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has been or will be filed. If the request is with respect to an issue or an area of the type discussed in section 5.01, the taxpayer will be so advised and the request may be forwarded to the appropriate district office for association with the proper return or report of the taxpayer. SEC. 10. REVIEW OF DETERMINATION LETTERS.

.01 Determination letters issued with respect to the types of inquiries authorized by sections 4.01, 4.02, and 4.03 are not generally reviewed by the National Office as they merely inform a taxpayer of a position of the Service which has been previously established either in the regulations or in a ruling, opinion, or court decision published in the Internal Revenue Bulletin. If a taxpayer believes that a determination letter of this type is in error, he may ask the District Director to reconsider the matter. He may also ask the District Director to request advice from the National Office. If the District Director, in his discretion, decides to request such advice, the procedure in Revenue Procedure 67-2, page 555, this Bulletin, will be followed.

.02 The procedures for review of determination letters relating to the qualification of employers' plans under section 401(a) of the Code are provided in Revenue Procedure 67-4.

.03 The procedures for review of determination letters relating to the exemption from Federal income tax of certain organizations under sections 501 and 521 of the Code are provided in Revenue Procedure 67-3.

SEC. 11. WITHDRAWAL OF REQUESTS.

The taxpayer's request for a ruling or a determination letter may be withdrawn at any time prior to the signing of the letter of reply. However, in such a case, the National Office may furnish its views to the District Director in whose office the return has been or will be filed. The District Director will consider the information submitted in a subsequent audit or examination of the taxpayer's return. Even though a request is withdrawn, all correspondence and exhibits will be retained in the Service and may not be returned to the taxpayer. SEC. 12. ORAL ADVICE TO TAXPAYERS.

.01 The Service does not issue rulings or determination letters upon oral requests. Furthermore, National Office officials and employees ordinarily will not discuss a substantive tax issue with a taxpayer or his representative prior to the receipt of a request for a ruling. since oral opinions or advice are not binding on the Service. This should not be construed as preventing a taxpayer or his representative from inquiring whether the Service will rule on a particular question, or from discussing questions relating to procedural matters with regard to submitting a request for a ruling.

.02 A taxpayer may, of course, seek oral technical assistance from a district office in the preparation of his return or report, pursuant to other established procedures. Such oral advice is advisory only and the Service is not bound to recognize it in the examination of the taxpayer's return.

SEC. 13. EFFECT OF RULINGS.

.01 A ruling, except to the extent incorporated in a closing agree ment, may be revoked or modified at any time in the wise administra tion of the taxing statutes. See section 2.06 for the effect of a closing

agreement. If a ruling is revoked or modified, the revocation or modification applies to all open years under the statutes, unless the Commissioner or his delegate exercises the discretionary power under section 7805 (b) of the Code to limit the retroactive effect of the ruling. The manner in which the Commissioner or his delegate generally will exercise this power is set forth in this section. With reference to rulings relating to the sale or lease of articles subject to the manufacturers excise tax and the retailers excise tax, see specifically section 13.08.

02 As part of the determination of a taxpayer's liability, it is the responsibility of the District Director to ascertain whether any ruling previously issued to the taxpayer has been properly applied. It should be determined whether the representations upon which the ruling was based reflected an accurate statement of the material facts and whether the transaction actually was carried out substantially as proposed. If, in the course of the determination of the tax liability, it is the view of the District Director that a ruling previously issued to the taxpayer should be modified or revoked, the findings and recommendations of that office will be forwarded to the National Office for consideration prior to further action. Such reference to the National Office will be treated as a request for technical advice and the procedures of Revenue Procedure 67-2 will be followed. Otherwise, the ruling is to be applied by the district office in its determination of the taxpayer's liability.

03 Appropriate coordination with the National Office shall be undertaken in the event that any other field official having jurisdiction of a return or other matter proposes to reach a conclusion contrary to a ruling previously issued to the taxpayer.

.04 A ruling found to be in error or no longer in accord with the position of the Service may be modified or revoked. Modification or revocation may be effected by a notice to the taxpayer to whom the ruling originally was issued, or by a Revenue Ruling or other statement published in the Internal Revenue Bulletin.

05 Except in rare or unusual circumstances, the revocation or modification of a ruling will not be applied retroactively with respect to the taxpayer to whom the ruling was originally issued or to a taxpayer whose tax liability was directly involved in such ruling if (1) there has been no misstatement or omission of material facts, (2) the facts subsequently developed are not materially different from the facts on which the ruling was based, (3) there has been no change in the applicable law, (4) the ruling was originally issued with respect to a prospective or proposed transaction, and (5) the taxpayer directly involved in the ruling acted in good faith in reliance upon the ruling and the retroactive revocation would be to his detriment. To illustrate, the tax liability of each employee covered by a ruling relating to a pension plan of an employer is directly involved in such ruling. Also, the tax liability of each shareholder is directly involved in a ruling related to the reorganization of a corporation. However, the tax liability of members of an industry is not directly involved in a ruling issued to one of the members, and the position taken in a revocation or modification of a ruling to one member of an industry may be retroactively applied to other members of that industry. By the same reasoning, a tax practitioner may not obtain the nonretroactive

application to one client of a modification or revocation of a ruling previously issued to another client.

.06 A ruling issued to a taxpayer on a particular transaction applies to that transaction only. If the ruling is later found to be in error or no longer in accord with the position of the Service, it will afford the taxpayer no protection with respect to a like transaction in the same or subsequent year, except to the extent provided in sec

tions 13.07 and 13.08.

.07 If a ruling is issued covering a continuing action or a series of actions and it is determined that the ruling was in error or no longer in accord with the position of the Service, the Assistant Commissioner (Technical) ordinarily will limit the retroactivity of the revocation or modification to a date not earlier than that on which the original ruling was modified or revoked. To illustrate, if a taxpayer rendered service or provided a facility which is subject to the excise tax on services or facilities, and in reliance on a ruling issued to the same taxpayer did not pass the tax on to the user of the service or the facility, the Assistant Commissioner (Technical) ordinarily will restrict the retroactive application of the revocation or modification of the ruling.

.08 A ruling holding that the sale or lease of a particular article is subject to the manufacturers excise tax or the retailers excise tax may not revoke or modify retroactively a prior ruling holding that the sale or lease of such article was not taxable, if the taxpayer to whom the ruling was issued, in reliance upon such prior ruling, parted with possession or ownership of the article without passing the tax on to his customer. Section 1108 (b), Revenue Act of 1926.

.09 With respect to Revenue Rulings published in the Internal Revenue Bulletin, taxpayers generally may rely upon such rulings in determining the rule applicable to their own transactions and need not request a specific ruling applying the principles of a published Revenue Ruling to the facts of their particular cases where otherwise applicable. However, see section 13.10 below. Revenue Rulings published in the Internal Revenue Bulletin ordinarily are not revoked or modified retroactively.

.10 Since each Revenue Ruling represents the conclusion of the Service as to the application of the law to the entire state of facts involved, taxpayers, Service personnel, and others concerned are cautioned against reaching the same conclusion in other cases unless the facts and circumstances are substantially the same. Furthermore, they should consider the effect of subsequent legislation, regulations, court decisions, and Revenue Rulings.

SEC. 14. EFFECT OF DETERMINATION LETTERS.

.01 A determination letter issued by a District Director, in accordance with this Revenue Procedure, shall be given the same effect upon examination of the return of the taxpayer to whom the determination letter was issued as is described in section 13, in the case of a ruling issued to a taxpayer, except that reference to the National Office is not necessary where, upon examination of the return, it is the opinion of the District Director that a conclusion contrary to that expressed in the determination letter is indicated. A District Director may not limit the modification or revocation of a determination letter but may refer the matter to the National Office for exercise by the Commis

sioner or his delegate of the authority to limit the modification or revocation.

.02 In this connection see also Revenue Procedure 67-3 and Revenue Procedure 67-4.

SEC. 15. EFFECT ON OTHER DOCUMENTS.

Revenue Procedure 62-28, C.B. 1962-2, 496, is superseded by this Revenue Procedure.

SEC. 16. EFFECTIVE DATE.

This Revenue Procedure is effective January 3, 1967, the date of its publication in the Internal Revenue Bulletin.

26 CFR 601.105: Examination of returns and claims for refund, credit or abatement; determination of correct tax liability.

Rev. Proc. 67-2

Outline of general procedures of the Internal Revenue Service in furnishing technical advice to District Directors, and an explanation of the rights of taxpayers under these procedures.

Revenue Procedure 62-29, C.B. 1962-2, 507, superseded.

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to prescribe the general procedures of the Internal Revenue Service in furnishing technical advice to District Directors of Internal Revenue. It is also intended to inform taxpayers of their rights when a District Director requests such advice from the National Office. For purposes of this Revenue Procedure any reference to district director or district office, also includes the office of the Director, Office of International Operations, where appropriate.

SEC. 2. DEFINITION AND NATURE OF TECHNICAL ADVICE.

.01 "Technical advice," as used herein, means advice or guidance as to the interpretation and proper application of internal revenue laws, related statutes, and regulations, to a specific set of facts, furnished by the National Office upon request of a district office in connection with the examination or consideration of a taxpayer's return or claim for refund or credit. It is furnished as a means of assisting Service personnel in closing cases and establishing and maintaining consistent positions in the several districts. It does not include memorandums on matters of general technical application furnished to district offices where the issues are not raised in connection with the examination of the return of a specific taxpayer.

.02 The consideration or examination of the facts relating to a request for a determination letter is considered to be in connection. with the examination or consideration of a return of the taxpayer. Thus, a District Director may, in his discretion, request technical advice with respect to the consideration of a request for a determination letter.

.03 If a District Director is of the opinion that a ruling letter previously issued to a taxpayer should be modified or revoked, and he requests the National Office to reconsider the ruling, the reference

of the matter to the National Office is treated as a request for technical advice and the procedures set out herein will be followed. (For procedures relating to a request for a ruling see Revenue Procedure 67–1, page 544, this Bulletin.)

.04 The provisions of this Revenue Procedure apply only to a case under the jurisdiction of a District Director. They do not apply to a case under the jurisdiction of the Alcohol and Tobacco Tax Division or of the Appellate Division.

.05 The Assistant Commissioner (Technical), acting under a delegation of authority from the Commissioner of Internal Revenue, is exclusively responsible for providing technical advice in any issue involving the establishment of basic principles or policies for the uniform interpretation and application of tax laws other than those which are under the jurisdiction of the Alcohol and Tobacco Tax Division. This authority has been largely redelegated to subordinate officials.

SEC. 3. AREAS IN WHICH TECHNICAL ADVICE MAY BE REQUESTED.

District Directors may request technical advice or assistance on any technical or procedural question which develops during the audit or examination of a return, or claim for refund or credit, of a taxpayer. These procedures are applicable as provided in section 2.

.02 District Directors are encouraged to request technical advice on any technical or procedural question arising in connection with any case of the type described in section 2, at any state of the proceedings in the district office, which cannot be resolved on the basis of law, regulations, or a clearly applicable Revenue Ruling or other precedent issued by the National Office.

SEC. 4. REQUESTING TECHNICAL ADVICE,

01 It is the responsibility of the district office to determine whether technical advice is to be requested on any issue before that office. However, during the course of an examination or a conference in a district office, a taxpayer or his representative may request that an issue be referred to the National Office for technical advice on the grounds that a lack of uniformity exists as to the disposition of the issue, or that the issue is so unusual or complex as to warrant consideration by the National Office. While taxpayers are encouraged to make written requests setting forth the facts, law, and argument with respect to the issue, and reasons for requesting National Office advice, a taxpayer may make the request orally. If, after considering the taxpayer's request, the examining officer or conferee is of the opinion that the circumstances do not warrant referral of the case to the National, Office, he will so advise the taxpayer.

.02 The taxpayer may appeal the decision of the examining officer or conferee not to request technical advice by submitting to that official within 10 days (or such longer period as may be agreed upon), a state ment of the facts, law, and arguments with respect to the issue, and the reasons why he believes the matter should be referred to the National Office for advice.

.03 The examining officer or conferee will submit the statement of the taxpayer through channels to the Chief, Audit Division, accom panied by a statement of his reasons why the issue should not be referred to the National Office. The Chief, Audit Division, will deter

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