- 31.1.1 Legal Work
- 18.104.22.168 General Principles for Handling Legal Work
- 22.214.171.124.1 Determination of Service Position
- 126.96.36.199.2 Policies of the Service
- 188.8.131.52.3 Principles of Litigation
- 184.108.40.206.3.1 Settlement Policy
- 220.127.116.11 Roles within the Office of Chief Counsel
- 18.104.22.168.1 Published Guidance
- 22.214.171.124.2 Litigation
- 126.96.36.199.3 Pre-Review of Litigation Documents by the Associate Chief Counsel
- 188.8.131.52.4 Sanctions and Attorneys Fees
- 184.108.40.206.5 Appellate Matters
- 220.127.116.11.6 Tax Court Liaison
- 18.104.22.168.7 Legal Advice
- Exhibit 31.1.1-1 Issues Requiring Associate Office Review
Part 31.Guiding Principles
Chapter 1. Guiding Principles
Section 1. Legal Work
July 11, 2016
(1) This transmits new CCDM 31.1.1, Guiding Principles, Legal Work.
Exhibit 31.1.1-1, Issues Requiring Associate Office Review, is being revised to update the list of issues requiring National Office review.
(1) Exhibit 31.1.1-1, Issues Requiring Associate Office Review, was revised to include an updated Associate office review list.
(2) Exhibit 31.1.1-1, was revised to emphasize to both Division Counsel offices and Associate offices that when an issue is identified as significant and requires coordination, it is the responsibility of the Division Counsel office to timely seek and the Associate office to timely provide advice. As such, coordination on these issues should be commenced at the earliest opportunity and well before litigation, if possible.
Associate Chief Counsel
(Procedure & Administration)
The role of the Office of Chief Counsel is to ensure the correct and uniform application of the tax laws. It is, therefore, the responsibility of each component of the Office, individually and collectively, to ensure that all published guidance, documents filed in litigation, and legal advice issued to the Service or to taxpayers accurately reflect the position of the Office.
It is the responsibility of each individual Chief Counsel attorney to ensure the uniform application of the tax laws and the fair disposition of cases. Both objectives require the attorney to thoroughly develop the facts and issues in the case before the trial or settlement of a case or the issuance of advice to any component of the Service. Where there is any doubt regarding the position of the Service, the attorney must request advice from the office or offices responsible for developing and maintaining the Service’s position on the proper interpretation of the section or sections at issue. The overall Service objective of uniform application of the tax laws must be kept in mind to ensure that the correct legal theory is maintained at all times.
In interpreting and applying the provisions of the Internal Revenue Code, our responsibilities must be discharged in a balanced and impartial manner, with neither a "Government" nor a "taxpayer" point of view. It is our responsibility to find the true meaning of the statutory provision and not to adopt a strained construction with the goal of maximizing revenue. We properly protect the revenue only when we ascertain and apply the true meaning of the statute.
The proper handling of problems of interpretation and application of the tax laws requires cooperation and consultation between the various offices in Chief Counsel, the Operating Divisions and other components of the Service, and the Department of the Treasury. Uniform interpretation requires efforts to arrive at common understanding of the problems involved and efforts to reach common ground for handling these problems. Although each component of the Office has a separate and distinct role to play in achieving our mission, the positions taken must be consistent with the above principles and should reflect a consensus arrived at through close coordination across all Division Counsel and Associate Chief Counsel offices. Anything signed or approved by or in the name of the Chief Counsel must represent the position of the entire office and not merely the position of a particular division or office.
Service position, as a general rule, is initially determined in published guidance, which includes regulations (including proposed regulations), revenue rulings, revenue procedures, and notices and announcements published in the Internal Revenue Bulletin. It is important that all documents issued by the Office reflect service positions where it is unclear whether a published position covers a particular situation, the Associate Office with responsibility for the guidance at issue should be consulted.
The Office of Chief Counsel will also occasionally transmit procedural guidance or litigating positions through Chief Counsel notices, litigation guideline memoranda (LGMs), or other documents. While such documents are not approved by the Commissioner, and, thus, cannot be relied upon by taxpayers as a statement of Service position, they should not be disregarded by Chief Counsel attorneys. Where it is unclear whether positions set forth in the documents cover a particular situation, the Associate office that issued the document should be consulted.
Similarly, Technical Advice Memoranda (TAMs) and Private Letter Rulings (PLRs) can only be relied upon by the particular taxpayer whose case they address. Although not precedential, such documents should be reviewed for discussions of legal analysis as applied to particular factual scenarios. Consultation with the Associate office is appropriate prior to taking a position that appears contrary to the position taken in the TAM or PLR.
In some instances the terms "policy" and "position" are used in documents interchangeably. Normally, the use of the word "policy" within the Service is confined to those matters in which the Commissioner exercises discretion or has an established policy statement on the matter in question. Thus, the term "policy" should not be used unless the reference is to a matter that is the subject of a policy statement or other document approved by the Commissioner or his delegate. In general, briefs, actions on decision, and legal memoranda should refer to the "position" of the Office. In particular cases, the Office of Chief Counsel may have an established "position" on the law which is to be followed by all Associate Chief Counsel and Division Counsel offices, but it is not generally characterized as "policy." The Chief Counsel may, however, promulgate policies to be followed by the Office in handling matters within its jurisdiction, such as the litigation and settlement of cases.
The proper method for conveying the positions of the Office and the policies of the Service is through published guidance. In contrast, litigation should be used as an enforcement tool to advance and defend established positions, not as a vehicle for making policy. The importance of litigation to the administration of the tax law is not measured by the amount of taxes collected through litigation, but rather by its success in defending the Service’s position on the proper interpretation of the tax laws. The position taken in a case must be one that is reasonable based on the facts of the case and one which makes the maximum contribution to a sound tax system. Thus, it is the broad effect of the case which must govern our litigation attitude in specific cases. This litigation policy is applicable to all cases, including those we refer to the Department of Justice.
The position taken in any case must represent the official position of the Service, not just the position of a particular division or office. Attorneys as well as supervisors must always take cognizance of the fact that a position taken solely to win a case against one taxpayer may in the future be used by other taxpayers against the Service. These principles apply with equal force even when the sole or primary purpose of the argument is to improve the Government’s position in settlement negotiations. Thus, the development of the litigation position of the Office of Chief Counsel must take into consideration the broad effect of such position as it affects all taxpayers in the administration of the tax laws.
In applying the litigation policy of the Office, it may be necessary in particular cases to settle or concede an issue which ordinarily would be litigated. This type of situation usually arises in cases where, under the existing facts and circumstances, it would be unwise to use that case as a vehicle to establish the broad objectives of the Service. Also, where an appellate court has decided an issue in a case contrary to the Service position, it may be necessary to settle or concede the issue in cases appealable to that court until an appropriate case can be litigated in another circuit. These types of cases must be coordinated with the Associate Office or Offices responsible for interpretation of the section or sections at issue. The Associate Office should consider whether guidance is appropriate to help resolve the issue.
Consistent with Executive Order 12988 on Civil Justice Reform, it is the policy of the Office of Chief Counsel, unless there are compelling reasons otherwise, to settle or eliminate as many issues as is feasible or justifiable prior to submission of a case for decision by the court. Every effort should be made to settle the issue or issues on which there are no real basic differences between the parties.
As part of the Office’s responsibility for defending the positions of the Service in deficiency proceedings, it is the policy of the Office of Chief Counsel that cases and issued being tried in the Tax Court will be settled on the merits. Even where the amount in controversy is small, the Office will defend the Commissioner’s determination and conduct cases in a manner that supports the Service’s tax administration priorities.
Settlement on the merits usually involves a stipulation as to each issue before the court. Lump sum or blanket settlements which include tax, penalty, and interest should be avoided, and generally should not be entertained or accepted. The Service has a definite policy against settlements without statutory interest on the deficiency.
No case is to be settled on a so called "nuisance basis" either for or against the Government. What constitutes a nuisance settlement is dependent upon the circumstances in each case. When each issue is settled on its merits, the fact that the resulting deficiency is a small percentage of the deficiency amount in the statutory notice does not result in a "nuisance basis" settlement.
In keeping with the policy of settling cases based on the merits of the position determined by the Service, collection aspects of a case are not normally considered as part of a Tax Court settlement. Where a collection based settlement can be considered in a manner consistent with the settlement principles outlined above, an offer in compromise based on collectibility can be considered by the Service prior to the conclusion of the Tax Court case. Such offers should only be considered where the taxpayer would be willing to stipulate to the full amount of the deficiency prior to final acceptance of the compromise. For procedures to follow in such cases, see CCDM 35.5, Settlement Procedures.
The role of the Associate Chief Counsel is to develop and maintain the technical positions of the Internal Revenue Service with respect to proper interpretation of the Code. Associate offices fulfill this role principally through the issuance of published guidance, the legal review of proposed policies and procedures, the issuance of program advice and other advisory products and the review of positions to be taken in the courts in the course of litigation.
The role of the Division Counsel is to provide legal service to specific components of the Service through litigation on their behalf, providing legal advice in specific cases, and providing strategic advice to the executive leadership of those components. Division Counsel develops and executes litigation strategy and provides legal advice based on the technical positions developed and announced by the Associate Chief Counsel.
To the extent that a regulation or ruling does not provide clear guidance on the position of the Service, or that position is not clear from existing case law or the unambiguous language of the Code, the Division Counsel or Associate Chief Counsel must seek advice from the Associate office with responsibility for the subject matter at issue. Coordination is particularly important where there has been a statutory change, new regulations have been issued, published guidance is pending, or there has been a significant new court opinion.
Published guidance generally refers to that body of guidance that sets forth the definitive position of the Service, as approved by the Commissioner and the Department of the Treasury. Published guidance must be followed by all components of the Service and can be relied upon by taxpayers in litigation. For purposes of this section, published guidance includes treasury decisions, notices of proposed rulemaking, revenue rulings, revenue procedures, and Internal Revenue Bulletin notices and announcements.
The Associate Chief Counsel is responsible for the development and issuance of all published guidance. In the course of drafting published guidance, the Associate Chief Counsel is charged with building a consensus among all interested parties within the Department of the Treasury, including other offices within Counsel, the operating divisions and other components of the Service, and the Office of Tax Policy, and with elevating significant, unresolved issues to the appropriate official for determination. To the extent necessary, the Associate Chief Counsel is also responsible for coordinating with other Federal agencies, such as the Department of Justice.
The Division Counsel has two key roles to play in the development and issuance of published guidance.
Although the Associate Chief Counsel will be primarily responsible for identifying the need for published guidance based on new legislation and the Service’s program level needs, the Division Counsel is uniquely qualified to identify areas of the law that are unclear to both taxpayers and the Service in the day-to-day resolution of cases. The Division Counsel should bring such issues to the attention of the appropriate Associate and begin a dialogue that will result in issuance of appropriate published guidance.
Published guidance should reflect not only the correct interpretation of the law, but also the practical realities of applying the law in the course of administering the tax system. Division Counsel should contribute to the published guidance process by advising the Associate Chief Counsel on the Service’s ability to apply the proposed guidance as a practical matter.
Division Counsel has primary responsibility for the litigation of cases in the Tax Court and the referral of general litigation and refund cases to the Department of Justice. In this role, Division Counsel is responsible for development and execution of litigation strategy, including selection of cases to litigate, whether to try or settle particular cases, whether to agree to mediation/arbitration, whether to employ expert witnesses, etc.
In the course of litigation, Division Counsel must determine that the position to be advanced in Tax Court or other litigation accurately reflects the Service’s position on the law. To the extent that position is unclear, Division Counsel must coordinate with the appropriate Associate Chief Counsel. This coordination may be accomplished through informal or formal advice procedures, as appropriate for the issue or case.
In general, documents to be filed in Tax Court, as well as letters to the Department of Justice regarding the prosecution or defense of cases in the bankruptcy or district courts, will not be subject to pre-review by the Associate Chief Counsel. Mandatory pre-review of such documents will, however, be required where:
The continued development of the Service’s position on either the law or the appropriate use of a particular type of motion or other procedural mechanism warrants close coordination between field counsel and national office subject matter experts;
The case raises novel or significant issues. Novel or significant issues include issues relating to recently enacted legislation, issues of first impression, and issues relating to the validity of a regulation or revenue ruling; or
The document to be filed or the proposed letter to the Department of Justice advocates a position contrary to the position taken in published guidance or attempts to distinguish a case from a position taken in published guidance based on the facts of the case.
The Associate Offices, in conjunction with Division Counsel, will establish a list of issues in which pre-review will be required. This will ensure that uniform positions and procedures are adopted and that the published guidance being prepared by the Associate Office is informed by the practical information to be derived from this review. The Associate Chief Counsel and Division Counsel will consult regarding the prompt removal of any pre-review requirement once the Service’s position has become sufficiently established that pre-review is no longer necessary. For a list of issues for which pre-review is mandatory, see Exhibit 31.1.1-1, Issues Requiring Associate Office Review, and Exhibit 35.11.1.-1, Issues Requiring Associate Office Review. Each office is, however, responsible for determining whether pre-review or coordination is warranted based on the standards articulated in paragraph (1), above, regardless of whether the case involves an issue specifically included on the established pre-review list. In addition certain Tax Court documents require review by the Associate Offices.
As provided in Executive Order 12988 on Civil Justice Reform, a motion for sanctions must be reviewed by the agency sanctions officer. This includes motions by the Government asking the court to sanction opposing parties, as well as motions by opposing parties seeking sanctions against counsel, the United States, the Service, or its employees. The Associate Chief Counsel (Procedure and Administration) is the designated sanctions officer for the Office of Chief Counsel.
Sanctions subject to review by the sanctions officer under the Executive Order include motions to sanction a taxpayer’s representative for violations of section 6673(a)(2), sanctions under the Tax Court Rules of Practice and Procedure, and sanctions based on the Tax Court’s inherent power to regulate conduct in cases that come before it, including any such sanctions imposed or sought to be imposed against Chief Counsel attorneys or Service employees.
In addition to the review required by the Executive Order, it is the policy of the Office that certain other matters involving sanctions will also be subject to pre-review by the Sanctions Officer. Those matters include letters advising opposing counsel of a potential conflict of interest or of a potential motion to disqualify based on a conflict, letters to the Department of Justice recommending that sanctions be sought against an opposing party, and any referral of a private practitioner to the IRS Office of Professional Responsibility. Requests for imposition of the section 6673(a)(1) penalty and motions for attorneys fees (unless involving alleged misconduct by counsel) are generally not subject to Sanctions Officer procedures. Procedures for obtaining the required review are found at CCDM 22.214.171.124.3, Sanctions Requiring National Office Review.
Adverse decisions of the Tax Court, Federal District Courts, the Court of Federal Claims, and the Courts of Appeals will be reviewed by the appropriate Associate Office which will prepare a letter to the Department of Justice recommending for or against appeal. Procedures for preparing appeal recommendations can be found in CCDM 36.2, Appeal/Certiorari Recommendations.
Procedural issues relating to practice before the Tax Court cut across all divisions and offices. In order to maintain uniformity in this area, the Associate Chief Counsel (Procedure and Administration) acts as the Office’s liaison with the Tax Court and the Court of Federal Claims and is responsible for matters of Tax Court procedure.
Division Counsel offices are responsible for providing legal advice relating to case development to their respective clients. Such advice is not subject to pre-review by the Associate Chief Counsel except to the extent consultation is necessary to determine the position of the Service. For procedures regarding pre-review of legal advice, see CCDM Part 33, Legal Advice.
Associate offices are responsible for providing legal advice to the Operating Divisions, other components of the Service, and Division Counsel regarding the technical position of the Service with respect to proper interpretation of the Code.
Occasionally, the field client will request case-specific advice directly from the Associate Chief Counsel, rather than going to local Division Counsel, or may turn to local Division Counsel for advice on matters of interpretation of the Code that may be of national application. In such cases, the receiving office should review the request and either forward the request to the appropriate office or coordinate the response as appropriate.
Certain issues listed below by respective Associate office require National Office review. An issue on the Associate office review list must be coordinated regardless of the stage of the case in which the issue arises (e.g., whether in examination or in litigation). Coordination on these issues should be commenced at the earliest opportunity and well before litigation, if possible.
With respect to “S” cases it is recognized that coordination might take place later than normally expected with regular cases, typically after they are returned from Appeals.
Advice issued to the client, briefs and motions filed with the Tax Court and suit and defense letters sent to the Department of Justice must reflect positions consistent with Service legal positions and policies, and uphold the office’s reputation for the highest quality of written product. In order to ensure these attributes, documents involving novel or significant issues contained on the Associate office review list will be reviewed in Associate offices before issuance or filing of the document. The Associate Chief Counsel and Division Counsel will consult regarding the prompt removal of any pre-review requirement once the Service’s position has become sufficiently established that pre-review is no longer necessary.
The issues list set forth below contains both generic and specific significant issues. Any issue included on either list must be coordinated with the affected Associate offices. Although some Associate offices may not have a specific issue list, coordination of generic significant issues with those offices is required and should be done at the earliest opportunity.
There are issues that do not require Associate office review. An issue not described in the generic or specific significant issues list is presumed not to require Associate office review. Court documents that contain no issues requiring Associate office review and that are not of a nature that requires Associate office review may be filed directly without Associate office review. Defense and suit letters that do not contain issues on this list may be sent to the Department of Justice without Associate office review regardless of their classification as Standard or S.O.P. See CCDM 34.8.1, Settlement Procedures Overview.
Even though a case does not contain any of the issues described below, novel, unusual, or unique questions may be presented. The Division office is expected to communicate informally with the appropriate Associate office when these issues arise. In some cases, the Associate office will want to review certain documents before they are filed or issued. It is the responsibility of the trial attorney and the reviewer in the Division Counsel to identify those issues that warrant review by an Associate office, and to forward the document for both prereview and review according to current procedures. For those briefs, motions, and letters which are directly filed or sent to the Department of Justice by the Division Counsel office, it is the responsibility of the Division Counsel reviewer to ensure that they are correct factually and legally and of the highest quality. In addition, trial attorneys and reviewers in Division Counsel are still required to perform any necessary substantive issue coordination among Division Counsel offices pursuant to existing issue coordination procedures.
When an issue is identified as significant and requires coordination, it is the responsibility of the Division Counsel office to seek and the Associate offices to provide timely advice. Generally, the Division and Associate office attorneys will come to an agreement with respect to the timing of the advice that will be given, and if an agreement cannot be reached, then the issue should be elevated through the respective management chains. In exigent situations, such as an expiring statute of limitations or court deadline, the Division and Associate office attorneys should discuss the urgency for the advice and the advice should be provided by the Associate office in sufficient time to take the appropriate action before the exigent event. If the advice is not timely sought by the Division Counsel office, or is not timely provided by the Associate office, the Division Counsel office may proceed with the proposed position subject to modifying or changing the position, as appropriate, to reflect the correct legal position after the advice request has been fully considered and coordinated. Before doing so, however, the Division Counsel office must notify the appropriate Associate office and their Division Counsel of their intent to do so. The attorney in the Associate office who receives such notice must promptly notify his or her Associate Chief Counsel of the Division Counsel office’s intent. The failure to timely seek or provide advice when circumstances would have permitted timely coordination is a performance issue that should occur only in rare circumstances. It should be addressed at the management level. This will typically require a post-filing review of the circumstances leading to the event and a discussion between the relevant Division Counsel and Associate Chief Counsel as to how to prevent a reoccurrence.
The below list of issues, code sections, and documents requiring Associate office review is also contained in Exhibit 35.11.1-1.
I. Generic Significant Issues that Require Associate Office Review with the Affected Associate Office
A case will be significant such that it requires relevant Associate office review if it involves any of the following matters, regardless of the underlying code section or subject matter:
The validity of a regulation, temporary regulation, revenue ruling, revenue procedure, or other published guidance item (coordination with P&A also required)
A case involving an issue of importance to tax administration, such as:
a. An issue of first impression
b. An interpretation of a statute or regulation when there have been no prior judicial opinions addressing the interpretation
c. An issue affecting large numbers of taxpayers or an industry
d. An issue falling within an operating division’s major strategic goal
A case or issue likely to attract congressional or public attention on a national level
An issue where the Government attempts to distinguish a regulation, proposed regulation, temporary regulation, revenue ruling, or revenue procedure
A position that is inconsistent with a proposed Treasury regulation
A change in litigation position as identified in a Chief Counsel Notice
An argument contrary to Chief Counsel advice issued in the case
Any statute or statutory amendment that has been enacted within the year preceding the filing date of the document or the due date of the letter to the Department of Justice.
Nonfrivolous constitutional challenges to statutes, regulations, published guidance or Service administrative practices or any nonfrivolous assertion of the application of the Religious Freedom Restoration Act. Examples of frivolous constitutional issues that need not be reviewed are contained in The Truth About Frivolous Tax Arguments that can be found at https://www.irs.gov/PUP/taxpros/The%20Truth%20-%20February%202016(checked).pdf
Issues appearing on the current Priority Guidance Plan (PGP) of pending published guidance projects. The current PGP can be found at https://www.irs.gov/uac/priority-guidance-plan
An issue considered for designation for litigation under CCDM 33.3.6, which is subject to the separate procedures under that section that control the coordination between the Division Counsel and Associate offices
An issue that will not be referred to Appeals under Rev. Proc. 2016-22, 2016-15 I.R.B. 577, sec 3.03, for a technical tax reason, as opposed to a strategic or tactical reason involving the preparation and trial of the case, if the issue is otherwise considered significant
Matters to be submitted to the Justice Department Office of Legal Counsel
II. Other Specific Issues Requiring Review by an Associate Office or the Special Counsel to the National Taxpayer Advocate
In addition to the foregoing issues, the following specific issues require review by an Associate office or the Special Counsel to the National Taxpayer Advocate:
Section 7811, including the authority to issue a Taxpayer Assistance Order and the tolling of the statute of limitations
Section 351 (formation of a corporation) with repatriation transaction
Section 355 (spin off transactions), specifically
a. The device factor relating to nature and use of assets as described in Notice 2015-59.
b. The weighing of significant device factors (other than pro rata distributions) with business purpose
c. Planned sales of stock after the transaction
d. Disturbing corporation debt to be retired with Controlled corporation securities
Section 385(c) (debt v. equity)
Income Tax and Accounting
Section 36B refundable credit for coverage under a qualified health plan
Section 162 limited to deductibility of a payment of a shareholder’s expenses in the context of a corporate reorganization or buyout and unreasonable compensation in the context of mergers or buyouts or golden parachute payments
Section 162(l) – limited to issues involving the interaction of section 162(l) (health insurance costs of self-employed individuals) and section 36B (premium tax credit)
Section 170 charitable contribution deductions involving quid pro quo issues for contributions to churches or religious organizations
Section 274(a), except where the issue is whether an activity constitutes entertainment, amusement, or recreation, or where the issue is the deductibility of country club dues, section 274(d), except where the substantiation issue is strictly factual, section 274(e), section 274(g), section 274(k), section 274(m), section 274(n)
Section 5000A requirements to maintain minimum essential coverage
Section 6055 reporting of health insurance coverage
Passthroughs and Special Industries
A tax shelter that is a listed transaction within the description in Treas. Reg. § 1.6011-4(b)(2)
Valuation of minority interest discounts or post-death events or valuation issues in the context of family limited partnerships
Chapter 49 and sections 9008 and 9010 of the Affordable Care Act
Sections 513, 543 and 613 regarding rents and royalties paid for oil and gas interests or whether payments to tax-exempt organizations constitute rent or royalties
Sections 4001 through 4907 -excise taxes in chapters 31, 32, 33, 35, 36 subchapters B and D, 38, and 40
Sections 6415, 6416, 6426, and 6427 – certain excise tax refunds and credits
Treas. Reg. § 1.701-2 – Partnership Anti-Abuse Rule
Procedure and Administration
The applicability of the Administrative Procedure Act
Bankruptcy issues under 11 U.S.C § 523(a)(1)(B)(i) involving a Form 1040 filed after the due date
Any suit letter recommending that the Government:
a. Join with other creditors to commence an involuntary bankruptcy case against an individual, partnership, or corporation.
b. File an objection to confirmation under 11 U.S.C. § 1129(d) on the ground that the that the principal purpose of the plan is tax avoidance
Injunction, mandamus, or declaratory judgment sought by the Government
- Preparer/promoter injunction referrals and injunctions to prevent pyramiding, however, do not require Associate office review unless the case involves a novel substantive issue
Disclosure and novel privilege issues involving informants. Coordination is required before any disclosure regarding the existence or identity of a confidential source (e.g., prior to use of a whistleblower as a witness). Novel privilege issues include taint issues described in CC Notice CC-2010-004
Sanctions officer issues, including misconduct on the part of Service employees or Division counsel or opposing counsel, disqualification of counsel, recusal or disqualification of judges, referrals to the Office of Professional Responsibility, section 6673(a)(2) penalty against counsel for unreasonable or vexatious multiplication of proceedings in Tax Court or other ethical issues in litigation
Any constitutional or conscience-based objections to the use of a Social Security Number (SSN) or Taxpayer Identification Number (TIN)
Novel issues related to same-sex marriage
Section 6015 - The effect on the allocation of a deficiency under section 6015(c) due to the tax benefits rule of section 6015(d)(3)(B); res judicata and meaningful participation under section 6015(g)(2); claims solely for relief from unpaid interest or penalties
Section 6050W – requirement to file information returns for payment card and third party network payments on Form 1099-K, including penalties for failure to file and for filing incorrect returns
Section 6109 – the issuance or use of individual taxpayer identification numbers (ITINs) after the effective date of section 203 of the PATH Act of 2015
Sections 6221 through 6241 – All issues relating to new provisions for partnership audit and adjustment contained in the Bipartisan Budget Act of 2016 (BBA) (sec. 1101 of the BBA)
Section 6306 – Contracting for collection services
Section 6330 and 6320 Collection Due Process – briefs, motions, and other Tax Court documents (including motions for summary judgment) raising novel or significant issues. Issues that are considered novel or significant include (but are not limited to):
a. Challenges to the admission of evidence based on the administrative record rule;
b. Whether the following issues are liability issues for purposes of determining standard of review and liability preclusion: challenges to the validity of an assessment, whether assessment or collection occurred within the applicable period of limitations, or whether payments or credits were properly applied;
c. Issues involving whether a Notice of Determination was issued in violation of the bankruptcy automatic stay
Section 6332(d)(2) – penalty for failure to honor levy
Section 6404(g) – Tax Court jurisdiction over interest suspension (Corbalis issue)
Sections 6601 and 6611 issues involving restricted interest; section 6621 issues involving the appropriate interest rate to be used; section 6621(d)(interest netting); Tax Court Motions to Redetermine Interest; suits for additional overpayment interest filed in the Court of Federal Claims or District Court
Section 7345 – Revocation or denial of passport
Section 7430 – any purported qualified offer; motions for costs; responses or briefs filed in opposition to taxpayers’ motions for costs; settlements of section 7430 claims that require approval. For more specific coordination requirements in section 7430 matters, see CCDM 35.10.1.
Section 7602 – limited to designated summonses, John Doe summonses, summonses to third parties for foreign-based records (so-called Bank of Nova Scotia summonses), LB&I promoter summonses, summonses for audit or tax accrual workpapers, cases where section 7612, the Right to Financial Privacy Act or Health Insurance Portability and Accountability Act has been argued in a suit to enforce or quash summons, cases where the government advocates assertion of the tax shelter exception of section 7525(b)
Section 7623 whistleblower matters (including briefs, motions, and other Tax Court filings) involving novel or significant issues. Issues that are considered novel and significant include: non-routine privilege and taint issues, potential identification of a whistleblower, scope and standard of review or remand issues, any arguments requiring an interpretation of the statute, any arguments requiring an interpretation or application of the regulations, and any dispositive motion (except summary judgment motions in cases where the IRS took no action on the whistleblower’s information)
Section 7701(o) – The application of the codified economic substance doctrine under section 7701(o) in novel cases
Tax Exempt and Government Entities
Issues regarding scope of Additional Medicare Tax under FICA, RRTA, or SECA Section 530 of the Revenue Act of 1978
Relief from employment tax liability is claimed when taxpayer treated workers as employees for the periods at issue
Section 1402(a)(13) – identification of partner as limited partner or general partner for purposes of application of self-employment tax
Section 3401(d)(1) – issues regarding identification of employer in control of the payments of the wages
Section 3504 – issues involving application of Treas. Reg. § 31.3504-2
Section 3509 – special employment tax rates are claimed when taxpayer treated workers as employees for the periods at issue
Section 3511 – determination of liability if a Certified Professional Employer Organization is involved
Section 7705 – issues regarding CPEO certification, suspension or revocation
Employee Plans/Qualified Plans/Executive & Nonqualified Compensation/IRAs
Section 107 – exclusion for parsonage or parsonage allowances
Sections 401 through 418 – qualification issues for employee benefit plans involving diversion or misuse of plan assets, egregious failures relating to coverage, nondiscrimination, or benefit limitations, and deductions issues for employee benefit plans involving non-cash contributions
Section 409(l)(3) and 409(p) – issues involving preferred stock or synthetic equity
Section 409A – issues involving nonqualified deferred compensation plans
Section 414(e) – definition of a church plan
Section 420 – transfer of excess pension assets to retiree health accounts
Section 457A – issues involving nonqualified deferred compensation plans of nonqualified entities
Section 4971 – pension underfunding taxes in bankruptcy cases
Section 4975 – issues involving prohibited transactions and individual retirement arrangements (IRAs)
Section 4976 – excise tax on welfare benefit funds providing a disqualified benefit
Section 4985 – excise tax on stock compensation on insiders of inverting corporations
Health and Welfare Plans
Section 45R – employee health insurance expenses of small employer
Section 79 – issues involving group term life insurance plans utilizing cash value life insurance policies
Section 4980D – excise tax for failure to meet certain group health plan requirements
Section 4980H – shared responsibility payment for employers regarding health coverage
Section 6056 – certain employers required to report on health insurance coverage
Issues regarding identification of taxpayers as federal, state or local governments or Indian Tribal Governments
Section 501(c)(3) – issues involving internet churches or schools
Section 501(c)(3) – issues involving health maintenance organizations
Sections 501(c)(3) and 511-514 – issues involving joint ventures or partnerships
Sections 501(m) and 511-514 – issues involving commercial type insurance
Section 501(r) – additional requirements for certain hospitals
Section 509(a)(3) – issues involving whether supporting organizations satisfy the relationship test
Section 512 – issues involving unrelated business taxable income (UBTI) and voluntary employee beneficiary associations (VEBAs)
Section 529A – Qualified ABLE Programs
Section 4958 – excess benefit transaction issues involving indirect transactions, the rebuttable presumption, the interaction with the requirements for exemption, and interaction with section 4967 (taxes on prohibited benefits)