Part 4. Examining Process

Chapter 71. Employee Plans Examination of Returns

Section 13. Technical Assistance, Technical Advice Requests and Requests for Relief under IRC section 7805(b)

4.71.13 Technical Assistance, Technical Advice Requests and Requests for Relief under IRC section 7805(b)

Manual Transmittal

July 12, 2019

Purpose

(1) This transmits revised IRM 4.71.13, Employee Plans Examination of Returns, Technical Assistance, Technical Advice Requests and Requests for Relief under IRC section 7805(b).

Material Changes

(1) Enhanced IRM 4.71.13.1, Program, Scope and Objectives, and the subsections thereunder, by adding more information on the internal controls regulating EP Examinations. Reorganized material for improved readability and uniformity with other EP Examination IRMs.

(2) IRM 4.71.13.1.7, Safeguarding Personally Identifiable Information, was added to comply with the December 20, 2016, Internal Guidance Memorandum (IGM) from the Director, Identity and Records Protection Privacy, Governmental Liaison and Disclosure, entitled Social Security Number Elimination and Reduction (SSN ER). This section augments compliance with the May 22, 2007 Memorandum (M-07-16) issued by the Office of Management and Budget (OMB) entitled Safeguarding Against and Responding to the Breach of Personally Identifiable Information to the Heads of Executive Departments and Agencies.

(3) Replace references as needed for the Revenue Procedures listed in the first column of the table below with the Revenue Procedures they were superseded by in the second column.

Replaced Rev. Proc. Updated Rev. Proc
2018-1 2019-1
2018-2 2019-2
2018-4 2019-4

(4) Updated IRM section 4.71.13.4.1, Mandatory Technical Advice, to comply with the revised Section 3.04 of Revenue Procedure 2019-2, by deleting collectively bargained plans from the list of issues required to be submitted for a Technical Advice Memorandum (TAM).

(5) Removed reference to IRM 1.2.13.1.25 due to the pending obsolescence of the IRM.

(6) Made editorial changes, including changes for Plain Language (the Plain Writing Act of 2010), throughout the document.

Effect on Other Documents

This supersedes IRM 4.71.13 dated April 10, 2018.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(07-12-2019)

Robert S. Choi
Director, Employee Plans
Tax Exempt and Government Entities

4.71.13.1 (07-12-2019)

Program, Scope and Objectives

  1. Purpose: IRM 4.71.13, Employee Plans Examination of Returns, Technical Assistance and Technical Advice Requests, contains guidance and procedures for EP agents to obtain:

    1. technical assistance from EP Rulings and Agreements, Area Counsel, EP Mandatory Review (Mandatory Review) and Special Review Group 1 (Special Review)

    2. technical advice (tech advice).

  2. Audience: This IRM provides procedures for agents, managers, and support staff in EP Examinations.

  3. Program Owner: Director, EP Examinations sets the program for the EP Examination program.

  4. Program Authority: EP Examinations’ authority to conduct examinations, resolve issues and determine tax liability is derived from Title 26, Internal Revenue Code, Subtitle F – Procedure and Administration, which includes but is not limited to:

    1. IRC section 7602 - Examination of Books and Witnesses, which falls under Chapter 78 - Discovery of Liability and Enforcement of Title.

      Note:

      IRC 7602 provides agents with the authority to:
      * Audit any books, papers, records or other data necessary to complete an audit.
      * Take testimony under oath to secure additional information needed.
      * Issue summons for information necessary to complete an audit.
      * Ask about any offense connected to the administering or enforcing of the Internal Revenue laws.

    2. IRC section 6201- Assessment Authority, which falls under Chapter 63 - Assessment.

      Note:

      EP Examinations’ authority to resolve issues is derived from its authority to make determinations of tax liability under IRC 6201.

  5. This IRM section is authored by EP Mandatory Review. For questions, information or suggestions, contact the manager of EP Mandatory Review

4.71.13.1.1 (07-12-2019)

Background

  1. EP Examinations is the division designated to determine if a retirement plan is qualified under IRC 401, and the underlying regulations, and thus, exempt from tax under IRC 501.

  2. EP Examinations’ primary objective is regulatory, emphasizing continued qualification of employee benefit plans EP selects and examines returns to:

    1. Promote the highest degree of voluntary compliance with the tax laws on plan qualification.

    2. Determine qualified plans’ extent of compliance and the causes of noncompliance with the tax laws.

    3. Determine whether such plans meet the applicable qualification requirements in operation.

  3. Under Policy Statement 4-117, EP agents and managers are:

    1. Given broad authority to consider and weigh conflicting information, data, and opinions.

    2. To use professional judgement according to auditing standards to make findings of fact and apply the IRS’s position on issues of law to determine the correct tax liability.

    3. To exercise this authority to obtain the greatest number of tax determination agreements without sacrificing the quality or integrity of those determinations and to dispose of tax differences at the lowest level.

  4. All examinations are done per Policy Statement 1-236, Fairness and Integrity in Enforcement Selection.

  5. See Rev. Proc. 2019-4 for procedures for 7805(b) relief.

4.71.13.1.2 (07-12-2019)

Program Controls

  1. EP Examinations established two review groups to make sure agents conduct examinations per technical, procedural and administrative requirements:

    1. Mandatory Review, see IRM 4.71.14, Employee Plans Examination of Returns, EP Mandatory Review.

    2. Special Review, see IRM 4.70.7, Special Review (SR) and Tax Exempt Quality Measurement System (TEQMS) Procedures.

  2. Tax Exempt Quality Measurement System (TEQMS) is the quality control system TE/GE uses to oversee the entire examination program. For more information on TEQMS, see IRM 4.70.7, Special Review (SR) and Tax Exempt Quality Measurement System (TEQMS) Procedures.

  3. All examinations are to be conducted according to the Taxpayer Bill of Rights as listed in IRC 7803(a)(3).

    Note:

    Find additional information at Taxpayer Bill of Rights

  4. The IRS is fully committed to protecting the privacy rights of taxpayers and employees.

    1. Privacy laws are included in the IRC, the Privacy Act of 1974, the Freedom of Information Act, and IRS policies and practices.

    2. For more information about these laws, visit the IRS Electronic Freedom of Information Act Reading Room.

    3. For questions about privacy, email *Privacy.

    4. For question about disclosure, email *Disclosure.

4.71.13.1.3 (07-12-2019)

Acronyms, Forms and Notices

  1. This manual uses the following acronyms and references the following forms.

    Acronyms

    Acronym Definition
    AIMS Audit Information Management System
    EP Employee Plans
    IRC Internal Revenue Code
    IRM Internal Revenue Manual
    IRS Internal Revenue Service
    K-Net TE/GE Knowledge Management Portal
    RAR Revenue Agent Report
    RCCMS Reporting Compliance Case Management System
    SOL Statute of Limitations
    TAM Technical Advice Memorandum
    TIN Taxpayer Identification Number
    TEQMS Tax Exempt Quality Measurement System

     

    Forms and Notices

    Form Name
    Form 870-EP Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment
    Form 2297 Waiver of Statutory Notification of Claim Disallowance
    Form 2504 Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment
    Form 2848 Power of Attorney and Declaration of Representative
    Form 3198-A TE/GE Special Handling Notice
    Form 3363 Acceptance of Proposed Disallowance of Claim for Refund or Credit
    Form 4463 Request for Technical Advice Memorandum
    Form 4549-E Income Tax Discrepancy Adjustments
    Form 6212-B Examination Referral Checksheet B
    Form 6490 TE/GE Technical Time Report
    Form 8821 Tax Information Authorization
    Notice 438 Notice of Intention to Disclose (Technical Advice)

     

4.71.13.1.4 (07-12-2019)

Overview of Requesting Technical Assistance and Technical Advice

  1. Agents may secure technical assistance when the need arises. They can get help from:

    1. The Area field office of Division Counsel (Area Counsel)

    2. Special Review Group 1 (Special Review)

    3. EP Mandatory Review (Mandatory Review)

  2. Agents may also obtain technical advice (tech advice) related to EP examinations from the TE/GE Office of Associate Chief Counsel (Associate Chief Counsel). See IRM 4.71.13.4, Technical Advice Procedures, and Rev. Proc. 2019-2 (updated annually).

    Reminder:

    Effective January 1, 2015, Associate Chief Counsel assumed the authority for issuing tech advice (Technical Advice Memorandum (TAM))

  3. Technical advice is a written advice or guidance memo Associate Chief Counsel gives as to:

    1. The interpretation and proper application of tax law, tax treaties, regulations, revenue rulings, notices or other published precedents.

    2. A specific set of facts for the examination of a taxpayer's return, consideration of a taxpayer’s claim for refund or credit.

    3. Any other matter under EP Examinations’ jurisdiction.

  4. Request a TAM when the application of the law to the facts involved in your audit is unclear. The question must be on "the interpretation and proper application of tax laws, tax treaties, regulations, revenue rulings, notices, or other precedents to a specific set of facts that concerns the treatment of an item in a year under examination."

  5. Effective January 5, 2018, under Rev. Proc. 2018-4, EP exam groups process section 7805(b) relief requests per IRM 4.71.13.5, Requests for Relief under IRC 7805(b), and Rev. Proc. 2019-4 (updated annually).

  6. EP Quality Assurance offers help with questions about determination cases. Send questions to: *TE/GE-EP-Determ Exam Requests.

4.71.13.2 (07-12-2019)

Assistance from Area Counsel

  1. Make informal, and if needed, written requests for assistance to Area Counsel for:

    1. Legal interpretations

    2. Case development for "unagreed" issues

  2. Obtain approval from your group manager before contacting Area Counsel.

  3. You can ask Special Review for help when preparing a request for Area Counsel assistance. Email Special Review at *TE/GE-EP-Tech Adv.

  4. When Area Counsel responds, the group manager sends a sanitized copy to the Manager, Special Review, who determines if Area Counsel’s guidance impacts other cases.

    Note:

    Remove the taxpayer's name and TIN to create a sanitized copy.

  5. If the Manager, Special Review determines that Area Counsel’s guidance impacts other cases, he/she will prepare a memo describing the guidance and distribute to EP Examination agents and their managers.

    Note:

    Area Counsel can help Special Review to draft the memo.

  6. In general, request assistance from the Area Counsel office covering the taxpayer's state. However, if your case is part of a special project, your request is assigned to a project attorney, regardless of the taxpayer's location.

  7. See the Area Counsel Geographic Coverage List for the office covering the taxpayer’s location and the Area Counsel Office Listing for Counsel employees’ contact information.

  8. Generally, an opinion from Area Counsel is confined to the specific facts and circumstances of a case. You shouldn't apply the opinion to other cases without contacting Counsel.

  9. Whenever you want to pursue the six year statute of limitations (SOL) for a case, you must obtain written approval from Area Counsel. Keep a copy of the written response in the case file.

4.71.13.3 (07-12-2019)

Assistance from Mandatory Review, Special Review and the K-Net

  1. Reviewers in Mandatory Review and Special Review help agents and managers with technical and procedural issues.

  2. Mandatory Review offers help when the agent or manager:

    1. Needs help on anticipated "unagreed" exam issues.

    2. Has procedural questions about IRM 4.71 (EP Examination Procedures).

    3. Has questions about a special exam project coordinated by a reviewer in Mandatory Review.

      Note:

      Contact the Manager, EP Mandatory Review if you need help.

  3. Special Review helps agents and managers with EP Examination procedural questions, including but not limited to questions related to third party contacts, disclosure, Form 2848, Form 8821 or potential fraud issues.

  4. Agents and managers may get help on technical issues through the TE/GE Knowledge Management Portal (K-Net).

  5. Agents should attempt to resolve technical and procedural issues at the group level before requesting assistance. Ask senior agents and the group manager for help before you contact Mandatory Review or Special Review.

  6. Group managers may contact the Manager, Mandatory Review or the Manager, Special Review to ask a reviewer to give a presentation of a specific topic of interest at a group meeting.

4.71.13.4 (07-12-2019)

Technical Advice Procedures

  1. These technical advice (tech advice) procedures follow Rev. Proc. 2019-2 guidelines and aid agents when requesting a TAM from the TE/GE Office of Associate Chief Counsel (Associate Chief Counsel) for help on any technical or procedural question that develops during your EP exam. These procedures cover the agent’s responsibilities through the entire TAM process.

    Reminder:

    Effective January 1, 2015, the TE/GE Office of Associate Chief Counsel in Washington D.C. issues TAMs instead of EP Technical.

  2. A taxpayer may request technical advice during an examination for an issue under Policy Statement 4-82.

  3. This IRM supplements the general tech advice procedures in IRM 7.1.5, Employee Plans Technical Advice Procedures, as updated by Rev. Proc. 2019-2.

  4. Tech advice is defined as written advice prepared by Associate Chief Counsel as to:

    1. The interpretation and proper application of tax law, tax treaties, regulations, revenue rulings, notices or other published precedents.

    2. A specific set of facts connected to the examination of a taxpayer's return, consideration of a taxpayer’s claim for refund or credit.

    3. Any other matter under EP Examinations’ jurisdiction.

  5. Request a TAM when the application of the law to the facts involved in your exam is unclear. The question must be on "the interpretation and proper application of tax laws, tax treaties, regulations, revenue rulings, notices, or other precedents to a specific set of facts that concerns the treatment of an item in a period under examination."

  6. Contact the Area Counsel office responsible for the state in which the taxpayer is located before you request a TAM. See IRM 4.71.13.2 (7), Assistance from Area Counsel.

    Note:

    You must receive Area Counsel’s support before proceed with a TAM. As discussed below, Area Counsel will help you with the TAM request submission.

  7. Prepare tech. advice requests on Form 4463. See IRM 4.71.13 Exhibit 1, Request for Technical Advice Memorandum, at IRM 4.71 - Employee Plans Examination Exhibits for an example of a completed Form 4463.

  8. Submit all TAM requests to Associate Chief Counsel through Area Counsel.

4.71.13.4.1 (07-12-2019)

Mandatory Technical Advice

  1. You must request tech. advice for plans for which the IRS is proposing to issue a revocation letter because of certain fiduciary actions that violate the exclusive benefit rule of IRC 401(a) 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

    Note:

    If a plan is not subject to Title I of ERISA (plans covering only owners and their spouses may be exempt) a request for tech advice isn’t required. If you’re unsure whether a plan is subject to Title I of ERISA, contact Area Counsel.

  2. Effective January 5, 2018, under Rev. Proc. 2018-4, EP Examination groups began processing section 7805(b) relief requests. See Rev. Proc. 2019-4, which superseded Rev. Proc. 2018-4, for the most current procedures.

  3. Effective January 1, 2018, under Rev. Proc. 2018-1, requests for letter rulings on a waiver of the minimum funding standard are submitted to the TE/GE Office of Associate Chief Counsel and not to Employee Plans Rulings and Agreements. For current procedures see Rev. Proc. 2019–1 (updated annually).

4.71.13.4.2 (07-12-2019)

Initiating A Request For Technical Advice

  1. Initiate a request for a TAM (to the extent possible) at the earliest stage of the examination.

  2. If you think that technical advice is warranted, discuss the issue with your group manager.

  3. If your group manager agrees that technical advice may be warranted, he/she will contact Area Counsel to discuss the issue.

    Note:

    Area Counsel must be consulted before requesting a TAM.

    Note:

    Follow the procedures in IRM 4.71.13.2, Assistance from Area Counsel, for contacting Area Counsel

    .

  4. After obtaining Area Counsel’s approval to request a TAM, the group manager must obtain written approval (email approval will suffice) from his/her Area Manager and the Director, EP Examinations before submitting the formal TAM request.

  5. If the Area Manager and the Director, EP Examinations agree that a TAM should be pursued, a Pre-Submission Conference must be held with Associate Chief Counsel, see IRM 4.71.13.4.4, Pre-submission Conference.

  6. If Associate Chief Counsel agrees during the Pre-Submission Conference that a TAM should be requested, the agent prepares Form 4463 with attachments explaining the:

    1. Facts and the issues surrounding the TAM request

    2. Applicable law and arguments in support of the position(s) of the IRS on the issue or issues

    3. Applicable law and arguments in support of the position(s) of the taxpayer on the issue or issues

      Note:

      Generally, each issue should be presented separately using the traditional facts, law, government’s position, taxpayer’s position and conclusion format.

      Note:

      Area Counsel will help prepare the TAM request. See sections 7.01 and 7.06 of Rev. Proc. 2019-2.

  7. The agent sends Form 4463 to the Director, EP Examinations, for approval.

  8. The agent must also notify the taxpayer of the TAM request in writing using Letter 1399-A, Technical Advice Notification. See IRM 4.71.13 Exhibit 2 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Letter 1399-A.

  9. The taxpayer has no authority to bar an internal decision to seek technical advice. However, agents, group managers, and Area Managers may consider any taxpayer objections.

  10. The taxpayer has five calendar days to respond to the Technical Advice Notification. If the taxpayer requests additional time:

    1. The taxpayer must make a written request to extend the five day period before the period expires. The request must include the specific reasons justifying the extended time requested and a written signature of a duly authorized individual on behalf of the taxpayer.

    2. Upon receipt of the written request to extend the five day period, the agent immediately reviews the request and sends it to his/her group manager with a recommendation.

      Note:

      These actions can be conducted by fax or secure email.

    3. The group manager must approve the written request to extend the five-day period. He/she may direct the manner and the extent of documentation needed forapproval.

  11. If the taxpayer:

    1. Agrees with the issues and facts stated in the Technical Advice Notification, he/she should acknowledge agreement in writing. Include the taxpayer's letter in the TAM request package.

    2. Disagrees with the agent’s statement of issues and facts in the Technical Advice Notification, he/she should identify each point of disagreement and state the reasons for disagreement in writing. The taxpayer’s written statement should respond completely to the Technical Advice Notification and must include a written signature of a duly authorized individual on behalf of the taxpayer.

    Note:

    The agent and taxpayer have 10 calendar days to resolve disagreements. See section 7.06 of Rev. Proc. 2019-2.

    .

  12. Follow these procedures depending on your case progress:

    If you Then
    Don’t receive a written statement from the taxpayer or it’s incomplete, Advise him/her that the formal request for technical advice will go forward with the information available.
    Disagree with the issues and facts presented in the taxpayer’s written statement Try to resolve any disagreement over the issues and facts with the taxpayer.
    Can’t agree on the issues and facts with the taxpayer Send a written notice of disagreement to the taxpayer.
    Continue to disagree Send both the taxpayer’s set of facts and issues and the field’s set of facts and issues to Associate Chief Counsel with the TAM.

  13. 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."

  14. Include all statements and correspondence between the agent and the taxpayer on disagreements over the issue(s) or facts in the formal TAM request.

    Note:

    The Area Counsel attorney will help the field office prepare the memo for Associate Chief Counsel, highlighting the material factual differences.

  15. If the TAM request is for a case involving a prohibited transaction, as defined in IRC 4975(c)(1), or a violation of the exclusive benefit rule under IRC 401(a)(2), which is subject to review by the Department of Labor under section 103 of Reorganization Plan No. 4 of 1978, then you must make a referral on Form 6212-B, Examination Referral Checksheet B, to the Department of Labor before submitting the TAM to Associate Chief Counsel. Follow the Procedures in IRM 4.71.6.7, EP Group Procedures - Making Referrals to DOL.

4.71.13.4.3 (07-12-2019)

Taxpayer Initiated Requests For Technical Advice

  1. The taxpayer may initiate a request for a TAM orally or by submitting a written statement to the agent that includes the taxpayer’s reasons for requesting the TAM per section 5.02 of Rev. Proc. 2019-2.

  2. Agent: If you receive a written statement from the taxpayer, evaluate all documents and:

    1. Disagree with the taxpayer’s statements of issues and facts, respond with a written notice of disagreement to the taxpayer. This response is required even if we determine a TAM request is unwarranted.

    2. Determine a TAM is warranted/unwarranted, prepare a written summary of the issues, specifically for the group manager and the Area Manager, explaining why the taxpayer’s request for a TAM should be approved or denied.

    3. Immediately fax or email the summary and a copy of the taxpayer’s written statement to your manager.

  3. Group manager: Upon receipt, immediately forward the agent’s summary and a copy of the taxpayer’s written statement with your recommendation to the Area Manager.

  4. The Area Manager:

    1. May direct the manner and the extent of additional documentation needed for approval.

    2. May deny a taxpayer initiated request for a TAM based on material disagreement over issues and/or facts.

    3. May approve the taxpayer’s request for a TAM, then solicit the Director, EP Examinations approval.

    4. Will inform the group manager in writing when he/she and the Director, EP Examinations both approve the TAM.

  5. The formal TAM request includes the taxpayer’s written statement and all other statements and correspondence between the agent and the taxpayer in connection with any disagreement over issues and facts.

  6. Agent: If the Area Manager denies the taxpayer’s request for a TAM, inform the taxpayer in writing.

  7. The taxpayer may appeal IRS’s decision to deny the taxpayer’s TAM request by submitting to the agent, within 30 calendar days after being notified the request was denied, a written statement of the reasons why the matter should be referred to Associate Chief Counsel. 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 statutory, regulatory, or administrative provisions, tax treaties, case law, or other authority; and an explanation of the taxpayer’s position and the need for technical advice.

    Note:

    Any extensions of the 30-day period must be requested in writing and approved by the Director, EP Examinations.

  8. Group manager: Immediately forward the taxpayer’s written request appealing the decision to deny the TAM request, along with the field office’s statement as to why the issue shouldn’t be referred to Associate Chief Counsel for technical advice, to the Director, EP Examinations.

  9. Agent: If the Director, EP Examinations:

    1. Agrees with the taxpayer that a TAM should be requested, inform the taxpayer of the decision and submit the TAM request per IRM 4.71.13.4.2, Initiating A Request For Technical Advice.

    2. Determines that a TAM is not warranted, inform the taxpayer in writing of the denial of the request and the reasons for the denial.

  10. If the taxpayer disagrees with the Director, EP Examinations' decision to deny the TAM request, the taxpayer may request a review by the Commissioner, TE/GE.

    Note:

    The Commissioner, TE/GE has 45 days to deliver a final decision per section 5.04 of Rev. Proc. 2019-2.

4.71.13.4.4 (07-12-2019)

Pre-submission Conference

  1. After Area Counsel, the Area Manager and the Director, EP Examinations approve the TAM request, a pre-submission conference is scheduled with the:

    • Associate Chief Counsel attorney

    • Area Counsel attorney

    • agent

    • group manager

    • taxpayer

  2. The purpose of the conference is to help facilitate agreement on the statement of the issue.

  3. Agent: Before the pre-submission conference:

    1. Prepare your own statement of pertinent facts and issues

    2. Solicit from the taxpayer their respective statement of pertinent facts and issues

    3. Make sure Form 2848 is secured for the representative involved with the TAM and that the Form 2848 covers all applicable periods.

    Note:

    The legal analysis provided in the parties’ statements should be sufficient to enable Counsel to be reasonably informed about the subject matter.

  4. The agent 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 Associate Chief Counsel’s understanding of the issues to be discussed during the conference.

    Note:

    The taxpayer’s failure to provide a statement of pertinent issues and facts shouldn’t unduly delay the scheduling of the pre-submission conference. If the taxpayer doesn’t provide it within a reasonable period of time, you may schedule the conference without the statements.

  5. Agent: Email the following items to the Area Counsel attorney:

    1. A statement of issues that the parties would like to discuss.

    2. A statement of pertinent facts.

    3. A statement of the facts in dispute, if any.

    4. Any legal analysis, authorities or background documents that could help the attorney understand the issues. (This doesn’t have to be fully developed as there will be an analysis that will ultimately accompany the formal request for a TAM).

    5. The taxpayer's statement of pertinent facts and issues

    6. A copy of Form 2848.

  6. Area Counsel: After reviewing the emailed information (from the agent), forward it to the Associate Chief Counsel TSS4510 mailbox, requesting a pre-submission conference. Include the following in the request for pre-submission conference:

    • A cover memo, including contact information, requesting a technical advice pre-submission conference

    • The name of the office expected to have jurisdiction over the request for a TAM (For example, the EP Examination Group and Area)

    • A list of representatives from each IRS function known to the agent that he/she expects to attend the pre-submission conference

    • A brief explanation of the primary issue.

      Note:

      The factual information should cover all collateral issues for which EP Examinations is seeking tech. advice from Associate Chief Counsel.

      Note:

      The assigned branch of the Associate Chief Counsel office must receive the pre-submission materials at least 10 business days before the conference is to be held.

  7. Area Counsel: If you can’t email any part of the information in IRM 4.71.13.4.4 (5), fax it to 202-317-6718, or send the package by express mail or private delivery service to:

    Internal Revenue Service
    Attn.: CC:PA:LPD:TSS,
    1111 Constitution Ave., NW
    Room 5336
    Washington, DC 20224

  8. Associate Chief Counsel: Contact the taxpayer, the agent, and the Area Counsel attorney within five business days of receipt of the request to schedule a pre-submission conference.

  9. The pre-submission conference (likely held by telephone) should be held within 30 calendar days after the agent is contacted.

  10. Associate Chief Counsel: arrange the pre-submission conference call and notify all parties involved of the date, time and conference call number.

  11. Agent: If determined during the pre-submission conference that tech. advice is:

    1. Not warranted, continue to process the case to completion under normal procedures.

    2. Warranted, continue to prepare and submit the formal technical advice package.

  12. During the pre-submission conference, Counsel may raise new issues in addition to those that the field office and taxpayer submitted.

4.71.13.4.5 (07-12-2019)

Preparation of the Technical Advice Package

  1. The agent prepares the tech. advice package with Area Counsel’s help. The package consists of:

    1. Form 4463.

    2. A detailed explanation of the issues, facts, law, government’s position, and taxpayer’s position (as further explained in IRM 4.71.13.4.5 (2))

    3. Supporting documentation

    4. Documentation of the Area Manager and Director, EP Examinations TAM approval

    Note:

    Whenever possible, mark all documents with the case number and name of the Associate Chief Counsel attorney assigned to the pre-submission conference for the TAM request.

    Note:

    Make sure Form 4463 reflects the Director, EP Examinations as the approving official and includes the Director's address. Associate Chief Counsel will mail the TAM to this address.

  2. Every request for tech. advice must include a description of the facts, issues, applicable law, and arguments supporting the taxpayer’s position on the issues and the IRS’s position on the issues.

    1. If the taxpayer and the field office disagree about ultimate findings of fact or about the relevance of facts, include all of the facts with an explanation highlighting the areas of disagreement.

    2. Include in the memo, an explanation of the taxpayer’s position. This explanation must include a discussion of any relevant statutory provisions, tax treaties, court decisions, regulations, revenue rulings, revenue procedures, notices, and any other authority supporting the taxpayer’s position.

    3. Include in the memo, a similar explanation of the position of the IRS. This explanation must include a discussion of any relevant statutory provisions, tax treaties, court decisions, regulations, revenue rulings, revenue procedures, notices, and any other authority supporting the IRS position.

    4. Both the IRS and the taxpayer should comment on any existing or pending legislation, tax treaties, regulations, revenue rulings, revenue procedures, or court decisions contrary to their respective positions.

    5. If either party determines that there are no authorities conflicting their position, that statement should be noted in the memo. The field office submits the request for tech. advice.

  3. Unless specifically requested, don’t send the exam case file to Associate Chief Counsel with the TAM request.

  4. Keep original documents in the exam case file. Use copies of these documents for the tech advice package.

  5. Include only relevant information, documents, correspondence etc. related to the issue(s) in the request.

  6. Remember that Associate Chief Counsel will base their decision on the information provided with the tech. advice package, so it’s important that you include all relevant information and clearly articulate the issue(s).

  7. Keep a copy of the tech. advice package for reference if Associate Chief Counsel has any questions.

  8. Ensure that a minimum of one year remains on the statute of limitations for all returns before you submit the request.

  9. Send a courtesy copy of Form 4463 to Special Review. Form 4463 can be sent electronically to Special Review's Tech Advice mailbox at *TE/GE-EP-Tech Adv.

  10. After you assemble, tab and index the tech. advice package, route the package through your group manager to the Area Counsel attorney who will submit the package to the Associate Chief Counsel attorney.

    Note:

    The agent must send a paper copy of the entire TAM request package to Area Counsel.

    Note:

    Area Counsel will review the technical package before submitting it to Associate Chief Counsel.

  11. Area Counsel will submit Form 4463 and the rest of the tech. advice package to the TSS4510 email address within 10 business days of receipt from the agent. To the extent feasible, also send the accompanying documents to the TSS4510 email address. Follow by sending any hard copy documents if Associate Chief Counsel requests.

  12. Fax any part of the tech. advice package that can’t be emailed to TSS4510 at 202-317-6718, or send by express mail or private delivery service to:

    Internal Revenue Service
    Attn: CC:PA:LPD:TSS, Room 5336
    1111 Constitution Ave., NW
    Washington, DC 20224

4.71.13.4.6 (07-12-2019)

Electronic Submissions

  1. In lieu of submitting in hard copy form, except as provided for in IRM 4.71.13.4.6 (2), you may electronically submit the technical advice package. You may:

    1. Scan all documents (except documents listed in IRM 4.71.13.4.6 (2)) and submit the entire TAM electronically (optional method).

    2. Email documents already in electronic format and mail hard copies of the remaining items, if desired.

  2. Send executed legal documents and penalty of perjury statements in hard copy.

  3. Email the electronic submission material related to the TAM to Area Counsel.

4.71.13.4.7 (07-12-2019)

Responsibilities of the Exam Agent While Technical Advice is Pending

  1. During the tech. advice process, the examining agent "owns" the case and maintains possession of all exam case files involved in the tech. advice and all related exam files.

    Exception:

    A rare exception is if there’s a short statute that is in danger of expiring. The group manager should contact the Area Counsel attorney and the Manager, EP Mandatory Review when 180 days or less remains on the statute of limitations of a case with a pending TAM and the agent is unable to secure a statute extension.

  2. The examining agent:

    1. Maintains possession of all original documents secured during the examination.

    2. Is always responsible for ensuring that the statute of limitations is protected on the lead exam and any related case while Associate Chief Counsel considers the tech. advice request.

    3. Is responsible for updating the inventory control systems upon receipt of the approved Form 4463 from the Director, EP Examinations. Update the AIMS and RCCMS to status 38, Suspense, All Other. AIMS and RCCMS should continue to reflect case control at the group level.

    4. Must issue Letter 1014-A, Taxpayer Notification of Examination Delay, to the taxpayer to formally notify them of the technical advice and the corresponding delay in the examination. See IRM 4.71.13 Exhibit 3 at IRM 4.71 - Employee Plans Examination Exhibits for an example of a Letter 1014-A.

    5. Must forward any additional information received for an issue pending technical advice to Associate Chief Counsel through the Area Counsel attorney.

4.71.13.4.8 (07-12-2019)

Obtaining Status Updates of the TAM

  1. The taxpayer or their representative may obtain information on the TAM request status by contacting the EP agent who requested the TAM, see Section 10.02 of Rev. Proc. 2019-2. However, section 10.08 provides that 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.

  2. Associate Chief Counsel will give monthly TAM status updates to the Area Counsel attorney, who in turn will notify/email the agent of the status of the TAM request.

  3. When the TAM is complete, Associate Chief Counsel will mail or email the TAM to the Director, EP Examinations and send a copy to the agent and the Area Counsel attorney.

4.71.13.4.9 (07-12-2019)

Review of the TAM by Associate Chief Counsel

  1. If Associate Chief Counsel determines that the TAM request package is deficient, the agent, the Area Counsel attorney and the Associate Chief Counsel attorney will work together to obtain the necessary information. If the issue can’t be resolved within 7 days, Associate Chief Counsel may return the TAM request and a new TAM request may have to be submitted.

  2. Within 21 days after receipt, Associate Chief Counsel will:

    1. Contact the agent and/or Area Counsel to discuss any procedural and substantive issues in the case.

    2. Notify the agent whether any matters have been referred to another Associate Chief Counsel attorney for assistance.

  3. When Associate Chief Counsel is ready to issue the TAM, they’ll communicate their conclusions and reasoning to Area Counsel. Area Counsel may informally discuss any disagreements.

  4. If Associate Chief Counsel proposes an adverse TAM and the taxpayer has not waived its right to a conference, then they’ll inform the taxpayer of the time and place of the conference.

    1. The agent and his/her group manager will be given the opportunity to participate in that conference.

    2. Although the taxpayer is entitled to only one conference of right, Associate Chief Counsel may choose to offer additional conferences.

  5. If the taxpayer submits additional information after the conference, the agent must either provide Associate Chief Counsel with comments on the additional information or notate to Associate Chief Counsel that the agent has no comments.

  6. Before issuing the final TAM, Associate Chief Counsel will issue a preliminary TAM to the agent and to Area Counsel.

    1. If there is disagreement about any aspect of the TAM, normal reconciliation and reconsideration procedures will be followed to resolve the disagreement.

    2. The agent should refrain from discussing the TAM issues while Associate Chief Counsel processes the TAM request and issues the final TAM.

  7. When the TAM is complete, Associate Chief Counsel will mail or email the TAM to the Director, EP Examinations and send a copy to the agent and the Area Counsel attorney.

4.71.13.4.10 (07-12-2019)

Effect of the TAM

  1. Associate Chief Counsel's reply to a TAM request is in two parts. Each part identifies the taxpayer by name, address, identification number and year or years involved.

  2. The first part of the reply is a transmittal memorandum.

    1. The transmittal memorandum, which is sent with the technical advice memorandum, should never be released to the taxpayer.

    2. Coordinate any request, by any party, for a copy of the transmittal memorandum with the agent’s Disclosure Officer.

    3. In unusual cases, the transmittal memorandum gives the EP Examinations office other information that under the nondisclosure statutes or for other reasons may not be discussed with the taxpayer.

  3. The second part is the TAM, which contains:

    1. A statement of the issues

    2. A statement of the facts pertinent to the issues

    3. A statement of the pertinent law, tax treaties, regulations, revenue rulings, other precedents published in the Internal Revenue Bulletin and court decisions

    4. A discussion of the rationale underlying conclusions reached by Associate Chief Counsel

    5. The conclusions of Associate Chief Counsel

  4. If a TAM is subject to IRC 6110, a notice under IRC 6110(f)(1) of intention to disclose the TAM (including a copy of the version proposed to be open to public inspection and notations of third party communications under IRC 6110(d)) will be enclosed.

  5. A TAM involving criminal or civil fraud investigations or a jeopardy or termination assessment is not furnished to the taxpayer.

  6. The agent must process the taxpayer's case on the basis of the conclusions in the TAM.

  7. A TAM applies only to the taxpayer for which technical advice was requested.

  8. A taxpayer may not rely on a TAM issued by the IRS for another taxpayer.

4.71.13.4.11 (07-12-2019)

Responsibilities of the Exam Agent Upon Receipt of the TAM

  1. Upon receipt of the TAM, update AIMS and RCCMS to status 12, Assigned with Taxpayer Contact.

  2. If the Area Manager and group manager concur with Associate Chief Counsel’s recommendations, and don't request reconsideration, send a copy of the TAM by certified mail to the taxpayer and its designated representatives within 30 days after the exam group receives the TAM.

    Note:

    You may use Letter 1014-A for this purpose. Select paragraph 8 and enter the applicable information in the space provided.

  3. If the TAM pertains to issues that:

    1. affect the plan’s qualified status, then give the TAM to the taxpayer without any deletions, omissions or sanitizing marks.

    2. don’t affect the plan’s qualified status, then send the taxpayer:

    1. A cover letter describing the enclosed attachments

      Note:

      The cover letter should emphasize the 20-day response period for additional IRC 6110 deletions.

    2. An exact copy of the TAM as received from Associate Chief Counsel

    3. A copy of the TAM with proposed deletions under IRC 6110

    4. Notice 438, Notice of Intention to Disclose

    5. If applicable, waiver form(s) soliciting agreement for the issues covered by the TAM, including Form 4549-E, Form 870-EP, Form 2297, Form 3363, or Form 2504.

      Note:

      See IRM 4.71.13 Exhibit 4 at IRM 4.71 - Employee Plans Examination Exhibits for an example of a Notice 438.

  4. The TAM is effective when the taxpayer receives it.

  5. Upon receipt, the agent will send a copy of the TAM to Special Review to Special Review's Tech Advice mailbox at *TE/GE-EP-Tech Adv.

4.71.13.4.12 (07-12-2019)

Notice 438, Notice of Intention to Disclose

  1. Notice 438 must be included with TAM notices subject to IRC 6110. The notice states the IRS’ intention to disclose the TAM (including a copy of the version proposed to be open to public inspection and notations of third party communications under IRC 6110(d)). See IRC 6110(f)(1).

  2. If Notice 438 is required, Associate Chief Counsel will send it to the agent with the TAM and all the information that the agent will need to complete the notice, before sending it to the taxpayer. See IRM 4.71.13 Exhibit 4 at IRM 4.71 - Employee Plans Examination Exhibits for an example of a Notice 438.

  3. Notice 438 informs taxpayers of their right to request additional deletions from the sanitized TAM.

  4. Per Notice 438, the Office of Chief Counsel for Disclosure is the primary contact for the taxpayer for this matter.

  5. The agent isn't involved in the IRC 6110 deletion process after mailing Notice 438 except to provide direction to the taxpayer, as needed.

  6. Before you mail the TAM Package, complete Notice 438 by filling in the taxpayer's name and the required dates. Input the dates:

    1. "Mailing date of this notice" : Enter the certified mailing date.

    2. "Last date to request IRS review" : Enter the 20th day after the notice mailing date. If the 20th day falls on a weekend or holiday, then enter the next business day.

    3. "Last Date to petition Tax Court" : Enter the 60th day after the notice mailing date. If the 60th day falls on a weekend or holiday, then enter the next business day.

    4. "Date open to public inspection" : Enter the Friday preceding the 90th day. Enter the date after the notice mailing date. If that Friday falls on a holiday, then enter the previous business day.

4.71.13.4.13 (07-12-2019)

Withdrawal of Requests for Technical Advice

  1. Once the request for a TAM has been sent to Associate Chief Counsel, only the Director, EP Examinations may withdraw the request, and it may only be done before the responding transmittal memorandum for the TAM is signed.

  2. The agent will notify the taxpayer of the decision to withdraw the TAM unless:

    1. The period of limitation on assessment is about to expire and the taxpayer has declined to give written consent to extend, or

    2. The notification would be prejudicial to the best interest of the Government.

  3. If the taxpayer disagrees with the Director, EP Examinations‘ decision to deny the TAM request, the taxpayer may request a review by the Commissioner, TE/GE.

    Note:

    The Commissioner, TE/GE has 45 days to deliver a final decision in accordance with section 5.04 of Rev. Proc. 2019-2.

4.71.13.4.14 (07-12-2019)

Conclusion of the Case When Technical Advice Is Received

  1. After you mail the TAM to the taxpayer, close the case based on the TAM conclusions.

  2. Follow the normal "agreed" or "unagreed" closing procedures, as applicable.

  3. If the issue covered by the TAM is still unagreed, attach the TAM to the RAR.

  4. Tech advice cases aren't subject to mandatory review unless they meet one of the other criteria for mandatory review.

  5. The holdings in a TAM are applied retroactively, unless the TAM grants section 7805(b) relief.

  6. Use AIMS disposal code 10, (RCCMS disposal code 604), Unagreed Without Protest, to close your case if there is an unagreed issue for which the taxpayer is unable to file a protest to Appeals because it was the subject of a TAM.

  7. Notate on Form 3198-A that the case had been in suspense, status code 38, and attach Form 3198-A to the front of the case file before it is closed.

  8. Note in the RCCMS comment box that this case was previously in status 38, and there is a Form 3198-A. This alerts the Closing Function Tax Examiner to change the case to status 55, Closing Unit: Cases Previously Held in Suspense or Returned from Appeals.

  9. If the case is closed "agreed" , the tax examiner closing the case in TE/GE Closing Group will update the case from status 51, Closing Unit: Unassigned, to status 55 first and then to status 90, Closed, when it closes.

    Note:

    The tax examiner puts the case in status code 55 immediately before placing the case in status 90. This tells AIMS that the return shouldn't be counted against the official table upon which cycle time is measured.

4.71.13.5 (07-12-2019)

Requests for Relief under IRC 7805(b)

  1. The procedures for requesting relief under 7805(b) for plans under examination changed effective January 2, 2018, with the issuance of Rev. Proc. 2018-4.

     

    1. Section 22.03 of Rev. Proc. 2019-4 provides," In order for a petitioner to be deemed to have exhausted administrative remedies within the Service with respect to § 7805(b), an applicant must submit a request for relief under § 7805(b) to the Service in accordance with the procedures in section 23.08 of this revenue procedure. A request for relief under § 7805(b) must be submitted to the agent or specialist assigned to the case."

    2. Section 23.08 provides, "A request for relief under § 7805(b) must be in writing and must be submitted to the agent or specialist assigned to the case. The request for relief under § 7805(b) must be submitted before issuance of the final adverse determination letter" .

  2. A request for relief can occur only when the plan has a determination letter and the agent discovers the plan document contains faulty language or fails to include required language. In other words, the determination letter was issued in error.

  3. A taxpayer’s request for retroactive relief must be in writing and submitted to the agent prior to Mandatory Review issuing the final revocation letter.

    Reminder:

    Without 7805(b) relief, revocation is retroactive. Generally, the revocation will be retroactive to the effective date of the plan, to the effective date of the plan provision containing the faulty language or, if later, to the effective date of the required omitted language. Retroactivity is based on when the language was effective.

  4. The taxpayer’s written request must:

    1. State that it is being made under IRC 7805(b)

    2. State the relief sought

    3. Explain the reasons and arguments in support of the relief sought

    4. Include any documents bearing on the request

      Note:

      This information is referred to as the Request File.

  5. When the taxpayer submits a request for relief, the agent and group manager review and analyze the taxpayer’s documents and request. The group manager will make the final recommendation whether to:

    1. Grant (see IRM 4.71.13.5.1) or deny (see IRM 4.71.13.5.2), or

    2. Have the issue considered further by Area Counsel (see IRM 4.71.13.5.2)

    Note:

    The agent assigned the case may also initiate a request to limit retroactivity. When the group manager concurs with the agent’s recommendation, follow the guidance in IRM 4.71.13.5.1.

4.71.13.5.1 (07-12-2019)

Group Manager Recommends Granting IRC 7805(b) Relief

  1. When the group manager recommends granting 7805(b) relief, the agent prepares and sends a Recommendation Memo to the Director, EP Examinations (the Director) using the memo in IRM 4.71.13 Exhibit 5 IRM 4.71.13 - Recommendation Memo.

  2. The group manager routes the Recommendation Memo through their Area Manager for review and approval.

  3. When the Director:

    1. Concurs that relief is appropriate, he/she acknowledges concurrence on the Recommendation Memo and signs and returns the Recommendation Memo to the agent and group manager to associate with the case file. The agent prepares an individually designed letter notifying the taxpayer that 7805(b) relief was granted.

    2. Disagrees with the group manager’s recommendation to grant relief, he/she sends the Request File to Area Counsel to obtain their legal opinion.

  4. Area Counsel reviews the request and provides a memo (Legal Opinion Memo) responding to the Director. When the Area Counsel Legal Opinion Memo:

    1. Agrees with the Director in denying relief, the Director will provide the denial rationale directly on the Recommendation Memo, sign the Recommendation Memo, and return the memos (Recommendation Memo and Legal Opinion Memo) to the agent and group manager for association with the case file.

      Note:

      The agent must prepare an individually designed letter to notify the taxpayer that 7805(b) relief was denied.

    2. Disagrees with the Director and grants relief, the Director will contact the appropriate Area Counsel to discuss and resolve the matter.

  5. If the final resolution is to:

    1. Grant 7805(b) relief, the Director acknowledges agreement on the Recommendation Memo, and signs and returns the Recommendation Memo, along with the Area Counsel Legal Opinion Memo, to the agent and group manager to associate with the case file. The agent prepares an individually designed letter to notify the taxpayer that 7805(b) relief was granted.

    2. Deny 7805(b) relief, the Director provide the rationale for the denial directly on the Recommendation Memo, sign the Recommendation Memo, and return the memos (Recommendation Memo and Legal Opinion Memo) to the agent and group manager to associate with the case file. The agent must prepare an individually designed letter to notify the taxpayer that 7805(b) relief was denied.

4.71.13.5.2 (07-12-2019)

Group Manager Recommends Denying 7805(b) Relief or that Further Consideration Is Warranted

  1. When the group manager recommends denying 7805(b) relief or determines further consideration is warranted, he/she sends the Request File to Area Counsel for their legal opinion. Area Counsel will respond in the form of a memo (Legal Opinion Memo).

    Note:

    The appropriate Area Counsel office is based on the physical address of the taxpayer.

    Exception:

    In some cases, the Area Counsel office is determined based on project code or subject matter. These cases are worked by the designated Area Counsel office.

  2. When the Area Counsel Legal Opinion Memo supports denial of 7805(b) relief, the agent prepares and provides a Recommendation Memo to the Director using the memo in IRM 4.71.13 Exhibit 5 IRM 4.71.13 - Recommendation Memo.

  3. The group manager sends the Recommendation Memo through their Area Manager for review and approval.

  4. When the Director:

    1. Agrees to deny relief, the Director will acknowledge concurrence directly on the Recommendation Memo, sign the Recommendation Memo, and return the memos (Recommendation Memo and Legal Opinion Memo) to the agent and group manager for association with the case file. The agent must prepare an individually designed letter notifying the taxpayer that 7805(b) relief was denied.

    2. Disagrees with the group manager’s decision to deny relief, the Director will contact the appropriate Area Counsel to discuss and resolve the matter.

  5. If the final resolution is to:

    1. Grant 7805(b) relief, the Director will acknowledge agreement directly on the Recommendation Memo, sign the Recommendation Memo, and return the memos (Recommendation Memo and Legal Opinion Memo) to the agent and group manager for association with the case file. The agent prepares an individually designed letter to notify the taxpayer that 7805(b) relief was granted.

    2. Deny 7805(b) relief, the Director will provide the rationale for denial directly on the Recommendation Memo, sign the Recommendation Memo, and return the memos (Recommendation Memo and Legal Opinion Memo) to the agent and group manager for association with the case file. The agent must prepare an individually designed letter to notify the taxpayer that 7805(b) relief was denied.