7.1.5  Employee Plans Technical Advice Procedures

Manual Transmittal

September 26, 2014

Purpose

(1) This transmits revised IRM 7.1.5, Rulings and Agreements, Employee Plans Technical Advice Procedures.

Material Changes

(1) This IRM has been updated to reflect current versions of annual revenue procedures.

(2) Editorial changes have been made throughout.

Effect on Other Documents

IRM 7.1.5, dated July 15, 2013, is superseded.

Audience

TE/GE (Employee Plans)

Effective Date

(09-26-2014)

Robert Choi
Director, Employee Plans
Tax Exempt and Government Entities Division

7.1.5.1  (09-26-2014)
Overview

  1. This IRM section sets forth the applicable procedures for requesting technical advice. Technical advice is available on an issue in controversy. Employee Plans (EP) Technical receives cases involving unagreed issues from:

    • 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 have the potential to be forwarded for technical advice. For additional information on Appeals procedures see IRM 8.6.3, Conference and Settlement Practices, Appeals Rulings.

  3. Administrative procedures for requesting technical advice on matters under the jurisdiction of the Director, Employee Plans of the Office of the Commissioner, Tax Exempt and Government Entities Division (TE/GE) are found in Rev. Proc. 2014-5, (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  (07-15-2013)
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.

  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 the following:

    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. If technical advice is adverse to the applicant, then the Service will not allow the applicant any further appeal within the Service on those issues.

  4. EP Determinations or EP Examinations may issue specific procedures for requesting technical advice. Generally, these procedures will not conflict with a published revenue procedure. However, if an office revises its internal procedures after publication of a revenue procedure, the revised internal procedures will be incorporated into a subsequent published procedure.

    • EP Examinations specific procedures may be found at IRM 4.71.13.5.

7.1.5.2  (09-26-2014)
Annual Revenue Procedure for Requesting Technical Advice

  1. Rev. Proc. 2014-5 provides the administrative procedures for submitting requests for technical advice to EP Technical. Also, see section 4.02 of Rev. Proc. 2014-5 with respect to technical advice on a determination letter under IRC 521.

7.1.5.2.1  (09-26-2014)
Issues Covered by Other Revenue Procedures

  1. Rev. Proc. 2014-4 contains procedures for processing ruling letters in EP Technical. This includes requests for relief under Treas. Reg. 301.9100–1. See section 6 of Rev. Proc. 2014-5.

7.1.5.2.2  (09-26-2014)
Mandatory Issues

  1. Technical advice is encouraged on any technical or procedural question that cannot be resolved based on 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) for 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. 2014-5 includes a list of mandatory technical advice issues. Review the current version of the revenue procedure for any revisions.

  3. If EP Examinations requests technical advice from EP Technical for a case with either an unagreed prohibited transaction, as defined in IRC 4975(c)(1) and ERISA 406(a), or a violation of the exclusive benefit rule of IRC 401(a)(2) or ERISA 404(a)(1)(A), EP Examinations must submit a Form 6212-B, Examination Checksheet B to the Department of Labor prior to submitting the request to EP Technical for technical advice.

  4. Refer technical advice cases to Chief Counsel for legal advice on issues within its jurisdiction. See Rev. Proc. 2014-1.

7.1.5.2.3  (09-26-2014)
Procedural Matters

  1. Instructions for preparing a request for technical advice are located in section 10 of Rev. Proc. 2014–5. This includes:

    1. Statement of issues, facts, law, and arguments.

    2. Statement of the taxpayer's position.

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

    4. Disclosure provisions under IRC 6104 and IRC 6110. See IRM 11.3.10, Disclosure of Official Information, Employee Plans Information.

    5. Submitting case files.

  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. 2014-2. If another function requests technical advice on certain EP issues, Form 5565 is also used.

    Example:

    Wage & Investment (W&I) might request technical advice on deductibility of contributions to or taxability of distributions from simplified employee pension plans (SEPs), individual retirement arrangements (IRAs), corporate or other types of qualified retirement plans

  3. Procedures for requesting Technical Advice for EP determination cases are found at IRM 7.11.1.40.8, Procedures for Requesting Technical Advice for Employee Plans, examination cases are found at IRM 4.71.13, Employee Plans Examination of Returns, Technical Assistance and Technical Advice Requests.

  4. The appropriate office of the Service must submit electronically the Form 5565 for a technical advice request to William Hulteng, manager, EP Technical, at William.Hulteng@irs.gov.

  5. The applicable office should also submit additional documents that are not available in electronic form by fax to 202-317-8810 or by express mail or private delivery service to the address below:

    Employee Plans
    Internal Revenue Service
    Attn: SE:T:EP:RA
    1111 Constitution Ave., NW - NCA
    Washington, DC 20224

  6. The Appeals function may also request technical advice on EP matters by completing Form 5565. If a request is from an Appeals office and is within EP’s jurisdiction, the field office must send the request for a technical advice memorandum (TAM) to the above office address with an electronic copy (no paper copy to follow) to the Appeals TAM Coordinator at the AP Tax Policy & Procedure email address - Attention TAM Coordinator - in the subject line.

  7. Cases with less than 181 days remaining on the statute will require expedited handling and/or may require a statute extension. Form 3198, Special Handling Notice for Examination Case Processing, must indicate that special handling is required due to a short statute.

  8. EP Determinations and EP Examinations have 30 calendar days to review the TAM before providing it to the taxpayer.

7.1.5.2.4  (09-26-2014)
Additional Procedures Under Rev. Proc. 2014-5

  1. Section 7 provides instructions for the officials responsible for requesting technical advice. It also indicates that the taxpayer may initiate a request for technical advice.

  2. Section 8 provides guidance on when to request technical advice.

  3. Section 9 specifies how to schedule pre-submission conferences.

  4. Sections 9.07 and 10.05 contain instructions related to both the required and optional use of electronic transmission of material related to pre-submission material, Form 5565, and additional documents for technical advice memoranda.

  5. Section 11 instructs a taxpayer on the procedures for handling technical advice.

  6. Section 12 indicates how a taxpayer can appeal a decision by the Service not to seek technical advice.

  7. Section 13 discusses how to withdraw a request for technical advice.

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

  9. Section 15 covers questions concerning the status of the technical advice memorandum.

  10. Section 16 provides instructions to EP Technical personnel on preparing the technical advice. See Exhibit 7.1.5-1, Technical Advice Memorandum -- Sample Format. Exhibit 7.1.5-2, Transmittal Memorandum -- Sample Format on TE/GE Letterhead is an example of the transmittal memorandum, which is a cover sheet for the technical advice memorandum from the tax law specialist or actuary in EP Technical.

  11. Section 17 explains how the requesting office uses the technical advice.

  12. Section 18 describes the reliance a taxpayer has on the technical advice as well as the retroactive effect of such technical advice.

  13. Section 19 describes IRC 7805(b), the provision which limits the retroactive effect of a technical 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 memorandum or ruling as to plan qualification, submit the proposed disposition through the appropriate Appeals Area Director who will route its cases to either of the following:

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

    2. The Associate Chief Counsel, (Pass-throughs 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  (07-15-2013)
Status Reports

  1. At a minimum, EP Technical is responsible for providing a monthly report of cases in its inventory including only case name, EIN, and received date, and additional reporting on the status of technical advice requests more than 90 days from the received date as of the end of each quarter.

  2. A separate status report is prepared for technical advice cases originating in EP Determinations and EP Examinations. At a minimum, the report will specify the following information for cases more than 90 days from the received date:

    1. Name of Organization/Plan

    2. Employee Identification Number

    3. Date Received

    4. Issue Involved

    5. Estimated Completion Date

    6. Status of the case

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

    8. Telephone number of the person to contact

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

7.1.5.3.1  (09-26-2014)
Distribution of Status Report

  1. EP Technical will transmit the status reports to the EP Examinations Area manager or EP Determinations office or the applicable Appeals Area Director.

Exhibit 7.1.5-1 
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. Use short quotations from the incoming statement as an aid in definitely identifying particular areas when the conclusion depends on the interpretation of such language. However, the statement should avoid lengthy quotations from documents contained in the file whenever practicable.

Law
This part of the document should set forth clearly and concisely the pertinent law, regulations, published Service rulings, and case law or other precedent. Ensure that all citations are directly on point. Judiciously use quotations, which are helpful, but as with the facts, avoid lengthy quotations whenever practicable.

Rationale
Provide sufficient rationale to bridge any gaps between the issue, law and conclusion. (The rationale can be included in the law section.)

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 the taxpayer should not receive a copy of the technical advice memorandum, note that fact here.)

In summary, the Service’s function is to promote uniformity, clarity, and responsiveness and, to the extent practicable, to insure an orderly method of approaching a technical advice issue. 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 TAM pattern where proper.

Exhibit 7.1.5-2 
Transmittal Memorandum -- Sample Format on TE/GE Letterhead

MEMORANDUM FOR MANAGER, EP EXAMINATIONS SPECIAL REVIEW, MANAGER EP DETERMINATIONS, QUALITY ASSURANCE OR APPEALS DIRECTOR
     
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 not furnish 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
LB&I
W&I
  Appeals
Headquarters and Area Office
  SBSE
W&I
LB&I
TEGE
  Division Counsel
  SB/SE
W&I
LB&I
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 (the Chief Counsel Directive Manual) 33.2.2, Requests for Technical Advice.


More Internal Revenue Manual