arguments in support of both the Service’s and the taxpayer’s positions on the issue or issues; the information required in sections 9.01(4) and 9.01(5) of this revenue procedure, if applicable; and the written statement required in section 9.01(6) of this revenue procedure, if applicable.

Prior to submitting a request for the TAM or the TEAM, the party initiating the request, whether the field or the taxpayer, must prepare a statement of facts. The field and the taxpayer should have discussed the pertinent facts and issues, prior to preparing this factual statement, during the pre-submission conference.

If the field initiates the request, the examining agent or Appeals officer will prepare the factual statement with the assistance of field counsel. The taxpayer will have ten calendar days to respond to the field’s statement by providing to that officer a written statement specifying any disagreement on the facts and issues. A taxpayer who needs more than ten calendar days must justify in writing the request for an extension of time, subject to the approval of the territory manager or the Appeals area director. If the taxpayer initiates the TAM or the TEAM request, the taxpayer prepares the factual statement and provides it to the appropriate field office. The Service will notify the taxpayer in writing of any areas of disagreement. The taxpayer has ten calendar days after receiving the written notice to reply. A taxpayer who needs more than ten calendar days must justify in writing the request for an extension of time, subject to the approval of the territory manager or the Appeals area director.

If the taxpayer and the field continue to disagree over the factual statement, the parties will have ten calendar days to attempt to resolve the disagreements. This 10-day period begins either when the field receives the taxpayer’s written notification of disagreement with the field’s factual statement (in the case of a field-initiated TAM or TEAM), or when the field receives the taxpayer’s written reply to the field’s written notification of disagreement with the taxpayer’s factual statement (in the case of a taxpayer-initiated TAM or TEAM). Within five calendar days of the expiration of the 10-day period or the day that factual agreement is reached, whichever is earlier, the TAM or the TEAM request will be forwarded to the Associate office. If there is no agreement on the facts, the taxpayer must submit a statement of facts to the field office, and both sets of facts will be forwarded to the Associate office. The Associate office will, as discussed below in section 12.12 of this revenue procedure, issue a TAM or a TEAM on each set of facts. The field, with the assistance of field counsel, will prepare a memorandum for the Associate office highlighting the material factual differences, and provide a copy to the taxpayer. This memorandum will be forwarded with the initial request for a TAM or a TEAM.

If there is no agreement on the facts, the taxpayer’s set of facts must be accompanied by the following declaration: “Under penalties of perjury, I declare that I have examined this information, including accompanying documents, and, to the best of my knowledge and belief, the information contains all the relevant facts relating to the request for technical advice (or technical expedited advice), and such facts are true, correct, and complete.” This declaration must be signed in accordance with the requirements in section 7.01(15)(b) of Rev. Proc. 2006-1. The taxpayer must submit this declaration to the field office so that the field office can include the declaration when submitting the TAM or the TEAM request to TSS4510.

To facilitate prompt action on TAM and TEAM requests, the taxpayer is encouraged to request that, if the Service requests additional information from the taxpayer, the Service do so by telephone or fax.

(1) If taxpayer initiates the request for a TAM or a TEAM, taxpayer must submit written statement, copy of relevant foreign laws, and certified English translations of documents in a language other than English. If the taxpayer initiates the request for a TAM or a TEAM, the taxpayer must submit to the examining agent or Appeals officer, at the time the taxpayer initiates the request:

(b) the information required in sections 9.01(4) and 9.01(5) of this revenue procedure with respect to the submission of a copy of relevant foreign laws and certified English translations of documents in a language other than English, if applicable; and

(c) the written statement required in section 9.01(6) of this revenue procedure with respect to the interpretation of a substantive provision of an income or estate tax treaty, if applicable.

If the examining agent or Appeals officer determines that a TAM or a TEAM will be requested, the taxpayer’s statement, including the information required in sections 9.01(4), 9.01(5), and 9.01(6) of this revenue procedure, will be forwarded to the Associate office with the request for a TAM or a TEAM. As described in section 8.01 of this revenue procedure, the field office must first schedule a pre-submission conference prior to submitting the request for a TAM or a TEAM. When forwarding the taxpayer’s statement to the Associate office, the examining agent or Appeals officer must also provide a copy to field counsel.

(2) If the Service initiates the request for a TAM or a TEAM, taxpayer is encouraged to submit written statement, copy of relevant foreign laws, and certified English translations of documents in a language other than English. If the request for a TAM is initiated by a field office, the taxpayer is encouraged to submit a written statement explaining the taxpayer’s position and discussing relevant statutory provisions, court decisions, regulations, revenue rulings, revenue procedures, notices or any other authority supporting the taxpayer’s position. If the taxpayer chooses to submit this statement and information, the taxpayer must submit this statement and information to the field office within 21 calendar days after the taxpayer receives a copy of the TAM request.

As set forth in section 10.07 of this revenue procedure, the taxpayer will be given an opportunity to submit a statement and information if a request for a TAM is submitted without taxpayer participation.

If the request for a TAM is prepared without the taxpayer’s cooperation, the Associate office will nonetheless process the request, as neither factual agreement nor taxpayer participation are required. A request for a TEAM that falls into one of the two exceptions discussed in section 1.03 of this revenue procedure will be processed without a statement and information from the taxpayer. Any request for a TEAM that is not governed by those two exceptions will be treated as a request for a TAM and the taxpayer will be given an opportunity to submit a statement and information in accordance with section 10.07 of this revenue procedure.

(3) Statement of authorities contrary to taxpayer’s position. Whether the request for a TAM or a TEAM is initiated by the taxpayer or by a field office, the taxpayer is also encouraged to comment on any legislation (or pending legislation), tax treaties, regulations, revenue rulings, revenue procedures, or court decisions contrary to the taxpayer’s position. If the taxpayer determines that there are no contrary authorities, the taxpayer should include with the TAM or the TEAM submission a statement to this effect.

(4) Relevant parts of all foreign laws. Whether initiated by the taxpayer or by a field office, a request for a TAM or a TEAM, and other statements forwarded to the Associate office with the request, must include a copy of the relevant parts of all foreign laws, including statutes, regulations, administrative pronouncements, and any other relevant legal authority. The documents submitted must be in the official language of the country involved and must be copied from an official publication of the foreign government or another widely available, generally accepted publication. If English is not the official language of the country involved, the submission must also include a copy of an English language version of the relevant parts of all foreign laws. The translation must be: (a) from an official publication of the foreign government or another widely available, generally accepted publication; or (b) a certified English translation submitted in accordance with section 9.01(5) of this revenue procedure.

The taxpayer or the field office must identify the title and date of publication, including updates, of any widely available, generally accepted publication that it (or its qualified translator) uses as a source for the relevant parts of the foreign law.

The taxpayer and the field office are encouraged to inform the Associate office of the implications of any authority believed to interpret the foreign law, such as pending legislation, treaties, court decisions, notices, or administrative decisions. But under section 10.08 of this revenue procedure, the Associate office may refuse to provide a TAM or a TEAM if the interpretation of a foreign law or foreign document is a material fact.

(5) Standards for acceptability of submissions of documents in a language other than English and certified English translations of laws in a language other than English. Whether initiated by the taxpayer or by a field office, a request for a TAM or a TEAM, and other statements forwarded to the Associate office with the request, must include an accurate and complete certified English translation of the relevant parts of all contracts, wills, deeds, agreements, instruments, trust documents, proposed disclaimers, or other documents in a language other than English. If the taxpayer or the field office chooses to submit certified English translations of foreign laws, those translations must be based on an official publication of the foreign government or another widely available, generally accepted publication. In either case, the translation must be that of a qualified translator and must be attested to by the translator. The attestation must contain: (a) a statement that the translation submitted is a true and accurate translation of the foreign language document or law; (b) a statement as to the attestant’s qualifications as a translator and as to that attestant’s qualifications and knowledge regarding tax matters or any foreign law translated if the law is not a tax law; and (c) the attestant’s name and address.

(6) Statement regarding interpretation of a substantive provision of an income or estate tax treaty. Whether initiated by the taxpayer or by a field office, a request for a TAM or a TEAM involving the interpretation of a substantive provision of an income or estate tax treaty must include a written statement regarding whether:

(a) the tax authority of the treaty jurisdiction has issued a ruling on the same or similar issue for the taxpayer, 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 (related taxpayer)), or any predecessor;

(b) the same or similar issue for the taxpayer, a related taxpayer, or any predecessor is being examined, or has been settled, by the tax authority of the treaty jurisdiction or is otherwise the subject of a closing agreement in that jurisdiction; and

(c) the same or similar issue for the taxpayer, a related taxpayer, or any predecessor is being considered by the competent authority of the treaty jurisdiction.

The text of TAMs and TEAMs are open to public inspection under § 6110(a). The Service deletes certain information from the text before it is made available for inspection. To help the Service make the deletions required by § 6110(c), the taxpayer must provide a statement indicating the deletions desired (“deletion statement”). If the taxpayer does not submit the deletion statement, the director or the Appeals area director will advise the taxpayer that the statement is required. In the case of a taxpayer-initiated TAM or TEAM, if the director or the Appeals area director does not receive the deletion statement within ten calendar days after asking the taxpayer for it, the director or the Appeals area director may decline to submit the request for a TAM or a TEAM.

A taxpayer who wants only names, addresses, and identifying numbers deleted should state this in the deletion statement. If the taxpayer wants more information deleted, the deletion statement must be accompanied by a copy of the TAM or the TEAM request and supporting documents on which the taxpayer should bracket the material to be deleted. The deletion statement must indicate the statutory basis under § 6110(c) for each proposed deletion.

The taxpayer may submit additional deletion statements before the TAM or the TEAM is issued.

The deletion statement must not appear in the request for a TAM or a TEAM but, instead, must be made in a separate document.

The deletion statement must be signed and dated by the taxpayer or the taxpayer’s authorized representative. A stamped signature or faxed signature is not permitted.

The taxpayer should follow the same procedures to propose deletions from any additional information submitted after the initial request for a TAM or a TEAM. An additional deletion statement is not required with each submission of additional information if the taxpayer’s initial deletion 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.

The field counsel, with whom the TAM or the TEAM request was coordinated as described in section 8.03 of this revenue procedure, must use Form 4463, Request for Technical Advice or Technical Expedited Advice, for submitting a request for a TAM or a TEAM through TSS4510 to the Associate office. While the field office is responsible for preparing Form 4463, field counsel must submit the Form 4463 for a TAM or a TEAM request to the TSS4510 email address. To the extent feasible, the accompanying documents should also be submitted to the TSS4510 email address (followed by hard copy upon the request of the assigned branch of the Associate office).

Field counsel should send additional or supporting documents that are not available in electronic form by fax to TSS4510 at 202-622-4817 or by express mail or private delivery service to the following address to avoid any delays in regular mail:

Whenever possible, all documents should contain the case number and name of the Associate office attorney assigned to the pre-submission conference for the TAM or the TEAM request. Documents that are being sent in hardcopy should be sent on or before the day that the request for a TAM or a TEAM is submitted via email, so as not to delay the process. It is anticipated that most, if not all, such documents will be identified during the pre-submission conference.

The field office must indicate on, or attach to, the Form 4463 the proper mailing address of the director or Appeals area director to whom the Associate office is required to mail a copy of its reply to the TAM or the TEAM request under section 12.13 of this revenue procedure. In addition, the field office must indicate the name of each Associate office attorney involved in the pre-submission conference.

The field and the taxpayer are encouraged to provide electronic versions of a proposed TAM or a TEAM containing the taxpayer’s deletions and legends for the Associate office’s use.

The field office must submit three copies of any hard copies of the request for a TAM or a TEAM to the address in section 9.03 of this revenue procedure with two copies being designated for the Associate office.

The field office must send one copy of the request for a TAM or a TEAM to the division counsel of the operating division that has jurisdiction of the taxpayer’s tax return.

If the request is from an Appeals office, the field office must send one copy of the request for a TAM or a TEAM to the Appeals Director, Technical Services.

Any authorized representative, as described in section 7.01(13) of Rev. Proc. 2006-1, whether or not enrolled to practice, must comply with Treasury Department Circular No. 230 (31 C.F.R. part 10 (2002)) and with the conference and practice requirements of the Statement of Procedural Rules (26 C.F.R. §§ 601.501-601.509 (2002)). It is preferred that Form 2848, Power of Attorney and Declaration of Representative (Rev. March 2004), be used with regard to a request for a TAM or a TEAM under this revenue procedure. An original, a copy, or a fax transmission of the power of attorney is acceptable so long as its authenticity is not reasonably disputed.

A request for a TAM or a TEAM generally is given priority and processed expeditiously. As soon as the request for a TAM or a TEAM is assigned, the Associate office attorney analyzes the file to see whether it meets all requirements of sections 7, 8, and 9 of this revenue procedure. In addition, the Associate office attorney must analyze the issue(s) in the TAM or the TEAM request to ensure the request does not conflict with section 6 of this revenue procedure.

If the request does not comply with the requirements of section 9.02 of this revenue procedure relating to the deletion statement, the Service will follow the procedure in the last paragraph of section 10.09 of this revenue procedure.

Within five calendar days after the assigned branch in the Associate office receives the TAM or the TEAM request, the assigned Associate office attorney will contact the field and the field counsel to confirm the receipt of the request for advice. Within this 5-day period, the assigned Associate office attorney will also contact the examining agent or Appeals officer, field counsel, and the taxpayer (if the taxpayer is participating in the TAM or the TEAM request), to discuss an estimated timetable setting forth how and when a TAM or a TEAM will be considered. The assigned Associate office attorney will prepare a work plan that sets forth this timetable and share the work plan with all parties, and all parties (except the taxpayer) must agree to the work plan within five business days after the assigned branch receives the TAM or the TEAM request. The assigned Associate office attorney will notify the examining agent or Appeals officer and the field counsel of any deficiencies in the request for a TAM or a TEAM and will work with the examining agent, Appeals officer, and the field counsel to resolve those deficiencies expeditiously.

If the examining agent, Appeals officer, and the field counsel are unable to resolve the deficiencies within 15 days, the request will be withdrawn and can be resubmitted only when the deficiencies have been corrected.

The assigned Associate office attorney and reviewer should also evaluate the issue(s) presented in any TEAM request to confirm that the issue(s) is appropriate for the TEAM procedures. If the attorney and reviewer have reservations about whether the TEAM procedures should apply, the attorney and reviewer should discuss those reservations with both the field and the taxpayer and, if necessary, the Associate Chief Counsel. If they agree that the TEAM procedures should not apply because the issue is too complex or cannot, for practical reasons, be resolved within 60 calendar days, the Associate Chief Counsel should prepare a memorandum to the Chief Counsel stating that the case has been excluded from the TEAM procedures and will be treated as a TAM. A memorandum to the Chief Counsel is not required if the parties agree during the pre-submission conference that the TEAM procedures are not appropriate or if the parties have not timely submitted all materials necessary to process a TEAM request.

If the assigned reviewer in the Associate office thinks that general guidance should be published regarding the issue presented, the reviewer will immediately notify the Associate Chief Counsel. The reviewer should make this determination and recommendation as soon as possible, which may occur during the pre-submission conference. As criteria for this determination, the reviewer should consider whether the issue has a broad application to similarly situated taxpayers or an industry, or resolution of the issue is important to a clear understanding of the tax laws. If the Associate Chief Counsel, in consultation with Division Counsel Headquarters and Treasury, agrees that general guidance is desirable, an expedited guidance project will be initiated. The Associate Chief Counsel, in consultation with Division Counsel and the Operating Division, also will coordinate the appropriate resolution of the TAM or the TEAM request with the general guidance project. In general, except where policy issues and concerns regarding proper administration of the tax laws require otherwise, the TAM or the TEAM will be issued in advance of the published guidance.

Regardless of whether the taxpayer or the Service initiated the request for a TAM or a TEAM, the examining agent or Appeals officer in the field office will: (1) notify the taxpayer that a TAM or a TEAM request is being submitted; and (2) at or before the time the request is submitted to the Associate office, give to the taxpayer a copy of the request, including the statement of the pertinent facts, and the arguments being submitted to the Associate office. As discussed in section 10.07 of this revenue procedure, the taxpayer will be given an opportunity to submit a statement and information after the request for a TAM is forwarded to the Associate office.

This section 10.05 does not apply to a TAM or a TEAM described in section 10.11 of this revenue procedure (civil fraud or criminal investigation cases).

When notifying the taxpayer that a TAM or a TEAM is being requested, the examining agent or Appeals officer will also tell the taxpayer about the right to a conference with the Associate office if an adverse decision is indicated, and will ask the taxpayer whether such a conference is desired.

If the request for a TAM is prepared without participation on the part of the taxpayer, the Associate office will nonetheless process the request, as neither factual agreement nor participation by the taxpayer are required (except in the case of a TAM involving multiple taxpayers as discussed in section 1.03 of this revenue procedure). If a request for a TAM is forwarded to the Associate office without the taxpayer’s statement and information, the field office must inform the taxpayer of the date on which the request for a TAM was forwarded to the Associate office. If the taxpayer chooses to submit a statement and information, the taxpayer must submit the statement and information to the Associate office within 21 calendar days after the request for a TAM has been forwarded. The taxpayer must also send a copy of the statement and information to the director or the Appeals area director. The procedures for requesting an extension of the 21-day period and receiving approval of such extension are the same as those in section 12.09 of this revenue procedure for responding to a request for additional information. If the Associate office does not receive the taxpayer’s statement and information within the 21-day period, plus any extensions granted by the Associate office, the Associate office, at its discretion, may base its advice on the facts provided by the field office.

Because taxpayer agreement and cooperation is required for most TEAMs, a TEAM request should not generally be submitted without the taxpayer’s statement and information. A TEAM request that requires, but does not include, the taxpayer’s statement and information, generally will be processed as a TAM; however, a TEAM request may be submitted to and processed by the Associate office without the taxpayer’s statement and information under the two exceptions set forth above in section 1.03 of this revenue procedure.

If the interpretation of a foreign law or foreign document is a material fact, the Associate office, at its discretion, may refuse to issue a TAM or a TEAM. This section applies whether or not the field office and the taxpayer dispute the interpretation of a foreign law or foreign document. The interpretation of a foreign law or foreign document means making a judgment about the import or effect of the foreign law or document that goes beyond its plain meaning.

When the field office initiates the request for a TAM or a TEAM, the taxpayer has ten calendar days after receiving the statement of facts and issues to be submitted to the Associate office to provide the deletion statement required under § 6110(c). See section 9.02 of this revenue procedure for directives on making deletions.

Once a deletion statement is submitted, the taxpayer may submit additional deletion statements before the TAM or the TEAM is issued. The taxpayer should follow the same procedures to propose deletions from any additional information submitted after the initial request for a TAM or a TEAM. An additional deletion statement is not required with each submission of additional information if the taxpayer’s initial deletion 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.

If the taxpayer does not submit a deletion statement when a TAM or a TEAM is requested, the Associate office will make those deletions that the Commissioner of Internal Revenue determines are required by § 6110(c).

The public inspection provisions of § 6110, including taxpayer notification and deletion processes, do not apply to any document to which § 6104 applies.

The provisions of this section (about referring issues upon the taxpayer’s request, telling the taxpayer about the referral of issues, giving the taxpayer a copy of the arguments submitted, submitting proposed deletions, and granting conferences in the Associate office) do not apply to a TAM or a TEAM described in § 6110(g)(5)(A) that involves any matter which is the subject of a civil fraud or criminal investigation or is otherwise closely related to a civil fraud or criminal investigation, or a jeopardy or termination assessment.

In these cases, a copy of the TAM or the TEAM is given to the taxpayer after all proceedings in the investigations or assessments are complete, but before the Commissioner mails the notice of intention to disclose the TAM or the TEAM under § 6110(f)(1). The taxpayer may then provide the statement of proposed deletions to the Associate office.

The taxpayer or the taxpayer’s authorized representative may obtain information on the status of the request for a TAM or a TEAM by contacting the field office that requested the advice. See section 12.07 of this revenue procedure concerning discussing the tentative conclusion with the taxpayer or the taxpayer’s representative. See section 14.03 of this revenue procedure regarding discussions of the contents of the TAM or the TEAM with the taxpayer or the taxpayer’s representative.

The Associate office attorney or reviewer assigned to the TAM or the TEAM request will give status updates by telephone once a month to the examining agent or Appeals officer, and field counsel. If at the beginning of the month, the Associate office attorney or reviewer expects that the TAM request will be pending more than 120 days during that month, he or she must email the examining agent or Appeals officer within the first five calendar days of the month with a status update and estimated completion date. A copy of the email should be sent to TSS4510. In addition, a director or an Appeals area director may get current information on the status of the request for a TAM or a TEAM by calling the Associate office attorney or reviewer assigned to the request for a TAM or a TEAM.

See section 12.08 of this revenue procedure about discussing the final conclusions with the field office and field counsel. Further, the director or the Appeals area director will be notified by telephone at the time the TAM or the TEAM is mailed.

The Associate office will attempt to issue all TEAMs to the field within 60 calendar days of receipt, provided that the field and the taxpayer submit all required information in a timely manner. The Associate office will provide the field with the TEAM at the earliest possible date (whether the proposed TEAM is favorable or adverse, in whole or in part, to the taxpayer). The Associate office will not advise the taxpayer of a proposed or final conclusion until the Associate office has considered a request for reconsideration under section 14.02 of this revenue procedure or, if no reconsideration is requested, after the expiration of the 30-day period to request reconsideration, whichever occurs later.

After prior consultation with Appeals, the Service may send the taxpayer a letter (Letter 950 (DO), also known as a 30-day letter) notifying the taxpayer of the right to appeal the proposed changes within 30 days, while a TAM or a TEAM request is pending.

If, after the TAM or the TEAM request is analyzed, it appears that a TAM or a TEAM adverse to the taxpayer will be given and if a conference has been requested, the taxpayer will be informed, by telephone if possible, of the time and place of the conference. As discussed below in section 11.11 of this revenue procedure, the conference will normally be conducted by telephone.

The conference for a TAM must be held within 21 calendar days after the taxpayer is informed that an adverse TAM is proposed. Within 20 calendar days of receipt of the TEAM request, the assigned branch in the Associate office will analyze the facts and offer the taxpayer and the field a conference of right, which will be scheduled for a date within ten calendar days of the date of the offer for the conference.

If conferences are being arranged for more than one request for a TAM or a TEAM for the same taxpayer, they will be scheduled to cause the least inconvenience to the taxpayer. The Associate office will notify the examining agent or Appeals officer and field counsel of the scheduled conference and will offer the examining agent or Appeals officer and field counsel the opportunity to participate in the conference. The director, territory manager, or Appeals area director with supervisory authority over the assigned examining agent or Appeals officer may designate other Service representatives to participate in the conference in lieu of, or in addition to, the examining agent or Appeals officer.

In the case of a TAM, only an Associate Chief Counsel may approve an extension of the 21-day period for holding a conference. The taxpayer (or an authorized representative) must direct a written request for the extension, with an appropriate justification, to the Associate Chief Counsel of the office to which the case is assigned. The taxpayer (or an authorized representative) must notify the examining agent or Appeals officer of the request for an extension. The examining agent or Appeals officer must then notify field counsel of the request for an extension. Except in rare and unusual circumstances, the Associate office will not agree to an extension of more than ten working days beyond the end of the 21-day period.

For a TAM, the taxpayer’s request for extension must be submitted before the end of the 21-day period, and should be submitted sufficiently before the end of this period to allow the Associate Chief Counsel to consider, and either approve or deny, the request before the end of the 21-day period. If unusual circumstances near the end of the 21-day period make a timely written request impractical, the taxpayer (or an authorized representative) should orally inform the assigned Associate office attorney or reviewer before the end of the period about the problem and promptly submit the written request for extension. The Associate Chief Counsel or a delegate will promptly tell the taxpayer by telephone (with written confirmation) of the approval or denial of a requested extension.

No extension of the 10-day period for TEAMs will be allowed.

There is no right to appeal the denial of a request for extension. If the taxpayer does not notify the Associate office of problems with meeting the 21-day period within the 21-day period or promptly confirm any oral request in writing, the case will be processed on the basis of the existing record.

A taxpayer is entitled by right to only one conference with the Associate office, except as provided in section 11.09 of this revenue procedure. The conference is normally held at the branch level and a person who has authority to sign the transmittal memorandum (discussed in section 12.12 of this revenue procedure) in his or her own name or on behalf of the branch chief will participate.

When more than one branch of an Associate office has taken an adverse position on an issue in the request or when the position ultimately adopted by one branch will affect another branch’s determination, a representative from each branch with authority to sign in his or her own name or for the branch chief will participate in the conference. If more than one subject is discussed at the conference, the discussion will constitute the taxpayer’s conference of right for each subject.

To have a thorough and informed discussion of the issues, the conference usually will be held after the branch has had an opportunity to study the case. The taxpayer may request that the conference of right be held earlier in the consideration of the case than the Service would ordinarily designate. The taxpayer has no right to appeal the action of a branch to an Associate Chief Counsel, or to any other Service official.

Because conference procedures are informal, no tape, stenographic, or other verbatim recording of a conference may be made by any party.

In the event of a tentatively adverse determination, the taxpayer may request, in writing, a delay of the conference so that the taxpayer can prepare and submit a brief requesting relief under § 7805(b) (regarding limitation of retroactive effect, discussed in section 15 of this revenue procedure). The Associate Chief Counsel of the office to which the case is assigned will determine whether to grant or deny the request for delaying the conference. If such request is granted, the Service will schedule a conference on the tentatively adverse decision and the § 7805(b) relief request within ten calendar days of receiving the taxpayer’s § 7805(b) request. There is no right to appeal the denial of a request to delay the conference. See section 16.04 of this revenue procedure for the conference procedures if the § 7805(b) request is made after the conference on the substantive issues has been held.

The senior Service representative at the conference ensures that the taxpayer has a full opportunity to present views on all the issues in question. The Service representatives explain the tentative decision on the substantive issues. If the taxpayer requests relief under § 7805(b), the Service representatives will discuss the tentative recommendation concerning the request for relief and the reason for the tentative recommendation.

No commitment will be made as to the conclusion that the Service will finally adopt regarding any issue, including the outcome of the § 7805(b) request for relief.

In the case of a TAM, the Service will offer the taxpayer an additional conference if, after the conference of right, an adverse holding is proposed on a new issue or on the same issue but on grounds different from those discussed at the first conference. In the case of a TEAM, once the conference of right is held, no further conferences will be offered unless the case is first excluded from the TEAM procedures and treated as a TAM, as set forth in section 10.03.

When a proposed holding is reversed at a higher level with a result less favorable to the taxpayer, the taxpayer has no right to another conference if the grounds or arguments on which the reversal is based were discussed at the conference of right.

The limitation on the number of conferences to which a taxpayer is entitled does not prevent the Associate office from inviting a taxpayer to participate in additional conferences, including conferences with an official higher than the branch level, if Associate office personnel think they are necessary. Such conferences are not offered routinely following an adverse decision. In general, conferences with higher level officials are offered only if the Service determines that the case presents significant issues of tax policy or tax administration and that the consideration of these issues would be enhanced by additional conferences with the taxpayer.

Exam or Appeals personnel and field counsel will be offered the opportunity to participate in any additional taxpayer conference, including a conference with an official higher than the branch level. As provided in section 11.02 of this revenue procedure, other Service representatives are also permitted to participate in the conference.

After the conference of right, the taxpayer must furnish to the Associate office any additional data, lines of reasoning, precedents, etc., that the taxpayer proposed and discussed at the conference, but did not previously or adequately present in writing. This additional information must be submitted to the appropriate Associate office branch by letter with a “penalties of perjury” statement in the form described in section 9.01 of this revenue procedure. In the case of a TAM, the additional information must be submitted within 21 calendar days after the conference. The Associate office will notify the field both when a taxpayer has requested an extension of the 21-day period and when the Associate office grants or denies the request. In the case of a TEAM, the additional information must be submitted within 15 calendar days after the conference.

For TAMs and TEAMs, the taxpayer must also send a copy of the additional information to the director or the Appeals area director for comment. The director or Appeals area director must provide a copy to the field counsel assigned to the TAM or the TEAM. Any comments by the director or the Appeals area director must be furnished promptly to the appropriate branch in the Associate office. If the director or the Appeals area director does not have any comments, he or she must notify the Associate office attorney promptly.

If the additional information has a significant impact on the facts in the request for a TAM or a TEAM, the Associate office will ask the director or the Appeals area director for comment on the facts contained in the additional information submitted. The director or the Appeals area director will respond within the agreed period of time.

In the case of a TAM, if the additional information is not received from the taxpayer within 21 calendar days plus any extensions granted by an Associate Chief Counsel, the TAM will be issued on the basis of the existing record. In the case of a TEAM, if the additional information is not received within 15 calendar days, the TEAM will be issued on the basis of the existing record.

An extension of the 21-day period for TAMs may be granted only if the taxpayer justifies it in writing and the Associate Chief Counsel of the office to which the case is assigned approves the extension. Such extension will not be routinely granted. The procedures for requesting an extension of the 21-day period and notifying the taxpayer of the Service’s decision are the same as those in section 11.03 of this revenue procedure. There is no extension of the 15-day period for TEAMs.

The conference will be conducted by telephone, unless the taxpayer or the field requests that the conference be held in-person. The taxpayer will be advised when to call the Service representatives (not a toll-free call). In no event will the conference be delayed to provide an in-person conference rather than a telephone conference.

In accordance with section 11.02 of this revenue procedure, the examining agent or Appeals officer, field counsel, and any other authorized service representative will be offered the opportunity to participate in any TAM or TEAM conference.

Upon receipt of a request for a TAM or a TEAM, an attorney of the assigned branch of the Associate office should contact the field office and any assigned field attorney by telephone to acknowledge receipt of the TAM or the TEAM and to establish a point of contact. Then, within 21 calendar days for a TAM or within five calendar days for a TEAM, the assigned Associate office attorney should contact the field office to discuss the procedural and substantive issues in the request that come within the branch’s jurisdiction. The timeline for contacting the field office to discuss issues should be included in the work plan, as described in section 10.02 of this revenue procedure.

If the TAM request concerns matters within the jurisdiction of more than one branch or office, a representative of the branch that received the original TAM request should inform the field office within 21 calendar days of receiving the request that:

(1) matters within the jurisdiction of another branch or office have been referred to the other branch or office for consideration; and

(2) a representative of the other branch or office will contact the field office about the TAM request within 21 calendar days after receiving it in accordance with section 12.01 of this revenue procedure.

If a request for a TEAM involves more than one Associate office, all involved Associate offices should have had the opportunity to participate in the pre-submission conference. Within five calendar days of receipt, the Associate office attorney with primary responsibility over the TEAM will confirm that all involved Associate offices have received copies of the TEAM request and will advise the field office as to who is assigned to the TEAM in each Associate office. If, after receiving the TEAM request, the Associate office with jurisdiction over a TEAM determines that coordination with another Associate office is required, the assigned Associate office attorney will also notify the field office of the new coordination within five calendar days of the receipt of the TEAM.

The Associate office attorney will inform the field office and field counsel that a TAM or a TEAM request is being returned if substantial additional information is required to resolve an issue. Cases should also be returned if major procedural problems cannot be resolved by telephone. The field office should promptly notify the taxpayer of the decision to return the case and the reason(s) for such decision.

If only minor procedural deficiencies exist, the Associate office attorney will request the additional information in the most expeditious manner without returning the case.

If all necessary information has been provided, the Associate office attorney will inform the field office within 21 calendar days after receiving the information requested for a TAM and within five calendar days for a TEAM of the tentative conclusion and the estimated date that the TAM or the TEAM will be mailed.

If a tentative conclusion has not been reached because of the complexity of the issue, the Associate office attorney will inform the field office and field counsel of the estimated date the tentative conclusion will be made.

Because the Associate office attorney’s tentative conclusion may change during the preparation and review of the TAM or the TEAM, the tentative conclusion should not be considered final. If the tentative conclusion is changed, the Associate office attorney will inform the field office.

Neither the Associate office nor the field office should discuss with the taxpayer or the taxpayer’s representative the tentative conclusion and the rationale for that conclusion during the initial consideration of the request for a TAM or a TEAM. To afford taxpayers an appropriate opportunity to prepare and present their position, however, the taxpayer or the taxpayer’s representative should be told the tentative conclusion when scheduling the adverse conference, at the adverse conference, or in any discussion between the scheduling and commencement of the adverse conference. See section 14.03 of this revenue procedure regarding discussions of the contents of the issued TAM or TEAM with the taxpayer or the taxpayer’s representative.

In all cases, the Associate office attorney will inform the field office of the Associate office’s final conclusions. The field office will be offered the opportunity to discuss the issues and the Associate office’s final conclusions before the TAM or the TEAM is issued.

If, following the initial contact referenced in section 12.01 of this revenue procedure, it is determined, after discussion with the branch chief or other reviewer, that additional information is needed, an Associate office attorney will obtain the additional information from the taxpayer or from the director or the Appeals area director in the most expeditious manner possible. In the case of a TAM, any additional information requested from the taxpayer by the Associate office must be submitted by letter with a penalties of perjury statement that conforms with the penalties of perjury statement set forth in section 9.01 of this revenue procedure within 21 calendar days after the request for information is made. In the case of a TEAM, any additional information requested from the taxpayer by the Associate office must be submitted by letter with the penalties of perjury statement that conforms with the penalties of perjury statement set forth in section 9.01 of this revenue procedure within five calendar days after the request for information is made.

(1) Request to receive a request for additional information by fax or email. To facilitate prompt action on TAM and TEAM requests, the taxpayer is encouraged to request that the Service request any additional information from the taxpayer by fax or email.

A request to fax a copy of the request for additional information to the taxpayer or the taxpayer’s authorized representative must be made in writing, either as part of the original TAM or TEAM request or prior to the mailing of the request for additional information. The request to fax must contain the fax number of the taxpayer or the taxpayer’s authorized representative to whom the document is to be faxed.

(2) 21-day period for TAMs and 5-day period for TEAMs will be extended if justified and approved. A written request for an extension of time to submit additional information must be received by the Associate office within the 21-day period for TAMs (5-day period for TEAMs), giving compelling facts and circumstances to justify the proposed extension. Only the Associate Chief Counsel of the office to which the case is assigned may determine whether to grant or deny the request for an extension. Except in rare and unusual circumstances, the Associate office will not agree to an extension of more than ten working days beyond the end of the 21-day period in the case of a TAM or a 5-day period in the case of a TEAM. There is no right to appeal the denial of a request for an extension.

(3) If the taxpayer does not submit additional information. If the Associate office does not receive the additional information within the 21-day period for TAMs or within the 5-day period for TEAMs, plus any extensions granted by the Associate Chief Counsel, the Associate office will issue the TAM or the TEAM based on the existing record.

Whether or not requested by the Service, any additional information submitted by the taxpayer should be sent to the attention of the assigned Associate office attorney. Generally, the taxpayer needs only to submit the original of the additional information to the Associate office. In appropriate cases, however, the Associate office may request additional copies of the information.

The taxpayer must also send a copy of the additional information to the director or the Appeals area director for comment. Any comments by the director or the Appeals area director must be furnished within an agreed period of time to the appropriate branch in the Associate office. If the director or the Appeals area director does not have any comments, he or she must notify the Associate office attorney promptly. When the director or the Appeals area director receives a copy of the additional information from the taxpayer, the director or the Appeals area director must provide field counsel with a copy.

Generally, before replying to the request for a TAM or a TEAM, the Associate office informs the taxpayer orally or in writing of the material likely to appear in the TAM or the TEAM that the taxpayer proposed be deleted but that the Service has determined should not be deleted.

If so informed, the taxpayer may submit within ten calendar days any further information or arguments supporting the taxpayer’s proposed deletions.

The Service attempts, if possible, to resolve all disagreements about proposed deletions before the Associate office replies to the request for a TAM or a TEAM. The taxpayer does not have the right to a conference to resolve any disagreements about material to be deleted from the text of the TAM or the TEAM. These matters may be considered at any conference otherwise scheduled for the request. See section 14.05 of this revenue procedure for the procedures to protest the disclosure of information in the TAM or the TEAM.

The Service prepares replies to TAM or TEAM requests in two parts. Each part identifies the taxpayer by name, address, identification number, and year or years involved.

The first part of the reply is a transmittal memorandum (Form M-6000). In unusual cases, it is a way of giving the field office strategic advice that need not be discussed with the taxpayer. If the transmittal memorandum provides more than the fact that the TAM or the TEAM is attached or the case is returned for further development, the transmittal memorandum may constitute Chief Counsel Advice, as defined in § 6110(i)(1), subject to public inspection under § 6110.

The second part is the TAM or the TEAM, which contains:

The conclusions give direct answers, whenever possible, to the specific issues raised by the field office. The Associate office is not bound by the precise statement of the issues as submitted by the taxpayer or by the field office and may reframe the issues to be answered in a TAM or a TEAM. The discussion of the issues in a TAM or a TEAM will be in sufficient detail so that the field or Appeals officials will understand the reasoning underlying the conclusion.

If two sets of facts are provided to the Associate office (i.e., the parties were unable to reach agreement on the facts), the following procedure will be used: If the Associate office would rule the same way on either set of facts, a TAM or a TEAM may be issued, which will note that the factual disagreement is immaterial. If the Associate office would rule differently based on which specific set of facts is considered, then a single TAM or a single TEAM may be issued describing the resolution of the issue based on each set of facts.

As discussed in section 14.01 of this revenue procedure, if a TAM or a TEAM provides alternate responses based on separate sets of facts, the field is required to process the case consistently with the legal analysis in the TAM or the TEAM as applied to the facts as they are ultimately determined by the field office.

Accompanying the TAM or the TEAM is a notice under § 6110(f)(1) of intention to disclose a TAM or a TEAM (including a copy of the version proposed to be open to public inspection and notations of third party communications under § 6110(d)).

When field personnel requests a TAM or a TEAM under the signature authority of a director, replies to the request are addressed to the field personnel who requested the TAM or the TEAM. A copy of the reply to a request from LMSB should be mailed simultaneously to the director. Replies to requests from Appeals should be routed to the appropriate field office through the Appeals Director, Technical Services, C:AP.

The Associate office will send a copy of the reply to the request for a TAM or a TEAM to the division counsel of the operating division that has jurisdiction over the taxpayer’s tax return that is the subject of the TAM or the TEAM and to any field counsel involved in assisting the examining agent or Appeals officer in submitting the TAM or the TEAM request.

Once a request for a TAM or a TEAM has been sent to the Associate office, only a director or an Appeals area director may withdraw the request. He or she may ask to withdraw a request at any time before the responding transmittal memorandum for the TAM or the TEAM is signed.

The director or the Appeals area director, as appropriate, must notify the taxpayer in writing of an intent to withdraw the request for a TAM or a TEAM except:

If the taxpayer does not agree that the request for a TAM or a TEAM should be withdrawn, the procedures in section 7.03 of this revenue procedure must be followed.

If the Associate office, on the basis of sound tax administration, determines that a TAM or a TEAM should not be issued, it may, after consultation with field counsel and the requesting field office, return the TAM or the TEAM unanswered. The decision not to issue a TAM or a TEAM should be a rare case and must be approved by the Associate or Deputy Associate Chief Counsel. If field counsel disagrees with this decision, they may request reconsideration through existing reconciliation procedures.

In general, a TAM will only be returned if it appears that the Associate office will be unable to provide an answer to the incoming request within the foreseeable future. In order to minimize the need to return TAMs, every effort should be made to identify TAMs of this nature during the pre-submission conference.

When a request for a TAM or a TEAM is withdrawn or when an Associate office decides not to issue a TAM or a TEAM, the Associate office may send its views to the director or the Appeals area director and field counsel when acknowledging the withdrawal request. These memoranda may constitute Chief Counsel Advice, as defined in § 6110(i)(1), subject to public inspection under § 6110. In an Appeals case, acknowledgment of the withdrawal request should be sent to the appropriate Appeals office, through the Appeals Director, Technical Services, C:AP. In appropriate cases, the subject matter may be published as a revenue ruling or as a revenue procedure.

The director or the Appeals area director must process the taxpayer’s case on the basis of the conclusions in the TAM or the TEAM unless:

Except as provided in paragraphs (1), (2), (3), or (4) of this section 14.01, the director or Appeals area director must treat conclusions in a TAM or a TEAM involving a § 103 obligation and the issuer of this obligation as applying to the issuer and any holder of the obligation, unless the holder also initiates a request for a TAM or a TEAM on the same issue addressed in the TAM or the TEAM involving the issuer, and the Associate office issues a TAM or a TEAM involving that issue and that holder.

The director or Appeals area director has 30 calendar days after receipt of a TAM or a TEAM to either formally request reconsideration or give the adopted TAM or TEAM to the taxpayer. If no request for reconsideration is made during the 30-day period after the receipt of a TAM or a TEAM, the TAM or the TEAM is deemed adopted.

Before formally requesting reconsideration, the director or Appeals area director must consult with field counsel. Requests for TAM or TEAM reconsideration must describe with specificity the errors in the TAM or the TEAM analysis and conclusions. Requests for reconsideration should not reargue points raised in the initial request, but should instead focus on points that the TAM or the TEAM overlooked or misconstrued in the field’s arguments in support of their request. The Associate office will consider the field’s request for reconsideration of a TEAM and rule on that request within 30 calendar days of receipt. The Associate office may request further submissions from the field or the taxpayer, but the parties should make no additional submissions in the absence of such a request. In the event that a request for reconsideration fails to follow the procedures set forth in this section of this revenue procedure, or the request fails to raise issues or arguments different from those asserted in the initial TAM or TEAM request, the Associate office may return the request for reconsideration to the requesting party without ruling on the request for reconsideration.

If the field does not request reconsideration of a TAM or a TEAM, the TAM or the TEAM, once adopted, will take effect when the field provides a copy of the adopted TAM or TEAM to the taxpayer, as described in section 14.04 of this revenue procedure.

If reconsideration is requested for a TAM or a TEAM, the TAM or the TEAM will be deemed adopted five calendar days after the reconsideration is ruled on. After the reconsideration is ruled on and the TAM or the TEAM is adopted, the TAM or the TEAM will take effect when the field provides a copy of the adopted TAM or TEAM to the taxpayer, as described in section 14.04 of this revenue procedure.

The Associate office will not discuss the contents of the TAM or the TEAM with the taxpayer or the taxpayer’s representative until the field office gives a copy of the TAM or the TEAM to the taxpayer. See section 12.07 of this revenue procedure concerning the time for discussing the tentative conclusion with the taxpayer or the taxpayer’s representative.

If reconsideration is requested for a TAM or a TEAM, the Service is not required to inform the taxpayer or the taxpayer’s representative that a request for reconsideration is being considered.

Upon adopting the TAM or the TEAM, the director or the Appeals area director gives the taxpayer:

If a formal request for reconsideration is made and ruled upon, the director or the Appeals area director will provide the taxpayer with the reconsidered TAM or TEAM only. The TAM or the TEAM drafted prior to the ruling on the request for reconsideration must not be forwarded to the taxpayer. Additionally, if a formal request for reconsideration is made and ruled upon, only the reconsidered TAM or TEAM will be open to public inspection and notations of third party communications under § 6110(d).

In the event that a TAM or a TEAM request pertains to more than one taxpayer (see section 1.03 of this revenue procedure), the director or the Appeals area director will provide each pertinent taxpayer with a copy of the TAM or the TEAM, in accordance with this section of the revenue procedure.

The requirement to give a taxpayer a copy of the TAM or the TEAM does not apply to a TAM or a TEAM involving civil fraud or a criminal investigation, or a jeopardy or termination assessment, as described in section 10.11 of this revenue procedure.

The director or Appeals officer must notify the Associate office when the TAM or the TEAM is given to the taxpayer. This requirement does not apply to a TAM or a TEAM involving civil fraud or a criminal investigation, or a jeopardy or termination assessment, as described in section 10.11 of this revenue procedure.

In the event of a TAM or a TEAM adverse to the taxpayer, in whole or in part, the taxpayer may request § 7805(b) relief. Such a request will be treated as a separate request for a TAM or a TEAM.

After receiving the notice under § 6110(f)(1) of intention to disclose the TAM or the TEAM, the taxpayer may protest the disclosure of certain information in it. The taxpayer must submit a written statement within 20 calendar days identifying those deletions not made by the Service that the taxpayer believes should have been made. The taxpayer must also submit a copy of the version of the TAM or the TEAM proposed to be open to public inspection with brackets around the deletions proposed by the taxpayer that have not been made by the Associate office.

Generally, the Associate office considers only the deletion of material that the taxpayer has proposed be deleted or other deletions as required under § 6110(c) before the Associate office reply is sent to the director or the Appeals area director. Within 20 calendar days after it receives the taxpayer’s response to the notice under § 6110(f)(1), the Associate office must mail to the taxpayer its final administrative conclusion about the deletions to be made.

If the Associate office tells the director or the Appeals area director that a copy of the TAM or the TEAM should not be given to the taxpayer and the taxpayer requests a copy, the director or the Appeals area director will tell the taxpayer that no copy will be given.

A taxpayer may not rely on a TAM or a TEAM issued by the Service for another taxpayer. See § 6110(k)(3).

Except in rare or unusual circumstances, a holding in a TAM or a TEAM that is favorable to the taxpayer is applied retroactively.

Moreover, because a TAM or a TEAM, as described in section 3 of this revenue procedure, is issued only on a closed transaction, a holding that is adverse to the taxpayer is also applied retroactively, unless the Associate Chief Counsel with jurisdiction over the TAM or the TEAM, as appropriate, exercises the discretionary authority under § 7805(b) to limit the retroactive effect of the holding.

A holding that modifies or revokes a holding in a prior TAM or TEAM is generally applied retroactively, unless the Associate Chief Counsel with jurisdiction over the TAM or the TEAM, as appropriate, exercises the discretionary authority under § 7805(b) to limit the retroactive effect of the holding. See sections 15.05 and 15.06 of this revenue procedure, however, for situations when the retroactive effect of the holding will not be limited.

If a TAM or a TEAM relates to a continuing action or a series of actions, ordinarily it is applied until specifically withdrawn or until the conclusion is modified or revoked by the enactment of legislation, the ratification of a tax treaty, a decision of the United States Supreme Court, or the issuance of regulations (temporary or final), a revenue ruling, or other statement published in the Internal Revenue Bulletin. Publication of a notice of proposed rulemaking does not affect the application of a TAM or a TEAM.

If the new holding in a TAM or a TEAM is less favorable to the taxpayer than the holding in an earlier TAM or TEAM, it generally is not applied to the period when the taxpayer relied on the prior holding in situations involving a continuing action or a series of actions. A taxpayer is not protected, however, against retroactive modification or revocation of a TAM or a TEAM involving a continuing action or a series of actions for any actions occurring after the material facts on which the earlier TAM or TEAM was based have changed.

In the case of a TAM or a TEAM revoking or modifying a letter ruling, TAM, or TEAM, the TAM or the TEAM will be applied retroactively to the taxpayer for whom the letter ruling was issued or to a taxpayer whose tax liability was directly involved in a letter ruling, TAM, or TEAM if:

Generally, in all other circumstances, a TAM or a TEAM revoking or modifying a letter ruling or another TAM or a TEAM will not be applied retroactively to the taxpayer for whom the letter ruling, TAM, or TEAM was issued or to a taxpayer whose tax liability was directly involved in the letter ruling, TAM, or TEAM, provided that:

When a letter ruling to a taxpayer or a TAM or a TEAM involving a taxpayer is modified or revoked with retroactive effect, the notice to the taxpayer, except in fraud cases, sets forth the grounds on which the modification or revocation is being made and the reason why the modification or revocation is being applied retroactively.

Under § 7805(b), an Associate Chief Counsel, as the Commissioner’s delegate, may prescribe the extent, if any, to which a TAM or a TEAM will be applied without retroactive effect.

A taxpayer for whom a TAM or a TEAM was issued or for whom a TAM or a TEAM request is pending may request that the appropriate Associate Chief Counsel limit the retroactive effect of any holding in the TAM or the TEAM or of any subsequent modification or revocation of the TAM or the TEAM.

When germane to a pending TAM or TEAM request, a taxpayer should request to limit the retroactive effect of the holding of the TAM or the TEAM early during the consideration of the advice request by the Associate office. This § 7805(b) request should be made initially as part of that pending TAM or TEAM request. The Associate office will consider a § 7805(b) request to limit the retroactive effect of the holding if the request is made at a later time and the Service determines that there is justification for having delayed the request.

When a TAM or a TEAM that concerns a continuing transaction is modified or revoked by, for example, issuance of a subsequent revenue ruling or temporary or final regulations, a request to limit the retroactive effect of the modification or revocation of the TAM or the TEAM must be made in the form of a request for a letter ruling if the request is submitted before an examination of the return pertaining to the transaction that is the subject of the request for the letter ruling. The requirements for a letter ruling request are given in Rev. Proc. 2006-1 (this Bulletin).

In all other cases during the course of an examination of a taxpayer’s return by the director or during consideration of the taxpayer’s return by the Appeals area director (including when the taxpayer is informed that the director or the Appeals area director will recommend that a TAM, TEAM, letter ruling, or determination letter previously issued to, or with regard to, the taxpayer be modified or revoked), a taxpayer’s request to limit retroactivity must be made in the form of a request for a TAM or a TEAM.

The request must meet the general requirements of a TAM or a TEAM request, which are given in sections 7 and 9 of this revenue procedure. The request must also:

The taxpayer’s request, including the statement that the request is being made under § 7805(b), must be submitted to the director or the Appeals area director who must then forward the request to the Associate office for consideration.

When a request for a TAM or a TEAM concerns only the application of § 7805(b), the taxpayer has the right to a conference with the Associate office in accordance with the provisions of section 11 of this revenue procedure. In accordance with section 11.02 of this revenue procedure, the examining agent or Appeals officer, field counsel, and other Service representatives will be offered the opportunity to participate in the conference on the § 7805(b) issue.

If the request for application of § 7805(b) is included in the request for a TAM or a TEAM on the substantive issues or is made before the conference of right on the substantive issues, the § 7805(b) issues will be discussed at the taxpayer’s one conference of right.

If the request for the application of § 7805(b) is made as part of a pending TAM or TEAM request after a conference has been held on the substantive issues and the Service determines that there is justification for having delayed the request, then the taxpayer will have the right to one conference of right concerning the application of § 7805(b), with the conference limited to discussion of this issue only.

When a TAM or a TEAM grants a taxpayer relief under § 7805(b), the director or Appeals area director may not request reconsideration of the §7805(b) issue unless the director or Appeals area director determines there has been a misstatement or omission of controlling facts by the taxpayer in its request for § 7805(b) relief.