Advises the EP or EO .09 In all cases, the group representative should inform the EP or EO specialist or appeals officer of EP or EO Technical's final conclusions. The EP or EO specialist or the appeals officer should be offered the opportunity to discuss the issues and EP or EO Technical's final conclusions before the technical advice memorandum is issued. If needed, requests additional information .10 If, following the initial contact referenced in section 16.03 of this revenue procedure, it is determined, after discussion with the appropriate group manager or reviewer, that additional information is needed, a group representative will obtain the additional information from the taxpayer, the EP or EO Examinations office or the EP or EO Determinations office or the Appeals Area Director, SB/SE-TE/GE, in the most expeditious manner possible. Any additional information requested from the taxpayer by EP or EO Technical must be submitted by letter, accompanied by a penalties of perjury statement, within 21 calendar days after the request for information is made. Penalties of perjury statement Additional information submitted to EP or EO Technical 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 the information and such facts are true, correct, and complete.” This declaration must be signed and dated by the taxpayer, not the taxpayer's representative. A stamped signature is not permitted. A written request for an extension of time to submit additional information must be received by EP or EO Technical within the 21-day period, giving compelling facts and circumstances to justify the proposed extension. The group manager (or his or her delegate) of the office to which the case is assigned will determine whether to grant or deny the request for an extension of the 21-day period. No extension will be granted without the approval of the appropriate group manager (or his or her delegate). Except in rare and unusual circumstances, EP or EO Technical will not agree to an extension of more than 10 working days beyond the end of the 21-day period. There is no right to appeal the denial of a request for an extension. If EP or EO Technical does not receive the additional information within 21 calendar days, plus any extensions granted by the appropriate group manager (or his or her delegate), EP or EO Technical will process the technical advice memorandum based on the existing record. Requests taxpayer to send .11 Whether or not requested by the Service, any additional information submitted by the taxpayer should be sent to the headquarters office. Generally, the taxpayer needs only to submit the original of the additional information to EP or EO Technical. However, in appropriate cases, EP or EO Technical may request additional copies of the information. Also, the taxpayer must send a copy to either the EP or EO Examinations office or the EP or EO Determinations office or the Appeals Area Director, SB/SE-TE/GE, for comment. Any comments must be furnished promptly to the appropriate group in EP or EO Technical. If the EP or EO Examinations office or the EP or EO Determinations office or the Appeals Area Director, SB/SE-TE/GE, does not have any comments, he or she must notify the group representative promptly. Informs the taxpayer when requested deletions will not be made .12 Generally, before replying to the request for technical advice, EP or EO Technical informs the taxpayer orally or in writing of the material likely to appear in the technical advice memorandum that the taxpayer proposed be deleted but that the Service has determined should not be deleted. If so informed, the taxpayer may submit within 10 calendar days any further information or other arguments supporting the taxpayer's proposed deletions. The Service will attempt to resolve all disagreements about proposed deletions before EP or EO Technical replies to the request for technical advice. However, the taxpayer does not have the right to a conference to resolve any disagreements about material to be deleted from the text of the technical advice memorandum. These matters, however, may be considered at any conference otherwise scheduled for the request. Prepares reply in two parts .13 EP or EO Technical's reply to a technical advice request is 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. In unusual cases, it is a way of giving the EP or EO Examinations office or the EP or EO Determinations office or the appeals office administrative or other information that under the nondisclosure statutes or for other reasons may not be discussed with the taxpayer. The second part is the technical advice memorandum, which contains, (1) a statement of the issues; (3) a statement of the pertinent law, tax treaties, regulations, revenue rulings, and other precedents published in the Internal Revenue Bulletin, and court decisions; (4) a discussion of the rationale underlying the conclusions reached by EP or EO Technical; and (5) the conclusions of EP or EO Technical. The conclusions give direct answers, whenever possible, to the specific issues raised by the EP or EO Examinations office or the EP or EO Determinations office or the appeals office. However, EP or EO Technical is not bound by the precise statement of the issues as submitted by the taxpayer or by the EP or EO Examinations office or the EP or EO Determinations office or the appeals office and may reframe the issues to be answered in the technical advice memorandum. The discussion of the issues will be in sufficient detail so that the EP or EO Examinations or EP or EO Determinations or appeals officials will understand the reasoning underlying the conclusion. Accompanying a technical advice memorandum subject to § 6110, is a notice under $ 6110(f)(1) of intention to disclose the technical advice memorandum (including a copy of the version proposed to be open to public inspection and notations of third party communications under $ 6110(d)). Routes replies to appropriate office .14 Replies to requests for technical advice from EO Examinations Area managers and EO Determinations managers are addressed to: Internal Revenue Service The EO Mandatory Review Staff will ensure that copies are forwarded to the EO Examinations Area manager or the EO Determinations manager. Replies to requests for technical advice (1) from EP Examinations Area managers and (2) from EP Determinations managers that were sent to Headquarters before November 1, 2000, are addressed to: The EP Special Review Staff will ensure that copies are forwarded to the applicable EP manager. Replies to requests for technical advice from EP Determinations managers sent to Headquarters after October 31, 2000, are addressed to: Internal Revenue Service Replies to requests for technical advice from an Appeals Area Director, SB/SE-TE/GE are routed to the appropriate appeals office through the Director, Appeals LMSB Operations, C:AP: LMSB. SECTION 17. HOW DOES EP Generally applies advice in processing the taxpayer's case .01 The EP or EO Examinations Area manager or the EP or EO Determinations manager or the Appeals Area Director, SB/SE-TE/GE, must process the taxpayer's case on the basis of the conclusions in the technical advice memorandum unless (1) the EP or EO Examinations Area manager or the EP or EO Determinations manager or the Appeals Area Director, SB/SE-TE/GE, decides that the conclusions reached by EP or EO Technical in a technical advice memorandum should be reconsidered, or (2) the Appeals Area Director, SB/SE-TE/GE, in the case of technical advice unfavorable to the taxpayer, decides to settle the issue in the usual manner under existing authority. Subject to a request for reconsideration of the conclusions in a technical advice memorandum, EP or EO Examinations or EP or EO Determinations must follow the conclusions in a technical advice memorandum as to all issues and the Appeals Area Director, SB/SETE/ GE, must follow the conclusions in a technical advice memorandum on issues of an organization’s/plan’s status or qualification. Thus, if the technical advice memorandum received by EP or EO Examinations or EP or EO Determinations concerns an organization's/ plan’s status or qualification, the organization/plan has no appeal to the appeals office on those specific issues. Discussion with the taxpayer .02 EP or EO Technical will not discuss the contents of the technical advice memorandum with the taxpayer or the taxpayer's representative until the taxpayer has been given a copy by the EP or EO Examinations office or the EP or EO Determinations office or the appeals office Gives copy to the taxpayer .03 The EP or EO Examinations office or the EP or EO Determinations office or the Appeals Area Director, SB/SE-TE/GE, only after adopting the technical advice, gives the taxpayer (1) a copy of the technical advice memorandum described in section 16.13, and (2) the notice under § 6110(f)(1) of intention to disclose the technical advice memorandum (including a copy of the version proposed to be open to public inspection and notations of third party communications under $ 6110(d)). This requirement does not apply to a technical advice memorandum involving a criminal or civil fraud investigation, or a jeopardy or termination assessment, as described in section 11.06 of this revenue procedure, or documents to which § 6104 (document open to public inspection) applies as described in section 10.03. Taxpayer may protest deletions not made .04 After receiving the notice under $ 6110(f)(1) of intention to disclose the technical advice memorandum, 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 technical advice memorandum proposed to be open to public inspection with brackets around deletions proposed by the taxpayer that have not been made by EP or EO Technical. Generally, EP or EO Technical considers only the deletion of material that the taxpayer has proposed be deleted or other deletions as required under $ 6110(c) before the EP or EO Technical reply is sent to the EP or EO Examinations office or the EP or EO Determinations office or the Appeals Area Director, SB/SE-TE/GE. Within 20 calendar days after it receives the taxpayer's response to the notice under § 6110(f)(1), EP or EO Technical must mail the taxpayer its final administrative conclusion about the deletions to be made. When no copy is given to the taxpayer .05 If EP or EO Technical tells the EP or EO Examinations office or the EP or EO Determinations office or the Appeals Area Director, SB/SE-TE/GE, that a copy of the technical advice memorandum should not be given to the taxpayer and the taxpayer requests a copy, the EP or EO Examinations office or the EP or EO Determinations office or the Appeals Area Director, SB/SE-TE/GE, will tell the taxpayer that no copy will be given. SECTION 18. WHAT IS THE .01 A taxpayer may not rely on a technical advice memorandum issued by the Service for another taxpayer. Applies only to the taxpayer for .02 Except when stated otherwise, a holding in a technical advice memorandum is applied retroactively, unless the Commissioner, Tax Exempt and Government Entities Division exercises discretionary authority under § 7805(b) to limit the retroactive effect of the holding. Section 18.06 below lists the criteria necessary for granting $ 7805(b) relief, and section 18 of this revenue procedure describes the effect of $ 7805(b) relief. a Generally applied retroactively to modify or revoke prior technical advice .03 A holding that modifies or revokes a holding in a prior technical advice memorandum is applied retroactively, with one exception. If the new holding is less favorable to the taxpayer than the earlier one, it generally is not applied to the period when the taxpayer relied on the prior holding in situations involving continuing transactions. Applies to continuing action or series of actions until specifically withdrawn, modified, or revoked .04 If a technical advice memorandum 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 enactment of legislation, 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 technical advice memorandum. Applies to continuing action or series of actions until material facts change .05 A taxpayer is not protected against retroactive modification or revocation of a technical advice memorandum involving a continuing action or a series of actions occurring after the material facts on which the technical advice memorandum is based have changed. Does not apply retroactively under certain conditions .06 Generally, a technical advice memorandum that modifies or revokes a letter ruling or another technical advice memorandum or a determination letter is not applied retroactively either to the taxpayer to whom or for whom the letter ruling or technical advice memorandum or determination letter was originally issued, or to a taxpayer whose tax liability was directly involved in such letter ruling or technical advice memorandum or determination letter if (1) there has been no misstatement or omission of material facts; (2) the facts at the time of the transaction are not materially different from the facts on which the letter ruling or technical advice memorandum or determination letter was based; (3) there has been no change in the applicable law; . (4) in the case of a letter ruling, it was originally issued on a prospective or proposed transaction; and (5) the taxpayer directly involved in the letter ruling or technical advice memorandum or determination letter acted in good faith in relying on the letter ruling or technical advice memorandum or determination letter, and the retroactive modification or revocation would be to the taxpayer's detriment. For example, the tax liability of each employee covered by a letter ruling or technical advice memorandum or determination letter relating to a pension plan of an employer is directly involved in the letter ruling or technical advice memorandum or determination letter. However, the tax liability of members of an industry is not directly involved in a letter ruling or technical advice memorandum or determination letter issued to one of the members, and the holding in a modification or revocation of a letter ruling or technical advice memorandum or determination letter 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 obtain the nonretroactive application to one client of a modification or revocation of a letter ruling or technical advice memorandum or determination letter previously issued to another client. When a letter ruling or determination letter to a taxpayer or a technical advice memorandum 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. In order for a technical advice memorandum that modifies or revokes a letter ruling or another technical advice memorandum or a determination letter not to be applied retroactively either to the taxpayer to whom or for whom the letter ruling, technical advice memorandum or determination letter was originally issued, or to a taxpayer whose tax liability was directly involved in such letter ruling, technical advice memorandum or determination letter, such taxpayer generally must request relief under $ 7805(b) in the manner described in section 19 below. SECTION 19. HOW MAY Commissioner has discretionary authority under $ 7805(b) .01 Under $ 7805(b) the Commissioner or the Commissioner's delegate has the discretion to prescribe the extent, if any, to which a technical advice memorandum will be applied without retroactive effect. Taxpayer may request Commissioner to exercise authority .02 A taxpayer who has received a technical advice memorandum or for whom a technical advice request is pending may request that the Commissioner, Tax Exempt and Government Entities Division, the Commissioner of Internal Revenue's delegate, exercise the discretionary authority under $ 7805(b) to limit the retroactive effect of any holding stated in the technical advice memorandum or to limit the retroactive effect of any subsequent modification or revocation of the technical advice memorandum. Form of request to limit retroactivity—before an examination .03 When a technical advice memorandum that concerns a continuing transaction is modified or revoked by, for example, a subsequent revenue ruling or final regulations, a request to limit the retroactive effect of the modification or revocation of the technical advice memorandum must be made in the form of a request for a letter ruling if submitted before examination of the return that contains the transaction that is the subject of the request for the letter ruling. See Rev. Proc. 2003–4. Form of request to limit retroactivity-during course of an examination .04 When, during the course of an examination of a taxpayer's return by EP or EO Examinations or consideration by the Appeals Area Director, SB/SE-TE/ GE, a taxpayer is informed that EP or EO Examinations or the Appeals Area Director, SB/SE-TE/GE, recommends that a technical advice memorandum be modified or revoked, a request to limit the retroactive application of the modification or revocation of the technical advice memorandum must itself be made in the form of a request for technical advice. See sections 7, 8 and 10 of this revenue procedure and sections 19.07 and 19.08 below. |