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Internal Revenue Bulletin: 2017-1

January 3, 2017


Highlights of This Issue

These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.

INCOME TAX

Rev. Proc. 2017–7 Rev. Proc. 2017–7

Areas in which rulings will not be issued, Associate Chief Counsel (International).

EMPLOYEE PLANS

Rev. Proc. 2017–4 Rev. Proc. 2017–4

This procedure contains consolidated and revised procedures for determination letters and letter rulings issued by the Commissioner, Tax Exempt and Government Entities Division, Employee Plans Rulings and Agreements Office. Rev. Proc. 2016–4, Rev. Proc. 2016–6, and Rev. Proc. 2016–8 are superseded.

EXEMPT ORGANIZATIONS

Rev. Proc. 2017–5 Rev. Proc. 2017–5

Revised procedures for issuing determination letters on issues under the jurisdiction of the Director, Exempt Organizations Rulings and Agreements.

ADMINISTRATIVE

Rev. Proc. 2017–1 Rev. Proc. 2017–1

This procedure contains revised procedures for letter rulings and information letters issued by the Associate Chief Counsel (Corporate), Associate Chief Counsel (Financial Institutions and Products), Associate Chief Counsel (Income Tax and Accounting), Associate Chief Counsel (International), Associate Chief Counsel (Passthroughs and Special Industries), Associate Chief Counsel (Procedure and Administration), and Associate Chief Counsel (Tax Exempt and Government Entities). This procedure also contains revised procedures for determination letters issued by the Large Business and International Division, Small Business/Self Employed Division, Wage and Investment Division, and Tax Exempt and Government Entities Division. Rev. Proc. 2016–1 superseded.

Rev. Proc. 2017–2 Rev. Proc. 2017–2

These procedures explain when and how an Associate office within the Office of Chief Counsel provides technical advice, conveyed in technical advice memoranda (TAMs). It also explains the rights that a taxpayer has when a field office requests a TAM regarding a tax matter. Rev. Proc. 2016–2 superseded.

Rev. Proc. 2017–3 Rev. Proc. 2017–3

This revenue procedure provides a revised list of areas of the Code under the jurisdiction of the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Procedure and Administration), and the Associate Chief Counsel (Tax Exempt and Government Entities) relating to matters on which the Service will not issue letter rulings or determination letters. Rev. Proc. 2016–3, 2016–1 I.R.B. 126, is superseded.

Preface

The IRS Mission

Provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation, court decisions, and other items of general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of internal practices and procedures that affect the rights and duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations, but they may be used as precedents. Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code. This part includes rulings and decisions based on provisions of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation. This part is divided into two subparts as follows: Subpart A, Tax Conventions and Other Related Items, and Subpart B, Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous. To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Secretary (Enforcement).

Part IV.—Items of General Interest. This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index for the matters published during the preceding months. These monthly indexes are cumulated on a semiannual basis, and are published in the last Bulletin of each semiannual period.

Part III. Administrative, Procedural, and Miscellaneous

Rev. Proc. 2017–1

NOTE TO PRINTER: Please layout and print Rev. Proc. 2017–1 on a page by itself.

TABLE OF CONTENTS

SECTION 1. WHAT IS THE PURPOSE OF THIS REVENUE PROCEDURE? 6
.01 Description of terms used in this revenue procedure 7
.02 Updated annually 8
SECTION 2. WHAT ARE THE FORMS IN WHICH THE SERVICE PROVIDES ADVICE TO TAXPAYERS? 8
.01 Letter ruling 8
.02 Closing agreement 8
.03 Determination letter 8
.04 Information letter 9
.05 Oral advice 9
(1) No oral rulings and no written rulings in response to oral requests 9
(2) Discussion possible on substantive issues 9
(3) Oral guidance is advisory only, and the Service is not bound by it. 10
SECTION 3. ON WHAT ISSUES MAY TAXPAYERS REQUEST WRITTEN ADVICE UNDER THIS REVENUE PROCEDURE? 10
.01 Issues under the jurisdiction of the Associate Chief Counsel (Corporate) 10
.02 Issues under the jurisdiction of the Associate Chief Counsel (Financial Institutions and Products) 10
.03 Issues under the jurisdiction of the Associate Chief Counsel (Income Tax and Accounting) 10
.04 Issues under the jurisdiction of the Associate Chief Counsel (International) 11
.05 Issues under the jurisdiction of the Associate Chief Counsel (Passthroughs and Special Industries) 11
.06 Issues under the jurisdiction of the Associate Chief Counsel (Procedure and Administration) 11
.07 Issues under the jurisdiction of the Associate Chief Counsel (Tax Exempt and Government Entities) 11
SECTION 4. ON WHAT ISSUES MUST WRITTEN ADVICE BE REQUESTED UNDER DIFFERENT PROCEDURES? 12
.01 Issues involving alcohol, tobacco, and firearms taxes 12
.02 Certain issues involving employee plans, individual retirement accounts (IRAs), and exempt organizations 12
SECTION 5. UNDER WHAT CIRCUMSTANCES DO THE ASSOCIATE OFFICES ISSUE LETTER RULINGS? 12
.01 In income and gift tax matters 12
.02 Special relief for late S corporation and related elections in lieu of letter ruling process 12
.03 A § 301.9100 request for extension of time for making an election or for other relief 13
(1) Format of request 13
(2) Period of limitation 13
(3) Taxpayer must notify the Associate office if examination of its return begins while the request is pending 13
(4) Associate office will notify the examination agent, appeals officer, or attorney of a § 301.9100 request if the taxpayer’s return is being examined by a Field office or is being considered by an Appeals office or a Federal court 13
(5) Inclusion of statement required by section 4.04 of Rev. Proc. 2009–41 14
(6) Relief for late initial classification election 14
.04 Determinations under § 999(d) 14
.05 In matters involving § 367 14
.06 In estate tax matters 14
.07 In matters involving additional estate tax under § 2032A(c) 15
.08 In matters involving qualified domestic trusts under § 2056A 15
.09 In generation-skipping transfer tax matters 15
.10 In employment and excise tax matters 15
.11 In procedural and administrative matters 15
.12 In Indian tribal government matters 16
(1) Definition of Indian tribal government 16
(2) Inclusion in list of tribal governments 16
.13 On constructive sales price under § 4216(b) or § 4218(c) 16
.14 In exempt organizations matters 16
.15 In qualified retirement plan and IRA matters 17
.16 A request to revoke an election 17
.17 Under some circumstances before the issuance of a regulation or other published guidance 17
(1) Answer is clear or is reasonably certain 17
(2) Answer is not reasonably certain 18
SECTION 6. UNDER WHAT CIRCUMSTANCES DOES THE SERVICE NOT ISSUE LETTER RULINGS OR DETERMINATION LETTERS? 18
.01 Ordinarily not if the request involves an issue under examination or consideration or in litigation 18
.02 Ordinarily not in certain areas because of factual nature of the problem or for other reasons 18
.03 Ordinarily not on part of an integrated transaction 19
.04 Ordinarily not on which of two entities is a common law employer 20
.05 Ordinarily not to business associations or groups 20
.06 Ordinarily not where the request does not address the tax status, liability, or reporting obligations of the requester 20
.07 Ordinarily not to foreign governments 20
.08 Ordinarily not on Federal tax consequences of proposed legislation 20
.09 Ordinarily not before issuance of a regulation or other published guidance 21
.10 Not on frivolous issues 21
.11 No “comfort” letter rulings 22
.12 Not on alternative plans or hypothetical situations 22
.13 Not on property conversions after return filed 22
.14 Circumstances under which determination letters are not issued by a Director 22
SECTION 7. WHAT ARE THE GENERAL INSTRUCTIONS FOR REQUESTING LETTER RULINGS AND DETERMINATION LETTERS? 22
.01 Documents and information required in all requests 23
(1) Complete statement of facts and other information 23
(2) Copies of all contracts, wills, deeds, agreements, instruments, other documents pertinent to the transaction, and foreign laws 23
(3) Analysis of material facts 24
(4) Statement regarding whether same issue is in an earlier return and additional information required for § 301.9100 requests 24
(5) Statement regarding whether same or similar issue was previously ruled on or whether a request involving it was submitted or is currently pending 25
(6) Statement regarding interpretation of a substantive provision of an income or estate tax treaty 25
(7) Letter from Bureau of Indian Affairs relating to a letter ruling request for recognition of Indian tribal government status or status as a political subdivision of an Indian tribal government. 26
(8) Statement of supporting authorities 26
(9) Statement of contrary authorities 26
(10) Statement identifying pending legislation 26
(11) Statement identifying information to be deleted from the public inspection copy of letter ruling or determination letter 27
(12) Signature by taxpayer or authorized representative 28
(13) Authorized representatives 28
(14) Power of attorney and declaration of representative 30
(15) Penalties of perjury statement 30
(16) Number of copies of request to be submitted 31
(17) Sample format for a letter ruling request 31
(18) Checklist for letter ruling requests 31
.02 Additional procedural information required with request 32
(1) To request separate letter rulings for multiple issues in a single situation 32
(2) Power of attorney used to indicate recipient of a copy or copies of a letter ruling or a determination letter 32
(3) To request a particular conclusion on a proposed transaction 32
(4) To request expedited handling 33
(5) To request the receipt of any document related to letter ruling request by fax 34
(6) To request a conference 34
.03 Additional information required in letter ruling requests involving welfare benefit funds (including voluntary employees’ beneficiary associations (VEBAs)) 34
(1) Request for letter rulings on the tax consequences of a proposed transaction involving a welfare benefit fund 34
(2) Code sections to consider 34
.04 Address to which to send request for letter ruling or determination letter 35
(1) Request for letter ruling 35
(2) Request for determination letter 36
.05 Pending letter ruling requests 36
(1) Circumstances under which the taxpayer with a pending letter ruling request must notify the Associate office 36
(2) Taxpayer must notify the Associate office if a return is filed and must attach the request to the return 37
.06 When to attach letter ruling or determination letter to return 37
.07 How to check on status of request for letter ruling or determination letter 37
.08 Request for letter ruling or determination letter may be withdrawn or Associate office may decline to issue letter ruling 37
(1) In general 37
(2) Notification of appropriate Service official 38
(3) Refund of user fee 38
SECTION 8. HOW DO THE ASSOCIATE OFFICES HANDLE LETTER RULING REQUESTS? 38
.01 Docket, Records, and User Fee Branch receives, initially controls, and refers the requests to the appropriate Associate office 38
.02 Branch representative of the Associate office contacts taxpayer within 21 calendar days 38
.03 Determines if transaction can be modified to obtain favorable letter ruling 39
.04 Not bound by informal opinion expressed 39
.05 May request additional information 39
(1) Additional information must be submitted within 21 calendar days 39
(2) Extension of reply period if justified and approved 40
(3) Letter ruling request closed if the taxpayer does not submit additional information 40
(4) Penalties of perjury statement 40
(5) Faxing request and additional information 40
(6) Address to which to send additional information 40
(7) Identifying information 41
(8) Number of copies 41
.06 Near the completion of the ruling process, advises the taxpayer of conclusions and, if the Associate offices will rule adversely, offers the taxpayer the opportunity to withdraw the letter ruling request 41
.07 May request that taxpayer submit draft proposed letter ruling near the completion of the ruling process 41
.08 Issues separate letter rulings for substantially identical letter rulings, but generally issues a single letter ruling for related § 301.9100 letter rulings 42
(1) Substantially identical letter rulings 42
(2) Related § 301.9100 letter rulings 42
.09 Sends a copy of the letter ruling to appropriate Service official 42
SECTION 9. WHAT ARE THE SPECIFIC AND ADDITIONAL PROCEDURES FOR A REQUEST FOR A CHANGE IN METHOD OF ACCOUNTING FROM THE ASSOCIATE OFFICES? 42
.01 Automatic and non-automatic change in method of accounting requests 42
(1) Automatic change in method of accounting 43
(2) Non-automatic change in method of accounting 43
.02 Ordinarily only one change in method of accounting on a Form 3115, Application for Change in Accounting Method, and a separate Form 3115 for each taxpayer and for each separate and distinct trade or business 43
.03 Information required with a Form 3115 43
(1) Facts and other information requested on Form 3115 and in applicable revenue procedures 43
(2) Statement of contrary authorities 44
(3) Copies of all contracts, agreements, and other documents 44
(4) Analysis of material facts 44
(5) Information regarding whether same issue is in an earlier return 45
(6) Statement regarding prior requests for a change in method of accounting and other pending requests 45
(7) Statement identifying pending legislation 45
(8) Authorized representatives 45
(9) Power of attorney and declaration of representative 45
(10) Tax Information Authorization 46
(11) Penalties of perjury statement 46
.04 Additional procedural information required in certain circumstances 46
(1) Recipients of original and copy of change in method of accounting correspondence 46
(2) To request expedited handling 46
(3) To receive the change in method of accounting letter ruling or any other correspondence related to Form 3115 by fax 47
(4) To request a confered:\sweta\pritesh\gpo\2017-1\complete_gpo\d:\sweta\pritesh\gpo\2017-1\complete_gpo\nce 47
.05 Addresses to which to send Forms 3115 47
(1) Non-automatic Form 3115 47
(2) Automatic change request 48
.06 A Form 3115 must not be submitted by fax 48
.07 Docket, Records, and User Fee Branch receives, initially controls, and refers the Form 3115 to the appropriate Associate office 48
.08 Additional information 48
(1) Reply period. 48
(2) Request for extension of reply period. 49
(3) Penalties of perjury statement for additional information 49
(4) Identifying information included in additional information 49
(5) Faxing information request and additional information 49
(6) Address to which to send additional information to an Associate office 49
(7) Failure to timely submit additional information to an Associate office 50
.09 Circumstances in which the taxpayer must notify the Associate office 51
.10 Determines if proposed method of accounting can be modified to obtain favorable letter ruling 51
.11 Near the completion of processing the Form 3115, advises the taxpayer if the Associate office will rule adversely and offers the taxpayer the opportunity to withdraw Form 3115 51
.12 Non-automatic Form 3115 may be withdrawn or Associate office may decline to issue a change in method of accounting letter ruling 51
(1) In general 51
(2) Notification of appropriate Service official. 51
(3) Refund of user fee. 52
.13 How to check status of a pending non-automatic Form 3115 52
.14 Service is not bound by informal opinion 52
.15 Single letter ruling issued to a taxpayer or consolidated group for qualifying identical change in method of accounting 52
.16 Letter ruling ordinarily not issued for one of two or more interrelated items or submethods 52
.17 Consent Agreement 52
.18 A copy of the change in method of accounting letter ruling is sent to appropriate Service official 53
.19 Consent to change a method of accounting may be relied on subject to limitations 53
.20 Change in method of accounting letter ruling does not apply to another taxpayer 53
.21 Associate office discretion to permit requested change in method of accounting 53
.22 List of automatic change in method of accounting request procedures 54
.23 Other sections of this revenue procedure that are applicable to Form 3115 55
SECTION 10. HOW ARE CONFERENCES FOR LETTER RULINGS SCHEDULED? 57
.01 Schedules a conference if requested by taxpayer 57
.02 Permits taxpayer one conference of right 57
.03 Disallows verbatim recording of conferences 57
.04 Makes tentative recommendations on substantive issues 57
.05 May offer additional conferences 58
.06 Requires written confirmation of information presented at conference 58
.07 May schedule a pre-submission conference 58
(1) Taxpayer may request a pre-submission conference in writing or by telephone 58
(2) Pre-submission conference held in person or by telephone 59
(3) Certain information required to be submitted to the Associate office prior to the pre-submission conference 59
(4) Discussion of substantive issues not binding on the Service 59
.08 May schedule a conference to be held by telephone 60
SECTION 11. WHAT EFFECT WILL A LETTER RULING HAVE? 60
.01 May be relied on subject to limitations 60
.02 Will not apply to another taxpayer 60
.03 Will be used by a Field office in examining the taxpayer’s return 60
.04 May be revoked or modified if found to be in error or there has been a change in law 60
.05 Letter ruling revoked or modified based on material change in facts applied retroactively 61
.06 Not otherwise generally revoked or modified retroactively 61
.07 Retroactive effect of revocation or modification applied to a particular transaction 62
.08 Retroactive effect of revocation or modification applied to a continuing action or series of actions 62
.09 Generally not retroactively revoked or modified if related to sale or lease subject to excise tax 63
.10 May be retroactively revoked or modified when transaction is entered into before the issuance of the letter ruling 63
.11 Taxpayer may request that retroactivity be limited 63
(1) Request for relief under § 7805(b) must be made in required format 63
(2) Taxpayer may request a conference on application of § 7805(b) 64
SECTION 12. UNDER WHAT CIRCUMSTANCES DO DIRECTORS ISSUE DETERMINATION LETTERS? 64
.01 In income and gift tax matters 64
.02 In estate tax matters 64
.03 In generation-skipping transfer tax matters 64
.04 In employment and excise tax matters 65
.05 Requests concerning income, estate, or gift tax returns 65
.06 Review of determination letters 65
SECTION 13. WHAT EFFECT WILL A DETERMINATION LETTER HAVE? 65
.01 Has same effect as a letter ruling 65
.02 Taxpayer may request that retroactive effect of revocation or modification be limited 66
(1) Request for relief under § 7805(b) must be made in required format 66
(2) Taxpayer may request a conference on application of § 7805(b) 66
SECTION 14. UNDER WHAT CIRCUMSTANCES ARE MATTERS REFERRED BETWEEN A DIRECTOR AND AN ASSOCIATE OFFICE? 66
.01 Requests for determination letters 66
.02 No-rule areas 67
.03 Requests for letter rulings 67
.04 Letter ruling request mistakenly sent to a Director 67
SECTION 15. WHAT ARE THE USER FEE REQUIREMENTS FOR REQUESTS FOR LETTER RULINGS AND DETERMINATION LETTERS? 67
.01 Legislation authorizing user fees 67
.02 Requests to which a user fee applies 67
.03 Requests to which a user fee does not apply 68
.04 Exemptions from the user fee requirements 68
.05 Fee schedule 69
.06 Applicable user fee for a request involving multiple offices, fee categories, issues, transactions, or entities 69
(1) Requests involving several offices 69
(2) Requests involving several fee categories 69
(3) Requests involving several issues 69
(4) Requests involving several unrelated transactions 69
(5) Requests involving several entities 69
(6) Requests made by married taxpayers who file jointly 69
.07 Applicable user fee for requests for substantially identical letter rulings or identical changes in method of accounting 70
(1) In general 70
(2) Substantially identical letter rulings 70
(3) Substantially identical plans under § 25(c)(2)(B) 71
(4) Identical changes in method of accounting and related § 301.9100 letter rulings 71
.08 Method of payment 72
.09 Effect of nonpayment or payment of incorrect amount 72
.10 Refunds of user fee 73
.11 Request for reconsideration of user fee 74
SECTION 16. WHAT SIGNIFICANT CHANGES HAVE BEEN MADE TO REVENUE PROCEDURE 2016–1? 75
SECTION 17. WHAT IS THE EFFECT OF THIS REVENUE PROCEDURE ON OTHER DOCUMENTS? 76
SECTION 18. WHAT IS THE EFFECTIVE DATE OF THIS REVENUE PROCEDURE? 76
SECTION 19. PAPERWORK REDUCTION ACT 76
DRAFTING INFORMATION 76
INDEX 78
APPENDIX A—SCHEDULE OF USER FEES 81
APPENDIX B—SAMPLE FORMAT FOR A LETTER RULING REQUEST 86
APPENDIX C—CHECKLIST FOR A LETTER RULING REQUEST 89
APPENDIX D—ADDITIONAL CHECKLIST FOR GOVERNMENT PICK-UP PLAN RULING REQUESTS 93
APPENDIX E—ADDITIONAL CHECKLIST FOR CHURCH PLAN RULING REQUESTS 94
APPENDIX F—LIST OF SMALL BUSINESS/SELF-EMPLOYED OPERATING DIVISION (SB/SE) OFFICES TO WHICH TO SEND REQUESTS FOR DETERMINATION LETTERS 95
APPENDIX G—CHECKLISTS, GUIDELINE REVENUE PROCEDURES, NOTICES, SAFE HARBOR REVENUE PROCEDURES, AND AUTOMATIC CHANGE REVENUE PROCEDURES 96
.01 Checklists, guideline revenue procedures, and notices 96
.02 Safe harbor revenue procedures 101
.03 Automatic change in accounting period revenue procedures 105

SECTION 1. WHAT IS THE PURPOSE OF THIS REVENUE PROCEDURE?

This revenue procedure explains how the Service provides advice to taxpayers on issues under the jurisdiction of the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (International), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Procedure and Administration), and the Associate Chief Counsel (Tax Exempt and Government Entities). It explains the forms of advice and the manner in which advice is requested by taxpayers and provided by the Service. A sample format for a letter ruling request is provided in Appendix B. See section 4 of this revenue procedure for information on certain issues outside the scope of this revenue procedure on which advice may be requested under a different revenue procedure.

Description of terms used in this revenue procedure

.01 For purposes of this revenue procedure—

(1) the term “Service” includes the four operating divisions of the Internal Revenue Service and the Associate offices. The four operating divisions are:

(a) Large Business & International Division (LB&I), which generally serves corporations, including S corporations, and partnerships, with assets in excess of $10 million;

(b) Small Business/Self-Employed Division (SB/SE), which generally serves corporations, including S corporations, and partnerships, with assets less than or equal to $10 million; filers of gift, estate, excise, employment and fiduciary returns; individuals filing an individual Federal income tax return with accompanying Schedule C (Profit or Loss From Business (Sole Proprietorship)), Schedule E (Supplemental Income and Loss), Schedule F (Profit or Loss From Farming), Form 2106, Employee Business Expenses, or Form 2106–EZ, Unreimbursed Employee Business Expenses;

(c) Wage and Investment Division (W&I), which generally serves individuals with wage and investment income only (and with no international tax returns) filing an individual Federal income tax return without accompanying Schedule C, E, or F, or Form 2106 or Form 2106–EZ; and

(d) Tax Exempt and Government Entities Division (TE/GE), which serves three distinct taxpayer segments: employee plans (including IRAs), exempt organizations, and government entities.

(2) the term “Associate office” refers to the Office of Associate Chief Counsel (Corporate), the Office of Associate Chief Counsel (Financial Institutions and Products), the Office of Associate Chief Counsel (Income Tax and Accounting), the Office of Associate Chief Counsel (International), the Office of Associate Chief Counsel (Passthroughs and Special Industries), the Office of Associate Chief Counsel (Procedure and Administration), or the Office of Associate Chief Counsel (Tax Exempt and Government Entities), as appropriate.

(3) the term “Director” refers to the Director, Field Operations, LB&I; Director, Field Examination, SB/SE; Director, Specialty Examination Policy, SB/SE; Program Manager, Estate & Gift Tax Policy, SB/SE; Program Manager, Employment Tax Policy, SB/SE; Program Manager, Excise Tax Policy, SB/SE; Director, Compliance, W&I; Director, Employee Plans; Director, Employee Plans, Rulings and Agreements; Director, Employee Plans Examinations; Director, Exempt Organizations; Director, Exempt Organizations, Rulings and Agreements; Director, Exempt Organizations Examinations; Director, Federal, State & Local Governments; Director, Tax Exempt Bonds; or Director, Indian Tribal Governments, as appropriate.

(4) the term “Field office” refers to the respective offices of the Directors, as appropriate.

(5) the term “taxpayer” includes all persons subject to any provision of the Internal Revenue Code and, when appropriate, their representatives. More specifically, the term includes tax-exempt organizations, as well as issuers of tax-exempt obligations, mortgage credit certificates, and tax credit bonds.

Updated annually

.02 This revenue procedure is updated annually as the first revenue procedure of the year, but it may be modified, amplified or clarified during the year.

SECTION 2. WHAT ARE THE FORMS IN WHICH THE SERVICE PROVIDES ADVICE TO TAXPAYERS?

The Service provides advice in the form of letter rulings, closing agreements, determination letters, information letters, and oral advice.

Letter ruling

.01 A “letter ruling” is a written determination issued to a taxpayer by an Associate office in response to the taxpayer’s written inquiry, filed prior to the filing of returns or reports that are required by the tax laws, about its status for tax purposes or the tax effects of its acts or transactions. A letter ruling interprets the tax laws and applies them to the taxpayer’s specific set of facts. A letter ruling is issued when appropriate in the interest of sound tax administration. One type of letter ruling is an Associate office’s response granting or denying a request for a change in a taxpayer’s method of accounting or accounting period. Once issued, a letter ruling may be revoked or modified for a number of reasons. See section 11 of this revenue procedure. A letter ruling may be issued with a closing agreement, however, and a closing agreement is final unless fraud, malfeasance, or misrepresentation of a material fact can be shown. See section 2.02 of this revenue procedure.

Letter rulings are subject to exchange of information under U.S. tax treaties or tax information exchange agreements in accordance with the terms of such treaties and agreements (including terms regarding relevancy, confidentiality, and the protection of trade secrets.)

Closing agreement

.02 A “closing agreement” is a final agreement between the Service and a taxpayer on a specific issue or liability. It is entered into under the authority in § 7121, and it is final unless fraud, malfeasance, or misrepresentation of a material fact can be shown.

A taxpayer may request a closing agreement with a letter ruling or in lieu of a letter ruling, with respect to a transaction that would be eligible for a letter ruling. In such situations, the Associate Chief Counsel with subject matter jurisdiction signs the closing agreement on behalf of the Service.

A closing agreement may be entered into when it is advantageous to have the matter permanently and conclusively closed or when a taxpayer can show that there are good reasons for an agreement and that making the agreement will not prejudice the interests of the Government. In appropriate cases, a taxpayer may be asked to enter into a closing agreement as a condition for the issuance of a letter ruling.

If, in a single case, a closing agreement is requested for each person or entity in a class of taxpayers, separate agreements are entered into only if the class consists of 25 or fewer taxpayers. If the issue and holding are identical for the class and there are more than 25 taxpayers in the class, a “mass closing agreement” will be entered into with the taxpayer who is authorized by the others to represent the class.

Determination letter

.03 A “determination letter” is a written determination issued by a Director that applies the principles and precedents previously announced by the Service to a specific set of facts. It is issued only when a determination can be made based on clearly established rules in a statute, a tax treaty, the regulations, a conclusion in a revenue ruling, or an opinion or court decision that represents the position of the Service.

Information letter

.04 An “information letter” is a statement issued by an Associate office or Director 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. An information letter may be issued if the taxpayer’s inquiry indicates a need for general information or if the taxpayer’s request does not meet the requirements of this revenue procedure and the Service concludes that general information will help the taxpayer. An information letter is advisory only and has no binding effect on the Service. If the Associate office issues an information letter in response to a request for a letter ruling that does not meet the requirements of this revenue procedure, the information letter is not a substitute for a letter ruling. The taxpayer should provide a daytime telephone number with the taxpayer’s request for an information letter.

Information letters that are issued by the Associate offices to members of the public are made available to the public. Information letters that are issued by the Field offices are generally not made available to the public.

Because information letters do not constitute written determinations as defined in § 6110, they are not subject to public inspection under § 6110. The Service makes the information letters available to the public under the Freedom of Information Act (the “FOIA”). Before any information letter is made available to the public, an Associate office will redact any information exempt from disclosure under the FOIA. See, e.g., 5 U.S.C. § 552(b)(6) (exemption for information the disclosure of which would constitute a clearly unwarranted invasion of personal privacy); 5 U.S.C. § 552(b)(3) in conjunction with § 6103 (exemption for returns and return information as defined in § 6103(b)).

The following documents also will not be available for public inspection as part of this process:

(1) transmittal letters in which the Service furnishes publications or other publicly available material to taxpayers, without any significant legal discussion;

(2) responses to taxpayer or third party contacts that are inquiries with respect to a pending request for a letter ruling, technical advice memorandum, or Chief Counsel Advice (which are subject to public inspection under § 6110 after their issuance); and

(3) responses to taxpayer or third party communications with respect to any investigation, audit, litigation, or other enforcement action.

Oral Advice

.05

(1) No oral rulings and no written rulings in response to oral requests. The Service does not orally issue letter rulings or determination letters, nor does it issue letter rulings or determination letters in response to oral requests from taxpayers. Service employees ordinarily will discuss with taxpayers or their representatives inquiries about whether the Service will rule on particular issues and about procedural matters regarding the submission of requests for letter rulings or determination letters for a particular case.

(2) Discussion possible on substantive issues. At the discretion of the Service and as time permits, Service employees may also discuss substantive issues with taxpayers or their representatives. Such a discussion will not bind the Service or the Office of Chief Counsel, and it cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

Service employees who are not directly involved in the examination, appeal, or litigation of particular substantive tax issues will not discuss those issues with taxpayers or their representatives unless the discussion is coordinated with Service employees who are directly involved. The taxpayer or the taxpayer’s representative ordinarily will be asked whether an oral request for advice or information relates to a matter pending before another office of the Service or before a Federal court.

If a tax issue is not under examination, in appeals, or in litigation, the tax issue may be discussed even though the issue is affected by a nontax issue pending in litigation.

A taxpayer may seek oral technical guidance from a taxpayer service representative in a Field office or Service Center when preparing a return or report.

The Service does not respond to letters seeking to confirm the substance of oral discussions, and the absence of a response to such a letter is not a confirmation.

(3) Oral guidance is advisory only, and the Service is not bound by it. Oral guidance is advisory only, and the Service is not bound by it, for example, when examining the taxpayer’s return.

SECTION 3. ON WHAT ISSUES MAY TAXPAYERS REQUEST WRITTEN ADVICE UNDER THIS REVENUE PROCEDURE?

Taxpayers may request letter rulings, information letters, and closing agreements under this revenue procedure on issues within the jurisdiction of the Associate offices. Taxpayers uncertain as to whether an Associate office has jurisdiction with regard to a specific factual situation may call the telephone number for the Associate office listed in section 10.07(1) of this revenue procedure.

Except as provided in section 6.14 of this revenue procedure, taxpayers also may request determination letters from the Director in the appropriate operating division. See sections 7 and 12 of this revenue procedure. For determination letters from TE/GE, see Rev. Proc. 2017–4 and Rev. Proc. 2017–5, this Bulletin.

Issues under the jurisdiction of the Associate Chief Counsel (Corporate)

.01 Issues under the jurisdiction of the Associate Chief Counsel (Corporate) include those that involve consolidated returns, corporate acquisitions, reorganizations, liquidations, redemptions, spinoffs, transfers to controlled corporations, distributions to shareholders, corporate bankruptcies, the effect of certain ownership changes on net operating loss carryovers and other tax attributes, debt vs. equity determinations, allocation of income and deductions among taxpayers, acquisitions made to evade or avoid income tax, and certain earnings and profits questions.

Issues under the jurisdiction of the Associate Chief Counsel (Financial Institutions and Products)

.02 Issues under the jurisdiction of the Associate Chief Counsel (Financial Institutions and Products) include those that involve income taxes and changes in method of accounting of banks, savings and loan associations, real estate investment trusts (REITs), regulated investment companies (RICs), real estate mortgage investment conduits (REMICs), insurance companies and products, tax-exempt obligations, mortgage credit certificates, tax credit bonds (including specified tax credit bonds), build America bonds, and financial products.

For the procedures to obtain private letter rulings involving tax-exempt state and local obligations, see Rev. Proc. 96–16, 1996–1 C.B. 630.

Issues under the jurisdiction of the Associate Chief Counsel (Income Tax and Accounting)

.03 Issues under the jurisdiction of the Associate Chief Counsel (Income Tax and Accounting) include those that involve recognition and timing of income and deductions of individuals and corporations, sales and exchanges, capital gains and losses, installment sales, equipment leasing, long-term contracts, inventories, amortization, depreciation, the alternative minimum tax, net operating losses generally, including changes in method of accounting for these issues, and accounting periods. (Note that certain issues involving individual retirement accounts (IRAs) are under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. See section 4.02, this revenue procedure).

Issues under the jurisdiction of the Associate Chief Counsel (International)

.04 Issues under the jurisdiction of the Associate Chief Counsel (International) include the tax treatment of nonresident aliens and foreign corporations, withholding of tax on nonresident aliens and foreign corporations, foreign tax credit, determination of sources of income, income from sources outside the United States, subpart F questions, domestic international sales corporations (DISCs), foreign sales corporations (FSCs), exclusions under § 114 for extraterritorial income (ETI), international boycott determinations, treatment of certain passive foreign investment companies, income affected by treaty, U.S. possessions, and other matters relating to the activities of non-U.S. persons within the United States or U.S.-related persons outside the United States, and changes in method of accounting for these persons.

For the procedures to obtain advance pricing agreements under § 482, see Rev. Proc. 2015–41, 2015–35 I.R.B. 263.

For competent authority procedures related to bilateral and multilateral advance pricing agreements, see Rev. Proc. 2015–40, 2015–35 I.R.B. 236.

Issues under the jurisdiction of the Associate Chief Counsel (Passthroughs and Special Industries)

.05 Issues under the jurisdiction of the Associate Chief Counsel (Passthroughs and Special Industries) include those that involve income taxes of S corporations (except accounting periods and methods) and certain noncorporate taxpayers (including partnerships, common trust funds, and trusts), entity classification, estate (excluding § 6166), gift, generation-skipping transfer, and certain excise taxes, depletion, and other engineering issues, cooperative housing corporations, farmers’ cooperatives under § 521, the low-income housing, disabled access, and qualified electric vehicle credits, research and experimental expenditures, shipowners’ protection and indemnity associations under § 526, and certain homeowners associations under § 528.

Issues under the jurisdiction of the Associate Chief Counsel (Procedure and Administration)

.06 Issues under the jurisdiction of the Associate Chief Counsel (Procedure and Administration) include those that involve Federal tax procedure and administration, disclosure and privacy law, reporting and paying taxes (including payment of taxes under § 6166), assessing and collecting taxes (including interest and penalties), abating, crediting, or refunding overassessments or overpayments of tax, and filing information returns.

Issues under the jurisdiction of the Associate Chief Counsel (Tax Exempt and Government Entities)

.07 Issues under the jurisdiction of the Associate Chief Counsel (Tax Exempt and Government Entities) include those that involve the application of employment taxes and taxes on self-employment income, exemption requirements for tax-exempt organizations, tax treatment (including application of the unrelated business income tax) of tax-exempt organizations (including federal, state, local, and Indian tribal governments), political organizations described in § 527, qualified tuition programs described in § 529, qualified ABLE programs described in § 529A, trusts described in § 4947(a), certain excise taxes, disclosure obligations and information return requirements of tax-exempt organizations, employee benefit programs (including executive compensation arrangements, qualified retirement plans, deferred compensation plans, and health and welfare benefit programs) and IRAs, issues integrally related to employee benefit programs and IRAs (such as, for example, the sale of stock to employee stock ownership plans or eligible worker-owned cooperatives under § 1042), and changes in method of accounting associated with employee benefit programs.

Note that certain issues involving exempt organizations, employee plans, and government entities fall under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division of the Internal Revenue Service. See Rev. Proc. 2017–4 and Rev. Proc. 2017–5 this Bulletin.

SECTION 4. ON WHAT ISSUES MUST WRITTEN ADVICE BE REQUESTED UNDER DIFFERENT PROCEDURES?

Issues involving alcohol, tobacco, and firearms taxes

.01 The procedures for obtaining letter rulings, closing agreements, determination letters, information letters, and oral advice that apply to Federal alcohol, tobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction of the Alcohol and Tobacco Tax and Trade Bureau of the Department of the Treasury.

Certain issues involving qualified retirement plans, individual retirement accounts (IRAs), and exempt organizations

.02 The procedures for obtaining certain letter rulings, closing agreements, determination letters, information letters, and oral advice on qualified retirement plans and IRAs that are under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division are provided in Rev. Proc. 2017–4, this Bulletin. Rev. Proc. 2017–4, this Bulletin, also includes the procedures for issuing determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under §§ 401, 403(a), 409, and 4975(e)(7), and the status for exemption of any related trusts or custodial accounts under § 501(a). See also Rev. Proc. 2017–5, this Bulletin, for the procedures for issuing determination letters on the tax-exempt status of organizations under § 501 and § 521, the foundation status of organizations described in § 501(c)(3) and the foundation status of nonexempt charitable trusts described in § 4947(a)(1).

For the user fee requirements applicable to requests under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, see Section 30 of Rev. Proc. 2017–4, and Section 14 of Rev. Proc. 2017–5 this Bulletin.

SECTION 5. UNDER WHAT CIRCUMSTANCES DO THE ASSOCIATE OFFICES ISSUE LETTER RULINGS?

In income and gift tax matters

.01 In income and gift tax matters, an Associate office generally issues a letter ruling on a proposed transaction or on a completed transaction if the letter ruling request is submitted before the return is filed for the year in which the transaction is completed. An Associate office will not ordinarily issue a letter ruling on a completed transaction if the letter ruling request is submitted after the return is filed for the year in which the transaction is completed. “Not ordinarily” means that unique and compelling reasons must be demonstrated to justify the issuance of a letter ruling submitted after the return is filed for the year in which the transaction is completed. The taxpayer must contact the Field office having audit jurisdiction over their return and obtain the Field’s consent to the issuance of such a letter ruling.

Special relief for late S corporation and related elections in lieu of letter ruling process

.02 In lieu of requesting a letter ruling under this revenue procedure, a taxpayer may obtain relief for certain late S corporation and related elections by following the procedure in Rev. Proc. 2013–30, 2013–36 I.R.B. 173. This procedure is in lieu of the letter ruling process and does not require payment of any user fee. See section 3.01 of Rev. Proc. 2013–30, and section 15.03(3) of this revenue procedure.

A § 301.9100 request for extension of time for making an election or for other relief

.03 An Associate office will consider a request for an extension of time for making an election or other application for relief under § 301.9100–3 of the Treasury Regulations, even if submitted after the return covering the issue presented in the § 301.9100 request has been filed, an examination of the return has begun, or the issues in the return are being considered by Appeals or a Federal court. Except for certain requests pertaining to applications for recognition of tax exemption under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, a § 301.9100 request is a letter ruling request. Therefore, the § 301.9100 request should be submitted pursuant to this revenue procedure. However, a § 301.9100 request involving recharacterization of an IRA (see § 1.408A–5, Q&A–6) should be submitted pursuant to Rev. Proc. 2017–4. An election made pursuant to § 301.9100–2 for an automatic extension of time is not a letter ruling request and does not require payment of any user fee. See § 301.9100–2(d) and section 15.03(1) of this revenue procedure.

(1) Format of request. A § 301.9100 request (other than an election made pursuant to § 301.9100–2 and certain requests pertaining to applications for recognition of tax exemption under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division) must be in the general form of, and meet the general requirements for, a letter ruling request. These requirements are given in section 7 of this revenue procedure. A § 301.9100 request must include an affidavit and declaration from the taxpayer and other parties having knowledge or information about the events that led to the failure to make a valid regulatory election and to the discovery of the failure. See §§ 301.9100–3(e)(2) and (e)(3). In addition, a § 301.9100 request must include the information required by § 301.9100–3(e)(4).

(2) Period of limitation. The filing of a request for relief under § 301.9100 does not suspend the running of any applicable period of limitation. See § 301.9100–3(d)(2). The Associate office ordinarily will not issue a § 301.9100 ruling if the period of limitation on assessment under § 6501(a) for the taxable year in which an election should have been made, or for any taxable years that would have been affected by the election had it been timely made, will expire before receipt of a § 301.9100 letter ruling. See § 301.9100–3(c)(1)(ii). If, however, the taxpayer consents to extend the period of limitation on assessment under § 6501(c)(4) for the taxable year in which the election should have been made and for any taxable years that would have been affected by the election had it been timely made, the Associate office may issue the letter ruling. See § 301.9100–3(d)(2). Note that the filing of a claim for refund under § 6511 does not extend the period of limitation on assessment. If § 301.9100–3 relief is granted, the Associate office may require the taxpayer to consent to an extension of the period of limitation on assessment. See § 301.9100–3(d)(2).

(3) Taxpayer must notify the Associate office if examination of its return begins while the request is pending. The taxpayer must notify the Associate office if the Service begins an examination of the taxpayer’s return for the taxable year in which an election should have been made, or for any taxable years that would have been affected by the election had it been timely made, while a § 301.9100–3 request is pending. This notification must include the name and telephone number of the examining agent. See § 301.9100–3(e)(4)(i) and section 7.05(1)(b) of this revenue procedure.

(4) Associate office will notify examination agent, appeals officer, or attorney of a § 301.9100 request if the taxpayer’s return is being examined by a Field office or is being considered by an Appeals office or a Federal court. If the taxpayer’s return for the taxable year in which an election should have been made, or for any taxable years that would have been affected by the election had it been timely made, is being examined by a Field office or considered by an Appeals office or a Federal court, the Associate office will notify the appropriate examination agent, appeals officer, or attorney that a § 301.9100 request has been submitted to the Associate office. The examination agent, appeals officer, or attorney is not authorized to deny consideration of a § 301.9100 request. The letter ruling will be mailed to the taxpayer and a copy will be sent to the appeals officer, attorney, or appropriate Service official in the operating division that has examination jurisdiction over the taxpayer’s tax return.

(5) Inclusion of statement required by section 4.04 of Rev. Proc. 2009–41. Eligible entities requesting a letter ruling because they do not meet all of the eligibility requirements of section 4.01 of Rev. Proc. 2009–41, 2009–39 I.R.B. 439, must include either the following representation as part of the entity’s request for a letter ruling or an explanation regarding why they do not qualify to do so: “All required U.S. tax and information returns of the entity (or, if the entity was not required to file any such returns under the desired classification, then all required U.S. tax and information returns of each affected person as defined in Section 4.02 of Rev. Proc. 2009–41) were filed timely or within 6 months of the due date of the respective return (excluding extensions) as if the entity classification election had been in effect on the requested date. No U.S. tax or information returns were filed inconsistently with those described in the prior sentence.”

(6) Relief for late initial classification election. In lieu of requesting a letter ruling under § 301.9100–1 through § 301.9100–3 and this revenue procedure, entities that satisfy the requirements set forth in section 4.01 of Rev. Proc. 2009–41, 2009–39 I.R.B. 439, may apply for late classification election relief under Rev. Proc. 2009–41. Requests for such relief are not subject to user fees. See section 3.01 of Rev. Proc. 2009–41 and section 15.03(2) of this revenue procedure.

Determinations under § 999(d)

.04 As provided in Rev. Proc. 77–9, 1977–1 C.B. 542, the Associate Chief Counsel (International) issues determinations under § 999(d) that a particular operation of a person, or of a member of a controlled group (within the meaning of § 993(a)(3)) that includes that person, or a foreign corporation of which a member of the controlled group is a U.S. shareholder, constitutes participation in or cooperation with an international boycott. The effect of that determination is to deny certain benefits of the foreign tax credit and the deferral of earnings of foreign subsidiaries and domestic international sales corporations (DISCs) to that person. The same principles shall apply with respect to exclusions under § 114 for exterritorial income (ETI). Requests for determinations under Rev. Proc. 77–9 are letter ruling requests and should be submitted to the Associate office pursuant to this revenue procedure.

In matters involving § 367

.05 Unless the issue is covered by section 6 of this revenue procedure, the Associate Chief Counsel (International) may issue a letter ruling under § 367 even if the taxpayer does not request a letter ruling as to the characterization of the transaction under the reorganization provisions of the Code. The Associate office will determine the § 367 consequences of a transaction but may indicate in the letter ruling that it expresses no opinion as to the characterization of the transaction under the reorganization. The Associate office may decline to issue a § 367 ruling in situations in which the taxpayer inappropriately characterizes the transaction under the reorganization provisions.

In estate tax matters

.06 In general, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on transactions affecting the estate tax on the prospective estate of a living person. The Associate office will not issue letter rulings for prospective estates on computations of tax, actuarial factors, or factual matters. With respect to the transactions affecting the estate tax of the decedent’s estate, generally the Associate office issues letter rulings before the decedent’s estate tax return is filed.

If the taxpayer is requesting a letter ruling regarding a decedent’s estate tax and the estate tax return is due to be filed before the letter ruling is expected to be issued, the taxpayer should obtain an extension of time for filing the return and should notify the Associate office branch considering the letter ruling request that an extension has been obtained.

If the return is filed before the letter ruling is received from the Associate office, the taxpayer must disclose on the return that a letter ruling has been requested, attach a copy of the pending letter ruling request to the return, and notify the Associate office that the return has been filed. See section 7.05(2) of this revenue procedure. The Associate office will make every effort to issue the letter ruling within 3 months of the date the return was filed.

If the taxpayer requests a letter ruling after the return is filed, but before the return is examined, the taxpayer must notify the Field office having jurisdiction over the return that a letter ruling has been requested, attach a copy of the pending letter ruling request, and notify the Associate office that a return has been filed. See section 7.05(2) of this revenue procedure. The Associate office will make every effort to issue the letter ruling within 3 months of the date the return has been filed.

If the letter ruling cannot be issued within that 3-month period, the Associate office will notify the Field office having jurisdiction over the return, which may, by memorandum to the Associate office, grant an additional period for the issuance of the letter ruling.

In matters involving additional estate tax under § 2032A(c)

.07 In matters involving additional estate tax under § 2032A(c), the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on proposed transactions and on completed transactions that occurred before the return is filed.

In matters involving qualified domestic trusts under § 2056A

.08 In matters involving qualified domestic trusts under § 2056A, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on proposed transactions and on completed transactions that occurred before the return is filed.

In generation-skipping transfer tax matters

.09 In general, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on proposed transactions that affect the generation-skipping transfer tax and on completed transactions that occurred before the return is filed. In the case of a generation-skipping trust or trust equivalent, letter rulings are issued either before or after the trust or trust equivalent has been established.

In employment and excise tax matters

.10 In employment and excise tax matters, the Associate offices issue letter rulings on proposed transactions and on completed transactions either before or after the return is filed for those transactions.

Letter ruling requests regarding employment status (employer/employee relationship) from Federal agencies and instrumentalities or their workers must be submitted to the Internal Revenue Service at the address set forth on the current Form SS–8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. If the Federal agency or instrumentality service recipient (the firm) makes the request, the firm will receive any issued letter ruling. A copy will also be sent to any identified workers. If the worker makes the request and the firm has been contacted for information, both the worker and the firm will receive any issued letter ruling. The letter ruling will apply to any individuals engaged by the firm under substantially similar circumstances. See section 12.04 of this revenue procedure for requests regarding employment status made by taxpayers other than Federal agencies and instrumentalities or their workers.

In procedural and administrative matters

.11 The Associate Chief Counsel (Procedure and Administration) issues letter rulings on matters arising under the Code and related statutes and regulations that involve the time, place, manner, and procedures for reporting and paying taxes; or the filing of information returns.

In Indian tribal government matters

.12 Pursuant to Rev. Proc. 84–37, 1984–1 C.B. 513, as modified by Rev. Proc. 86–17, 1986–1 C.B. 550, and this revenue procedure, the Office of Associate Chief Counsel (Tax Exempt and Government Entities) issues determinations recognizing a tribal entity as an Indian tribal government within the meaning of § 7701(a)(40) or as a political subdivision of an Indian tribal government under § 7871(d) if it determines, after consultation with the Secretary of the Interior, that the entity satisfies the statutory definition of an Indian tribal government or has been delegated governmental functions of an Indian tribal government. Requests for determinations under Rev. Proc. 84–37 are letter ruling requests, and, therefore, should be submitted to the Office of Associate Chief Counsel (Tax Exempt and Government Entities) pursuant to this revenue procedure.

(1) Definition of Indian tribal government. The term “Indian tribal government” is defined under § 7701(a)(40) to mean the governing body of any tribe, band, community, village, or group of Indians, or (if applicable) Alaska Natives, which is determined by the Secretary of the Treasury, after consultation with the Secretary of the Interior, to exercise governmental functions. Section 7871(d) provides that, for purposes of § 7871(a), a subdivision of an Indian tribal government shall be treated as a political subdivision of a state if the Secretary of the Treasury determines, after consultation with the Secretary of the Interior, that the subdivision has been delegated the right to exercise one or more of the substantial governmental functions of the Indian tribal government.

(2) Inclusion in list of tribal governments. Rev. Proc. 2008–55, 2008–2 C.B. 768, designates the Indian tribal entities that appear on the current or future lists of federally recognized Indian tribes published annually by the Department of the Interior, Bureau of Indian Affairs, as Indian tribal governments that are treated similarly to states for certain Federal tax purposes. Rev. Proc. 84–36, 1984–1 C.B. 510, as modified by Rev. Proc. 86–17, 1986–1 C.B. 550, provides a list of political subdivisions of Indian tribal governments that are treated as political subdivisions of states for certain Federal tax purposes. Under Rev. Proc. 84–37, as modified by Rev. Proc. 86–17, tribal governments or subdivisions recognized under § 7701(a)(40) or § 7871(d) will be included in the list of recognized tribal government entities in future lists of federally recognized Indian tribes published annually by the Department of the Interior, Bureau of Indian Affairs, or revised versions of Rev. Proc. 84–36.

On constructive sales price under § 4216(b) or § 4218(c)

.13 The Associate Chief Counsel (Passthroughs and Special Industries) will issue letter rulings in all cases on the determination of a constructive sales price under § 4216(b) or § 4218(c) and in all other cases on prospective transactions if the law or regulations require a determination of the effect of a proposed transaction for Federal tax purposes. See section 6.14(5) of this revenue procedure.

In exempt organizations matters

.14 In exempt organizations matters, the Associate Chief Counsel (Tax Exempt and Government Entities) generally issues letter rulings on proposed transactions or on completed transactions if the letter ruling request is submitted before the return is filed for the year in which the transaction is completed. The Associate Chief Counsel (Tax Exempt and Government Entities) will not ordinarily issue a letter ruling on a completed transaction if the letter ruling request is submitted after the return is filed for the year in which the transaction is completed. “Not ordinarily” means that unique and compelling reasons must be demonstrated to justify the issuance of a letter ruling submitted after the return is filed for the year in which the transaction is completed. The taxpayer must contact the Field office having audit jurisdiction over their return and obtain the Field’s consent to the issuance of such a letter ruling.

See Rev. Proc. 2017–5, this Bulletin, for the procedures for issuing determination letters on issues under the jurisdiction of the Director Exempt Organizations Rulings and Agreements, including determination letters on the tax-exempt status of organizations under § 501 and § 521, the foundation status of organizations described in § 501(c)(3), and the foundation status of nonexempt charitable trusts described in § 4947(a)(1).

In qualified retirement plan and IRA matters

.15 In qualified retirement plan and IRA matters, (other than those listed in Rev. Proc. 2017–4), the Associate Chief Counsel (Tax Exempt and Government Entities) will generally issue letter rulings on proposed transactions and on completed transactions either before or after the return is filed, including those involving:

(1) §§ 72 (other than the computation of the exclusion ratio), 219, 381(c)(11), 402, 403(b) (except with respect to whether the form of a plan satisfies the requirements of § 403(b) as provided in Rev. Proc. 2017–4, this Bulletin), 404, 408, 408A, 412, 414(e), 511 through 514, 4971(b) and (g), 4972, 4973, 4974, 4978, 4979, and 4980;

(2) Waiver of the minimum funding standard (see Rev. Proc. 2004–15, 2004–1 C.B. 490, section 3.03 of which is superseded by 2017–4);

(3) Waiver under § 4980F(c)(4) of all or part of the excise tax imposed for failure to satisfy the notice requirements described in § 4980F(e);

(4) Whether a plan amendment is reasonable and provides for only de minimis increases in plan liabilities in accordance with §§ 401(a)(33) and 412(c)(7)(B)(i) of the Code (see Rev. Proc. 79–62, 1979–2 C.B. 576);

(5) With respect to employee stock ownership plans and tax credit employee stock ownership plans, §§ 409, 1042, 4975(d)(3) and 4975(e)(7). Qualification issues arising under these sections are generally within the jurisdiction of Employee Plans Determinations. However, see Rev. Proc. 2017–3, section 4.02(12);

(6) Abatement of first tier excise taxes under § 4962;

(7) Relief under § 301.9100–1 that is not related to Roth IRA recharacterizations; and

(8) Grants of extensions of time other than pursuant to § 301.9100–1.

A request to revoke an election

.16 If a taxpayer is required to file a letter ruling request to obtain consent to revoke an election made on a return, an Associate office will consider the request, even if an examination of the return has begun or the issues in the return are being considered by Appeals or a Federal court. The procedures in this revenue procedure applicable to a § 301.9100 request apply to a letter ruling request to revoke the election.

Under some circumstances before the issuance of a regulation or other published guidance

.17 In general, the Service will not issue a letter ruling or determination letter on an issue that it cannot readily resolve before the promulgation of a regulation or other published guidance. See section 6.09 of this revenue procedure.

However, an Associate office may issue letter rulings under the following conditions:

(1) Answer is clear or is reasonably certain. If the letter ruling request presents an issue for which the answer seems clear by applying the statute, regulations, and applicable case law to the facts or for which the answer seems reasonably certain but not entirely free from doubt.

(2) Answer is not reasonably certain. If the letter ruling request presents an issue for which the answer does not seem reasonably certain, the Associate office may issue the letter ruling, using its best efforts to arrive at a determination, if it is in the best interest of tax administration.

SECTION 6. UNDER WHAT CIRCUMSTANCES DOES THE SERVICE NOT ISSUE LETTER RULINGS OR DETERMINATION LETTERS?

Ordinarily not if the request involves an issue under examination or consideration or in litigation

.01 The Service ordinarily does not issue a letter ruling or a determination letter if, at the time of the request, the identical issue is involved in the taxpayer’s return for an earlier period and that issue—

(1) is being examined by a Field office;

(2) is being considered by Appeals;

(3) is pending in litigation in a case involving the taxpayer or a related taxpayer;

(4) has been examined by a Field office or considered by Appeals and the statutory period of limitations on assessment or on filing a claim for refund or credit of tax has not expired; or

(5) has been examined by a Field office or considered by Appeals and a closing agreement covering the issue or liability has not been entered into by a Field office or by Appeals.

If a return dealing with an issue for a particular year is filed while a request for a letter ruling on that issue is pending, an Associate office will issue the letter ruling unless it is notified by the taxpayer or otherwise learns that an examination of that issue or the identical issue on an earlier year’s return has been started by a Field office. See section 7.05 of this revenue procedure. In income and gift tax matters, as well as in qualified retirement plan, IRA, and exempt organizations matters, even if an examination has begun, an Associate office ordinarily will issue the letter ruling if the Field office agrees by memorandum to the issuance of the letter ruling.

Ordinarily not in certain areas because of factual nature of the problem or for other reasons

.02 The Service ordinarily does not issue letter rulings or determination letters in certain areas because of the factual nature of the matter involved or for other reasons. Rev. Proc. 2017–3, this Bulletin, and Rev. Proc. 2017–7, this Bulletin, provide a list of these areas. This list is not all-inclusive because the Service may decline to issue a letter ruling or a determination letter when appropriate in the interest of sound tax administration, including due to resource constraints, or on other grounds whenever warranted by the facts or circumstances of a particular case.

Instead of issuing a letter ruling or determination letter, the Service may, when it is considered appropriate and in the interest of sound tax administration, issue an information letter calling attention to well-established principles of tax law.

If the Service determines that it is not in the interest of sound tax administration to issue a letter ruling or determination letter due to resource constraints, it will adopt a consistent approach with respect to taxpayers that request a ruling on the same issue. The Service will also consider adding the issue to the no rule list at the first opportunity. See sections 2.01 and 3.02 of Rev. Proc. 2017–3, this Bulletin.

Ordinarily not on part of an integrated transaction

.03 An Associate office ordinarily will not issue a letter ruling on only part of an integrated transaction. If a part of a transaction falls under a no-rule area, a letter ruling on other parts of the transaction may be issued. Before preparing the letter ruling request, a taxpayer should call a branch having jurisdiction for the matters on which the taxpayer is seeking a letter ruling to discuss whether the Associate office will issue a letter ruling on part of the transaction.

In addition, the Service will not rule on the qualification of any transaction under § 332, § 351, § 355, or § 1036, or on whether a transaction constitutes a reorganization within the meaning of § 368, regardless of whether such transaction is part of an integrated transaction (see section 3.01(51) of Rev. Proc. 2017–3, this Bulletin). Instead, the Associate Chief Counsel (Corporate) will only issue a letter ruling on significant issues (within the meaning of section 3.01(51) of Rev. Proc. 2017–3) presented in a transaction described in § 332, § 351, § 355, § 368, or § 1036. For example, the Service may rule on significant issues under § 1.368–1(d) (continuity of business enterprise) and § 1.368–1(e) (continuity of interest). Letter rulings requested under this section 6.03 are subject to the no-rule policies of Rev. Proc. 2017–3. In addition, the Service will not rule on the tax consequences that result from the application of § 332, § 351, § 355, § 368, or § 1036 (including nonrecognition and basis) except to the extent of a significant issue and only to the extent consistent with the no-rule policies of Rev. Proc. 2017–3.

Before preparing a letter ruling request under this section involving significant issues presented in a transaction described in § 332, § 351, § 355, § 368, or § 1036, a taxpayer is encouraged to call the Office of Associate Chief Counsel (Corporate) at the telephone number provided in section 10.07(1)(a) of this revenue procedure to discuss whether the Service will entertain a letter ruling request under this section 6.03. The Service reserves the right to rule on any other aspect of the transaction (including ruling adversely) to the extent the Service believes it is in the best interests of tax administration. Cf. section 2.01 of Rev. Proc. 2017–3.

Taxpayers may request rulings on one or more significant issues in a single letter ruling request. Letter ruling requests under this section 6.03 must include the following for each significant issue:

(1) A narrative description of the transaction that puts the issue in context;

(2) A statement identifying the issue;

(3) An analysis of the relevant law, which should set forth the authorities most closely related to the issue and explain why these authorities do not resolve the issue, and an explanation concerning why the issue is significant within the meaning of section 3.01(51) of Rev. Proc. 2017–3;

(4) Information and representations relevant to the issue. Taxpayers should consult other published authorities (see, for example, Appendix G of this revenue procedure, which identifies certain checklist and guideline revenue procedures), including those modified by Rev. Proc. 2013–32, 2013–28 I.R.B. 55 (e.g., Rev. Proc. 96–30, 1996–1 C.B. 696), and other authorities (e.g., Rev. Rul. 73–234, 1973–1 C.B. 180 (applying § 355(b) to the activities performed by employees of a corporation engaged in a farming business)), to identify information or representations but only to the extent that they relate to the issue; and

(5) The precise ruling(s) requested.

If the Service issues a letter ruling on a significant issue under this revenue procedure, then the letter ruling will state that no opinion is expressed as to any issue or step not specifically addressed by the letter. In addition, letter rulings issued under this revenue procedure will contain the following (or similar) language:

This letter is issued pursuant to section 6.03 of Rev. Proc. 2017–1, 2017–1 I.R.B. 1, regarding one or more significant issues under § 332, § 351, § 355, § 368, or § 1036. The ruling[s] contained in this letter only address[es] one or more discrete legal issues involved in the transaction. This Office expresses no opinion as to the overall tax consequences of the transactions described in this letter or as to any issue not specifically addressed by the ruling[s] below.

Ordinarily not on which of two entities is a common law employer

.04 The Service ordinarily does not issue a letter ruling or a determination letter on which of two entities, under common law rules applicable in determining the employer-employee relationship, is the employer, when one entity is treating the worker as an employee.

Ordinarily not to business associations or groups

.05 The Service ordinarily does not issue letter rulings or determination letters to business, trade, or industrial associations or to similar groups concerning the application of the tax laws to members of the group. Groups and associations, however, may submit suggestions of generic issues that could be appropriately addressed in revenue rulings. See Rev. Proc. 89–14, 1989–1 C.B. 814, which states the objectives of, and standards for, the publication of revenue rulings and revenue procedures in the Internal Revenue Bulletin.

The Service may issue letter rulings or determination letters to groups or associations on their own tax status or liability if the request meets the requirements of this revenue procedure.

Ordinarily not where the request does not address the tax status, liability, or reporting obligations of the requester

.06 The Service ordinarily does not issue letter rulings or determination letters regarding the tax consequences of a transaction for taxpayers who are not directly involved in the request if the requested letter ruling or determination letter would not address the tax status, liability, or reporting obligations of the requester. For example, a taxpayer may not request a letter ruling relating to the tax consequences of a transaction to a customer or client, if the tax status, liability, or reporting obligations of the taxpayer would not be addressed in the ruling, because the customer or client is not directly involved in the letter ruling request. The tax liability of each shareholder is, however, directly involved in a letter ruling on the reorganization of a corporation. Accordingly, a corporate taxpayer could request a letter ruling that solely addressed the tax consequences to its shareholders of a proposed reorganization.

Rev. Proc. 96–16, 1996–1 C.B. 630, sets forth rules for letter ruling requests involving tax-exempt state and local government obligations.

Ordinarily not to foreign governments

.07 The Service ordinarily does not issue letter rulings or determination letters to foreign governments or their political subdivisions about the U.S. tax effects of their laws. The Associate offices also do not issue letter rulings on the effect of a tax treaty on the tax laws of a treaty country for purposes of determining the tax of the treaty country. See section 13.02 of Rev. Proc. 2015–40, 2015–35 I.R.B. 236. Treaty partners can continue to address matters such as these under the provisions of the applicable tax treaty. In addition, the Associate offices may issue letter rulings to foreign governments or their political subdivisions on their own tax status or liability under U.S. law if the request meets the requirements of this revenue procedure.

Ordinarily not on Federal tax consequences of proposed legislation

.08 The Associate offices ordinarily do not issue letter rulings on a matter involving the Federal tax consequences of any proposed Federal, state, local, municipal, or foreign legislation. The Office of Associate Chief Counsel (Tax Exempt and Government Entities) may issue letter rulings regarding the effect of proposed state, local, or municipal legislation upon an eligible deferred compensation plan under § 457(b) provided that the letter ruling request relating to the plan complies with the other requirements of this revenue procedure. The Associate offices also may provide general information in response to an inquiry.

Ordinarily not before issuance of a regulation or other published guidance

.09 Generally, the Service will not issue a letter ruling or a determination letter if the request presents an issue that cannot be readily resolved before a regulation or any other published guidance is issued. When the Service has closed a regulation project or any other published guidance project that might have answered the issue or decided not to open a regulation project or any other published guidance project, the Associate offices may consider all letter ruling requests unless the issue is covered by section 6 of this revenue procedure, Rev. Proc. 2017–3, this Bulletin, or Rev. Proc. 2017–7, this Bulletin.

Not on frivolous issues

.10 The Service will not issue a letter ruling or a determination letter on frivolous issues. A “frivolous issue” is one without basis in fact or law or one that asserts a position that courts have held frivolous or groundless. Examples of frivolous or groundless issues include, but are not limited to:

(1) frivolous “constitutional” claims, such as claims that the requirement to file tax returns and pay taxes constitutes an unreasonable search barred by the Fourth Amendment, violates Fifth and Fourteenth Amendment protections of due process, violates Thirteenth Amendment protections against involuntary servitude, or is unenforceable because the Sixteenth Amendment does not authorize nonapportioned direct taxes or was never ratified;

(2) claims that income taxes are voluntary, that the term “income” is not defined in the Internal Revenue Code, or that preparation and filing of Federal income tax returns violates the Paperwork Reduction Act;

(3) claims that tax may be imposed only on coins minted under a gold or silver standard or that receipt of Federal Reserve Notes does not cause an accretion to wealth;

(4) claims that a person’s income is not taxable because he or she falls within a class entitled to “reparation claims” or an extra-statutory class of individuals exempt from tax, e.g., “free-born” individuals;

(5) claims that a taxpayer can refuse to pay taxes on the basis of opposition to certain Governmental expenditures;

(6) claims that taxes apply only to Federal employees; only to residents of Puerto Rico, Guam, the U.S. Virgin Islands, the District of Columbia, or “Federal enclaves;” or that §§ 861 through 865 or any other provision of the Code imposes taxes on U.S. citizens and residents only on income derived from foreign based activities;

(7) claims that wages or personal service income are “not income,“ are ”nontaxable receipts,“ or are a “nontaxable exchange for labor;”

(8) claims that income tax withholding by an employer on wages is optional; or

(9) other claims that the courts have characterized as frivolous or groundless.

Additional examples of frivolous or groundless issues may be found in IRS publications and other guidance (including, but not limited to, Notice 2010–33, Frivolous Positions, and I.R.M. 4.10.12.1.1, Frivolous Arguments).

No “comfort” letter rulings

.11 A letter ruling will not be issued with respect to an issue that is clearly and adequately addressed by statute, regulations, decision of a court, revenue rulings, revenue procedures, notices, or other authority published in the Internal Revenue Bulletin (Comfort Ruling). However, except with respect to issues under § 332, § 351, § 355, § 368, or § 1036 and the tax consequences resulting from the application of such Code sections (see generally section 6.03), the Associate office may, in its discretion, decide to issue a Comfort Ruling if the Associate office is otherwise issuing a letter ruling to the taxpayer on another issue arising in the same transaction.

Not on alternative plans or hypothetical situations

.12 The Service will not issue a letter ruling or a determination letter on alternative plans of proposed transactions or on hypothetical situations.

Not on property conversion after return filed

.13 An Associate office will not issue a letter ruling on the replacement of involuntarily converted property, whether or not the property has been replaced, if the taxpayer has already filed a Federal tax return for the taxable year in which the property was converted. A Director may issue a determination letter in this case. See section 12.01 of this revenue procedure.

Circumstances under which determination letters are not issued by a Director .14 A Director will not issue a determination letter if—

(1) the taxpayer has directed a similar inquiry to an Associate office;

(2) the same issue, involving the same taxpayer or a related taxpayer, is pending in a case in litigation or before Appeals;

(3) the request involves an industry-wide problem;

(4) the specific employment tax question at issue in the request has been, or is being, considered by the Central Office of the Social Security Administration or the Railroad Retirement Board for the same taxpayer or a related taxpayer; or

(5) the request is for a determination of constructive sales price under § 4216(b) or § 4218(c), which deal with special provisions applicable to the manufacturers excise tax. The Associate Chief Counsel (Passthroughs and Special Industries) will, in certain circumstances, issue letter rulings in this area. See section 5.13 of this revenue procedure.

SECTION 7. WHAT ARE THE GENERAL INSTRUCTIONS FOR REQUESTING LETTER RULINGS AND DETERMINATION LETTERS?

This section provides the general instructions for requesting letter rulings and determination letters. See section 9 of this revenue procedure for the specific and additional procedures for requesting a change in method of accounting.

Requests for letter rulings, closing agreements, and determination letters require the payment of the applicable user fee listed in Appendix A of this revenue procedure. Certain changes in method of accounting under the automatic change request procedures (see section 9.01(1) of this revenue procedure) and certain changes in accounting periods made under automatic change request procedures do not require payment of a user fee (see Appendix G of this revenue procedure). For additional user fee requirements, see section 15 of this revenue procedure.

Specific and additional instructions also apply to requests for letter rulings and determination letters on certain matters. Those matters are listed in Appendix G of this revenue procedure with a reference (usually to another revenue procedure) where more information can be obtained.

Documents and information required in all requests

.01

Facts

(1) Complete statement of facts and other information. Each request for a letter ruling or a determination letter must contain a complete statement of all facts relating to the transaction. These facts include—

(a) names, addresses, telephone numbers, and taxpayer identification numbers of all interested parties (the term “all interested parties” does not mean all shareholders of a widely held corporation requesting a letter ruling relating to a reorganization or all employees where a large number may be involved);

(b) the annual accounting period, and the overall method of accounting (cash or accrual) for maintaining the accounting books and filing the Federal income tax return, of all interested parties;

(c) a description of the taxpayer’s business operations;

(d) a complete statement of the business reasons for the transaction;

(e) a detailed description of the transaction; and

(f) all other facts relating to the transaction or to the taxpayer’s requested tax treatment thereof.

Documents and foreign laws

(2) Copies of all contracts, wills, deeds, agreements, instruments, other documents pertinent to the transaction, and foreign laws.

(a) Documents. True copies of all contracts, wills, deeds, agreements, instruments, trust documents, proposed disclaimers, and other documents pertinent to the transaction must be submitted with the request.

If the request concerns a corporate distribution, reorganization, or similar transaction, the corporate balance sheet and profit and loss statement should also be submitted. If the request relates to a prospective transaction, the most recent balance sheet and profit and loss statement should be submitted.

If any document, including any balance sheet and profit and loss statement, is in a language other than English, the taxpayer must also submit a certified English translation of the document, along with a true copy of the document. For guidelines on the acceptability of such documents, see paragraph (c) of this section 7.01(2).

Each document other than the request should be labeled and attached to the request in alphabetical sequence. Original documents such as contracts, wills, etc., should not be submitted because they become part of the Service’s file and will not be returned.

(b) Foreign laws. The taxpayer must submit with the request a copy of the relevant parts of all foreign laws, including statutes, regulations, administrative pronouncements, and any other relevant legal authority. The documents submitted must be in the official language of the country involved and must be copied from an official publication of the foreign government or another widely available and generally accepted publication. If English is not the official language of the country involved, the taxpayer must also submit a copy of an English language version of the relevant parts of all foreign laws. This translation must be: (i) from an official publication of the foreign government or another widely available, generally accepted publication; or (ii) a certified English translation submitted in accordance with paragraph (c) of this section 7.01(2).

The taxpayer must identify the title and date of publication, including updates, of any widely available and generally accepted publication that the taxpayer (or the taxpayer’s qualified translator) uses as a source for the relevant parts of the foreign law.

(c) Standards for acceptability of submissions of documents in a language other than English and certified English translations of laws in a language other than English. The taxpayer must submit with the request an accurate and complete certified English translation of the relevant parts of all contracts, wills, deeds, agreements, instruments, trust documents, proposed disclaimers, and other documents pertinent to the transaction that are in a language other than English. If the taxpayer chooses to submit certified English translations of foreign laws, those translations must be based on an official publication of the foreign government or another widely available and generally accepted publication. In either case, the translation must be that of a qualified translator and must be attested to by the translator. The attestation must contain: (i) a statement that the translation submitted is a true and accurate translation of the foreign language document or law; (ii) a statement as to the attestant’s qualifications as a translator and as to that attestant’s qualifications and knowledge regarding tax matters or foreign law if the law is not a tax law; and (iii) the attestant’s name and address.

Analysis of material facts

(3) Analysis of material facts. The request must be accompanied by an analysis of facts and their bearing on the issue or issues. If documents attached to a request contain material facts, they must be included in the taxpayer’s analysis of facts in the request rather than merely incorporated by reference.

Same issue in an earlier return under Examination, before Appeals, before a Federal Court, or being Considered by the Pension Benefit Guaranty Corporation, by the Department of Labor, or by the Department of Health and Human Services

(4) Statement regarding whether same issue is in an earlier return and additional information required for § 301.9100 requests. The request must state whether, to the best of the knowledge of both the taxpayer and the taxpayer’s representatives, the same issue is addressed in any return of the taxpayer, a related taxpayer within the meaning of § 267, or of a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504, or any predecessor that-

(a) is currently under examination, before Appeals, or before a Federal court;

(b) was previously under examination, before Appeals, or before a Federal court;

(c) in qualified retirement plan matters, is being considered by the Pension Benefit Guaranty Corporation or the Department of Labor; or

(d) in health care matters, is being considered by the Department of Labor or the Department of Health and Human Services.

The Service will not ordinarily issue a letter ruling or determination letter if, at the time of the request, the identical issue is under examination or consideration or in litigation. See section 6.01 in this revenue procedure. A limited exception to the above rule is made for a § 301.9100 request. See section 5.03 in this revenue procedure.

If a § 301.9100 request involves a tax year that is currently under examination, before Appeals, or before a Federal court, the taxpayer must notify the Service, as outlined above. This notification must include the name and telephone number of the examining agent or appeals officer.

Same or similar issue in a request previously submitted or currently pending

(5) Statement regarding whether same or similar issue was previously ruled on or whether a request involving it was submitted or is currently pending. The request must state whether, to the best of the knowledge of both the taxpayer and the taxpayer’s representatives—

(a) the Service previously ruled on the same or a similar issue for the taxpayer, a related taxpayer within the meaning of § 267, or a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504, or a predecessor;

(b) the taxpayer, a related taxpayer, a predecessor, or any of their representatives previously submitted a request (including an application for change in method of accounting) involving the same or a similar issue but no letter ruling or determination letter was issued;

(c) the taxpayer, a related taxpayer, or a predecessor previously submitted a request (including an application for change in method of accounting) involving the same or a similar issue that is currently pending with the Service;

(d) at the same time as this request, the taxpayer or a related taxpayer is presently submitting another request (including an application for change in method of accounting) involving the same or a similar issue; or

(e) the taxpayer or a related taxpayer had, or has scheduled, a pre-submission conference involving the same or a similar issue.

If the statement is affirmative for (a), (b), (c), (d), or (e) of this section 7.01(5), the statement must give the date the request was submitted, the date the request was withdrawn or ruled on, if applicable, and other details of the Service’s consideration of the issue.

Interpretation of a substantive provision of an income or estate tax treaty

(6) Statement regarding interpretation of a substantive provision of an income or estate tax treaty. If the request involves the interpretation of a substantive provision of an income or estate tax treaty, the request must state whether—

(a) the tax authority of the treaty jurisdiction has issued a ruling on the same or similar issue for the taxpayer, a related taxpayer within the meaning of § 267, or a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504, or any predecessor;

(b) the same or similar issue for the taxpayer, a related taxpayer, or any predecessor is being examined or has been settled by the tax authority of the treaty jurisdiction or is otherwise the subject of a closing agreement in that jurisdiction; and

(c) the same or similar issue for the taxpayer, a related taxpayer, or any predecessor is being considered by the competent authority of the treaty jurisdiction.

Letter from Bureau of Indian Affairs relating to certain letter ruling requests

(7) Letter from Bureau of Indian Affairs relating to a letter ruling request for recognition of Indian tribal government status or status as a political subdivision of an Indian tribal government. To facilitate prompt action on a letter ruling request for recognition of Indian tribal government status or status as a political subdivision of an Indian tribal government, the taxpayer must submit with the letter ruling request a letter from the Department of the Interior, Bureau of Indian Affairs (“BIA”), verifying that the tribe is recognized by BIA as an Indian tribe and that the tribal government exercises governmental functions or that the political subdivision of the Indian tribal government has been delegated substantial governmental functions. A letter ruling request that does not contain this letter from BIA cannot be resolved until the Service obtains a letter from BIA regarding the tribe’s status.

The taxpayer should send a request to verify tribal status to the following address:

  • Branch of General Indian Legal Activity

  • Division of Indian Affairs

  • Office of the Solicitor

  • U.S. Department of the Interior

  • 1849 C Street, NW

  • Washington, DC 20240

Statement of authorities supporting taxpayer’s views

(8) Statement of supporting authorities. If the taxpayer advocates a particular conclusion, the taxpayer must include an explanation of the grounds for that conclusion and the relevant authorities to support it. Even if the taxpayer is not advocating a particular tax treatment of a proposed transaction, the taxpayer must furnish views on the tax results of the proposed transaction and a statement of relevant authorities to support those views.

In all events, the request must include a statement of whether the law in connection with the request is uncertain and whether the issue is adequately addressed by relevant authorities.

Statement of authorities contrary to taxpayer’s views

(9) Statement of contrary authorities. To avoid a delay in the ruling process, contrary authorities should be brought to the attention of the Service at the earliest possible opportunity. If there are significant contrary authorities, it is usually helpful to discuss them in a pre-submission conference prior to submitting the ruling request. See section 10.07 of this revenue procedure regarding pre-submission conferences. The taxpayer is strongly encouraged to inform the Service about, and discuss the implications of, any authority believed to be contrary to the position advanced, such as legislation, tax treaties, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements. If the taxpayer determines that there are no contrary authorities, a statement in the request to this effect should be included. If the taxpayer does not furnish either contrary authorities or a statement that none exist, the Service in complex cases or those presenting difficult or novel issues may request submission of contrary authorities or a statement that none exist. Failure to comply with this request may result in the Service’s refusal to issue a letter ruling or determination letter.

The taxpayer’s identification of and discussion of contrary authorities will generally enable Service personnel to more quickly understand the issue and relevant authorities. Having this information should make research more efficient and lead to earlier action by the Service. If the taxpayer does not disclose and distinguish significant contrary authorities, the Service may need to request additional information, which will delay action on the request.

Statement identifying pending legislation

(10) Statement identifying pending legislation. When filing the request, the taxpayer must identify any pending legislation that may affect the proposed transaction. In addition, the taxpayer must notify the Service if any such legislation is introduced after the request is filed but before a letter ruling or determination letter is issued.

Deletion statement required by § 6110

(11) Statement identifying information to be deleted from the public inspection copy of letter ruling or determination letter. The text of letter rulings and determination letters is open to public inspection under § 6110. The Service makes deletions from the text before it is made available for inspection. To help the Service make the deletions required by § 6110(c), a request for a letter ruling or determination letter must be accompanied by a statement indicating the deletions desired, except where a letter ruling or determination letter is open to public inspection under § 6104. If the deletion statement is not submitted with the request, a Service representative will tell the taxpayer that the request will be closed if the Service does not receive the deletion statement within 21 calendar days. See section 8.05 of this revenue procedure.

Section 6110(l)(1) provides that § 6110 disclosure provisions do not apply to any matter to which § 6104 applies. Therefore, letter rulings, determination letters, technical advice memoranda, and related background file documents dealing with the following matters (covered by § 6104) are not subject to § 6110 disclosure provisions—

(i) An approved application for exemption under § 501(a) as an organization described in § 501(c) or (d), or notice of status as a political organization under § 527, together with any papers submitted in support of such application or notice;

(ii) An application for exemption under § 501(a) with respect to the qualification of a pension, profit sharing or stock bonus plan, or an individual retirement account described in § 408 or § 408A, or any application for exemption under § 501(a) by an organization forming part of such a plan or account;

(iii) Any document issued by the Internal Revenue Service in which the qualification or exempt status of a plan or account is granted, denied, or revoked or the portion of any document in which technical advice with respect thereto is given;

(iv) Any application filed and any document issued by the Internal Revenue Service with respect to the qualification or status of master and prototype retirement plans; and

(v) The portion of any document issued by the Internal Revenue Service with respect to the qualification or exempt status of a retirement plan or account of a proposed transaction by such plan or account.

(a) Format of deletion statement. A taxpayer who wants only names, addresses, and identifying numbers to be deleted should state this in the deletion statement. If the taxpayer wants more information deleted, the deletion statement must be accompanied by a copy of the request and supporting documents on which the taxpayer should bracket the material to be deleted. The deletion statement must include the statutory basis under § 6110(c) for each proposed deletion.

If the taxpayer decides to ask for additional deletions before the letter ruling or determination letter is issued, additional deletion statements may be submitted.

(b) Location of deletion statement. The deletion statement must be made in a separate document from the request for a letter ruling or determination letter and must be placed on top of the request.

(c) Signature. The deletion statement must be signed and dated by the taxpayer or the taxpayer’s authorized representative. A stamped signature or faxed signature is not permitted.

(d) Additional information. The taxpayer should follow the same procedures of this section 7.01(11) to propose deletions from any additional information submitted after the initial request. An additional deletion statement is not required with each submission of additional information if the taxpayer’s initial deletion statement requests that only names, addresses, and identifying numbers are to be deleted and the taxpayer wants only the same information deleted from the additional information.

(e) Taxpayer may protest deletions not made. After receiving from the Service the notice under § 6110(f)(1) of intention to disclose the letter ruling or determination letter (including a copy of the version proposed to be open to public inspection and notation of third-party communications under § 6110(d)), the taxpayer may protest the disclosure of certain information in the letter ruling or determination letter. The taxpayer must send a written statement to the Service office indicated on the notice of intention to disclose, within 20 calendar days of the date the notice of intention to disclose is mailed to the taxpayer. The statement must identify those deletions that the Service has not made and that the taxpayer believes should have been made. The taxpayer must also submit a copy of the version of the letter ruling or determination letter and bracket the proposed deletions that have not been made by the Service. Generally, the Service will not consider deleting any material that the taxpayer did not propose to be deleted before the letter ruling or determination letter was issued.

Within 20 calendar days after the Service receives the response to the notice under § 6110(f)(1), the Service will mail to the taxpayer its final administrative conclusion regarding the deletions to be made. The taxpayer does not have the right to a conference to resolve any disagreements concerning material to be deleted from the text of the letter ruling or determination letter. These matters may, however, be taken up at any conference that is otherwise scheduled regarding the request.

(f) Taxpayer may request delay of public inspection. After receiving the notice of intention to disclose under § 6110(f)(1), but no later than 60 calendar days after the date of the notice, the taxpayer may send a written request for delay of public inspection under either § 6110(g)(3) or (4). The request for delay must be sent to the Service office indicated on the notice of intention to disclose. A request for delay under § 6110(g)(3) must contain the date on which it is expected that the underlying transaction will be completed. The request for delay under § 6110(g)(4) must contain a statement from which the Commissioner of Internal Revenue may determine whether there are good reasons for the continued delay.

Signature on request

(12) Signature by taxpayer or authorized representative. The request for a letter ruling or determination letter must be signed and dated by the taxpayer or the taxpayer’s authorized representative. A stamped signature or faxed signature is not permitted.

Authorized representatives

(13) Authorized representatives.

(a) To sign the request or to appear before the Service in connection with the request, the taxpayer’s authorized representative must be (for rules on who may practice before the Service, see Treasury Department Circular No. 230, 31 C.F.R. part 10):

(1) An attorney who is a member in good standing of the bar of the highest court of any state, possession, territory, commonwealth, or the District of Columbia and who is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration with the Service showing current qualification as an attorney and current authorization to represent the taxpayer;

(2) A certified public accountant who is duly qualified to practice in any state, possession, territory, commonwealth, or the District of Columbia and who is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration with the Service showing current qualification as a certified public accountant and current authorization to represent the taxpayer;

(3) An enrolled agent is a person who is currently enrolled as an agent to practice before the Service and who is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration with the Service showing current enrollment and authorization to represent the taxpayer. The enrollment number must be included in the declaration;

(4) An enrolled actuary is an individual currently enrolled as an actuary by the Joint Board for the Enrollment of Actuaries pursuant to 29 U.S.C. § 1242 and who is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration with the Service showing current qualification as an enrolled actuary and current authorization to represent the taxpayer. Practice before the Service as an enrolled actuary is limited to representation with respect to issues involving §§ 401, 403(a), 404, 412, 413, 414, 419, 419A, 420, 4971, 4972, 4976, 4980, 6057, 6058, 6059, 6652(e), 6652(f), 6692, and 7805(b); former § 405; and 29 U.S.C. § 1083;

(5) An enrolled retirement plan agent is an individual currently enrolled as a retirement plan agent who is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration as an enrolled retirement plan agent and current authorization to represent the taxpayer. Practice before the Service as an enrolled retirement plan agent is limited to representation with respect to issues involving the following programs: Employee Plans Determination Letter program; Employee Plans Compliance Resolution System; and Employee Plans Master and Prototype and Volume Submitter program. Enrolled retirement plan agents also are generally permitted to represent taxpayers with respect to IRS forms under the 5300 and 5500 series, which are filed by retirement plans and plans sponsors, but not with respect to actuarial forms and schedules; or

(6) Any other person, including a foreign representative, who has received a “Letter of Authorization” from the Director of the Office of Professional Responsibility under section 10.7(d) of Treasury Department Circular No. 230. A person may make a written request for a “Letter of Authorization” to: Office of Professional Responsibility, SE:OPR, Internal Revenue Service, 1111 Constitution Ave., NW, Washington, DC 20224. Section 10.7(d) of Circular No. 230 authorizes the Commissioner to allow an individual who is not otherwise eligible to practice before the Service to represent another person in a particular matter.

(b) A regular full-time employee representing his or her employer; a general partner representing his or her partnership; a bona fide officer representing his or her corporation, association, or organized group; a trustee, receiver, guardian, personal representative, administrator, executor, or regular full-time employee representing a trust, receivership, guardianship, or estate; or an individual representing an immediate family member may sign the request or appear before the Service in connection with the request if the individual provides current authorization to represent the taxpayer. See section 7.01(14) of this revenue procedure.

A taxpayer may be required to file a Form 8821, Tax Information Authorization, for certain employees not authorized to represent the taxpayer to receive taxpayer information from the Service.

(c) Tax return preparers, including registered tax return preparers, that are not described in subsections (a) and (b) of this section may not sign the request, appear before the Service, or represent a taxpayer in connection with a request for a letter ruling or a determination letter. See section 10.3(f)(3) of Treasury Department Circular No. 230.

(d) A foreign representative, other than a person referred to in subsections (a) and (b) of this section, is not authorized to practice before the Service within the United States and must withdraw from representing a taxpayer in a request for a letter ruling or a determination letter. In this situation, the nonresident alien or foreign entity must submit the request for a letter ruling or a determination letter on the individual’s or the entity’s own behalf or through a person referred to in subsections (a) and (b) of this section.

Power of attorney and declaration of representative

(14) Power of attorney and declaration of representative. Form 2848, Power of Attorney and Declaration of Representative, should be used to provide the representative’s authority (Part I of Form 2848, Power of Attorney) and the representative’s qualification (Part II of Form 2848, Declaration of Representative). The name of the person signing Part I of Form 2848 should also be typed or printed on this form. A stamped signature is not permitted. An original, a copy, or fax of the power of attorney is acceptable so long as its authenticity is not reasonably disputed. For additional information regarding the power of attorney form, see section 7.02(2) of this revenue procedure.

The taxpayer’s authorized representative, whether or not enrolled, must comply with Treasury Department Circular No. 230, which provides the rules for practice before the Service. In situations where the Service believes that the taxpayer’s representative is not in compliance with Circular 230, the Service will bring the matter to the attention of the Office of Professional Responsibility.

Penalties of perjury statement

(15) Penalties of perjury statement.

(a) Format of penalties of perjury statement. A request for a letter ruling or determination letter and any change in the request submitted at a later time must be accompanied by the following declaration: “Under penalties of perjury, I declare that I have examined [Insert, as appropriate: this request or this modification to the request], including accompanying documents, and, to the best of my knowledge and belief, [Insert, as appropriate: the request or the modification] contains all the relevant facts relating to the request, and such facts are true, correct, and complete.”

See section 8.05(4) of this revenue procedure for the penalties of perjury statement applicable for submissions of additional information.

(b) Signature by taxpayer. The declaration must be signed and dated by the taxpayer, not the taxpayer’s representative. A stamped signature or faxed signature is not permitted.

The person who signs for a corporate taxpayer must be an officer of the corporate taxpayer who has personal knowledge of the facts and whose duties are not limited to obtaining a letter ruling or determination letter from the Service. If the corporate taxpayer is a member of an affiliated group filing consolidated returns, a penalties of perjury statement must also be signed and submitted by an officer of the common parent of the group.

The person signing for a trust, a state law partnership, or a limited liability company must be, respectively, a trustee, general partner, or member-manager who has personal knowledge of the facts.

Number of copies of request to be submitted

(16) Number of copies of request to be submitted. Generally, a taxpayer needs to submit the original and one copy of the request for a letter ruling or determination letter. If more than one issue is presented in the letter ruling request, the taxpayer is encouraged to submit additional copies of the request.

Further, the original and two copies of the request for a letter ruling or determination letter are required if—

(a) the taxpayer is requesting separate letter rulings or determination letters on multiple issues as explained later under section 7.02(1) of this revenue procedure;

(b) the taxpayer is requesting deletions other than names, addresses, and identifying numbers, as explained in section 7.01(11)(a) of this revenue procedure (one copy is the request for the letter ruling or determination letter and the second copy is the deleted version of such request); or

(c) the taxpayer is requesting a closing agreement (as defined in section 2.02 of this revenue procedure) on the issue presented.

Sample format for a letter ruling request

(17) Sample format for a letter ruling request. To assist a taxpayer or the taxpayer’s representative in preparing a letter ruling request, a sample format for a letter ruling request is provided in Appendix B of this revenue procedure. This format is not required to be used.

Checklist

(18) Checklist for letter ruling requests. An Associate office will be able to respond more quickly to a taxpayer’s letter ruling request if the request is carefully prepared and complete. The checklist in Appendix C of this revenue procedure is designed to assist taxpayers in preparing a request by reminding them of the essential information and documents to be furnished with the request. The checklist in Appendix C must be completed to the extent required by the instructions in the checklist, signed and dated by the taxpayer or the taxpayer’s representative, and placed on top of the letter ruling request. If the checklist in Appendix C is not received, a branch representative will ask the taxpayer or the taxpayer’s representative to submit the checklist; this may delay action on the letter ruling request.

For letter ruling requests on certain matters, specific checklists supplement the checklist in Appendix C. These checklists are in Appendix D, Appendix E, or are listed in section 1 of Appendix G of this revenue procedure and must also be completed and placed on top of the letter ruling request along with the checklist in Appendix C.

Taxpayers can obtain copies of the checklist in Appendix C by calling (202) 317-5221 (not a toll-free call) or by accessing this revenue procedure in Internal Revenue Bulletin 2017–1 on the IRS website at www.irs.gov. Taxpayers can access this revenue procedure on the website by following the “News” link, the “IRS Guidance” link, and the “Internal Revenue Bulletins (after June 2003)” link to obtain Internal Revenue Bulletin 2017–1. A copy of this checklist may be used.

Additional procedural information required with request

.02 Multiple issues

(1) To request separate letter rulings for multiple issues in a single situation. If more than one issue is presented in a request for a letter ruling, the Associate office generally will issue a single letter ruling covering all the issues. If the taxpayer requests separate letter rulings on any of the issues (because, for example, one letter ruling is needed sooner than another), the Associate office usually will comply with the request unless doing so is not feasible or not in the best interest of the Service. A taxpayer who wants separate letter rulings on multiple issues should make this clear in the request and submit the original and two copies of the request. See section 15.06(3) regarding whether a single user fee will be charged.

In issuing each letter ruling, the Associate office will state that it has issued separate letter rulings or that requests for other letter rulings are pending.

Power of attorney used to indicate recipient of a copy or copies of a letter ruling or a determination letter

(2) Power of attorney used to indicate recipient or recipients of a copy or copies of a letter ruling or a determination letter. Once the Service signs the letter ruling or determination letter, it will send the original to the taxpayer. The Service will not send the original letter ruling or determination letter to the taxpayer’s representative.

At the taxpayer’s request, the Service will send one copy of the letter ruling or determination letter to up to two authorized representatives. At the discretion of the Service, the Service may provide a copy of the letter ruling or determination letter to up to two authorized representatives, even though the taxpayer did not request that the Service send a copy of notices and communications to the taxpayer’s representatives. Taxpayers that use Form 2848, Power of Attorney and Declaration of Representative, to designate representatives, may request that copies of notices and communications be sent to the representatives listed at Line 2 by checking the corresponding box on Line 2. Taxpayers may use Line 5 of Form 2848 to advise the Service that a copy of the letter ruling or determination letter should not be sent to the taxpayer’s representative(s). If no box is checked on Line 2 and the taxpayer does not indicate otherwise on Line 5, the Service may in its discretion provide a copy of the letter ruling or determination letter to up to two authorized representatives.

“Two-part” letter ruling requests

(3) To request a particular conclusion on a proposed transaction. A taxpayer who requests a particular conclusion on a proposed transaction may make the request for a letter ruling in two parts. This type of request is referred to as a “two-part” letter ruling request. The first part must include the complete statement of facts and related documents described in section 7.01 of this revenue procedure. The second part must include a summary statement of the facts the taxpayer believes to be controlling in reaching the conclusion requested.

If the Associate office accepts the taxpayer’s statement of controlling facts, it will base its letter ruling on these facts. Ordinarily, this statement will be incorporated into the letter ruling. The Associate office reserves the right to rule on the basis of a more complete statement of the facts and to seek more information in developing the facts and restating them.

A taxpayer who chooses this two-part procedure has all the rights and responsibilities provided in this revenue procedure.

Taxpayers may not use the two-part procedure if it is inconsistent with other procedures, such as those dealing with requests for permission to change accounting methods or periods, applications for recognition of exempt status under § 501(a) or § 521, or requests for rulings on employment tax status.

After the Associate office has resolved the issues presented by a letter ruling request, the Associate office representative may request that the taxpayer submit a proposed draft of the letter ruling to expedite the issuance of the ruling. See section 8.07 of this revenue procedure.

Expedited handling

(4) To request expedited handling. The Service ordinarily processes requests for letter rulings and determination letters in order of the date received. Expedited handling means that a request is processed ahead of requests received before it. Expedited handling is granted only in rare and unusual cases, both out of fairness to other taxpayers and because the Service seeks to process all requests as expeditiously as possible and to give appropriate deference to normal business exigencies in all cases not involving expedited handling.

A taxpayer with a compelling need to have a request processed ahead of requests received before it may request expedited handling. This request must explain in detail the need for expedited handling. The request for expedited handling must be made in writing, preferably in a separate letter included with the request for the letter ruling or determination letter or provided soon after its filing. If the request for expedited handling is contained in the letter requesting the letter ruling or determination letter, the letter should state at the top of the first page “Expedited Handling Is Requested. See page ___ of this letter.”

A request for expedited handling will not be forwarded to a branch for action until the user fee has been paid

Whether a request for expedited handling will be granted is within the Service’s discretion. The Service may grant the request when a factor outside a taxpayer’s control creates a real business need to obtain a letter ruling or determination letter before a certain date to avoid serious business consequences. Examples include situations in which a court or governmental agency has imposed a specific deadline for the completion of a transaction, or where a transaction must be completed expeditiously to avoid an imminent business emergency (such as the hostile takeover of a corporate taxpayer), provided that the taxpayer can demonstrate that the deadline or business emergency, and the need for expedited handling, resulted from circumstances that could not reasonably have been anticipated or controlled by the taxpayer. To qualify for expedited handling in such situations, the taxpayer must also demonstrate that the taxpayer submitted the request as promptly as possible after becoming aware of the deadline or emergency. The extent to which the letter ruling or determination letter request complies with all of the applicable requirements of this revenue procedure, and fully and clearly presents the issues, is a factor in determining whether expedited treatment will be granted. When the Service agrees to process a request out of order, it cannot give assurance that any letter ruling or determination letter will be processed by the date requested.

The scheduling of a closing date for a transaction or a meeting of the board of directors or shareholders of a corporation, without regard for the time it may take to obtain a letter ruling or determination letter, will not be considered a sufficient reason to process a request ahead of its regular order. Also, the possible effect of fluctuation in the market price of stocks on a transaction will not be considered a sufficient reason to process a request out of order.

Because most requests for letter rulings and determination letters cannot be processed out of order, the Service urges all taxpayers to submit their requests well in advance of the contemplated transaction. In addition, to facilitate prompt action on letter ruling requests, taxpayers are encouraged to ensure that their initial submissions comply with all of the requirements of this revenue procedure (including the requirements of other applicable guidelines set forth in Appendix G of this revenue procedure), to prepare “two-part” requests described in section 7.02(3) of this revenue procedure when possible, and to promptly provide any additional information requested by the Service.

Fax to taxpayer or taxpayer’s authorized representative of any document related to letter ruling request

(5) To request the receipt of any document related to letter ruling request by fax. If the taxpayer so requests, the Associate office may fax to the taxpayer or the taxpayer’s authorized representative a copy of any document related to the letter ruling request (for example, the letter ruling itself or a request for additional information).

A request to fax to the taxpayer or the taxpayer’s authorized representative a copy of any document related to the letter ruling request must be made in writing, preferably as part of the original request for the letter ruling. The request may be submitted at a later date, but such a request will only be respected prospectively with respect to documents generated after it is received, and must be received prior to the signing of the letter ruling. The request must contain the fax number of the taxpayer or the taxpayer’s authorized representative to whom the document is to be faxed.

A document other than the letter ruling will be faxed by a branch representative. The copy of the letter ruling may be faxed by either a branch representative or the Disclosure and Litigation Support Branch of the Legal Processing Division of the Office of Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DLS). For purposes of § 301.6110–2(h), however, a letter ruling is not issued until the ruling is mailed.

Requesting a conference

(6) To request a conference. A taxpayer who wants to have a conference on the issues involved in a request for a letter ruling should indicate this in writing when filing the request or soon thereafter. See sections 10.01, 10.02, and 11.11(2) of this revenue procedure.

Additional information required in letter ruling requests involving welfare benefit funds (including voluntary employees’ beneficiary associations (VEBAs))

.03

Requests for letter rulings on the tax consequences of a proposed transaction involving a welfare benefit fund

(1) Requests for letter rulings on the tax consequences of a proposed transaction involving a welfare benefit fund. If a letter ruling is sought on the tax consequences to both the welfare benefit fund and an employer that contributed to the fund, each taxpayer (the fund and each contributing employer) must submit a separate letter ruling request and pay the applicable user fee listed in Appendix A of this revenue procedure.

Code sections to consider

(2) Code sections to consider. In addition to any other applicable Code sections, taxpayers should consider whether there are tax consequences under the following Code sections—

(a) For taxpayers that are VEBAs. VEBAs requesting a letter ruling on a proposed transaction involving the use or transfer of VEBA assets should consider the tax consequences under §§ 501(c)(9), 505, 511, and 512, and should also include with the request a copy of the VEBA’s most recent letter addressing its status under § 501(c)(9).

(b) For taxpayers that are contributing employers. Contributing employers requesting a letter ruling on a proposed transaction involving the disposition of fund assets should consider the tax consequences under §§ 61, 111, 419, 419A, and 4976.

(i) Special considerations for § 4976 rulings.

(A) Tax Benefit Rule. A contributing employer that deducted contributions to a welfare benefit fund and requests a letter ruling as to the tax consequences under § 4976 must either (1) address why no amount should be included in income under the tax benefit rule, or (2) represent that it is including in income amounts that are subject to the tax benefit rule.

(B) Standing. In the case of a trade association (an organization described in § 501(c)(6)) that sponsors a welfare benefit fund, the association does not have standing to request a ruling under § 4976 on behalf of employers who contributed to the fund. However, a trade association generally has standing to request a ruling under § 4976 on its own behalf as an employer if the trade association contributed to the fund and the fund provided benefits to the trade association’s own employees.

(C) Additional use of welfare benefit fund assets or transfer of assets between two or more welfare benefit funds. If the proposed transaction involves either an additional use of welfare benefit fund assets (for example, providing benefits to a new group of employees or providing a new type of benefit) or a transfer of assets between or among two or more welfare benefit funds, the application should state whether the employer has an obligation, in the current or any future year, to provide the benefits. For situations in which a use or transfer of assets would involve assets or benefits subject to one or more collective bargaining agreements, the application should include a copy of each applicable collective bargaining agreement. For a transfer of assets, the application should also address whether the welfare benefit funds could be merged.

Address to which to send request for letter ruling or determination letter

.04 Request for letter ruling

(1) Request for letter ruling. Original letter ruling requests must be sent to the appropriate Associate office. The packages should be marked RULING REQUEST SUBMISSION.

(a) If a private delivery service is not used, requests for letter rulings should be sent to the following address:

  • Internal Revenue Service

  • Attn: CC:PA:LPD:DRU

  • P.O. Box 7604

  • Ben Franklin Station

  • Washington, DC 20044

If a private delivery service is used, the address is:

  • Internal Revenue Service

  • Attn: CC:PA:LPD:DRU, Room 5336

  • 1111 Constitution Ave., NW

  • Washington, DC 20224

(b) Requests for letter rulings may also be hand delivered between the hours of 8:00 a.m. and 4:00 p.m. to the courier’s desk at the loading dock of 1111 Constitution Avenue, NW, Washington, DC. A receipt will be given at the courier’s desk. The package should be addressed to:

  • Courier’s Desk

  • Internal Revenue Service

  • Attn: CC:PA:LPD:DRU, Room 5336

  • 1111 Constitution Ave., NW

  • Washington, DC 20224

(c) Requests for letter rulings must not be submitted by fax.

Request for determination letter

(2) Request for determination letter.

(a) Taxpayers under the jurisdiction of LB&I should send a request for a determination letter to the following address:

  • Internal Revenue Service

  • Large Business and International Division

  • 1111 Constitution Ave., NW

  • LB&I:ACDDI:PMO, IR 1135

  • Washington, DC 20224

or via email to *PFTS@irs.gov

(b) SB/SE and W&I taxpayers should send requests for determination letters to the appropriate SB/SE office listed in Appendix F of this revenue procedure.

(c) For a determination letter under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, see Rev. Proc. 2017–4 and Rev. Proc. 2017–5, this Bulletin.

Pending letter ruling requests

.05

.05 Circumstances under which the taxpayer with a pending letter ruling request must notify the Associate office

(1) Circumstances under which the taxpayer with a pending letter ruling request must notify the Associate office. The taxpayer must notify the Associate office if, after the letter ruling request is filed but before a letter ruling is issued, the taxpayer knows that—

(a) a Field office has started an examination of the issue or the identical issue on an earlier year’s return;

(b) in the case of a § 301.9100 request, a Field office has started an examination of the return for the taxable year in which an election should have been made or any taxable year that would have been affected by the election had it been timely made. See § 301.9100–3(e)(4)(i) and section 5.03(3) of this revenue procedure;

(c) legislation that may affect the transaction has been introduced. See section 7.01(10) of this revenue procedure;

(d) another letter ruling request (including an application for change in method of accounting), involving the same or similar issue as that pending with the Service, has been submitted by the taxpayer or a related party within the meaning of § 267 or a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504;

(e) in qualified retirement plan matters, the issue is being considered by the Pension Benefit Guaranty Corporation or the Department of Labor; or

(f) in health care matters, the issue is being considered by the Department of Labor or the Department of Health and Human Services.

Taxpayer must notify the Associate office if a return is filed and must attach the request to the return

(2) Taxpayer must notify the Associate office if a return is filed and must attach the request to the return. If the taxpayer files a return before a letter ruling is received from the Associate office concerning an issue in the return, the taxpayer must notify the Associate office that the return has been filed. The taxpayer must also attach a copy of the letter ruling request (Form 3115, if for a non-automatic change in method of accounting) to the return to alert the Field office and avoid premature field action on the issue. Taxpayers filing their returns electronically may satisfy this requirement by attaching to their return a statement providing the date of the letter ruling request and the control number of the letter ruling.

If, under the limited circumstances permitted in section 5 of this revenue procedure, the taxpayer requests a letter ruling after the return is filed, but before the return is examined, the taxpayer must notify the Associate office that the return has been filed. The taxpayer must also notify the Field office having jurisdiction over the return and attach a copy of the letter ruling request to the notification to alert the Field office and avoid premature field action on the issue.

This section 7.05 also applies to pending requests for a closing agreement on a transaction for which a letter ruling is not requested or issued.

For purposes of this section 7.05, the term “return” includes an original return, amended return, or claim for refund.

When to attach letter ruling or determination letter to return

.06 A taxpayer who, before filing a return, receives a letter ruling or determination letter about any transaction that has been consummated and that is relevant to the return being filed must attach to the return a copy of the letter ruling or determination letter. Taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter ruling or determination letter.

For purposes of this section 7.06, the term “return” includes an original return, amended return, or claim for refund.

How to check on status of request for letter ruling or determination letter

.07 The taxpayer or the taxpayer’s authorized representative may obtain information regarding the status of a request for a letter ruling or determination letter by calling the person whose name and telephone number are shown on the acknowledgment of receipt of the request or, in the case of a request for a letter ruling, the appropriate branch representative who contacts the taxpayer as explained in section 8.02 of this revenue procedure.

Request for letter ruling or determination letter may be withdrawn or Associate office may decline to issue letter ruling

.08

In General

(1) In general. A taxpayer may withdraw a request for a letter ruling or determination letter at any time before the letter ruling or determination letter is signed by the Service. Correspondence and exhibits related to a request that is withdrawn or related to a letter ruling request for which an Associate office declines to issue a letter ruling will not be returned to the taxpayer. See section 7.01(2)(a) of this revenue procedure. In appropriate cases, an Associate office may publish its conclusions in a revenue ruling or revenue procedure.

Notification of appropriate Service official

(2) Notification of appropriate Service official.

(a) Letter ruling requests. If a taxpayer withdraws a letter ruling request or if the Associate office declines to issue a letter ruling, the Associate office generally will notify, by memorandum, the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return. For taxpayers under the jurisdiction of the Division Counsel (Large Business & International), the Associate office will also send a copy of the memorandum to the Assistant Deputy Commissioner, Compliance Integration. In doing so, the Associate office may give the Service official its views on the issues in the request for consideration in any later examination of the return. This section 7.08(2)(a) generally does not apply if the taxpayer withdraws the letter ruling request and submits a written statement that the transaction has been, or is being, abandoned and if the Associate office has not already formed an adverse opinion. See section 7.08(1) of this revenue procedure.

(b) Notification of Service official may constitute Chief Counsel Advice. If the memorandum to the Service official referred to in paragraph (a) of this section 7.08(2) provides more than the fact that the request was withdrawn and that the Associate office was tentatively adverse, or more than the fact that the Associate office declines to issue a letter ruling, the memorandum may constitute Chief Counsel Advice, as defined in § 6110(i)(1), and may be subject to disclosure under § 6110.

(3) Refund of user fee. Ordinarily, the user fee will not be returned for a letter ruling request that is withdrawn. If the Associate office declines to issue a letter ruling on all of the issues in the request, the user fee will be returned. If the Associate office issues a letter ruling on some, but not all, of the issues, the user fee will not be returned. See section 15.10 of this revenue procedure for additional information regarding the refund of user fees.

SECTION 8. HOW DO THE ASSOCIATE OFFICES HANDLE LETTER RULING REQUESTS?

The Associate offices will issue letter rulings on the matters and under the circumstances explained in sections 3 and 5 of this revenue procedure and in the manner explained in this section and section 11 of this revenue procedure. See section 9 of this revenue procedure for procedures for change in method of accounting requests.

Docket, Records, and User Fee Branch receives, initially controls, and refers the request to the appropriate Associate office

.01 All requests for letter rulings will be received and initially controlled by the Docket, Records, and User Fee Branch of the Legal Processing Division of the Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DRU). That office will process the incoming documents and the user fee, and it will forward the file to the appropriate Associate office for assignment to a branch that has jurisdiction over the specific issue involved in the request.

Branch representative of the Associate office contacts taxpayer within 21 calendar days

.02 Within 21 calendar days after a letter ruling request has been received in the branch of the Associate office that has jurisdiction over the issue, a representative of the branch will contact the taxpayer or, if the request includes a properly executed power of attorney, the authorized representative, unless the power of attorney provides otherwise. During such contact, the branch representative will discuss the procedural issues in the letter ruling request. If the case is complex or a number of issues are involved, it may not be possible for the branch representative to discuss the substantive issues during this initial contact. When possible, for each issue within the branch’s jurisdiction, the branch representative will tell the taxpayer—

(1) whether the branch representative will recommend that the Associate office rule as the taxpayer requested, rule adversely on the matter, or not rule;

(2) whether the taxpayer should submit additional information to enable the Associate office to rule on the matter;

(3) whether the letter ruling complies with all of the provisions of this revenue procedure, and if not, which requirements have not been met; or

(4) whether, because of the nature of the transaction or the issue presented, a tentative conclusion on the issue cannot be reached.

If the letter ruling request involves matters within the jurisdiction of more than one branch or Associate office, a representative of the branch that received the original request will tell the taxpayer within the initial 21 calendar days—

(1) that the matters within the jurisdiction of another branch or Associate office have been referred to that branch or Associate office for consideration, and the date the referral was made, and

(2) that a representative of that branch or Associate office will contact the taxpayer within 21 calendar days after receiving the referral to discuss informally the procedural and, to the extent possible, the substantive issues in the request.

This section 8.02 applies to all matters except for cases involving a request for change in method of accounting or accounting period and cases within the jurisdiction of the Associate Chief Counsel (Financial Institutions and Products) concerning insurance issues requiring actuarial computations.

Determines if transaction can be modified to obtain favorable letter ruling

.03If less than a fully favorable letter ruling is indicated, the branch representative will tell the taxpayer whether minor changes in the transaction or adherence to certain published positions would bring about a favorable ruling. The branch representative may also tell the taxpayer the facts that must be furnished in a document to comply with Service requirements. The branch representative will not suggest precise changes that would materially alter the form of the proposed transaction or materially alter a taxpayer’s proposed accounting period.

If, at the end of this discussion, the branch representative determines that a meeting in the Associate office would be more helpful to develop or exchange information, a meeting will be offered and an early meeting date arranged. When offered, this meeting is in addition to the taxpayer’s conference of right that is described in section 10.02 of this revenue procedure.

Not bound by informal opinion expressed

.04 The Service will not be bound by the informal opinion expressed by the branch representative or any other Service representative, and such an opinion cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

May request additional information

.05 Must be submitted within 21 calendar days

(1) Additional information must be submitted within 21 calendar days. If the request lacks essential information, which may include additional information needed to satisfy the procedural requirements of this revenue procedure as well as substantive changes to transactions or documents needed from the taxpayer, the branch representative will request such information during the initial or subsequent contacts with the taxpayer or its authorized representative. The representative will inform the taxpayer or its authorized representative that the request will be closed if the Associate office does not receive the requested information within 21 calendar days from the date of the request unless an extension of time is granted. To facilitate prompt action on letter ruling requests, taxpayers may request that the Associate office request additional information by fax. See section 7.02(5) of this revenue procedure.

Material facts furnished to the Associate office by telephone or fax, or orally at a conference, must be promptly confirmed by letter to the Associate office. This confirmation, and any additional information requested by the Associate office that is not part of the information requested during the initial contact, must be furnished within 21 calendar days from the date the Associate office makes the request.

Extension of reply period if justified and approved

(2) Extension of reply period if justified and approved. The Service will grant an extension of the 21-day period for providing additional information only if the extension is justified in writing by the taxpayer and approved by the branch reviewer. A request for an extension should be submitted before the end of the 21-day period. If unusual circumstances close to the end of the 21-day period make a written request impractical, the taxpayer should notify the Associate office within the 21-day period that there is a problem and that the written request for extension will be provided shortly. The taxpayer will be told promptly of the approval or denial of the requested extension. If the extension request is denied, there is no right of appeal.

Letter ruling request closed if the taxpayer does not submit additional information

(3) Letter ruling request closed if the taxpayer does not submit additional information. If the taxpayer does not submit the information requested during the initial or subsequent contacts within the time provided, the letter ruling request will be closed and the taxpayer will be notified in writing. f the information is received after the request is closed, the request will be reopened and treated as a new request as of the date the information is received. The taxpayer must pay another user fee before the case can be reopened.

Penalties of perjury statement for additional information

(4) Penalties of perjury statement. Additional information submitted to the Service must be accompanied by the following declaration: “Under penalties of perjury, I declare that I have examined this information, including accompanying documents, and, to the best of my knowledge and belief, the information contains all the relevant facts relating to the request for the information, and such facts are true, correct, and complete.” This declaration must be signed in accordance with the requirements in section 7.01(15)(b) of this revenue procedure.

Faxing request and additional information

(5) Faxing request and additional information. To facilitate prompt action on letter ruling requests, taxpayers may request that the Associate office request additional information by fax. See section 7.02(5) of this revenue procedure. Taxpayers may also submit additional information by fax as soon as the information is available. The Associate office representative who requests additional information can provide a fax number to which the information can be faxed. The original of the faxed material and a signed penalties of perjury statement must be mailed or delivered to the Associate office.

Address to which to send additional information

(6) Address to which to send additional information

(a) If a private delivery service is not used, the additional information should be sent to:

  • Internal Revenue Service

  • ADDITIONAL INFORMATION

  • Attn: [Name, office symbols, and

  • room number of the Associate office representative who requested

  • the information]

  • P.O. Box 7604

  • Ben Franklin Station

  • Washington, DC 20044

For cases involving a request for change in method of accounting or period, see section 9.08 of this revenue procedure for the address to which to send additional information.

(b) If a private delivery service is used, the additional information for all cases should be sent to:

  • Internal Revenue Service

  • ADDITIONAL INFORMATION

  • Attn: [Name, office symbols, and

  • room number of the Associate office representative who requested

  • the information]

  • 1111 Constitution Ave., NW

  • Washington, DC 20224

Identifying information included in additional information

(7) Identifying information. For all cases, the additional information should include the taxpayer’s name and the case control number and the name, office symbols, and room number of the Associate office representative who requested the information. The Associate office representative can provide the latter information to the taxpayer.

Number of copies of additional information to be submitted

(8) Number of copies. A taxpayer only needs to submit one copy of the additional information unless the Associate office requests additional copies.

Near the completion of the ruling process, advises the taxpayer of conclusions and, if the Associate office will rule adversely, offers the taxpayer the opportunity to withdraw the letter ruling request

.06 Generally, after the conference of right is held but before the letter ruling is issued, the branch representative will orally notify the taxpayer or the taxpayer’s representative of the Associate office’s conclusions. See section 10 of this revenue procedure for a discussion of conferences of right. If the Associate office is going to rule adversely, the taxpayer will be offered the opportunity to withdraw the letter ruling request. If, within ten calendar days of the notification by the branch representative, the taxpayer or the taxpayer’s representative does not notify the branch representative that the taxpayer wishes to withdraw the ruling request, the adverse letter ruling will be issued unless an extension is granted. The user fee will not be refunded for a letter ruling request that is withdrawn. See section 15.10(1)(a) of this revenue procedure.

May request that taxpayer submit draft proposed letter ruling near the completion of the ruling process

.07 To accelerate the issuance of letter rulings, in appropriate cases near the completion of the ruling process, the Associate office representative may request that the taxpayer or the taxpayer’s representative submit a proposed draft of the letter ruling. Such draft would be based on the discussions of the issues between the representative and the taxpayer or the taxpayer’s representative. The taxpayer is not required to prepare a draft letter ruling to receive a letter ruling.

The format of the submission should be discussed with the Associate office representative who requests the draft letter ruling. The representative usually can provide a sample format of a letter ruling and will discuss with the taxpayer or the taxpayer’s representative the facts, analysis, and letter ruling language to be included.

Taxpayers are encouraged to submit this draft in a printed copy that is in a computer scannable format. The printed copy will become part of the permanent files of the Associate office. The printed copy should be sent to the same address as any additional information and should contain in the transmittal the information that should be included with any additional information (for example, a penalties of perjury statement is required). See section 8.05(4) of this revenue procedure.

Issues separate letter rulings for substantially identical letter rulings, but generally issues a single letter ruling for related § 301.9100 letter rulings

.08 Substantially identical letter rulings

(1) Substantially identical letter rulings. For letter ruling requests qualifying for the user fee provided in paragraph (A)(5)(a) of Appendix A of this revenue procedure for substantially identical letter rulings, a separate letter ruling will generally be issued for each requester or entity as the Associate office deems necessary.

Related § 301.9100 letter rulings

(2) Related § 301.9100 letter rulings.

(a) For a § 301.9100 letter ruling request for an extension of time to file a Form 3115 qualifying under section 15.07(4) for the user fee provided in paragraph (A)(5)(d) of Appendix A of this revenue procedure for an identical change in method of accounting, the Associate office generally will issue a single letter on behalf of all applicants on Form 3115 that are the subject of the request.

(b) For a § 301.9100–3 letter ruling request for an extension of time to file an entity classification election for multiple entities qualifying under section 15.07(2) for the user fee provided in paragraph (A)(5)(a) of Appendix A of this revenue procedure, the Associate office generally will issue a single letter on behalf of all entities that are the subject of the request. The taxpayer may request that separate letters be issued to each entity that is the subject of the request. See generally section 5.03 of this revenue procedure.

Sends a copy of the letter ruling to appropriate Service official

.09 The Associate office will send a copy of the letter ruling, whether favorable or adverse, to the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return.

SECTION 9. WHAT ARE THE SPECIFIC AND ADDITIONAL PROCEDURES FOR A REQUEST FOR A CHANGE IN METHOD OF ACCOUNTING FROM THE ASSOCIATE OFFICES?

This section provides the specific and additional procedures applicable to a request for a change in method of accounting under Rev. Proc. 2015–13, 2015–5 I.R.B. 419 (or any successor), as clarified and modified by Rev. Proc. 2015–33, 2015–24 I.R.B. 1067, and as modified by Section 17.02 of Rev. Proc. 2016–1, 2016–1 I.R.B. 1, or other automatic change request procedures.

A request for a change in method of accounting under Rev. Proc. 2015–13, (or any successor), or other automatic change request procedures is a type of request for a letter ruling. See section 2.01 of this revenue procedure.

Automatic and non-automatic change in method of accounting requests

.01 Automatic change in method of accounting under Rev. Proc. 2015–13 (or any successor), or other automatic change request procedures

Non-automatic change in method of accounting

(1) Automatic change in method of accounting. Certain changes in methods of accounting must be made under automatic change request procedures. A change in method of accounting provided for in an automatic change request procedure must be made using that procedure if the taxpayer requesting the change is within the scope of the procedure, the change is an automatic change for the requested year of the change, and the taxpayer is eligible to make the change. The Commissioner’s consent to an otherwise qualifying automatic change in method of accounting is granted only if the taxpayer timely complies with the applicable automatic change request procedures. But see section 9.19 of this revenue procedure concerning review by an Associate office and a Field office. In general, a taxpayer requests an automatic change by filing a current Form 3115, Application for Change in Method of Accounting.

An application filed under the automatic change procedures in Rev. Proc. 2015–13 (or any successor) or other automatic change request procedure, and this revenue procedure, is hereinafter referred to as an “automatic change request.” See section 9.22 of this revenue procedure for a list of automatic change request procedures. See section 9.23 for a list of the sections and Appendices of this revenue procedure in addition to this section 9 that apply to an automatic change request. No user fee is required for a change made under an automatic change request procedure.

(2) Non-automatic change in method of accounting. If a change in method of accounting may not be made under an automatic change request procedure, the taxpayer may request a non-automatic letter ruling by filing a current Form 3115, Application for Change in Accounting Method, under the non-automatic change procedures in Rev. Proc. 2015–13 (or any successor), and this revenue procedure. A Form 3115 filed under Rev. Proc. 2015–13 (or any successor) and this revenue procedure for a non-automatic change request is hereinafter referred to as a “non-automatic Form 3115.” A taxpayer filing a non-automatic Form 3115 must submit the required user fee with the completed Form 3115. See section 15 and Appendix A of this revenue procedure for information about user fees. See section 9.23 for a list of the sections and Appendices of this revenue procedure in addition to this section 9 that apply to a non-automatic Form 3115.

Ordinarily only one change in method of accounting on a Form 3115, Application for Change in Accounting Method, and a separate Form 3115 for each taxpayer and for each separate and distinct trade or business

.02 Ordinarily, a taxpayer may request only one change in method of accounting on a Form 3115, Application for Change in Accounting Method. If the taxpayer wants to request a change in method of accounting for more than one unrelated item or submethod of accounting, the taxpayer must submit a separate Form 3115 for each unrelated item or submethod, except in certain situations in which the Service specifically permits certain unrelated changes to be included on a single Form 3115. For an example of such a situation, see section 15.03 of Rev. Proc. 2016–29, 2016–21 I.R.B. 880 (or its successor).

A separate Form 3115 (and, therefore, a separate user fee pursuant to section 15 and Appendix A of this revenue procedure) must be submitted for each taxpayer and each separate trade or business of a taxpayer, including a qualified subchapter S subsidiary (QSub) or a single-member limited liability company (single-member LLC), requesting a change in method of accounting, except as specifically permitted or required in guidance published by the Service. See, for example, section 15.07(4) of this revenue procedure.

Information required with a Form 3115

.03 Facts and other information

(1) Facts and other information requested on Form 3115 and in applicable revenue procedures. In general, a taxpayer requesting a change in method of accounting must file a current Form 3115, unless the procedures applicable to the specific type of change in method of accounting do not require a Form 3115 to be submitted.

To be eligible for approval of the requested change in method of accounting, the taxpayer must provide all information requested on the Form 3115 and in its instructions and in Rev. Proc. 2015–13 (or any successor), and, if applicable, the automatic change request procedure. In addition, the taxpayer must provide all information requested in the applicable sections of this revenue procedure, including a detailed and complete description of the item being changed and of the taxpayer’s trade(s) or business(es), the taxpayer’s present and proposed method for the item being changed, information regarding whether the taxpayer has claimed any federal tax credit relating to the cost being changed, information regarding whether the taxpayer is under examination, or before Appeals or a Federal court, and a summary of the computation of the net § 481(a) adjustment, along with an explanation of the methodology used to determine the adjustment, sufficient to demonstrate that the net § 481(a) adjustment is computed correctly.

For a non-automatic Form 3115 or an automatic change request specified in the instructions for line 16 of the Form 3115, the taxpayer must also include a full explanation of the legal basis and relevant authorities supporting the proposed method, and a detailed and complete description of the facts and explanation of how the law applies to the taxpayer’s situation.

For a non-automatic Form 3115, the taxpayer must also include a statement of the applicant’s reasons for the proposed change, copies of all documents related to the proposed change, and a discussion of whether the law related to the request is uncertain or inadequately addresses the issue.

The applicant must provide the requested information to be eligible for approval of the requested change in method of accounting. The taxpayer may be required to provide information specific to the requested change in method of accounting, such as an attached statement. The taxpayer must provide all information relevant to the requested change in method of accounting, even if not specifically requested, including an explanation of all material facts relevant to the requested change in method of accounting.

See also sections 7.01(1) and 7.01(8) of this revenue procedure.

Statement of authorities contrary to taxpayer’s views

(2) Statement of contrary authorities. For a non-automatic Form 3115, the taxpayer is encouraged to inform the Associate office about, and discuss the implications of, any authority believed to be contrary to the proposed change in method of accounting, including legislation, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements.

If the taxpayer does not furnish either contrary authorities or a statement that none exist, the Associate office may request submission of contrary authorities or a statement that none exist. Failure to comply with this request may result in the Associate office’s refusal to issue a change in method of accounting letter ruling.

Documents

(3) Copies of all contracts, agreements, and other documents. True copies of all contracts, agreements, and other documents relevant to the requested change in method of accounting must be submitted with a non-automatic Form 3115. Original documents should not be submitted because they become part of the Associate office’s file and will not be returned.

Analysis of material facts

(4) Analysis of material facts. When submitting any document with a Form 3115 or in a supplemental letter, the taxpayer must explain and provide an analysis of all material facts in the document. The taxpayer may not merely incorporate the document by reference. The analysis of the facts must include their bearing on the requested change in method of accounting and must specify the provisions that apply.

Same issue in an earlier return

(5) Information regarding whether same issue is in an earlier return. A Form 3115 must state whether, to the best of the knowledge of both the taxpayer and the taxpayer’s representatives, any return of the taxpayer (or any return of a current or former consolidated group in which the taxpayer is or was a member) in which the taxpayer used the method of accounting being changed is under examination, before Appeals, or before a Federal court. See Rev. Proc. 2015–13 (or any successor).

Issue previously submitted or currently pending

(6) Statement regarding prior requests for a change in method of accounting and other pending requests.

(a) Other requests for a change in method of accounting within the past five years. A Form 3115 must state, to the best of the knowledge of both the taxpayer and the taxpayer’s representatives, whether the taxpayer or a related taxpayer within the meaning of § 267 or a member of a current or former affiliated group of which the taxpayer is or was a member within the meaning of § 1504 or a predecessor requested or made within the past five years (including the year of the requested change), or is currently filing, any request for a change in method of accounting.

If the statement is affirmative, for each separate and distinct trade or business, give a description of each request and the year of change and whether consent was obtained. If any application was withdrawn, not perfected, or denied, or if a Consent Agreement was sent to the taxpayer but was not signed and returned to the Associate office, or if the change was not made in the requested year of change, give an explanation.

(b) Any other pending request(s). A Form 3115 must state, to the best of the knowledge of both the taxpayer and the taxpayer’s representatives, whether the taxpayer or a related taxpayer within the meaning of § 267 or a member of a current or former affiliated group of which the taxpayer is or was a member within the meaning of § 1504 or a predecessor currently have pending any request (including any concurrently filed request) for a letter ruling, a change in method of accounting, or technical advice.

If the statement is affirmative, for each request, give the name(s) of the taxpayer, identification number(s), the type of request (letter ruling, request for change in method of accounting, or request for technical advice), and the specific issues in the request.

Statement identifying pending legislation

(7) Statement identifying pending legislation. At the time the taxpayer files a non-automatic Form 3115, the taxpayer must identify any pending legislation that may affect the proposed change in method of accounting. The taxpayer also must notify the Associate office if any such legislation is introduced after the request is filed but before a change in method of accounting letter ruling is issued.

Authorized representatives

(8) Authorized representatives. To appear before the Service in connection with a request for a change in method of accounting, the taxpayer’s authorized representative must be an attorney, a certified public accountant, an enrolled agent, an enrolled actuary, a person with a “Letter of Authorization,” an employee, general partner, bona fide officer, administrator, trustee, etc., as described in section 7.01(13) of this revenue procedure.

Power of attorney and declaration of representative

(9) Power of attorney and declaration of representative. Any authorized representative, whether or not enrolled to practice, must comply with Treasury Department Circular No. 230, which provides the rules for practice before the Service, and the conference and practice requirements of the Statement of Procedural Rules, which provide the rules for representing a taxpayer before the Service. See section 7.01(14) of this revenue procedure. A taxpayer should use Form 2848, Power of Attorney and Declaration of Representative, to provide the representative’s authority.

Tax Information Authorization

(10) Tax Information Authorization. A taxpayer may use Form 8821, Tax Information Authorization, to authorize an individual to receive a copy of the taxpayer’s change in method of accounting letter ruling and other related correspondence. If the taxpayer wishes to authorize a corporation, firm, organization, or partnership to receive the correspondence, an individual, identified by either name or title, must be specified on the Form 8821. A Form 8821 does not authorize the taxpayer’s appointee to advocate the taxpayer’s position or to otherwise represent the taxpayer before the Service.

Penalties of perjury statement

(11) Penalties of perjury statement

(a) Format of penalties of perjury statement. A Form 3115, and any change to a Form 3115 submitted at a later time, must be accompanied by the following declaration: “Under penalties of perjury, I declare that I have examined this application, including accompanying schedules and statements, and to the best of my knowledge and belief, the application contains all the relevant facts relating to the application, and it is true, correct, and complete.”

See section 9.08(3) of this revenue procedure for the penalties of perjury statement required for submissions of additional information.

(b) Signature by taxpayer. A Form 3115 must be signed by, or on behalf of, the taxpayer requesting the change by an individual who has personal knowledge of the facts of, and authority to bind the taxpayer in, such matters. For example, an officer must sign on behalf of a corporation, a general partner on behalf of a state law partnership, a member-manager on behalf of a limited liability company, a trustee on behalf of a trust, or an individual taxpayer on behalf of a sole proprietorship. If the taxpayer is a member of a consolidated group, a Form 3115 should be submitted on behalf of the taxpayer by the common parent and must be signed by a duly authorized officer of the common parent. Refer to the signature requirements set forth in the instructions for the current Form 3115 regarding those who are to sign. See also section 6.02(8) of Rev. Proc. 2015–13 (or any successor). A stamped signature or faxed signature is not permitted.

(c) Signature by preparer. A declaration of preparer (other than the taxpayer) is based on all information of which the preparer has any knowledge.

Additional procedural information required in certain circumstances

.04

Recipients of original and copy of correspondence

(1) Recipients of original and copy of change in method of accounting correspondence. The Service will send the signed original of the change in method of accounting letter ruling and other related correspondence to the taxpayer, and copies to the taxpayer’s representative, if so instructed on Form 2848. See section 7.02(2) of this revenue procedure for how to designate alternative routing of the copies of the letter ruling and other correspondence.

Expedited handling

(2) To request expedited handling. The Associate offices ordinarily process non-automatic Forms 3115 in order of the date received. A taxpayer with a compelling need to have a non-automatic Form 3115 processed on an expedited basis may request expedited handling. See section 7.02(4) of this revenue procedure for procedures regarding expedited handling.

Fax of any document to the taxpayer or taxpayer’s authorized representative

(3) To receive the change in method of accounting letter ruling or any other correspondence related to a Form 3115 by fax. If the taxpayer wants a copy of the change in method of accounting letter ruling or any other correspondence related to a Form 3115, such as a request for additional information, faxed to the taxpayer or the taxpayer’s authorized representative, the taxpayer must submit a written request to fax the letter ruling or related correspondence, preferably as part of the Form 3115. The request may be submitted at a later date, but it must be received prior to the mailing of correspondence other than the letter ruling and prior to the signing of the change in method of accounting letter ruling.

The request to have correspondence relating to the Form 3115 faxed to the taxpayer or taxpayer’s authorized representative must contain the fax number of the taxpayer or the taxpayer’s authorized representative to whom the correspondence is to be faxed.

A document other than the change in method of accounting letter ruling will be faxed by a branch representative. The change in method of accounting letter ruling may be faxed by either a branch representative or the Disclosure and Litigation Support Branch of the Legal Processing Division of the Office of Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DLS).

For purposes of § 301.6110–2(h), a change in method of accounting letter ruling is not issued until the change in method of accounting letter ruling is mailed.

Requesting a conference

(4) To request a conference. The taxpayer must complete the appropriate line on the Form 3115 to request a conference, or must request a conference in a later written communication, if an adverse response is contemplated by the Associate office. See section 11.03(1) of Rev. Proc. 2015–13 (or any successor), and sections 10.01 and 10.02 of this revenue procedure.

Addresses to which to send Forms 3115

.05 Addresses to which to send Forms 3115. Submit the original Form 3115, in the case of a non-automatic Form 3115, or the copy of the Form 3115, in the case of an automatic change request, as follows:

(1) Non-automatic Form 3115.

(a) Associate office mailing address if private delivery service is not used. If a private delivery service is not used, a taxpayer, including an exempt organization, must send the original completed Form 3115 and the required user fee to:

  • Internal Revenue Service

  • Attn: CC:PA:LPD:DRU

  • P.O. Box 7604

  • Benjamin Franklin Station

  • Washington, DC 20044

(b) Mailing address if private delivery service is used. If a private delivery service is used, a taxpayer, including an exempt organization, must send the original completed Form 3115 and the required user fee to:

  • Internal Revenue Service

  • Attn: CC:PA:LPD:DRU

  • Room 5336

  • 1111 Constitution Ave., NW

  • Washington, DC 20224

(c) Address if hand-delivered to the IRS Courier’s desk. For taxpayers, including an exempt organization, the original completed Form 3115 and the required user fee may be hand delivered between the hours of 8:00 a.m. and 4:00 p.m. to the courier’s desk at the loading dock of 1111 Constitution Ave., NW, Washington, DC. A receipt will be given at the courier’s desk. The package should be addressed to:

  • Courier’s Desk

  • Internal Revenue Service

  • Attn: CC:PA:LPD:DRU, Room 5336

  • 1111 Constitution Ave., NW

  • Washington, DC 20224

(2) Automatic change request. If the automatic change request procedure requires a taxpayer to file a duplicate copy of the completed Form 3115 for an automatic change request, send the duplicate copy of the automatic change request Form 3115 to:

  • Internal Revenue Service

  • 201 West Rivercenter Blvd.

  • PIN Team Mail Stop 97

  • Covington, KY 41011-1424

A Form 3115 must not be submitted by fax

.06 A completed Form 3115 must not be submitted by fax.

Docket, Records, and User Fee Branch receives, initially controls, and refers the Form 3115 to the appropriate Associate office

.07 A non-automatic Form 3115 is received and controlled by the Docket, Records, and User Fee Branch, Legal Processing Division of the Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DRU) if the required user fee is submitted with the Form 3115. Once controlled, the Form 3115 is forwarded to the appropriate Associate office for assignment and processing.

Additional information

.08 Reply period

(1) Reply period.

(a) Non-automatic Form 3115 - 21-day rule. In general, for a non-automatic Form 3115, additional information requested by the Associate office and additional information furnished to the Associate office by telephone must be furnished in writing within 21 calendar days from the date of the information request. The Associate office may impose a shorter reply period for a request for additional information made after an initial request. See section 10.06 of this revenue procedure for the 21-day rule for submitting information after any conference.

(b) Automatic change request – 30-day rule. In general, for an automatic change request, additional information requested by the Associate office, and additional information furnished to the Associate office by telephone or fax, must be furnished in writing (other than a fax) within 30 calendar days from the date of the information request. The Associate office may impose a shorter reply period for a request for additional information made after an initial request. See section 10.06 of this revenue procedure for the 21-day rule for submitting information after any conference with the Associate office.

Extension of reply period

(2) Request for extension of reply period.

(a) Non-automatic Form 3115. For a non-automatic Form 3115, an additional period, not to exceed 15 calendar days, to furnish information may be granted to a taxpayer. Any request for an extension of time must be made in writing and submitted before the end of the original 21-day period. If unusual circumstances close to the end of the 21-day period make a written request impractical, the taxpayer should notify the Associate office within the 21-day period that there is a problem and that the written request for extension will be provided shortly. An extension of the 21-day period will be granted only if approved by a branch reviewer. An extension of the 21-day period ordinarily will not be granted to furnish information requested on Form 3115. The taxpayer will be told promptly, and later in writing, of the approval or denial of the requested extension. If the extension request is denied, there is no right of appeal.

(b) Automatic change request. For an automatic change request, an additional period, not to exceed 30 calendar days, to furnish information may be granted to a taxpayer. Any request for an extension of time must be made in writing and submitted before the end of the original 30-day period. If unusual circumstances close to the end of the 30-day period make a written request impractical, the taxpayer should notify the Associate office within the 30-day period that there is a problem and that the written request for extension will be coming soon. An extension of the 30-day period will be granted only if approved by a branch reviewer. An extension of the 30-day period ordinarily will not be granted to furnish information requested on Form 3115. The taxpayer will be told promptly of the approval or denial of the requested extension. If the extension request is denied, there is no right of appeal.

Penalties of perjury statement for additional information

(3) Penalties of perjury statement for additional information. Additional information submitted to the Associate office must be accompanied by the following declaration: “Under penalties of perjury, I declare that I have examined this information, including accompanying documents, and, to the best of my knowledge and belief, the information contains all the relevant facts relating to the request for the information, and such facts are true, correct, and complete.” This declaration must be signed in accordance with the requirements in section 9.03(11)(b) of this revenue procedure.

Identifying information included in additional information

(4) Identifying information included in additional information. The additional information should also include the taxpayer’s name and the case control number and the name, office symbols, and room number of the Associate office representative who requested the information. The Associate office representative can provide the latter information to the taxpayer.

Faxing information request and additional information

(5) Faxing information request and additional information. To facilitate prompt action on a change in method of accounting ruling request, taxpayers may request that the Associate office request additional information by fax. See section 9.04(3) of this revenue procedure.

Taxpayers may also submit additional information by fax as soon as the information is available. The Associate office representative who requests additional information can provide a telephone number to which the information can be faxed. A copy of the requested information and an original signed penalties of perjury statement also must be mailed or delivered to the Associate office.

Address to which to send additional information to an Associate office

(6) Address to which to send additional information to an Associate office.

(a) Address if private delivery service is not used. For a request for change in method of accounting under the jurisdiction of the Associate Chief Counsel (Income Tax and Accounting), if a private delivery service is not used, the additional information should be sent to:

  • Internal Revenue Service

  • ADDITIONAL INFORMATION

  • Attn: [Name, office symbols, and

  • room number of the Associate office

  • representative who requested

  • the information]

  • P.O. Box 14095

  • Ben Franklin Station

  • Washington, DC 20044

For any other request for change in method of accounting, if a private delivery service is not used, the additional information should be sent to:

  • Internal Revenue Service

  • ADDITIONAL INFORMATION

  • Attn: [Name, office symbols, and

  • room number of the Associate office

  • representative who requested the information]

  • P.O. Box 7604

  • Ben Franklin Station

  • Washington, DC 20044

(b) Address if private delivery service is used. For a request for a change in method of accounting, if a private delivery service is used, the additional information should be sent to:

  • Internal Revenue Service

  • ADDITIONAL INFORMATION

  • Attn: [Name, office symbols, and

  • room number of the Associate office

  • representative who requested

  • the information]

  • 1111 Constitution Ave., NW

  • Washington, DC 20224

Failure to timely submit additional information to an Associate office

(7) If taxpayer does not timely submit additional information.

(a) Non-automatic Form 3115. In the case of a non-automatic Form 3115, if the required information is not furnished to the Associate office within the reply period, the Form 3115 will not be processed and the case will be closed. The taxpayer or authorized representative will be so notified in writing.

(b) Automatic change request. In the case of an automatic change request, if the required information is not furnished to the Associate office within the reply period, the request does not qualify for the automatic change request procedure. In such a case, the Associate office will notify the taxpayer that consent to make the change in method of accounting is not granted.

(c) Submitting the additional information at a later date. If the taxpayer wants to submit the additional information at a later date, the taxpayer must submit it with a new completed Form 3115 (and user fee, if applicable) for a year of change for which such new Form 3115 is timely filed under the applicable change in method of accounting procedure.

Circumstances in which the taxpayer must notify the Associate office

.09 For a non-automatic Form 3115, the taxpayer must promptly notify the Associate office if, after the Form 3115 is filed but before a change in method of accounting letter ruling is issued, the taxpayer knows that—

(1) a Field office has started an examination of the present or proposed accounting;

(2) a Field office has started an examination of the proposed year of change;

(3) legislation that may affect the change in method of accounting has been introduced, see section 9.03(7) of this revenue procedure; or

(4) another letter ruling request (including another Form 3115) has been submitted by the taxpayer or a related party within the meaning of § 267 or a member of an affiliated group of which the taxpayer is a member within the meaning of § 1504.

Determines if proposed method of accounting can be modified to obtain favorable letter ruling

.10 For a non-automatic Form 3115, if a less than fully favorable change in method of accounting letter ruling is indicated, the branch representative will tell the taxpayer whether minor changes in the proposed method of accounting would bring about a favorable ruling. The branch representative will not suggest precise changes that materially alter a taxpayer’s proposed method of accounting.

Near the completion of processing the Form 3115, advises the taxpayer if the Associate office will rule adversely and offers the taxpayer the opportunity to withdraw Form 3115

.11 Generally, after the conference is held (or offered, in the event no conference is held) and before issuing any change in method of accounting letter ruling that is adverse to the requested change in method of accounting, the taxpayer will be offered the opportunity to withdraw the Form 3115. See section 9.12 of this revenue procedure. If, within 10 calendar days of the notification by the branch representative, the taxpayer or the taxpayer’s representative does not notify the branch representative of a decision to withdraw the Form 3115, the adverse change in method of accounting letter ruling will be issued unless an extension is granted. Ordinarily, the user fee required for a non-automatic Form 3115 will not be refunded for a Form 3115 that is withdrawn.

Non-automatic Form 3115 may be withdrawn or Associate office may decline to issue a change in method of accounting letter ruling

.12 In general

(1) In general. A taxpayer may withdraw a non-automatic Form 3115 at any time before the change in method of accounting letter ruling is signed by the Associate office. The Form 3115, correspondence, and any documents relating to the Form 3115 that is withdrawn or for which the Associate office declines to issue a letter ruling will not be returned to the taxpayer. See section 9.03(3) of this revenue procedure. In appropriate cases, the Service may publish its conclusions in a revenue ruling or revenue procedure.

Notification of appropriate Service official

(2) Notification of appropriate Service official. If a taxpayer withdraws, or the Associate office declines to grant (for any reason), a request to change from or to an improper method of accounting, the Associate office will notify, in writing, the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return and the Manager of the Methods of Accounting and Timing Issue Practice Group, and may give its views on the issues in the request to the Service official to consider in any later examination of the return.

If the memorandum to the Service official provides more than the fact that the request was withdrawn and the Associate office was tentatively adverse, or that the Associate office declines to grant a change in method of accounting, the memorandum may constitute Chief Counsel Advice, as defined in § 6110(i)(1), and may be subject to disclosure under § 6110.

Refund of user fee

(3) Refund of user fee. Ordinarily, the user fee will not be returned for a non-automatic Form 3115 that is withdrawn. See section 15.10 of this revenue procedure for information regarding refunds of user fees.

How to check status of a pending non-automatic Form 3115

.13 The taxpayer or the taxpayer’s authorized representative may obtain information regarding the status of a non-automatic Form 3115 by calling the person whose name and telephone number are shown on the acknowledgement of receipt of the Form 3115.

Service is not bound by informal opinion

.14 The Service will not be bound by any informal opinion expressed by the branch representative or any other Service representative, and such an opinion cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

Single letter ruling issued to a taxpayer or consolidated group for qualifying identical change in method of accounting

.15 For a non-automatic Form 3115 qualifying under section 15.07(4) for the user fee provided in paragraph (A)(5)(b) of Appendix A of this revenue procedure for identical changes in method of accounting, the Associate office generally will issue a single letter ruling on behalf of all applicants on the Form 3115 that are the subject of the request.

Letter ruling ordinarily not issued for one of two or more interrelated items or submethods

.16 If two or more items or submethods of accounting are interrelated, the Associate office ordinarily will not issue a letter ruling on a change in method of accounting involving only one of the items or submethods.

Consent Agreement

.17 Ordinarily, for a non-automatic Form 3115, the Commissioner’s permission to change a taxpayer’s method of accounting is set forth in a letter ruling (original and a Consent Agreement copy). If the taxpayer agrees to the terms and conditions contained in the change in method of accounting letter ruling, the taxpayer must sign and date the Consent Agreement copy of the letter ruling in the appropriate space. The Consent Agreement must be signed by an individual with authority to bind the taxpayer in such matters. The Consent Agreement copy must not be signed by the taxpayer’s representative. The signed copy of the letter ruling will constitute an agreement (Consent Agreement) within the meaning of Treas. Reg. § 1.481–4(b). The signed Consent Agreement copy of the letter ruling must be returned to the Associate office within 45 calendar days of the date of the letter ruling. In addition, a copy of the signed Consent Agreement generally must be attached to the taxpayer’s income tax return for the year of change. See section 11.03(2)(a) of Rev. Proc. 2015–13 (or any successor). A taxpayer filing its return electronically should attach the Consent Agreement as a PDF file named “Form3115Consent.” If the taxpayer has filed its income tax return for the year of change before the letter ruling has been received and the Consent Agreement has been signed and returned, the copy of the signed Consent Agreement should be attached to the amended return for the year of change that the taxpayer files to implement the change in method of accounting.

A taxpayer must secure the consent of the Commissioner before changing a method of accounting for Federal income tax purposes. See Treas. Reg. § 1.446–1(e)(2)(i). For a change in method of accounting requested on a non-automatic Form 3115, a taxpayer has secured the consent of the Commissioner when the taxpayer timely signs and returns the Consent Agreement copy of the letter ruling from the Associate office granting permission to make the change in method of accounting and otherwise complies with Rev. Proc. 2015–13 (or any successor).

A taxpayer that timely files a non-automatic Form 3115 and takes the requested change in method of accounting into account in its federal income tax return for the year of change (and any subsequent taxable year) prior to receiving a letter ruling granting consent for that change has made a change in method of accounting without obtaining the consent of the Commissioner as required by § 446(e) (an “unauthorized change”). As provided in section 12.02 of Rev. Proc. 2015–13 (or any successor), the Director may determine when a change is not made in compliance with all applicable provisions of Rev. Proc. 2015–13 (or any successor) and may deny the unauthorized change. However, the Commissioner’s consent, issued subsequent to the requested year of change, applies back to the year of change (and any subsequent taxable year) as of the date of the letter ruling granting consent for that change if the taxpayer timely signs and returns the Consent Agreement copy and implements the change in accordance with all applicable provisions of Rev. Proc. 2015–13 (or any successor) and section 11 of this revenue procedure. If the Commissioner does not grant consent under Rev. Proc. 2015–13 (or any successor) for the change in method of accounting taken into account by the taxpayer, the taxpayer is subject to any interest, penalties, or other adjustments resulting from improper implementation of the change. See § 446(f). A taxpayer who timely files a non-automatic Form 3115 and takes the requested change into account in the taxpayer’s Federal income tax return for the year of change (and any subsequent taxable year), prior to receiving the letter ruling granting permission for the requested change, may nevertheless rely on the letter ruling received from the Associate office after it is received, as provided in section 9.19 of this revenue procedure. If, however, the requested change is modified or is withdrawn, denied, or similarly closed without the Associate office having granted consent, taxpayers are not relieved of any interest, penalties, or other adjustments resulting from improper implementation of the change.

A copy of the change in method of accounting letter ruling is sent to appropriate Service official

.18 The Associate office will send a copy of each change in method of accounting letter ruling, whether favorable or adverse, to the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return.

Consent to change a method of accounting may be relied on subject to limitations

.19 A taxpayer may rely on a change in method of accounting letter ruling received from the Associate office, subject to certain conditions and limitations. See sections 7, 8, 10, 11, and 12 of Rev. Proc. 2015–13 (or any successor).

A qualifying taxpayer complying timely with an automatic change request procedure may rely on the consent of the Commissioner as provided in the automatic change request procedure to change the taxpayer’s method of accounting, subject to certain conditions and limitations. See generally sections 7, 8, 10, 11, and 12 of Rev. Proc. 2015–13 (or any successor). An Associate office may review a Form 3115 filed under an automatic change request procedure and will notify the taxpayer if additional information is needed or if consent is not granted to the taxpayer for the requested change. See section 11 of Rev. Proc. 2015–13 (or any successor). Further, the Field office that has jurisdiction over the taxpayer’s return may review the Form 3115. See section 12 of Rev. Proc. 2015–13 (or any successor).

Change in method of accounting letter ruling does not apply to another taxpayer

.20 A taxpayer may not rely on a change in method of accounting letter ruling issued to another taxpayer. See § 6110(k)(3).

Associate office discretion to permit requested change in method of accounting

.21 The Associate office reserves the right to decline to process any non-automatic Form 3115 in situations in which it would not be in the best interest of sound tax administration to permit the requested change or it would not clearly reflect income. In this regard, the Associate office will consider whether the change in method of accounting would clearly and directly frustrate compliance efforts of the Service in administering the income tax laws. See section 11.02 of Rev. Proc. 2015–13 (or any successor).

List of automatic change in method of accounting request procedures

.22 For procedures regarding requests for an automatic change in method of accounting, refer to the following published automatic change request procedures. The Commissioner’s consent to an otherwise qualifying automatic change in method of accounting is granted only if the taxpayer complies timely with the applicable automatic change request procedure.

The automatic change request procedures for obtaining a change in method of accounting include:

(1) Rev. Proc. 2015–13, 2015–5 I.R.B. 419 (or any successor). Rev. Proc. 2015–13 applies to the changes in method of accounting described in Rev. Proc. 2016–29, 2016–21 I.R.B. 880 (or any successor).

(2) The following automatic change request procedures, which require a completed Form 3115, provide both the procedures under which a change may be made automatically and the procedures under which such change must be made:

Treas. Reg. § 1.166–2(d)(3) (bank conformity for bad debts);

Treas. Reg. § 1.448–1 (to an overall accrual method for the taxpayer’s first taxable year it is subject to § 448) (this change may also be subject to the procedures of Rev. Proc. 2015–13, 2015–5 I.R.B. 419 (or any successor));

Treas. Reg. § 1.458–1 and –2 (exclusion for certain returned magazines, paperbacks, or records);

Rev. Proc. 97–43, 1997–2 C.B. 494 (§ 475 – electing out of certain exemptions from securities dealer status); and

Rev. Proc. 91–51, 1991–2 C.B. 779 (§ 1286 – certain taxpayers under examination that sell mortgages and retain rights to service the mortgages).

(3) The following automatic change request procedures, which do not require a completed Form 3115, provide the type of change in method of accounting that may be made automatically and also provide the procedures under which such change must be made:

Notice 96–30, 1996–1 C.B. 378 (§ 446 – change to comply with Statement of Financial Accounting Standards No. 116);

Rev. Proc. 92–29, 1992–1 C.B. 748 (§ 461 – change in real estate developer’s method for including costs of common improvements in the basis of property sold);

Rev. Proc. 98–58, 1998–2 C.B. 712 (certain taxpayers seeking to change to the installment method of accounting under § 453 for alternative minimum tax purposes for certain deferred payment sales contracts relating to property used or produced in the trade or business of farming);

Treas. Reg. § 1.472–2 (taxpayers changing to the last-in, first-out (LIFO) inventory method);

Section 585(c) and Treas. Reg. §§ 1.585–6 and 1.585–7 (large bank changing from the reserve method of § 585); and

Rev. Proc. 92–67, 1992–2 C.B. 429 (election under § 1278(b) to include market discount in income currently or election under § 1276(b) to use constant interest rate to determine accrued market discount).

(4) See Appendix G for the list of revenue procedures for automatic changes in accounting period.

Other sections of this revenue procedure that are applicable to Form 3115

.23 In addition to this section 9, the following sections of this revenue procedure apply to automatic change requests and non-automatic change requests:

1 (purpose of Rev. Proc. 2017–1);

2.01 (definition of “letter ruling”);

2.02 (definition of “closing agreement”);

2.05 (oral guidance);

3.01 (issues under the jurisdiction of the Associate Chief Counsel (Corporate));

3.02 (issues under the jurisdiction of the Associate Chief Counsel (Financial Institutions and Products));

3.03 (issues under the jurisdiction of the Associate Chief Counsel (Income Tax and Accounting));

3.04 (issues under the jurisdiction of the Associate Chief Counsel (International));

3.05 (issues under the jurisdiction of the Associate Chief Counsel (Passthroughs and Special Industries));

3.07 (issues under the jurisdiction of the Associate Chief Counsel (Tax Exempt and Government Entities));

5.03(2) (period of limitation when filing a request for extensions of time for making an election or for other relief under § 301.9100);

6.02 (letter rulings ordinarily not issued in certain areas because of the factual nature of the problem);

6.05 (letter rulings ordinarily not issued to business associations or groups);

6.06 (letter rulings ordinarily not issued where the request does not address the tax status, liability, or reporting obligations of the requester);

6.08 (letter rulings ordinarily not issued on Federal tax consequences of proposed legislation);

6.10 (letter rulings not issued on frivolous issues);

6.12 (letter rulings not issued on alternative plans or hypothetical situation);

7.01(1) (statement of facts and other information);

7.01(8) (statement of supporting authorities);

7.01(13) (authorized representatives);

7.01(14) (power of attorney and declaration of representative);

7.02(2) (power of attorney used to indicate recipient of a copy or copies of a letter ruling or a determination letter);

7.02(4) (expedited handling);

7.05(2) (notify Associate office if a return, amended return, or claim for refund is filed while request is pending and attach request to the return);

8.01 (receipt and control of the request, and referral to the appropriate Associate office);

8.04 (not bound by informal opinion expressed);

10 (scheduling conferences);

15 (user fees);

16 (significant changes to Rev. Proc. 2017–1);

17 (effect of Rev. Proc. 2017–1 on other documents);

18 (effective date of this revenue procedure);

Appendix A (schedule of user fees); and

Appendix G (revenue procedures and notices regarding letter ruling requests relating to specific Code sections and subject matters).

SECTION 10. HOW ARE CONFERENCES FOR LETTER RULINGS SCHEDULED?

Schedules a conference if requested by taxpayer

.01 A taxpayer may request a conference regarding a letter ruling request. Normally, a conference is scheduled only when the Associate office considers it to be helpful in deciding the case or when an adverse decision is indicated. If conferences are being arranged for more than one request for a letter ruling involving the same taxpayer, they will be scheduled so as to cause the least inconvenience to the taxpayer. As stated in sections 7.02(6) and 9.04(4) of this revenue procedure, a taxpayer who wants to have a conference on the issue or issues involved should indicate this in writing when, or soon after, filing the request.

If a conference has been requested, the taxpayer or the taxpayer’s representative will be notified by telephone, if possible, of the time and place of the conference, which must then be held within 21 calendar days after this contact. Instructions for requesting an extension of the 21-day period and notifying the taxpayer or the taxpayer’s representative of the Associate office’s approval or denial of the request for extension are the same as those explained in section 8.05(2) (section 9.08(2)(a) for a change in method of accounting request) of this revenue procedure regarding providing additional information.

Permits taxpayer one conference of right

.02 A taxpayer is entitled, as a matter of right, to only one conference in the Associate office, except as explained under section 10.05 of this revenue procedure. This conference is normally held at the branch level and is attended by a person who has the authority to sign the letter ruling in his or her own name or for the branch chief.

When more than one branch has taken an adverse position on an issue in a letter ruling request or when the position ultimately adopted by one branch will affect that adopted by another, a representative from each branch with the authority to sign in his or her own name or for the branch chief will attend the conference. If more than one subject is to be discussed at the conference, the discussion will constitute a conference on each subject.

To have a thorough and informed discussion of the issues, the conference usually will be held after the branch has had an opportunity to study the case. At the request of the taxpayer, the conference of right may be held earlier.

No taxpayer has a right to appeal the action of a branch to an Associate Chief Counsel or to any other official of the Service. But see section 10.05 of this revenue procedure for situations in which the Associate office may offer additional conferences.

In employment tax matters, if the service recipient (the firm) requests the letter ruling, the firm is entitled to a conference. If the worker requests the letter ruling, both the worker and the firm are entitled to a conference. See section 5.10 of this revenue procedure.

Disallows verbatim recording of conferences

.03 Because conference procedures are informal, no tape, stenographic, or other verbatim recording of a conference may be made by any party.

Makes tentative recommendations on substantive issues

.04 The senior Associate office representative present at the conference ensures that the taxpayer has the opportunity to present views on all the issues in question. An Associate office representative explains the Associate office’s tentative decision on the substantive issues and the reasons for that decision. If the taxpayer asks the Associate office to limit the retroactive effect of any letter ruling or limit the revocation or modification of a prior letter ruling, an Associate office representative will discuss the recommendation concerning this issue and the reasons for the recommendation. The Associate office representatives will not make a commitment regarding the conclusion that the Associate office will finally adopt.

May offer additional conferences

.05 The Associate office will offer the taxpayer an additional conference if, after the conference of right, an adverse holding is proposed, but on a new issue, or on the same issue but on different grounds from those discussed at the first conference. There is no right to another conference when a proposed holding is reversed at a higher level with a result less favorable to the taxpayer, if the grounds or arguments on which the reversal is based were discussed at the conference of right.

The limit on the number of conferences to which a taxpayer is entitled does not prevent the Associate office from offering additional conferences, including conferences with an official higher than the branch level, if the Associate office decides they are needed. These conferences are not offered as a matter of course simply because the branch has reached an adverse decision. In general, conferences with higher level officials are offered only if the Associate office determines that the case presents significant issues of tax policy or tax administration and that the consideration of these issues would be enhanced by additional conferences with the taxpayer.

Requires written confirmation of information presented at conference

.06 The taxpayer should furnish to the Associate office any additional data, reasoning, precedents, etc. that were proposed by the taxpayer and discussed at the conference but not previously or adequately presented in writing. The taxpayer must furnish the additional information within 21 calendar days from the date of the conference. If the additional information is not received within that time, a letter ruling will be issued on the basis of the information on hand or, if appropriate, no ruling will be issued. See section 8.05 of this revenue procedure for instructions on submission of additional information for a letter ruling request other than a change in method of accounting request. See section 9.08 of this revenue procedure for instructions on submitting additional information for a change in method of accounting request.

May schedule a pre-submission conference

.07 Sometimes it will be advantageous to both the Associate office and the taxpayer to hold a conference before the taxpayer submits the letter ruling request to discuss substantive or procedural issues relating to a proposed transaction. These conferences are held only if the identity of the taxpayer is provided to the Associate office, only if the taxpayer actually intends to make a request, only if the request involves a matter on which a letter ruling is ordinarily issued, and only at the discretion of the Associate office and as time permits. For example, a pre-submission conference will not be held on an income tax issue if, at the time the pre-submission conference is requested, the identical issue is involved in the taxpayer’s return for an earlier period and that issue is being examined by a Field office. See section 6.01(1) of this revenue procedure. A letter ruling request submitted following a pre-submission conference will not necessarily be assigned to the branch that held the pre-submission conference. Also, when a letter ruling request is not submitted following a pre-submission conference, the Associate office may notify, by memorandum, the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return and may give its views on the issues raised during the pre-submission conference. For LB&I taxpayers, a copy of the memorandum will be sent to the Assistant Deputy Commissioner, Compliance Integration. This memorandum may constitute Chief Counsel Advice, as defined in § 6110(i), and may be subject to disclosure under § 6110.

(1) Taxpayer may request a pre-submission conference in writing or by telephone. A taxpayer or the taxpayer’s representative may request a pre-submission conference in writing or by telephone. If the taxpayer’s representative is requesting the pre-submission conference, a power of attorney is required. A taxpayer should use Form 2848, Power of Attorney and Declaration of Representative, to provide the representative’s authority. If multiple taxpayers and/or their authorized representatives will attend or participate in the pre-submission conference, cross powers of attorney (or, as appropriate, tax information authorizations) are required. If the taxpayer’s representative is requesting the pre-submission conference by telephone, the Associate office’s representative (see list of phone numbers below) will provide the fax number to send the power of attorney (or, as appropriate, tax information authorizations) prior to scheduling the pre-submission conference.

The request must identify the taxpayer and briefly explain the primary issue so it can be assigned to the appropriate branch. If submitted in writing, the request should also identify the Associate office expected to have jurisdiction over the request for a letter ruling. A written request for a pre-submission conference should be sent to the appropriate address listed in section 7.04 of this revenue procedure.

To request a pre-submission conference by telephone, call:

(a) (202) 317-7700 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Corporate);

(b) (202) 317-3900 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Financial Institutions and Products);

(c) (202) 317-7002 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Income Tax and Accounting);

(d) (202) 317-3800 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (International);

(e) (202) 317-3100 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Passthroughs and Special Industries);

(f) (202) 317-3400 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Procedure and Administration); or

(g) (202) 317-6000 (not a toll-free call) for matters under the jurisdiction of the Office of Associate Chief Counsel (Tax Exempt and Government Entities).

(2) Pre-submission conferences held in person or by telephone. Depending on the circumstances, pre-submission conferences may be held in person at the Associate office or may be conducted by telephone.

(3) Certain information required to be submitted to the Associate office prior to the pre-submission conference. . Generally, the taxpayer will be asked to provide a statement of whether the issue is an issue on which a letter ruling is ordinarily issued and a draft of the letter ruling request or other detailed written statement explaining the proposed transaction, issue, and legal analysis, before scheduling the pre-submission conference. The Associate office will allow taxpayers to submit a statement after the conference is scheduled at its discretion. If the taxpayer’s authorized representative will attend or participate in the pre-submission conference, a power of attorney is required.

(4) Discussion of substantive issues is not binding on the Service. Any discussion of substantive issues at a pre-submission conference is advisory only, is not binding on the Service in general or on the Office of Chief Counsel in particular, and cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

May schedule a conference to be held by telephone

.08 Depending on the circumstances, conferences, including conferences of right and pre-submission conferences, may be held by telephone. This may occur, for example, when a taxpayer wants a conference of right but believes that the issue involved does not warrant incurring the expense of traveling to Washington, DC, or if it is believed that scheduling an in-person conference of right will substantially delay the ruling process. If a taxpayer makes such a request, the branch reviewer will decide if it is appropriate in the particular case to hold a conference by telephone. If the request is approved, the taxpayer will be advised when to call the Associate office representatives (not a toll-free call).

SECTION 11. WHAT EFFECT WILL A LETTER RULING HAVE?

May be relied on subject to limitations

.01 A taxpayer ordinarily may rely on a letter ruling received from the Associate office subject to the conditions and limitations described in this section.

Will not apply to another taxpayer

.02 A taxpayer may not rely on a letter ruling issued to another taxpayer. See § 6110(k)(3). However, shareholders and security holders of a corporation may rely on a letter ruling issued to the corporation for the limited purpose of determining the proper treatment of directly related tax items. For example, a letter ruling issued to a corporation with respect to the reorganization of that corporation may be relied upon by the corporation’s shareholders in determining their basis in the stock of the corporation following the reorganization. See also section 11.06(3) of this revenue procedure.

Will be used by a Field office in examining the taxpayer’s return

.03 When determining a taxpayer’s liability, the Field office must ascertain whether—

(1) the conclusions stated in the letter ruling are properly reflected in the return;

(2) the representations upon which the letter ruling was based reflect an accurate statement of the controlling facts;

(3) the transaction was carried out substantially as proposed; and

(4) there has been any change in the law that applies to the period during which the transaction or continuing series of transactions were consummated.

If, when determining the liability, the Field office finds that a letter ruling should be revoked or modified, the findings and recommendations of the Field office will be forwarded through the appropriate Director to the Associate office for consideration before further action is taken by the Field office. Such a referral to the Associate office will be treated as a request for technical advice and the provisions of Rev. Proc. 2017–2, this Bulletin, relating to requests for technical advice will be followed. See section 13.02 of Rev. Proc. 2017–2, this Bulletin. Otherwise, the Field office should apply the letter ruling in determining the taxpayer’s liability. If a Field office having jurisdiction over a return or other matter proposes to reach a conclusion contrary to a letter ruling previously issued to the taxpayer, it should coordinate the matter with the Associate office.

May be revoked or modified if found to be in error or there has been a change in law

.04 Unless it was part of a closing agreement as described in section 2.02 of this revenue procedure, a letter ruling found to be in error or not in accord with the current views of the Service may be revoked or modified. If a letter ruling is revoked or modified, the revocation or modification applies to all years open under the period of limitation unless the Service uses its discretionary authority under § 7805(b) to limit the retroactive effect of the revocation or modification.

A letter ruling may be revoked or modified by—

(1) a letter giving notice of revocation or modification to the taxpayer to whom the letter ruling was issued;

(2) the enactment of legislation or ratification of a tax treaty;

(3) a decision of the United States Supreme Court;

(4) the issuance of temporary or final regulations; or

(5) the issuance of a revenue ruling, revenue procedure, notice, or other statement published in the Internal Revenue Bulletin.

Consistent with these provisions, if a letter ruling relates to a continuing action or a series of actions, it ordinarily will be applied until any one of the events described above occurs or until it is specifically withdrawn.

Publication of a notice of proposed rulemaking will not affect the application of any letter ruling issued under this revenue procedure.

Where a letter ruling is revoked or modified by a letter to the taxpayer, the letter will state whether the revocation or modification is retroactive. Where a letter ruling is revoked or modified by the issuance of final or temporary regulations or by the publication of a revenue ruling, revenue procedure, notice, or other statement in the Internal Revenue Bulletin, the document may contain a statement as to its retroactive effect on letter rulings.

Letter ruling revoked or modified based on material change in facts applied retroactively

.05 An Associate office will revoke or modify a letter ruling and apply the revocation retroactively to the taxpayer for whom the letter ruling was issued or to a taxpayer whose tax liability was directly involved in the letter ruling if—

(1) there has been a misstatement or omission of controlling facts;

(2) the facts at the time of the transaction are materially different from the controlling facts on which the letter ruling was based; or

(3) the transaction involves a continuing action or series of actions and the controlling facts change during the course of the transaction.

Not otherwise generally revoked or modified retroactively

.06 Where the revocation or modification of a letter ruling is for reasons other than a change in facts as described in section 11.05 of this revenue procedure, it will generally not be applied retroactively to the taxpayer for whom the letter ruling was issued or to a taxpayer whose tax liability was directly involved in the letter ruling provided that—

(1) there has been no change in the applicable law;

(2) the letter ruling was originally issued for a proposed transaction; and

(3) the taxpayer directly involved in the letter ruling acted in good faith in relying on the letter ruling, and revoking or modifying the letter ruling retroactively would be to the taxpayer’s detriment. For example, the tax liability of each shareholder is directly involved in a letter ruling on the reorganization of a corporation. Depending on all facts and circumstances, the shareholders’ reliance on the letter ruling may be in good faith. The tax liability of a member of an industry, however, is not directly involved in a letter ruling issued to another member of the same industry. Therefore, a nonretroactive revocation or modification of a letter ruling to one member of an industry will not extend to other members of the industry who have not received letter rulings. By the same reasoning, a tax practitioner may not extend to one client the non-retroactive application of a revocation or modification of a letter ruling previously issued to another client.

If a letter ruling is revoked or modified by a letter to the taxpayer with retroactive effect, the letter to the taxpayer will, except in fraud cases, state the grounds on which the letter ruling is being revoked or modified and explain the reasons why it is being revoked or modified retroactively.

Retroactive effect of revocation or modification applied to a particular transaction

.07 A letter ruling issued on a particular transaction represents a holding of the Service on that transaction only. It will not apply to a similar transaction in the same year or any other year. Except in unusual circumstances, the application of that letter ruling to the transaction will not be affected by the later issuance of regulations (either temporary or final) if conditions (1) through (3) in section 11.06 of this revenue procedure are met.

If a letter ruling on a transaction is later found to be in error or no longer in accord with the position of the Service, it will not protect a similar transaction of the taxpayer in the same year or later year.

Retroactive effect of revocation or modification applied to a continuing action or series of actions

.08 If a letter ruling is issued covering a continuing action or series of actions and the letter ruling is later found to be in error or no longer in accord with the position of the Service, the appropriate Associate Chief Counsel ordinarily will limit the retroactive effect of the revocation or modification to a date that is not earlier than that on which the letter ruling is revoked or modified. For example, the retroactive effect of the revocation or modification of a letter ruling covering a continuing action or series of actions ordinarily would be limited in the following situations when the letter ruling is in error or no longer in accord with the position of the Service:

(1) A taxpayer received a letter ruling that certain payments are excludable from gross income for Federal income tax purposes. The taxpayer ordinarily would be protected only for the payment received after the letter ruling was issued and before the revocation or modification of the letter ruling.

(2) A taxpayer rendered a service or provided a facility that is subject to the excise tax on services or facilities and, in relying on a letter ruling received, it did not pass the tax on to the user of the service or the facility.

(3) An employer incurred liability under the Federal Insurance Contributions Act but, in relying on a letter ruling received, neither collected the employee tax nor paid the employee and employer taxes under the Federal Insurance Contributions Act. The retroactive effect would be limited for both the employer and employee tax. The limitation would be conditioned on the employer furnishing wage data, as may be required by § 31.6011(a)–1 of the Treasury Regulations.

Generally not retroactively revoked or modified if related to sale or lease subject to excise tax

.09 A letter ruling holding that the sale or lease of a particular article is subject to the manufacturer’s excise tax or the retailer’s excise tax may not retroactively revoke or modify an earlier letter ruling holding that the sale or lease of such an article was not taxable if the taxpayer to whom the letter ruling was issued, in relying on the earlier letter ruling, gave up possession or ownership of the article without passing the tax on to the customer. See § 1108(b), Revenue Act of 1926.

May be retroactively revoked or modified when transaction is entered into before the issuance of the letter ruling

.10 A taxpayer is not protected against retroactive revocation or modification of a letter ruling involving a transaction completed before the issuance of the letter ruling or involving a continuing action or series of actions occurring before the issuance of the letter ruling, because the taxpayer did not enter into the transaction relying on a letter ruling.

Taxpayer may request that retroactivity be limited

.11 Under § 7805(b), the Service may prescribe any extent to which a revocation or modification of a letter ruling will be applied without retroactive effect.

A taxpayer to whom a letter ruling has been issued may request that the appropriate Associate Chief Counsel limit the retroactive effect of any revocation or modification of the letter ruling.

For letter rulings governed by Rev. Proc. 2017–4, this Bulletin, a taxpayer to whom a letter ruling has been issued by the Commissioner, Tax Exempt and Government Entities may request limiting the retroactive effect of any revocation or modification of the letter ruling pursuant to the procedures set forth in section 29 of Rev. Proc. 2017–4, this Bulletin.

Format of request

(1) Request for relief under § 7805(b) must be made in required format. A request to limit the retroactive effect of the revocation or modification of a letter ruling must be in the general form of, and meet the general requirements for, a letter ruling request. These requirements are given in section 7 of this revenue procedure. Specifically, the request must also

(a) state that it is being made under § 7805(b);

(b) state the relief sought;

(c) explain the reasons and arguments in support of the relief requested (including a discussion of section 11.05 of this revenue procedure, the three items listed in section 11.06 of this revenue procedure, and any other factors as they relate to the taxpayer’s particular situation); and

(d) include any documents bearing on the request.

A request that the Service limit the retroactive effect of a revocation or modification of a letter ruling may be made in the form of a separate request for a letter ruling when, for example, a revenue ruling has the effect of modifying or revoking a letter ruling previously issued to the taxpayer or when the Service notifies the taxpayer of a change in position that will have the effect of revoking or modifying the letter ruling.

When notice is given by the Field office during an examination of the taxpayer’s return or by Appeals, during consideration of the taxpayer’s return before Appeals, a request to limit retroactive effect must be made in the form of a request for technical advice as explained in section 14.02 of Rev. Proc. 2017–2, this Bulletin.

When germane to a pending letter ruling request, a request to limit the retroactive effect of a revocation or modification of a letter ruling may be made as part of the request for the letter ruling, either initially or at any time before the letter ruling is issued. When a letter ruling that concerns a continuing transaction is revoked or modified by, for example, a subsequent revenue ruling, a request to limit retroactive effect must be made before the examination of the return that contains the transaction that is the subject of the letter ruling request.

Request for conference

(2) Taxpayer may request a conference on application of § 7805(b). A taxpayer who requests the application of § 7805(b) in a separate letter ruling request has the right to a conference in the Associate office as explained in sections 10.02, 10.04, and 10.05 of this revenue procedure. If the request is made initially as part of a pending letter ruling request or is made before the conference of right is held on the substantive issues, the § 7805(b) issue will be discussed at the taxpayer’s one conference of right as explained in section 10.02 of this revenue procedure. If the request for the application of § 7805(b) relief is made as part of a pending letter ruling request after a conference has been held on the substantive issue and the Associate office determines that there is justification for having delayed the request, the taxpayer is entitled to one conference of right concerning the application of § 7805(b), with the conference limited to discussion of this issue only.

SECTION 12. UNDER WHAT CIRCUMSTANCES DO DIRECTORS ISSUE DETERMINATION LETTERS?

Directors issue determination letters only if the question presented is specifically answered by a statute, tax treaty, or regulations, a conclusion stated in a revenue ruling, or an opinion or court decision that represents the position of the Service.

Under no circumstances will a Director issue a determination letter unless it is clearly shown that the request concerns a return that has been filed or is required to be filed and over which the Director has, or will have, examination jurisdiction.

A determination letter does not include assistance provided by the U.S. competent authority pursuant to the mutual agreement procedure in tax treaties as set forth in Rev. Proc. 2015–40, 2015–35 I.R.B. 236.

In income and gift tax matters

.01 In income and gift tax matters, Directors issue determination letters in response to taxpayers’ written requests on completed transactions that affect returns over which they have examination jurisdiction. A determination letter usually is not issued for a question concerning a return to be filed by the taxpayer if the same question is involved in a return already filed.

Normally, Directors do not issue determination letters on the tax consequences of proposed transactions. A Director may issue a determination letter on the replacement of involuntarily converted property under § 1033, even if the replacement has not yet been made, if the taxpayer has filed an income tax return for the year in which the property was involuntarily converted.

In estate tax matters

.02 In estate tax matters, Directors issue determination letters in response to written requests affecting the estate tax returns over which they have examination jurisdiction. They do not issue determination letters on matters concerning the application of the estate tax to the prospective estate of a living person.

In generation-skipping transfer tax matters

.03 In generation-skipping transfer tax matters, Directors issue determination letters in response to written requests affecting the generation-skipping transfer tax returns over which they have examination jurisdiction. They do not issue determination letters on matters concerning the application of the generation-skipping transfer tax before the distribution or termination takes place.

In employment and excise tax matters

.04 In employment and excise tax matters, Directors issue determination letters in response to taxpayers’ written requests on completed transactions over which they have examination jurisdiction.

All determination letter requests regarding employment status (employer/employee relationship) made by taxpayers that are not Federal agencies and instrumentalities or their workers, must be submitted to the Internal Revenue Service at the address set forth on the current instructions for Form SS–8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.

If the service recipient (the firm) requests the determination regarding employment status, the firm will receive any determination letter issued. A copy will also be sent to any workers identified in the request. If the worker makes the request and the firm has been contacted for information, both the worker and the firm will receive any issued determination letter. The determination letter will apply to any individuals engaged by the firm under substantially similar circumstances. See section 5.10 of this revenue procedure for requests regarding employment status made by Federal agencies and instrumentalities or their workers.

Requests concerning income, estate, or gift tax returns

.05 A request received by a Director on a question concerning an income, estate, or gift tax return already filed generally will be considered in connection with the examination of the return. If a response is made to the request before the return is examined, it will be considered a tentative finding in any later examination of that return.

Review of determination letters

.06 Determination letters issued under sections 12.01 through 12.04 of this revenue procedure are not reviewed by the Associate offices before they are issued. If a taxpayer believes that a determination letter of this type is in error, the taxpayer may ask the Director to reconsider the matter or to request technical advice from an Associate office as explained in Rev. Proc. 2017–2, this Bulletin.

The preceding sentence does not apply to SS–8 requests under section 12.04. If a taxpayer disagrees with a determination of employment status made in response to an SS–8 request, the taxpayer may request that the SS–8 Program reconsider the determination letter if the taxpayer has additional information concerning the relationship that was not part of the original submission or the taxpayer can identify facts that were part of the original submission that the taxpayer thinks were not fully considered.

SECTION 13. WHAT EFFECT WILL A DETERMINATION LETTER HAVE?

Has same effect as a letter ruling

.01 A determination letter issued by a Director has the same effect as a letter ruling issued to a taxpayer under section 11 of this revenue procedure.

If a Field office proposes to reach a conclusion contrary to that expressed in a determination letter, that office need not refer the matter to the Associate office as is required for a letter ruling found to be in error. The Field office must, however, refer the matter to the Associate office through the appropriate Director if it desires to have the revocation or modification of the determination letter limited under § 7805(b), except if the determination letter has been issued by the Commissioner, Tax Exempt and Government Entities. See Rev. Proc. 2017–4 and Rev. Proc. 2017–5.

Taxpayer may request that retroactive effect of revocation or modification be limited

.02 Under § 7805(b), the Service may prescribe the extent to which a revocation or modification of a determination letter will be applied without retroactive effect. A Director does not have authority under § 7805(b) to limit the revocation or modification of the determination letter. Therefore, if the Field office proposes to revoke or modify a determination letter, the taxpayer may request limitation of the retroactive effect of the revocation or modification by asking the Director that issued the determination letter to seek technical advice from the Associate office. See section 14.02 of Rev. Proc. 2017–2, this Bulletin.

A taxpayer to whom a determination letter has been issued by the Commissioner, Tax Exempt and Government Entities may request limiting the retroactive effect of any revocation or modification of the determination letter pursuant to the procedures set forth in section 23 of Rev. Proc. 2017–4, or section 12.04 of 2017–5, this Bulletin.

Format of request

(1) Request for relief under § 7805(b) must be made in required format. A taxpayer’s request to limit the retroactive effect of the revocation or modification of the determination letter must be in the form of, and meet the general requirements for, a technical advice request. See section 14.02 of Rev. Proc. 2017–2, this Bulletin. The request must also—

(a) state that it is being made under § 7805(b);

(b) state the relief sought;

(c) explain the reasons and arguments in support of the relief sought (including a discussion of section 11.05 of this revenue procedure, the three items listed in section 11.06 of this revenue procedure, and any other factors as they relate to the taxpayer’s particular situation); and

(d) include any documents bearing on the request.

Request for conference

(2) Taxpayer may request a conference on application of § 7805(b). When technical advice is requested regarding the application of § 7805(b), the taxpayer has the right to a conference with the Associate office to the same extent as does any taxpayer who is the subject of a technical advice request. See section 14.04 of Rev. Proc. 2017–2, this Bulletin.

SECTION 14. UNDER WHAT CIRCUMSTANCES ARE MATTERS REFERRED BETWEEN A DIRECTOR AND AN ASSOCIATE OFFICE?

Requests for determination letters

.01 If a Director receives a request for a determination letter, but it may not issue one under the provisions of this revenue procedure, the Director will forward the request to the appropriate Associate office for reply. The Field office will notify the taxpayer that the matter has been referred.

Directors will also refer to the appropriate Associate office any request for a determination letter that in their judgment should have the attention of the Associate office. The Field office will notify the taxpayer that the matter has been referred.

No-rule areas

.02 If the request involves an issue on which the Service will not issue a letter ruling or determination letter, the request will not be forwarded to an Associate office. The Director will notify the taxpayer that the Service will not issue a letter ruling or a determination letter on the issue. See section 6 of this revenue procedure for a description of no-rule areas.

Requests for letter rulings

.03 If an Associate office receives a request for a letter ruling that it may not act upon under section 6 of this revenue procedure, the Associate office may, in its discretion, forward the request to the Field office that has examination jurisdiction over the taxpayer’s return. The taxpayer will be notified of this action. If the request is on an issue or in an area of the type discussed in section 6 of this revenue procedure and the Service decides not to issue a letter ruling or a determination letter, the Associate office will notify the taxpayer and will then forward the request to the appropriate Field office for association with the related return.

Letter ruling request mistakenly sent to a Director

.04 If a request for a letter ruling is mistakenly sent to a Director, the Director will return it to the taxpayer so that the taxpayer can send it to an Associate office.

SECTION 15. WHAT ARE THE USER FEE REQUIREMENTS FOR REQUESTS FOR LETTER RULINGS AND DETERMINATION LETTERS?

Legislation authorizing user fees

.01 Section 7528 was added to the Internal Revenue Code by section 202 of the Extension of the Temporary Assistance for Needy Families Block Grant Program, Pub. L. No. 108–89, amended by section 891(a) of the American Jobs Creation Act of 2004, Pub. L. 108–357, and was made permanent by section 8244 of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, Pub. L. No. 110–28.

Section 7528 provides that the Secretary of the Treasury or delegate (the “Secretary”) shall establish a program requiring the payment of user fees for requests to the Service for letter rulings, opinion letters, determination letters, and other similar requests. The fees charged under the program are to: (1) vary according to categories or subcategories established by the Secretary; (2) be determined after taking into account the average time for, and difficulty of, complying with requests in each category or subcategory; and (3) be payable in advance. The Secretary is to provide for exemptions and reduced fees under the program as the Secretary determines to be appropriate, but the average fee applicable to each category or subcategory must not be less than the amount specified in § 7528(b)(3).

Requests to which a user fee applies

.02 In general, user fees apply to all requests for—

(1) letter rulings (including non-automatic Forms 3115, Application for Change in Accounting Method), determination letters, and advance pricing agreements;

(2) closing agreements described in paragraph (A)(3)(d) of Appendix A of this revenue procedure and pre-filing agreements described in Rev. Proc. 2009–14, 2009–3 I.R.B. 324 (or its successor);

(3) renewal of advance pricing agreements; and

(4) reconsideration of letter rulings or determination letters.

Requests to which a user fee applies must be accompanied by the appropriate fee as determined from the fee schedule provided in Appendix A of this revenue procedure. The fee may be refunded as provided in section 15.10 of this revenue procedure.

Requests to which a user fee does not apply

.03 User fees do not apply to—

(1) elections made pursuant to § 301.9100–2, pertaining to automatic extensions of time (see section 5.03 of this revenue procedure);

(2) late initial classification elections made pursuant to Rev. Proc. 2009–41, 2009–2 C.B. 439 (see section 5.03(6) of this revenue procedure);

(3) late S corporation and related elections made pursuant to Rev. Proc. 2013–30, 2013–36 I.R.B. 173 (see section 5.02 of this revenue procedure);

(4) requests for a change in accounting period or method of accounting permitted to be made by a published automatic change request revenue procedure (see section 9.01(1) of this revenue procedure);

(5) requests for harassment campaign letter rulings under Section 6104(d)(4);

(6) request for Neighborhood Land Use Rule letter rulings under Section 514(b)(3);

(7) information letters; or

(8) late elections under § 338 that qualify under the automatic provisions in sections 3, 4, and 5 of Rev. Proc. 2003–33, 2003–1 C.B. 803.

Exemptions from the user fee requirements

.04 The user fee requirements do not apply to—

(1) departments, agencies, or instrumentalities of the United States if they certify that they are seeking a letter ruling or determination letter on behalf of a program or activity funded by Federal appropriations. The fact that a user fee is not charged does not have any bearing on whether an applicant is treated as an agency or instrumentality of the United States for purposes of any provision of the Code; or

(2) requests as to whether a worker is an employee for Federal employment taxes and income tax withholding purposes (Subtitle C of the Code) submitted on Form SS–8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, or its equivalent.

Fee schedule

.05 The schedule of user fees is provided in Appendix A of this revenue procedure. For the user fee requirements applicable to—

(1) requests for advance pricing agreements or renewals of advance pricing agreements, see section 3.05 of Rev. Proc. 2015–41, 2015–35 I.R.B. 263; or

(2) requests for letter rulings, determination letters, etc. under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division (which no longer include changes in method of accounting), see Rev. Proc. 2017–4 and Rev. Proc. 2017–5, this Bulletin.

Applicable user fee for a request involving multiple offices, fee categories, issues, transactions, or entities

.06

(1) Requests involving several offices. If a request dealing with only one transaction involves more than one office within the Service (for example, one issue is under the jurisdiction of the Associate Chief Counsel (Passthroughs and Special Industries) and another issue is under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division), only one fee applies, namely the highest fee that otherwise would apply to each of the offices involved. See Rev. Proc. 2017–4 and Rev. Proc. 2017–5, this Bulletin, for the user fees applicable to issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division.

(2) Requests involving several fee categories. If a request dealing with only one transaction involves more than one fee category, only one fee applies, the highest fee that otherwise would apply to each of the categories involved.

(3) Requests involving several issues. If a request dealing with only one transaction involves several issues, a request for a change in method of accounting dealing with only one item or submethod of accounting involves several issues, or a request for a change in accounting period dealing with only one item involves several issues, the request is treated as one request. Therefore, only one fee applies, i.e., the fee that applies to the particular category or subcategory involved. The addition of a new issue relating to the same transaction, item, or submethod will not result in an additional fee unless the issue places the transaction, item, or submethod in a higher fee category. So long as the issues all relate to a single transaction, a request that the Service address one or more of the issues in a separate ruling will not result in an additional fee.

(4) Requests involving several unrelated transactions. If a request involves several unrelated transactions, a request for a change in method of accounting involves several unrelated items or submethods of accounting, or a request for a change in accounting period involves several unrelated items, each transaction or item is treated as a separate request. As a result, a separate fee will apply for each unrelated transaction, item, or submethod. An additional fee will apply if the request is changed by the addition of an unrelated transaction, item, or submethod not contained in the initial request. An example of a request involving unrelated transactions is a request involving relief under § 301.9100–3 and the underlying issue.

(5) Requests involving several entities. Each entity involved in a transaction (for example, a reorganization) that desires a separate letter ruling in its own name must pay a separate fee regardless of whether the transaction or transactions may be viewed as related. But see section 15.07 of this revenue procedure.

(6) Requests made by married taxpayers who file jointly. A married couple filing a joint return may jointly request a single letter ruling and pay a single user fee if the issues arise from a joint activity or if the spouses would otherwise qualify for substantially identical letter rulings. If a spouse desires a ruling to be individually issued to him or her, a separate fee must be paid for each individual request. But see section 15.07 of this revenue procedure (providing a reduced user fee for substantially identical letter rulings or substantially identical changes in method of accounting).

Applicable user fee for requests for substantially identical letter rulings or identical changes in method of accounting

.07

(1) In general. The user fees provided in paragraph (A)(5) of Appendix A of this revenue procedure apply to the situations described in sections 15.07(2) and 15.07(4) of this revenue procedure. To assist in the processing of these user fee requests, all letter ruling requests submitted under this section 15.07 should—

(a) except for non-automatic Forms 3115, include the following typed or printed language at the top of the letter ruling request: “REQUEST FOR USER FEE UNDER SECTION 15.07 OF REV. PROC. 2017–1”;

(b) list on the first page of the submission all taxpayers and entities, and separate and distinct trades or businesses, including qualified subchapter S subsidiaries (QSubs) or single member limited liability companies (single member LLCs), requesting a letter ruling (including the taxpayer identification number and the amount of user fee submitted for each taxpayer, entity, or separate and distinct trade or business); and

(c) make one payment to cover all user fees.

If the Service determines that the letter ruling requests do not qualify for the user fee provided in paragraph (A)(5) of Appendix A of this revenue procedure, the Service will request the proper fee. See section 15.09 of this revenue procedure.

(2) Substantially identical letter rulings. The user fee provided in paragraph (A)(5)(a) of Appendix A of this revenue procedure applies to a taxpayer or taxpayers requesting substantially identical letter rulings (including accounting period, method of accounting, and earnings and profits requests other than those submitted on Form 1128, Application to Adopt, Change, or Retain a Tax Year, Form 2553, Election by a Small Business Corporation, Form 3115, Application for Change in Accounting Method, and Form 5452, Corporate Report of Nondividend Distributions) in the following situations:

  • (a) The taxpayers to whom the letter rulings will be issued are multiple entities with a common member or sponsor, or multiple members of a common entity; or

  • (b) The taxpayers to whom the letter rulings will be issued are parties engaged together in the same transaction affecting all requesting taxpayers.

To qualify for this reduced user fee, all information and underlying documents must be substantially identical and all letter ruling requests must be submitted at the same time in a single submission. In addition, the taxpayer(s) must state that the letter ruling requests and all information and underlying documents are substantially identical, and must specifically identify the extent to which the letter ruling requests, information, and underlying documents are not identical.

If a taxpayer or taxpayers requesting reduced user fees pursuant to this section 15.07(2) also request a pre-submission conference pursuant to section 10.07, the taxpayer(s) should notify the Associate office at or before the pre-submission conference that the taxpayer(s) intend to request reduced user fees pursuant to this paragraph. At the pre-submission conference, the taxpayer(s) should discuss with the Associate office how the letter ruling requests will satisfy the requirements of this paragraph.

The reduced fee for substantially identical letter rulings is applicable to taxpayers requesting closing agreements as described in section 2.02 of this revenue procedure, assuming they meet the requirements described above for letter rulings.

(3) Substantially identical plans under § 25(c)(2)(B). The user fee provided in paragraph (A)(5)(c) of Appendix A of this revenue procedure shall apply to a taxpayer who submits substantially identical plans for administering the 95-percent requirement of § 143(d)(1) following the submission and approval of an initial plan for administering the requirement. The request for subsequent approvals of substantially identical plans must (1) state that a prior plan was submitted and approved and include a copy of the prior plan and approval; (2) state that the subsequent plan is substantially identical to the approved plan; and (3) describe any differences between the approved plan and the subsequent plan.

(4) Identical changes in method of accounting and related § 301.9100 letter rulings. A common parent of a consolidated group, or other taxpayer, is eligible for the user fees provided in paragraphs (A)(5)(b) and (d) of Appendix A of this revenue procedure when requesting an identical change in method of accounting on a single Form 3115, Application for Change in Accounting Method, or an extension of time to file Form 3115 under § 301.9100–3 for the identical change in method of accounting, for two or more of the following in any combination—

(a) members of that consolidated group;

(b) separate and distinct trades or businesses (for purposes of § 1.446–1(d)) of that taxpayer or member(s) of that consolidated group. Separate and distinct trades or businesses, include QSubs and single member LLCs;

(c) partnerships that are wholly-owned within that consolidated group; or

(d) controlled foreign corporations (CFCs) and noncontrolled § 902 corporations (10/50 corporations) that do not engage in a trade or business within the United States where (i) all controlling U.S. shareholders of the CFCs and all majority domestic corporate shareholders of the 10/50 corporations, as applicable, are members of that consolidated group; or (ii) the taxpayer is the sole controlling U.S. shareholder of the CFCs or the sole domestic corporate shareholder of that 10/50 corporation.

To qualify as an identical change in method of accounting, the multiple entities wholly owned or controlled by a consolidated group or other taxpayer, or separate and distinct trades or businesses (that is, the applicants) must request to change from an identical present method of accounting to an identical proposed method of accounting. All aspects of the requested change in method of accounting must be identical, including the year of change, the present and proposed methods, the underlying facts and the authority for the request, except for the § 481(a) adjustments. If the Associate office determines that the requested changes in method of accounting are not identical, additional user fees will be required before any letter ruling is issued.

The taxpayer or common parent must, for each applicant for which the change in method of accounting is being requested, attach to the Form 3115 a schedule providing the name, employer identification number (where applicable), and § 481(a) adjustment. If the request is on behalf of eligible CFCs or 10/50 corporations, the taxpayer or common parent must attach a statement that “[a]ll controlling U.S. shareholders (as defined in § 1.964–1(c)(5)(i)) of all the CFCs to which the request relates are members of the common parent’s consolidated group,” “[a]ll majority domestic corporate shareholders (as defined in § 1.964–1(c)(5)(ii)) of all the 10/50 corporations to which the request relates are members of the common parent’s consolidated group,” that “the taxpayer filing the request is the sole controlling U.S. shareholder (as defined in § 1.964–1(c)(5)) of the CFCs to which the request relates,” or “the taxpayer filing the request is the sole domestic corporate shareholder (as defined in § 1.964–1(c)(5)) of the 10/50 corporations to which the request relates,” as applicable. If the request is on behalf of eligible partnerships, the common parent must attach a statement that “[a]ll partnerships to which the request relates are wholly-owned by members of the common parent’s consolidated group.”

In the case of a § 301.9100 request for an extension of time to file a Form 3115 requesting an identical change in method of accounting for multiple members of a consolidated group and/or multiple separate and distinct trades or businesses of a taxpayer or member(s) of the consolidated group, or multiple eligible CFCs or 10/50 corporations (applicants), the taxpayer or common parent must submit the information required in the preceding paragraph in addition to the information required by section 5.03 of this revenue procedure.

Method of payment

.08 Each request to the Service for a letter ruling, determination letter, advance pricing agreement, closing agreement described in paragraph (A)(3)(d) of Appendix A of this revenue procedure, or reconsideration of a letter ruling or determination letter must be accompanied by full payment. The IRS is transitioning towards using www.pay.gov as the exclusive means for making payments for user fees in this revenue procedure. An announcement will provide more details about the transition period to www.pay.gov, which will accept credit card payments under $25,000 and direct debit through a checking or savings account. During the transition period, payment may be made by either www.pay.gov or by sending a check or money order in U.S. dollars, payable to the Internal Revenue Service, in the appropriate amount.

User fees for Statement of Value requests submitted pursuant to Rev. Proc. 96–15 must be paid by direct debit from a checking or savings account through www.pay.gov. Payment confirmations are provided through the www.pay.gov portal and should be submitted with the Statement of Value request. Art Appraisal Services will not consider a Statement of Value request complete, and will hold the request in suspense, until the correct user fee is paid through the www.pay.gov website. Additional information about Statement of Value requests can be found at www.irs.gov/Individuals/Art-Appraisal-Services. Information on payment submission can be found under Frequently Asked Questions at www.pay.gov.

Effect of nonpayment or payment of incorrect amount

.09 If a request is not matched with full payment through www.pay.gov or accompanied by full payment, the office within the Service that is responsible for issuing the letter ruling, determination letter, information letter, advance pricing agreement, closing agreement, or reconsideration of a letter ruling or determination letter generally will exercise discretion in deciding whether to immediately return the request. If a request is not immediately returned, the taxpayer will be contacted and given a reasonable amount of time to submit the proper fee. If the proper fee is not received within a reasonable amount of time, the entire request will then be returned. The Service will usually defer substantive consideration of a request until proper payment has been received. The return of a request to the taxpayer may adversely affect substantive rights if the request is not perfected and resubmitted to the Service within 30 calendar days of the date of the cover letter returning the request.

If a payment is made for more than the correct amount, the request will be accepted and the amount of the excess payment will be returned to the taxpayer.

Refunds of user fee

.10 In general, the user fee will not be refunded unless the Service declines to rule on all issues for which a ruling is requested.

(1) The following situations are examples of situations in which the user fee will not be refunded:

(a) The request for a letter ruling, determination letter, etc. is withdrawn at any time subsequent to its receipt by the Service unless the only reason forwithdrawal is that the Service has advised the taxpayer that a higher user fee than was sent with the request is applicable and the taxpayer is unwilling to pay the higher fee.

(b) The request is procedurally deficient, although accompanied by the proper fee or an overpayment, and is not timely perfected. When there is a failure to timely perfect the request, the case will be considered closed and the failure to perfect will be treated as a withdrawal for purposes of this revenue procedure. See section 8.05(3) of this revenue procedure.

(c) The Associate office notifies the taxpayer that the Associate office will not issue the letter ruling and has closed the case as a result of the taxpayer’s failure to submit timely the additional information requested by the Associate office. The failure to submit the additional information will be treated as a withdrawal for purposes of this revenue procedure. See section 8.05(3) of this revenue procedure (section 9.08(7) for a request for a change in method of accounting).

(d) A letter ruling, determination letter, etc. is revoked in whole or in part at the initiative of the Service. The fee paid at the time the original letter ruling, determination letter, etc. was requested will not be refunded.

(e) The request contains several issues, and the Service rules on some, but not all, of the issues. The highest fee applicable to the issues on which the Service rules will not be refunded.

(f) The taxpayer asserts that a letter ruling the taxpayer received covering a single issue is erroneous or not responsive (other than an issue on which the Associate office has declined to rule) and requests reconsideration. The Associate office, upon reconsideration, does not agree that the letter ruling is erroneous or is not responsive. The fee accompanying the request for reconsideration will not be refunded.

(g) The situation is the same as described in paragraph (f) of this section 15.10(1) except that the letter ruling covered several unrelated transactions. The Associate office, upon reconsideration, does not agree with the taxpayer that the letter ruling is erroneous or is not responsive for all of the transactions, but does agree that it is erroneous as to one transaction. The fee accompanying the request for reconsideration will not be refunded except to the extent applicable to the transaction for which the Associate office agrees the letter ruling was in error.

(h) The request is for a supplemental letter ruling, determination letter, etc. concerning a change in facts (whether significant or not) relating to the transaction on which the Service ruled.

(i) The request is for reconsideration of an adverse or partially adverse letter ruling or a final adverse determination letter, and the taxpayer submits arguments and authorities not submitted before the original letter ruling or determination letter was issued.

(2) The following situations are examples of situations in which the user fee will be refunded:

(a) In a situation to which section 15.10(1)(i) of this revenue procedure does not apply, the taxpayer asserts that a letter ruling the taxpayer received covering a single issue is erroneous or is not responsive (other than an issue on which the Associate office declined to rule) and requests reconsideration. Upon reconsideration, the Associate office agrees that the letter ruling is erroneous or is not responsive. The fee accompanying the taxpayer’s request for reconsideration will be refunded.

(b) In a situation to which section 15.10(1)(i) of this revenue procedure does not apply, the taxpayer requests a supplemental letter ruling, determination letter, etc. to correct a mistake that the Service agrees it made in the original letter ruling, determination letter, etc. such as a mistake in the statement of facts or in the citation of a Code section. Once the Service agrees that it made a mistake, the fee accompanying the request for the supplemental letter ruling, determination letter, etc. will be refunded.

(c) The taxpayer requests and is granted relief under § 7805(b) in connection with the revocation in whole or in part, of a previously issued letter ruling, determination letter, etc. The fee accompanying the request for relief will be refunded.

(d) In a situation to which section 15.10(1)(e) of this revenue procedure applies, the taxpayer requests reconsideration of the Service’s decision not to rule on an issue. Once the Service agrees to rule on the issue, the fee accompanying the request for reconsideration will be refunded.

(e) The letter ruling is not issued and taking into account all the facts and circumstances, including the Service’s resources devoted to the request, the responsible Associate Chief Counsel determines a refund is appropriate. This determination is at the sole discretion of the Associate Chief Counsel.

(f) Refunds based on grounds listed in section 15.10(2)(a) through (d) of this revenue procedure are approved at the branch level by a reviewer or branch chief. Refunds based on the ground listed in section 15.10(2)(e) of this revenue procedure must be approved by the Associate Chief Counsel.

Request for reconsideration of user fee

.11 A taxpayer who believes the user fee charged by the Service for its request for a letter ruling, determination letter, advance pricing agreement, or closing agreement is either inapplicable or incorrect and wishes to receive a refund of all or part of the amount paid (see section 15.10 of this revenue procedure) may request reconsideration and, if desired, the opportunity for an oral discussion by sending a letter to the Service at the appropriate address given in section 7.04 in this revenue procedure. Both the incoming envelope and the letter requesting such reconsideration should be prominently marked “USER FEE RECONSIDERATION REQUEST.” No user fee is required for these requests. The request should be marked for the attention of: If the matter involves primarily: Mark for the attention of:

Associate Chief Counsel (Corporate) letter ruling requests

Associate Chief Counsel (Corporate)

Associate Chief Counsel (Financial Institutions and Products) letter ruling requests Associate Chief Counsel (Financial Institutions and Products)

Associate Chief Counsel (Income Tax and Accounting) letter ruling requests

Associate Chief Counsel (Income Tax and Accounting)

Associate Chief Counsel (International) letter ruling requests

Associate Chief Counsel (International)

Associate Chief Counsel (Passthroughs and Special Industries) letter ruling requests

Associate Chief Counsel (Passthroughs and Special Industries)

Associate Chief Counsel (Procedure and Administration) letter ruling requests

Associate Chief Counsel (Procedure and Administration)

Associate Chief Counsel (Tax Exempt and Government Entities) letter ruling requests

Deputy Associate Chief Counsel ( ) (Complete parenthetical by using the applicable designation “Employee Benefits” or “Exempt Organizations/Employment Tax/Government Entities”)

Determination letter requests submitted pursuant to this revenue procedure by taxpayers under the jurisdiction of LB&I

Assistant Deputy Commissioner, Compliance Integration

Determination letter requests submitted pursuant to this revenue procedure by taxpayers under the jurisdiction of SB/SE, W&I

The appropriate SB/SE official listed in Appendix F

Determination letter requests submitted pursuant to this revenue procedure by taxpayers under the jurisdiction of TE/GE

Director, Employee Plans Examinations

Director, Exempt Organizations Examinations

Director, Federal, State & Local Governments

Director, Tax Exempt Bonds

Director, Indian Tribal Governments

(Add name of Field office handling the request)

SECTION 16. WHAT SIGNIFICANT CHANGES HAVE BEEN MADE TO REV. PROC. 2016–1?

Editorial changes have been made throughout.

Section 2.01 was amended to clarify that letter rulings are subject to exchange of information under U.S. tax treaties or tax information exchange agreements.

Section 10.07(3) was amended to provide that taxpayers generally should submit a statement of whether the issue that is the subject of a request is an issue on which a letter ruling is ordinarily issued and a draft of the letter ruling request or other detailed written statement explaining the proposed transaction, issue, and legal analysis, before scheduling the pre-submission conference.

Section 15.07 was amended to clarify and expand when the reduced user fee for substantially identical letter rulings applies. Conforming changes were made throughout.

Section 15.08 was amended to reflect that the IRS is transitioning towards making www.pay.gov the exclusive means for making payments for certain guidance under this revenue procedure. Conforming changes were made throughout.

Sections B.3 and B.5 of Appendix A were amended to clarify the calculation of gross income for S corporations.

SECTION 17. WHAT IS THE EFFECT OF THIS REVENUE PROCEDURE ON OTHER DOCUMENTS?

.01 Rev. Proc. 2016–1, 2016–1 I.R.B. 1 is superseded.

SECTION 18. WHAT IS THE EFFECTIVE DATE OF THIS REVENUE PROCEDURE?

This revenue procedure is effective January 3, 2017.

SECTION 19. PAPERWORK REDUCTION ACT

The collections of information contained in this revenue procedure have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. § 3507) under control number 1545-1522.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

The collections of information in this revenue procedure are in sections 5.06, 6.03, 7.01, 7.02, 7.03, 7.04, 7.05, 7.07, 7.08, 8.02. 8.05, 8.07, 10.01, 10.06, 10.07, 11.11, 13.02, 15.02, 15.07, 15.08, 15.09, 15.11, paragraph (B)(1) of Appendix A, Appendix C, Appendix D, Appendix E, and Appendix G (subject matter—rate orders; regulatory agency; normalization). This information is required to evaluate and process the request for a letter ruling or determination letter. In addition, this information will be used to help the Service delete certain information from the text of the letter ruling or determination letter before it is made available for public inspection as required by § 6110. The collections of information are required to obtain a letter ruling or determination letter. The likely respondents are businesses or other for-profit institutions and tax exempt organizations.

The estimated total annual reporting and/or recordkeeping burden is 316,020 hours.

The estimated annual burden per respondent/recordkeeper varies from 1 to 200 hours, depending on individual circumstances, with an estimated average burden of 80 hours. The estimated number of respondents and/or recordkeepers is 3,956.

The estimated annual frequency of responses is on occasion.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by

§ 6103.

DRAFTING INFORMATION

The principal author of this revenue procedure is Eliezer Mishory of the Office of Associate Chief Counsel (Procedure and Administration). For further information regarding this revenue procedure for matters under the jurisdiction of—

(1) the Associate Chief Counsel (Corporate), contact Ken Cohen or Jean R. Broderick at (202) 317-7700 (not a toll-free call),

(2) the Associate Chief Counsel (Financial Institutions and Products), contact James Polfer at (202) 317-4556 (not a toll-free call),

(3) the Associate Chief Counsel (Income Tax and Accounting), contact R. Matthew Kelley at (202) 317-7002 (not a toll-free call),

(4) the Associate Chief Counsel (Passthroughs and Special Industries), contact Anthony McQuillen at (202) 317-5260 (not a toll-free call),

(5) the Associate Chief Counsel (Procedure and Administration), contact Charles A. Hall at (202) 317-3400 (not a toll-free call),

(6) the Associate Chief Counsel (Tax Exempt and Government Entities), contact Michael B. Blumenfeld at (202) 317-6000 (not a toll-free call), or

(7) the Associate Chief Counsel (International), contact Nancy Galib at (202) 317-3800 (not a toll-free call).

For further information regarding user fees, contact the Docket, Records, and User Fee Branch at (202) 317-5221 (not a toll-free call).

For further information regarding determination letters:

SBSE and WI taxpayers should contact the offices listed in Appendix F of this Revenue Procedure;

LB&I taxpayers should contact Melanie Perrin in the Office of Compliance Integration, LB&I, at (202) 317-3157 (not a toll-free call);

TE/GE taxpayers should also refer to Revenue Procedures 2017–4 and 2017–5, this bulletin.

NOTE TO PRINTER: Please layout and print Index on a page by itself.

INDEX
References are to sections in Rev. Proc. 2017–1
Additional Information
– penalties of perjury statement required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05(4)
– proposed deletions under § 6110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(11)
– information requested during initial and subsequent contacts . . . . . . . . . . . . . . . . . 8.05
failure to submit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05(3)
subsequent information after conference. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
– where to send . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05(6)
Changes in Method of Accounting or Accounting Period
– applicable sections of Rev. Proc. 2017–1 for changes in method of accounting . . . . . 9
– applicable sections of Rev. Proc. 2017–1 for accounting period . . . . . . . . . . Appendix G
– automatic change request procedures . . . . . . . . . . . . . . . . . . . 9.01, 9.22, Appendix G
– identical changes in method of accounting . . . . . . . . . . . . . . . . 9.15, 15.07, Appendix A
– user fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix A
Checklist Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(18), Appendix C
Conferences
– offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02
after conference of right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.05
application of § 6110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(11)(e)
– requesting a conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(6)
– scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01, 10.02
application of § 7805(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.11(2), 13.02(2)
pre-submission conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.07
telephone conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.08
Definitions
– Associate office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 1.01(2)
– closing agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
– determination letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
– Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(3)
– Field office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(4)
– taxpayer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(5)
– information letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
– letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
– Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(1)
Determinations Under § 999(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04
Discussions Not Binding on Service
– at pre-submission conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.07(4)
– informal opinion expressed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.04
– oral advice to taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05(2)
Employee Plans and Exempt Organizations
– jurisdiction of Commissioner, Tax Exempt and Government Entities Division . . . . . 4.02
– user fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
Estate Tax Matters
– issuance of determination letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.02, 12.05
– issuance of letter rulings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.06
under § 2032A(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
Expedited Handling of Letter Ruling and Determination Letter Requests . . . . 7.02(4)
Extension of Time
– to schedule conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01
– to submit additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05(2)
Fax Transmission
– to receive letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(5)
– to receive request for additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(5)
– to submit additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05(5)
– letter ruling requests must not be submitted by fax . . . . . . . . . . . . . . . . . . . . . 7.04(1)(c)
Hand Delivery of Letter Ruling Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04(1)
No-Rule Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Oral Advice to Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
Penalties of Perjury Statement
– form for letter ruling request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(15)(a)
– form for submission of additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05(4)
– required with draft letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
– signature requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(15)(b)
Pending Letter Ruling Requests
– when to attach a copy to return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05(2)
estate tax matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.06
– when to notify Associate office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
estate tax matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.06
Power of Attorney
– Form 2848 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(14), 7.02(2)
original sent to the taxpayer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(2)
copy sent to a representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(2)
copies sent to multiple representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(2)
no copy sent to representatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(2)
– signature requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(14)
Public Disclosure of Information Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
Public Inspection Under § 6110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(11)
– signature requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(11)(c)
Representatives
– compliance with Treasury Department Circular No. 230 . . . . . . . . . . . . . . . . . . 7.01(13)
– power of attorney required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(14)
– requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(13)
authorized representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(13)(a)
authorized based on relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(13)(b)
return preparer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(13)(c)
foreign representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(13)(d)
Retroactive Revocation or Modification
– of determination letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
request to limit retroactive effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
– of letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05 – 11.10
request to limit retroactive effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.11
Revenue Rulings
– effect on a letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
– request to limit retroactive effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.11
Sample of a Letter Ruling Request . . . . . . . . . . . . . . . . . . . . . . . . 7.01(17), Appendix B
Section 301.9100 Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
Section 367 Rulings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05
Status of Letter Ruling and Determination Letter Requests . . . . . . . . . . . . . . . . . 7.07
Substantially Identical Letter Rulings . . . . . . . . . . . . . . . . . . . .. . 15.07(2), Appendix A
Tax Exempt and Government Entities
– jurisdiction of Commissioner, Tax Exempt and Government Entities Division . . . . . 4.02
– user fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
User Fees
– schedule of user fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix A
– user fee requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
to reopen case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05(3)
Where to Send
– determination letter request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04
– letter ruling request . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . 7.04, 9.05
additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05(6), 9.08(6)
hand delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04(1)
Withdrawal of Letter Ruling and Determination Letter Requests . . . . . . . . . . . . . 7.08

NOTE TO PRINTER: Please layout and print Appendix A on a page by itself.

APPENDIX A

SCHEDULE OF USER FEES

NOTE: Checks or money orders must be in U.S. dollars. Payment may also be made through www.pay.gov.

(A) FEE SCHEDULE

CATEGORY USER FEE FOR REQUESTS RECEIVED PRIOR TO FEBRUARY 2, 2017 USER FEE FOR REQUESTS RECEIVED AFTER FEBRUARY 1, 2017
(1) User fee for a request for a determination letter from a Director. The user fee for each determination letter request governed by Rev. Proc. 2017–1, this revenue procedure. $275 $275
(2) User fee for a request for an advance pricing agreement or a renewal of an advance pricing agreement. See section 3.05 of Rev. Proc. 2015–41, 2015–35 I.R.B. 263. See section 3.05 of Rev. Proc. 2015–41, 2015–35 I.R.B. 263.
(3) User fee for a request for a letter ruling or closing agreement. Except for the user fees for advance pricing agreements and renewals, the reduced fees provided in paragraph (A)(4) of this appendix, the user fees provided in paragraph (A)(5) of this appendix, and the exemptions provided in section 15.04 of Rev. Proc. 2017–1, this revenue procedure, the user fee for each request for a letter ruling or closing agreement under the jurisdiction of the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (International), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Procedure and Administration), or the Associate Chief Counsel (Tax Exempt and Government Entities) is as follows:
(a) Accounting periods
(i) Form 1128, Application to Adopt, Change, or Retain a Tax Year, (except as provided in paragraph (A)(4)(a) of this appendix) $4,200 $5,800
(ii) Requests made on Part II of Form 2553, Election by a Small Business Corporation, to use a fiscal year based on a business purpose (except as provided in paragraph (A)(4)(a) of this appendix) $4,200 $5,800
(iii) Letter ruling requests for extensions of time to file Form 1128, Application to Adopt, Change, or Retain a Tax Year, Form 8716, Election To Have a Tax Year Other Than a Required Tax Year, or Part II of Form 2553 under § 301.9100–3 (except as provided in paragraph (A)(4)(a) of this appendix) $3,700 $5,400
(b) Changes in Methods of Accounting
(i) Non-automatic Form 3115, Application for Change in Accounting Method (except as provided in paragraph (A)(4)(a) or (b), or (5)(b) of this appendix) $8,600 $9,500
(ii) Letter ruling requests for extensions of time to file Form 3115, Application for Change in Accounting Method, under § 301.9100–3 (except as provided in paragraph (A)(4)(a) or (b), or (5)(c) of this appendix) $9,100 $10,000
No user fee is required if the change in accounting period or method of accounting is permitted to be made pursuant to a published automatic change request procedure. See section 9.22 and Appendix G of Rev. Proc. 2017–1, this revenue procedure, for the list of automatic change request procedures published and/or in effect as of December 31, 2016.
(c) (i) Letter ruling request for relief under § 301.9100–3 (except as provided in paragraph (A)(4)(a) or (b), or (5)(a) of this appendix) $9,800 $10,000
(ii) All other letter ruling requests (including accounting period and method of accounting requests other than those properly submitted on Form 1128, Application to Adopt, Change, or Retain a Tax Year, Part II of Form 2553, Election by a Small Business Corporation, or Form 3115, Application for Change in Accounting Method) (except as provided in paragraph (A)(4)(a) or (b), or (5)(a) of this appendix) $28,300 $28,300
(d) Requests for closing agreements on a proposed transaction or on a completed transaction before a return for the transaction has been filed in which a letter ruling on that transaction is not requested or issued (except as provided in paragraph (A)(4)(a) or (b) of this appendix) $28,300 $28,300
(e) A request for a Foreign Insurance Excise Tax Waiver Agreement $7,200 $7,200
NOTE: A taxpayer who receives relief under § 301.9100–3 (for example, an extension of time to file Form 3115, Application for Change in Accounting Method) will be charged a separate user fee for the letter ruling request on the underlying issue (for example, the accounting period or method of accounting application).
(4) Reduced user fee for a request for a letter ruling, method or period change, or closing agreement. A reduced user fee for a request involving a personal, exempt organization, governmental entity, or business tax issue is provided in the following situations if the person provides the certification described in paragraph (B)(1) of this appendix:
(a) Request involves a tax issue from a person with gross income (as determined under paragraphs (B)(2), (3), (4), and (5) of this appendix) of less than $250,000 $2,200 $2,400
(b) Request involves a tax issue from a person with gross income (as determined under paragraphs (B)(2), (3), (4), and (5) of this appendix) of less than $1 million and $250,000 or more. $6,500 $7,600
(5) User fee for substantially identical letter ruling requests, identical changes in method of accounting, or plans from issuing authorities under § 25(c)(2)(B). If the requirements of section 15.07 of Rev. Proc. 2017–1, this revenue procedure, are satisfied, the user fee for the following situations is as follows:
(a) Substantially identical letter rulings requested (other than changes in methods of accounting requested on Form 3115) $2,700 $2,700
Requests for substantially identical letter rulings for multiple entities with a common member or sponsor, or for multiple members of a common entity, or for parties engaged together in the same transaction affecting all requesting taxpayers, for each additional letter ruling request after the $28,300 fee or reduced fee, as applicable, has been paid for the first letter ruling request. These requests may include, but are not limited to, requests for substantially identical letter rulings for two or more identical trusts, multiple beneficiaries of a trust, a trust divided into identical subtrusts, spouses making split gifts, or series funds within a single trust or series organization.
NOTE: Each entity or member that is entitled to the user fee under paragraph (A)(5)(a) of this appendix, that receives relief under § 301.9100–3 (for example, an extension of time to file an election) will be charged a separate user fee for the letter ruling request on the underlying issue.
NOTE: The fee charged for the first letter ruling is the highest fee applicable to any of the entities.
NOTE: Where the requests for the letter rulings are submitted by a private foundation described in § 509 and one or more disqualified persons described in § 4946, the fee charged for the first letter ruling to a disqualified person is the highest fee applicable to any of the taxpayers.
(b) Identical change in method of accounting requested on a single Form 3115, Application for Change in Accounting Method, as provided in section 15.07(4). Fee for each additional applicant seeking the identical change in method of accounting on the same Form 3115 after the $8,600 fee or reduced fee, as applicable, has been paid for the first applicant. $180 $200
(c) Substantially identical plans under § 25(c)(2)(B) $1,500 $1,500
Situations where an issuing authority under § 25 submits substantially identical plans for administering the 95-percent requirement of § 143(d)(1) following the submission of an initial plan that was approved.
NOTE: The fee charged for the first letter ruling is the highest fee applicable to any of the entities.
(d) Extension of time requested to file Form 3115, Application for Change in Accounting Method, for an identical change in method of accounting as provided in section 15.07(4). Fee for each additional or each additional applicant seeking the identical extension of time under § 301.9100–3 to file a single Form 3115 for the identical change in method of accounting after the $9,100 fee or reduced fee, as applicable, has been paid for the first applicant. $180 $200
NOTE: When an extension of time to file Form 3115, Application for Change in Accounting Method, is granted under § 301.9100–3 for multiple applicants, a separate user fee will be charged for the change in method of accounting application, Form 3115.
(6) User fee for information letter requests. $0 $0
(7) User fee for pre-filing agreements. Effective January 1, 2017. See section 10 of Rev. Proc. 2016–30. $218,600 $218,600
(8) Tax treaty limitation of benefits. See Rev. Proc. 2015–40, 2015–35 I.R.B. 236 for procedures for requesting competent authority assistance under tax treaties. $27,500 $27,500
(9) Statement of Value. See Rev. Proc. 96–15 for procedures for requesting a statement of value.
(a) Effective February 3, 2016:
(i) User fee for a case with 1–3 items $5,700 $5,700
(ii) Cost per each additional item beyond 3 $290 $290

(B) PROCEDURAL MATTERS

(1) Required certification. A person seeking a reduced user fee under paragraph (A)(4) of this Appendix must provide the following certification in order to obtain the reduced user fee:

(a) If a person is seeking a reduced user fee under paragraph (A)(4)(a) of this appendix, the person must certify in the request that his, her, or its gross income, as defined under paragraphs (B)(2), (3), (4), and (5) of this appendix, as applicable, is less than $250,000 as reported on their last federal income tax return (as amended) filed for a full (12 months) taxable year ending before the date the request is filed.

(b) If a person is seeking a reduced user fee under paragraph (A)(4)(b) of this appendix, the person must certify in the request that his, her, or its gross income, as defined under paragraphs (B)(2), (3), (4), and (5) of this appendix, as applicable, is less than $1 million and more than $250,000 for the last full (12 months) taxable year ending before the date the request is filed.

The certification must be attached as part of the ruling request.

(2) Gross income for a request involving a personal tax issue. For purposes of the reduced user fees provided in paragraphs (A)(4)(a) and (b) of this Appendix of—

(a) U.S. citizens and resident alien individuals, domestic trusts, and domestic estates, “gross income” is equal to “total income” as reported on their last federal income tax return (as amended) filed for a full (12 months) taxable year ending before the date the request is filed, plus any interest income not subject to tax under § 103 (interest on state and local bonds) for that period. “Total income” is a line item on Federal tax returns. For example, if the 2014 Form 1040, U.S. Individual Income Tax Return, is the most recent 12-month taxable year return filed by a U.S. citizen, “total income” on the Form 1040 is the amount entered on line 22.

In the case of a request for a letter ruling or closing agreement from a domestic estate or trust that, at the time the request is filed, has not filed a Federal income tax return for a full taxable year, the reduced user fee in paragraph (A)(4)(a) of this Appendix will apply if the decedent’s or (in the case of an individual grantor) the grantor’s total income as reported on the last Federal income tax return filed for a full taxable year ending before the date of death or the date of the transfer, taking into account any additions required to be made to total income described in this paragraph (B)(2)(a), is less than $250,000 (or less than $1,000,000 for the paragraph (A)(4)(b) fee to apply). In this case, the executor or administrator of the decedent’s estate or the grantor must provide the certification required under paragraph (B)(1) of this appendix.

(b) Nonresident alien individuals, foreign trusts, and foreign estates, “gross income” is equal to “total effectively connected income” as reported on their last Federal income tax return (as amended) filed for a full (12 months) taxable year ending before the date the request is filed, plus any income for the period from United States or foreign sources that is not taxable by the United States, whether by reason of § 103, an income tax treaty, § 871(h) (regarding portfolio interest), or otherwise, plus the total amount of any fixed or determinable annual or periodical income from United States sources, the United States tax liability for which is satisfied by withholding at the source. “Total effectively connected income” is a line item on Federal tax returns. For example, if the 2014 Form 1040NR, U.S. Nonresident Alien Income Tax Return, is the most recent 12-month taxable year return filed by a nonresident alien individual, “total effectively connected income” on the Form 1040NR is the amount entered on line 23.

In the case of a request for a letter ruling or closing agreement from a foreign estate or trust that, at the time the request is filed, has not filed a Federal income tax return for a full taxable year, the reduced user fee in paragraph (A)(4)(a) of this Appendix will apply if the decedent’s or (in the case of an individual grantor) the grantor’s total income or total effectively connected income, as relevant, as reported on the last Federal income tax return filed for a full taxable year ending before the date of death or the date of the transfer, taking into account any additions required to be made to total income or total effectively connected income described respectively in paragraph (B)(2)(a) of this Appendix or in this paragraph (B)(2)(b), is less than $250,000 (or less than $1,000,000 for the paragraph (A)(4)(b) fee to apply). In this case, the executor or administrator of the decedent’s estate or the grantor must provide the certification required under paragraph (B)(1) of this Appendix.

(3) Gross income for a request involving a business-related tax issue. For purposes of the reduced user fees provided in paragraphs (A)(4)(a) and (b) of this Appendix of—

(a) U.S. citizens and resident alien individuals, domestic trusts, and domestic estates, “gross income” is equal to gross income as defined under paragraph (B)(2)(a) of this Appendix, plus “cost of goods sold” as reported on the same Federal income tax return.

(b) Nonresident alien individuals, foreign trusts, and foreign estates, “gross income” is equal to gross income as defined under paragraph (B)(2)(b) of this Appendix, plus “cost of goods sold” as reported on the same Federal income tax return.

(c) Partnerships with a Form 1065 filing requirement and corporations (foreign and domestic), “gross income” is equal to “total income” as reported on their last Federal tax return (as amended) filed for a full (12 months) taxable year ending before the date the request is filed, plus “cost of goods sold” as reported on the same Federal tax return, plus any interest income not subject to tax under § 103 (interest on state and local bonds) for that period. Partnerships with a Form 1065 filing requirement should also include “gross rents” reported on Form 8825 at line 2, as well as the income amounts reported on Schedule K Form 1065 at lines 3a, 5, 6a, 7, 8, 9a, 10, and 11 from the same Federal tax return described in the preceding sentence to calculate “gross income” for the purpose of applying the reduced user fee in paragraph (A)(4) of this Appendix. S Corporations with a Form 1120S filing requirement should also include “gross rents” reported on Form 8825 at line 2, as well as the income amounts reported on Schedule K Form 1120S at lines 3a, 4, 5a, 6, 7, 8a, 9, and 10 from the same Federal tax return described in the first sentence of this paragraph to calculate “gross income” for the purpose of applying the reduced user fee in paragraph (A)(4) of this Appendix. If a partnership or S Corporation is not required to file or a C corporation is not subject to tax, “total income” and “cost of goods sold” are the amounts that the partnership or corporation would have reported on the Federal tax return if the partnership or S Corporation had been required to file or the C corporation had been subject to tax.

“Cost of goods sold” and “total income” are line items on Federal tax returns. For example, if the 2015 Form 1065, U.S. Return of Partnership Income, is the most recent 12-month taxable year return filed by a partnership, “cost of goods sold” and “total income” on the Form 1065 are the amounts entered on lines 2 and 8, respectively; if the 2015 Form 1120, U.S. Corporation Income Tax Return, is the most recent 12-month taxable year return filed by a domestic corporation, “cost of goods sold” and “total income” on the Form 1120 are the amounts entered on lines 2 and 11, respectively; and if the 2015 Form 1120S, U.S. Income Tax Return for an S Corporation, is the most recent 12-month taxable year return filed by an S corporation, “cost of goods sold” and “total income” on the Form 1120S are the amounts entered on lines 2 and 6, respectively.

If, at the time the request is filed, a partnership or corporation subject to tax has not filed a Federal tax return for a full taxable year, the reduced user fee in paragraph (A)(4)(a) or (b) of this Appendix will apply if, in the aggregate, the partners’ or the shareholders’ gross income (as defined in paragraph (B)(3)(a), (b), or (c), of this Appendix, as applicable) is less than $250,000 for purposes of paragraph (A)(4)(a) or $1 million for purposes of paragraph (A)(4)(b) for the last full (12 months) taxable year ending before the date the request is filed. In this case, the partners or the shareholders must provide the certification required under paragraph (B)(1) of this Appendix.

(4) Gross income for a request involving an exempt organization or governmental entity. For purposes of the reduced user fees provided in paragraphs (A)(4)(a) and (b) of this Appendix of—

(a) Organizations exempt from income tax under “Subchapter F-Exempt Organizations” of the Code, “gross income” is equal to the amount of gross receipts for the last full (12 months) taxable year ending before the date the request for a letter ruling or closing agreement is filed.

(b) State, local, and Indian tribal government entities, “gross income” is equal to the annual operating revenue of the government requesting the ruling for its last fiscal year ending before the date of the ruling request. The annual operating revenue is to be determined at the government level and not at the level of the government entity or agency making the request.

(5) Special rules for determining gross income. For purposes of paragraphs (B)(2), (3) and (4) of this Appendix, the following rules apply for determining gross income.

(a) Gross income of individuals, trusts, and estates.

(1) In the case of a request from a married individual, the gross incomes (as defined in paragraph (B)(2) or (3) of this Appendix, as applicable) of the applicant and the applicant’s spouse must be combined. This rule does not apply to an individual: (1) who is legally separated from his or her spouse and (2) who did not file a joint income tax return; and

(2) If there are two or more applicants filing the request, the gross incomes (as defined in paragraph (B)(2) or (3) of this Appendix, as applicable) of the applicants must be combined.

(b) Gross income of domestic partnerships and corporations.

(1) In the case of a request from a domestic C corporation, the gross income (as defined in paragraph (B)(3) of this Appendix) of (i) all members of the applicant’s controlled group (as defined in § 1563(a)), and (ii) any taxpayer who is involved in the transaction on which the letter ruling or closing agreement is requested, must be combined; and

(2) In the case of a request from a domestic partnership, the gross income (as defined in paragraph (B)(3) of this Appendix) of (i) the partnership, and (ii) any partner who owns, directly or indirectly, 50 percent or more of the capital interest or profits interest in the partnership, must be combined.

(3) In the case of a request from an S corporation, the gross income (as defined in paragraph (B)(3) of this Appendix) of (i) the S corporation, and (ii) any shareholder who owns 50 percent or more of the S corporation, must be combined.

(c) Gross income of exempt organizations. If there are two or more organizations exempt from income tax under Subchapter F filing the request, the gross receipts (as defined in paragraph (B)(4)(a) of this Appendix) of the applicants must be combined.

NOTE TO PRINTER: Please layout and print Appendix B on a page by itself.

APPENDIX B

SAMPLE FORMAT FOR A LETTER RULING REQUEST

INSTRUCTIONS

To assist you in preparing a letter ruling request, the Service is providing this sample format. You are not required to use this sample format. If your request is not identical or similar to the sample format, the different format will not defer consideration of your request.

(Insert the date of request)

  • Internal Revenue Service

  • Insert either: Associate Chief Counsel (Insert one of the following: Corporate, Financial Institutions and Products, Income Tax and Accounting, International, Passthroughs and Special Industries, Procedure and Administration, or Tax Exempt and Government Entities)

  • Attn: CC:PA:LPD:DRU

  • P.O. Box 7604

  • Ben Franklin Station

  • Washington, DC 20044

Dear Sir or Madam:

(Insert the name of the taxpayer) requests a ruling on the proper treatment of (insert the subject matter of the letter ruling request) under section (insert the number) of the Internal Revenue Code.

[If the taxpayer is requesting expedited handling, a statement to that effect must be attached to, or contained in, the letter ruling request. The statement must explain the need for expedited handling. See section 7.02(4) of Rev. Proc. 2017–1, this revenue procedure. Hereafter, all references are to Rev. Proc. 2017–1 unless otherwise noted.]

A. STATEMENT OF FACTS

1. Taxpayer Information

[Provide the statements required by sections 7.01(1)(a) and (b).]

2. Description of Taxpayer’s Business Operations

[Provide the statement required by section 7.01(1)(c).]

3. Facts Relating to Transaction

[The ruling request must contain a complete statement of the facts relating to the transaction that is the subject of the letter ruling request. This statement must include a detailed description of the transaction, including material facts in any accompanying documents, and the business reasons for the transaction. See sections 7.01(1)(d), 7.01(1)(e), and 7.01(2).]

B. RULING REQUESTED

[The ruling request should contain a concise statement of the ruling requested by the taxpayer. The Service prefers that the language of the requested ruling be exactly the same as the language the taxpayer wishes to receive.]

C. STATEMENT OF LAW

[The ruling request must contain a statement of the law in support of the taxpayer’s views or conclusion and identify any pending legislation that may affect the proposed transaction. The taxpayer also is strongly encouraged to identify and discuss any authorities believed to be contrary to the position advanced in the ruling request. See sections 7.01(6), 7.01(8), 7.01(9), and 7.01(10).]

D. ANALYSIS

[The ruling request must contain a discussion of the facts and an analysis of the law. The taxpayer also is strongly encouraged to identify and discuss any authorities believed to be contrary to the position advanced in the ruling request. See sections 7.01(3), 7.01(6), 7.01(8), 7.01(9), and 7.01(10).]

E. CONCLUSION

[The ruling request should contain a statement of the taxpayer’s conclusion on the ruling requested.]

F. PROCEDURAL MATTERS

1. Revenue Procedure 2017–1 Statements

a. [Provide the statement required by section 7.01(4) regarding whether any return of the taxpayer, a related taxpayer within the meaning of § 267 or of a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504 which would be affected by the requested letter ruling or determination letter, is currently under examination, before Appeals, or before a Federal court, or was previously under examination, before Appeals, or before a Federal court.]

b. [Provide the statement required by section 7.01(5)(a) regarding whether the Service previously ruled on the same or similar issue for the taxpayer, a related taxpayer, or a predecessor. Please further note that if a reduced user fee is being submitted, a certification of eligibility for the reduced fee must be included with the ruling request.]

c. [Provide the statement required by section 7.01(5)(b) regarding whether the taxpayer, a related taxpayer, a predecessor, or any representatives previously submitted a request (including an application for change in method of accounting) involving the same or similar issue but withdrew the request before a letter ruling or determination letter was issued.]

d. [Provide the statement required by section 7.01(5)(c) regarding whether the taxpayer, a related taxpayer, or a predecessor previously submitted a request (including an application for change in method of accounting) involving the same or a similar issue that is currently pending with the Service.]

e. [Provide the statement required by section 7.01(5)(d) regarding whether, at the same time as this request, the taxpayer or a related taxpayer is presently submitting another request (including an application for change in method of accounting) involving the same or similar issue to the Service.]

f. [Provide the statement required by section 7.01(5)(e) regarding whether the taxpayer or a related taxpayer had, or has scheduled, a pre-submission conference involving the same or a similar issue.]

g. [If the letter ruling request involves the interpretation of a substantive provision of an income or estate tax treaty, provide the statement required by section 7.01(6) regarding whether the tax authority of the treaty jurisdiction has issued a ruling on the same or similar issue for the taxpayer, a related taxpayer, or a predecessor; whether the same or similar issue is being examined, or has been settled, by the tax authority of the treaty jurisdiction or is otherwise the subject of a closing agreement in that jurisdiction; and whether the same or similar issue is being considered by the competent authority of the treaty jurisdiction.]

h. [Provide the statement required by section 7.01(8) regarding whether the law in connection with the letter ruling request is uncertain and whether the issue is adequately addressed by relevant authorities.]

i. [If the taxpayer determines that there are no contrary authorities, a statement in the request to this effect should be included. See section 7.01(9).]

j. [If the taxpayer wants to have a conference on the issues involved in the letter ruling request, the ruling request should contain a statement to that effect. See section 7.02(6).]

k. [If the taxpayer is requesting a copy of any document related to the letter ruling request to be sent by facsimile (fax) transmission, the ruling request should contain a statement to that effect. See section 7.02(5).]

l. [If the taxpayer is requesting separate letter rulings on multiple issues, the letter ruling request should contain a statement to that effect. See section 7.02(1).]

m. [If the taxpayer is seeking to obtain the user fee provided in paragraph (A)(5)(a) of Appendix A for substantially identical letter rulings, the letter ruling request must contain the statements required by section 15.07.]

2. Administrative

a. [The ruling request should state: “The deletion statement and checklist required by Rev. Proc. 2017–1 are enclosed.” See sections 7.01(11) and 7.01(18).]

b. [The ruling request should state: "The required user fee of $ (Insert the amount of the fee) has been paid through www.pay.gov, or is enclosed.” See section 15 and Appendix A.]

c. [If the taxpayer’s authorized representative is to sign the letter ruling request or is to appear before the Service in connection with the request, the ruling request should state: “A Power of Attorney is enclosed.” See sections 7.01(13), 7.01(14), and 7.02(2).]

Sincerely yours,

(Insert the name of the taxpayer or the taxpayer’s authorized representative)

By:

Signature Date

Typed or printed name of

person signing request

DECLARATION: [See section 7.01(15).]

Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete.

(Insert the name of the taxpayer)

By:

_____________

Signature Title Date

(must be signed by taxpayer, not by taxpayer’s representative, see section 7.01(15)(b) of this revenue procedure)

Typed or printed name of

person signing declaration

[If the taxpayer is a corporation that is a member of an affiliated group filing consolidated returns, the above declaration must also be signed and dated by an officer of the common parent of the group. See section 7.01(15).]

NOTE TO PRINTER: Please layout and print Appendix C on a page by itself so that it can be photocopied for use by taxpayers.

APPENDIX C

CHECKLIST

IS YOUR LETTER RULING REQUEST COMPLETE?

INSTRUCTIONS

The Service will be able to respond more quickly to your letter ruling request if it is carefully prepared and complete. Use this checklist to ensure that your request is in order. Complete the four items of information requested before the checklist. Answer each question by circling “Yes,” “No,” or “N/A.” When a question contains a place for a page number, insert the page number (or numbers) of the request that gives the information called for by a “Yes” answer to a question. Sign and date the checklist (as taxpayer or authorized representative) and place it on top of your request.

If you are an authorized representative submitting a request for a taxpayer, you must include a completed checklist with the request or the request will either be returned to you or substantive consideration of it will be deferred until a completed checklist is submitted. If you are a taxpayer preparing your own request without professional assistance, an incomplete checklist will not cause the return of your request or defer substantive consideration of your request. You should still complete as much of the checklist as possible and submit it with your request.

TAXPAYER’S NAME

TAXPAYER’S I.D. NO.

ATTORNEY/P.O.A.

PRIMARY CODE SECTION

CIRCLE ONE ITEM
Yes No 1. Does your request involve an issue under the jurisdiction of the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (International), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Procedure and Administration), or the Associate Chief Counsel (Tax Exempt and Government Entities)? See section 3 of Rev. Proc. 2017–1, this revenue procedure. For issues under the jurisdiction of other offices, see section 4 of Rev. Proc. 2017–1. (Hereafter, all references are to Rev. Proc. 2017–1 unless otherwise noted.)
Yes No 2. Have you read Rev. Proc. 2017–1, Rev. Proc. 2017–3, and Rev. Proc. 2017–7, this bulletin, to see if part or all of the request involves a matter on which letter rulings are not issued or are ordinarily not issued?
Yes No N/A 3. If your request involves a matter on which letter rulings are not ordinarily issued, have you given compelling reasons to justify the issuance of a letter ruling? Before preparing your request, you may want to call the branch in the Office of Associate Chief Counsel (Corporate), the Office of Associate Chief Counsel (Financial Institutions and Products), the Office of Associate Chief Counsel (Income Tax and Accounting), the Office of Associate Chief Counsel (International), the Office of Associate Chief Counsel (Passthroughs and Special Industries), the Office of Associate Chief Counsel (Procedure and Administration), or the Office of Associate Chief Counsel (Tax Exempt and Government Entities) responsible for substantive interpretations of the principal Internal Revenue Code section on which you are seeking a letter ruling to discuss the likelihood of an exception. For matters under the jurisdiction of—
(a) the Office of Associate Chief Counsel (Corporate), the Office of Associate Chief Counsel (Financial Institutions and Products), the Office of Associate Chief Counsel (Income Tax and Accounting), the Office of Associate Chief Counsel (Passthroughs and Special Industries), or the Office of Associate Chief Counsel (Tax Exempt and Government Entities), the Office of the Associate Chief Counsel (Procedure and Administration), the appropriate branch to call may be obtained by calling (202) 317-5221 (not a toll-free call);
(b) the Office of the Associate Chief Counsel (International), the appropriate branch to call may be obtained by calling (202) 317-3800 (not a toll-free call).
Yes No N/A Page __ 4. If the request involves a retirement plan qualification matter under § 401(a), § 409, or § 4975(e)(7), have you demonstrated that the request satisfies the three criteria in section 4.02 of Rev. Proc. 2017–3, this Bulletin, for a ruling?
Yes No N/A Page__ 5. If the request deals with a completed transaction, have you filed the return for the year in which the transaction was completed? See section 5.01.
Yes No 6. Are you requesting the letter ruling on a hypothetical situation or question? See section 6.12.
Yes No 7. Are you requesting the letter ruling on alternative plans of a proposed transaction? See section 6.12.
Yes No 8. Are you requesting the letter ruling for only part of an integrated transaction?
Yes No __ 9. Are you requesting a letter ruling under the jurisdiction Page of Associate Chief Counsel (Corporate) on a significant issue (within the meaning of section 3.01(51) of Rev. Proc. 2017–3, this Bulletin) with respect to a transaction described in § 332, § 351, § 355, or § 1036 or a reorganization within the meaning of § 368? See section 6.03.
Yes No 10. Are you requesting the letter ruling for a business, trade, industrial association, or similar group concerning the application of tax law to its members? See section 6.05.
Yes No 11. Are you requesting the letter ruling for a foreign government or its political subdivision? See section 6.07.
Yes No Page __ 12. Have you included a complete statement of all the facts relevant to the transaction? See section 7.01(1).
Yes No N/A 13. Have you submitted with the request true copies of all wills, deeds, and other documents relevant to the transaction, and labeled and attached them in alphabetical sequence? See section 7.01(2).
Yes No N/A 14. Have you submitted with the request a copy of all applicable foreign laws, and certified English translations of documents that are in a language other than English or of foreign laws in cases where English is not the official language of the foreign country involved? See section 7.01(2).
Yes No 15. Have you included an analysis of facts and their bearing on the issues? Have you included, rather than merely incorporated by reference, all material facts from the documents in the request? See section 7.01(3).
Yes No Page __ 16. Have you included the required statement regarding whether any return of the taxpayer (or any return of a related taxpayer within the meaning of § 267 or of a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504) who would be affected by the requested letter ruling or determination letter is currently or was previously under examination, before Appeals, or before a Federal court? See section 7.01(4).
Yes No Page __ 17. Have you included the required statement regarding whether the Service previously ruled on the same or similar issue for the taxpayer, a related taxpayer, or a predecessor? See section 7.01(5)(a).
Yes No Page __ 18. Have you included the required statement regarding whether the taxpayer, a related taxpayer, a predecessor, or any representatives previously submitted a request (including an application for change in method of accounting) involving the same or similar issue but withdrew the request before the letter ruling or determination letter was issued? See section 7.01(5)(b).
Yes No Page __ 19. Have you included the required statement regarding whether the taxpayer, a related taxpayer, or a predecessor previously submitted a request (including an application for change in method of accounting) involving the same or similar issue that is currently pending with the Service? See section 7.01(5)(c).
Yes No Page __ 20. Have you included the required statement regarding whether, at the same time as this request, the taxpayer or a related taxpayer is presently submitting another request (including an application for change in method of accounting) involving the same or similar issue to the Service? See section 7.01(5)(d).
Yes No Page __ 21. Have you included the required statement regarding whether the taxpayer or a related taxpayer had, or has scheduled, a pre-submission conference involving the same or a similar issue? See section 7.01(5)(e).
Yes No N/A Page __ 22. If your request involves the interpretation of a substantive provision of an income or estate tax treaty, have you included the required statement regarding whether the tax authority of the treaty jurisdiction has issued a ruling on the same or similar issue for the taxpayer, a related taxpayer, or a predecessor; whether the same or similar issue is being examined, or has been settled, by the tax authority of the treaty jurisdiction or is otherwise the subject of a closing agreement in that jurisdiction; and whether the same or similar issue is being considered by the competent authority of the treaty jurisdiction? See section 7.01(6).
Yes No N/A Page __ 23. If your request is for recognition of Indian tribal government status or status as a political subdivision of an Indian tribal government, does your request contain a letter from the Bureau of Indian Affairs regarding the tribe’s status? See section 7.01(7), which states that taxpayers are encouraged to submit this letter with the request and provides the address for the Bureau of Indian Affairs.
Yes No Page __ 24. Have you included the required statement of relevant authorities in support of your views? See section 7.01(8).
Yes No Page 25. Have you included the required statement regarding whether the law in connection with the request is uncertain and whether the issue is adequately addressed by relevant authorities? See section 7.01(8).
Yes No Pages __ 26. Does your request discuss the implications of any legislation, tax treaties, court decisions, regulations, notices, revenue rulings, or revenue procedures that you determined to be contrary to the position advanced? See section 7.01(9), which states that taxpayers are encouraged to inform the Service of such authorities.
Yes No N/A Page __ 27. If you determined that there are no contrary authorities, have you included a statement to this effect in your request? See section 7.01(9).
Yes No N/A Page __ 28. Have you included in your request a statement identifying any pending legislation that may affect the proposed transaction? See section 7.01(10).
Yes No 29. Have you included the deletion statement required by § 6110 and placed it on the top of the letter ruling request as required by section 7.01(11)(b)?
Yes No Page __ 30. Have you (or your authorized representative) signed and dated the request? See section 7.01(12).
Yes No N/A 31. If the request is signed by your representative or if your representative will appear before the Service in connection with the request, is the request accompanied by a properly prepared and signed power of attorney with the signatory’s name typed or printed? See section 7.01(14).
Yes No Page __ 32. Have you signed, dated, and included the penalties of perjury statement in the format required by section 7.01(15)?
Yes No N/A 33. Are you submitting your request in duplicate if necessary? See section 7.01(16).
Yes No N/A Page __ 34. If you are requesting separate letter rulings on different issues involving one factual situation, have you included a statement to that effect in each request? See section 7.02(1).
Yes No N/A 35. If you want copies of the letter ruling sent to a representative, does the power of attorney contain a statement to that effect? See section 7.02(2).
Yes No N/A 36. If you do not want a copy of the letter ruling to be sent to any representative, does the power of attorney contain a statement to that effect? See section 7.02(2).
Yes No N/A 37. If you are making a two-part letter ruling request, have you included a summary statement of the facts you believe to be controlling? See section 7.02(3).
Yes No N/A Page __ 38. If you want your letter ruling request to be processed ahead of the regular order or by a specific date, have you requested expedited handling in the manner required by section 7.02(4) and stated a compelling need for such action in the request? See section 7.02(4) of this revenue procedure.
Yes No N/A Page __ 39. If you are requesting a copy of any document related to the letter ruling request to be sent by facsimile (fax) transmission, have you included a statement to that effect? See section 7.02(5).
Yes No N/A Page __ 40. If you want to have a conference on the issues involved in the request, have you included a request for conference in the letter ruling request? See section 7.02(6).
Yes No 41. Have you paid the correct user fee through www.pay.gov (or if paying by check or money order in U.S. dollars, is it payable to the Internal Revenue Service)? See section 15 and Appendix A to determine the correct amount.
Yes No N/A Page __ 42. If your request involves a personal, exempt organization, governmental entity, or business-related tax issue and you qualify for the reduced user fee because your gross income is less than $250,000, have you included the required certification? See paragraphs (A)(4)(a) and (B)(1) of Appendix A.
Yes No N/A Page __ 43. If your request involves a personal, exempt organization, governmental entity, or business-related tax issue and you qualify for the reduced user fee because your gross income is less than $1 million, have you included the required certification? See paragraphs (A)(4)(b) and (B)(1) of Appendix A.
Yes No N/A Page __ 44. If you qualify for the user fee for substantially identical letter rulings, have you included the required information? See section 15.07(2) and paragraph (A)(5)(a) of Appendix A.
Yes No N/A Page __ 45. If you qualify for the user fee for a § 301.9100 request to extend the time for filing an identical change in method of accounting on a single Form 3115, Application for Change in Accounting Method, have you included the required information? See section 15.07(4) and paragraph (A)(5)(d) of Appendix A.
Yes No N/A 46. If your request is covered by any of the checklists, guideline revenue procedures, notices, safe harbor revenue procedures, or other special requirements listed in Appendix G, have you complied with all of the requirements of the applicable revenue procedure or notice?
Rev. Proc. List other applicable revenue procedures or notices, including checklists, used or relied upon in the preparation of this letter ruling request (Cumulative Bulletin or Internal Revenue Bulletin citation not required).
Yes No N/A Page __ 47. If you are requesting relief under § 7805(b) (regarding retroactive effect), have you complied with all of the requirements in section 11.11?
Yes No N/A Page __ 48. If you are requesting relief under § 301.9100 for a late entity classification election, have you included a statement that complies with section 4.04 of Rev. Proc. 2009–41, 2009–39 I.R.B. 439? See section 5.03(5) of this revenue procedure.
Yes No N/A Page __ 49. If you are requesting relief under § 301.9100, and your request involves a year that is currently under examination or with appeals, have you included the required notification, which also provides the name and telephone number of the examining agent or appeals officer? See section 7.01(4) of this revenue procedure.
Yes No 50. If you are requesting relief under § 301.9100, have you included the affidavit(s) and declaration(s) required by § 301.9100–3(e)? See § 5.03(1) of this revenue procedure.
Yes No 51. If you are requesting relief under § 301.9100–3, and the period of limitations on assessment under § 6501(a) will expire for any year affected by the requested relief before the anticipated receipt of a letter ruling, have you secured consent under § 6501(c)(4) to extend the period of limitations on assessment for the year(s) at issue? See § 5.03(2) of this revenue procedure.
Yes No 52. Have you addressed your request to the attention of the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (International), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Procedure and Administration), or the Associate Chief Counsel (Tax Exempt and Government Entities), as appropriate? The mailing address is:
  • Internal Revenue Service

  • Attn: CC:PA:LPD:DRU

  • P.O. Box 7604

  • Ben Franklin Station

  • Washington, DC 20044

If a private delivery service is used, the address is:
  • Internal Revenue Service

  • Attn: CC:PA:LPD:DRU, Room 5336

  • 1111 Constitution Ave., NW

  • Washington, DC 20224

The package should be marked: RULING REQUEST SUBMISSION. Improperly addressed requests may be delayed (sometimes for over a week) in reaching CC:PA:LPD:DRU for initial processing.

Signature Title or Authority Date

Typed or printed name of

person signing checklist

NOTE TO PRINTER: Please layout and print Appendix D on a page by itself so that it can be photocopied for use by taxpayers.

APPENDIX D

ADDITIONAL CHECKLIST FOR GOVERNMENT PICK-UP PLAN RULING REQUESTS

In order to assist Associate Chief Counsel (Tax Exempt and Government Entities) in processing a ruling request involving government pick-up plans, in addition to the items in Appendix C please check the following list.

Yes No N/A Page ___ 1. Is the plan qualified under § 401(a) of the Code? (Evidence of qualification or representation that the plan is qualified.)
Yes No N/A Page ___ 2. Is the organization that established the plan a State or political subdivision thereof, or any agency or instrumentality of the foregoing? An example of this would be a representation that the organization that has established the plan is a political subdivision or municipality of the State.
Yes No N/A Page ___ 3. Is there specific information regarding who are the eligible participants?
Yes No N/A Page ___ 4. Are the contributions that are the subject of the ruling request mandatory employee contributions? These contributions must be for a specified dollar amount or a specific percentage of the participant’s compensation and the dollar amount or percentage of compensation cannot be subject to change.
Yes No N/A Page ___ 5. Does the plan provide that the participants do not have the election to opt in and/or out of the plan?
Yes No N/A Page ___ 6. Are copies of the enacting legislation providing that the contributions although designated as employee contributions are being paid by the employer in lieu of contributions by the employee included?
Yes No N/A Page ___ 7. Are copies of the specific enabling authorization that provides the employee must not have the option of choosing to receive the contributed amounts directly instead of having them paid by the employer to the plan included? For example, a resolution, ordinance, plan provision, or collective bargaining agreement could specify this information.

NOTE TO PRINTER: Please layout and print Appendix E on a page by itself so that it can be photocopied for use by taxpayers.

APPENDIX E

ADDITIONAL CHECKLIST FOR CHURCH PLAN RULING REQUESTS

In order to assist Associate Chief Counsel (Tax Exempt and Government Entities) in processing a church plan ruling request, in addition to the items in Appendix C, please check the following list.

Yes No N/A Page ___ 1. Is there specific information showing that the submission is on behalf of a plan established by a named church or convention or association of churches? The information must show how the sponsoring organization, if not a church or convention or association of churches, is controlled by, or associated with, the named church or convention or association of churches. For example, the board of directors of the sponsoring organization may be made up of members of the named church, or the sponsoring organization might be listed in the church’s official directory of related organizations whose mission is to further the objectives of the church. In order to be considered associated with a church or convention or association of churches, the organization must share common religious bonds and convictions with that church or convention or association of churches.
Yes No N/A Page ___ 2. Is there specific information showing that the organization that has established the plan is a tax-exempt organization as described in § 501 of the Code?
Yes No N/A Page ___ 3. Is there a representation that the plan for which the ruling is being requested is qualified under § 401(a) of the Code or meets the requirements of § 403(b) of the Code?
Yes No N/A Page ___ 4. Does the ruling request clearly state who are the eligible participants and the name of the employer of these eligible participants?
Yes No N/A Page ___ 5. Is there a representation that none of the eligible participants are or can be considered employed in connection with one or more unrelated trades or businesses within the meaning of § 513 of the Code?
Yes No N/A Page ___ 6. Is there a representation that all of the eligible participants are or will be employed by the named church or convention or association of churches, and will not include employees of for-profit entities? An example of an eligible employee includes a duly ordained, commissioned, or licensed minister of a church in the exercise of his or her ministry.
Yes No N/A Page ___ 7. Is there specific information showing an existing plan committee whose principal purpose or function is the administration or funding of the plan? This committee must be controlled by or associated with the named church or convention or association of churches.
Yes No N/A Page ___ 8. Is the composition of the committee stated?
Yes No N/A Page ___ 9. Did the plan sponsor provide a written notice to interested persons that a letter ruling under § 414(e) of the Code on behalf of a church plan will be submitted to the IRS? (See Rev. Proc. 2011–44).
Yes No N/A Page ___ 10. Does the ruling request include a copy of the notice?

NOTE TO PRINTER: Please layout and print Appendix F on a page by itself.

APPENDIX F

LIST OF SMALL BUSINESS/SELF-EMPLOYED OPERATING DIVISION (SB/SE)

OFFICES TO WHICH TO SEND REQUESTS FOR DETERMINATION LETTERS

SB/SE and W&I taxpayers should send requests for determination letters under this Rev. Proc. 2017–1 to the appropriate SB/SE office listed below. Both the request and its envelope should be marked “DETERMINATION LETTER REQUEST.”

INCOME TAX

Requests for determination letters regarding income tax (including requests from international taxpayers) should be sent to:

  • Office of the Director, Technical Services

  • Internal Revenue Service

  • Attn: SE:S:E:TS

  • Mail Stop 5000

  • 24000 Avila Road

  • Laguna Niguel, CA 92677

ESTATE AND GIFT TAXES

Requests for determination letters regarding estate and gift tax should be sent to:

  • Program Manager, Estate & Gift Tax Policy

  • Internal Revenue Service

  • SE:S:E:HQ:SEP:E&GP

  • 6340 Variel

  • Woodland Hills, CA 91367

EMPLOYMENT TAXES

Requests for determination letters regarding employment tax (except for requests for determination of worker status made on Form SS–8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, which should be sent to the address in the Form instructions) should be sent to:

  • Program Manager, Employment Tax Policy

  • Internal Revenue Service

  • Attn: SE:S:E:HQ:SEP

  • c/o Director, Specialty Examination Policy

  • 5000 Ellin Road, C9–400

  • Lanham, MD 20706

EXCISE TAXES

Requests for determination letters regarding excise taxes should be sent to:

  • Program Manager, Excise Tax Policy

  • Internal Revenue Service

  • Attn: SE:S:E:HQ:SEP

  • c/o Director, Specialty Examination Policy

  • 5000 Ellin Road, C9–400

  • Lanham, MD 20706

NOTE TO PRINTER: Please layout and print Appendix G on a page by itself.

APPENDIX G

CHECKLISTS, GUIDELINE REVENUE PROCEDURES, NOTICES, SAFE HARBOR REVENUE PROCEDURES, AND AUTOMATIC CHANGE REVENUE PROCEDURES

Specific revenue procedures and notices supplement the general instructions for requests explained in section 7 of this revenue procedure and apply to requests for letter rulings or determination letters regarding the Code sections and matters listed in this section.
Checklists, guideline revenue procedures, and notices .01 For requests relating to the following Code sections and subject matters, refer to the following checklists, guideline revenue procedures, and notices.
CODE OR REGULATION SECTION REVENUE PROCEDURE AND NOTICE
103, 141 – 150, 1394, 1400L(d), 1400N(a), 1400U–1, 1400U–3, 7478, and 7871 Issuance of state or local obligations Rev. Proc. 96–16, 1996–1 C.B. 630 (for a reviewable ruling under § 7478 and a nonreviewable ruling); Rev. Proc. 88–31, 1988–1 C.B. 832 (for approval of areas of chronic economic distress); and Rev. Proc. 82–26, 1982–1 C.B. 476 (for “on behalf of” and similar issuers). For approval of areas of chronic economic distress, Rev. Proc. 88–31 explains how this request for approval must be submitted to the Assistant Secretary for Housing/Federal Housing Commissioner of the Department of Housing and Urban Development.
1.166–2(d)(3) Uniform express determination letter for making election Rev. Proc. 92–84, 1992–2 C.B. 489.
Subchapter C-Corporate Distributions, Adjustments, Transfers, and Reorganizations Rev. Proc. 77–37, 1977–2 C.B. 568, as modified by Rev. Proc. 89–30, 1989–1 C.B. 895, and as amplified by Rev. Proc. 77–41, 1977–2 C.B. 574, Rev. Proc. 83–81, 1983–2 C.B. 598 (see also Rev. Proc. 2017–3, this bulletin), Rev. Proc. 84–42, 1984–1 C.B. 521 (superseded, in part, as to no-rule areas by Rev. Proc. 2017–3, this bulletin), Rev. Proc. 86–42, 1986–2 C.B. 722, and Rev. Proc. 89–50, 1989–2 C.B. 631. But see section 3.01 of Rev. Proc. 2017–3, which states that the Service will not issue a letter ruling as to whether a transaction constitutes a reorganization within the meaning of § 368. However, the Service will issue a letter ruling addressing significant issues (within the meaning of section 3.01 of Rev. Proc. 2017–3) presented in a reorganization within the meaning of § 368. The information and representations described in these revenue procedures should be included in a letter ruling request only to the extent that they relate to the significant issues with respect to which the letter ruling is requested. See section 6.03(4).
301 Nonapplicability on sales of stock of employer to defined contribution plan Rev. Proc. 87–22, 1987–1 C.B. 718.
302, 311 Checklist questionnaire Rev. Proc. 86–18, 1986–1 C.B. 551; and Rev. Proc. 77–41, 1977–2 C.B. 574.
302(b)(4) Checklist questionnaire Rev. Proc. 81–42, 1981–2 C.B. 611.
311 Checklist questionnaire Rev. Proc. 86–16, 1986–1 C.B. 546.
332 Checklist questionnaire See section 3.01 of Rev. Proc. 2017–3, this Bulletin, which states that the Service will not issue a letter ruling on whether a corporate distribution qualifies for nonrecognition treatment under § 332. However, the Service will issue a letter ruling addressing significant issues (within the meaning of section 3.01 of Rev. Proc. 2017–3) presented in a transaction described in § 332. The information and representations described in Rev. Proc. 90–52, 1990–2 C.B. 626, should be included in a letter ruling request only to the extent that they relate to the significant issues with respect to which the letter ruling is requested. See section 6.03(4).
338 Extension of time to make elections Rev. Proc. 2003–33, 2003–1 C.B. 803, provides guidance as to how an automatic extension of time under § 301.9100–3 of the Treasury Regulations may be obtained to file elections under § 338. This revenue procedure also informs taxpayers who do not qualify for the automatic extension of the information necessary to obtain a letter ruling.
351 Checklist questionnaire See section 3.01 of Rev. Proc. 2017–3, this Bulletin, which states that the Service will not issue a letter ruling on whether certain transfers to controlled corporations qualify for nonrecognition treatment under § 351. However, the Service will issue a letter ruling addressing significant issues (within the meaning of section 3.01 of Rev. Proc. 2017–3) presented in a transaction described in § 351. The information and representations described in Rev. Proc. 83–59, 1983–2 C.B. 575, should be included in a letter ruling request only to the extent that they relate to the significant issues with respect to which the letter ruling is requested. See section 6.03(4).
355 Checklist questionnaire See section 3.01 of Rev. Proc. 2017–3, this Bulletin, which states that the Service will not issue a letter ruling on whether certain distributions of controlled corporation stock qualify for nonrecognition treatment under § 355. However, the Service will issue a letter ruling addressing significant issues (within the meaning of section 3.01 of Rev. Proc. 2017–3) presented in a transaction described in § 355. The information and representations described in Rev. Proc. 96–30, 1996–1 C.B. 696, should be included in a letter ruling request only to the extent that they relate to the significant issues with respect to which the letter ruling is requested. See section 6.03(4).
368(a)(1)(E) Checklist questionnaire See section 3.01 of Rev. Proc. 2017–3, this Bulletin, which states that the Service will not issue a letter ruling as to whether a transaction constitutes a reorganization, including a recapitalization within the meaning of § 368(a)(1)(E) (or a transaction that qualifies under § 1036). However, the Service will issue a letter ruling addressing significant issues (within the meaning of section 3.01 of Rev. Proc. 2017–3) presented in a transaction described in § 368(a)(1)(E) (or in a transaction described in § 1036). The information and representations described in Rev. Proc. 81–60, 1981–2 C.B. 680, should be included in a letter ruling request only to the extent that they relate to the significant issues. See section 6.03(4).
412, 4971(b) Additional tax (on failure to meet minimum funding standards) Rev. Proc. 81–44, 1981–2 C.B. 618, provides guidance for requesting a waiver of the 100 percent tax imposed under § 4971(b) on a pension plan that fails to meet the minimum funding standards of § 412.
412(d) Minimum funding standards Rev. Proc. 2004–15, 2004–1 C.B. 490, provides guidance for requesting a waiver of the minimum funding standards.
412(c)(7)(B) Minimum funding standards - restrictions on plan amendments Rev. Proc. 79–62, 1979–2 C.B. 576 provides guidance for requesting a determination that a plan amendment is reasonable and provides for only de minimis increases in plan liabilities in accordance with former § 412(f)(2)(A) (now § 412(c)(7)(B)(i)).
412(d)(2) Minimum funding standards - certain retroactive plan amendments Rev. Proc. 94–42, 1994–1 C.B. 717, sets forth procedures under which a plan sponsor may file notice with and obtain approval for a retroactive amendment described in § 412(d)(2) (formerly § 412(c)(8)) and § 302(d)(2) of the Employee Retirement Income Security Act of 1974 (ERISA) that reduces prior accrued benefits.
414(e) Church plans Rev. Proc. 2011–44, 2011–39 I.R.B. 445 provides supplemental procedures for requesting a ruling relating to church plans under section 414(e). This revenue procedure provides that plan participants and other interested persons must receive a notice when a letter ruling is requested and a copy of the notice must be submitted as part of the ruling request. It also provides procedures for the Service to receive and consider comments about the ruling request from interested persons. See Appendix E.
414(r) Qualified separate lines of business – administrative scrutiny Rev. Proc. 93–41, 1993–2 C.B. 536, sets forth procedures relating to the issuance of an administrative scrutiny determination, which is a determination by the Service as to whether a separate line of business satisfies the requirement of administrative scrutiny, within the meaning of § 1.414(r)–6, for the testing year.
461(h) Alternative method for the inclusion of common improvement costs in basis Rev. Proc. 92–29, 1992–1 C.B. 748.
482 Advance pricing agreements Rev. Proc. 2015–40, 2015–35 I.R.B. 236, and Rev. Proc. 2015–41, 2015–35 I.R.B. 263.
521 Appeal procedure with regard to adverse determination letters and revocation or modification of exemption letter rulings and determination letters Rev. Proc. 2017–5, this Bulletin.
817(h) Closing agreement for inadvertent failures of variable contracts Rev. Proc. 2008–41, 2008–2 C.B. 155.
860 Self Determination of Deficiency Dividend Rev. Proc. 2009–28, 2009–20 I.R.B. 1011.
877, 2107, and 2501(a)(3) Individuals who lose U.S. citizenship or cease to be taxed as long-term U.S. residents with a principal purpose to avoid U.S. taxes Notice 97–19, 1997–1 C.B. 394, as modified by Notice 98–34, 1998–2 C.B. 29, and as obsoleted in part by Notice 2005–36, 2005–1 C.B. 1007.
1362(b)(5) and 1362(f) Relief for late S corporation and related elections under certain circumstances Rev. Proc. 2013–30, 2013–36 I.R.B. 173.
1362(b)(5) and 301.7701–3 Automatic extensions of time for late S corporation election and late corporate entity classification Rev. Proc. 2013–30, 2013–36 I.R.B. 173.
1.1502–13(e)(3) Consent to treat intercompany transactions on a separate entity basis and revocation of this consent Rev. Proc. 2009–31, 2009–27 I.R.B. 107.
1.1502–75(b) Consent to Be Included in a Consolidated Income Tax Return Rev. Proc. 2014–24, 2014–13 I.R.B. 879, provides a determination that certain subsidiary corporations are treated as if they had filed a Form 1122, Authorization and Consent of Subsidiary Corporation To Be Included in a Consolidated Income Tax Return, even though they failed to do so. This revenue procedure also informs taxpayers who do not qualify for the automatic determination of the procedure for requesting such determination.
1.1502–76(a)(1) Consent to file a consolidated return where member(s) of the affiliated group use a 52–53 week taxable year Rev. Proc. 89–56, 1989–2 C.B. 643, as modified by Rev. Proc. 2006–21, 2006–1 C.B. 1050.
1504(a)(3)(A) and (B) Waiver of application of § 1504(a)(3)(A) for certain corporations Rev. Proc. 2002–32, 2002–1 C.B. 959, as modified by Rev. Proc. 2006–21, 2006–1 C.B. 1050.
1552 Consent to elect or change method of allocating affiliated group’s consolidated Federal income tax liability Rev. Proc. 90–39, 1990–2 C.B. 365, as clarified by Rev. Proc. 90–39A, 1990–2 C.B. 367, and as modified by Rev. Proc. 2006–21, 2006–1 C.B. 1050.
2642 Allocations of generation-skipping transfer tax exemption Rev. Proc. 2004–46, 2004–2 C.B. 142, provides an alternative method for requesting relief to make a late allocation of the generation-skipping transfer tax exemption. This revenue procedure also informs taxpayers who are denied relief or who are outside the scope of the revenue procedure of the information necessary for obtaining a letter ruling.
2652(a)(3) Reverse qualified terminable interest property elections Rev. Proc. 2004–47, 2004–2, C.B. 169, provides an alternative method for certain taxpayers to obtain an extension of time to make a late reverse qualified terminable interest property election under § 2652(a)(3). This revenue procedure also informs taxpayers who are denied relief or who are outside the scope of the revenue procedure of the information necessary to obtain a letter ruling.
4980B Failure to satisfy continuation coverage requirements of group health plans Rev. Proc. 87–28, 1987–1 C.B. 770 (treating references to former § 162(k) as if they were references to § 4980B).
7701 Relief for a late initial classification election for a newly formed entity Rev. Proc. 2009–41, 2009–39 I.R.B. 439.
7701(a)(40) and 7871(d) Indian tribal governments and subdivision of Indian tribal governments Rev. Proc. 84–37, 1984–1 C.B. 513, as modified by Rev. Proc. 86–17, 1986–1 C.B. 550, and Rev. Proc. 2017–1, this revenue procedure, (provides guidelines for obtaining letter rulings recognizing Indian tribal government or tribal government subdivision status; also provides for inclusion in list of federally recognized Indian tribes published annually by the Department of the Interior, Bureau of Indian Affairs, or in list of recognized subdivisions of Indian tribal governments in revised versions of Rev. Proc. 84–36, 1984–1 C.B. 510, as modified and made permanent by Rev. Proc. 86–17).
301.7701–2(a) Classification of undivided fractional interests in rental real estate Rev. Proc. 2002–22, 2002–1 C.B. 733 (specifies the conditions under which the Service will consider a letter ruling request that an undivided fractional interest in rental real property (other than a mineral property as defined in § 614) is not an interest in a business entity).
301.7701–3 Automatic extensions of time for late S corporation election and late corporate entity classification Rev. Proc. 2013–30, 2013–36 I.R.B. 173.
301.9100–3 Extension of time to make entity classification election Rev. Proc. 2009–41, 2009–39 I.R.B. 439.
7702 Closing agreement for failure to account for charges for qualified additional benefits Rev. Proc. 2010–26, 2010–30 I.R.B. 91.
7702 Closing agreement for failed life insurance contracts Rev. Proc. 2008–40, 2008–2 C.B. 151.
7702A Closing agreement for inadvertent non-egregious failure to comply with modified endowment contract rules Rev. Proc. 2008–39, 2008–2 C.B. 143.
7704(g) Revocation of election Notice 98–3, 1998–1 C.B. 333.
SUBJECT MATTERS REVENUE PROCEDURE
Accounting periods; changes in period Rev. Proc. 2002–39, 2002–1 C.B. 1046, as clarified and modified by Notice 2002–72, 2002–2 C.B. 843, as modified by Rev. Proc. 2003–34, 2003–1 C.B. 856, and modified by Rev. Proc. 2003–79, 2003–2 C.B. 1036; and Rev. Proc. 2017–1, this revenue procedure, for which sections 1, 2.01, 2.02, 2.05, 3.03, 5.02, 6.03, 6.05, 6.07, 6.11, 7.01(1), 7.01(2), 7.01(3), 7.01(4), 7.01(5), 7.01(6), 7.01(8), 7.01(9), 7.01(10), 7.01(13), 7.01(14), 7.01(15), 7.02(2), 7.02(4), 7.02(5), 7.02(6), 7.04, 7.05, 7.06, 7.08, 8.01, 8.03, 8.04, 8.05, 8.06, 10, 11, 15, 17, 18, Appendix A, and Appendix G are applicable.
Classification of liquidating trusts Rev. Proc. 82–58, 1982–2 C.B. 847, as modified and amplified by Rev. Proc. 94–45, 1994–2 C.B. 684, and as amplified by Rev. Proc. 91–15, 1991–1 C.B. 484 (checklist questionnaire), as modified and amplified by Rev. Proc. 94–45.
Earnings and profits determinations Rev. Proc. 75–17, 1975–1 C.B. 677; Rev. Proc. 2017–1, this revenue procedure, sections 2.05, 3.03, 7, 8, and 10.05; and Rev. Proc. 2017–3, this Bulletin, section 3.01.
Estate, gift, and generation-skipping transfer tax issues Rev. Proc. 91–14, 1991–1 C.B. 482 (checklist questionnaire).
Intercompany transactions; election not to defer gain or loss Rev. Proc. 2009–31, 2009–27 I.R.B. 107.
Leveraged leasing Rev. Proc. 2001–28, 2001–1 C.B. 1156, and Rev. Proc. 2001–29, 2001–1 C.B. 1160.
Rate orders; regulatory agency; normalization A letter ruling request that involves a question of whether a rate order that is proposed or issued by a regulatory agency will meet the normalization requirements of § 168(f)(2) (pre-Tax Reform Act of 1986, § 168(e)(3)) and former §§ 46(f) and 167(l) ordinarily will not be considered unless the taxpayer states in the letter ruling request whether— (1) the regulatory authority responsible for establishing or approving the taxpayer’s rates has reviewed the request and believes that the request is adequate and complete; and (2) the taxpayer will permit the regulatory authority to participate in any Associate office conference concerning the request.
If the taxpayer or the regulatory authority informs a consumer advocate of the request for a letter ruling and the advocate wishes to communicate with the Service regarding the request, any such communication should be sent to: Internal Revenue Service, Associate Chief Counsel (Procedure and Administration), Attn: CC:PA:LPD:DRU, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044 (or, if a private delivery service is used: Internal Revenue Service, Associate Chief Counsel (Procedure and Administration), Attn: CC:PA:LPD:DRU, Room 5336, 1111 Constitution Ave., NW, Washington, DC 20224). These communications will be treated as third party contacts for purposes of § 6110.
Unfunded deferred compensation Rev. Proc. 71–19, 1971–1 C.B. 698, as amplified by Rev. Proc. 92–65, 1992–2 C.B. 428. See Rev. Proc. 92–64, 1992–2 C.B. 422, as modified by Notice 2000–56, 2000–2 C.B. 393, for the model trust for use in Rabbi Trust Arrangements.
Safe harbor revenue procedures .02 For requests relating to the following Code sections and subject matters, refer to the following safe harbor revenue procedures.
CODE OR REGULATION SECTION REVENUE PROCEDURE
23 and 36C Adoption credit for foreign adoptions Rev. Proc. 2010–31, 2010–40 I.R.B. 413.
103 and 141–150 Issuance of state or local obligations Rev. Proc. 2016–44, 2016–36 I.R.B. 316 (management contracts); and Rev. Proc. 2007–47, 2007–2 C.B. 108 (research agreements).
61 Utility Cost Recovery Securitization Transactions Rev. Proc. 2005–62, 2005–2 C.B. 507.
137 Exclusion for Employer Reimbursements Rev. Proc. 2010–31, 2010–40 I.R.B. 413.
162 Restaurant Small Wares Costs Rev. Proc. 2002–12, 2002–1 C.B. 374.
165 Losses from corrosive drywall Rev. Proc. 2010–36, 2010–42 I.R.B. 439.
165 Theft losses from fraudulent investment arrangements Rev. Proc. 2009–20, 2009–14 I.R.B. 749; Rev. Proc. 2011–58, 2011–50 I.R.B. 849 (modifies Rev. Proc. 2009–20).
167 and 168 Primary use of certain cable network assets described in asset class 48.42 of Rev. Proc. 87–56, 1987–2 C.B. 674 Section 9 of Rev. Proc. 2015–12, 2015–2 I.R.B. 266.
168 Depreciation of original and replacement tires for certain vehicles Rev. Proc. 2002–27, 2002–1 C.B. 802.
168 Depreciation of fiber optic node and trunk line of a cable system operator Section 8 of Rev. Proc. 2015–12, 2015–2 I.R.B. 266.
168 Recovery periods of certain tangible assets used by wireless telecommunication carriers Rev. Proc. 2011–22, 2011–18 I.R.B. 737
263, 471 Treatment of rotable spare parts as inventory or depreciable property Rev. Proc. 2007–48, 2007–2 C.B. 110
263 Safe harbor methods for track structure expenditures Rev. Proc. 2002–65, 2002–2 C.B. 700; Rev. Proc. 2001–46, 2001–2 C.B. 263.
263 Determination whether expenditures to maintain, replace or improve wireline network assets must be capitalized Rev. Proc. 2011–27, 2011–18 I.R.B. 740.
263 Determination whether expenditures to maintain, replace or improve wireless network assets must be capitalized Rev. Proc. 2011–28, 2011–18 I.R.B. 743.
263 Allocating success-based fees paid in business acquisitions or reorganizations Rev. Proc. 2011–29, 2011–18 I.R.B. 746.
263 Electric trade and distribution property assets Rev. Proc. 2011–43, 2011–37 I.R.B. 326.
263A Safe harbor methods for certain motor vehicle dealerships Rev. Proc. 2010–44, 2010–49 I.R.B. 811.
280A Safe harbor method to determine the amount of deductible expenses attributable to certain business use of a residence Rev. Proc. 2013–13, 2013–6 I.R.B. 478.
280B Certain structural modifications to a building not treated as a demolition Rev. Proc. 95–27, 1995–1 C.B. 704.
446 Film producer’s treatment of certain creative property costs Rev. Proc. 2004–36, 2004–1 C.B. 1063.
446 Bank’s treatment of uncollected interest Rev. Proc. 2007–33, 2007–1 C.B. 1289.
448 Nonaccrual-experience method - book safe harbor method Rev. Proc. 2011–46, 2011–42 I.R.B. 518.
451 Safe harbor for capital cost reduction payments Rev. Proc. 2002–36, 2002–1 C.B. 993
451 Treatment of gift cards issued to customers in exchange for returned merchandise Rev. Proc. 2011–17, 2011–5 I.R.B. 441.
451 Safe harbor for certain minors’ trusts established under the Indian Gaming Regulatory Act (U.S.C. §§ 2701–2721) Rev. Proc. 2011–56, 2011–49 I.R.B. 834.
461 Safe harbor method for payroll tax liabilities for compensation Rev. Proc. 2008–25, 2008–1 C.B. 686.
471 Estimating inventory shrinkage Rev. Proc. 98–29, 1998–1 C.B. 857.
471 Valuation of automobile dealer vehicle parts inventory Rev. Proc. 2002–17, 2002–1 C.B. 676.
471 Valuation of remanufactured cores Rev. Proc. 2003–20, 2003–1 C.B. 445.
471 Valuation of heavy equipment dealer parts inventory Rev. Proc. 2006–14, 2006–1 C.B. 350.
471 Rolling-average method of accounting for inventories Rev. Proc. 2008–43, 2008–2 C.B. 186.
475 Eligible positions Rev. Proc. 2007–41, 2007–1 C.B. 1492.
584(a) Qualification of a proposed common trust fund plan Rev. Proc. 92–51, 1992–1 C.B. 988.
642(c)(5) Qualification of trusts as pooled income funds Rev. Proc. 88–53, 1988–2 C.B. 712.
664 Charitable remainder trusts Rev. Proc. 2005–24, 2005–1 C.B. 909, as modified by Notice 2006–15, 2006–1 C.B. 501.
664(d)(1) Qualification of trusts as charitable remainder annuity trusts Rev. Proc. 2003–53, 2003–2 C.B. 230; Rev. Proc. 2003–54, 2003–2 C.B. 236; Rev. Proc. 2003–55, 2003–2 C.B. 242; Rev. Proc. 2003–56, 2003–2 C.B. 249; Rev. Proc. 2003–57, 2003–2 C.B. 257; Rev. Proc. 2003–58, 2003–2 C.B. 262; Rev. Proc. 2003–59, 2003–2 C.B. 268; Rev. Proc. 2003–60, 2003–2 C.B. 274.
664(d)(2) and (3) Qualification of trusts as charitable remainder unitrusts Rev. Proc. 2005–52, 2005–2 C.B. 326; Rev. Proc. 2005–53, 2005–2 C.B. 339; Rev. Proc. 2005–54, 2005–2 C.B. 353; Rev. Proc. 2005–55, 2005–2 C.B. 367; Rev. Proc. 2005–56, 2005–2 C.B. 383; Rev. Proc. 2005–57, 2005–2 C.B. 392; Rev. Proc. 2005–58, 2005–2 C.B. 402; Rev. Proc. 2005–59, 2005–2 C.B. 412.
832 Insurance company premium acquisition expenses Rev. Proc. 2002–46, 2002–2 C.B. 105.
856(c) Certain loans treated as real estate assets Rev. Proc. 2003–65, 2003–2 C.B. 336.
860H Transfers of ownership interests in Financial Asset Securitization Investment Trusts Rev. Proc. 2001–12, 2001–1 C.B. 335.
1031(a) Qualification as a qualified exchange accommodation arrangement Rev. Proc. 2000–37, 2000–2 C.B. 308, as modified by Rev. Proc. 2004–51, 2004–2 C.B. 294.
1031 Safe harbor with respect to exchanges of residential real property Rev. Proc. 2008–16, 2008–1 C.B. 547.
1031 Safe harbor for reporting gain or loss on failed exchanges Rev. Proc. 2010–14, 2010–12 I.R.B. 456.
1272(a)(6) Proportional method of accounting for original issue discount on pools of credit card receivables Rev. Proc. 2013–26, 2013–22 I.R.B. 1160.
1286 Determination of reasonable compensation under mortgage servicing contracts Rev. Proc. 91–50, 1991–2 C.B. 778.
1362(f) Automatic inadvertent termination relief to certain corporations Rev. Proc. 2013–30, 2013–36 I.R.B. 173.
2056A Qualified Domestic Trust Rev. Proc. 96–54, 1996–2 C.B. 386.
2702(a)(3)(A) and 25.2702–5(c) Qualified Personal Residence Trust Rev. Proc. 2003–42, 2003–1 C.B. 993.
4051(a)(2) Imposition of tax on heavy trucks and trailers sold at retail Rev. Proc. 2005–19, 2005–1 C.B. 832.
1.7704–2(d) New business activity of existing partnership is closely related to pre-existing business Rev. Proc. 92–101, 1992–2 C.B. 579.
SUBJECT MATTERS REVENUE PROCEDURE
Certain rent-to-own contracts treated as leases Rev. Proc. 95–38, 1995–2 C.B. 397.
Automatic change in accounting period revenue procedures .03 For requests for an automatic change in accounting period, refer to the following automatic change revenue procedures.
Rev. Proc. 2006–45, 2006–2 C.B. 851, as clarified and modified by Rev. Proc. 2007–64, 2007–2 C.B. 818 (certain corporations); Rev. Proc. 2006–46, 2006–2 C.B. 859 (certain partnerships, subchapter S corporations, personal service corporations, and trusts); and Rev. Proc. 2003–62, 2003–2 C.B. 299 (individuals seeking a calendar year);
The Commissioner’s consent to an otherwise qualifying automatic change in accounting period is granted only if the taxpayer timely complies with the applicable automatic change revenue procedure.

Rev. Proc. 2017–2

TABLE OF CONTENTS

SECTION 1. PURPOSE AND AUTHORITY 108
.01 Description of purpose 108
.02 Updated annually 108
SECTION 2. DEFINITIONS 108
.01 Operating division 108
.02 Director 108
.03 Appeals officer 109
.04 Taxpayer 109
.05 Associate office 109
.06 Field office 109
.07 Field counsel 109
SECTION 3. THE NATURE OF TECHNICAL ADVICE 109
.01 When advice furnished 109
.02 TAM may be requested even if previous TAM on same matter was issued 109
.03 Taxpayer participation 109
.04 Areas of mandatory technical advice on employee plans matters 110
.05 Basis for requests by Exempt Organizations Rulings & Agreements 110
SECTION 4. TYPES OF ISSUES NOT SUBJECT TO THIS PROCEDURE 110
.01 Alcohol, tobacco, and firearms taxes 110
.02 Employment status determinations 110
.03 Issues under § 301.9100 110
.04 Frivolous issues 110
.05 Issues in a docketed case 110
.06 Collection issues 111
.07 Request for relief under § 7805(b) relating to matters handled by TEGE 111
SECTION 5. INITIATING A REQUEST FOR TECHNICAL ADVICE 111
.01 Initiating a request for technical advice 111
.02 Taxpayer may request referral for technical advice 111
.03 Appeal of field office denial of TAM referral request 111
.04 The decision of the Director, the LB&I Territory Manager, or the Tax Exempt Bonds Manager, Field Operations may be reviewed but not appealed 112
SECTION 6. PRE-SUBMISSION CONFERENCES 112
.01 Purpose 112
.02 Pre-submission conferences are mandatory 112
.03 Actions before a pre-submission conference 112
.04 Initiating a pre-submission conference 113
.05 Manner of transmitting pre-submission materials 113
.06 Scheduling the pre-submission conference 113
.07 Pre-submission conferences may be conducted in person 114
.08 Pre-submission conference may not be taped 114
.09 Discussion of substantive issues is not binding on the Service 114
.10 New issues may be raised at pre- submission conference 114
.11 Power of attorney 114
SECTION 7. SUBMITTING THE REQUEST FOR TECHNICAL ADVICE 114
.01 Memorandum of issues, facts, law, and arguments 114
.02 Transaction involving multiple taxpayers 115
.03 Foreign laws and documents: submission of relevant foreign laws and documents in the official language and in English 115
.04 Statement regarding interpretation of relevant income tax or estate tax treaty 115
.05 Statement recommending information to be deleted from public inspection 115
.06 Preparation of the memorandum; resolution of disagreements 116
.07 Transmittal Form 4463, Request for Technical Advice 117
.08 All supporting and additional documents 117
.09 Number of copies of request to be submitted 117
SECTION 8. INITIAL PROCESSING OF THE REQUEST FOR TECHNICAL ADVICE BY THE ASSOCIATE OFFICE 118
.01 Assignment and initial review by Associate office attorney 118
.02 Other forms of guidance 118
.03 Initial acknowledgment and processing 118
.04 Deficiencies in request leading to return 118
.05 Initial discussion 118
.06 If additional information requested 118
.07 Taxpayer request for extension of time to submit additional information 119
.08 Where to send additional information 119
.09 Tentative conclusions 119
SECTION 9. TAXPAYER CONFERENCES 120
.01 Notification of conference 120
.02 Scheduling conference 120
.03 Taxpayer may request extensions 120
.04 One conference of right 120
.05 Additional conferences may be offered 120
.06 Additional information submitted after the conference 120
.07 Normally conducted in person 121
.08 Service makes only tentative recommendations 121
.09 Conference may not be taped 121
SECTION 10. PREPARATION OF THE TECHNICAL ADVICE 121
.01 Reply consists of two parts 121
.02 Status of a request 121
.03 Opportunity for field counsel review 121
.04 Copy of preliminary TAM to field office and field counsel 122
.05 Routing of reply 122
.06 Copy of final TAM to field counsel and Division Counsel 122
.07 Reconsideration 122
.08 Discussing contents with the taxpayer 122
.09 Section 6110 122
.10 TAM takes effect when taxpayer receives a copy 123
.11 Taxpayer may protest deletions not made 123
.12 Public inspection in civil fraud or criminal investigation cases 123
SECTION 11. WITHDRAWAL OF REQUESTS FOR TECHNICAL ADVICE 123
.01 Taxpayer notified 123
.02 Acknowledgment of withdrawal 123
.03 Associate office may decide not to provide a TAM 123
.04 Associate office may provide views 124
SECTION 12. USE OF THE TECHNICAL ADVICE 124
.01 Service generally applies advice in processing taxpayer’s case 124
SECTION 13. RETROACTIVITY AND RELIANCE 124
.01 Usually applies retroactively 124
.02 Revocation or modification of an earlier letter ruling or TAM 124
.03 Continuing action or series of actions 125
.04 Other taxpayers 125
SECTION 14. HOW MAY RETROACTIVE EFFECT BE LIMITED? 125
.01 Request for relief under § 7805(b) 125
.02 Form of request for relief—in general 125
.03 Form of request for relief—continuing transaction before examination of return 125
.04 Taxpayer’s right to a conference 126
.05 Reconsideration of request for relief under § 7805(b) 126
SECTION 15. SIGNIFICANT CHANGES MADE TO REV. PROC. 2016–2 126
SECTION 16. EFFECT ON OTHER DOCUMENTS 126
SECTION 17. EFFECTIVE DATE 126
DRAFTING INFORMATION 126
INDEX 128

SECTION 1. PURPOSE AND AUTHORITY

Description of purpose

.01 Technical advice. This revenue

procedure explains when and how an Associate office provides technical advice, conveyed in a technical advice memorandum (TAM). It also explains the rights that a taxpayer has when a field office requests a TAM regarding a tax matter. Rev. Proc. 2016–2 superseded.

Updated annually

.02 This revenue procedure is updated

annually as the second revenue procedure of the year, but it may be modified, amplified, or clarified during the year.

SECTION 2. DEFINITIONS

Operating division

.01 The term “operating division” means (1) the Large Business & International Division (LB&I); (2) the Small Business/Self-Employed Division (SB/SE); (3) the Wage and Investment Division (W&I); and (4) the Tax Exempt and Government Entities Division (TE/GE).

Director

.02 The term “Director” means (1) the Director, Field Operations (LB&I) for the taxpayer’s practice area; (2) a Territory Manager, Field Compliance (SB/SE); (3) the Director, Return Integrity & Compliance Services (W&I); (4) the Director, International Compliance, Strategy and Policy; (5) the Director, Employee Plans Examinations; (6) the Director, Employee Plans Rulings & Agreements; (7) the Director, Exempt Organizations Examinations; (8) the Director, Exempt Organizations Rulings & Agreements; (9) the Director, Federal, State & Local Governments; (10) the Director, Tax Exempt Bonds; (11) the Director, Indian Tribal Governments; (12) the Appeals Area Director; (13) the Appeals Director, Technical Guidance; (14) the Appeals Director, International Operations; or (15) any official to whom the authority normally exercised by a Director has properly been delegated.

Appeals officer

.03 The term “Appeals officer” means the Appeals officer assigned to the taxpayer’s case and can include an Appeals Team Case Leader or settlement officer.

Taxpayer

.04 The term “taxpayer” means any person subject to any provision of the Internal Revenue Code, including an issuer of obligations the interest on which is excluded from gross income under § 103, and issuers of other bonds that provide a tax subsidy.

Associate office

.05 The term “Associate office” means (1) the Office of Associate Chief Counsel (Corporate); (2) the Office of Associate Chief Counsel (Financial Institutions and Products); (3) the Office of Associate Chief Counsel (Income Tax and Accounting); (4) the Office of Associate Chief Counsel (International); (5) the Office of Associate Chief Counsel (Passthroughs and Special Industries); (6) the Office of Associate Chief Counsel (Procedure and Administration); or (7) the Office of Associate Chief Counsel (Tax Exempt and Government Entities).

Field office

.06 The term “field office” means personnel in any examination or Appeals office. For qualified retirement plan and exempt organizations matters, the term “field office” also means personnel in any Rulings & Agreements office.

Field counsel

.07 The term “field counsel” means any attorney assigned to the Division Counsel for an operating division who is not a member of Division Counsel Headquarters.

SECTION 3. THE NATURE OF TECHNICAL ADVICE

When advice furnished

.01 Technical advice is advice furnished by an Associate office in a memorandum that responds to any request, submitted under this revenue procedure, for assistance on any technical or procedural question that develops during any proceeding before the Internal Revenue Service (Service). The field office may request a TAM when the application of the law to the facts involved is unclear. The question must be on the interpretation and proper application of any legal authority, including legislation, tax treaties, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements to a specific set of facts that concerns the treatment of an item in a tax period under examination or in Appeals. A TAM may not be requested for prospective or hypothetical transactions (except for certain TAMs in connection with a taxpayer’s request for a determination letter on a matter within the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, pursuant to Rev. Proc. 2017–4 or 2017–5). Proceedings before the Service include: (1) the examination of a taxpayer’s return; (2) the consideration of a taxpayer’s claim for credit or refund; (3) any matter under examination or in Appeals pertaining to tax-exempt bonds, tax credit bonds, or mortgage credit certificates; and (4) any other matter involving a specific taxpayer under the jurisdiction of a Director. Technical advice does not include any oral legal advice or any written legal advice furnished to the field office that is not submitted and processed under this revenue procedure.

TAM may be requested even if previous TAM on same matter was issued

.02 The field office may request a TAM on an issue in any tax period, even if a TAM was requested and furnished for the same or similar issue for another tax period. The field office may also request a TAM on an issue even if Appeals disposed of the same or similar issue for another tax period of the same taxpayer.

Taxpayer participation

.03 Taxpayers will be afforded an opportunity to participate in the technical advice process. Taxpayer participation is preferred but not required in order to process a TAM. A taxpayer’s failure to participate in stages identified as “material,” however, will constitute waiver of the taxpayer’s right to the taxpayer conference described in section 9.

Under no circumstances will a taxpayer be treated as having waived its right to see the issued TAM or having waived its rights regarding disclosure and deletions described in section 10.

Areas of mandatory technical advice on employee plans matters .04 Regarding qualified retirement plan matters, a request for a TAM is required in cases concerning (1) proposed adverse letters or proposed revocation letters on collectively bargained plans or (2) plans for which the Service is proposing to issue a revocation letter because of certain fiduciary actions that violate the exclusive benefit rule of § 401(a) of the Code and are subject to Part 4 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, Pub. L. No. 93–406, 1974–3 C.B. 1, 43 (ERISA).

Basis for requests by Exempt Organizations Rulings & Agreements .05 The circumstances in which Exempt Organizations Determinations should seek technical advice in the course of processing applications for tax exemption are described in Rev. Proc. 2017–5, this Bulletin, section 3.03. Technical advice may also be requested by Exempt Organizations Determinations in connection with requests for determination letters where no pending application for tax exemption is involved. A request for a TAM is not required if the Director, Exempt Organizations Examinations proposes to revoke or modify a letter recognizing tax-exempt status issued by the Service.

SECTION 4. TYPES OF ISSUES NOT SUBJECT TO THIS PROCEDURE

Alcohol, tobacco, and firearms taxes

.01 The procedures for obtaining technical advice that apply to Federal alcohol, tobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction of the Alcohol and Tobacco Tax and Trade Bureau of the Department of the Treasury.

Employment status determinations

.02 Employment status determination letters issued pursuant to section 12.04 of Rev. Proc. 2017–1, of this Bulletin, are not subject to technical advice procedures.

Issues under § 301.9100

.03 A request for an extension of time for making an election or other application for relief under § 301.9100–3 of the Procedure and Administration Regulations is not submitted as a request for technical advice. Instead, the request must be submitted as a request for a letter ruling, even if submitted after the examination of the taxpayer’s return has begun or after the issues in the return are being considered in Appeals or a federal court. Therefore, a request under § 301.9100 should be submitted under Rev. Proc. 2017–1, of this Bulletin, and the payment of the applicable user fee is determined under Appendix A of Rev. Proc. 2017–1. However, a request under § 301.9100 related to recharacterization of a Roth IRA should be submitted under Rev. Proc. 2017–4 of this Bulletin. Requests for relief pertaining to exemption application matters involving §§ 505(c) and 508 are considered in the determination letter process under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. See Revenue Procedure 2017–5, this Bulletin.

Frivolous issues

.04 Associate offices will not issue a TAM on frivolous issues. The field office will deny a taxpayer’s request that it consider requesting technical advice if the taxpayer’s request involves frivolous issues. For purposes of this revenue procedure, a “frivolous issue” is one without basis in fact or law or one that asserts a position that courts have held frivolous or groundless. Examples of frivolous or groundless issues may be found in Service publications and other guidance (including, but not limited to, section 6.10 of Rev. Proc. 2017–1, Notice 2010–33, and I.R.M. 4.10.12.1.1, Frivolous Arguments).

Issues in a docketed case

.05 Associate offices will not issue technical advice on an issue if the same issue of the same taxpayer (or of a related taxpayer within the meaning of § 267 or a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504) is in a docketed case for any taxable year. If a case is docketed for an estate tax issue of a taxpayer while a request for technical advice on the same issue of the same taxpayer is pending, the Associate office may issue the TAM only if the appropriate Appeals officer and field counsel agree, by memorandum, to the issuance of the TAM.

Collection issues

Request for relief under § 7805(b) relating to matters handled by TEGE

.06 The Associate Chief Counsel (Procedure and Administration) will not issue technical advice on matters arising under the Internal Revenue Code and related statutes and regulations that involve the collection of taxes (including interest and penalties). With respect to such matters, the Associate Chief Counsel (Procedure and Administration) may issue alternative forms of advice.

.07 Requests for relief under § 7805(b) relating to the revocation or modification of determination letters or letter rulings issued by TE/GE are handled in accordance with the procedures in sections 23 and 29 of Rev. Proc. 2017–4, and section 12 of Rev. Proc. 2017–5, this Bulletin.

SECTION 5. INITIATING A REQUEST FOR TECHNICAL ADVICE

Initiating a request for technical advice

.01 Because technical advice is issued to assist field offices, it is the field office that determines whether to request it. In determining whether to request technical advice, the field office should consider whether other forms of guidance, e.g., published guidance, generic advice, or some other form of advice, would be more appropriate. Additionally, before requesting technical advice, the field office must request assistance and a recommendation from field counsel. If the field office disagrees with field counsel’s recommendation, the field office must seek reconciliation with field counsel through their respective supervisors. A field office’s request for technical advice must be approved in writing by a Director. If technical advice is requested from the Associate Chief Counsel (Tax Exempt and Government Entities) for a case with either an unagreed prohibited transaction, as defined in § 4975(c)(1) and ERISA § 406(a), or a violation of the exclusive benefit rule of § 401(a)(2) or ERISA § 404(a)(1)(A), a Form 6212-B must be submitted to the Department of Labor prior to submitting the request for technical advice.

Taxpayer may request referral for technical advice

.02 While a case is under the jurisdiction of a Director, a taxpayer may request that the field office refer an issue to the Associate office for technical advice. The taxpayer’s request may be oral or written and should be directed to the field office. If the field office decides that a taxpayer’s request for referral of an issue to the Associate office for a TAM is unwarranted, the field office will notify the taxpayer. A taxpayer’s request for referral of an issue for technical advice will not be denied merely because the Associate office has already provided legal advice other than a TAM to the field office on the matter.

Appeal of field office denial of TAM referral request

.03 The taxpayer may appeal the field office’s denial of the taxpayer’s request for referral by submitting to the field office, within 30 calendar days after notification that the request was denied, a written statement of the reasons why the matter should be referred to the Associate office. The statement should include a description of all pertinent facts (including any facts in dispute); a statement of the issue that the taxpayer would like to have addressed; a discussion of any relevant legal authority, including legislation, tax treaties, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements; and an explanation of the taxpayer’s position and the need for technical advice. Any extensions of the 30-day period must be requested in writing and must be approved by the Director, the LB&I Territory Manager, or the Tax Exempt Bonds Manager, Field Operations. Decisions on any extensions by the Director, the LB&I Territory Manager, or in the case of Tax Exempt Bonds, the Manager, Field Operations, are final and may not be appealed.

Upon receipt, the field office will refer the taxpayer’s written statement, along with the field office’s statement of why the issue should not be referred to the Associate office for technical advice, to the Director, the LB&I Territory Manager, or in the case of Tax Exempt Bonds, the Manager, Field Operations, for decision. The Director, the LB&I Territory Manager, or in the case of Tax Exempt Bonds, the Manager, Field Operations, will determine whether the issue should be referred for technical advice on the basis of the statements of the field office and the taxpayer. No conference will be held with the taxpayer or the taxpayer’s representative. If the Director, the LB&I Territory Manager, or in the case of Tax Exempt Bonds, the Manager, Field Operations, determines that a TAM is not warranted, the taxpayer will be informed in writing of the proposed denial of the request and the reasons for the denial (unless doing so would prejudice the Government’s interests).

The decision of the Director, the LB&I Territory Manager, or the Tax Exempt Bonds Manager, Field Operations may be reviewed but not appealed

.04 The taxpayer may not appeal the decision of the Director, the LB&I Territory Manager, or in the case of Tax Exempt Bonds, the Manager, Field Operations, not to request a TAM. If the taxpayer does not agree with the proposed denial, all data on the issue for which a TAM has been sought, including the taxpayer’s written request and statements, will be submitted for review to the Director, LB&I; the Director, Examination, SB/SE; the Director, Specialty Tax, SB/SE; the Director, Return Integrity & Compliance Services, W&I; the Director, Federal, State & Local Governments; the Director, Tax Exempt Bonds; the Director, Indian Tribal Governments; the Appeals Director, Tax Policy and Procedure (Exam); or the Commissioner, Tax Exempt and Government Entities Division (who will review the proposed denial through the Director, Employee Plans; the Director, Exempt Organizations; or, if appropriate, the Appeals Director, Tax Policy and Procedure (Exam)). Review of the proposed denial will be based solely on the written record. No conference will be held with the taxpayer or the taxpayer’s representative. The person responsible for review may consult with the Associate office, if appropriate, and will notify the field office whether the proposed denial of the taxpayer’s request is approved or denied within 45 days of receiving all information. The field office will then notify the taxpayer. While the matter is under review, the field office will suspend any final decision on the issue (except when the delay would prejudice the Government’s interests). If the request for technical advice has been denied because the issue is frivolous as described in section 4.04 of this revenue procedure, this review process is not available.

SECTION 6. PRE-SUBMISSION CONFERENCES

Purpose

.01 A pre-submission conference helps the field office, field counsel, the taxpayer, and the Associate office agree on the appropriate scope of the request for technical advice and the factual information and documents that must be included in the request. A pre-submission conference is not an alternative procedure for addressing the merits of the substantive positions advanced by the field office or by the taxpayer. During the pre-submission conference, the parties should discuss the framing of the issues and the background information and documents that should be included in the formal submission of the request for technical advice.

Pre-submission conferences are mandatory

.02 Pre-submission conferences are mandatory because they promote expeditious processing of requests for technical advice. If a request for technical advice is submitted without first holding a pre-submission conference, the Associate office will return the request for advice. Pre-submission conferences include the taxpayer and representatives from the field office, field counsel, and the Associate office. Requests for technical advice can proceed, however, even if a taxpayer declines to participate in a pre-submission conference.

Actions before a pre-submission conference

.03 Before requesting a pre-submission conference, the field office and the taxpayer must exchange proposed statements of the pertinent facts and issues. The proposed statements should include any facts in dispute, the issues that the parties intend to discuss, any legal analysis and supporting authorities, and any other background information that the parties believe would facilitate the Associate office’s understanding of the issues to be discussed during the conference. Prior to the scheduled pre-submission conference, the field office and the taxpayer must submit to the Associate office their respective statements of pertinent facts and issues. The legal analysis provided in the parties’ statements should be sufficient to enable the Associate office to be reasonably informed about the subject matter. Failure of the taxpayer to provide a statement of pertinent issues and facts shall not be allowed to unduly delay the scheduling of the pre-submission conference. If it is not provided within a reasonable period of time, the conference may be scheduled without the taxpayer’s statements.

The field office or the taxpayer must ensure that the Associate office receives a copy of any required power of attorney. Form 2848, Power of Attorney and Declaration of Representative, should be used.

Pre-submission materials include the field office and taxpayer’s statements (discussed above) and any required power of attorney for the taxpayer. The assigned Associate office must receive the pre-submission materials at least 10 business days before the conference is to be held.

Initiating a pre-submission conference

.04 A request for a pre-submission conference must be submitted in writing by the field office, with the assistance of field counsel. The request should identify the Associate office expected to have jurisdiction over the request for a TAM and should include a brief explanation of the primary issue so that an assignment within the appropriate Associate office can be made. If the request is submitted by Appeals, field counsel assignments will be subject to the ex parte rules set forth in section 1001(a)(4) of the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105–206, and Rev. Proc. 2012–18, 2012–10 I.R.B. 455. If the request involves an issue under the office of the Director, Abusive Tax Avoidance Transactions (ATAT) Examination, SB/SE, an issue under the Office of Tax Shelter Analysis (OTSA), LB&I, then the field office and field counsel should coordinate with LB&I Division Counsel headquarters. If the request is from Appeals and involves a coordinated issue or emerging issue under Appeals Technical Guidance or International Operations or Appeals Coordinated Issue (ACI) Program, the Appeals officer must coordinate with the Appeals Technical Guidance or International Operations Technical Specialist.

Manner of transmitting pre-submission materials

.05 The request for a pre-submission conference and pre-submission materials should be electronically transmitted by field counsel to the Technical Services Support Branch (TSS4510). TSS4510 will ensure delivery of the pre-submission materials to the appropriate Associate office. The TSS4510 email box cannot accept encrypted mail.

If documents are not electronically available, or if documents cannot reasonably be transmitted electronically, the request for a pre-submission conference and pre-submission materials may be sent by fax to TSS4510 at 855-592-8976 or by express mail or private delivery service to the following address to avoid any delays in regular mail:

  • Internal Revenue Service

  • Attn: CC:PA:LPD:TSS, Room 5336

  • 1111 Constitution Avenue, NW

  • Washington, DC 20224

Scheduling the pre-submission conference

.06 After the pre-submission materials have been received, the Associate office responsible for conducting the pre-submission conference will contact the taxpayer, the field office, and field counsel to arrange a mutually convenient time for the parties to participate in the conference. The conference generally should be held within 15, but not more than 30, calendar days after the field office is contacted.

Pre-submission conferences may be conducted in person

.07 Although pre-submission conferences are generally conducted by telephone, the parties may choose to conduct the conference in person.

Pre-submission conference may not be taped

.08 No tape, stenographic, or other verbatim recording of a conference may be made by any party.

Discussion of substantive issues is not binding on the Service

.09 Any discussion of substantive issues at a pre-submission conference is advisory only, is not binding on the Service in general or on the Office of Chief Counsel in particular, and cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

New issues may be raised at pre-submission conference

Power of attorney

.10 During the pre-submission conference, the Associate office may raise new issues in addition to those submitted by the field office and the taxpayer.

.11 Form 2848, Power of Attorney and Declaration of Representative, should be used to provide the representative’s authority (Part I of Form 2848, Power of Attorney) and the representative’s qualification (Part II of Form 2848, Declaration of Representative). The name of the person signing Part I of Form 2848 should also be typed or printed on this form. A stamped signature is not permitted. An original, a copy, or fax of the power of attorney is acceptable so long as its authenticity is not reasonably disputed.

The taxpayer’s authorized representative, as described in section 7.01(13) of Rev. Proc. 2017–1, whether or not enrolled, must comply with Treasury Department Circular No. 230, which provides the rules for practice before the Service. In situations where the Service believes that the taxpayer’s representative is not in compliance with Circular 230, the Service will bring the matter to the attention of the Office of Professional Responsibility.

SECTION 7. SUBMITTING THE REQUEST FOR TECHNICAL ADVICE

Memorandum of issues, facts, law, and arguments

.01 The field office submits the request for technical advice. Every request for technical advice must include a memorandum that describes the facts, issues, applicable law, and arguments supporting the taxpayer’s position on the issues and the field office’s position on the issues. The field office will prepare this statement with the assistance of field counsel. The memorandum must include a statement of all the facts and the issues. If the taxpayer and the field office disagree about ultimate findings of fact or about the relevance of facts, all of the facts should be included with an explanation that highlights the areas of disagreement. The memorandum must include an explanation of the taxpayer’s position, discussing any relevant legal authority, including legislation, tax treaties, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements supporting the taxpayer’s position. The memorandum must also include a similar explanation of the field office’s position. Both the field office and the taxpayer should comment on any relevant legal authority contrary to their respective positions. If either party determines that there are no authorities contrary to its position, that statement should be noted in the memorandum.

When the field office initiates a request for technical advice, the field office should notify the taxpayer that it is requesting technical advice and provide the taxpayer with a copy of the arguments supporting the field office’s position. The taxpayer has 10 calendar days to state, in writing, any factual disagreement. The field office will make every effort to reach agreement on the facts and specific points at issue. The taxpayer is encouraged to submit a written statement with an explanation of the taxpayer’s position, including a discussion of any relevant legal authority.

Transaction involving multiple taxpayers

.02 If the subject matter of the request involves a transaction among multiple taxpayers, the field office may submit a request for a single TAM, but only if each taxpayer agrees to participate in the process, including the furnishing of Forms 8821, Tax Information Authorization, or other written disclosure consent, as appropriate.

Foreign laws and documents: submission of relevant foreign laws and documents in the official language and in English

.03 If applicable, the request for technical advice must include a copy of the relevant parts of all foreign laws, including statutes, regulations, administrative pronouncements, and any other relevant legal authority. The documents submitted must be in the official language of the country involved and must be copied from an official publication of the foreign government or another widely available and generally accepted publication. If English is not the official language of the country involved, the submission must also include a copy of an English language version of the relevant parts of all foreign laws. This translation must be: (i) from an official publication of the foreign government or another widely available, generally accepted publication; or (ii) a certified English translation submitted in accordance with paragraph (2) of this section 7.03. The taxpayer or the field office must identify the title and date of publication, including updates, of any widely available and generally accepted publication used as a source for the relevant parts of the foreign law. The taxpayer and the field office must inform the Associate office of the implications of any authority believed to interpret the foreign law, such as pending legislation, treaties, court decisions, notices, and administrative decisions.

(1) If the interpretation of a foreign law or foreign document is a material component of the request for technical advice, the Associate office, at its discretion, may refuse to provide a TAM. The interpretation of a foreign law or foreign document means making a judgment about the import or effect of the foreign law or document that goes beyond its plain meaning. This section applies whether or not the field office and the taxpayer dispute the interpretation of a foreign law or foreign document.

(2) If applicable, a request for technical advice must include an accurate and complete certified English translation of the relevant parts of all contracts, wills, deeds, agreements, instruments, trust documents, proposed disclaimers, and other documents pertinent to the request that are in a language other than English. If the taxpayer or the field office chooses to submit certified English translations of foreign laws, those translations must be based on an official publication of the foreign government or another widely available and generally accepted publication. In either case, the translation must be that of a qualified translator and must be attested to by the translator. The attestation must contain: (i) a statement that the translation submitted is a true and accurate translation of the foreign language document or law; (ii) a statement as to the attestant’s qualifications as a translator and as to that attestant’s qualifications and knowledge regarding tax matters or foreign law if the law is not a tax law; and (iii) the attestant’s name and address.

Statement regarding interpretation of relevant income tax or estate tax treaty

.04 A request for technical advice involving the interpretation of a substantive provision of a relevant income tax or estate tax treaty must include a written statement addressing whether: (1) the tax authority of the treaty jurisdiction has issued a ruling on the same or similar issue for the taxpayer, a related taxpayer (within the meaning of § 267 or a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504 (related taxpayer)), or any predecessor; (2) the same or similar issue for the taxpayer, a related taxpayer, or any predecessor, is being examined, or has been settled, by the tax authority of the treaty jurisdiction or is otherwise the subject of a closing agreement in that jurisdiction; and (3) the same or similar issue for the taxpayer, a related taxpayer, or any predecessor, is being considered by the competent authority of the treaty jurisdiction.

Statement recommending information to be deleted from public inspection

.05 Except as provided below, every request for technical advice must separately include a statement of proposed deletions from public inspection (deletion statement). The text of TAMs and background file documents are open to public inspection under § 6110(a). The Service deletes certain information from the text before it is made available to the public in order to protect the privacy of taxpayers. To help the Service make the necessary deletions, the taxpayer must provide a deletion statement indicating the deletions desired. A taxpayer who wants only names, addresses, and identifying numbers deleted should state this in the deletion statement. A taxpayer who wants more information deleted must provide a copy of the TAM request and supporting documents on which the taxpayer has placed brackets around the material to be deleted plus a deletion statement indicating the statutory basis under § 6110(c) for each proposed deletion. The deletion statement is not to be included in the memorandum described in section 7.01 of this revenue procedure. Instead, the deletion statement is to be made in a separate document that is signed and dated by the taxpayer or the taxpayer’s authorized representative. A stamped signature or faxed signature is not permitted. If the deletion statement is not submitted, the taxpayer will be notified and advised by the field office that the deletion statement is required and that failure to provide a deletion statement will be interpreted by the field office, field counsel, and Associate office to mean that the taxpayer only wants names, addresses, and identifying numbers deleted. If the deletion statement is not received within 10 calendar days after the notification, the field office will notify the Associate office that the taxpayer has not provided a deletion statement and will advise the Associate office of any information in addition to names, addresses, and identifying numbers, that should be deleted pursuant to § 6110(c). The taxpayer should follow this same process to propose deletions from any additional information submitted after the initial request for a TAM. An additional deletion statement is not required with each submission of additional information if the taxpayer’s initial deletion statement requests that only names, addresses, and identifying numbers are to be deleted and the taxpayer wants only the same information deleted from the additional information. The above deletion statement requirements do not apply to the extent that the TAM is open to public inspection under § 6104. Section 6104(a)(1)(A) generally provides that if an organization described in § 501(c) or § 501(d) is exempt from taxation under § 501(a) or a political organization is exempt from taxation under § 527, the application for exemption under § 501(a) that the organization filed or the notice of status filed by a political organization pursuant to § 527(i) is open for public inspection as prescribed by regulations. Generally, § 6104(a)(1)(B) provides that an application filed with respect to: (1) the qualification of a pension, profit-sharing, or stock bonus plan under § 401(a) or § 403(a) or an individual retirement arrangement under § 408(a) or § 408(b) will be open to public inspection pursuant to regulations, as will (2) any application filed for an exemption from tax under § 501(a) of an organization forming part of a plan or account described above.

Preparation of the memorandum; resolution of disagreements

.06 The field office prepares the memorandum described in section 7.01 of this revenue procedure with the assistance of field counsel and sends it to the taxpayer by mail or fax transmission. The taxpayer then will have 10 calendar days from the date of mailing or fax transmission to respond by providing a written statement specifying any disagreement on the facts and issues. A taxpayer who needs more than 10 calendar days must submit a written request for an extension of time, subject to the approval of the field office. The field office will make a determination on the request for extension as soon as reasonably possible. The request for extension will be considered denied unless the field office informs the taxpayer otherwise. The decision of the field office on whether to approve an extension, and the length of any extension granted, is final and may not be appealed. After the taxpayer’s response is received by the field office, the parties will have 10 calendar days to resolve remaining disagreements. If all disagreements about the statement of facts and issues are resolved, then the field office will prepare a single statement of those agreed facts and issues.

If disagreements continue, both the taxpayer’s set of facts and issues and the field’s set of facts and issues will be forwarded to the Associate office. The field office, with the assistance of field counsel, will prepare a memorandum for the Associate office highlighting the material factual differences, and provide a copy to the taxpayer for review. The taxpayer may respond in writing to the memorandum highlighting material factual differences. The field office may revise the memorandum described in section 7.01 of this revenue procedure in response to the taxpayer’s comments. This memorandum will be forwarded with the initial request for technical advice.

The taxpayer’s statement of facts and issues must be accompanied by the following declaration: “Under penalties of perjury, I declare that I have examined this information, including accompanying documents, and, to the best of my knowledge and belief, the information contains all the relevant facts relating to the request for technical advice, and such facts are true, correct, and complete.” This declaration must be signed in accordance with the requirements in section 7.01(15)(b) of Rev. Proc. 2017–1. The field office must submit this declaration with the initial request for technical advice. If no agreement regarding the facts is reached, the Associate office may rely on the facts presented by the field office.

The field office will offer the taxpayer an opportunity to participate in the development of the request for technical advice. If the taxpayer participates in the process, the field office will continue to offer the taxpayer the opportunity to participate. If the taxpayer does not participate in a material stage of the process after being offered an opportunity, the Associate office will nonetheless process the request, and the taxpayer will have waived the right to participate in the development and issuance of the TAM, including the right to the taxpayer conference described in section 9. A taxpayer’s failure to participate in the development of the memorandum described in section 7.01 of this revenue procedure will be considered a failure to participate in a material stage of the TAM process.

Under no circumstances will a taxpayer be treated as having waived its right to see the issued TAM or having waived its rights regarding disclosure and deletions described in section 10.

Transmittal Form 4463, Request for Technical Advice

.07 The field counsel with whom the TAM request was coordinated must use Form 4463, Request for Technical Advice Memorandum, for submitting a request for a TAM through TSS4510 to the Associate office. While the field office is responsible for preparing Form 4463, field counsel must submit the Form 4463 for a TAM request to the TSS4510 email address. To the extent feasible, the accompanying documents should also be submitted to the TSS4510 email address, followed by hard copies upon the request of the assigned Associate office.

All supporting and additional documents

.08 Field counsel should send additional or supporting documents that are not available in electronic form by fax to TSS4510 at 855-592-8976 or by express mail or private delivery service to the following address to avoid any delays in regular mail:

  • Internal Revenue Service

  • Attn: CC:PA:LPD:TSS, Room 5336

  • 1111 Constitution Avenue, NW

  • Washington, DC 20224

Whenever possible, all documents should contain the case number and name of the Associate office attorney assigned to the pre-submission conference for the TAM request.

The field office must indicate on the Form 4463 the proper mailing address of the Director to whom the Associate office should mail a copy of its reply to the TAM request under section 10.06 of this revenue procedure.

Number of copies of request to be submitted

.09 The field office must submit one paper copy of the request for a TAM to the address in section 7.08 of this revenue procedure. If the TAM relates to a SB/SE, W&I, or TE/GE taxpayer, the field office must send one paper copy to the Division Counsel of the operating division that has jurisdiction over the taxpayer’s tax return. If the TAM relates to a LB&I taxpayer, an electronic copy (no paper copy to follow) to “&LB&I HQ” email address should be sent. If the request is from an Appeals office, the field office must advise Appeals Policy that a request has been submitted by accessing the Tax Policy and Procedure I SharePoint site and selecting “Enter New Question.” The field office will include “Attn: TAM Requested” in the subject line of the submission. After an analyst responds to the submission, the field office will send a copy of the TAM request to the analyst by encrypted e-mail (no paper copy to follow).

SECTION 8. INITIAL PROCESSING OF THE REQUEST FOR TECHNICAL ADVICE BY THE ASSOCIATE OFFICE

Assignment and initial review by Associate office attorney

.01 After a request for technical advice has been received by the appropriate Associate office, it will be assigned to an Associate office attorney and reviewer. The Associate office attorney determines whether the request meets all procedural requirements of sections 4, 5, 6, and 7 of this revenue procedure and whether it raises issues that may be appropriately addressed in a TAM. Unless otherwise indicated, all references in this section to the Associate office or Associate office attorney are to the Associate office and attorney with primary responsibility for the TAM request.

Other forms of guidance

.02 If the assigned reviewer in the Associate office determines that guidance other than a TAM should be provided, the reviewer will immediately notify the Associate Chief Counsel. This other form of guidance may be published guidance, generic advice, or case-specific advice. Although the reviewer should make this determination as soon as possible, it may be made at any time during the processing of the request for technical advice. To make this determination, the reviewer should consider whether the issue has a broad application to similarly situated taxpayers or a practice area and whether resolution of the issue is important to a clear understanding of the tax laws. The Associate Chief Counsel, after consultation with Division Counsel Headquarters and the Operating Division, will decide whether to provide the TAM or issue guidance in another form. The Associate Chief Counsel may decide to provide the TAM as well as another type of guidance, if doing so would promote sound tax administration.

Initial acknowledgment and processing

.03 Upon receipt of a request for technical advice, the Associate office attorney who is assigned as the primary attorney on the request should immediately contact the field office. The purpose of this contact is only to acknowledge receipt of the request.

Deficiencies in request leading to return

.04 Within 7 calendar days after assignment, the Associate office attorney will contact the field office and field counsel to discuss any deficiencies in the request and will work with the field office and field counsel to correct them.

If only minor procedural deficiencies exist, the Associate office attorney will request the additional information without returning the case. If the deficiencies cannot be corrected over the next 7 calendar days, the request will be closed and returned to the field office. The request may be resubmitted when the deficiencies are corrected. If substantial additional information is required to resolve an issue or if major procedural problems cannot be resolved, the Associate office attorney will inform the field office and field counsel that the request for technical advice will be returned. If a request is returned, the field office should promptly notify the taxpayer of that decision and the reasons for the decision.

Initial discussion

.05 Within 21 calendar days of receipt, the Associate office attorney should contact the field office to discuss any procedural and substantive issues in the request. The Associate office attorney should also inform the field office about any matters referred to another Associate office for assistance and provide points of contact.

If additional information requested

.06 If additional information is needed, the Associate office attorney will obtain that information from the taxpayer, the field office, the Director, or the Appeals Area Director in the most expeditious manner possible. Any additional information requested from the taxpayer by the Associate office must be submitted by letter, accompanied by a penalties of perjury statement that conforms with the penalties of perjury statement set forth in section 7.06 of this revenue procedure, within 10 calendar days after the request for information is made. To facilitate prompt action, the Associate office and taxpayers are encouraged to exchange information by fax or express mail service whenever feasible. A taxpayer’s failure to submit the additional information requested is considered a failure to participate in a material stage of the TAM process and results in a waiver of the right to the taxpayer conference discussed in section 9.

Request for additional information by fax

To facilitate prompt action on TAM requests, the Associate office may request any additional information from the taxpayer by fax.

The Associate office attorney will take certain precautions to protect confidential information. For example, the Associate office attorney will use a cover sheet that identifies the intended recipient of the fax and the number of pages transmitted, that does not identify the taxpayer by name or tax identifying number and that contains a statement prohibiting unauthorized disclosure of the document if a recipient of the faxed document is not the intended recipient of the fax. The cover sheet will be faxed in an order in which it is the first page covering the faxed document.

Taxpayer request for extension of time to submit additional information

.07 A taxpayer’s request for an extension of time to submit additional information must be made in writing and received by the Associate office within the 10-day period. It must provide compelling facts and circumstances to justify an extension. Only an Associate Chief Counsel may determine whether to grant or deny the request for an extension. Except in rare and unusual circumstances, the Associate office will not agree to an extension of more than 10 calendar days beyond the end of the 10-day period. There is no right to appeal the denial of a request for an extension.

Where to send additional information

.08 Any additional information submitted by the taxpayer should be sent to the attention of the assigned Associate office attorney. Generally, only the original of the additional information is necessary. In appropriate cases, however, the Associate office may request additional copies of the information. In all cases, the taxpayer must also send a copy of the additional information to the field office and field counsel for comment.

Any comments by the field office or field counsel must be furnished within an agreed period of time to the Associate office with primary responsibility for the TAM request. If there are no comments, the Associate office attorney should be notified promptly.

Tentative conclusions

.09 The Associate office attorney will inform the field office and field counsel when all necessary substantive and procedural information has been received. If possible, the Associate office attorney will provide a tentative conclusion. If no tentative conclusion can be reached, the Associate office attorney is encouraged to discuss the underlying complexities with the field office and field counsel. Because the Associate office attorney’s tentative conclusion may change during the preparation and review of the TAM, the tentative conclusion is not considered final. If the tentative conclusion is changed, the Associate office attorney will inform the field office and field counsel. Neither the Associate office, nor the field office or the field counsel, should discuss the tentative conclusion and its underlying rationale with the taxpayer or the taxpayer’s representative until the Associate office is ready to provide a TAM that agrees with the taxpayer’s position or is ready to hold an adverse conference. To afford taxpayers an appropriate opportunity to prepare and present their position at a taxpayer conference, however, the taxpayer or the taxpayer’s representative is to be told (by the Associate office attorney) the tentative conclusion when scheduling the taxpayer conference. Field counsel should be notified of, and given the opportunity to participate in, the notification to the taxpayer of the tentative conclusions and scheduling of the taxpayer conference.

SECTION 9. TAXPAYER CONFERENCES

Notification of conference

.01 If the Associate office proposes to provide a TAM that will be adverse to the taxpayer, and if the taxpayer has not waived its right to a taxpayer conference, the taxpayer will be informed of the time and place of the conference.

Scheduling conference

.02 The taxpayer conference for a TAM must occur within 10 calendar days after the taxpayer is informed that an adverse TAM is proposed. The Associate office will notify the field office and field counsel of the scheduled taxpayer conference and will offer the field office and field counsel the opportunity to participate in the conference.

Taxpayer may request extensions

.03 Only an Associate Chief Counsel may approve an extension of the 10-day period for holding a conference. Although extensions are granted in appropriate circumstances at the discretion of the Associate Chief Counsel, taxpayers should not expect extensions to be routinely granted. The taxpayer must submit a request for an extension in writing to the Associate office, and must immediately notify the field office and field counsel of the request. The request must contain a detailed justification for the extension and must be submitted sufficiently before the end of the 10-day period to allow the Associate Chief Counsel to consider, and either approve or deny, the request before the end of the 10-day period. If unusual circumstances near the end of the 10-day period make a timely written request impracticable, the taxpayer may orally inform the assigned Associate office attorney or reviewer before the end of the 10-day period about the need for an extension and then promptly submit the written request. The Associate office attorney will inform the taxpayer by telephone of the approval or denial of a requested extension. There is no right to appeal the denial of a request for extension.

One conference of right

.04 In general, a taxpayer who has not waived the right to a taxpayer conference is entitled by right to only one conference with the Associate office. The conference is normally held at the branch level. A person who has authority to sign the transmittal memorandum in his or her own name, or on behalf of the branch chief, will participate. When more than one branch of an Associate office has taken an adverse position on issues in the request or when the position ultimately adopted by one branch will affect another branch’s determination, a representative from each branch with authority to sign in his or her own name, or for the branch chief, will participate in the conference. The conference is the taxpayer conference for each subject discussed.

Additional conferences may be offered

.05 After the taxpayer conference, the Service will offer the taxpayer an additional conference only if an adverse holding is proposed on a new issue or on the same issue but on grounds different from those discussed at the first conference. If a tentative position is changed at a higher level with a result less favorable to the taxpayer, the taxpayer has no right to another conference if the grounds or arguments on which the change is based were discussed at the taxpayer conference. The limitation on the number of conferences to which a taxpayer is entitled does not prevent the Associate office from inviting a taxpayer to participate in additional conferences if that office determines that additional conferences would be useful. These additional conferences are not to be offered routinely following an adverse decision.

Additional information submitted after the conference

.06 In order to ensure that the taxpayer conference is productive, the taxpayer should make a reasonable effort to supply all information, documents, and arguments in writing well before the conference.

Sometimes, however, it becomes apparent that new information may be helpful in resolving issues discussed at the conference. If the Associate office and the taxpayer agree that such information would be helpful, all such materials must be submitted and received within 10 calendar days after the conference. Any extension of the 10-day period must be requested by the taxpayer in writing and must be approved by the branch chief of the Associate office attorney. Extensions will not be routinely granted. Taxpayers have no right to submit additional materials after the conference, and are discouraged from providing additional copies or versions of materials already submitted. If the additional information is not received from the taxpayer within 10 calendar days plus any extensions granted by the branch chief, the TAM will be issued on the basis of the existing record.

The taxpayer must also send a copy of the additional information to the field office and field counsel for comment. If the additional information has a significant impact on the facts in the request, the Associate office will ask the field office and field counsel for comments, both of which will respond within the agreed upon period of time. If there are no comments, the Associate office attorney will be promptly notified.

Normally conducted in person

.07 Conferences under this section are generally conducted in person, but may be conducted by telephone.

Service makes only tentative recommendations

.08 At the end of the taxpayer conference, no commitment will be made about the conclusion that the Service will finally adopt for any issue, including the outcome of a request for relief under § 7805(b).

Conference may not be taped

.09 No tape, stenographic, or other verbatim recording of a taxpayer conference may be made by any party.

SECTION 10. PREPARATION OF THE TECHNICAL ADVICE

Reply consists of two parts

.01 The Associate office attorney prepares replies to requests for technical advice in two parts. Each part identifies the taxpayer by name, address, identification number, and tax period(s) involved. The first part of the reply is a transmittal memorandum (Form M-6000). The second part is the TAM, which contains: (1) a statement of the issues; (2) the conclusions of the Associate office; (3) a statement of the facts pertinent to the issues; (4) a statement of the relevant legal authority, including legislation, tax treaties, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements; and (5) a discussion of the rationale supporting the conclusions reached by the Associate office. The conclusions give direct answers, whenever possible, to the specific issues raised by the field office. The Associate office is not bound by the issues as submitted by the taxpayer or by the field office and may reframe the issues to be answered in a TAM after consultation with the field office and field counsel. The discussion of the issues in a TAM will be in sufficient detail so that the field or Appeals officials will understand the reasoning underlying the conclusion.

Status of a request

.02 The taxpayer or the taxpayer’s authorized representative may obtain information on the status of the request by contacting the field office that requested the advice. The Associate office attorney or reviewer assigned to the TAM request will give frequent status updates to the field office and field counsel.

Opportunity for field counsel review

.03 The Associate office attorney will inform field counsel regarding the Associate office’s final conclusions before a draft of the TAM is sent to the field office. Field counsel will be offered a reasonable opportunity to review and informally discuss these conclusions with the Associate office before the final TAM is sent to the field office.

Copy of preliminary TAM to field office and field counsel

.04 After field counsel is given a reasonable opportunity to review the Associate office’s final conclusions, the Associate office attorney will provide a draft of the proposed final version of the TAM to the field office and field counsel. If the field office or field counsel disagrees with the proposed final conclusions, normal reconciliation and reconsideration procedures will be followed to resolve the disagreement.

Routing of reply

.05 A TAM is generally addressed to the field office that requested it. In the case of issues arising within the jurisdiction of the Director, Tax Exempt Bonds; the Director, Employee Plans or Exempt Organizations Examinations; or the Director, Employee Plans or Exempt Organizations Rulings & Agreements, the TAM is addressed to the appropriate Director with a copy sent to the field office and the field counsel attorney. A copy of a TAM requested by LB&I should be mailed simultaneously to the appropriate Practice Area Director. A copy of a TAM requested by Appeals should be addressed to the appropriate field office, and an electronic copy uploaded to the Intake List for Case Support Requests on the Appeals Account & Processing Support SharePoint site using Request Type “TPP: TAM Coordinator” on the intake request.

Copy of final TAM to field counsel and Division Counsel

.06 The Associate office will provide a copy of the final TAM to the individual field counsel attorney who assisted the field office in submitting the request and to that attorney’s Associate Area Counsel or other manager, as appropriate. The Associate office also will provide a copy of the final TAM to the Division Counsel for the operating division from which the request originated or that has jurisdiction over the particular matter in the TAM. The TAM may be transmitted electronically if it is in .pdf format, or may be sent by mail or fax transmission.

Reconsideration

.07 Requests for reconsideration may be submitted by the field office, or in the case of bonds under the jurisdiction of the Director of Tax Exempt Bonds, by that Director after the Associate office has provided a final copy of the TAM to field counsel and Division Counsel. Requests for reconsideration must describe with specificity the errors in the analysis and conclusions. Requests should focus on points that the TAM overlooked or misconstrued rather than simply re-argue points raised in the initial request. The Associate office will give priority consideration to the request and should act on the request as expeditiously as possible. The Associate office may request further submissions from the field office and field counsel or the taxpayer, but the parties should otherwise make no additional submissions. If a request for reconsideration fails to follow the procedures set forth in this section of this revenue procedure, or the request fails to raise issues or arguments different from those asserted in the initial request for technical advice, the Associate office may return the request for reconsideration without ruling on the request for reconsideration.

Discussing contents with the taxpayer

Section 6110

.08 The Associate office will not discuss the specific contents of the TAM with the taxpayer until after the field office has provided a copy of the TAM to the taxpayer.

.09 Before the TAM is issued, the Associate office will inform the taxpayer in writing of the material likely to appear in the TAM that the taxpayer proposed for deletion but that the Associate office has determined should not be deleted. If so informed, the taxpayer may submit within 10 calendar days any further information or arguments supporting the taxpayer’s proposed deletions. The Associate office will attempt to resolve all disagreements about proposed deletions before the TAM is issued. The taxpayer does not have the right to a conference to resolve any disagreements about material to be deleted from the text of the TAM. For TAMs subject to § 6110, accompanying the TAM is a notice under § 6110(f)(1) of intention to disclose a TAM, including a copy of the version proposed to be open to public inspection and notations of third party communications under § 6110(d). If the transmittal memorandum associated with the TAM provides information not in the TAM, or if the case is returned for further development without issuance of the TAM, the transmittal memorandum may be Chief Counsel Advice, as defined in § 6110(i)(1), subject to public inspection under § 6110. These procedures do not apply to TAMs to the extent that § 6104 applies. See section 7.05 of this revenue procedure and § 6110(l)(1).

TAM takes effect when taxpayer receives a copy

.10 After a TAM is sent to the field office (or, for Tax Exempt Bonds, Employee Plans, and Exempt Organizations, to the Director), the field office or Director adopts and issues the TAM within the meaning of Treas. Reg. § 301.6110–2(h). Then the field office or Director provides the taxpayer a copy of the TAM, the notice of intention to disclose under § 6110(f)(1), as applicable, and a copy of the version proposed to be open to public inspection, which includes notations of third party communications under § 6110(d), as applicable. If a request for technical advice pertains to more than one taxpayer, and the requirements of section 7.02 of this revenue procedure have been met, the field office or Director will provide each taxpayer with a copy of the TAM and will notify the Associate office when this occurs. The requirement to provide a taxpayer a copy of the TAM does not apply to a TAM involving civil fraud or a criminal investigation, or to a TAM involving a jeopardy or termination assessment. See section 10.12 of this revenue procedure.

Taxpayer may protest deletions not made

.11 Generally, the Associate office considers only the deletion of material that the taxpayer has proposed for deletion or other deletions as required under § 6110(c) before the TAM is sent to the field office or Director. After receiving the notice of intention to disclose under § 6110(f)(1), the taxpayer may protest the disclosure of certain information in it by submitting a written statement in accordance with the notice of intention to disclose under § 6110(f)(1) (Notice 438, Notice of Intention to Disclose).

Public inspection in civil fraud or criminal investigation cases

.12 The provisions of this revenue procedure about referring issues upon the taxpayer’s request, telling the taxpayer about the referral of issues, giving the taxpayer a copy of the arguments submitted, submitting proposed deletions, granting conferences in the Associate office, or providing a copy of the TAM to the taxpayer do not apply to a TAM described in § 6110(g)(5)(A), which involves any matter that is the subject of a civil fraud or criminal investigation, or that involves a jeopardy or termination assessment. In these cases, after all proceedings in the investigations or assessments are complete, the taxpayer receives a copy of the TAM with the notice of intention to disclose under § 6110(f)(1). The taxpayer may protest the disclosure of certain information in the TAM by submitting a written statement in accordance with the Notice of Intention to Disclose (Notice 438).

SECTION 11. WITHDRAWAL OF REQUESTS FOR TECHNICAL ADVICE

Taxpayer notified

.01 Once a request for a TAM has been sent to the Associate office, only a Director may withdraw the request, and this must be done before the responding transmittal memorandum for the TAM is signed. To withdraw the request, the Director must first notify the taxpayer of the intent to withdraw unless: (1) the period of limitation on assessment is about to expire and the taxpayer has declined to give written consent to extend the period; or (2) the notification would be prejudicial to the best interests of the Government. If the taxpayer does not agree that the request should be withdrawn and wishes to request review of the decision, the procedures in section 5.04 of this revenue procedure for review must be followed.

Acknowledgment of withdrawal

.02 Acknowledgment of the withdrawal of a request submitted by a Director should be sent to the appropriate Director, with a copy to the TAM coordinator. For a withdrawal of a request submitted by Appeals, upload an electronic copy to the Intake List for Case Support Requests on the Appeals Account & Processing Support SharePoint site using Request Type “TPP: TAM Coordinator” on the intake request.

Associate office may decide not to provide a TAM

.03 If the Associate office determines that a TAM will not be provided, it may return the request for technical advice unanswered. This determination must be made on the basis of sound tax administration and must be approved by the Associate Chief Counsel. The decision not to provide a TAM should be an infrequent occurrence and be made only after consultation with field counsel and the requesting field office. If field counsel disagrees with this determination, they may request reconsideration through existing reconciliation procedures.

Associate office may provide views

.04 If a request for technical advice is withdrawn or an Associate office decides not to provide a TAM, the Associate office may address the substantive issues through other published guidance. The Associate office may also address the substantive issues through legal advice, either generic or case-specific. The decision to address the issues through these other forms of guidance will be based on the general standards for issuing those types of guidance.

SECTION 12. USE OF THE TECHNICAL ADVICE

Service generally applies advice in processing the taxpayer’s case

.01 After a TAM is issued, the field office must process the taxpayer’s case on the basis of the conclusions in the TAM. In the case of a TAM unfavorable to the taxpayer, the Appeals Area Director may decide to settle the issue under existing settlement authority. Appeals, however, will not settle an issue contrary to a TAM if it concerns an organization’s exempt status or private foundation classification, or if it concerns an employee plan’s status or qualification. Thus, if the TAM received by the field office concerns an organization’s exempt status, private foundation classification, or a plan’s status or qualification, the organization or plan has no right to appeal those specific issues with the Appeals Office. Appeals may submit a proposed disposition of the issue contrary to a TAM as a request for a new TAM. If a TAM provides conclusions involving a § 103 obligation and the issuer of this obligation, the field office must apply the conclusions to the issuer and any holder of the obligation, unless a field office separately initiates a request for a TAM on behalf of the holder for the same issue addressed in the TAM involving the issuer, and the Associate office issues a TAM involving that issue and that holder.

SECTION 13. RETROACTIVITY AND RELIANCE

Usually applies retroactively

.01 The holdings in a TAM are applied retroactively, whether they are initial holdings or they are later holdings that modify or revoke holdings in a prior TAM. The Associate Chief Counsel with jurisdiction over the TAM, however, may exercise the discretionary authority under § 7805(b) to limit the retroactive effect of any holding. This authority is exercised in rare and unusual circumstances.

Revocation or modification of an earlier letter ruling or TAM

.02 A TAM may be used to seek revocation or modification of an earlier TAM or revocation or modification of a private letter ruling (PLR). Rev. Proc. 2017–1, section 11.03 with respect to revocation or modification of PLRs. Generally, a TAM that revokes or modifies a letter ruling or an earlier TAM will not be applied retroactively if: (1) the applicable law has not changed; (2) the taxpayer directly involved in the letter ruling or earlier TAM relied in good faith on it; and (3) revocation or modification would be detrimental to the taxpayer. The new TAM will be applied retroactively to the taxpayer whose tax liability was directly involved in the letter ruling or TAM if: (1) controlling facts have been misstated or omitted; or (2) the facts at the time of the transaction are materially different from the controlling facts on which the letter ruling or earlier TAM was based. If a letter ruling or a TAM is modified or revoked with retroactive effect, the notice to the taxpayer, except in fraud cases, should set forth the grounds on which the modification or revocation is being made and the reason why the modification or revocation is being applied retroactively.

Continuing action or series of actions

.03 If an issue addressed in the TAM relates to a continuing action or a series of actions, it is generally applied until it is withdrawn or until the conclusion is modified or revoked by a final decision in favor of the taxpayer with respect to that issue, the enactment of legislation, the ratification of a tax treaty, a decision of the United States Supreme Court, or the issuance of temporary regulations, final regulations, a revenue ruling, or other statement published in the Internal Revenue Bulletin. Publication of a notice of proposed rulemaking does not affect the application of a TAM. If a new holding in a TAM is less favorable to the taxpayer than the holding in an earlier TAM, the new holding is generally not applied to the tax period when the taxpayer relied on the earlier holding. It will be applied to that tax period, however, if material facts on which the earlier TAM was based have changed.

Other taxpayers

.04 Under § 6110(k)(3), a taxpayer may not rely on a TAM issued by the Service for another taxpayer. In addition, retroactive or non-retroactive treatment to one member of a practice area directly involved in a letter ruling or TAM does not extend to another member of that same practice area, and retroactive or non-retroactive treatment to one client of a tax practitioner does not extend to another client of that same practitioner. The tax liability of each employee covered by a letter ruling or TAM relating to a pension plan of an employer is directly involved in the letter ruling or TAM.

SECTION 14. HOW MAY RETROACTIVE EFFECT BE LIMITED?

Requests for relief under § 7805(b)

.01 A taxpayer with respect to whom a TAM is issued, or for whom a TAM request is pending, may request that the appropriate Associate Chief Counsel limit the retroactive effect of any holding in the TAM or of any subsequent modification or revocation of the TAM. For a pending request for technical advice, the taxpayer should make the request for relief under § 7805(b) as part of the initial request for advice. The Associate office will consider a request for relief under § 7805(b) made at a later time if the Director determines that there is justification for the delay in the making of the request. The Director’s determination that the delayed request for § 7805 is not justified cannot be appealed. Requests for relief under § 7805(b) relating to the revocation or modification of determination letters and letter rulings issued by TE/GE are handled under the procedures in sections 23 and 29 of Rev. Proc. 2017–4, and section 12 of Rev. Proc. 2017–5, this Bulletin.

Form of request for relief – in general

.02 During the course of an examination of a taxpayer’s return by the field office or during consideration of the taxpayer’s return by the Appeals Area Director, a taxpayer’s request to limit retroactivity must be made in the form of a request for a TAM. This includes recommendations by a Director that an earlier letter ruling or TAM be modified or revoked. The request must meet the general requirements of a request for technical advice. It must also: (1) state that it is being made under § 7805(b); (2) state the relief sought; (3) explain the reasons and arguments in support of the relief sought; and (4) include any documents bearing on the request. The taxpayer’s request must be submitted to the Director, who should then forward the request to the Associate office for consideration. If taxpayer submits a request for relief after the initial TAM request, the taxpayer must provide justification for having delayed the request.

Form of request for relief – continuing transaction before examination of return

.03 A request for relief under § 7805(b) must be made in the form of a request for a letter ruling if: (1) a TAM addressing a continuing transaction is modified or revoked by later published guidance; and (2) the request for relief is submitted before an examination has begun covering the tax period(s) for which relief is sought. The requirements for a letter ruling request are given in Rev. Proc. 2017–1 (this Bulletin).

Taxpayer’s right to a conference

.04 When a request for a TAM concerns only the application of § 7805(b), the taxpayer has the right to a conference with the Associate office in accordance with the provisions of section 9 of this revenue procedure. If the request for application of § 7805(b) is included in the request for a TAM on the substantive issues or is made before the taxpayer conference on the substantive issues, the § 7805(b) issues will be discussed at the taxpayer’s one conference of right. If the request for the application of § 7805(b) is made as part of a pending TAM request after a taxpayer conference has been held on the substantive issues and the Director determines that there is justification for having delayed the request, then the taxpayer will have the right to a taxpayer conference concerning the application of § 7805(b), with the conference limited to discussion of this issue only.

Reconsideration of request for relief under § 7805(b)

.05 When a TAM grants a taxpayer relief under § 7805(b), the Director may not request reconsideration of the § 7805(b) issue unless the Director determines there has been a misstatement or omission of controlling facts by the taxpayer in its request for § 7805(b) relief.

SECTION 15. SIGNIFICANT CHANGES MADE TO REV. PROC. 2016–2

Rev. Proc. 2017–2 contains a number of clarifying and organizational changes that update the procedures without making any significant change to the procedures of Rev. Proc. 2016–2.

Section 7.06 was amended to allow a taxpayer 10 calendar days to respond to a field office memorandum.

Section 4.07 was added and section 14.01 was amended to reflect that requests for relief under § 7805(b) relating to the revocation or modification of determination letters and letter rulings issued by TE/GE are handled under the procedures in sections 23 and 29 of Rev. Proc. 2017–4, and section 12 of Rev. Proc. 2017–5.

SECTION 16. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2016–2, 2016–1 I.R.B. 102, is superseded.

SECTION 17. EFFECTIVE DATE

This revenue procedure is effective January 3, 2017.

DRAFTING INFORMATION

The principal author of this revenue procedure is Melissa A. Jarboe of the Office of Associate Chief Counsel (Procedure and Administration). For further information regarding this revenue procedure for matters under the jurisdiction of:

(1) the Associate Chief Counsel (Corporate), contact Ken Cohen at (202) 317-7700 or Jean Broderick at (202) 317-6848 (not a toll-free call);

(2) the Associate Chief Counsel (Financial Institutions and Products), contact Scott Brown at (202) 317-4423 (not a toll-free call);

(3) the Associate Chief Counsel (Income Tax and Accounting), contact R. Matthew Kelley at (202) 317-7002 (not a toll-free call);

(4) the Associate Chief Counsel (Passthroughs and Special Industries), contact Anthony McQuillen at (202) 317-5260 (not a toll-free call);

(5) the Associate Chief Counsel (Procedure and Administration), contact Charles Hall at (202) 317-3400 (not a toll-free call);

(6) the Associate Chief Counsel (Tax Exempt and Government Entities), contact Michael B. Blumenfeld at (202) 317-6000 (not a toll-free call);

(7) the Associate Chief Counsel (International), contact Nancy Galib at (202) 317-3800 (not a toll-free call);

(8) the Commissioner (Large Business & International Division), contact Shirley S. Lee at (202) 317-3152 (not a toll-free call);

(9) the Commissioner (Small Business/Self-Employed Division), contact Samuel Berman at (240) 613-6368 (not a toll-free call);

(10) the Commissioner (Wage and Investment Division), contact Geoffrey Gerbore at (631) 447-4428 (not a toll-free call); or

(11) the Office of Appeals, contact Andrew J. Waters at (720) 956-4516 (not a toll-free call).

INDEX

References are to sections in Rev. Proc. 2017–2

INDEX

Additional Information
— initial processing of TAM request 8.06
— taxpayer request for extension of time to send................................. 8.07
— where to send................................................................................... 8.08
— after taxpayer conference 9.06
— proposed deletions under § 6110 7.05, 10.09
Appeal of decision to seek or not seek TAM 5.03
—The decision of the Director, the LB&I Territory Manager, or the Tax Exempt Bonds Manager, Field Operations may be reviewed but not appealed 5.04
Civil fraud or criminal investigation cases 10.12
Conferences
— offered 6, 9, 14.04
— after taxpayer conference 9.05
— scheduling 6.06, 9.02
request to limit retroactivity 14.04
telephone conferences 6.07, 9.07
Definitions
— Appeals officer 2.03
— Director 2.02
— field office 2.06
— field counse 2.07
— frivolous issue 4.04
— taxpayer 2.04
— technical advice 1.01
Discussions with Taxpayers
— contents of TAM 10.08
— substantive issues at pre-submission conference 6.09
— tentative conclusion in TAM 8.09
Employee Plans and Exempt Organizations
— application of § 6104 7.05
— mandatory technical advice on employee plans matters.................. 3.04
— requests by Exempt Organizations Rulings & Agreements.............. 3.05
— request for relief under § 7805(b) for matters handled by TEGE..... 4.07
Extension of Time
— to appeal decision not to request a TAM 5.03
— to disagree with statement of facts in technical advice request 7.06
— to schedule conference 9.03
— to submit additional information requested by Associate office in initial processing of TAM 8.07
— to submit additional information after conference 9.06
Foreign laws and documents 7.03
Issues Eligible for TAMs 3
Issues Not Eligible for TAMs 4
Penalties of Perjury Statement
— form 7.06
— required when no factual agreement 7.06
— required with additional information 8.06
Power of Attorney 6.11
Pre-submission Conferences 6
Public Inspection Under § 6110
— deletion statement required 7.05
— exception when § 6104 applies 7.05
— notice of intention to disclose 10.09
— protesting deletions not made 10.11
Responsibility for Requesting Advice 5.01
Retroactive Effect
— request to limit retroactivity 14.01
— format of request 14.02, 14.03
— right to conference 14.04
Section 301.9100 Relief 4.03
Status of TAM 10.02
Taxpayer Participation 3.03
— consequences of failure to participate in material stage 7.06, 8.06
What to Include in the Request for Advice
— Memorandum of issues, facts, law, and arguments 7.01
— Statement proposing information to be deleted from public inspection 7.05
— Transmittal Form 4463 7.07
— Number of copies 7.09
Where to Send
— information required prior to pre-submission conference 6.05
— request for referral for a TAM 5.02
Withdrawal of TAM Requests 11

Rev. Proc. 2017–3

TABLE OF CONTENTS

SECTION 1. PURPOSE AND NATURE OF CHANGES 130
SECTION 2. BACKGROUND AND SCOPE 130
SECTION 3. AREAS IN WHICH RULINGS WILL NOT BE ISSUED 131
SECTION 4. AREAS IN WHICH RULINGS WILL NOT ORDINARILY BE ISSUED 137
SECTION 5. AREAS UNDER STUDY IN WHICH RULINGS WILL NOT BE ISSUEDSECTION 142
SECTION 6. AREAS COVERED BY AUTOMATIC APPROVAL PROCEDURES 144
SECTION 7. EFFECT ON OTHER REVENUE PROCEDURES 145
SECTION 8. EFFECTIVE DATE 145
SECTION 9. PAPERWORK REDUCTION ACT 145
DRAFTING INFORMATION 145

SECTION 1. PURPOSE AND NATURE OF CHANGES

.01 The purpose of this revenue procedure is to update Rev. Proc. 2016–3, 2016–1 I.R.B. 126, by providing a revised list of those areas of the Internal Revenue Code under the jurisdiction of the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Procedure and Administration), and the Associate Chief Counsel (Tax Exempt and Government Entities) (TEGE) relating to issues on which the Internal Revenue Service (the “Service”) will not issue letter rulings or determination letters. For a list of areas under the jurisdiction of the Associate Chief Counsel (International) relating to international issues on which the Service will not issue letter rulings or determination letters, see Rev. Proc. 2017–7, this Bulletin. For a list of areas under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division relating to issues, exempt organizations, plans, or plan amendments on which the Service will and will not issue letter rulings or determination letters, see Rev. Proc. 2017–4 and Rev. Proc. 2017–5, this Bulletin.

.02 Changes.

(1) Section 3.01(24), regarding § 118, has been added.

(2) Section 3.01(51), regarding the definition of “significant issue”, has been modified.

(3) Section 3.01(54), regarding § 355, has been modified to delete the provisions relating to business purpose and device, pursuant to Rev. Proc. 2016–45, 2016–37 I.R.B. 344.

(4) Section 3.01(62), regarding § 419(e), has been added.

(5) Old section 4.01(30), regarding RICs and REITs in certain § 355 transactions, has been deleted.

(6) Section 4.01(44), regarding § 851, has been added to incorporate the provisions of Rev. Proc. 2016–50, 2016–43 I.R.B. 522.

(7) Section 4.02(12), regarding Employee Plan Determinations, has been updated to reflect that Rev. Proc. 2007–44, 2007–28 I.R.B. 54, has been clarified, modified, and superseded by Rev. Proc. 2016–37, 2016–29 I.R.B. 136.

(8) Old section 5.01(1), regarding § 148, has been deleted.

(9) Old section 5.01(4), regarding acquisition of control in a § 355 transaction, has been deleted pursuant to Rev. Proc. 2016–40, 2016–32 I.R.B. 228.

SECTION 2. BACKGROUND, SCOPE OF APPLICATION, AND NO-RULE ISSUES PART OF INTEGRATED TRANSACTION

.01 Background.

Whenever appropriate in the interest of sound tax administration, it is the policy of the Service to answer inquiries of individuals and organizations regarding their status for tax purposes and the tax effects of their acts or transactions, prior to the filing of returns or reports that are required by the revenue laws. In employee plans matters described in section 5.15 of Rev. Proc. 2017–1, this Bulletin, the Associate Chief Counsel (TEGE) may issue letter rulings after the filing of returns or reports that are required by the revenue laws.

There are, however, certain areas in which, because of the inherently factual nature of the problems involved, or for other reasons, the Service will not issue rulings or determination letters. These areas are set forth in four sections of this revenue procedure. Section 3 reflects those areas in which rulings or determination letters will not be issued. Section 4 sets forth those areas in which rulings or determination letters will not ordinarily be issued. “Not ordinarily” means that unique and compelling reasons must be demonstrated to justify the issuance of a ruling or determination letter. Section 5 sets forth those areas in which the Service is temporarily not issuing rulings or determination letters because those matters are under study. Finally, section 6 of this revenue procedure lists specific areas in which the Service will not ordinarily issue rulings because the Service has provided automatic approval procedures for these matters.

See Rev. Proc. 2017–1, this Bulletin, particularly section 6 captioned “Under What Circumstances Does The Service Not Issue Letter Rulings Or Determination Letters?” for general instructions and other situations in which the Service will not or ordinarily will not issue letter rulings or determination letters.

With respect to the items listed, revenue rulings or revenue procedures may be published in the Internal Revenue Bulletin from time to time to provide general guidelines regarding the position of the Service.

Additions or deletions to this revenue procedure as well as restatements of items listed will be made by modification of this revenue procedure. Changes will be published as they occur throughout the year and will be incorporated annually in a new revenue procedure published as the third revenue procedure of the year. These lists should not be considered all-inclusive because the Service may decline to issue a letter ruling or a determination letter when appropriate in the interest of sound tax administration (including due to resource constraints) or on other grounds whenever warranted by the facts or circumstances of a particular case. Decisions not to rule on individual cases (as contrasted with those that present significant pattern issues) are not reported in this revenue procedure and will not be added to subsequent revisions.

If the Service determines that it is not in the interest of sound tax administration to issue a letter ruling or determination letter due to resource constraints, it will adopt a consistent approach with respect to taxpayers that request a ruling on the same issue. The Service will also consider adding the issue to the no rule list at the first opportunity. See section 6.02 of Rev. Proc. 2017–1, this Bulletin.

.02 Scope of Application.

This revenue procedure does not preclude the submission of requests for technical advice to the National Office from other offices of the Service.

.03 No-Rule Issues Part of Integrated Transaction.

If it is impossible for the Service to determine the tax consequences of an integrated transaction without knowing the resolution of an issue on which the Service will not issue rulings or determination letters under this revenue procedure involving a part of the transaction or a related transaction, the taxpayer must state in the request to the best of the taxpayer’s knowledge and belief the tax consequences of the no-rule issue. The Service’s ruling or determination letter will state that the Service did not consider, and no opinion is expressed upon, that issue. In appropriate cases the Service may decline to issue rulings or determination letters on such integrated transactions due to the relevance of the no-rule issue, despite the taxpayer’s representation. See also section 4.02(2) of this revenue procedure.

SECTION 3. AREAS IN WHICH RULINGS OR DETERMINATION LETTERS WILL NOT BE ISSUED

.01 Specific Questions and Problems.

(1) Section 42.—Low-Income Housing Credit.—Whether under § 42(j)(4)(E) a casualty loss has been restored by reconstruction or replacement within a reasonable period of time. The Service may issue a determination letter in this case. See section 12 of Rev. Proc. 2017–1, this Bulletin.

(2) Section 45.—Electricity Produced from Certain Renewable Resources, Etc.—The allocation by a partnership of the § 45 credit, the validity of the partnership, or whether any taxpayer is a valid partner in the partnership.

(3) Section 45.—Electricity Produced from Certain Renewable Resources, Etc.—Whether the taxpayer meets the requirements of § 45 or Notice 2010–54, 2010–40 I.R.B. 403, for refined coal.

(4) Sections 45 and 48.—Electricity Produced from Certain Renewable Resources, Etc.; Energy Credit.—The application of the beginning of construction requirement under § 45(d) and § 48(a)(5).

(5) Section 47.—Rehabilitation Credit.—The allocation by a partnership of the § 47 rehabilitation credit, the validity of the partnership, or whether any taxpayer is a valid partner in the partnership.

(6) Section 48.—See section 3.01(4), above.

(7) Section 61.—Gross Income Defined.—Whether amounts voluntarily deferred by a taxpayer under a deferred-compensation plan maintained by an organization described in § 501 (other than an eligible plan maintained by an eligible employer pursuant to the provisions of § 457(b)) are currently includible in the taxpayer’s gross income.

(8) Section 61.—Gross Income Defined.—Whether a split-dollar life insurance arrangement is “materially modified” within the meaning of § 1.61–22(j)(2) of the Income Tax Regulations. (Also §§ 83, 301, 1401, 2501, 3121, 3231, 3306, 3401, and 7872.)

(9) Sections 61, 451, and 1001.—Gross Income Defined; General Rule for Taxable Year of Inclusion; Determination of Amount of and Recognition of Gain or Loss.—Whether, under authorization by an appropriate state agency to recover certain costs pursuant to state specified cost recovery legislations, any investor-owned utility company realizes income upon: (i) the creation of an intangible property right; (ii) the transfer of that intangible property right; or (iii) the securitization of the intangible property right.

(10) Section 79.—Group-Term Life Insurance Purchased for Employees.—Whether a group insurance plan for 10 or more employees qualifies as group-term insurance, if the amount of insurance is not computed under a formula that would meet the requirements of § 1.79–1(c)(2)(ii) of the Income Tax Regulations had the group consisted of fewer than 10 employees.

(11) Section 83.—Property Transferred in Connection with Performance of Services.—Whether a restriction constitutes a substantial risk of forfeiture, if the employee is a controlling shareholder. Also, whether a transfer has occurred, if the amount paid for the property involves a nonrecourse obligation.

(12) Section 83.—Property Transferred in Connection with Performance of Services.—Which corporation is entitled to the deduction under § 83(h) in cases in which a corporation undergoes a corporate division, if the facts are not similar to those described in Rev. Rul. 2002–1, 2002–1 C.B. 268.

(13) Section 101.—Certain Death Benefits.—Whether there has been a transfer for value for purposes of § 101(a) in situations involving a grantor and a trust when (i) substantially all of the trust corpus consists or will consist of insurance policies on the life of the grantor or the grantor’s spouse, (ii) the trustee or any other person has a power to apply the trust’s income or corpus to the payment of premiums on policies of insurance on the life of the grantor or the grantor’s spouse, (iii) the trustee or any other person has a power to use the trust’s assets to make loans to the grantor’s estate or to purchase assets from the grantor’s estate, and (iv) there is a right or power in any person that would cause the grantor to be treated as the owner of all or a portion of the trust under §§ 673 to 677.

(14) Sections 101, 761, and 7701.—Certain Death Benefits; Terms Defined; Definitions.—Whether, in connection with the transfer of a life insurance policy to an unincorporated organization, (i) the organization will be treated as a partnership under §§ 761 and 7701, or (ii) the transfer of the life insurance policy to the organization will be exempt from the transfer for value rules of § 101, when substantially all of the organization’s assets consist or will consist of life insurance policies on the lives of the members.

(15) Section 102.—Gifts and Inheritances.—Whether a transfer is a gift within the meaning of § 102(a).

(16) Section 105(h).—Amount Paid to Highly Compensated Individuals Under a Discriminatory Self-Insured Medical Expense Reimbursement Plan.—Whether a self-insured medical reimbursement plan satisfies the requirements of § 105(h) for a plan year.

(17) Section 107.—Rental Value of Parsonages.—Whether amounts distributed to a retired minister from a pension or annuity plan should be excludible from the minister’s gross income as a parsonage allowance under § 107.

(18) Section 107.—Rental Value of Parsonages.—Whether an individual is a “minister of the gospel” for Federal tax purposes. (Also §§ 1402(a)(8), (c)(4), and (e), 3121(b)(8)(A), and 3401(a)(9).)

(19) Section 115.—Income of States, Municipalities, Etc.—The results of transactions pursuant to a plan or arrangement created by state statute a primary objective of which is to enable participants to pay for the costs of a post-secondary education for themselves or a designated beneficiary, including: (i) whether the plan or arrangement, itself, is an entity separate from a state and, if so, how the plan or arrangement is treated for Federal tax purposes; and (ii) whether any contract under the plan or arrangement is a debt instrument and, if so, how interest or original issue discount attributable to the contract is treated for Federal tax purposes. (Also §§ 61, 163, 1275, 2501, and 7701.)

(20) Section 115.—Income of States, Municipalities, Etc.—Whether the income of membership organizations established by states exclusively to reimburse members for losses arising from workmen’s compensation claims is excluded from gross income under § 115.

(21) Section 115.—Income of States, Municipalities, Etc.—Whether some, but not all, income of an entity is from the exercise of an essential government function in order to be excluded from gross income under § 115.

(22) Section 117.—Qualified Scholarships.—Whether amounts paid to research fellows and research associates are scholarships or fellowships excluded from wages for FICA tax purposes.

(23) Section 117.—Qualified Scholarships.—Whether an employer-related scholarship or fellowship grant is excludible from the employee’s gross income, if there is no intermediary private foundation distributing the grants, as described in Rev. Proc. 76–47, 1976–2 C.B. 670.

(24) Section 118.—Contributions to the Capital of a Corporation.—Whether a transfer of an intertie as defined in section III. B. 2. of Notice 2016–36, 2016–25 I.R.B. 1029, meets all of the requirements under the safe harbor provided by Notice 2016–36.

(25) Section 119.—Meals or Lodging Furnished for the Convenience of the Employer.—Whether the value of meals or lodging is excludible from gross income by an employee who is a controlling shareholder of the employer.

(26) Section 121.—Exclusion of Gain from Sale of Principal Residence.—Whether property qualifies as the taxpayer’s principal residence.

(27) Section 125.—Cafeteria Plans.—Whether amounts used to provide group-term life insurance under § 79, accident and health benefits under §§ 105 and 106, and dependent care assistance programs under § 129 are includible in the gross income of participants and considered “wages” for purposes of §§ 3401, 3121, and 3306 when the benefits are offered through a cafeteria plan.

(28) Section 162.—Trade or Business Expenses.—Whether compensation is reasonable in amount.

(29) Section 163.—Interest.—The income tax consequences of transactions involving “shared appreciation mortgage” (SAM) loans in which a taxpayer, borrowing money to purchase real property, pays a fixed rate of interest on the mortgage loan below the prevailing market rate and will also pay the lender a percentage of the appreciation in value of the real property upon termination of the mortgage. This applies to all SAM arrangements in which the loan proceeds are used for commercial or business activities, or to finance a personal residence, if the facts are not similar to those described in Rev. Rul. 83–51, 1983–1 C.B. 48. (Also §§ 61, 451, 461, 856, 1001, and 7701.)

(30) Section 170.—Charitable, Etc., Contributions and Gifts.—Whether a charitable contribution deduction under § 170 is allowed for a transfer of an interest in a limited partnership or a limited liability company taxed as a partnership to an organization described in § 170(c).

(31) Section 170.—Charitable, Etc., Contributions and Gifts.—Whether a taxpayer who advances funds to a charitable organization and receives therefor a promissory note may deduct as contributions, in one taxable year or in each of several years, amounts forgiven by the taxpayer in each of several years by endorsement on the note.

(32) Section 170.—Charitable, Etc., Contributions and Gifts.—Whether an organization is or continues to be described in § 170(b)(1)(A) (other than clause (v)) or § 170(c)(2) – (5), including, for example, whether changes in an organization’s activities or operations will affect or jeopardize the organization’s status as an organization described in those sections. The Associate Chief Counsel (TEGE) will rule, however, on specific legal questions related to §§ 170(b)(1)(A) or 170(c) that are not otherwise described in this revenue procedure. See Rev. Proc. 2017–5, this Bulletin, for the procedures for obtaining determination letters on public charity status under § 170.

(33) Section 181.—Treatment of Certain Qualified Film and Television Productions.—The determination under § 1.181–1(a)(1) and (2) as to who is the owner of a qualified film or television production.

(34) Section 199.—Income Attributable to Domestic Production Activities.—The determination under § 1.199–3(f)(1) as to who is the taxpayer that has the benefits and burdens of ownership under Federal income tax principles of any qualifying production property (as defined in § 1.199–3(j)(1)), qualified film (as defined in § 1.199–3(k)), or utilities (as defined in § 1.199–3(l)) during the period in which a qualifying activity under § 199 occurs.

(35) Section 213.—Medical, Dental, Etc., Expenses.—Whether a capital expenditure for an item that is ordinarily used for personal, living, or family purposes, such as a swimming pool, has as its primary purpose the medical care of the taxpayer or the taxpayer’s spouse or dependent, or is related directly to such medical care.

(36) Section 216.—Deduction of Taxes, Interest, and Business Depreciation by Cooperative Housing Corporation Tenant-Stockholder.—Whether a unit constitutes an “apartment in a building” under § 216(b)(1)(B).

(37) Section 264.—Certain Amounts Paid in Connection with Insurance Contracts.—Whether § 264(d)(1) applies.

(38) Section 264(c)(1).—Contracts Treated as Single Premium Contracts.—Whether “substantially all” the premiums of a contract of insurance are paid within a period of 4 years from the date on which the contract is purchased. Also, whether an amount deposited is in payment of a “substantial number” of future premiums on such a contract.

(39) Sections 267, 304, 331, 332, 351, and 1502.—Losses, Expenses, and Interest with Respect to Transactions Between Related Taxpayers; Redemption Through Use of Related Corporations; Gain or Loss to Shareholders in Corporate Liquidations; Complete Liquidations of Subsidiaries; Transfer to Corporation Controlled by Transferor; Regulations.—The treatment of transactions in which stock of a corporation is transferred with a plan or intention that the corporation be liquidated in a transaction intended to qualify under § 331.

(40) Section 269.—Acquisitions Made to Evade or Avoid Income Tax.—Whether an acquisition is within the meaning of § 269.

(41) Section 274.—Disallowance of Certain Entertainment, Etc., Expenses.—Whether a taxpayer who is traveling away from home on business may, in lieu of substantiating the actual cost of meals, deduct a fixed per-day amount for meal expenses that differs from the amount authorized by the revenue procedure providing optional rules for substantiating the amount of travel expenses for the period in which the expense was paid or incurred.

(42) Section 302.—Distributions in Redemption of Stock.—Whether § 302(b) applies when the consideration given in redemption by a corporation consists entirely or partly of its notes payable, and the shareholder’s stock is held in escrow or as security for payment of the notes with the possibility that the stock may or will be returned to the shareholder in the future, upon the happening of specific defaults by the corporation.

(43) Section 302.—Distributions in Redemption of Stock.—Whether § 302(b) applies when the consideration given in redemption by a corporation in exchange for a shareholder’s stock consists entirely or partly of the corporation’s promise to pay an amount based on, or contingent on, future earnings of the corporation, when the promise to pay is contingent on working capital being maintained at a certain level, or any other similar contingency.

(44) Section 302.—Distributions in Redemption of Stock.—Whether § 302(b) applies to a redemption of stock, if, after the redemption, the distributing corporation uses property that is owned by the shareholder from whom the stock is redeemed and the payments by the corporation for the use of the property are dependent upon the corporation’s future earnings or are subordinate to the claims of the corporation’s general creditors. Payments for the use of property will not be considered to be dependent upon future earnings merely because they are based on a fixed percentage of receipts or sales.

(45) Section 302.—Distributions in Redemption of Stock.—Whether the acquisition or disposition of stock described in § 302(c)(2)(B) has, or does not have, as one of its principal purposes the avoidance of Federal income taxes within the meaning of that section, unless the facts and circumstances are materially identical to those set forth in Rev. Rul. 85–19, 1985–1 C.B. 94; Rev. Rul. 79–67, 1979–1 C.B. 128; Rev. Rul. 77–293, 1977–2 C.B. 91; Rev. Rul. 57–387, 1957–2 C.B. 225; Rev. Rul. 56–584, 1956–2 C.B. 179; or Rev. Rul. 56–556, 1956–2 C.B. 177.

(46) Section 302(b)(4) and (e).—Redemption from Noncorporate Shareholder in Partial Liquidation; Partial Liquidation Defined.—The amount of working capital attributable to a business or portion of a business terminated that may be distributed in partial liquidation.

(47) Section 304.—See section 3.01(39), above.

(48) Section 312.—Effect on Earnings and Profits.—The determination of the amount of earnings and profits of a corporation.

(49) Sections 331, 453, and 1239.—Gain or Loss to Shareholders in Corporate Liquidations; Installment Method; Gain from Sale of Depreciable Property Between Certain Related Taxpayers.—The tax effects of a transaction in which there is a transfer of property by a corporation to a partnership or other noncorporate entity (or the transfer of stock to such entity followed by a liquidation of the corporation) when more than a nominal amount of the stock of such corporation and the capital or beneficial interests in the purchasing entity (that is, more than 20 percent in value) is owned by the same persons, and the consideration to be received by the selling corporation or the selling shareholders includes an installment obligation of the purchasing entity.

(50) Section 331.—See section 3.01(39), above.

(51) Sections 332, 351, 355, 368, and 1036.—Complete Liquidations of Subsidiaries; Transfer to Corporation Controlled by Transferor; Distribution of Stock and Securities of a Controlled Corporation; Definitions Relating to Corporate Reorganizations; Stock for Stock of Same Corporation.—Whether a transaction qualifies under § 332, 351, 355, or 1036 for nonrecognition treatment or whether it constitutes a corporate reorganization within the meaning of § 368, and whether various tax consequences (such as nonrecognition and basis) result from the application of that section. The Service will instead rule only on significant issues presented in a transaction described in § 332, 351, 355, 368, or 1036. Additionally, the Service will rule on one or more significant issues under the Code sections that address the tax consequences (such as nonrecognition and basis) that result from the qualification of a transaction under § 332, 351, 355, 368, or 1036. See section 6.03 of Rev. Proc. 2017–1, this Bulletin.

SIGNIFICANT ISSUE: A significant issue is a germane and specific issue of law, provided that a ruling on the issue would not be a comfort ruling, as defined in section 6.11 of Rev. Proc. 2017–1, or the conclusion in such a ruling otherwise would not be essentially free from doubt. An issue is germane if resolution of the issue is necessary to determine an element of the tax treatment of the transaction. An issue is specific if it is the narrowest articulation of the germane issue. A change of circumstances arising after a transaction ordinarily does not present a significant issue with respect to the transaction.

OBTAINING A LETTER RULING: To obtain a letter ruling on a significant issue presented in a transaction, the taxpayer in its letter ruling request must comply with all the requirements set forth in section 6.03 of Rev. Proc. 2017–1, as well as Rev. Proc. 2017–1, in general.

(52) Section 332.—See section 3.01(39), above.

(53) Section 351.—See sections 3.01(39) and (51), above.

(54) Section 355.—Distribution of Stock and Securities of a Controlled Corporation.—Whether the distribution of the stock of a controlled corporation and an acquisition are part of a plan under § 355(e). See Rev. Proc. 2003–48, 2003–2 C.B. 86. Notwithstanding the preceding sentence, the Service may issue a ruling regarding the effect of redemptions under § 355(e) pending the issuance of temporary or final regulations regarding redemptions under § 355(e) if an adverse ruling on such question would result in there being a direct or indirect acquisition by one or more persons of stock representing a 50-percent or greater interest in the distributing corporation or the controlled corporation that is part of a plan under § 355(e).

(55) Section 355.—See section 3.01(51), above.

(56) Section 358.—Basis to Distributees.—The acceptability of an estimation procedure or the acceptability of a specific sampling procedure to determine the basis of stock acquired by an acquiring corporation in a reorganization described in § 368(a)(1)(B).

(57) Section 368.—See section 3.01(51), above.

(58) Section 403(b).—Taxability of Beneficiary Under Annuity Purchased by Section 501(c)(3) Organization or Public School.—Whether the form of a plan satisfies the requirements of § 403(b) as provided in Rev. Proc. 2017–4, this Bulletin.

(59) Section 409A.—Inclusion in Gross Income of Deferred Compensation Under Nonqualified Deferred Compensation Plans.—The income tax consequences of establishing, operating, or participating in a nonqualified deferred compensation plan within the meaning of § 1.409A–1(a); whether a plan is described in § 1.409A–1(a)(3)(iv) or (v); whether a plan is a bona fide vacation leave, sick leave, or compensatory time plan described in § 1.409A–1(a)(5); and whether a plan provides for the deferral of compensation under § 1.409A–1(b).

(60) Section 411(d)(3).—Termination or Partial Termination; Discontinuance of Contributions.—Whether there has been a partial termination of an employee plan. The Service may issue a determination letter involving the partial termination of an employee plan. See Rev. Proc. 2017–4, this Bulletin.

(61) Section 414(d).—Governmental Plan.—Whether a plan is a governmental plan under § 414(d).

(62) Section 419(e).—Welfare Benefit Fund.—Whether a captive insurance arrangement through which an employer provides health insurance to current or retired employees is a welfare benefit fund.

(63) Section 424.—Definitions and Special Rules.—Whether the substitution of a new Incentive Stock Option (ISO) for an old ISO, or the assumption of an old ISO, by an employer by reason of a corporate transaction constitutes a modification which results in the issuance of a new option by reason of failing to satisfy the spread test requirement of § 424(a)(1) or the ratio test requirement of § 1.425–1(a)(4). The Service will continue to rule on the issue of whether the new ISO or the assumption of the old ISO gives the employee additional benefits not present under the old option within the meaning of § 424(a)(2).

(64) Section 451.—General Rule for Taxable Year of Inclusion.—The tax consequences of a nonqualified unfunded deferred-compensation arrangement with respect to a controlling shareholder-employee eligible to participate in the arrangement.

(65) Section 451.—General Rule for Taxable Year of Inclusion.—The tax consequences of nonqualified unfunded deferred-compensation arrangements in which the arrangements fail to meet the requirements of Rev. Proc. 92–65, 1992–2 C.B. 428, and Rev. Proc. 71–19, 1971–1 C.B. 698.

(66) Sections 451 and 457.—General Rule for Taxable Year of Inclusion; Nonqualified Deferred Compensation Plans of State and Local Governments and Tax-Exempt Organizations.—The tax consequences to unidentified independent contractors in nonqualified unfunded deferred compensation plans. This applies to plans established under § 451 by employers in the private sector and to plans of state and local governments and tax-exempt organizations under § 457. However, a ruling with respect to a specific independent contractor’s participation in such a plan may be issued.

(67) Section 451.—See section 3.01(9), above.

(68) Section 453.—See section 3.01(49), above.

(69) Section 457.—See section 3.01(66), above.

(70) Section 457A.—Nonqualified Deferred Compensation from Certain Tax Indifferent Parties.—The income tax consequences of establishing, operating, or participating in a nonqualified deferred compensation plan within the meaning of § 457A(d)(3).

(71) Section 501.—Exemption from Tax on Corporations, Certain Trusts, Etc.—Whether an organization is or continues to be exempt from taxation under § 501(a) as an organization described in §§ 501(c) or 501(d), including, for example, whether changes in an organization’s activities or operations will affect or jeopardize the organization’s exempt status. The Associate Chief Counsel (TEGE) will rule, however, on specific legal questions related to §§ 501(c) or 501(d) that are not otherwise described in this revenue procedure. For example, although the Associate Chief Counsel (TEGE) would not rule on whether a change in a § 501(c)(3) organization’s activities would jeopardize the organization’s exempt status, the Associate Chief Counsel (TEGE) would (subject to the limitations described in this revenue procedure) rule on whether such new activities would further an exempt purpose described in § 501(c)(3). See Rev. Proc. 2017–5, this Bulletin, for the procedures for issuing determination letters on tax-exempt status under § 501.

(72) Sections 501, 511, 512, 513, and 514.—Exemption from Tax on Corporations, Certain Trusts, Etc.; Imposition of Tax on Unrelated Business Income of Charitable, Etc., Organizations; Unrelated Business Taxable Income; Unrelated Trade or Business; Unrelated Debt-Financed Income.—Whether a joint venture between a tax-exempt organization and a for-profit organization affects an organization’s exempt status or results in unrelated business income.

(73) Sections 507, 664, 4941, and 4945.—Termination of Private Foundation Status; Charitable Remainder Trusts; Taxes on Self-Dealing; Taxes on Taxable Expenditures.—Issues pertaining to the tax consequences of the termination of a charitable remainder trust (as defined in § 664) before the end of the trust term as defined in the trust’s governing instrument in a transaction in which the trust beneficiaries receive their actuarial shares of the value of the trust assets.

(74) Section 509.—Private Foundation Defined.—Whether an organization is or continues to be described in § 509(a) including, for example, whether changes in an organization’s activities or operations will affect or jeopardize the organization’s status as a public charity described in § 509(a)(1) – (4). The Associate Chief Counsel (TEGE) will rule, however, on specific legal questions related to § 509(a) that are not otherwise described in this revenue procedure. See Rev. Proc. 2017–5, this Bulletin, for the procedures for obtaining determination letters on public charity status under § 509.

(75) Sections 511, 512, 513, and 514.—Imposition of Tax on Unrelated Business Income of Charitable, Etc., Organizations; Unrelated Business Taxable Income; Unrelated Trade or Business; Unrelated Debt-Financed Income.—Whether unrelated business income tax issues arise when charitable lead trust assets are invested with charitable organizations.

(76) Sections 511, 512, 513, and 514.—See section 3.01(72), above.

(77) Section 529.—Qualified Tuition Programs.—Whether a state-run tuition program qualifies under § 529.

(78) Sections 542, 543, and 544.—Definition of Personal Holding Company; Personal Holding Company Income; Rules for Determining Stock Ownership.—Whether the application of § 544(a) causes a corporation to meet the stock ownership requirements under § 542(a)(2), § 543(a)(7), § 543(a)(6), or § 543(a)(4).

(79) Section 641.—Imposition of Tax.—Whether the period of administration or settlement of an estate or a trust (other than a trust described in § 664) is reasonable or unduly prolonged.

(80) Section 642(c).—Deduction for Amounts Paid or Permanently Set Aside for a Charitable Purpose.—Allowance of an unlimited deduction for amounts set aside by a trust or estate for charitable purposes when there is a possibility that the corpus of the trust or estate may be invaded.

(81) Section 664.—Charitable Remainder Trusts.—Whether the settlement of a charitable remainder trust upon the termination of the noncharitable interest is made within a reasonable period of time.

(82) Section 664.—See section 3.01(73), above.

(83) Section 671.—Trust Income, Deductions, and Credits Attributable to Grantors and Others as Substantial Owners.—Whether the grantor will be considered the owner of any portion of a trust when (i) substantially all of the trust corpus consists or will consist of insurance policies on the life of the grantor or the grantor’s spouse, (ii) the trustee or any other person has a power to apply the trust’s income or corpus to the payment of premiums on policies of insurance on the life of the grantor or the grantor’s spouse, (iii) the trustee or any other person has a power to use the trust’s assets to make loans to the grantor’s estate or to purchase assets from the grantor’s estate, and (iv) there is a right or power in any person that would cause the grantor to be treated as the owner of all or a portion of the trust under §§ 673 to 677.

(84) Section 704(b).—Determination of Distributive Share.—Whether the allocation to a partner under the partnership agreement of income, gain, loss, deduction, or credit (or an item thereof) has substantial economic effect or is in accordance with the partner’s interest in the partnership.

(85) Section 761.—Terms Defined.—Matters relating to the validity of a partnership or whether a person is a partner in a partnership.

(86) Section 761.—See section 3.01(14), above.

(87) Section 856.—Definition of Real Estate Investment Trust.—Whether a corporation whose stock is “paired” with or “stapled” to stock of another corporation will qualify as a real estate investment trust under § 856, if the activities of the corporations are integrated.

(88) Section 1001.—Determination of Amount of and Recognition of Gain or Loss.—Whether the termination of a charitable remainder trust before the end of the trust term as defined in the trust’s governing instrument, in a transaction in which the trust beneficiaries receive their actuarial shares of the value of the trust assets, is treated as a sale or other disposition by the beneficiaries of their interests in the trust.

(89) Section 1001.—See section 3.01(9), above.

(90) Section 1033.—Involuntary Conversions.—Whether the replacement or proposed replacement of compulsorily or involuntarily converted property does or does not qualify under § 1033(a), if the taxpayer has already filed a Federal tax return for the taxable year in which the property was converted. The Service may issue a determination letter in this case. See section 12.01 of Rev. Proc. 2017–1, this Bulletin.

(91) Section 1036.—See section 3.01(51), above.

(92) Section 1221.—Capital Asset Defined.—Whether specialty stock allocated to an investment account by a registered specialist on a national securities exchange is a capital asset.

(93) Section 1221.—Capital Asset Defined.—Whether the termination of a charitable remainder trust before the end of the trust term as defined in the trust’s governing instrument, in a transaction in which the trust beneficiaries receive their actuarial shares of the value of the trust assets, is treated as a sale or exchange of a capital asset by the beneficiaries.

(94) Section 1239.—See section 3.01(49), above.

(95) Section 1361.—S Corporation Defined.—Whether a state law limited partnership electing under § 301.7701–3 to be classified as an association taxable as a corporation has more than one class of stock for purposes of § 1361(b)(1)(D). The Service will treat any request for a ruling on whether a state law limited partnership is eligible to elect S corporation status as a request for a ruling on whether the partnership complies with § 1361(b)(1)(D).

(96) Section 1502.—Regulations.—If a member of an affiliated group fails to file Form 1122 or fails to join in the making of a consolidated return due to a mistake of law or fact, or inadvertence, whether such member will be treated as if it had filed a Form 1122. The Service may issue a determination letter in this case. See section 12.01 of Rev. Proc. 2017–1, this Bulletin. But see also section 6.07 of this revenue procedure.

(97) Section 1502.—See section 3.01(39), above.

(98) Section 1551.—Disallowance of the Benefits of the Graduated Corporate Rates and Accumulated Earnings Credit.—Whether a transfer is within § 1551.

(99) Section 2031.—Definition of Gross Estate.—Actuarial factors for valuing interests in the prospective gross estate of a living person.

(100) Section 2055.—Transfers for Public, Charitable, and Religious Uses.—Whether a charitable contribution deduction under § 2055 is allowed for the transfer of an interest in a limited partnership or a limited liability company taxed as a partnership to an organization described in § 2055(a).

(101) Section 2512.—Valuation of Gifts.—Actuarial factors for valuing prospective or hypothetical gifts of a donor.

(102) Section 2522.—Charitable and Similar Gifts.—Whether a charitable contribution deduction under § 2522 is allowable for a transfer of an interest in a limited partnership or a limited liability company taxed as a partnership to an organization described in § 2522(a).

(103) Section 2601.—Tax Imposed.—Whether a trust exempt from generation-skipping transfer (GST) tax under § 26.2601–1(b)(1), (2), or (3) of the Generation-Skipping Transfer Tax Regulations will retain its GST exempt status when there is a modification of a trust, change in the administration of a trust, or a distribution from a trust in a factual scenario that is similar to a factual scenario set forth in one or more of the examples contained in § 26.2601–1(b)(4)(i)(E).

(104) Sections 3121, 3306, and 3401.—Definitions.—For purposes of determining prospective employment status, whether an individual will be an employee or an independent contractor. A ruling with regard to prior employment status may be issued.

(105) Sections 3121, 3306, and 3401.—Definitions.—Who is the employer of an “employee-owner” as defined in § 269A(b)(2).

(106) Sections 3121, 3306, and 3401.—Definitions.—For purposes of determining employment classification pursuant to the filing of Form SS–8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, whether a worker is a bona fide partner and, therefore, not an employee of the business.

(107) Section 4052(f)(1).—Certain Repairs and Modifications Not Treated as Manufacture.—Whether a chassis repaired or modified using a “glider kit” is treated as manufactured or produced if the cost of the repairs or modifications does not exceed 75 percent of the retail price of a comparable new chassis.

(108) Section 4191.—Medical Devices.—Whether a device (as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act) intended for humans is not a “taxable medical device” within the meaning of § 4191(b)(1) due to the application of the exemption provided in § 4191(b)(2) for eyeglasses, contact lenses, hearing aids, and any other medical device determined by the Secretary to be of a type which is generally purchased by the general public at retail for individual use.

(109) Section 4216(b).—Constructive Sale Price.—Whether a particular methodology for determining the tax base is allowable under the constructive sale price rules.

(110) Sections 4375, 4376, and 4377.—Health Insurance; Self-Insured Health Plans; Definitions and Special Rules.—Whether an arrangement is a specified health insurance policy or an applicable self-insured health plan that is subject to the fee applicable to such arrangements.

(111) Sections 4940 and 4942.—Excise Tax Based on Investment Income; Taxes on Failure to Distribute Income.—Whether an organization is or continues to be an “operating foundation” described in § 4942(j)(3) or an “exempt operating foundation” described in § 4940(d)(2), including, for example, whether changes in an organization’s activities or operations will affect or jeopardize the organization’s status as an operating foundation or exempt operating foundation. The Associate Chief Counsel (TEGE) will rule, however, on specific legal questions related to §§ 4940(d)(2) or 4942(j)(3) that are not otherwise described in this revenue procedure. See Rev. Proc. 2017–5, this Bulletin, for the procedures for obtaining determination letters on foundation status under §§ 4940 and 4942.

(112) Section 4941.—Taxes on Self-Dealing.—Whether transactions during the administration of an estate or trust meet the requirements of the exception to § 4941 set forth in § 53.4941(d)–1(b)(3) of the Private Foundation Excise Tax Regulations, in cases in which a disqualified person issues a promissory note in exchange for property of an estate or trust.

(113) Section 4941.—See section 3.01(73), above.

(114) Section 4942.—See section 3.01(111), above.

(115) Section 4945.—See section 3.01(73), above.

(116) Section 4958.—Taxes on Excess Benefit Transactions.—Whether a compensation or property transaction satisfies the rebuttable presumption that the transaction is not an excess benefit transaction as described in § 53.4958–6 of the Excess Benefit Transactions Excise Tax Regulations.

(117) Section 4975(d).—Exemptions.—Whether the renewal, extension, or refinancing of an exempt loan satisfies the requirements of § 4975(d)(3). Also, whether the pre-payment of employee stock ownership plan (ESOP) loans satisfies the requirements of § 4975(d)(3) other than with respect to plan termination.

(118) Section 4980B.—Failure to Satisfy Continuation Coverage Requirements of Group Health Plans.—Whether an action is “gross misconduct” within the meaning of § 4980B(f)(3)(B). (See section 3.05 of Rev. Proc. 87–28, 1987–1 C.B. 770, 771.)

(119) Section 4980H.—Shared Responsibility for Employers Regarding Health Coverage.—Whether an employer is required to make an assessable payment under § 4980(H)(a) or (b).

(120) Section 6166.—Extension of Time for Payment of Estate Tax Where Estate Consists Largely of Interest in Closely Held Business.—Requests involving § 6166 if there is no decedent.

(121) Section 6901.—Transferred Assets.—Whether a taxpayer is liable for tax as a transferee.

(122) Section 7216.—Disclosure or Use of Information by Preparers of Returns.—Whether a criminal penalty is applicable for any disclosure or use of information by preparers of returns.

(123) Section 7701.—Definitions.—The classification of an instrument that has certain voting and liquidation rights in an issuing corporation but whose dividend rights are determined by reference to the earnings of a segregated portion of the issuing corporation’s assets, including assets held by a subsidiary.

(124) Section 7701.—Definitions.—The classification for Federal tax purposes of a fideicomiso or other land trust created under local law, applying the principles of Rev. Rul. 2013–14, 2013–26 I.R.B. 1267, or Rev. Rul. 92–105, 1992–2 C.B. 204.

(125) Section 7701.—See section 3.01(14), above.

(126) Section 7704.—Certain Publicly Traded Partnerships Treated as Corporations.—Whether interests in a partnership that are not traded on an established securities market (within the meaning of § 7704(b) and § 1.7704–1(b) of the Procedure and Administration Regulations) are readily tradable on a secondary market or the substantial equivalent thereof under § 1.7704–1(c)(1).

(127) Section 9815.—Additional Market Reforms.—Whether an insured group health plan satisfies the requirements of § 2716 of the Public Health Service Act, Prohibition on Discrimination in Favor of Highly Compensated Individuals, as incorporated into the Code by § 9815.

.02 General Areas.

(1) Whether the economic substance doctrine is relevant to any transaction or whether any transaction complies with the requirements of § 7701(o).

(2) The results of transactions that lack a bona fide business purpose or have as their principal purpose the reduction of Federal taxes.

(3) A matter upon which a court decision adverse to the Government has been handed down and the question of following the decision or litigating further has not yet been resolved.

(4) A matter involving alternate plans of proposed transactions or involving hypothetical situations.

(5) Whether under Subtitle F (Procedure and Administration) reasonable cause, due diligence, good faith, clear and convincing evidence, or other similar terms that require a factual determination exist.

(6) A matter involving the regulations governing practice before the Service under 31 CFR Part 10 (reprinted as Treasury Department Circular No. 230).

(7) Whether a proposed transaction would subject the taxpayer to a criminal penalty.

(8) Whether a completed transaction can be rescinded for Federal income tax purposes.

(9) The income tax (including unrelated business income tax) or excise tax consequences of the contribution of stock options to, or their subsequent exercise from, plans described in Part 1 of Subchapter D of Chapter 1 of Subtitle A of the Code.

(10) Questions that the Service determines, in its discretion, should not be answered in the general interests of sound tax administration, including due to resource constraints.

(11) Any frivolous issue, as that term is defined in section 6.10 of Rev. Proc. 2017–1, this Bulletin.

(12) A request that does not comply with the provisions of Rev. Proc. 2017–1, this Bulletin.

SECTION 4. AREAS IN WHICH RULINGS OR DETERMINATION LETTERS WILL NOT ORDINARILY BE ISSUED

.01 Specific Questions and Problems.

(1) Sections 38, 39, 46, and 48.—General Business Credit; Carryback and Carryforward of Unused Credits; Amount of Credit; Energy Credit.—Application of these sections if the formal ownership of property is in a party other than the taxpayer, except when title is held merely as security.

(2) Section 61.—Gross Income Defined.—Determination as to who is the true owner of property in cases involving the sale of securities, or participation interests therein, if the purchaser has the contractual right to cause the securities, or participation interests therein, to be purchased by either the seller or a third party.

(3) Sections 61 and 163.—Gross Income Defined; Interest.—Determinations as to who is the true owner of property or the true borrower of money in cases in which the formal ownership of the property, or the liability for the indebtedness, is in another party.

(4) Section 62(c).—Certain Arrangements Not Treated as Reimbursement Arrangements.—Whether amounts related to a salary reduction and paid under a purported reimbursement or other expense allowance arrangement will be treated as paid under an “accountable plan” in accordance with § 1.62–2(c)(2).

(5) Sections 83 and 451.—Property Transferred in Connection with Performance of Services; General Rule for Taxable Year of Inclusion.—When compensation is realized by a person who, in connection with the performance of services, is granted a nonstatutory option without a readily ascertainable fair market value to purchase stock at a price that is less than the fair market value of the stock on the date the option is granted.

(6) Sections 101 and 7702.—Certain Death Benefits; Life Insurance Contract Defined.—Whether amounts received under an arrangement with an entity that is not regulated as an insurance company may be treated as received under a “life insurance contract” within the meaning of §§ 101(a) and 7702.

(7) Section 103.—Interest on State and Local Bonds.—Whether the interest on state or local bonds will be excludible from gross income under § 103(a), if the proceeds of issues of bonds (other than advance refunding issues) are placed in escrow or otherwise not expended for a governmental purpose for an extended period of time even though the proceeds are invested at a yield that will not exceed the yield on the state or local bonds prior to their expenditure.

(8) Section 103.—Interest on State and Local Bonds.—Whether a state or local governmental obligation that does not meet the criteria of section 5 of Rev. Proc. 89–5, 1989–1 C.B. 774, is an “arbitrage bond” within the meaning of former § 103(c)(2) solely by reason of the investment of the bond proceeds in acquired nonpurpose obligations at a materially higher yield more than 3 years after issuance of the bonds or 5 years after issuance of the bonds in the case of construction issues described in former § 1.103–13(a)(2)(ii)(E) or § 1.148–2(e)(2)(ii).

(9) Section 141.—Private Activity Bond; Qualified Bond.—Whether state or local bonds will meet the “private business use test” and the “private security or payment test” under § 141(b)(1) and (2) in situations in which the proceeds are used to finance certain output facilities and, pursuant to a contract to take, or take or pay for, a nongovernmental person purchases 30 percent or more of the actual output of the facility but 10 percent or less of the: (i) subparagraph (5) output of the facility as defined in § 1.103–7(b)(5)(ii)(b) (issued under former § 103(b)), or (ii) available output of the facility as defined in § 1.141–7(b)(1). In similar situations, the Service will not ordinarily issue rulings or determination letters concerning questions arising under paragraphs (3), (4), and (5) of § 141(b).

(10) Sections 142 and 144(a).—Exempt Facility Bond; Qualified Small Issue Bond.—Whether an issue of private activity bonds meets the requirements of § 142 or § 144(a), if the sum of—

  • (i) the portion of the proceeds used to finance a facility in which an owner (or related person) or a lessee (or a related person) is a user of the facility both after the bonds are issued and at any time before the bonds were issued, and

  • (ii) the portion used to pay issuance costs and nonqualified costs

    equals more than 5 percent of the net proceeds, as defined in § 150(a)(3).

(11) Section 148.—Arbitrage.—Whether amounts received as proceeds from the sale of municipal bond financed property and pledged to the payment of debt service or pledged as collateral for the municipal bond issue are sinking fund proceeds within the meaning of former § 1.103–13(g) (issued under former § 103(c)) or replaced proceeds described in § 148(a)(2) (or former § 103(c)(2)(B)).

(12) Sections 162 and 262.—Trade or Business Expenses; Personal, Living, and Family Expenses.—Whether expenses are nondeductible commuting expenses, except for situations governed by Rev. Rul. 99–7, 1999–1 C.B. 361.

(13) Section 162(m).—Certain Excessive Employee Remuneration.—Whether the deduction limit under § 162(m) applies to compensation attributable to services performed for a related partnership.

(14) Section 163.—See section 4.01(3), above.

(15) Section 165.—Losses. Whether stock in a corporation has been abandoned.

(16) Section 167.—Depreciation.

  • (i) Useful lives of assets.

  • (ii) Depreciation rates.

  • (iii) Salvage value of assets.

(17) Sections 167 and 168.—Depreciation; Accelerated Cost Recovery System.—Application of those sections in which the formal ownership of property is in a party other than the taxpayer except when title is held merely as security.

(18) Section 170.—Charitable, Etc., Contributions and Gifts.—Whether a transfer to a pooled income fund described in § 642(c)(5) qualifies for a charitable contribution deduction under § 170(f)(2)(A).

(19) Section 170.—Charitable, Etc., Contributions and Gifts.—Whether a transfer to a charitable remainder trust described in § 664 that provides for annuity or unitrust payments for one or two measuring lives qualifies for a charitable deduction under § 170(f)(2)(A).

(20) Section 170.—Charitable, Etc., Contributions and Gifts.—Whether a taxpayer who transfers property to a charitable organization and thereafter leases back all or a portion of the transferred property may deduct the fair market value of the property transferred and leased back as a charitable contribution.

(21) Section 216.—Deduction of Taxes, Interest, and Business Depreciation by Cooperative Housing Corporation Tenant-Stockholder.—If a cooperative housing corporation (CHC), as defined in § 216(b)(1), transfers an interest in real property to a corporation (not a CHC) in exchange for stock or securities of the transferee corporation, which engages in commercial activity with respect to the real property interest transferred, whether (i) the income of the transferee corporation derived from the commercial activity and (ii) any cash or property (attributable to the real property interest transferred) distributed by the transferee corporation to the CHC will be considered as gross income of the CHC for the purpose of determining whether 80 percent or more of the gross income of the CHC is derived from tenant-stockholders within the meaning of § 216(b)(1)(D).

(22) Section 262.—See section 4.01(12), above.

(23) Section 265(a)(2).—Interest.—Whether indebtedness is incurred or continued to purchase or carry obligations the interest on which is wholly exempt from the taxes imposed by Subtitle A.

(24) Section 302.—Distributions in Redemption of Stock.—The tax effect of the redemption of stock for notes, when the payments on the notes are to be made over a period in excess of 15 years from the date of issuance of such notes.

(25) Section 302(b)(4) and (e).—Redemption from Noncorporate Shareholder in Partial Liquidation; Partial Liquidation Defined.—Whether a distribution will qualify as a distribution in partial liquidation under § 302(b)(4) and (e)(1)(A), unless it results in a 20 percent or greater reduction in (i) gross revenue, (ii) net fair market value of assets, and (iii) employees. (Partial liquidations that qualify as § 302(e)(2) business terminations are not subject to this provision.)

(26) Section 306.—Dispositions of Certain Stock.—Whether the distribution, disposition, or redemption of “section 306 stock” in a closely held corporation is in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes within the meaning of § 306(b)(4).

(27) Sections 331 and 346(a).—Gain or Loss to Shareholders in Corporate Liquidations; Complete Liquidation.—The tax effect of the liquidation of a corporation by a series of distributions, when the distributions in liquidation are to be made over a period in excess of 3 years from the adoption of the plan of liquidation.

(28) Section 351.—Transfer to Corporation Controlled by Transferor.—Whether § 351 applies to the transfer of an interest in real property by a cooperative housing corporation (as described in § 216(b)(1)) to a corporation in exchange for stock or securities of the transferee corporation, if the transferee engages in commercial activity with respect to the real property interest transferred.

(29) Section 355.—Distribution of Stock and Securities of a Controlled Corporation.—Whether the active business requirement of § 355(b) is met when, within the 5-year period described in § 355(b)(2)(B), a distributing corporation acquired control of a controlled corporation as a result of the distributing corporation transferring cash or other liquid or inactive assets to the controlled corporation in a transaction in which gain or loss was not recognized as a result of the transfer meeting the requirements of § 351(a) or § 368(a)(1)(D).

(30) Section 355.—Distribution of Stock and Securities of a Controlled Corporation.—Any issue relating to the qualification, under § 355 and related provisions, of a distribution, or another distribution which is part of the same plan or series of related transactions, if, immediately after any such distribution, the fair market value of the gross assets of the trade(s) or business(es) on which the distributing corporation or the controlled corporation relies to satisfy the active trade or business requirement of § 355(b) is less than five percent of the fair market value of the total gross assets of such corporation.

For purposes of determining the fair market value of the total gross assets of such corporation and of the gross assets of such trade(s) or business(es), (i) all members of a separate affiliated group, within the meaning of § 355(b)(3)(B), are treated as one corporation; and (ii) if the distributing corporation or the controlled corporation relies on an active trade or business of a partnership for purposes of § 355(b), such corporation is treated as owning its ratable share of the gross assets of the partnership.

This section 4.01(30) does not apply if (i) all the stock of the controlled corporation that is distributed in the distribution is distributed to one or more members of the affiliated group, as defined in § 243(b)(2)(A), of which the distributing corporation is a member; and (ii) such distribution is not part of a plan or series of related transactions pursuant to which stock of any corporation will be distributed outside such affiliated group in a distribution described in this section 4.01(30) or section 5.01(3) of this revenue procedure.

(31) Section 355.—Distribution of Stock and Securities of a Controlled Corporation.—Any issue under § 355(e) other than whether a distribution and an acquisition are part of a plan (i.e., any non-plan issue). Notwithstanding the preceding sentence, the Service generally will rule on a non-plan issue or issues (e.g., whether a corporation constitutes a predecessor of distributing) if an adverse ruling on such non-plan issue or issues would result in there being a direct or indirect acquisition by one or more persons of stock representing a 50-percent or greater interest in the distributing corporation or the controlled corporation that is part of a plan under § 355(e).

(32) Section 441(i).—Taxable Year of Personal Service Corporations.—Whether the principal activity of the taxpayer during the testing period for the taxable year is the performance of personal services within the meaning of § 1.441–3(c)(1)(iii).

(33) Section 448(d)(2)(A).—Limitation on Use of Cash Method of Accounting; Qualified Personal Service Corporation.—Whether 95 percent or more of the time spent by employees of the corporation, serving in their capacity as such, is devoted to the performance of services within the meaning of § 1.448–1T(e)(4)(i).

(34) Section 451.—General Rule for Taxable Year of Inclusion.—The tax consequences of a nonqualified deferred compensation arrangement using a grantor trust if the trust fails to meet the requirements of Rev. Proc. 92–64, 1992–2 C.B. 422.

(35) Section 451.—General Rule for Taxable Year of Inclusion.—The income tax consequences as a result of being a beneficiary of a trust that an Indian tribe (as defined in 25 U.S.C. § 2703(5)) establishes to receive and invest per capita payments for its members under the Indian Gaming Regulatory Act (25 U.S.C. §§ 2701 through 2721).

(36) Section 451.—See section 4.01(5), above.

(37) Section 584.—Common Trust Funds.—Whether a common trust fund plan meets the requirements of § 584. (For § 584 plan drafting guidance, see Rev. Proc. 92–51, 1992–1 C.B. 988.)

(38) Section 642.—Special Rules for Credits and Deductions.—Whether a pooled income fund satisfies the requirements described in § 642(c)(5).

(39) Section 664.—Charitable Remainder Trusts.—Whether a charitable remainder trust that provides for annuity or unitrust payments for one or two measuring lives or for annuity or unitrust payments for a term of years satisfies the requirements described in § 664.

(40) Section 664.—Charitable Remainder Trusts.—Whether a trust that will calculate the unitrust amount under § 664(d)(3) qualifies as a § 664 charitable remainder trust when a grantor, a trustee, a beneficiary, or a person related or subordinate to a grantor, a trustee, or a beneficiary can control the timing of the trust’s receipt of trust income from a partnership or a deferred annuity contract to take advantage of the difference between trust income under § 643(b) and income for Federal income tax purposes for the benefit of the unitrust recipient.

(41) Sections 671 to 679.—Grantors and Others Treated as Substantial Owners.—In a nonqualified, unfunded deferred compensation arrangement described in Rev. Proc. 92–64, 1992–2 C.B. 422, the tax consequences of the use of a trust, other than the model trust described in that revenue procedure.

(42) Sections 671 to 679.—Grantors and Others Treated as Substantial Owners.—Whether an Indian tribe (as defined in 25 U.S.C. § 2703(5)) that establishes a trust to receive and invest per capita payments for its members under the Indian Gaming Regulatory Act (25 U.S.C. §§ 2701–2721) is the grantor and owner of the trust.

(43) Section 678.—Person Other than Grantor Treated as Substantial Owner.— Whether a person will be treated as the owner of any portion of a trust over which that person has a power to withdraw the trust property (or had such power prior to a release or modification, but retains other powers which would cause that person to be the owner of the trust under § 671 if the person were the grantor), other than a power which would constitute a general power of appointment within the meaning of § 2041, if the trust purchases the property from that person with a note and the value of the assets with which the trust was funded by the grantor is nominal compared to the value of the property purchased.

(44) Section 851.—Definition of Regulated Investment Company.—Any issue relating to the treatment of a corporation as a regulated investment company under § 851 and related provisions that requires a determination whether a financial instrument or position is a security as defined in the Investment Company Act of 1940.

(45) Section 856.—Definition of Real Estate Investment Trust.—Whether an outdoor advertising display constitutes real property for purposes of § 856. However, if the real estate investment trust has made an election under §1.1033(g)–1(b), the Service may rule on whether an asset that is not within the scope of the election, but is related to the outdoor advertising display, constitutes real property for purposes of § 856.

(46) Section 1031(f).—Special Rules for Exchanges Between Related Persons.—Except in the case of (i) a transaction involving an exchange of undivided interests in different properties that results in each taxpayer holding either the entire interest in a single property or a larger undivided interest in any of the properties or (ii) a disposition of property in a nonrecognition transaction, whether an exchange described in § 1031(f) involving related parties, or a subsequent disposition of property involved in the exchange, has as one of its principal purposes the avoidance of Federal income tax, or is part of a transaction (or series of transactions) structured to avoid the purposes of § 1031(f).

(47) Section 1362.—Election; Revocation; Termination.—All situations in which the Service has provided an automatic approval procedure or administrative procedure for an S corporation to obtain relief for late S corporation, qualified subchapter S subsidiary, qualified subchapter S trust, or electing small business trust elections. See Rev. Proc. 2013–30, 2013–36 I.R.B. 173. (For instructions on how to seek this relief, see the preceding revenue procedure.)

(48) Section 1502.—Regulations.—Whether a parent cooperative housing corporation (as defined in § 216(b)(1)) will be permitted to file a consolidated income tax return with its transferee subsidiary, if the transferee engages in commercial activity with respect to the real property interest transferred to it by the parent.

(49) Sections 2035, 2036, 2037, 2038, and 2042.—Adjustments for Certain Gifts Made Within Three Years of Decedent’s Death; Transfers with Retained Life Estate; Transfers Taking Effect at Death; Revocable Transfers; Proceeds of Life Insurance.—Whether trust assets are includible in a trust beneficiary’s gross estate under § 2035, 2036, 2037, 2038, or 2042 if the beneficiary sells property (including insurance policies) to the trust or dies within 3 years of selling such property to the trust, and (i) the beneficiary has a power to withdraw the trust property (or had such power prior to a release or modification, but retains other powers which would cause that person to be the owner if the person were the grantor), other than a power which would constitute a general power of appointment within the meaning of § 2041, (ii) the trust purchases the property with a note, and (iii) the value of the assets with which the trust was funded by the grantor is nominal compared to the value of the property purchased.

(50) Section 2055.—Transfers for Public, Charitable, and Religious Uses.—Whether a transfer to a pooled income fund described in § 642(c)(5) qualifies for a charitable deduction under § 2055(e)(2)(A).

(51) Section 2055.—Transfers for Public, Charitable, and Religious Uses.—Whether a transfer to a charitable remainder trust described in § 664 that provides for annuity or unitrust payments for one or two measuring lives or a term of years qualifies for a charitable deduction under § 2055(e)(2)(A).

(52) Section 2501.—Imposition of Tax.—Whether the sale of property (including insurance policies) to a trust by a trust beneficiary will be treated as a gift for purposes of § 2501 if (i) the beneficiary has a power to withdraw the trust property (or had such power prior to a release or modification, but retains other powers which would cause that person to be the owner if the person were the grantor), other than a power which would constitute a general power of appointment within the meaning of § 2041, (ii) the trust purchases the property with a note, and (iii) the value of the assets with which the trust was funded by the grantor is nominal compared to the value of the property purchased.

(53) Section 2503.—Taxable Gifts.—Whether the transfer of property to a trust will be a gift of a present interest in property when (i) the trust corpus consists or will consist substantially of insurance policies on the life of the grantor or the grantor’s spouse, (ii) the trustee or any other person has a power to apply the trust’s income or corpus to the payment of premiums on policies of insurance on the life of the grantor or the grantor’s spouse, (iii) the trustee or any other person has a power to use the trust’s assets to make loans to the grantor’s estate or to purchase assets from the grantor’s estate, (iv) the trust beneficiaries have the power to withdraw, on demand, any additional transfers made to the trust, and (v) there is a right or power in any person that would cause the grantor to be treated as the owner of all or a portion of the trust under §§ 673 to 677.

(54) Section 2514.—Powers of Appointment.—If the beneficiaries of a trust permit a power of withdrawal to lapse, whether § 2514(e) will be applicable to each beneficiary in regard to the power when (i) the trust corpus consists or will consist substantially of insurance policies on the life of the grantor or the grantor’s spouse, (ii) the trustee or any other person has a power to apply the trust’s income or corpus to the payment of premiums on policies of insurance on the life of the grantor or the grantor’s spouse, (iii) the trustee or any other person has a power to use the trust’s assets to make loans to the grantor’s estate or to purchase assets from the grantor’s estate, (iv) the trust beneficiaries have the power to withdraw, on demand, any additional transfers made to the trust, and (v) there is a right or power in any person that would cause the grantor to be treated as the owner of all or a portion of the trust under §§ 673 to 677.

(55) Section 2522.—Charitable and Similar Gifts.—Whether a transfer to a pooled income fund described in § 642(c)(5) qualifies for a charitable deduction under § 2522(c)(2)(A).

(56) Section 2522.—Charitable and Similar Gifts.—Whether a transfer to a charitable remainder trust described in § 664 that provides for annuity or unitrust payments for one or two measuring lives or a term of years qualifies for a charitable deduction under § 2522(c)(2)(A).

(57) Section 2601.—Tax Imposed.—Whether a trust that is exempt from the application of the generation-skipping transfer tax because it was irrevocable on September 25, 1985, will lose its exempt status if the situs of the trust is changed from the United States to a situs outside of the United States.

(58) Section 2702.—Special Valuation Rules in Case of Transfers of Interests in Trusts.—Whether annuity interests are qualified annuity interests under § 2702 if the amount of the annuity payable annually is more than 50 percent of the initial net fair market value of the property transferred to the trust, or if the value of the remainder interest is less than 10 percent of the initial net fair market value of the property transferred to the trust. For purposes of the 10 percent test, the value of the remainder interest is the present value determined under § 7520 of the right to receive the trust corpus at the expiration of the term of the trust. The possibility that the grantor may die prior to the expiration of the specified term is not taken into account, nor is the value of any reversion retained by the grantor or the grantor’s estate.

(59) Section 2702.—Special Valuation Rules in Case of Transfers of Interests in Trusts.—Whether a trust with one term holder satisfies the requirements of § 2702(a)(3)(A) and § 25.2702–5(c) to be a qualified personal residence trust.

(60) Section 2702.—Special Valuation Rules in Case of Transfers of Interests in Trusts.—Whether the sale of property (including insurance policies) to a trust by a trust beneficiary is subject to § 2702 if (i) the beneficiary has a power to withdraw the trust property (or had such power prior to a release or modification, but retains other powers which would cause that person to be the owner if the person were the grantor), other than a power which would constitute a general power of appointment within the meaning of § 2041, (ii) the trust purchases the property with a note, and (iii) the value of the assets with which the trust was funded by the grantor is nominal compared to the value of the property purchased.

(61) Section 3121.—Definitions.—Determinations as to which of two entities, under common law rules applicable in determining the employer-employee relationship, is the employer, when one entity is treating the worker as an employee.

(62) Section 7702.—See section 4.01(6), above.

.02 General Areas.

(1) Any matter in which the determination requested is primarily one of fact, e.g., market value of property, or whether an interest in a corporation is to be treated as stock or indebtedness. Although it is generally inappropriate for the Service to issue a letter ruling on whether an interest in a corporation is stock or indebtedness, there may be instances in which the Service may issue a letter ruling. For example, the Service may issue a letter ruling with respect to an instrument issued by a domestic corporation if (i) the taxpayer believes that the facts strongly support the classification of the instrument as stock and (ii) the taxpayer can demonstrate that there are unique and compelling reasons to justify the issuance of a letter ruling. Before preparing the letter ruling request, the taxpayer should call the Office of Associate Chief Counsel having jurisdiction for the matters on which the taxpayer is seeking a letter ruling to discuss whether the Service will consider issuing a letter ruling for a particular factual situation. To determine which associate office has jurisdiction over a particular issue see section 3 of Rev. Proc. 2017–1, this Bulletin. For a list of telephone numbers for the different associate offices, see section 10.07 of Rev. Proc. 2017–1.

(2) Situations in which the requested ruling deals with only part of an integrated transaction. Generally, a letter ruling will not be issued on only part of an integrated transaction. If, however, a part of a transaction falls under a no-rule area, a letter ruling on other parts of the transaction may be issued. Before preparing the letter ruling request, the taxpayer should call the Office of the Associate Chief Counsel having jurisdiction for the matters on which the taxpayer is seeking a letter ruling to discuss whether a letter ruling will be issued on part of the transaction. To determine which associate office has jurisdiction over a particular issue, see section 3 of Rev. Proc. 2017–1, this Bulletin. For a list of telephone numbers for the different associate offices, see section 10.07 of Rev. Proc. 2017–1.

Notwithstanding the previous paragraph, in connection with transactions described in § 332, 351, 355, or 1036 and reorganizations within the meaning of § 368, the Associate Chief Counsel (Corporate) may issue a letter ruling on part of an integrated transaction if and to the extent that the transaction presents a significant issue (within the meaning of section 3.01(51)). See section 6.03 of Rev. Proc. 2017–1.

(3) Situations in which two or more items or sub-methods of accounting are interrelated. If two or more items or sub-methods of accounting are interrelated, ordinarily a letter ruling will not be issued on a change in accounting method involving only one of the items or sub-methods.

(4) The tax effect of any transaction to be consummated at some indefinite future time.

(5) Any matter dealing with the question of whether property is held primarily for sale to customers in the ordinary course of a trade or business.

(6) The tax effect of a transaction if any part of the transaction is involved in litigation among the parties affected by the transaction, except for transactions involving bankruptcy reorganizations.

(7) (a) Situations in which the taxpayer or a related party is domiciled or organized in a foreign jurisdiction with which the United States does not have an effective mechanism for obtaining tax information with respect to civil tax examinations and criminal tax investigations, which would preclude the Service from obtaining information located in such jurisdiction that is relevant to the analysis or examination of the tax issues involved in the ruling request.

(b) The provisions of subsection (a) above do not apply if the taxpayer or affected related party (i) consents to the disclosure of all relevant information requested by the Service in processing the ruling request or in the course of an examination in order to verify the accuracy of the representations made and to otherwise analyze or examine the tax issues involved in the ruling request, and (ii) waives all claims to protection of bank or commercial secrecy laws in the foreign jurisdiction with respect to the information requested by the Service. In the event the taxpayer’s or related party’s consent to disclose relevant information or to waive protection of bank or commercial secrecy is determined by the Service to be ineffective or of no force and effect, then the Service may retroactively rescind any ruling rendered in reliance on such consent.

(8) A matter involving the Federal tax consequences of any proposed Federal, state, local, municipal, or foreign legislation. The Service may provide general information in response to an inquiry. However, the Office of Associate Chief Counsel (TEGE) may issue letter rulings regarding the effect of proposed state, local, or municipal legislation upon an eligible deferred compensation plan under § 457(b) provided that the letter ruling request relating to the plan complies with the other requirements of Rev. Proc. 2017–1, this Bulletin.

(9) A letter ruling will not be issued with respect to an issue that is clearly and adequately addressed by statute, regulations, decision of a court, revenue rulings, revenue procedures, notices, or other authority published in the Internal Revenue Bulletin (Comfort Ruling). However, except with respect to issues under §§ 332, 351, 355, 368, and 1036 and the tax consequences resulting from the application of such Code sections (see generally section 6.03 of Rev. Proc. 2017–1, this Bulletin), an Associate office may in its discretion issue a Comfort Ruling if the Associate office is otherwise ruling on another issue arising in the same transaction.

(10) Whether an amount received (in periodic payments or as a lump sum) in connection with a legal action or a settlement of a legal action is properly allocated (including an allocation of all payments to one category) to recovery of capital, compensatory damages, punitive damages, dividends, interest, back pay, etc., for Federal tax purposes.

(11) The treatment or effects of hook equity, including as a result of its issuance, ownership, or redemption. This section 4.02(11) ordinarily will not apply if (i) an interest’s status as hook equity is only transitory, such as in a triangular reorganization, or (ii) the treatment of the hook equity is not relevant to the treatment of the overall transaction and issue presented. For this purpose, “hook equity” means an ownership interest in a business entity (such as stock in a corporation) that is held by another business entity in which at least 50 percent of the interests (by vote or value) in such latter entity are held directly or indirectly by the former entity. However, if an entity directly or indirectly owns all of the equity interests in another entity, the equity interests in the latter entity are not hook equity.

(12) Whether a tax-qualified plan satisfies the requirements for qualification under §§ 401 through 420 and § 4975(e)(7). These matters are generally handled through the Employee Plans Determinations program as provided in Rev. Proc. 2017–4, this Bulletin, Rev. Proc. 2016–37, 2016–29 I.R.B. 136, and Rev. Proc. 2015–36, 2015–27 I.R.B. 20. Notwithstanding the preceding sentence, the Office of Associate Chief Counsel (TEGE) may issue a ruling if (i) the taxpayer has demonstrated to the Office of Associate Chief Counsel’s (TEGE) satisfaction that the qualification issue involved is unique and requires immediate guidance, (ii) as a practical matter, it is not likely that such issue will be addressed through the determination letter process, and (iii) the Office determines that it is in the interest of good tax administration to provide guidance to the taxpayer with respect to such qualification issue.

(13) Any issue that is being considered by the Pension Benefit Guaranty Corporation (PBGC) or the Department of Labor (DOL), and involves the same taxpayer, will be issued at the discretion of the Office of Associate Chief Counsel (TEGE).

SECTION 5. AREAS UNDER STUDY IN WHICH RULINGS OR DETERMINATION LETTERS WILL NOT BE ISSUED UNTIL THE SERVICE RESOLVES THE ISSUE THROUGH PUBLICATION OF A REVENUE RULING, A REVENUE PROCEDURE, REGULATIONS, OR OTHERWISE

.01 Specific Questions and Problems.

(1) Sections 302 and 304.—Distributions in Redemption of Stock; Redemptions Through Use of Related Corporations.—Treatment of basis in a § 302/304 redemption. See Announcement 2006–30, 2006–1 C.B. 879.

(2) Sections 351, 358, and 362.—Transfer to Corporation Controlled by Transferor; Basis to Distributees; Basis to Corporations.—The issues described as being under study in Rev. Rul. 2006–2, 2006–1 C.B. 261.

(3) Section 355.—Distribution of Stock and Securities of a Controlled Corporation.—Any issue relating to the qualification, under § 355 and related provisions, of a distribution, or another distribution which is part of the same plan or series of related transactions, if, immediately after any such distribution, all of the following conditions exist: (i) the fair market value of the gross investment assets of the distributing corporation or the controlled corporation is two-thirds or more of the fair market value of its total gross assets; (ii) the fair market value of the gross assets of the trade(s) or business(es) on which the distributing corporation or the controlled corporation relies to satisfy the active trade or business requirement of § 355(b) is less than 10 percent of the fair market value of its gross investment assets; and (iii) the ratio of the fair market value of the gross investment assets to the fair market value of the gross assets other than the gross investment assets of the distributing corporation or the controlled corporation is three times or more of such ratio for the other corporation (i.e., the controlled corporation or the distributing corporation, respectively).

For purposes of determining the fair market value of the distributing corporation’s and the controlled corporation’s gross investment assets, gross assets other than gross investment assets, gross assets of the trade or business, and total gross assets, all members of such corporation’s separate affiliated group, within the meaning of § 355(b)(3)(B), are treated as one corporation. If the distributing corporation or the controlled corporation relies on an active trade or business of a partnership for purposes of § 355(b), then for purposes of determining the fair market value of the gross assets of the trade(s) or business(es) on which the distributing corporation or the controlled corporation relies to satisfy the active trade or business requirement of § 355(b), such corporation is treated as owning its ratable share of the gross assets of the partnership.

For purposes of this section 5.01(3), “investment assets” has the meaning given such term by § 355(g)(2)(B), except as follows: (i) in the case of stock or securities in a corporation any stock of which is traded on (or subject to the rules of) an established financial market within the meaning of § 1.1092(d)–1(b) (publicly traded stock), § 355(g)(2)(B)(iv) is applied by substituting “50-percent” for “20-percent;” (ii) except as provided in clause (iv) of this sentence, an interest in a publicly traded partnership (as defined in § 7704(b), regardless of whether such partnership is treated as a corporation pursuant to § 7704(a)) is treated in the same manner as publicly traded stock; (iii) except as provided in clause (iv) of this sentence, an interest in a partnership that is not a publicly traded partnership is treated in the same manner as stock which is not publicly traded stock; and (iv) in the case of an interest in a partnership (other than a publicly traded partnership treated as a corporation pursuant to § 7704(a)), the active trade or business of which is taken into account by the distributing corporation or the controlled corporation for purposes of § 355(b), or would be taken into account without regard to the five-year requirement of § 355(b)(2)(B), clauses (ii) and (iii) of this sentence do not apply.

The Service also will not rule on any issue relating to the qualification, under § 355 and related provisions, of a distribution if, as part of a plan or series of related transactions, investment assets are disposed of, or property, including property qualifying as an active trade or business within the meaning of § 355(b), is acquired with a principal purpose of avoiding this section 5.01(3). This section 5.01(3) does not apply if (i) all the stock of the controlled corporation that is distributed in the distribution is distributed to one or more members of the affiliated group, as defined in § 243(b)(2)(A), of which the distributing corporation is a member; and (ii) such distribution is not part of a plan or series of related transactions pursuant to which stock of any corporation will be distributed outside such affiliated group in a distribution described in this section 5.01(3) or in section 4.01(30) of this revenue procedure.

(4) Sections 355 and 361.—Distribution of Stock and Securities of a Controlled Corporation; Nonrecognition of Gain or Loss to Corporations; Treatment of Distributions.—Whether either § 355 or § 361 applies to a distributing corporation’s distribution of stock or securities of a controlled corporation in exchange for, and in retirement of, any putative debt of the distributing corporation if such distributing corporation debt is issued in anticipation of the distribution.

(5) Section 358.—See section 5.01(2), above.

(6) Section 361.—See section 5.01(4), above.

(7) Section 362.—See section 5.01(2), above.

(8) Section 613A.—Limitations on Percentage Depletion in Case of Oil and Gas Wells.—Whether the sale of oil or gas, or any product derived from oil or gas, is a bulk sale for purposes of § 613A(d)(2).

(9) Sections 661 and 662.—Deduction for Estates and Trusts Accumulating Income or Distributing Corpus; Inclusion of Amounts in Gross Income of Beneficiaries of Estates and Trusts Accumulating Income or Distributing Corpus.—Whether the distribution of property by a trustee from an irrevocable trust to another irrevocable trust (sometimes referred to as a “decanting”) resulting in a change in beneficial interests is a distribution for which a deduction is allowable under § 661 or which requires an amount to be included in the gross income of any person under § 662.

(10) Section 1014.—Basis of Property Acquired from a Decedent.—Whether the assets in a grantor trust receive a § 1014 basis adjustment at the death of the deemed owner of the trust for income tax purposes when those assets are not includible in the gross estate of that owner under chapter 11 of subtitle B of the Internal Revenue Code.

(11) Section 2036.—Transfers with Retained Life Estate.—Whether the corpus of a trust will be included in a grantor’s estate when the trustee of the trust is a private trust company owned partially or entirely by members of the grantor’s family.

(12) Section 2038.—Revocable Transfers.—Whether the corpus of a trust will be included in a grantor’s estate when the trustee of the trust is a private trust company owned partially or entirely by members of the grantor’s family.

(13) Section 2041.—Powers of Appointment.—Whether the corpus of a trust will be included in an individual’s estate when the trustee of the trust is a private trust company owned partially or entirely by members of the individual’s family.

(14) Section 2501.—Imposition of Tax.—Whether the distribution of property by a trustee from an irrevocable trust to another irrevocable trust (sometimes referred to as a “decanting”) resulting in a change in beneficial interests is a gift under § 2501.

(15) Sections 2601 and 2663.—Tax Imposed; Regulations.—Whether the distribution of property by a trustee from an irrevocable generation-skipping transfer tax (GST) exempt trust to another irrevocable trust (sometimes referred to as a “decanting”) resulting in a change in beneficial interests is the loss of GST exempt status or constitutes a taxable termination or taxable distribution under § 2612.

(16) Sections 4966 and 4967.—Taxes on Taxable Distributions; Taxes on Prohibited Benefits.—Issues involving interpretation of §§ 4966 and 4967 regarding distributions from donor advised funds.

(17) Section 6050P.—Returns Relating to the Cancellation of Indebtedness by Certain Entities.—Whether amounts reduced pursuant to the terms of a debt instrument are reportable under § 6050P and the regulations.

(18) Section 6050P.—Returns Relating to the Cancellation of Indebtedness by Certain Entities. Whether amounts discharged in a nonlending transaction are reportable under § 6050P and the regulations.

(19) Section 6109.—Identifying Numbers. The proper assignment or retention of an employer identification number (EIN) in the case of a reorganization within the meaning of § 368(a)(1)(F) if the transferor corporation becomes disregarded as an entity separate from its owner under § 301.7701–3.

.02 General Areas.

Whether transfers of stock, money, or other property by a person to a corporation and transfers of stock, money, or property by that corporation to that person (or a person related to such person) in what are ostensibly two separate transactions (so-called “north–south” transactions), at least one of which is a distribution with respect to the corporation’s stock, a contribution to the corporation’s capital, or an acquisition of stock, are respected as separate transactions for Federal income tax purposes.

SECTION 6. AREAS COVERED BY AUTOMATIC APPROVAL PROCEDURES IN WHICH RULINGS WILL NOT ORDINARILY BE ISSUED

.01 Section 338.—Certain Stock Purchases Treated as Asset Acquisitions.—All requests for an extension of time under § 301.9100–3 within which to make an election under § 338(g) or (h)(10) where the Service has provided an administrative procedure to seek such an extension. See Rev. Proc. 2003–33, 2003–1 C.B. 803 (extension automatically granted to certain persons required to file Form 8023 to make a valid § 338 election that have not filed Form 8023 by its due date).

.02 Section 442.—Change of Annual Accounting Period.—All requests for a change in annual accounting period where the Service has provided an automatic change procedure for obtaining such a change in annual accounting period. See Rev. Proc. 2002–39, 2002–1 C.B. 1046 (general procedures for prior approval), as clarified and modified by Notice 2002–72, 2002–2 C.B. 843, and modified by Rev. Proc. 2003–34, 2003–1 C.B. 856; Rev. Proc. 2006–45, 2006–2 C.B. 851 (certain corporations), as clarified and modified by Rev. Proc. 2007–64, 2007–2 C.B. 818; Rev. Proc. 2006–46, 2006–2 C.B. 859 (partnership, S corporation, personal service corporation, or trust); and Rev. Proc. 2003–62, 2003–2 C.B. 299 (individual seeking a calendar year).

.03 Section 446.—General Rule for Methods of Accounting.—Except as otherwise specifically provided in applicable procedures published in the Internal Revenue Bulletin, all requests for a change in method of accounting where the Service has provided an automatic change request procedure for obtaining such a change in method of accounting. See the automatic change request procedures listed in section 9.22 of Rev. Proc. 2017–1, this Bulletin.

.04 Section 461.—General Rule for Taxable Year of Deduction.—All requests for making or revoking an election under § 461 where the Service has provided an administrative procedure for making or revoking such an election under § 461. See Rev. Proc. 92–29, 1992–1 C.B. 748 (dealing with the use of an alternative method for including in basis the estimated cost of certain common improvements in a real estate development).

.05 Section 704(c).—Contributed Property.—Requests from Qualified Master Feeder Structures, as described in section 4.02 of Rev. Proc. 2001–36, 2001–1 C.B. 1326, for permission to aggregate built-in gains and losses from contributed qualified financial assets for purposes of making § 704(c) and reverse § 704(c) allocations.

.06 Section 1362.—Election; Revocation; Termination.—All situations in which an S corporation qualifies for automatic late S corporation relief under Rev. Proc. 2013–30, 2013–36 I.R.B. 173.

.07 Sections 1502, 1504, and 1552.—Regulations; Definitions; Earnings and Profits.—All requests for waivers or consents on consolidated return issues where the Service has provided an administrative procedure for obtaining such waivers or consents on consolidated return issues. See Rev. Proc. 2014–24, 2014–13 I.R.B. 879 (certain subsidiary members treated as if they filed a Form 1122 even though they failed to do so); Rev. Proc. 2002–32, 2002–1 C.B. 959, as modified by Rev. Proc. 2006–21, 2006–1 C.B. 1050 (certain corporations seeking reconsolidation within the 5-year period specified in § 1504(a)(3)(A)); Rev. Proc. 90–39, 1990–2 C.B. 365, as modified by Rev. Proc. 2006–21, and as clarified by Rev. Proc. 90–39A, 1990–2 C.B. 367 (certain affiliated groups of corporations seeking, for earnings and profits determinations, to make an election or a change in their method of allocating the group’s consolidated Federal income tax liability); and Rev. Proc. 89–56, 1989–2 C.B. 643, as modified by Rev. Proc. 2006–21 (certain affiliated groups of corporations seeking to file a consolidated return in which member(s) of the group use a 52–53 week taxable year).

.08 Section 7701.—Definitions.—All requests for an extension of time under § 301.9100–3 within which to make an entity classification election under § 301.7701–3 where the Service has provided an administrative procedure to seek such an extension. See Rev. Proc. 2009–41, 2009–39 I.R.B. 439 (extension automatically granted to certain persons required to file Form 8832 to make a valid entity classification election that have not filed Form 8832 by its due date).

SECTION 7. EFFECT ON OTHER REVENUE PROCEDURES

Rev. Proc. 2016–3, 2016–1 I.R.B. 126; Rev. Proc. 2016–45, 2016–37 I.R.B. 344; and Rev. Proc. 2016–50, 2016–43 I.R.B. 522, are superseded.

SECTION 8. EFFECTIVE DATE

This revenue procedure is effective January 3, 2017.

SECTION 9. PAPERWORK REDUCTION ACT

The collections of information contained in this revenue procedure have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. § 3507) under control number 1545-1522.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

The collections of information in this revenue procedure are in sections 2.03 and 3.01(51).

This information is required to evaluate whether the request for a letter ruling or determination letter is not covered by the provisions of this revenue procedure. The collections of information are required to obtain a letter ruling or determination letter. The likely respondents are businesses or other for-profit institutions.

The estimated total annual reporting and/or recordkeeping burden of this revenue procedure, and Rev. Proc. 2017–1, this Bulletin is 316,020 hours.

The estimated annual burden per respondent/recordkeeper varies from 1 hour to 200 hours, depending on individual circumstances, with an estimated average burden of 80 hours. The estimated number of respondents and/or record keepers is 3,956.

The estimated annual frequency of responses is on occasion.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. § 6103.

DRAFTING INFORMATION

The principal author of this revenue procedure is Jean Broderick of the Office of Associate Chief Counsel (Corporate). For further information about this revenue procedure, please contact Ms. Broderick at (202) 317-6848 (not a toll-free number), or call the associate office contacts listed in section 10.07 of Rev. Proc. 2017–1, this Bulletin. See section 3 of Rev. Proc. 2017–1 to determine which associate office has jurisdiction over a particular issue.

Rev. Proc. 2017–4

TABLE OF CONTENTS

SECTION 1. WHAT IS THE PURPOSE OF THIS REVENUE PROCEDURE? 152
.01 Purpose of revenue procedure 152
.02 Organization of revenue procedure. 152
.03 Other guidance affecting this revenue procedure 152
.04 Updated annually 152
>SECTION 2. WHAT CHANGES HAVE BEEN MADE TO THIS REVENUE PROCEDURE? 152
.01 In general 152
.02 Specific changes 153
PART I. GENERALLY APPLICABLE PROCEDURES 154
>SECTION 3. IN WHAT FORM IS ADVICE PROVIDED BY EMPLOYEE PLANS RULINGS AND AGREEMENTS? 154
.01 In general 154
.02 Letter ruling 154
.03 Closing agreement 154
.04 Determination letter 154
.05 Opinion letter 155
.06 Oral advice 155
.07 Nonbank trustee approval letters 155
.08 Compliance statement 156
.09 Advisory letter 156
SECTION 4. ON WHAT ISSUES MAY TAXPAYERS REQUEST WRITTEN ADVICE UNDER THIS PROCEDURE? 156
SECTION 5. ON WHAT ISSUES MUST WRITTEN ADVICE BE REQUESTED UNDER DIFFERENT PROCEDURES? 156
.01 Master and prototype plans, volume submitter plans, and prototype plans 156
.02 Employee Plans Compliance Resolution System 157
.03 Chief Counsel 157
SECTION 6. WHAT ARE THE GENERAL INSTRUCTIONS FOR REQUESTING LETTER RULINGS AND DETERMINATION LETTERS FROM EMPLOYEE PLANS RULINGS AND AGREEMENTS? 157
.01 In general 157
.02 Certain information required in all requests 157
.03 Additional information required in certain circumstances 164
.04 Address to send the request 165
.05 Pending letter ruling requests 165
.06 When to attach letter ruling to return 166
.07 How to check on status of request 166
SECTION 7. WHAT ACTIONS ARE TAKEN IF A REQUEST IS WITHDRAWN OR EMPLOYEE PLANS RULINGS AND AGREEMENTS DECLINES TO ISSUE A LETTER RULING OR DETERMINATION LETTER? 166
.01 In general 166
.02 Notification of appropriate Service official 166
.03 Refunds of user fee 166
PART II. PROCEDURES FOR DETERMINATION LETTER REQUESTS
PART IIA. REQUESTING DETERMINATION LETTERS
SECTION 8. IN WHAT AREAS ARE DETERMINATION LETTERS ISSUED? 167
.01 Circumstances under which determination letters are issued 167
.02 Types of requests 167
.03 Areas in which determination letters will not be issued 168
.04 Cycle A determination letter applications 169
.05 Review of determination letters 169
SECTION 9. WHAT IS THE GENERAL SCOPE OF A DETERMINATION LETTER? 169
.01 Scope of this section 169
.02 Scope of determination letters 169
.03 Design-based safe harbor 170
.04 Governmental plans under § 414(d) 170
.05 Church plans under § 414(e) 170
.06 Tax treatment of certain contributions under § 414(h) 170
.07 Other limits on scope of determination letter 170
.08 Leased employees 170
.09 Partial terminations 170
.10 Publication 794, Favorable Determination Letter 171
SECTION 10. WHAT IS THE GENERAL PROCEDURE FOR REQUESTING DETERMINATION LETTERS? 171
.01 Scope 171
.02 Complete information required 171
.03 Complete copy of plan and trust instrument and applicable amendments required 171
.04 Submission of reference list encouraged 171
.05 Separate application for each single § 414(l) plan 171
.06 Prior letters 172
.07 Plans involving mergers 172
.08 User fees 172
.09 Interested party notification and comment 172
.10 Contrary authority must be distinguished 172
.11 Employer/employee relationship 172
.12 Incomplete applications 172
.13 Effect of failure to disclose material fact 173
.14 Where to file requests 174
.15 Submission of related plans 174
.16 Withdrawal of requests 174
.17 Right to status conference 174
.18 How to request status conference 174
.19 Correct format required 174
SECTION 11.WHAT IS THE PROCESS FOR REQUESTING DETERMINATION LETTERS FOR INDIVIDUALLY DESIGNED PLANS? 175
.01 Requesting determination letters 175
.02 Cycle A plans 175
.03 Forms 175
.04 Application must include copy of plan and amendments 176
.05 Restatements required 176
.06 Section 414(x) combined plans 176
SECTION 12. WHEN MAY AN ADOPTER OF A MASTER AND PROTOTYPE OR VOLUME SUBMITTER PLAN SUBMIT A DETERMINATION LETTER APPLICATION? 176
.01 Scope 176
.02 Reliance equivalent to determination letter 177
SECTION 13. WHAT ARE THE DETERMINATION LETTER FILING PROCEDURES FOR VOLUME SUBMITTER PLANS? 178
.01 Scope 178
.02 Determination letter for adoption of volume submitter plan 178
.03 Timing of determination letter applications for adopting employers of pre-approved plans 179
SECTION 14.WHAT ARE THE DETERMINATION LETTER FILING PROCEDURES FOR INDIVIDUALLY DESIGNED MULTIPLE EMPLOYER PLANS? 179
.01 Scope 179
.02 Controlling member must accompany any multiple employer plan submission 179
.03 Where to file requests 180
.04 Addition of employers 180
SECTION 15. WHAT ARE THE PROCEDURES FOR FILING A REQUEST FOR A DETERMINATION UPON TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS, NOTICE OF MERGER, CONSOLIDATION, ETC.? 180
.01 Scope 180
.02 Forms 180
.03 Supplemental information 181
.04 Compliance with Title IV of ERISA 181
.05 Termination prior to time for amending for change in law 181
.06 Restatement not required for terminating plan 181
SECTION 16. WHAT ARE THE DETERMINATION LETTER FILING PROCEDURES FOR GROUP TRUSTS? 182
.01 Scope 182
.02 Required information 182
.03 Forms 182
SECTION 17. WHAT ARE THE PROCEDURES FOR FILING A REQUEST FOR A DETERMINATION OF LEASED EMPLOYEE STATUS? 182
.01 Scope 182
.02 Employer must request the determination under § 414(n) 183
.03 Forms 183
.04 Employer is responsible for determining continuing status under § 414(n) 183
.05 Pre-approved plans 183
.06 Required information for § 414(n) determination 183
SECTION 18. WHAT ARE THE PROCEDURES FOR REQUESTING SECTION 401(h) and SECTION 420 DETERMINATION LETTERS? 184
.01 Scope 184
.02 Required information for § 401(h) determination 184
.03 Required information for § 420 determination 184
PART IIB. INTERESTED PARTY NOTICE AND COMMENT
SECTION 19. WHAT RIGHTS TO NOTICE AND COMMENT DO INTERESTED PARTIES HAVE? 185
.01 Rights of interested parties 185
.02 Comments by interested parties 186
.03 Requests for DOL to submit comments 186
.04 Right to comment if DOL declines to comment 187
.05 Confidentiality of comments 187
.06 Availability of comments 187
.07 When comments are deemed made 187
SECTION 20. WHAT ARE THE GENERAL RULES FOR NOTICE TO INTERESTED PARTIES? 188
.01 Notice to interested parties 188
.02 Time when notice must be given 188
.03 Content of notice 188
.04 Procedures for making information available to interested parties 189
.05 Information to be available to interested parties 189
.06 Special rules if there are fewer than 26 participants 189
.07 Information described in § 6104(a)(1)(D) should not be included 190
.08 Availability of additional information to interested parties 190
.09 Availability of notice to interested parties 190
PART IIC. PROCESSING DETERMINATION LETTER REQUESTS
SECTION 21. HOW DOES EMPLOYEE PLANS RULINGS AND AGREEMENTS HANDLE DETERMINATION LETTER REQUESTS? 190
.01 Oral advice 190
.02 Conferences 191
.03 Determination letter based solely on administrative record 191
.04 Notice of final determination 192
.05 Issuance of the notice of final determination 192
SECTION 22. WHAT ARE THE STEPS FOR EXHAUSTING ADMINISTRATIVE REMEDIES? 192
.01 In general 192
.02 Steps for exhausting administrative remedies 192
.03 Applicant’s request for § 7805(b) relief 193
.04 Interested parties 193
.05 Deemed exhaustion of administrative remedies 193
.06 Service must have reasonable time to act on appeal 193
.07 Service must have reasonable time to act on request for § 7805(b) relief 193
.08 Effect of request for § 7805(b) relief 193
SECTION 23. WHAT EFFECT WILL A DETERMINATION LETTER HAVE? 194
.01 May be relied on subject to limitations 194
.02 Scope of reliance on determination letter 194
.03 Effect of subsequent publication of revenue ruling, etc. 194
.04 Effect of subsequent amendment by employer 195
.05 Revocation or modification of a determination letter 195
.06 Determination letter revoked or modified based on material change in facts applied retroactively 195
.07 Not otherwise generally revoked or modified retroactively 195
.08 Taxpayer may request that retroactive effect of revocation or modification be limited under § 7805(b) 195
.09 Request for § 7805(b) relief must include required information 196
.10 Taxpayer’s right to a conference 196
.11 Reconsideration of request for § 7805(b) relief 196
.12 Exhaustion of administrative remedies 196
PART III. PROCEDURES FOR LETTER RULING REQUESTS
PART IIIA. REQUESTING LETTER RULINGS
SECTION 24. UNDER WHAT CIRCUMSTANCES DOES EMPLOYEE PLANS RULINGS AND AGREEMENTS ISSUE LETTER RULINGS? 196
.01 Scope limited to issues specified 196
.02 Generally not in employee plans qualification matters 197
.03 Request to Employee Plans Rulings and Agreements for extension of time for making an election or for other relief under § 301.9100–1 of the Procedure and Administration Regulations 197
.04 Issuance of a letter ruling before the issuance of a regulation or other published guidance 198
.05 Issues in prior return 198
.06 Generally not to business associations or groups 199
.07 Generally not to foreign governments 199
.08 Generally not on federal tax consequences of proposed legislation 199
SECTION 25. UNDER WHAT CIRCUMSTANCES DOES EMPLOYEE PLANS RULINGS AND AGREEMENTS HAVE THE DISCRETION TO ISSUE LETTER RULINGS? 199
.01 Ordinarily not in certain areas because of factual nature of the problem 199
.02 No “comfort” letter rulings 199
.03 Not on alternative plans or hypothetical situations 199
.04 Ordinarily not on part of an integrated transaction 199
.05 Not on partial terminations of employee plans 199
.06 Law requires a letter ruling 199
.07 Issues under consideration by the PBGC or the DOL 200
.08 Domicile in a foreign jurisdiction 200
SECTION 26. WHAT IS THE PROCEDURE FOR REQUESTING A LETTER RULING FROM EMPLOYEE PLANS RULINGS AND AGREEMENTS? 200
.01 General procedures for requesting a letter ruling 200
.02 Specific additional procedures apply to certain letter ruling requests 200
PART IIIB. PROCESSING LETTER RULING REQUESTS
SECTION 27. HOW DOES EMPLOYEE PLANS RULINGS AND AGREEMENTS HANDLE LETTER RULING REQUESTS? 201
.01 In general 201
.02 Is not bound by informal opinion expressed 201
.03 Will return any letter ruling request mistakenly sent to wrong address 201
.04 Tells taxpayer if request lacks essential information during initial contact 201
.05 Information must be submitted within 30 calendar days 201
.06 Requires prompt submission of additional information requested after initial contact 201
.07 Encourages use of fax 202
.08 Address to send additional information 202
.09 Number of copies of additional information to be submitted 202
.10 30-day or 21-day period may be extended if justified and approved 202
.11 Case closed if taxpayer does not submit additional information 202
.12 Near the completion of the ruling process, advises taxpayer of conclusions and, if Employee Plans Rulings and Agreements will rule adversely, offers the taxpayer the opportunity to withdraw the letter ruling request 202
.13 May request draft of proposed letter ruling near the completion of the ruling process 203
SECTION 28. HOW DOES EMPLOYEE PLANS RULINGS AND AGREEMENTS SCHEDULE CONFERENCES WITH TAXPAYERS? 203
.01 Schedules a conference if requested by taxpayer 203
.02 Permits taxpayer one conference of right 203
.03 Disallows verbatim recording of conferences 204
.04 Makes tentative recommendations on substantive issues 204
.05 May offer additional conferences 204
.06 Requires written confirmation of information presented at conference 204
.07 May schedule a pre-submission conference 204
.08 Under limited circumstances, may schedule a conference to be held by telephone 205
SECTION 29. WHAT EFFECT WILL A LETTER RULING HAVE? 205
.01 Has same effect as a determination letter 205
.02 Will not apply to another taxpayer 205
.03 Will be used by the Service in examining the taxpayer’s return 205
.04 May be revoked or modified if found to be in error 206
.05 Letter ruling revoked or modified based on material change in facts applied retroactively 206
.06 Not otherwise generally revoked or modified retroactively 207
.07 Retroactive effect of revocation or modification applied to a particular transaction 207
.08 Retroactive effect of revocation or modification applied to a continuing action or series of actions 207
.09 May be retroactively revoked or modified if the transaction is completed without reliance on the letter ruling 207
.10 Taxpayer may request that retroactivity be limited 207
PART IV. USER FEES
SECTION 30. WHAT ARE THE USER FEE REQUIREMENTS FOR REQUESTING ADVICE FROM EMPLOYEE PLANS RULINGS AND AGREEMENTS? 208
.01 Legislation authorizing user fees 208
.02 Requests to which user fees apply 208
.03 Requests and other actions that do not require the payment of a user fee. 208
.04 Exemptions from the user fee requirements 209
.05 User fees under EPCRS 209
.06 Requests involving multiple offices, fee categories, issues, transactions, or entities 209
.07 Method of payment 210
.08 Transmittal forms 210
.09 Effect of nonpayment or payment of incorrect amount 210
.10 Refunds of user fees 211
.11 Request for reconsideration of user fee 213
SECTION 31. WHAT ARE THE MAILING ADDRESSES FOR REQUESTING LETTER RULINGS, OPINION LETTERS, ADVISORY LETTERS, DETERMINATION LETTERS, AND VCP COMPLIANCE STATEMENTS FROM EMPLOYEE PLANS RULINGS AND AGREEMENTS? 213
.01 Letter rulings and opinion letters 213
.02 Determination letters 214
.03 VCP compliance statements 215
SECTION 32. WHAT IS THE EFFECT OF THIS REVENUE PROCEDURE ON OTHER DOCUMENTS? 215
SECTION 33. EFFECTIVE DATE 216
SECTION 34. PAPERWORK REDUCTION ACT 216
DRAFTING INFORMATION 216
APPENDIX A-SCHEDULE OF USER FEES 217
.01 Letter ruling requests 217
.02 Opinion letters on prototype individual retirement accounts and/or annuities, SEPs, SIMPLE IRAs, SIMPLE IRA Plans, Roth IRAs and dual-purpose IRAs 217
.03 Opinion letters on master and prototype plans 217
.04 Advisory letters on VS plans 217
.05 Determination letters 218
.06 Opinion letters on § 403(b) prototype plans 218
.07 Advisory letters on § 403(b) VS plans 218
.08 User fees for VCP submissions under EPCRS 218
APPENDIX B-SAMPLE NOTICE TO INTERESTED PARTIES 221
APPENDIX C-CHECKLIST FOR SECTION 401(h) AND SECTION 420 DETERMINATION LETTERS 223
APPENDIX D-SAMPLE FORMAT FOR A LETTER RULING REQUEST FROM EMPLOYEE PLANS RULINGS AND AGREEMENTS 225
APPENDIX E-CHECKLIST FOR LETTER RULINGS FROM EMPLOYEE PLANS RULINGS AND AGREEMENTS 227
APPENDIX F-ADDITIONAL CHECKLIST FOR ROTH IRA RECHARACTERIZATION RULING REQUESTS 229

SECTION 1. WHAT IS THE PURPOSE OF THIS REVENUE PROCEDURE?

Purpose of revenue procedure

.01 This revenue procedure explains how the Internal Revenue Service provides advice to taxpayers on issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, Employee Plans Rulings and Agreements Office (Employee Plans Rulings and Agreements). It also details the types of advice available to taxpayers, and the manner in which such advice is requested and provided.

Organization of revenue procedure

.02 Part I of this revenue procedure contains general information about the types of advice provided by Employee Plans Rulings and Agreements and the procedures that apply to both requests for determination letters and requests for private letter rulings. Part II contains procedures for determination letters for various types of plans and transactions. Part III contains procedures for private letter rulings within the jurisdiction of Employee Plans Rulings and Agreements. Part IV contains the rules for user fees that are required to be paid when requesting various types of advice.

Other guidance affecting this revenue procedure:

.03

(1) Revenue Procedure 2016–37, 2016–29 I.R.B.136, modifies the determination letter program for qualified plans to eliminate, as of January 1, 2017, the five-year remedial amendment cycle system for individually designed plans set forth in Rev. Proc. 2007–44, 2007–2 C.B. 54, and to provide the circumstances under which a plan sponsor may submit a determination letter application to Employee Plans Rulings and Agreements. In addition, Rev. Proc. 2016–37 describes a system of remedial amendment cycles that applies to qualified pre-approved (master and prototype (M&P) and volume submitter (VS)) plans and the deadlines to submit applications for opinion and advisory letters.

(2) The 2016 Required Amendments List, which establishes the end of the remedial amendment period for an individually designed plan with respect to changes in qualification requirements that appear on the list, is contained in Notice 2016–80, 2016–52 I.R.B. 918.

(3) The 2015 Cumulative List, which will apply to individually designed plans submitted for a determination letter during the 2017 calendar year (with the exception of terminating plans), is contained in Notice 2015–84, 2015–52 I.R.B. 880.

(4) Rev. Proc. 2015–36, 2015–27 I.R.B. 20, sets forth the procedures for obtaining opinion and advisory letters for qualified pre-approved plans.

(5) Rev. Proc. 2013–22, 2013–18 I.R.B. 985, sets forth the procedures for obtaining opinion and advisory letters for § 403(b) prototype plans and VS plans.

(6) Rev. Proc. 2016–51, 2016–42 I.R.B. 466, sets forth the procedures for correcting plan failures under the Employee Plans Compliance Resolution System (EPCRS).

Updated annually

.04 This revenue procedure is updated annually, but it may be modified, amplified or clarified during the year.

SECTION 2. WHAT CHANGES HAVE BEEN MADE TO THIS REVENUE PROCEDURE?

In general

.01 This revenue procedure consolidates procedures applicable to Employee Plans Rulings and Agreements advice that were formerly contained in: (1) Rev. Proc. 2016–4, 2016–1 I.R.B. 142, which contained Employee Plans Rulings and Agreements’ general procedures for letter ruling and determination letter requests; (2) Rev. Proc. 2016–6, 2016–1 I.R.B. 200, which contained specific procedures for determination letter requests; and (3) Rev. Proc. 2016–8, 2016–1 I.R.B. 243, which contained rules for user fees associated with advice requested from Employee Plans Rulings and Agreements. Procedures and user fees applicable to advice provided by the Commissioner, Tax Exempt and Government Entities, Exempt Organizations Office, contained in Rev. Proc. 2016–4 and Rev. Proc. 2016–8 are now contained in Rev. Proc. 2017–5, this Bulletin.

Employee Plans Rulings and Agreements will continue to issue letter rulings only on certain matters specified in section 24.01 of this revenue procedure. Rev. Proc. 2017–1, this Bulletin, sets forth procedures for obtaining letter rulings from the Office of Associate Chief Counsel, including letter rulings relating to qualified retirement plans and IRAs. Rev. Proc. 2017–2, this Bulletin, sets forth procedures for requesting technical advice from the Office of Associate Chief Counsel.

Specific Changes

.02 Notable changes to Rev. Proc. 2016–4, Rev. Proc. 2016–6 and Rev. Proc. 2016–8 that appear in this year’s update and consolidation include:

  • (1) Procedures for requesting determination letters were modified to reflect the elimination of the 5-year remedial amendment cycles for individually designed plans and other changes as described in section 4 of Rev. Proc. 2016–37. To the extent that employers that maintain individually designed plans may still request a determination letter under the third Cycle A, the procedures described in sections 6 and 7 of Rev. Proc. 2016–6 continue to apply.

  • (2) Procedures for requesting determination letters were modified to reflect that employers may request determination letters on whether covered employees are leased employees only to the extent the employer is otherwise eligible to apply for a determination letter under Rev. Proc. 2016–37.

  • (3) Procedures for requesting determination letters were modified to reflect that employers that maintain individually designed plans may no longer request determination letters on whether a plan sponsor is part of an affiliated service group.

  • (4) Procedures for requesting a minimum funding waiver, as described in section 3 of Rev. Proc. 2004–15, 2004–1 C.B. 490, have been modified to eliminate the alternative of requesting a determination letter in conjunction with a minimum funding waiver request. Requests for minimum funding waivers may still be submitted to the Office of Associate Chief Counsel (Tax Exempt and Government Entities) as requests for private letter rulings. See section 5.15(2) of Rev. Proc. 2017–1, this Bulletin.

  • (5) Procedures for requesting determination letters were modified to reflect that determination letters on partial terminations issued to individually designed plans will be limited in scope to whether a partial termination has occurred, unless the employer is otherwise eligible to apply for a determination letter under Rev. Proc. 2016–37.

  • (6) A favorable determination letter does not constitute a determination with respect to the federal tax consequences of a lump sum risk-transferring program as described in Notice 2015–49, 2015–30 I.R.B. 79.

  • (7) Procedures for describing the types of advice provided by Employee Plans Rulings and Agreements were revised to reflect that revenue rulings, information letters, and waivers of the minimum funding standard are no longer issued by Employee Plans Rulings and Agreements, but instead are issued by the Office of Associate Chief Counsel.

  • (8) Procedures for requesting § 7805(b) relief were modified to reflect delegation of authority to Division Counsel (TEGEDC) to limit retroactive revocation or modification of a determination letter or letter ruling issued by Employee Plans Rulings and Agreements.

  • (9) Procedures for user fees were modified to reflect the elimination of the 5-year remedial amendment period (as described in section 4 of Rev. Proc. 2016–37), as well as changes in EPCRS as described in Rev. Proc. 2016–51.

  • (10) References to Exempt Organizations have been deleted and the relevant procedures were moved to Rev. Proc. 2017–5 as appropriate.

  • (11) Minor nonsubstantive changes were made, and dates, cross-references and citations to other revenue procedures were changed to reflect the appropriate annual revenue procedures.

PART I. GENERALLY APPLICABLE PROCEDURES

SECTION 3. IN WHAT FORM IS ADVICE PROVIDED BY EMPLOYEE PLANS RULINGS AND AGREEMENTS?

In general

.01 Employee Plans Rulings and Agreements provides advice in the form of letter rulings, closing agreements, compliance statements, determination letters, opinion letters, advisory letters, nonbank trustee approval letters, and oral advice.

Letter ruling

.02 A “letter ruling” is a written statement issued to a taxpayer by Employee Plans Rulings and Agreements that interprets and applies the tax laws or any nontax laws applicable to employee plans to the taxpayer’s specific set of facts. Once issued, a letter ruling may be revoked or modified for any number of reasons, as described in section 29 of this revenue procedure, unless it is accompanied by a “closing agreement.”

Closing agreement

.03 A “closing agreement” is a final agreement between the Service and a taxpayer on a specific issue or liability. It is entered into under the authority in § 7121 of the Internal Revenue Code of 1986 and is final unless fraud, malfeasance, or misrepresentation of a material fact can be shown.

A closing agreement may be entered into if it is advantageous to have the matter permanently and conclusively closed, or if a taxpayer can show that there are good reasons for an agreement and that making the agreement will not prejudice the interests of the Government. In appropriate cases, taxpayers may be asked to enter into a closing agreement as a condition to the issuance of a letter ruling.

In appropriate cases, a closing agreement may be made with sponsors of M&P plans and practitioners of VS plans.

A closing agreement may also be entered into with respect to retirement plan failures corrected under EPCRS, as set forth in Rev. Proc. 2016–51.

Determination letter

.04 A “determination letter” is a written statement issued to a taxpayer by Employee Plans Rulings and Agreements that applies the principles and precedents previously announced to a specific set of facts. It is issued only if a determination can be made based on clearly established rules in the statute, a tax treaty, or the regulations, or based on a conclusion in a revenue ruling, opinion, or court decision that represents the position of the Service, and that specifically answers the questions presented. Employee Plans Rulings and Agreements issues determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under §§ 401, 403(a), 409 and 4975(e)(7), and the status for exemption of any related trusts or custodial accounts under § 501(a).

Opinion letter

.05 An “opinion letter” is a written statement issued by Employee Plans Rulings and Agreements to a sponsor or M&P mass submitter as to the acceptability of the form of an M&P plan under § 401(a) or § 403(a), and, in the case of a master plan, the acceptability of the master trust under § 501(a), or as to the conformance of a prototype trust, custodial account, or individual annuity with the requirements of § 408(a), (b), (k) or (p) or 408A, as applicable. An opinion letter will also be issued as to the acceptability of the form of a prototype plan under § 403(b). See Rev. Proc. 2015–36, 2015–27 I.R.B. 20, (M&P plans) and Rev. Proc. 2013–22, 2013–18 I.R.B. 985, as modified by Rev. Proc. 2014–28, 2014–16 I.R.B. 944 and Rev. Proc. 2015–22, 2015–11 I.R.B. 754. See also Rev. Proc. 87–50, 1987–2 C.B. 647; Rev. Proc. 91–44, 1991–2 C.B. 733; Rev. Proc. 92–38, 1992–1 C.B. 859; Rev. Proc. 97–29, 1997–1 C.B. 689; Rev. Proc. 98–59, 1998–2 C.B. 727; Rev. Proc. 2002–10, 2002–1 C.B. 401, and Rev. Proc. 2010–48, 2010–50, I.R.B. 828 (pre-approved IRAs), as modified by Appendix A of this revenue procedure.

Oral advice

.06 Oral advice is advisory only, and is not binding on the Service.

(1) No oral rulings and no written rulings in response to oral requests.

The Service does not orally issue rulings or determinations, nor does it issue letter rulings or determination letters in response to oral requests from taxpayers. Service employees ordinarily will discuss with taxpayers or their representatives inquiries about whether the Service will rule on particular issues and about procedural matters regarding the submission of requests for letter rulings or determination letters.

(2) Discussion possible on substantive issues.

At the discretion of the Service and as time permits, Service employees may also discuss substantive issues with taxpayers or their representatives. Such a discussion will not bind the Service or the Office of Associate Chief Counsel, and it cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

Service employees who are not directly involved in the examination, appeal, or litigation of particular substantive tax issues will not discuss those issues with taxpayers or their representatives unless the discussion is coordinated with Service employees who are directly involved in the matter. The taxpayer or the taxpayer’s representative ordinarily will be asked whether an oral request for advice or information relates to a matter pending before another office of the Service or before a Federal court.

If a tax issue is not under examination, in an Appeals Office, or in litigation, the tax issue may be discussed even though the issue is affected by a nontax issue pending in litigation.

A taxpayer may seek oral technical guidance from a taxpayer service representative in a field office or service center when preparing a return or report.

The Service does not respond to letters seeking to confirm the substance of oral discussions, and the absence of a response to such a letter is not a confirmation.

Nonbank trustee approval letters

.07 A “nonbank trustee approval letter” is a letter ruling that determines that the applicant is qualified to act as a nonbank custodian pursuant to the requirements of § 1.408–2(e)(2) through (5) of the Income Tax Regulations with respect to plans qualified under § 401(a), accounts described in § 403(b)(7), individual retirement arrangements (IRAs) established under § 408(a), (b), or (h), Roth IRAs established under § 408A, Coverdell educational savings accounts established under § 530, Archer medical savings accounts established under § 220, or Health Savings Accounts established under § 223. An applicant requesting approval as a nonbank trustee must provide Employee Plans Rulings and Agreements with clear and convincing proof that the requirements of the regulations are met. If there is a requirement that the applicant feels is not applicable, the application must provide clear and convincing proof that such requirement is not germane to the manner in which the applicant will administer any trust or custodial account. See § 1.408–2(e)(6).

Compliance statement

.08 A “compliance statement” is a binding written agreement between Employee Plans Rulings and Agreements and, generally, the plan sponsor with respect to certain failures of the retirement plan to meet the applicable qualification requirements identified by the plan sponsor in a voluntary submission under the Voluntary Correction Program (VCP) of EPCRS. The compliance statement addresses the failures identified in the VCP submission, the terms of correction, including any revision of administrative procedures, and the time period within which proposed corrections must be implemented. A compliance statement is conditioned on (i) there being no misstatement or omission of material fact in connection with the submission, and (ii) the implementation of the specific corrections and satisfaction of any other conditions in the compliance statement. See Rev. Proc. 2016–51.

Advisory letter

.09 An “advisory letter” is a written statement issued by Employee Plans Rulings and Agreements to a VS practitioner or VS mass submitter as to the acceptability of the form of a specimen plan and any related trust or custodial account under § 401(a) or § 403(a), or the form of a specimen plan under § 403(b). See Rev. Proc. 2015–36 and Rev. Proc. 2013–22, as modified by Rev. Proc. 2014–28 and Rev. Proc. 2015–22.

SECTION 4. ON WHAT ISSUES MAY TAXPAYERS REQUEST WRITTEN ADVICE UNDER THIS PROCEDURE?

Taxpayers may request determination letters, letter rulings and closing agreements on issues within the jurisdiction of Employee Plans Rulings and Agreements under this revenue procedure.

Employee Plans Rulings and Agreements issues determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under §§ 401, 403(a), 409 and 4975(e)(7), and the status for exemption of any related trusts or custodial accounts under § 501(a). See Rev. Proc. 2016–37, which contains a description of the determination letter program, including when to submit a request for a determination letter, for individually designed and pre-approved plans.

Employee Plans Rulings and Agreements issues letter rulings on the Code sections listed in section 24.01 of this revenue procedure, if appropriate in the interest of sound tax administration to answer written inquiries of individuals and organizations about their status for tax purposes and the tax effects of their acts or transactions.

Note that issues involving employee plans not listed in section 24.01 of this revenue procedure generally fall under the jurisdiction of the Office of Associate Chief Counsel (Tax Exempt and Government Entities). See section 5.03 below and Rev. Proc. 2017–1, this Bulletin.

SECTION 5. ON WHAT ISSUES MUST WRITTEN ADVICE BE REQUESTED UNDER DIFFERENT PROCEDURES?

Master and prototype plans, volume submitter plans, and prototype plans

.01 The procedures for obtaining opinion letters for M&P plans and any related trusts or custodial accounts under §§ 401(a), 403(a) and 501(a), and advisory letters for VS plans are contained in Rev. Proc. 2015–36. The procedures for obtaining opinion letters for prototype trusts, custodial accounts, or annuities under § 408(a), (b), (k) or (p) or § 408A, are contained in Rev. Proc. 87–50; Rev. Proc. 91–44; Rev. Proc. 92–38; Rev. Proc. 97–29; Rev. Proc. 98–59; Rev. Proc. 2002–10 and Rev. Proc. 2010–48, as modified by Appendix A of this revenue procedure. The procedures for obtaining opinion and advisory letters for prototype plans and VS plans under § 403(b) are contained in Rev. Proc. 2013–22, as modified by Rev. Proc. 2014–28 and Rev. Proc. 2015–22.

Employee Plans Compliance Resolution System

.02 The procedures for obtaining compliance statements, etc., for certain failures of plans qualified under § 401(a), § 403(b) plans, SEPs, SIMPLEs and § 457(b) plans under EPCRS are contained in Rev. Proc. 2016–51.

Chief Counsel

.03 The procedures for obtaining letter rulings, information letters, etc., on matters within the jurisdiction of the Office of Associate Chief Counsel (Tax Exempt and Government Entities), or within the jurisdiction of other Offices of Associate Chief Counsel are contained in the following revenue procedures:

  • (1) Chief Counsel’s letter rulings, information letters, etc.: See Rev. Proc. 2017–1, this Bulletin.

  • (2) Technical Advice Requests: See Rev. Proc. 2017–2, this Bulletin.

  • (3) Chief Counsel’s no-rule positions: See Rev. Proc. 2017–3, this Bulletin.

SECTION 6. WHAT ARE THE GENERAL INSTRUCTIONS FOR REQUESTING LETTER RULINGS AND DETERMINATION LETTERS FROM EMPLOYEE PLANS RULINGS AND AGREEMENTS?

In general

.01 This section explains the general instructions for requesting letter rulings and determination letters on all matters within the jurisdiction of Employee Plans Rulings and Agreements. Requests for letter rulings and determination letters require the payment of the applicable user fee discussed in section 6.02(15), section 30, and Appendix A of this revenue procedure. Specific and additional instructions also apply to requests for letter rulings and determination letters on certain matters.

All requests must be submitted in English. All documents submitted in support of such requests must be in English, or accompanied by an English translation.

Certain information required in all requests

.02

Facts

(1) Complete statement of facts and other information. Each request for a letter ruling or determination letter must contain a complete statement of all facts relating to the transaction. These facts include—

  • (a) names, addresses, telephone numbers, and taxpayer identification numbers of all interested parties (the term “all interested parties” does not mean all shareholders of a widely held corporation requesting a letter ruling relating to a reorganization, or all employees if a large number may be involved);

  • (b) a complete statement of the business reasons for the transaction; and

  • (c) a detailed description of the transaction.

The Service will usually not rule on only one step of a larger integrated transaction. See section 25.04 of this revenue procedure. However, if such a letter ruling is requested, the facts and circumstances relating to the entire transaction, including true copies of relevant documents, etc., must be submitted.

Documents

(2) Copies of all contracts, wills, deeds, agreements, instruments, plan documents, and other documents. All documents that are pertinent to the transaction (including contracts, wills, deeds, agreements, instruments, plan documents, trust documents, and proposed disclaimers) must be submitted with the request.

Original documents should not be submitted because they become part of the Service’s file and will not be returned to the taxpayer. Instead, true copies of all such documents should be submitted with the request. Each document, other than the request, should be labeled alphabetically and attached to the request in alphabetical order.

Analysis of material facts

(3) Analysis of material facts. All material facts in documents must be included, rather than merely incorporated by reference, in the taxpayer’s initial request or in supplemental letters. These facts must be accompanied by an analysis of their bearing on the issue or issues, specifying the legal provisions that apply.

Same issue in an earlier return

(4) Statement regarding whether same issue is in an earlier return. The request must state whether, to the best of the knowledge of both the taxpayer and the taxpayer’s representatives, the same issue is in an earlier return of the taxpayer (or in a return for any year of a related taxpayer within the meaning of § 267 or of a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504 or of a predecessor of the taxpayer).

If the statement is affirmative, it must specify whether the issue—

  • (a) is being examined by the Service;

  • (b) has been examined and, if so, whether or not the statutory period of limitations has expired for either assessing tax or filing a claim for refund or credit of tax;

  • (c) has been examined and, if so, whether or not a closing agreement covering the issue or liability has been entered into by the Service;

  • (d) is being considered by an Appeals Office in connection with a return from an earlier period;

  • (e) has been considered by an Appeals Office in connection with a return from an earlier period and, if so, whether or not the statutory period of limitations has expired for either assessing tax or filing a claim for refund or credit of tax;

  • (f) has been considered by an Appeals Office in connection with a return from an earlier period and whether or not a closing agreement covering the issue or liability has been entered into by an Appeals Office;

  • (g) is pending in litigation in a case involving the taxpayer or a related taxpayer; or

  • (h) is being considered by the Pension Benefit Guaranty Corporation (PBGC) or the Department of Labor (DOL).

Same or similar issue previously submitted or currently pending

(5) Statement regarding whether same or similar issue was previously ruled on or requested, or is currently pending. The request must also state whether, to the best of the knowledge of both the taxpayer and the taxpayer’s representatives—

  • (a) Employee Plans Rulings and Agreements previously ruled on the same or a similar issue for the taxpayer (or a related taxpayer within the meaning of § 267, or a member of an affiliated group of which the taxpayer is also a member within the meaning of § 1504 or a predecessor);

  • (b) the taxpayer, a related taxpayer, or a predecessor previously submitted the same or a similar issue to Employee Plans Rulings and Agreements but withdrew the request before a letter ruling or determination letter was issued;

  • (c) the taxpayer, a related taxpayer, or a predecessor previously submitted a request involving the same or a similar issue that is currently pending with Employee Plans Rulings and Agreements or the Office of Associate Chief Counsel (Tax Exempt and Government Entities); or

  • (d) at the same time as this request, the taxpayer or a related taxpayer is presently submitting another request involving the same or a similar issue to Employee Plans Rulings and Agreements or the Office of Associate Chief Counsel (Tax Exempt and Government Entities).

If the statement is affirmative for (a), (b), (c), or (d) of this section 6.02(5), the statement must give the date the request was submitted, the date the request was withdrawn or ruled on, if applicable, and other details of the consideration of the issue by Employee Plans Rulings and Agreements or the Office of Associate Chief Counsel (Tax Exempt and Government Entities).

Statement of authorities supporting taxpayer’s views

(6) Statement of supporting authorities. If the taxpayer advocates a particular conclusion, an explanation of the grounds for that conclusion and the relevant authorities to support it must also be included. Even if not advocating a particular tax treatment of a proposed transaction, the taxpayer must still furnish views on the tax results of the proposed transaction and a statement of relevant authorities to support those views.

In all events, the request must include a statement of whether the law in connection with the request is uncertain and whether and how the issue is addressed by relevant authorities.

Statement of authorities contrary to taxpayer’s views

(7) Statement of contrary authorities. The taxpayer is also encouraged to inform Employee Plans Rulings and Agreements about, and discuss the implications of, any authority believed to be contrary to the conclusion requested, such as legislation (or pending legislation), tax treaties, court decisions, regulations, revenue rulings, revenue procedures, notices, or announcements. If the taxpayer determines that there are no contrary authorities, a statement in the request to this effect would be helpful. If the taxpayer does not furnish either contrary authorities or a statement that none exists, Employee Plans Rulings and Agreements, in complex cases or those presenting difficult or novel issues, may request submission of contrary authorities or a statement that none exists. Failure to comply with this request may result in Employee Plans Rulings and Agreements refusing to issue a letter ruling or determination letter.

Identifying and discussing contrary authorities generally will enable Employee Plans Rulings and Agreements personnel to understand the issue and relevant authorities more quickly. In that case, when Employee Plans Rulings and Agreements personnel receive the request, they will have before them the taxpayer’s thinking on the effect and applicability of contrary authorities. This information should make research easier and lead to earlier action by Employee Plans Rulings and Agreements. If the taxpayer does not disclose and distinguish significant contrary authorities, Employee Plans Rulings and Agreements may need to request additional information, which will delay action on the request and may result in the application being returned due to being an incomplete submission.

Statement identifying pending legislation

(8) Statement identifying pending legislation. At the time of filing the request, the taxpayer must identify any pending legislation that may affect the proposed transaction. In addition, if applicable legislation is introduced after the request is filed but before a letter ruling or determination letter is issued, the taxpayer must notify Employee Plans Rulings and Agreements.

Deletions statement required by § 6110

(9) Statement identifying information to be deleted from copy of letter ruling for public inspection. The text of private letter rulings is open to public inspection under § 6110. The Service makes deletions from the text before it is made available for inspection. To help the Service make the deletions required by § 6110(c), a request for a letter ruling must be accompanied by a statement indicating the deletions desired (“deletions statement”). If the deletions statement is not submitted with the request, a Service representative will tell the taxpayer that the request will be closed if the Service does not receive the deletions statement within 30 calendar days. See section 27.05 of this revenue procedure.

(a) Format of deletions statement. A taxpayer who wants only names, addresses, and identifying numbers to be deleted should state this in the deletions statement. If the taxpayer wants more information deleted, the deletions statement must be accompanied by a copy of the request and supporting documents on which the taxpayer should bracket the material to be deleted. The deletions statement must indicate the statutory basis under § 6110(c) for each proposed deletion.

If the taxpayer decides to ask for additional deletions before the letter ruling is issued, additional deletions statements may be submitted.

(b) Location of deletions statement. The deletions statement must not appear in the request, but instead must be made in a separate document and placed on top of the request for a letter ruling.

(c) Signature. The deletions statement must be signed and dated by the taxpayer or the taxpayer’s authorized representative. A stamped or faxed signature is not permitted.

(d) Additional information. The taxpayer should follow the same procedures above to propose deletions from any additional information submitted after the initial request. An additional deletions statement, however, is not required with each submission of additional information if the taxpayer’s initial deletions statement requests that only names, addresses, and identifying numbers be deleted, and the taxpayer wants only the same information deleted from the additional information.

(e) Taxpayer may protest deletions not made. After receiving from the Service the notice under § 6110(f)(1) of intention to disclose the letter ruling (including a copy of the version proposed to be open to public inspection and notation of third-party communications under § 6110(d)), the taxpayer may protest the disclosure of certain information in the letter ruling. The taxpayer must send a written statement within 20 calendar days to the Service office indicated on the notice of intention to disclose. The statement must identify those deletions that the Service has not made and that the taxpayer believes should have been made. The taxpayer must also submit a copy of the version of the letter ruling and bracket the deletions proposed that have not been made by the Service. Generally, the Service will not consider deleting any material that the taxpayer did not propose to be deleted before the letter ruling was issued.

Within 20 calendar days after the Service receives the response to the notice under § 6110(f)(1), the Service will mail to the taxpayer its final administrative conclusion regarding the deletions to be made. The taxpayer does not have the right to a conference to resolve any disagreements concerning material to be deleted from the text of the letter ruling. However, these matters may be taken up at any conference that is otherwise scheduled regarding the request.

(f) Taxpayer may request delay of public inspection. After receiving the notice under § 6110(f)(1) of intention to disclose, but within 60 calendar days after the date of notice, the taxpayer may send a request for delay of public inspection under either § 6110(g)(3) or (4). The request for delay must be sent to the Service office indicated on the notice of intention to disclose. A request for delay under § 6110(g)(3) must contain the date on which it is expected that the underlying transaction will be completed. The request for delay under § 6110(g)(4) must contain a statement from which the Commissioner of Internal Revenue may determine that there are good reasons for the delay.

(g) Section 6110 does not apply to certain matters. Section 6110(l)(1) states that § 6110 disclosure provisions do not apply to any matter to which § 6104 applies. Therefore, letter rulings, determination letters, and related background file documents dealing with the following matters (covered by § 6104) are not subject to § 6110 disclosure provisions—

  • (i) An application for the qualification of a pension, profit-sharing or stock bonus plan, or an individual retirement account described in § 408 or § 408A, or any application for exemption under § 501(a) by an organization forming part of such a plan or an account;

  • (ii) Any document issued by the Service in which the qualification or exempt status of a plan or account is granted, denied, or revoked;

  • (iii) Any application filed and any document issued by the Service with respect to the qualification or status of M&P and VS plans; and

  • (iv) The portion of any document issued by the Service with respect to the qualification or exempt status of a plan or account of a proposed transaction by such plan or account.

Signature on request

(10) Signature by taxpayer or authorized representative. The request for a letter ruling or determination letter must be signed and dated by the taxpayer or the taxpayer’s authorized representative. Neither a stamped signature nor a faxed signature is permitted.

Authorized representatives

(11) Authorized representatives. To sign the request or to appear before the Service in connection with the request, the representative must be one of the following:

Attorney

(a) An attorney who is a member in good standing of the bar of the highest court of any state, possession, territory, commonwealth, or the District of Columbia and who is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration with the Service showing current qualification as an attorney and current authorization to represent the taxpayer.

Certified public accountant

(b) A certified public accountant who is qualified to practice in any state, possession, territory, commonwealth, or the District of Columbia and who is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration with the Service showing current qualification as a certified public accountant and current authorization to represent the taxpayer.

Enrolled agent

(c) An enrolled agent is a person, other than an attorney or certified public accountant that is currently enrolled to practice before the Service and is not currently under suspension or disbarment from practice before the Service, including a person enrolled to practice only for employee plans matters. He or she must file a written declaration with the Service showing current enrollment and authorization to represent the taxpayer. Either the enrollment number or the expiration date of the enrollment card must be included in the declaration. For the rules on who may practice before the Service, see Treasury Department Circular No. 230.

Enrolled actuary

(d) An enrolled actuary is a person enrolled as an actuary by the Joint Board for the Enrollment of Actuaries pursuant to 29 U.S.C. 1242 and qualified to practice in any state, possession, territory, commonwealth, or the District of Columbia and who is not currently under suspension or disbarment from practice before the Service. He or she must file a written declaration with the Service showing current qualification as an enrolled actuary and current authorization to represent the taxpayer. Practice as an enrolled actuary is limited to representation with respect to issues involving the following statutory provisions: §§ 401, 403(a), 404, 412, 413, 414, 419, 419A, 420, 4971, 4972, 6057, 6058, 6059, 6652(d), 6652(e), 6692, 7805(b), former § 405, and 29 U.S.C. 1083.

Enrolled retirement plan agent

(e) An enrolled retirement plan agent (ERPA) is an individual who is authorized to practice before the Service under the ERPA program. The ERPA program is established under Circular No. 230 of the U.S. Department of the Treasury and is administered by the Office of Professional Responsibility.

Practice as an ERPA is limited to representation with respect to issues involving the Employee Plans Determination Letter program, EPCRS, and the M&P and VS programs. In addition, ERPAs are generally permitted to represent taxpayers with respect to Form 5300 series and Form 5500 filings, but not with respect to actuarial forms or schedules. For additional information on ERPAs, see §§ 10.4, 10.5 and 10.6 of Circular No. 230.

A person with a “Letter of Authorization”

(f) Any other person, including a foreign representative, who has received a “Letter of Authorization” from the Director, Office of Professional Responsibility under section 10.7(d) of Treasury Department Circular No. 230. A person may make a written request for a “Letter of Authorization” to: Office of Director, Office of Professional Responsibility, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, DC 20224. Section 10.7(d) of Circular No. 230 authorizes the Commissioner to allow an individual who is not otherwise eligible to practice before the Service to represent another person in a particular matter. For additional information, see section 16.02(12) below.

Employee, general partner, bona fide officer, administrator, trustee, etc.

(g) The above requirements do not apply to a regular full-time employee representing his or her employer, to a general partner representing his or her partnership, to a bona fide officer representing his or her corporation, association, or organized group, to a trustee, receiver, guardian, personal representative, administrator, or executor representing a trust, receivership, guardianship, or estate, or to an individual representing his or her immediate family. A preparer of a return (other than a person referred to in paragraph (a), (b), (c), (d) or (e) of this section 6.02(11)) who is not a full-time employee, a general partner, a bona fide officer, an administrator, a trustee, etc., or an individual representing his or her immediate family may not represent a taxpayer in connection with a letter ruling, determination letter, or technical advice request. See section 10.7(c) of Treasury Department Circular No. 230.

Foreign representative

(h) A foreign representative (other than a person referred to in paragraph (a), (b), (c), (d) or (e) of this section 6.02(11)) is not authorized to practice before the Service and, therefore, may not represent a taxpayer in a request for a letter ruling or a determination letter. In this situation, the nonresident alien or foreign entity must submit the request for a letter ruling or a determination letter on the individual’s or entity’s own behalf or through a person referred to in paragraph (a), (b), (c), (d) or (e) of this section 6.02(11).

Power of attorney and declaration of representative

(12) Power of attorney and declaration of representative. Any authorized representative, whether or not enrolled to practice, must also comply with the conference and practice requirements of the Statement of Procedural Rules (26 C.F.R. § 601.501–601.509), which provide the rules for representing a taxpayer before the Service. In addition, an unenrolled preparer must file a Form 8821 (Rev. March 2015), Tax Information Authorization, for certain limited employee plans matters.

Form 2848 (Rev. December 2015), Power of Attorney and Declaration of Representative, must be used to provide the representative’s authorization (Part I of Form 2848, Power of Attorney) and the representative’s qualification (Part II of Form 2848, Declaration of Representative). The name of the person signing Part I of Form 2848 should also be typed or printed on this form. A stamped signature is not permitted. An original, a copy, or a facsimile transmission (fax) of the power of attorney is acceptable so long as its authenticity is not reasonably disputed. For additional information regarding the power of attorney form, see section 6.03(2) of this revenue procedure.

Compliance with Treasury Department Circular No. 230

(13) Compliance with Treasury Department Circular No. 230. The taxpayer’s authorized representative, whether or not enrolled, must comply with Treasury Department Circular No. 230, which provides the rules for practice before the Service. In those situations in which Employee Plans Rulings and Agreements believes that the taxpayer’s representative is not in compliance with Circular No. 230, Employee Plans Rulings and Agreements will bring the matter to the attention of the Director, Office of Professional Responsibility.

Penalties of perjury statement

(14) Penalties of perjury statement.

(a) Format of penalties of perjury statement. A request for a letter ruling or determination letter and any change in the request submitted at a later time must be accompanied by the following declaration: “Under penalties of perjury, I declare that I have examined this request, or this modification to the request, including accompanying documents, and, to the best of my knowledge and belief, the request or the modification contains all the relevant facts relating to the request, and such facts are true, correct, and complete.” See section 27.06 of this revenue procedure for the penalties of perjury statement applicable for submissions of additional information.

(b) Signature by taxpayer. The declaration must be signed and dated by the taxpayer, not the taxpayer’s representative. Neither a stamped signature nor a faxed signature is permitted.

The person who signs for a corporate taxpayer must be an officer of the corporate taxpayer who has personal knowledge of the facts, and whose duties are not limited to obtaining a letter ruling or determination letter from the Service. If the corporate taxpayer is a member of an affiliated group filing consolidated returns, a penalties of perjury statement must also be signed and submitted by an officer of the common parent of the group.

The person signing for a trust, a state law partnership, or a limited liability company must be, respectively, a trustee, general partner, or member-manager who has personal knowledge of the facts.

Applicable user fee

(15) Applicable user fee. Section 7528 of the Code requires taxpayers to pay user fees for requests for letter rulings, opinion letters, advisory letters, determination letters, and similar requests. Appendix A to this procedure contains the schedule of fees for each type of request under the jurisdiction of Employee Plans Rulings and Agreements. Section 30 of this revenue procedure provides guidance for administering the user fee requirements. If two or more taxpayers are parties to a transaction and each requests a letter ruling, each taxpayer must satisfy the rules herein and additional user fees may apply.

Number of copies of request to be submitted

(16) Number of copies of request to be submitted. Generally a taxpayer needs to submit only one copy of the request for a letter ruling or determination letter. If, however, more than one issue is presented in the letter ruling request, the taxpayer is encouraged to submit additional copies of the request.

Further, two copies of the request for a letter ruling or determination letter are required if—

  • (a) the taxpayer is requesting separate letter rulings or determination letters on different issues as described in section 6.03(1) of this revenue procedure;

  • (b) the taxpayer is requesting deletions other than names, addresses, and identifying numbers, as described in section 6.02(9) of this revenue procedure (one copy is the request for the letter ruling or determination letter and the second copy is the deleted version of such request); or

  • (c) the taxpayer is requesting a closing agreement (as defined in section 3.03 of this revenue procedure) on the issue presented.

Sample of a letter ruling request

(17) Sample format for a letter ruling request. To assist a taxpayer or the taxpayer’s representative in preparing a letter ruling request, a sample format for a letter ruling request is provided in Appendix D. This format is not required to be used by the taxpayer or the taxpayer’s representative. If the letter ruling request is not identical or similar to the format in Appendix D, the different format will neither defer consideration of the letter ruling request nor be cause for returning the request to the taxpayer or taxpayer’s representative.

Checklist

(18) Checklist for letter ruling requests. Employee Plans Rulings and Agreements will be able to respond more quickly to a taxpayer’s letter ruling request if it is carefully prepared and complete. The checklist in Appendix E of this revenue procedure is designed to assist taxpayers in preparing a request by reminding them of the essential information and documents to be furnished with the request. The checklist in Appendix E must be completed to the extent required by the instructions in the checklist, signed and dated by the taxpayer or the taxpayer’s representative, and placed on top of the letter ruling request. If the checklist in Appendix E is not received, Employee Plans Rulings and Agreements will ask the taxpayer or the taxpayer’s representative to submit the checklist, which may delay action on the letter ruling request. A photocopy of this checklist may be used.

Additional information required in certain circumstances

.03

Multiple issues

(1) To request a separate letter ruling for multiple issues in a single situation. If more than one issue is presented in a request for a letter ruling, Employee Plans Rulings and Agreements generally will issue a single letter ruling covering all the issues. However, if the taxpayer requests a separate letter ruling on any of the issues (because, for example, one letter ruling is needed sooner than another), Employee Plans Rulings and Agreements usually will comply with the request unless it is not feasible or not in the best interests of the Service to do so. A taxpayer who wants a separate letter ruling on multiple issues should make this clear in the request and submit two copies of the request. Additional checklists are solely for the specific issues designated.

In issuing each letter ruling, Employee Plans Rulings and Agreements will state that it has issued a separate letter ruling or that requests for other letter rulings are pending.

Power of attorney

(2) Recipient of original letter ruling or determination letter. Employee Plans Rulings and Agreements will send the original of the letter ruling or determination letter to the taxpayer and a copy of the letter ruling or determination letter to the taxpayer’s representative. The letter ruling or determination letter is addressed to the taxpayer. A Form 2848, Power of Attorney and Declaration of Representative (Rev. December 2015), must be used to provide the representative’s authorization except in certain employee plans matters. See section 6.02(12) of this revenue procedure.

To have a copy sent to taxpayer’s representative. A copy of the letter ruling or determination letter will be sent to any representative with a check in the box in the name and address block on Form 2848 to indicate the representative is to receive notices and communications. Copies of the letter ruling or determination letter, however, will be sent to no more than two representatives.

Expedited handling

(3) To request expedited handling. Employee Plans Rulings and Agreements ordinarily processes requests for letter rulings and determination letters in order of the date received. Determination letter requests are not eligible for expedited handling. Expedited handling with respect to a letter ruling request means that the request is processed ahead of the regular order. Expedited handling is granted only in rare and unusual cases, both out of fairness to other taxpayers and because Employee Plans Rulings and Agreements seeks to process all requests as expeditiously as possible and to give appropriate deference to normal business exigencies in all cases not involving expedited handling.

A taxpayer who has a compelling need to have a letter ruling request processed ahead of the regular order may request expedited handling. This request must explain in detail the need for expedited handling. The request must be made in writing, preferably in a separate letter with, or soon after filing, the request for the letter ruling. If the request is not made in a separate letter, then the letter in which the letter ruling request is made should say, at the top of the first page: “Expedited Handling Is Requested. See page ___ of this letter.”

A request for expedited handling will not be forwarded to the appropriate group for action until the check or money order for the user fee in the correct amount is received.

Whether the request will be granted is within the discretion of Employee Plans Rulings and Agreements. Employee Plans Rulings and Agreements may grant a request if a factor outside a taxpayer’s control creates a real business need to obtain a letter ruling before a certain time in order to avoid serious business consequences. Examples include situations in which a court or governmental agency has imposed a specific deadline for the completion of a transaction, or a transaction must be completed expeditiously to avoid an imminent business emergency (such as the hostile takeover of a corporate taxpayer), provided that the taxpayer can demonstrate that the deadline or business emergency, and the need for expedited handling, resulted from circumstances that could not reasonably have been anticipated or controlled by the taxpayer. To qualify for expedited handling in such situations, the taxpayer must also demonstrate that the taxpayer submitted the request as promptly as possible after becoming aware of the deadline or emergency. The extent to which the letter ruling complies with all of the applicable requirements of this revenue procedure, and fully and clearly presents the issues, is a factor in determining whether expedited treatment will be granted. If Employee Plans Rulings and Agreements agrees to process a request out of order, it cannot give assurance that any letter ruling will be processed by the time requested. The scheduling of a closing date for a transaction or a meeting of the board of directors or shareholders of a corporation, without regard for the time it may take to obtain a letter ruling, will not be considered a sufficient reason to process a request ahead of its regular order. Also, the possible effect of fluctuation in the market price of stocks on a transaction will not be considered a sufficient reason to process a request out of order.

Because most requests for letter rulings cannot be processed ahead of their regular order, Employee Plans Rulings and Agreements urges all taxpayers to submit their requests well in advance of the contemplated transaction. In addition, in order to facilitate prompt action on letter ruling requests taxpayers are encouraged to ensure that their initial submissions comply with all of the requirements of this revenue procedure (including the requirements of other applicable guidelines set forth in sections 1.03 and 26.02 of this revenue procedure), and to provide promptly any additional information requested by Employee Plans Rulings and Agreements.

Facsimile transmission (fax)

(4) To receive a letter ruling or submit a request for a letter ruling by facsimile transmission (fax).

(a) To receive a letter ruling by fax. A letter ruling ordinarily is not sent by fax. However, if the taxpayer requests, a copy of a letter ruling may be faxed to the taxpayer or the taxpayer’s authorized representative. A letter ruling, however, is not issued until the ruling is mailed. See § 301.6110–2(h).

A request to fax a copy of the letter ruling to the taxpayer or the taxpayer’s authorized representative must be made in writing, either as part of the original letter ruling request or prior to the approval of the letter ruling. The request must contain the fax number of the taxpayer or the taxpayer’s authorized representative to whom the letter ruling is to be faxed.

Employee Plans Rulings and Agreements will take certain precautions to protect confidential information. For example, Employee Plans Rulings and Agreements will use a cover sheet that identifies the intended recipient of the fax and the number of pages transmitted. The cover sheet, if possible, will not identify the specific taxpayer by name, and it will be the first page covering the letter ruling being faxed.

(b) To submit a request for a letter ruling by fax. Original letter ruling requests sent by fax are discouraged because such requests must be treated in the same manner as requests by letter. For example, the faxed letter ruling request will not be forwarded to the applicable office for action until the check for the user fee is received.

Requesting a conference

(5) To request a conference. A taxpayer who wants to have a conference on the issues involved in a request for a letter ruling should indicate this in writing when, or soon after, filing the request.

Address to send the request

.04

The addresses for sending requests are provided in section 31 of this revenue procedure.

Pending letter ruling requests

.05

(1) Circumstances under which the taxpayer must notify Employee Plans Rulings and Agreements. The taxpayer must notify Employee Plans Rulings and Agreements if, after the letter ruling request is filed but before a letter ruling is issued, the taxpayer knows that—

  • (a) an examination of the issue or the identical issue on an earlier year’s return has been started by an Examinations office of the Service;

  • (b) the issue is being considered by the PBGC or the DOL; or

  • (c) legislation that may affect the transaction has been introduced (see section 6.02(8) of this revenue procedure).

(2) Taxpayer must notify Employee Plans Rulings and Agreements if return is filed and must attach request to return. If the taxpayer files a return before a letter ruling is received from Employee Plans Rulings and Agreements concerning the issue, the taxpayer must notify Employee Plans Rulings and Agreements that the return has been filed. The taxpayer must also attach a copy of the letter ruling request to the return to alert the Employee Plans Examinations office and thereby avoid premature Employee Plans Examinations office action on the issue.

When to attach letter ruling to return

.06 If, before filing a return, a taxpayer receives a letter ruling about any transaction that is relevant to the return, the taxpayer must attach a copy of the letter ruling to the return when it is filed.

How to check on status of request

.07 The taxpayer or the taxpayer’s authorized representative may obtain information regarding the status of a request by calling the person whose name and telephone number are shown on the acknowledgement of receipt of the request.

SECTION 7. WHAT ACTIONS ARE TAKEN IF A REQUEST IS WITHDRAWN OR EMPLOYEE PLANS RULINGS AND AGREEMENTS DECLINES TO ISSUE A LETTER RULING OR DETERMINATION LETTER?

In general

.01 A taxpayer may withdraw a request for a letter ruling or determination letter at any time before the letter ruling or determination letter is signed by Employee Plans Rulings and Agreements. Correspondence and exhibits related to a request that is withdrawn or related to a letter ruling request or determination letter request for which Employee Plans Rulings and Agreements declines to issue a letter ruling or determination letter will not be returned to the taxpayer. See section 6.02(2) of this revenue procedure.

The processing of a request for a letter ruling or determination letter will not be suspended in Employee Plans Rulings and Agreements at the request of a taxpayer.

Notification of appropriate Service official

.02 If a taxpayer withdraws a request for a letter ruling, or if Employee Plans Rulings and Agreements declines to issue a letter ruling, Employee Plans Rulings and Agreements will notify the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return. Employee Plans Rulings and Agreements also may give the Service official its views on the issues in the request to consider in any later examination of the return.

Refunds of user fee

.03 The user fee will not be returned for a letter ruling or determination letter request that is withdrawn. If Employee Plans Rulings and Agreements declines to issue a letter ruling on all of the issues in the request or declines to issue a determination letter, the user fee will be returned. If Employee Plans Rulings and Agreements, however, issues a letter ruling on some, but not all, of the issues, the user fee will not be returned.

PART II. PROCEDURES FOR DETERMINATION LETTER REQUESTS

Part IIA. REQUESTING DETERMINATION LETTERS

SECTION 8. IN WHAT AREAS ARE DETERMINATION LETTERS ISSUED?

Circumstances under which determination letters are issued

.01 Employee Plans Rulings and Agreements issues determination letters in response to taxpayers’ written requests on completed transactions on matters within its jurisdiction.

Employee Plans Rulings and Agreements does not issue determination letters on the tax consequences of proposed transactions, except on the qualified status of employee plans under §§ 401, 403(a), 409, and 4975(e)(7), and the exempt status of any related trust under § 501.

Neither Employee Plans Rulings and Agreements nor any other office issues determination letters on plans under § 403(b). However, for information regarding the procedures for obtaining opinion and advisory letters for prototype plans and VS plans under § 403(b), see section 5.01 of this revenue procedure.

Types of requests

.02 Determination letters may be requested on completed and proposed transactions as set forth in the table below:

TYPE OF REQUEST FORMS REV. PROC. SECTION
1. Initial Qualification
a. Individually-designed plans (including collectively bargained plans) and partial terminations 5300 11
b. Pre-approved plans 5300 12
c. Employee Stock Ownership Plans (“ESOPs”) 5300, 5309 11
d. Adoptions of VS plans (if the employer has made limited modifications to the language of the approved specimen plan) 5307 13
e. Multiple employer plans 5300 14
f. Group trusts 5316 16
g. § 414(x) combined plans 5300 11
2. Termination
a. In general 5310, 6088 15
b. Multiemployer plan covered by PBGC insurance 5300, 6088, Cover letter 15
Note: Form 5310–A, Notice of Plan Merger, Consolidation, Spinoff or Transfer of Plan Assets or Liabilities – Notice of Qualified Separate Lines of Business generally must be filed not less than 30 days before the merger, consolidation or transfer of assets and liabilities. The filing of Form 5310–A will not result in the issuance of a determination letter.
3. Special Types of Requests
a. Leased employees (§ 414(n)) 5300, Cover letter 17
b. Partial termination 5300, Cover letter 9.09
c. Section 401(h) determination letters 5300, Cover letter 18
d. Section 420 determination letters including other matters under § 401(a) 5300, Cover letter, Checklist 18
e. Section 420 determination letters excluding other matters under § 401(a) Cover letter, Checklist 18

Areas in which determination letters will not be issued

.03 Determination letters issued in accordance with this revenue procedure do not include determinations involving the following:

(1) Issues involving §§ 72, 79, 105, 125, 127, 129, 402, 403 (other than 403(a)), 404, 409(l), 409(n), 412, 414(h)(2), 415(m), 457, 511 through 515, and 4975 (other than 4975(e)(7));

(2) Plans or plan amendments for which automatic reliance is granted pursuant to section 19 of Rev. Proc. 2015–36;

(3) Plan amendments described below (these amendments will, to the extent provided, be deemed not to alter the qualified status of a plan under § 401(a)):

(a) An amendment solely to permit a trust forming part of a plan to participate in a pooled fund arrangement described in Rev. Rul. 81–100, 1981–1 C.B. 326, as clarified and modified by Rev. Rul. 2004–67, 2004–2 C.B. 28; Rev. Rul. 2011–1, 2011–2 I.R.B. 251; Notice 2012–6, 2012–3 I.R.B. 293, and Rev. Rul. 2014–24, 2014–37 I.R.B. 529;

(b) An amendment that merely adjusts the maximum limitations under § 415 to reflect annual cost-of-living increases under § 415(d), other than an amendment that adds an automatic cost-of-living adjustment provision to the plan; and

(c) An amendment solely to include language pursuant to § 403(c)(2) of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) concerning the reversion of employer contributions made as a result of mistake of fact;

(4) Determination letter requests with respect to plans that combine an ESOP (as defined in § 4975(e)(7)) with retiree medical benefit features described in § 401(h) (sometimes referred to as an HSOP):

(a) In general, determination letters will not be issued with respect to plans that combine an ESOP with another ESOP containing 401(h) features with respect to:

(i) whether the requirements of § 4975(e)(7) are satisfied;

(ii) whether the requirements of § 401(h) are satisfied; or

(iii) whether the combination of an ESOP with an ESOP that contains 401(h) features in a plan adversely affects its qualification under § 401(a);

(b) However, an arrangement will not be considered covered by section 8.03(4) of this revenue procedure if, under the provisions of the plan, the following conditions are satisfied:

(i) No individual accounts are maintained in the § 401(h) account (except as required by § 401(h)(6));

(ii) No employer securities are held in the § 401(h) account;

(iii) The § 401(h) account does not contain the proceeds (directly or otherwise) of an exempt loan as defined in § 54.4975–7(b)(1)(iii) of the Pension Excise Tax Regulations; and

(iv) The amount of actual contributions to provide § 401(h) benefits (when added to actual contributions for life insurance protection under the plan) does not exceed 25 percent of the sum of (1) the amount of cash contributions actually allocated to participants’ accounts in the plan, and (2) the amount of cash contributions used to repay principal with respect to the exempt loan, both determined on an aggregate basis since the inception of the § 401(h) arrangement; and

(5) Any issue if the same issue involving the same taxpayer or a related taxpayer is pending in a case in litigation or before an Appeals Office.

Cycle A determination letter applications

.04 Employee Plans Rulings and Agreements will accept applications for determination letters for the third Cycle A submission period, which ends on January 31, 2017. Employee Plans Rulings and Agreements’ review will take into account the qualification requirements and other items identified on the 2015 Cumulative List in Notice 2015–84. See section 11.02 of this revenue procedure.

In addition, the Service will accept applications for determination letters for plans seeking initial qualification and terminating plans anytime during the year. See section 12 of Rev. Proc. 2016–37.

Review of determination letters

.05 Determination letters issued under this revenue procedure are not generally reviewed by any other office of the Service before they are issued. If a taxpayer believes that the conclusion reached in a determination letter is in error, the taxpayer may ask Employee Plans Rulings and Agreements to reconsider the matter or to request technical advice from the Office of Associate Chief Counsel (Tax Exempt and Government Entities) as described in Rev. Proc. 2017–2, this Bulletin.

SECTION 9. WHAT IS THE GENERAL SCOPE OF A DETERMINATION LETTER?

Scope of this section

.01 This section delineates, generally, the scope of a determination letter issued by Employee Plans Rulings and Agreements. This section also identifies certain qualification requirements that are not considered by the Employee Plans Rulings and Agreements in its review of a plan and with respect to which determination letters do not provide reliance. This section applies to all determination letters, other than letters relating to the qualified status of group trusts; and certain letters relating solely to the requirements of § 420 (regarding the transfer of assets in a defined benefit plan to a health benefit account described in § 401(h)). For additional information pertaining to the scope of reliance on a determination letter, see section 23 of this revenue procedure.

Scope of determination letters

.02 In general, employee plans are reviewed by Employee Plans Rulings and Agreements for compliance with the form requirements (that is, those plan provisions that are required as a condition of qualification under § 401(a)). For terminating plans, the requirements are those that apply as of the date of termination. See Rev. Proc. 2016–37 for further details on the scope of Employee Plans Rulings and Agreements’ review of determination letter applications.

Design-based safe harbor

.03 Generally, a plan will not be reviewed for, and a determination letter may not be relied on with respect to, whether a plan satisfies the nondiscrimination requirements of § 401(a)(4), the minimum participation requirements of § 401(a)(26), or the minimum coverage requirements of § 410(b). However, if the applicant elects, a plan will be reviewed for, and a determination letter may be relied on with respect to, whether the terms of the plan satisfy one of the design-based safe harbors in §§ 1.401(a)(4)–2(b) and 1.401(a)(4)–3(b) of the regulations (relating to nondiscrimination in amount of contributions and benefits). A defined contribution plan will also be reviewed for, and a determination letter may be relied on with respect to, whether a plan’s terms satisfy the applicable requirements of §§ 401(k) and 401(m).

Governmental plans under § 414(d)

.04 A plan will not be reviewed for, and a determination letter does not constitute a ruling or determination as to, whether the plan is a governmental plan within the meaning of § 414(d). If a determination letter applicant represents on the application that the plan is a governmental plan within the meaning of § 414(d), the determination letter issued for the plan is predicated on that representation, and qualification is conditioned on the plan constituting a governmental plan within the meaning of § 414(d).

Church plans under § 414(e)

.05 A plan will not be reviewed for, and a determination letter does not constitute a ruling or determination as to, whether the plan is a church plan within the meaning of § 414(e). If a determination letter applicant represents on the application that the plan is a church plan within the meaning of § 414(e), the determination letter issued for the plan is predicated on that representation, and qualification is conditioned on the plan constituting a church plan within the meaning of § 414(e).

Tax treatment of certain contributions under § 414(h)

.06 A plan will not be reviewed for, and a determination letter does not constitute a ruling or determination as to, whether contributions to the plan satisfy § 414(h). A determination letter does not express an opinion on whether contributions made to a plan treated as a governmental plan defined in § 414(d) constitute employer contributions under § 414(h)(2).

Other limits on scope of determination letter

.07 A favorable determination letter does not provide reliance for purposes of §§ 404, 412, 430, 431, and 432 with respect to whether an interest rate (or any other actuarial assumption) is reasonable. A favorable determination letter does not constitute a determination with respect to whether any requirements of § 414(r), relating to whether an employer is operating qualified separate lines of business, are satisfied. A favorable determination letter does not constitute a determination with respect to the federal tax consequences of a lump sum risk-transferring program as described in Notice 2015–49, 2015–30 I.R.B. 79, except as explicitly provided in that notice.

Leased employees

.08 Applicants that are otherwise eligible to submit an application for a determination letter may elect that the letter include a determination as to whether leased employees are deemed employees of the employer under the meaning of § 414(n). See section 17 for procedures for requesting a leased employee determination.

Partial terminations

.09 Applicants may elect that a determination letter include a determination as to whether a partial termination has occurred with respect to the plan, and if so, its impact on plan qualification. An applicant may file a determination letter application on a Form 5300 and elect a determination regarding a partial termination, whether or not the plan is otherwise eligible to be submitted for a determination letter pursuant to sections 11.01 or 12.01 of this revenue procedure. However, if the plan is not otherwise eligible to be submitted for a determination letter, as provided in sections 11.01 or 12.01 of this revenue procedure, the scope of the determination letter issued with respect to the plan will be limited solely to the request regarding whether a partial termination has occurred.

Publication 794, Favorable Determination Letter

.10 Publication 794, Favorable Determination Letter, contains other information regarding the scope of a determination letter, including the requirement that all information submitted with the application be retained as a condition of reliance. In addition, the specific terms of each letter may further define its scope and the extent to which it may be relied upon. Publication 794 can also be found at http://www.irs.gov/Forms-&-Pubs.

SECTION 10. WHAT IS THE GENERAL PROCEDURE FOR REQUESTING DETERMINATION LETTERS?

Scope

.01 Section 6 of this revenue procedure and this section 10 contain procedures that are generally applicable to all determination letter requests. Additional procedures for specific types of requests are contained in sections 11 through 18 of this revenue procedure.

Complete information required

.02 An applicant requesting a determination letter must file the material required by this revenue procedure with Employee Plans Rulings and Agreements Determinations Office (EP Determinations) at the address provided in section 31 of this revenue procedure. The filing of the application, when accompanied by all information and documents required by this revenue procedure, will generally serve to provide EP Determinations with the information required to make the requested determination. However, in making the determination, EP Determinations may require the submission of additional information. If an application is determined by EP Determinations to be procedurally or technically deficient, EP Determinations may decline to process the application and an applicant may be required to resubmit the entire application and pay a new user fee in order to request a determination letter. See section 10.12 of this revenue procedure for additional information. Information submitted to EP Determinations in connection with an application for determination may be subject to public inspection to the extent provided by § 6104. The applicant must include EPCRS documentation for any closing agreement or compliance statement. This includes applicable attachments or model schedules and copies of corrective amendments.

Complete copy of plan and trust instrument and applicable amendments required

.03 In addition to a copy of the plan and trust documents and other material required by the application, the determination letter application must also include a copy of all signed and dated plan amendments (including interim amendments, if applicable) adopted or effective subsequent to the most recent determination letter issued with respect to the plan (other than amendments adopted on behalf of the employer that adopted a VS plan by the practitioner that sponsors the employer’s VS plan) even if these amendments are dated earlier than a previous determination letter issued with respect to the plan. The application must also include the completed Procedural Requirements Checklist that is set forth in Forms 5300, 5307, 5310 and 5316.

Submission of reference list encouraged

.04 In order to facilitate the review of an application for a determination letter, an applicant is encouraged to submit a completed reference list along with the application for the plan. A reference list is a checklist that applicants may use to indicate the location in their plan document of items set forth in all Required Amendment Lists, and all Cumulative Lists (as applicable). A sample reference list will be made available at www.irs.gov. Submission of a reference list is not mandatory.

Separate application for each single § 414(l) plan

.05 A separate application is required for each single plan within the meaning of § 414(l). This requirement does not pertain to applications regarding the qualified status of group trusts.

Prior letters

.06 If the plan (other than a plan submitting an application for initial determination) has received a favorable determination letter in the past, the application must include a copy of the latest determination letter. If a prior determination letter is not available, an explanation must be included with the application, and the employer must include a copy of the prior plan or adoption agreement, and the opinion or advisory letter, if applicable. The application also must include all amendments necessary to verify that the plan was amended timely.

Plans involving mergers

.07 If the submitted plan is the result of a merger of two or more plans, the applicant must include a copy of the prior determination letter for each of the plans that were combined to result in the merged plan. If a prior determination letter is not available for any such plan involved in a merger, an explanation must be included with the application, and the applicant must include a copy of the prior plan document or adoption agreement, and the opinion or advisory letter for the plan, if applicable. The application also must include all amendments necessary to verify that each plan was amended timely. Additionally, for each plan involved in a merger the applicant must provide all signed and dated plan amendments (including interim amendments, if applicable) adopted or effective subsequent to the most recent determination letter issued with respect to the plan.

User fees

.08 The appropriate user fee, if applicable, must be paid according to the procedures in section 30 of this revenue procedure. Form 8717, User Fee for Employee Plan Determination Letter Request, must accompany each determination letter request. In addition, if the user fee for a determination letter request is paid through www.pay.gov, submit a copy of the payment confirmation in addition to Form 8717. If the criteria for the user fee exemption are met in accordance with Notice 2017–1, 2017–2 I.R.B. ___, the certification on Form 8717 must be signed. Stamped signatures are not acceptable.

Interested party notification and comment

.09 Before filing an application, the applicant requesting a determination letter must satisfy the requirements of section 3001(a) of ERISA, and § 7476(b)(2) of the Code and the regulations thereunder, which provide that an applicant requesting a determination letter on the qualified status of certain retirement plans must notify interested parties of such application. The general rules with respect to notifying interested parties of requests for determination letters relating to the qualification of plans involving §§ 401 and 403(a) are set out below in sections 19 and 20 of this revenue procedure.

Contrary authority must be distinguished

.10 If the application for determination involves an issue with respect to which contrary authorities exist, failure to disclose or distinguish such contrary authorities will result in requests for additional information or the determination that the application is not complete and cannot be processed.

Employer/employee relationship

.11 EP Determinations does not make determinations regarding the existence of an employer-employee relationship as part of its determination on the qualification of a plan, but relies on the applicant’s representations or assumptions, stated or implicit, regarding the existence of such a relationship. Taxpayers are reminded, however, that they may file Form SS–8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the Service to determine the employment status of the individuals involved prior to filing an application for a determination letter on the qualified status of the plan. See section 12.04 of Rev. Proc. 2017–1.

Incomplete applications

.12 This section provides procedures for processing incomplete applications.

(1) Procedural Completeness. Upon receipt, an application will be reviewed to determine if it is procedurally complete. In order for an application to be procedurally complete, the application must include all of the information and documents required by this revenue procedure, including but not limited to the Form 5300 series application and the Procedural Requirements Checklist. See section 10.03 of this revenue procedure.

(2) Procedurally Deficient Determination Letter Applications – Individually Designed Plans. A procedurally deficient application must either be perfected in accordance with section 10.12(2)(a) of this revenue procedure or resubmitted in accordance with section 10.12(2)(b).

(a) If an application is procedurally deficient, EP Determinations will send the applicant a letter identifying the missing information. The applicant will have 30 days from the date of the letter to submit the missing information identified. If the missing information is not sent (postmarked) within 30 days of EP Determinations’ letter, the case will be closed. The application will not be returned, and any user fee with respect to the application will not be refunded.

(b) If a determination letter application for an individually designed plan is closed pursuant to section 10.12(2)(a) of this revenue procedure, the applicant may resubmit the determination application. In such case, the entire application must be resubmitted, including a new user fee (if applicable).

(3) Procedurally Deficient Determination Letter Applications – Pre-approved Plans. A procedurally deficient application submitted by an adopter of an M&P or VS plan must either be perfected in accordance with section 10.12(3)(a) of this revenue procedure or resubmitted in accordance with section 10.12(3)(b).

(a) If an application submitted by an adopter of an M&P or VS plan is procedurally deficient, EP Determinations will send the applicant a letter identifying the missing information. The applicant will have 30 days from the date of the letter to submit the missing information identified. If the missing information is not sent (postmarked) within 30 days of EP Determinations’ letter, the case will be closed. The application will not be returned, and any user fee with respect to the application will not be refunded.

(b) If a determination letter application for an adopter of an M&P or VS plan is closed pursuant to section 10.12(3)(a) of this revenue procedure, the applicant must resubmit the entire application, including a new user fee (if applicable), by the end of the plan sponsor’s remedial amendment cycle, unless a later date is specified in EP Determinations’ letter.

(c) If a determination letter application for an adopter of an M&P or VS plan is closed pursuant to section 10.12(3)(a) and the postmark date of a response submitted pursuant to section 10.12(3)(a) occurs after the end of the plan sponsor’s remedial amendment cycle, EP Determinations will send the applicant a final disposition letter indicating that the remedial amendment cycle will not be extended to allow the plan to be submitted for that cycle. The application will not be returned, and any user fee with respect to the application will not be refunded.

(4) Technically deficient applications. An application that is procedurally complete will proceed for a technical review. During the course of the review, EP Determinations may request the submission of additional information.

(a) If EP Determinations needs additional information to process the application, the applicant will be sent an information request with a response date.

(b) If the applicant’s response to such information request is not timely or complete, a letter will be sent to the applicant, giving a set period of time in which to respond.

(c) If a complete response is not received by the response deadline set forth in the letter referenced in section 10.12(4)(b) of this revenue procedure, the case will be closed. The application will not be returned and any user fee submitted with respect to the application will not be refunded.

Effect of failure to disclose material fact

.13 EP Determinations may determine, based on the application form, the extent of review of the plan document. A failure to disclose a material fact or misrepresentation of a material fact on the application adversely affects the reliance that would otherwise be obtained through issuance by EP Determinations of a favorable determination letter. Similarly, failure to accurately provide any of the information called for on any form required by this revenue procedure may result in no reliance on the determination letter.

Where to file requests

.14 Requests for determination letters are to be addressed to EP Determinations at the address provided in section 31 of this revenue procedure.

Determination letter applications will not be accepted via fax.

Submission of related plans

.15 If applications for two or more plans of the same employer are submitted together, each application should include a cover letter that identifies the name of the employer and the plan numbers and employer identification numbers of all the related plans submitted together. EP Determinations will determine whether these applications will be worked simultaneously.

Withdrawal of requests

.16 The applicant’s request for a determination letter may be withdrawn by a written request at any time prior to the issuance of a final adverse determination letter. If an appeal to a proposed adverse determination letter is filed, a request for a determination letter may be withdrawn at any time prior to the forwarding of the proposed adverse action to the Chief, Appeals Office. In the case of a withdrawal, the Service will not issue a determination of any type. A failure to issue a determination letter as a result of a withdrawal will not be considered a failure of the Secretary or his delegate to make a determination within the meaning of § 7476. However, the Service may consider the information submitted in connection with the withdrawn request in a subsequent examination. Generally, the user fee will not be refunded if the application is withdrawn, however the applicant may submit a subsequent request for a determination letter pursuant to section 11 of this revenue procedure. The application must be accompanied with the appropriate user fee in accordance with section 30 of this revenue procedure. Any such application will be treated as an initial request.

Right to status conference

.17 An applicant for a determination letter has the right to a have a conference with the EP Determinations Manager concerning the status of the application if the application has been pending at least 270 days. The status conference may be by phone or in person, as mutually agreed upon. During the conference, any issues relevant to the processing of the application may be addressed, but the conference will not involve substantive discussion of technical issues. No tape, stenographic, or other verbatim recording of a status conference may be made by any party. Subsequent status conferences may also be requested if at least 90 days have passed since the last preceding status conference.

How to request status conference

.18 A request for a status conference with the EP Determinations Manager is to be made in writing and is to be sent to the specialist assigned to review the application or, if the applicant does not know who is reviewing the application, to the applicable EP Determinations Manager at the address provided in section 31 of this revenue procedure.

Correct format required

.19 Documents submitted should not be stapled or bound. The use of quickly removable clips or rubber bands is acceptable. The application form should be prepared using Courier 10 point font. Documents which must be unstapled or unbound may suffer data loss or may not scan properly, which impacts efficiency and delays processing the application.

SECTION 11.WHAT IS THE PROCESS FOR REQUESTING DETERMINATION LETTERS FOR INDIVIDUALLY DESIGNED PLANS?

Requesting determination letters

.01 This section 11 contains the procedures for requesting determination letters for individually designed plans. Except as provided in section 11.02 of this revenue procedure, determination letters will be issued with respect to individually designed plans solely in the following circumstances:

  • (1) Initial qualification. See Rev. Proc. 2016–37, section 4.03(1), for a description of which plans may be submitted on a Form 5300, Application for Determination for Employee Benefit Plan, for initial qualification.

  • (2) Plan termination. See section 15 of this revenue procedure for additional procedures for requesting determination upon plan termination.

  • (3) Certain other circumstances as may be set forth in guidance published in the Internal Revenue Bulletin.

Cycle A plans

.02 Effective January 1, 2017, the staggered five-year remedial amendment cycle system for individually designed plans set forth in Rev. Proc. 2007–44 is eliminated. As of that date, EP Determinations will no longer accept determination letter applications based on the five-year remedial amendment cycle system. However, sponsors of Cycle A plans (that is, generally, plan sponsors with employer identification numbers ending in 1 or 6) will continue to be permitted to submit determination letter applications during the period beginning February 1, 2016, and ending January 31, 2017. For this purpose, controlled groups and affiliated service groups that maintain more than one plan are permitted to submit determination letter applications during the Cycle A submission period beginning February 1, 2016, and ending January 31, 2017, provided that a prior Cycle A election with respect to the controlled group or affiliated service group had been made by January 31, 2012 (the last day of the previous Cycle A submission period) and any new member of the controlled group or affiliated service group made a timely election to join the group in accordance with section 10.08(1) of Rev. Proc. 2007–44, if applicable. See section 10.06 of Rev. Proc. 2007–44.

Forms

.03 A determination letter request for the items listed in section 11.01 is made by filing the appropriate form according to the instructions to the form and any prevailing revenue procedures, notices, and announcements.

(1) Form 5300, Application for Determination for Employee Benefit Plan, including a copy of the Procedural Requirements Checklist included therein, must be filed to request a determination letter for an individually designed plan, including a collectively bargained plan, an M&P plan, and a VS plan that has made modifications. In accordance with Rev. Proc. 2016–37, section 4.03(1), an employer may submit a plan for initial plan qualification on a Form 5300 as long as a favorable determination letter has never been issued with respect to the plan. Employers submitting requests under Cycle A should file Form 5300 with a revision date of December 2013. Employers submitting requests on behalf of all other individually designed plans should file the most recent version of the Form 5300.

(2) Form 5309, Application for Determination of Employee Stock Ownership Plan, must be filed as an attachment with a Form 5300 in order to request a determination whether the plan is an ESOP under § 409 or § 4975(e)(7).

(3) Form 5310, Application for Determination for Terminating Plan, including a copy of the Procedural Requirements Checklist included therein must be filed to request a determination for a terminating plan. Also, see section 15 of this revenue procedure for additional procedures pertaining to applications for determination upon plan termination.

(4) Form 8717, User Fee for Employee Plan Determination Letter Request (and the payment confirmation from www.pay.gov as described in section 10.08, if applicable). When completing the form, taxpayers should refer to the applicable Employee Plans user fees listed in Appendix A of this revenue procedure.

(5) Form 2848, Power of Attorney and Declaration of Representative.

(6) Form 8821, Tax Information Authorization.

Application must include copy of plan and amendments

.04 The application must include a copy of all signed and dated plan amendments (including interim amendments, if applicable) adopted or effective subsequent to the most recent determination letter issued with respect to the plan even if these amendments are dated earlier than a previous determination letter issued with respect to the plan. The application must also include a copy of the restated plan and trust instrument, if applicable. The application must also include the appropriate completed Procedural Requirements Checklist as set forth in Forms 5300, 5307, 5310 and 5316. If a plan did not receive a prior favorable determination letter, all plan documents and amendments must be submitted.

EP Determinations has the discretion to request copies of any other amendments during its review of a plan.

Restatements required

.05 If an individually designed plan has previously obtained a determination letter, the plan must be restated when it is submitted for a determination letter application, unless it is a terminating plan. Terminating plans are encouraged, but not required to submit a restatement when submitting a determination letter application. Plans submitted during 2017 must be restated for compliance with the 2015 Cumulative List in Notice 2015–84, as well as any applicable prior Cumulative List.

Section 414(x) combined plans

.06 EP Determinations will consider § 414(x) in issuing determination letters for individually designed plans that consist of a defined benefit plan and a qualified cash or deferred arrangement (subject to the eligibility requirements in section 11.01 of this revenue procedure). A § 414(x) plan sponsor must submit two Forms 5300 and two applicable user fees.

SECTION 12. WHEN MAY AN ADOPTER OF A MASTER AND PROTOTYPE OR VOLUME SUBMITTER PLAN SUBMIT A DETERMINATION LETTER APPLICATION?

Scope

.01 Rev. Proc. 2015–36 describes the procedures for requesting opinion letters and advisory letters on M&P and VS plans. If an adopter of an M&P or VS plan can rely on a favorable opinion or advisory letter pursuant to section 19 of Rev. Proc. 2015–36, as modified by Rev. Proc. 2016–37, the opinion or advisory letter is equivalent to a favorable determination letter. For example, the favorable opinion or advisory letter is treated as a favorable determination letter for purposes of section 23 of this revenue procedure, regarding the effect of a determination letter. Rev. Proc. 2015–36 also describes the extent to which adopting employers of such plans may rely on favorable opinion or advisory letters without having to request individual determination letters.

(1) An adopting employer of an M&P plan (whether standardized or nonstandardized) may not apply for a determination letter for the plan on Form 5307.

(2) An adopting employer of a VS plan may not apply for a determination letter for the plan on Form 5307 unless the employer has modified the terms of the approved plan, the approved plan is not a multiple employer plan and the modifications are not extensive. Section 13 of this revenue procedure describes the procedures for requesting determination letters on Form 5307 for a VS plan in situations in which the employer has not made extensive modifications to the language of the approved specimen plan and the approved plan is not a multiple employer plan.

(3) An adopting employer that makes modifications to a VS multiple employer plan in situations in which the modifications are not extensive, may apply for a determination letter on Form 5300 in the two-year window described in section 13.03 of this revenue procedure.

(4) An adopting employer that makes:

(a) Extensive modifications to an approved VS plan, or

(b) Any modification to an approved M&P plan,

may submit a determination letter application for the plan for initial plan qualification only during the two-year window described in section 13.03 of this revenue procedure, using Form 5300, as long as a favorable determination letter has never been issued with respect to the plan. See section 20 of Revenue Procedure 2016–37 regarding the effect of employer modifications on the six-year remedial amendment cycle.

(5) Notwithstanding the preceding paragraph, an adopter of an M&P or VS plan that has made no modifications other than the modifications listed in section 12.01(5)(a) and (b) of this revenue procedure may submit an application for a determination letter on Form 5300 only during the two-year window described in section 13.03 of this revenue procedure regardless of whether a prior favorable determination letter has been issued with respect to the plan.

(a) The employer has modified the terms of the M&P plan by adding overriding language necessary to coordinate the application of the limitations of § 415 or the requirements of § 416 because the employer maintains multiple plans.

(b) The plan is a pension plan and the normal retirement age under the plan is lower than 62. In this case, a determination letter is required for reliance that the plan’s normal retirement age satisfies the requirements of § 1.401(a)–1(b)(2) of the regulations.

An employer that submits an application for a determination letter for an M&P or VS plan for one or more of the reasons described in section 12.01(5)(a) and (b) of this revenue procedure must identify the applicable reason or reasons in a cover letter to the application and include a copy of the VS or M&P opinion or advisory letter. The plan will be reviewed on the basis of the Cumulative List that was used to review the underlying pre-approved plan.

(6) An adopting employer of an approved plan that is eligible to submit a determination letter application on Form 5300 in accordance with section 12.01(3), (4) or (5) of this revenue procedure may also request a determination regarding leased employee status (see section 17.05 of this revenue procedure).

(7) An adopting employer of an approved plan may request a determination regarding partial termination (see section 9.09 of this revenue procedure) at any time, using Form 5300, regardless of whether the employer is otherwise eligible to submit a determination letter application in accordance with section 12.01(3), (4) or (5) of this revenue procedure.

Reliance equivalent to determination letter

.02 If an employer can rely on a favorable opinion or advisory letter pursuant to section 19 of Rev. Proc. 2015–36, as modified by Rev. Proc. 2016–37, the opinion or advisory letter is equivalent to a favorable determination letter. For example, the favorable opinion or advisory letter is treated as a favorable determination letter for purposes of section 23 of this revenue procedure, regarding the effect of a determination letter.

SECTION 13. WHAT ARE THE DETERMINATION LETTER FILING PROCEDURES FOR VOLUME SUBMITTER PLANS?

Scope

.01 This section contains procedures for requesting determination letters for adopting employers of VS plans in situations in which the employer has made modifications to the approved specimen plan that are not extensive.

Determination letter for adoption of volume submitter plan

.02 An application filed on Form 5307, Application for Determination for Adopters of Modified Volume Submitter Plans, must include any interim plan amendments unless the VS plan authorizes the practitioner to amend on behalf of the adopting employer. EP Determinations may, however, request evidence of adoption of interim amendments during the course of its review of a particular plan. With respect to determination letters for adopting employers of VS plans:

(1) An application for a determination letter for an employer’s adoption of an approved VS plan in situations in which the employer has made limited modifications to the language of the approved specimen plan must be sent to the address provided in section 31 of this revenue procedure. For VS plans involved in plan mergers, see section 10.07 of this revenue procedure.

(2) The application for a determination letter must include the following:

(a) Form 8717, User Fee for Employee Plan Determination Letter Request (and the payment confirmation from www.pay.gov as described in section 10.08 of this revenue procedure, if applicable);

(b) Form 5307, Application for Determination for Adopters of Modified Volume Submitter (VS) Plans, including a copy of the Procedural Requirements Checklist included therein;

(c) Form 2848, Power of Attorney and Declaration of Representative, or other written authorization allowing the VS practitioner to act as a representative of the employer with respect to the request for a determination letter;

(d) Form 8905, Certification of Intent to Adopt a Pre-approved Plan, executed before the end of the employer’s 5-year remedial amendment cycle as determined under Part III of Rev. Proc. 2007–44, if applicable;

(e) A copy of the most recent advisory letter for the practitioner’s VS specimen plan;

(f) A complete copy of the plan and trust instrument and, if applicable, a copy of the completed adoption agreement;

(g) A written representation (signature optional) made by the VS practitioner that explains how the plan and trust instrument differ from the approved specimen plan, describing the location, nature and effect of each deviation from the language of the approved specimen plan;

(h) A copy of the plan’s latest favorable determination letter, if applicable;

(i) Applications filed on Form 5307 for VS plans in situations in which the employer has made modifications that are not extensive to the language of the approved specimen plan that do not authorize the practitioner to amend on behalf of the adopting employer must include any interim amendments that were adopted for qualification changes on the applicable Cumulative List used in reviewing and approving the underlying VS plan; and

(j) Any other information or material that may be required by EP Determinations.

(3) Deviations from the language of the approved specimen plan will be evaluated based on the extent and complexities of the changes. If the changes are determined to be extensive, EP Determinations will require the applicant to file Form 5300 and pay the higher user fee. If the changes are too extensive to be compatible with the VS program, the adopting employer’s plan will not be eligible for the VS program. See section 20.03(5) of Rev. Proc. 2016–37.

(4) An employer will not be treated as having adopted a VS plan if the employer has signed or otherwise adopted the plan prior to the date on the VS specimen plan’s advisory letter. In this case, the determination letter application for the employer’s plan may not be filed on Form 5307 and will not be eligible for a reduced user fee. A determination letter application for a VS plan must be based on the approved VS specimen plan with any applicable modifications. See section 19.03 of Rev. Proc. 2015–36.

Timing of determination letter applications for adopting employers of pre-approved plans

.03 In accordance with section 14 of Rev. Proc. 2016–37, adopting employers of M&P and VS plans have a six-year remedial amendment cycle. The deadline for an adopting employer to adopt the approved M&P or VS plan closes with the two-year window at the end of the plan’s remedial amendment cycle. An adopting employer of a modified VS plan that desires to obtain a determination letter for reliance must submit the application within the two-year window. Applications submitted outside of the two-year window will be returned.

SECTION 14. WHAT ARE THE DETERMINATION LETTER FILING PROCEDURES FOR INDIVIDUALLY DESIGNED MULTIPLE EMPLOYER PLANS?

Scope

.01 This section contains procedures for applications filed with respect to plans described in § 413(c). A plan is not described in § 413(c) if all the employers maintaining the plan are members of the same controlled group or affiliated service group under § 414(b), (c), or (m).

Controlling member must accompany any multiple employer plan submission

.02 A determination letter applicant for a multiple employer plan that is otherwise eligible to apply for a determination letter must request a letter for the plan in the name of the controlling member (the employer who sponsors the multiple employer plan). An applicant requesting a letter for the plan submits one Form 5300 application for the plan in the name of the controlling member, either including or omitting the design-based safe harbor questions. An employer maintaining a multiple employer plan may not request its own determination letter but may rely on a favorable determination letter issued to the plan sponsor, except with respect to the requirements of §§ 401(a)(4), 401(a)(26), 401(l), 410(b), and 414(s), and, if the employer maintains or has ever maintained another plan, §§ 415 and 416.

Where to file requests

.03 The complete application, including all Forms 5300 for employers maintaining the plan who request separate letters must be filed as one submission with EP Determinations. The application is to be sent to the address provided in section 31. See Appendix A, section 6.05(d) and (e) for the applicable user fee.

Addition of employers

.04 The controlling member may continue to rely on its favorable determination letter after another employer commences participation in the controlling member’s multiple employer plan. An employer that commences participation in the multiple employer plan after a controlling member receives a favorable determination letter may rely on the determination letter of the controlling member.

SECTION 15. WHAT ARE THE PROCEDURES FOR FILING A REQUEST FOR A DETERMINATION UPON TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS, NOTICE OF MERGER, CONSOLIDATION, ETC.?

Scope

.01 This section contains procedures for requesting determination letters involving plan termination or discontinuance of contributions. This section also contains procedures regarding required notices of merger, consolidation, or transfer of assets or liabilities.

Forms

.02 Required Forms

(1) Form 5310, Application for Determination for Terminating Plan, including a copy of the Procedural Requirements Checklist included therein, is filed by plans other than multiemployer plans covered by the insurance program of the PBGC.

(2) Form 5300, Application for Determination of Employee Benefit Plan, including a copy of the Procedural Requirements Checklist included therein, is filed in the case of a multiemployer plan covered by PBGC insurance.

(3) Form 6088, Distributable Benefits from Employee Pension Benefit Plans, is filed in addition to Form 5310 or 5300 by a sponsor or plan administrator of a defined benefit plan or an underfunded defined contribution plan that files an application for a determination letter regarding plan termination. For collectively bargained plans, a Form 6088 is required only if the plan benefits employees who are not collectively bargained employees within the meaning of § 1.410(b)–6(d). A separate Form 6088 is required for each employer employing such employees. See the instructions for Form 6088 for information required to be submitted along with the form, including a statement explaining how plan present values were determined.

(4) Form 5310–A, Notice of Plan Merger or Consolidation, Spinoff, or Transfer of Plan Assets or Liabilities – Notice of Qualified Separate Lines of Business, if required, generally must be filed not later than 30 days before a merger, consolidation, or transfer of assets and liabilities. The filing of Form 5310–A will not result in the issuance of a determination letter.

(5) Form 8717, User Fee for Employee Plan Determination Letter Request (and the payment confirmation from www.pay.gov as described in section 10.08 of this revenue procedure, if applicable).

(6) Form 2848, Power of Attorney and Declaration of Representative. If applicable, submit Form 8821, Tax Information Authorization.

(7) Schedule SB (Form 5500), Single-Employer Defined Benefit Plan Actuarial Information, for defined benefit plans.

Supplemental information

.03 The application for a determination letter involving plan termination must also include any supplemental information or schedules required by the forms or form instructions. For example, the application must include copies of all records of actions taken to terminate the plan (such as a resolution of the board of directors) and a schedule providing certain information regarding employees who separated from vesting service with less than 100% vesting.

In cases involving the termination of plans that contain a § 401(h) feature, a cover letter must accompany the submission, and it must reference the § 401(h) feature to make clear that this feature is part of the termination application. The cover letter must specifically state the location of plan provisions that relate to the § 401(h) feature.

In the case of the termination of a multiemployer plan, there must be a cover letter accompanying the submission, which specifies that it is an application for a termination of a multiemployer plan.

Compliance with Title IV of ERISA

.04 In the case of plans subject to Title IV of ERISA, a favorable determination letter issued in connection with a plan’s termination is conditioned on approval that the termination is a valid termination under Title IV of ERISA. Notification by the PBGC that a plan may not be terminated will be treated as a material change of fact.

Termination prior to time for amending for change in law

.05 A plan that terminates after the effective date of a change in law, but prior to the date that amendments related to the change in law are otherwise required, must be amended to comply with the applicable provisions of law from the date on which such provisions become effective with respect to the plan. Because such a terminated plan would no longer be in existence by the required amendment date and therefore could not be amended on that date, such plan must be amended in connection with the plan termination to comply with those provisions of law that become effective with respect to the plan on or before the date of plan termination. Such amendments include any amendments made after the date of plan termination that were required in order to obtain a favorable determination letter. In addition, annuity contracts distributed from such terminated plans must meet all the applicable provisions of any change in law. See section 7 of Rev. Proc. 2016–37.

An application will be deemed to be filed in connection with plan termination if it is filed no later than the later of (i) one year after the effective date of the termination, or (ii) one year after the date on which the action terminating the plan is adopted. However, in no event may the application be filed later than twelve months from the date of distribution of substantially all plan assets in connection with the termination of the plan.

Restatement not required for terminating plan

.06 An applicant for a terminating plan is encouraged to submit a restatement when applying for a determination; however, a restatement for a terminating plan is generally not required.

SECTION 16. WHAT ARE THE DETERMINATION LETTER FILING PROCEDURES FOR GROUP TRUSTS?

Scope

.01 This section provides special procedures for requesting a determination letter on the qualified status of a group trust under Rev. Rul. 81–100, as clarified and modified by Rev. Rul. 2004–67, Rev. Rul. 2011–1, Notice 2012–6, and Rev. Rul. 2014–24.

Required information

.02 A request for a determination letter on the status of a group trust is made by submitting a Form 5316, Application for Group or Pooled Trust Ruling, demonstrating how the group trust satisfies the criteria listed in Rev. Rul. 2011–1, together with the trust instrument and related documents. Rev. Rul. 2004–67 extends the ability to participate in group trusts to eligible governmental plans under § 457(b) and clarifies the ability of certain individual retirement accounts under § 408 to participate. Rev. Rul. 2011–1 extends the ability to participate in group trusts to custodial accounts under § 403(b)(7), retirement income accounts under § 403(b)(9), and governmental retiree benefit plans under § 401(a)(24). There are two model amendments in Rev. Rul. 2011–1. Amendment 1 is for a group trust that received a determination letter from EP Determinations prior to January 10, 2011, that the group trust satisfies Rev. Rul. 81–100, but that does not satisfy the separate account requirement of paragraph (6) of the holding of Rev. Rul. 2011–1. Amendment 2 is for a group trust that received a determination letter from EP Determinations prior to January 10, 2011, that the group trust satisfies Rev. Rul. 81–100, as modified by Rev. Rul. 2004–67, and that intends to permit custodial accounts under § 403(b)(7), retirement income accounts under § 403(b)(9), or § 401(a)(24) governmental retirement plans to participate in the group trust. Rev. Rul. 2014–24 extends the ability to participate in a group trust to certain retirement plans qualified only under the Código de Rentas Internas para un Nuevo Puerto Rico de la Ley Núm. 1 de 31 de enero de 2011 (“Puerto Rico Code”), and clarifies that assets held by certain separate accounts maintained by insurance companies may be invested in group trusts that satisfy Rev. Rule 81–100.

Forms

.03 Required Forms

(1) Form 8717, User Fee for Employee Plan Determination Letter Request (and the payment confirmation from www.pay.gov as described in section 10.08, if applicable).

(2) Form 2848, Power of Attorney and Declaration of Representative. If applicable, submit Form 8821, Tax Information Authorization.

(3) Form 5316, Application for Group or Pooled Trust Ruling, including a copy of the Procedural Requirements Checklist.

SECTION 17. WHAT ARE THE PROCEDURES FOR FILING A REQUEST FOR A DETERMINATION OF LEASED EMPLOYEE STATUS?

Scope

.01 This section provides procedures for determination letter requests on whether an employee is a leased employee and is deemed to be an employee of the recipient employer for qualification purposes under § 414(n). For an individually designed plan, an applicant may file a determination letter request on whether an employee is a leased employee and is deemed to be an employee of the recipient employer for qualification purposes under § 414(n) only if the plan is otherwise eligible to be submitted for a determination letter pursuant to section 11.01 of this revenue procedure.

Employer must request the determination under § 414(n)

.02 Generally, a determination letter will indicate whether an employee is a leased employee and is deemed to be an employee of the recipient employer under § 414(n) only if the employer requests such determination and submits with the determination letter application the information specified in section 17.06 of this revenue procedure.

Forms

.03 Form 5300 is submitted for a request on leased employee status. Form 5307 cannot be used for this purpose. In addition to the Form 5300, there must be a cover letter accompanying the submission, specifying that it is an application for determination of leased employee status.

Employer is responsible for determining continuing status under § 414(n)

.04 A determination letter on leased employee status under § 414(n) is based solely on the facts submitted at the time of the application. An employer that is the recipient of services of leased employees within the meaning of § 414(n) is responsible for determining, at any other time, whether it meets the requirements of § 401(a), and if a leased employee is deemed to be an employee of the recipient for qualified plan purposes.

Pre-approved plans

.05 An employer that has adopted a pre-approved plan and wants a determination with respect to § 414(n) must submit with Form 5300 the information required by section 17.06 of this revenue procedure and any other materials necessary for EP Determinations to make a determination. If an employer that has adopted a pre-approved plan requests a determination regarding leased employees, the plan will be reviewed on the basis of the Cumulative List that was used to review the underlying pre-approved plan. See section 12.01(6) of this revenue procedure.

Required information for § 414(n) determination

.06 A determination letter will be issued with respect to § 414(n) only if the employer requests and is otherwise eligible to receive such a determination, and the application includes:

  • (1) A description of the nature of the business of the recipient organization;

  • (2) A copy of the relevant leasing agreement(s);

  • (3) A description of the function of all leased employees within the trade or business of the recipient organization (including data as to whether all leased employees are performing services on a substantially full-time basis);

  • (4) A description of facts and circumstances relevant to a determination of whether such leased employees’ services are performed under primary direction or control by the recipient organization (including whether the leased employees are required to comply with instructions of the recipient about when, where, and how to perform the services, whether the services must be performed by particular persons, whether the leased employees are subject to the supervision of the recipient, and whether the leased employees must perform services in the order or sequence set by the recipient); and

  • (5) If the recipient organization is relying on any qualified plan(s) maintained by the employee leasing organization for purposes of qualification of the recipient organization’s plan, a description of such plan(s) (including a description of the contributions or benefits provided for all leased employees that are attributable to services performed for the recipient organization, plan eligibility, and vesting).

SECTION 18. WHAT ARE THE PROCEDURES FOR REQUESTING SECTION 401(h) AND SECTION 420 DETERMINATION LETTERS?

Scope

.01 This section provides procedures for requesting determination letters (i) with respect to whether the requirements of § 401(h) are satisfied in a plan with retiree medical benefit features, and (ii) on plan language that permits, pursuant to § 420, the transfer of assets in a defined benefit plan to a health benefit account described in § 401(h) or to an applicable life insurance account in the plan.

Required information for § 401(h) determination

.02 EP Determinations will issue a determination letter that considers whether the requirements of § 401(h) are satisfied in a plan with retiree medical benefit features only if the plan sponsor requests such a determination, the plan is otherwise eligible to apply for a determination letter, and the sponsor’s application includes, (in addition to the application forms and any other material required by this revenue procedure) a cover letter that requests consideration of § 401(h). The cover letter must specifically state that consideration is being requested with regard to § 401(h) in addition to other matters under § 401(a) and must specifically state the location of plan provisions that satisfy the requirements of § 401(h) (Part I of the checklist in Appendix C of this revenue procedure must be used to identify the location of relevant plan provisions).

Required information for § 420 determination

.03 EP Determinations will consider the qualified status of certain plan language designed to comply with § 420 only if the plan sponsor requests such consideration with Form 5300. The cover letter must specifically state (i) whether consideration is being requested only with regard to § 420, or (ii) whether consideration is being requested with regard to § 420 in addition to other matters under § 401(a) (if consideration of other matters under § 401(a) is being requested, the application forms and other material required by this revenue procedure must also be submitted). The cover letter must specifically state the location of plan provisions that satisfy each of the following requirements (Parts I and II of the checklist in Appendix C of this revenue procedure must be used to identify the location of relevant plan provisions).

(1) The plan must include a health benefits account as described in § 401(h).

(2) The plan must provide that transfers shall be limited to transfers of “excess assets” as defined in § 420(e)(2).

(3) The plan must provide that only one transfer may be made in a taxable year. However, if there is a transfer from a defined benefit plan to both a health benefits account and to an applicable life insurance account in the same taxable year, both transfers are treated as one transfer.

(4) The plan must provide that the amount transferred will not exceed the amount that is reasonably estimated to be the amount the employer will pay out (whether directly or through reimbursement) of the health benefit account and applicable life insurance account during the taxable year of the transfer for “qualified current retiree liabilities,” as defined in § 420(e)(1).

(5) The plan must provide that no transfer will be made after December 31, 2025.

(6) The plan must provide that any assets transferred, and any income allocable to such assets, will be used only to pay qualified current retiree health liabilities for the taxable year of transfer.

(7) The plan must provide that any amounts transferred to a health benefits account (and income attributable to such amounts) or an applicable life insurance account that are not used to pay qualified current retiree health liabilities will be transferred back to the defined benefit portion of the plan.

(8) The plan must provide that the amounts paid out of a health benefits account will be treated as paid first out of transferred assets and income attributable to those assets.

(9) The plan must provide that the accrued pension benefits for participants and beneficiaries must become nonforfeitable as if the plan had terminated immediately prior to the transfer (or in the case of a participant who separated during the 1-year period en