7.1.2  EO Administrative Procedures – Introduction  (12-16-2002)

  1. This section describes administrative procedures governing employee plans and exempt organizations matters, which are under the jurisdiction of Tax Exempt and Government Entities (TEGE).

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

  3. The following topics are covered in this chapter concerning administrative procedures and programs:

    1. Section 2, Introduction, provides an overview of the administrative procedures applicable to TEGE personnel.

    2. IRM 7.1.3, EO Closing Agreement, provides procedures on the Exempt Organizations closing agreement program.

    3. IRM 7.1.4, Technical Advice, provides procedures for submitting cases for technical advice from the area offices or Appeals.

  4. Revenue rulings are published in the Internal Revenue Bulletin (I.R.B.). A revenue ruling is the Service’s conclusion on how the law is applied to a specific set of facts. Revenue rulings, notices and announcements provide information and guidance to taxpayers, Service personnel and other interested parties. Rev. Proc. 2002-4, 2002-1 I.R.B. 127.  (12-16-2002)
Administrative Procedures

  1. The Service 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 (Rev. Ruls.) 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 Commissioner (TEGE) and are published on an annual basis in the I.R.B. :

    Letter rulings and other guidance Rev. Proc. 2002-4, 2002-1 I.R.B. 127
    Technical advice Rev. Proc. 2002-5, 2002-1 I.R.B. 173
    User Fees Rev. Proc. 2002-8, 2002-1 I.R.B. 252

  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 this 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.  (12-16-2002)
User Fees

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

  2. Section 6 of Rev. Proc. 2002-8, 2002-1 I.R.B. 255, which is annually updated, provides a complete schedule of user fees applicable to employee plans and exempt organizations matters, respectively.  (12-16-2002)
Jurisdiction of Washington POD

  1. The programs administered under the jurisdiction of the Director, Exempt Organizations are fully described in Rev. Proc. 2002-4, specifically with regard to the issuance of letter rulings and determination letters.

  2. Section 601.201(a) of the Treasury Regulations is the source for the definitions of terms described below (and in the revenue procedures).  (12-16-2002)
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 employee benefit plans and exempt organizations to a specific set of facts.

  2. A letter ruling found to be in error or not in accord with the Service’s current views, may be modified or revoked under the discretionary authority granted by IRC 7805(b).  (12-16-2002)
Determination Letters

  1. A "determination letter" is a written statement issued by an Area Manager in response to a written inquiry by an individual or an organization that applies to the particular facts involved the principles and precedents previously announced by Washington POD.

    1. 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.

    2. 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 an area office by the provisions of this section, a determination letter will not be issued.

  2. EO Determinations issues —

    1. determination letters as to the qualification of certain organizations for exemption from Federal income tax under IRC 501 and 521 (concerning Farmers' Cooperatives).

    2. advance determination letters to private foundations pertaining to proposed IRC 507(b) terminations.

    3. change of foundation status and qualification as private operating foundations and exempt operating foundaitons.  (12-16-2002)
Information Letters

  1. An "information letter" is a written statement 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 Service thinks general information will be helpful.  (12-16-2002)
Closing Agreements

  1. A "closing agreement" is a final agreement between the Service and a taxpayer on a specific issue or liability pursuant IRC 7121. The closing agreement program is more fully discussed in IRM 4.75.24 (EO Examinations Closing Agreements).  (12-16-2002)
Oral Guidance

  1. Service employees will discuss with, and respond to, inquiries from taxpayer(s) or their representative(s) involving general matters and also whether the Service 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 Ohio centralized customer service unit at (877) 829–5500 (toll-free number). See IRM 21.3.8 (concerning TEGE Call Site Operations).  (12-16-2002)
Requests Concerning IRC 408(a)(2) and (a)(5) Nonbank Trustee Status

  1. Information concerning disposition of requests concerning IRC 408(a)(2) and (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 satisifies 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.  (12-16-2002)
Assistance to Field

  1. Washington POD provides technical support to the field. This support may be provided in written or verbal form. Written advice may be presented as technical advice, technical assistance or field directive, depending on the nature of the matter.

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

    2. EO Determinations may request (or may be required to request) assistance on a technical issue raised during the determination process. Assistance may be provided in the form of technical advice or technical assistance.

    3. 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.  (12-16-2002)
Technical Advice

  1. "Technical advice" means advice or guidance in the form of a memorandum furnished by Washington POD 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 Service to a specific set of facts. See IRM 7.1.4 for additional guidance on requesting technical advice.  (12-16-2002)
Technical Assistance

  1. Technical assistance covers matters of general technical application furnished to Area Managers where the issues are not raised in connection with the examination of a taxpayer’s return, a request for a determination letter, or the issues do not relate to a specific case under consideration by an area office or Appeals.

  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 must be requested in writing. Address memorandums, as appropriate, to the Director, Exempt Organizations T:EO  (12-16-2002)
Memorandums to the Field

  1. Memorandums may be issued to field offices from Washington POD which provide either technical or procedural guidance. Such guidance may be provided on matters of policy, new legislation or to clarify Service positions. These instructions are subsequently incorporated into the Internal Revenue Manual.

More Internal Revenue Manual