7.1.2  Exempt Organizations Administrative Procedures

Manual Transmittal

September 22, 2014

Purpose

(1) This transmits revised text and exhibits for IRM 7.1.2, Rulings and Agreements, TE/GE Administrative Procedures and Programs, Exempt Organizations Administrative Procedures.

Material Changes

(1) IRM 7.1.2.2.6 and Exhibit 7.1.2-1 are added to incorporate Interim Guidance Memorandum TEGE-07-0913-13 clarifying the specific steps Exempt Organizations' personnel when issuing interim guidance memoranda to staff.

(2) IRM 7.1.2.3.2 was revised and expanded to incorporate Interim Guidance Memorandum TEGE-07-0714-0021 providing detailed procedures by which Exempt Organizations Determinations specialists can request technical assistance from Exempt Organizations Technical office.

(3) IRM 7.1.2 was reviewed and updated where necessary for the following types of editorial changes: legal citations and IRM references. In particular, the references to annual revenue procedures reflect the most current version.

Effect on Other Documents

IRM 7.1.2, dated December 16, 2002, is superseded. This revision incorporates Interim Guidance Memorandum TEGE-07-0913-13, Interim Guidance on Processing Interim Guidance Memoranda, and Interim Guidance Memorandum TEGE-07-0714-0021, Interim Guidance on Requests for Technical Assistance.

Audience

TE/GE (Exempt Organizations)

Effective Date

(09-22-2014)


Tamera L. Ripperda
Director, Exempt Organizations
Tax Exempt and Government Entities

7.1.2.1  (09-22-2014)
Overview

  1. The purpose of this IRM is to describe for Exempt Organizations' employees, the administrative procedures governing Exempt Organizations (EO)under the jurisdiction of Tax Exempt and Government Entities (TE/GE).

  2. Administrative procedures are generally set forth in revenue procedures. Revenue procedures are published in the Internal Revenue Bulletin (I.R.B.), published weekly.

  3. The following information is covered in IRM 7.1.2:

    1. IRM 7.1.2.1, Overview, provides an overview of the administrative procedures applicable to EO personnel.

    2. IRM 7.1.2.2, Definitions and Jurisdictions, defines letter rulings, determination letters, information letters, closing agreements, oral guidance, and interim guidance and lists the applicable jurisdictions for these programs.

    3. IRM 7.1.2.3, Assistance, provides procedures for submitting cases for technical advice, requesting technical assistance, and issuing memorandums providing technical or procedural guidance.

  4. Revenue rulings, notices, and announcements provide information and guidance to taxpayers, IRS personnel, and other interested parties. A revenue ruling is the IRS’s conclusion on how the law is applied to a specific set of facts. Revenue rulings are also published in the I.R.B. See Rev. Proc. 2014-4.

7.1.2.1.1  (09-22-2014)
Administrative Procedures

  1. The IRS issues interpretations to taxpayers to advise them or their authorized representatives, upon written request, of the proper application to specific situations of the provisions of the internal revenue laws, related statutes and regulations, or revenue rulings and other precedents published in the I.R.B. This is done to promote voluntary compliance with, and consistent administration of, the internal revenue laws in accordance with the intent and purpose of Congress.

  2. The following revenue procedures relate to matters that are under the jurisdiction of the Office of the Commissioner Tax Exempt and Government Entities Divisions and are published on an annual basis in the I.R.B.:

    • Letter rulings and other guidance Rev. Proc. 2014-4 , 2014-1 I.R.B. 125
    • Technical advice Rev. Proc. 2014-5 , 2014-1 I.R.B. 169
    • User fees Rev. Proc. 2014-8 , 2014-1 I.R.B. 242
  3. These procedures cover the following matters:

    • Letter rulings

    • Determination letters

    • Information letters (general correspondence)

    • Technical advice

    • Closing agreements

    • Oral guidance

    • Nonbank trustee requests (for IRC 529 organizations)

  4. Although the revenue procedures contain information and procedures, additional information and procedures for EO specialists may also be provided in the Internal Revenue Manual.

  5. Exempt Organizations uses its closing agreement program to facilitate voluntary compliance and to resolve certain issues that are appropriately handled by the program.

7.1.2.1.2  (09-22-2014)
User Fees

  1. The Revenue Act of 1987, enacted December 22, 1987, authorizes the IRS to require payment of user fees by taxpayers for rulings, opinion letters, and determination letters.

  2. Section 6 of Rev. Proc. 2014-8, updated annually, provides a complete schedule of user fees applicable to employee plans and exempt organizations matters, respectively.

7.1.2.2  (09-22-2014)
Definitions and Jurisdictions

  1. The programs administered under the jurisdiction of the Director, Exempt Organizations are described in Rev. Proc. 2014-4, updated annually, specifically with regard to the issuance of letter rulings and determination letters.

  2. Treas. Reg. 601.201(a) is the source for the definitions of terms described below. However, revenue procedures that are published after the applicable Regulations may alter the definitions.

7.1.2.2.1  (09-22-2014)
Letter Rulings

  1. A "letter ruling" is a written statement issued to a taxpayer (or his/her authorized representative) that interprets and applies the tax laws or any nontax laws applicable to exempt organizations to the taxpayer's specific set of facts.

  2. A letter ruling found to be in error or not in accord with the IRS’s current views, may be modified or revoked under the discretionary authority granted by IRC 7805(b).

  3. Letter rulings, issued only by the EO Technical office, are primarily redelegated to the Director, EO Rulings and Agreements and, in turn, to the EO Technical Manager, and then the groups under that Manager.

7.1.2.2.2  (09-22-2014)
Determination Letters

  1. A "determination letter" is a written statement issued by the Director, EO Rulings and Agreements in response to a written inquiry by an individual or an organization that applies to the particular facts involving the principles and precedents previously announced to a specific set of facts.

  2. A determination letter is issued only where a determination can be made on the basis of clearly established rules as set forth in the statute, Treasury Decision or regulation, or in a ruling, opinion, or court decision published in the I.R.B. Where such a determination cannot be made, such as where the question presented involves a novel issue or the matter is excluded from the jurisdiction of the Director, EO Rulings and Agreements by the provisions of this chapter, a determination letter will not be issued.

7.1.2.2.3  (09-22-2014)
Information Letters

  1. An "information letter" is a written statement issued by the Director of EO, Rulings and Agreements that 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.

  2. It is generally issued to a taxpayer when:

    1. An inquiry indicates a need for general information; or

    2. A request does not meet the requirements for a letter ruling and the IRS thinks general information will be helpful.

  3. An information letter is advisory only and has no binding effect on the IRS.

7.1.2.2.4  (09-22-2014)
Closing Agreements

  1. A "closing agreement" is a final agreement between the IRS and a taxpayer on a specific issue or liability pursuant to IRC 7121. The closing agreement program is more fully discussed in IRM 4.75.25, Exempt Organization Examinations Closing Agreements.

7.1.2.2.5  (09-22-2014)
Oral Guidance

  1. "Oral guidance" is a response to an inquiry from taxpayer(s) or their representative(s) involving general matters, and also whether the IRS will rule on particular issues relating to procedural matters about submitting requests for:

    • Letter rulings,

    • Determination letters, and

    • Recognition of exempt status of a particular organization.

  2. Taxpayers may obtain assistance regarding EO matters by calling the centralized customer service unit at (877) 829-5500 (toll-free number). See IRM 21.3.8 , Tax Exempt/Government Entities (TEGE) Customer Account Services (CAS) Telephone Operations, for information concerning TE/GE call site operations.

  3. Oral guidance is advisory only; the IRS is not bound to recognize it.

7.1.2.2.6  (09-22-2014)
Interim Guidance

  1. Interim guidance is an internal management document used by organizations to issue immediate, time-sensitive, or temporary instructions to employees. The guidance communicates procedural directions, guidelines, or standards to employees in the performance of their assigned duties. Generally, interim guidance modifies procedures in a currently published IRM section and is typically issued through memoranda. Interim guidance has a recommended one-year time period but may be issued for up to two years (see IRM 1.11.10.2.1 , Interim Guidance Effective Period, for more information). If the guidance is intended to be permanent, it will be incorporated into the IRM as soon as possible, but no later than the expiration date.

  2. Refer to Exhibit 7.1.2-1 for an EO flow chart for publishing interim guidance memoranda. These procedures supplement interim guidance procedures outlined in IRM 1.11.10 , Interim Guidance Process.

7.1.2.2.7  (09-22-2014)
Requests Concerning IRC 408(a)(2) and 408(a)(5) Nonbank Trustee Status

  1. Information concerning disposition of requests concerning IRC 408(a)(2) and IRC 408(a)(5) Nonbank Trustee status is forthcoming. Such requests arise from Section 402 of the Economic Growth and Tax Relief Reconciliation Act of 2001, which is effective for tax years beginning after December 31, 2001. Section 402 provides that (except to the extent provided by regulations) a program shall not be treated as an IRC 529 qualified tuition program unless the program's assets are held in a qualified trust that satisfies IRC 408(a)(2) and (5). The prior sentence does not apply to IRC 529 qualified tuition programs that are established and maintained by a state or a state's instrumentality.

7.1.2.3  (09-22-2014)
Assistance

  1. EO Technical or EO Technical Guidance and Quality Assurance provides technical support to Appeals, Customer Education and Outreach, Determinations, and Examinations. This support may be provided in written or verbal form. Written advice may be presented as technical advice, technical assistance, or memorandum directive, depending on the nature of the matter.

    1. EO Determinations and Examinations may request (or may be required to request) assistance on a technical issue raised during a determination letter request or examination. Assistance may be provided in the form of technical advice or technical assistance.

    2. Support may be provided in any circumstance where there is a need for action but there is inadequate published precedent concerning the issue under review.

7.1.2.3.1  (09-22-2014)
Technical Advice

  1. "Technical advice" means advice or guidance in the form of a memorandum furnished by EO Technical or EO Technical Guidance and Quality Assurance upon the request of an Area Manager or the Appeals office, in response to any technical or procedural question that develops during a proceeding on the interpretation and proper application of tax law, tax treaties, regulations, revenue rulings, notices or other precedents published by the IRS to a specific set of facts. See IRM 7.1.4, Exempt Organizations Technical Advice Procedures, for additional guidance on requesting technical advice.

7.1.2.3.2  (09-22-2014)
Technical Assistance

  1. Technical assistance is provided by EO Technical (EOT) to Area Managers under the following conditions:

    1. The issues are not raised in connection with the examination of a taxpayer’s return.

    2. The issues do not relate to a specific case under consideration by an Examination Area office or an Appeals Office.

  2. Technical assistance may involve any tax matter, but is generally requested where:

    1. A potential problem is recognized from a newspaper or a magazine article;

    2. State or local law or ordinance is recently enacted; or

    3. Uncertainty exists regarding the interpretation of internal revenue laws, related statutes and regulations, published revenue rulings, revenue procedures, or any other published precedent.

  3. Technical assistance definitions are as follows:

    1. A technical assistance (TA) request is a request by EO Determinations (EOD) to EOT for technical assistance based on the criteria listed above.

    2. Form to request technical assistance (TA form) is the form that EOD completes to request for technical assistance. The TA form includes a short summary of the issue(s) and any relevant information.

    3. Memorandum to request technical assistance is the memorandum accompanying the TA form which includes the issue(s), information associated with a case, or other material on which the TA request is based upon.

    4. Memorandum in response to EOD’s technical assistance request is the memorandum response to the TA which includes the legal issue(s), law, analysis, and recommendation.

    5. Tracking sheet is the spreadsheet prepared and maintained by designated persons in EOD and EOT to track technical assistance requests.

  4. TA requests are prepared in EOD as follows:

    1. Designated EOD personnel request technical assistance by completing:

      •Memorandum to request technical assistance, addressed to the Manager, EO Technical (Exhibit 7.1.2-2)
      •Technical assistance form (Exhibit 7.1.2-3)
      •Section A of the technical assistance tracking sheet (Exhibit 7.1.2-4)
    2. Designated EOD personnel send a request for technical assistance to EOT by submitting the above items to the designated email box, *TE/GE-EO-Tech Assistance Request.

    Note:

    All emails sent from EOD to EOT and EOT to EOD during this process are sent to or from this designated email box.

  5. Within two workdays of the request, the EOT staff assistant sends an acknowledgement email to the originating EOD personnel.

    Note:

    The EOT staff assistant is the designated monitor of the email box and keeper of the tracking sheet for EOT.

  6. The TA request is screened for assignment to an EOT group and recorded on TE/GE Rulings and Agreements Control System (TRAC) as follows:

    1. The EOT staff assistant sends the TA form to the EOT screener (a designated EOT group manager) to screen the technical issue(s) and assign the TA request to the appropriate technical group.

    2. The EOT staff assistant sends the TA form and assignment information to EO Technical Processing Unit (TPU) for recording on TRAC.

    3. TPU records the request information on TRAC within two workdays of receipt and gives the TA request to the manager of the assigned group.

  7. The group manager assigns the TA request to a tax law specialist (TLS) for processing. The group manager also designates a TLS to review the response memorandum to EOD.

    1. The assignment includes a completion date for both the TLS and reviewer.

    2. The manager updates comments in TRAC to reflect the deadline status.

  8. The EOT staff assistant updates Section B of the tracking sheet and emails it to the designated EOD personnel within two business days.

  9. TA requests are treated as expedite requests and are to be processed as follows within the listed time frames.

    1. The TLS has 60 days from assignment to complete the response memorandum.

      Note:

      The TLS uses TEDS to access supporting material, if needed, to prepare a response.

    2. The reviewer has 30 days from receipt to review the TLS’ response memorandum and supporting material and provide feedback/changes.

    3. The TLS has five days to make the changes and forward it back to the reviewer for clearance.

    4. If there is a technical disagreement between the TLS and reviewer, the reviewer must notify immediately the group manager so he/she can resolve the matter.

    5. The response memorandum is sent to the group manager for review.

    6. The group manager reviews the response memorandum within 15 days from receipt.

      Note:

      The EOT manager also may review the response memorandum. He/she must complete the review within 10 days of receipt.

    7. The group manager signs the response memorandum and notifies the EOT staff assistant and EOT manager that the response memorandum is completed.

  10. The group manager sends the response memorandum and any additional material to address the technical assistance request to TPU.

  11. TPU scans the response memorandum and any additional material and sends it electronically to the designated email box for transmission to the designated EOD personnel. TPU closes the case on TRAC and notifies the EOT staff assistant of the closing date.

  12. The EOT staff assistant updates and sends the TA tracking sheet, the response memorandum, and any additional material to the designated EOD personnel and cc's the EOT manager and the TPU manager.

7.1.2.3.3  (09-22-2014)
Memorandum Directive

  1. EO Technical Guidance and Quality Assurance may issue memoranda to Appeals, Determinations, and Examinations offices which provide either technical or procedural guidance. Such guidance may be provided on matters of policy, new legislation, or to clarify IRS positions. These instructions are subsequently incorporated into the Internal Revenue Manual.

Exhibit 7.1.2-1 
EO Flow Chart for Publishing Interim Guidance Memoranda

Step Responsible Party Action
1 Author (as/on behalf of Issuing Official) a. Draft text of interim guidance (IG) memorandum in Word following IG format found at IRM 1.11.10.6.2, Format for Preparing Interim Guidance Memoranda. Considerations for draft:
• To
• From
• Subject
• Affected IRM section
• Expiration time frame
• E-FOIA Criteria
• Official Use Only material
• Attachments

b. Send draft IG to EO IMD Coordinator.
2 EO IMD Coordinator a. Review IG for structure, IMD standards, grammar, etc., and coordinate corrections with Author. (Collaborate with TE/GE Communications & Liaison (C&L) when necessary.)

b. Send IG to EO Director's Senior Technical Advisor (STA).
3 STA a. Review IG for technical and procedural content.

b. Send IG to Director, EO for approval with any comments or concerns noted.
4 Director, EO a. Review IG and return to Author with any revisions (Repeat steps 1- 3 as necessary).

b. Approve and send IG to EO IMD Coordinator, confirming E-FOIA posting and/or any OUO designation.
5 EO IMD Coordinator a. Prepare and send PDF of IG and Form 2061 to affected offices and specialized reviewers, following clearance process outlined in IRM 1.11.10.6.3 . Required specialized reviewers may include:
  • TAS

  • PGLD

  • ACA Office

  • Chief Counsel

  • Workforce Relations

  • OTC

Reminder:

TAS is a required reviewer on all EO IGs.



b. Ensure each reviewer returns signed Form 2061 and forward any comments to Author for consideration.
6 Author a. Consider and incorporate changes into Word version of IG then send to EO IMD Coordinator.

b. Repeat steps 1- 4 as necessary.
7 EO IMD Coordinator a. Obtain control number from TE/GE IG Coordinator (send copy of IG along with name of contact/author).

b. Insert control number, issue date, and expiration date in IG, convert to PDF, and send to Issuing Official (or designee) for signature.

c. Secure signature of Issuing Official (or designee) on Form 2061 at same time as PDF copy.
8 Issuing Official Digitally sign PDF and Form 2061 and send to EO IMD Coordinator.
9 EO IMD Coordinator a. Add /s/ and printed name to Word copy of IG.

b. Send Word document to C&L for 508 compliance. General 508 requirements include:
  • Using an MS Office program such as Word, PowerPoint or Excel (no converting to Acrobat

  • Using IRS standard fonts (not animation, shadows, embossing, etc.)

  • Using standard circle bullets (not special characters)

  • Using paragraph and line spacing menus to align and space text (not space and/or enter keys)

  • Using few tables and images/pictures

  • Removing of all comments

  • Accepting all tracked changes track and disabling track changes function

Note:

Contact C&L with any questions on preparing document for 508 compliance.

10 C&L Prepare document for 508 compliance, convert to PDF, and return to EO IMD Coordinator.
11 EO IMD Coordinator Send 508 compliant PDF to Issuing Official for issuance and distribution.
12 Issuing Official Electronically distribute PDF to affected employees, external stakeholders, and EO IMD Coordinator.
13 EO IMD Coordinator a. Send 508 complaint PDF to TE/GE IG Coordinator and C&L.

b. Update internal tracking documents and archive clearance documents (along with signed PDF) for submission to IRS Historical Research Library when IG is incorporated into IRM.
14 TE/GE IG Coordinator Upload IG to IMD Tracking System for posting to IRM Online and to www.irs.gov, Electronic Reading Room (if identified for posting by Issuing Official).
15 C&L Post IG to TE/GE Connect, http://tege.web.irs.gov.

Exhibit 7.1.2-2 
Memorandum To Request Technical Assistance Request From EO Technical

[Letterhead]
Department of the Treasury
Internal Revenue Service
Washington, DC 20224

Date

Memorandum for Manager EO Technical SE:T:EO:RA:T
From: Manager, EO Determinations Area [Insert] SE:T:EO:RA:D:[Insert]
Subject: Request for Technical Assistance

Detailed Description of the Issues
 

Detailed Description of any Information Relating to the Issue
 
 
 
 

Exhibit 7.1.2-3 
Exempt Organizations Determinations Technical Assistance Request Form


Exempt Organizations Determinations Technical Assistance Request Form

SECTION 1: To be completed by EO Determinations Specialist
To: Manager, Exempt Organizations Technical SE:T:EO:RA:T Control No: Date:

From: Manager, Exempt Organizations Determinations
Area [Insert]
Date of Request

Name of the Organization in which the technical issue(s) is associated::

Organization's EIN:

EDS/TEDS Status

Type of Assistance Requested
□ Technical □ Procedural

Summary of the Issue(s) Identified

Remarks:
(Attach Request Memorandum with a detailed description of the issue(s) and information. Include any supporting material.)

Originator:

Group No:

Telephone No:

Group Manager's Signature:

Area Manager's Signature:

Send to:
 

SECTION 2: To be completed by EOT group manager

Date Received in the group:

Date Assigned to the TLS:

Date Assigned to the Reviewer
 

Date Completed:

Follow up Dates: 1) 30 days-__________(MMDDYYYY)
2) 60 days __________(MMDDYYYY)
3) 90 days __________(MMDDYYYY)

Comments/Recommendations: (Attach Response Memorandum)

Tax Law Specialist:

Date of Completion:

Manager's Signature

Date of Completion

Exhibit 7.1.2-4 
Tracking Sheet for Technical Assistance Request From EO Determinations to EO Technical

Section A

EO Determinations (EOD) Technical Assistance Requests (Applications) to EO Technical

  1. Organization Name - The case in which the Technical Issue(s) is Associated

  2. EDS TEDS Status

  3. Control Date

  4. EIN

  5. Subsection

  6. System

  7. Specialist

  8. Letter Sent

  9. Bucket

  10. Date Sent to DC

  11. EST Date return from DC

  12. Actual Date Rcvd from DC

  13. Notes

Section B

EO Technical (EOT) Tracking Assistance Requests From EOD and Written Response to the Requests

  1. Auto Revoke

  2. Date EOT sent acknowledgement of Receipt of Technical Assistance Request

  3. Date Technical Assistance Request was controlled on TRAC

  4. Date Technical Assistance Request Assigned to the Technical Group

  5. Date Technical Assistance Request Assigned to the Tax Law Specialist

  6. Projected Date of Completion by TLS

  7. Date Technical Assistance Request Assigned to the EOT Reviewer

  8. Projected Completion Date by Reviewer

  9. Date Written Response sent to EOD

  10. Notes


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