a (2) in the case of a letter ruling, it was originally issued for a proposed transaction; and (3) the taxpayer directly involved in the letter ruling, TAM or TEAM acted in good faith in relying on the letter ruling, TAM or TEAM and revoking or modifying it 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 tax liability of a member of an industry is not directly involved in a letter ruling, TAM or TEAM issued to another member and, therefore, the holding in a revocation or modification of a letter ruling, TAM, or TEAM to one member of an industry may be retroactively applied to other members of the industry. 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, TAM or TEAM previously issued to another client. a 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. SECTION 24. HOW MAY Taxpayer may request that retroactivity be limited .01 Under $ 7805(b), the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (International), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Procedure and Administration), or the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities), 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 TEAM request is pending may request that the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (International), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Procedure and Administration), or the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities), as appropriate, limit the retroactive effect of any holding in the TAM or TEAM or of any subsequent modification or revocation of the TAM or 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 TEAM early during the consideration of the advice request by the national office. This $ 7805(b) request should be made initially as part of that pending TAM or TEAM request. The national office will consider a § 7805(b) request to limit the retroactive effect of the holding if the request is made at a later time. .02 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 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. 2003–1. a .03 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 area director, appeals (including when the taxpayer is informed that the director or the area director, appeals 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. Sec. 24.03 The request must meet the general requirements of a TAM or TEAM request, which are given in sections 7, 8, 9, and 12 of this revenue procedure. The request must also— (1) state that it is being made under $ 7805(b); (2) state the relief sought; (3) explain the reasons and arguments in support of the relief sought (including a discussion of the five items listed in section 23.06 of this revenue procedure and any other factors as they relate to the taxpayer's particular situation); and The taxpayer's request, including the statement that the request is being made under $ 7805(b), must be submitted to the director or the area director, appeals who must then forward the request to the national office for consideration. Taxpayer's right to a conference .04 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 national office in accordance with the provisions of sections 18 and 19 of this revenue procedure. In accordance with sections 18.02 and 19 of this revenue procedure, the examining officer or appeals officer will be offered the opportunity to participate in the conference on the $ 7805(b) issue. Sections 18.02 and 19 of this revenue procedure also provide that other Service representatives are allowed to participate in the conference. 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. SECTION 25. WHAT The TEAM pilot program set forth in Rev. Proc. 2002–30, 2002–24 I.R.B. 1184, is incorporated as modified herein. The TEAM procedures are now permanent and are no longer lin to issues arising under the jurisdiction of the Associate Chief Counsel (Income Tax and Accounting). Additionally, the TAM procedures no longer require that there be an agreed upon set of facts for a TAM to be issued. Instead, a TAM will be issued addressing both the taxpayer's and the field's facts. Rev. Proc. 2002–2, 2002–1 I.R.B. 82, as modified by Rev. Proc. 2002–30, 2002–24 I.R.B. 1184, is superseded. SECTION 26. WHAT IS THE This revenue procedure is effective January 6, 2003. SECTION 27. WHAT IS THE DRAFTING INFORMATION The principal author of this revenue procedure is Susan L. Hartford of the Office of the Associate Chief Counsel (Procedure and Administration). For further information regarding this revenue procedure for matters under the jurisdiction of— (1) the Associate Chief Counsel (Corporate), contact Richard Todd at (202) 622–7700 (not a toll-free call); (2) the Associate Chief Counsel (Financial Institutions and Products), contact Arturo Estrada at (202) 622–3900 (not a toll-free call); Sec. 24.03 (3) the Associate Chief Counsel (Income Tax and Accounting), contact Arlene Blume at (202) 622–4800 (not a toll-free call); (4) the Associate Chief Counsel (Passthroughs and Special Industries), contact Kathleen Reed at (202) 622–3110 (not a toll-free call); (5) the Associate Chief Counsel (Procedure and Administration), contact George Bowden or Henry Schneiderman at (202) 622–3400 (not a toll-free call); (6) the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities), contact Calder Robertson at (202) 622–6000 (not a toll-free call); (7) the Associate Chief Counsel (International), contact Gerard Traficanti at (202) 622– 3619 (not a toll-free call); (8) the Commissioner (Large and Mid-Size Business Division), contact James Carfine at (202) 283–8552 (not a toll-free call); (9) the Commissioner (Small Business and Self-Employed Division), contact Ronald E. Hartman at (856) 321–2398 (not a toll-free call); (10) the Commissioner (Wage and Investment Division), contact Hugh Barrett at (404) 338-9903 (not a toll-free call); or (11) the Chief, Appeals, contact Thomas R. Roley at (202) 694–1822 (not a toll-free call). |