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Part 7. Rulings and Agreements

Chapter 1. TE/GE Administrative Procedures and Programs

Section 5. Employee Plans Technical Advice Procedures

7.1.5  Employee Plans Technical Advice Procedures

7.1.5.1  (06-01-2007)
Overview

  1. This IRM Section sets forth the applicable procedures for requesting technical advice and for submissions before January 2, 2007, technical expedited advice. Technical advice and for submissions before January 2, 2007, technical expedited advice may be requested on an issue in controversy. A case involving an unagreed issue may be submitted for technical advice and for submissions before January 2, 2007, or technical expedited advice by —

    • EP Determinations

    • EP Examinations

    • Appeals

    • Another operating division that has audit jurisdiction where EP Technical has interpretive jurisdiction

  2. This IRM Section does not include instructions on processing unagreed cases to Appeals, but covers only those cases which may be forwarded for technical advice. For additional information on Appeals procedures, see IRM 8.14.1, Appeals Rulings, Technical Advice, Technical Information and Other Assistance.

  3. Administrative procedures for requesting technical advice on matters under the jurisdiction of the Director, Employee Plans and the Director, Exempt Organizations of the Office of the Commissioner, Tax Exempt and Government Entities Division (TE/GE) are found in Rev. Proc. 2007–5, 2007–1 I.R.B. 161, (revised annually). Section 2 of the revenue procedure specifies the significant changes made to the prior year’s revenue procedure.

7.1.5.1.1  (06-01-2007)
Technical Advice

  1. Technical advice is written guidance in the form of a memorandum furnished by the office of the manager, EP Technical in the Office of the Commissioner, Tax Exempt and Government Entities Division (EP Technical) upon the request of the Manager, EP Determinations Quality Assurance Staff, an EP Examinations Area Manager, an Appeals Area Director or another operating division that has audit jurisdiction where EP Technical has interpretive jurisdiction. "Technical expedited advice" means technical advice issued in an expedited manner for certain submissions before January 2, 2007.

  2. Technical advice is issued in response to any technical or procedural question that develops during any proceeding on the interpretation and proper application of the tax laws to a specific set of facts, involving —

    1. the examination of a taxpayer’s return,

    2. consideration of taxpayer’s claim for refund or credit,

    3. a request for a determination letter,

    4. any other matter involving a specific taxpayer under the jurisdiction of EP Determinations or EP Examinations or an Appeals Area Director or another operating division that has audit jurisdiction where EP Technical has interpretive jurisdiction,

    5. processing and considering nondocketed cases in an appeals office.

  3. Where technical advice is adverse to the applicant, no further appeal is allowed within IRS on those issues.

  4. Separate business units, e.g., EP Determinations or EP Examinations, may issue specific procedures for requesting technical advice and for submissions before January 2, 2007, technical expedited advice within that office. Generally, these procedures will not conflict with a published revenue procedure or, where appropriate, e.g., where an office revises its internal procedures after the publication of a revenue procedure, will be incorporated into a subsequent published procedure.

    • EP Determinations procedures may be found at http://tege.web.irs.gov/templates/EmpPlansHome.asp?MWContent=../content/EmpPlansMainWindow/linkedHtmlDocuments/guidance.htm

    • EP Examinations procedures may be found at http://tege.web.irs.gov/templates/EmpPlansHome.asp?MWContent=../content/EmpPlansMainWindow/linkedHtmlDocuments/guidance.htm

7.1.5.2  (06-01-2007)
Annual Revenue Procedure for Requesting Technical Advice

  1. Rev. Proc. 2007-5 provides the administrative procedures for submitting requests for technical advice and technical expedited advice to EP Technical. An EO matter may also be under Rev. Proc. 2007-5. See section 4.02 of Rev. Proc. 2007-5 with respect to IRC 521.

7.1.5.2.1  (06-01-2007)
Issues Covered by Other Revenue Procedures

  1. The following issues are covered by revenue procedures other than Rev. Proc. 2007–5:

    1. Any matter pertaining to either tax-exempt bonds or mortgage credit certificates. See Rev. Proc. 2007-2, 2007-1 I.R.B. 88 (revised annually) and section 5 Rev. Proc. 2007-5.

    2. Application cases specifically reserved for handling as a ruling letter in EP Technical. See Rev. Proc. 2007–4, 2007-1 I.R.B. 118. This includes requests for relief under the Procedural and Administrative Reg. 301.9100–1. See section 6 Rev. Proc. 2007-5.

7.1.5.2.2  (06-01-2007)
Mandatory Issues

  1. Technical advice is encouraged on any technical or procedural question that can not be resolved on the basis of law, regulations, or a clearly applicable revenue ruling or other published precedent. However, technical advice must be requested on the following matters:

    1. Any request for relief under IRC 7805(b) of a ruling letter or technical advice previously issued to a taxpayer.

    2. Certain exclusive benefit violations under IRC 401(a).

  2. The above list is not all inclusive. Section 4.04 of Rev. Proc. 2007–5 sets forth a list of mandatory technical advice issues. The current version of the revenue procedure should be reviewed for any revisions.

  3. Technical advice and for submissions before January 2, 2007, technical expedited advice cases may be referred to Chief Counsel for legal advice on issues within its jurisdiction. See Rev. Proc. 2007–1, 2007–1 I.R.B. 1.

7.1.5.2.3  (06-01-2007)
Procedural Matters

  1. ) Instructions are provided for preparing a request for technical advice and for submissions before January 2, 2007, technical expedited advice. See section 10 of Rev. Proc. 2007–5. This includes:

    1. Transmittal Form 5565, Request for Technical Advice—EP/EO

    2. Disclosure provisions under IRC 6104 and 6110 (see also IRM 11.3.10, Disclosure of Official Information, Employee Plans Information)

    3. Submitting case files

    4. Statement of the taxpayer’s position

  2. Procedures involving operating divisions outside of EP, but involving an EP matter, are found in that organization's provisions of the IRM. Also, see Rev. Proc. 2007-2, 2007-1, I.R.B. 88. If another function requests technical advice on certain EP issues, Form 5565 is also used.

    Example:

    Deductibility of contributions to or taxability of distributions from simplified employee plans (SEPs) , individual retirement arrangements (IRAs), corporate or other types of qualified retirement plans

  3. The Appeals function may also request technical advice on EP matters. Form 5565 is also used in those instances. Currently, all EP cases will be routed through the Appeals Area Director, Area 4 with a copy to the Appeals Director, Technical Services. (Revisions to Appeals current procedures may alter the routing.

  4. Procedures for requesting Technical Advice for Employee Plans determination cases are found at IRM 7.11.1.16. Procedures for requesting Technical Advice for Employee Plans examination cases are found at IRM 4.71.13.

  5. Cases with less than 181 days remaining on the statute will require expedited handling and/or may require a statute extension). Form 3198 must indicate that special handling is required due to a short statute. See IRM 25.6, Statute of Limitations, and IRM 4.71.9, Employee Plans Examination of Returns, Statute Control Procedures for Employee Plans Agents.

7.1.5.2.4  (06-01-2007)
Additional Procedures

  1. Section 7 of Rev. Proc. 2007–5, provides instructions for the officials responsible for requesting technical advice and for submissions before January 2, 2007, technical expedited advice. It also indicates that the taxpayer may initiate a request for technical advice or for submissions before January 2, 2007, technical expedited advice.

  2. Section 8 provides guidance on when technical advice and for submissions before January 2, 2007, technical expedited advice should be requested.

  3. Section 9 specifies how pre-submission conferences are scheduled.

  4. Sections 9.07 and 10.05 contain instructions related to both the required and optional use of electronic transmission of material related to technical advice and technical expedited advice memoranda.

  5. Section 11 instructs a taxpayer on the procedures for handling technical advice and for submissions before January 2, 2007, technical expedited advice.

  6. Section 12 indicates how a taxpayer can appeal a decision by the Service not to seek technical advice and for submissions before January 2, 2007, technical expedited advice.

  7. Section 13 discusses how to withdraw a request for technical advice and for submissions before January 2, 2007, technical expedited advice.

  8. Section 14 discusses the procedure for scheduling a conference in the event of a proposed adverse.

  9. Section 15 covers questions concerning the status of the technical advice and for submissions before January 2, 2007, technical expedited advice request.

  10. Section 16 provides instructions to EP Technical personnel on preparing the technical advice and for submissions before January 2, 2007, technical expedited advice memorandum. See Exhibit 7.1.5-1. Exhibit 7.1.5-2 is an example of the transmittal memorandum, which is a cover sheet for the technical advice or for submissions before January 2, 2007, technical expedited advice memorandum from the tax law specialist or actuary in EP Technical.

  11. Section 17 explains how the requesting office uses the technical advice and for submissions before January 2, 2007, technical expedited advice.

  12. Section 18 describes the reliance a taxpayer has on the technical advice or technical expedited advice as well as the retroactive effect of such technical advice and for submissions before January 2, 2007, technical expedited advice.

  13. Section 19 describes IRC 7805(b), the provision which limits the retroactive effect of a technical advice and for submissions before January 2, 2007, technical expedited advice.

7.1.5.2.5  (06-01-2007)
Settlement Authority

  1. Appeals is authorized to settle issues under existing authorities, with certain exceptions, applicable to technical advice.

    IF the issue involves… THEN…
    a. Tax exemption No settlement or administrative appeal
    b. Plan qualification No settlement or administrative appeal
    c. Unfavorable ruling (other than a. or b.) Settlement authority

  2. If the proposed disposition by Appeals is contrary to a previously issued technical advice or ruling as to plan qualification, submit the proposed disposition through the appropriate Appeals Area Director who will route its cases to the --

    1. Director, Employee Plans in the Office of the Commissioner, Tax Exempt and Government Entities Division, or,

    2. Associate Chief Counsel, (Passthroughs and Special Industries (P&SI) in IRC 521 cases with a copy of the case to the Appeals Director, Technical Services.

  3. If the Director, Employee Plans or the Associate Chief Counsel (P&SI) does not agree with the proposed disposition by Appeals, the decision of the Director, Employee Plans or the Associate Chief Counsel will be followed.

7.1.5.3  (06-01-2007)
Status Reports

  1. At a minimum, EP Technical is responsible for reporting on the status of technical advice requests and for submissions before January 2, 2007, technical expedited advice requests more than 90 days old as of the end of each quarter.

    1. A separate status report is prepared for technical advice and for submissions before January 2, 2007, technical expedited advice cases originating in EP Determinations and EP Examinations.

    2. Status reports are not required for requests for technical assistance.

  2. At a minimum, the report will specify the--

    1. Name of Organization/Plan, EIN

    2. Date Received

    3. Issue Involved

    4. Estimated Completion Date

    5. Status of the case

    6. Name of the initiator and/or Group Manager assigned the case

    7. Telephone number of the person to contact

7.1.5.3.1  (06-01-2007)
Distribution

  1. EP Technical will transmit the status reports to the appropriate office.

Exhibit 7.1.5-1  (06-01-2007)
Technical Advice Memorandum -- Sample Format

INTERNAL REVENUE SERVICE
National Office Technical Advice Memorandum
 
Taxpayer's Name:
Taxpayer's Address:
Taxpayer's Identification no.:
Years Involved:
Date of Conference:
or (No Conference Held)

Issues
State the issues as presented by the applicable office. Also, whenever appropriate, state in clear, precise language any additional issues that have been identified that were not specifically raised by the incoming correspondence, or restate the issue presented by the applicable office to pinpoint the question at issue or to reframe the issue. (To the extent necessary, EP Technical may reframe the issue.)

Facts
The statement of facts incorporated in the technical advice memorandum should be set out concisely but without any sacrifice of clarity. The essential facts should be fully represented. Short quotations from the incoming statement may be used as an aid in definitely pinning down particular areas when the conclusion depends on the interpretation of such language. However, lengthy quotations from documents contained in the file are to be avoided whenever practicable.

Law
This part of the document should set forth clearly and concisely the pertinent law, regulations, published rulings of the Service, and case law or other precedent. Care should be taken that all citations are directly on point. Quotations which are helpful may be used judiciously, but as with the facts, lengthy quotations are to be avoided whenever practicable.

Rationale
Sufficient rationale must be provided to bridge any gaps between the issue, law, and conclusion reached. (The law and rationale sections may be combined.)

Conclusion
A specific statement as to the conclusion reached with respect to each issue is the final important step. These conclusions must be written to leave no doubt as to their meaning and to make it clear they are based solely on the facts presented.

(If a copy of the technical advice memorandum is not to be given to the taxpayer, that fact should be noted here.)

In summary, it is the Service’s function to promote uniformity, clarity, and responsiveness and, to the extent practicable, to insure an orderly method of approaching a technical advice problem. This requirement is not intended in any way to restrict originality or ingenuity on the part of the writer, nor is it intended to prevent necessary or desirable deviation from the pattern where proper.

Exhibit 7.1.5-2  (06-01-2007)
Transmittal Memorandum -- Sample Format on TE/GE Letterhead

MEMORANDUM FOR MANAGER, EP EXAMINATIONS SPECIAL REVIEW, MANAGER EP DETERMINATIONS, QUALITY ASSURANCE OR APPEALS AREA DIRECTOR, AREA 4
     
FROM: Manager,    
     
SUBJECT:    
     
Year(s) or Period(s) Involved:    
     
□ Attached is our memorandum in response to your request for technical advice in the case name above.
     
□ Case returned for further development. State reasons below or continue on a separate sheet, if necessary.
     
Do notfurnish any page of this transmittal memorandum to the taxpayer.
     
Attachments: Distribution:
Copy of this memorandum
Original and two copies of Technical Advice Memorandum 		Check appropriate blocks.
Copies of this memorandum and Technical Advice Memorandum to:
   
  Operating Division
  □ SBSE
□ TEGE 		□ LMSB
□ W&I
  Appeals
Headquarters and Area Office
  □ SBSE
□ W&I 		□ LMSB
□TEGE
  Division Counsell
  □ SB/SE
□ W&I 		□ LMSB
□ TEGE

Caution:

This form is not to be used to transmit Technical Advice Memorandums Involving civil fraud investigations, criminal investigations, or jeopardy or termination assessments. See CCDM 33.2.2, Requests for Technical Advice and Technical Expedited Advice.


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