4.75.36 Procedures For Processing Technical Advice Cases

Manual Transmittal

June 08, 2017

Purpose

(1) This transmits revised IRM 4.75.36, Exempt Organizations Examination Procedures, Procedures for Processing Technical Advice Cases.

Material Changes

(1) Incorporated the contents of Interim Guidance Memorandum TEGE-07-0117-0006, Reissuance of Internal Revenue Manual Sections Impacted by the Realignment of Work between the Tax Exempt and Government Entities Division (TE/GE) and the Office of Associate Chief Counsel (Tax Exempt and Government Entities) .

(2) Added IRM 4.75.36.1, Program Scope and Objectives.

(3) Removed IRM 4.75.36.3, Mandatory Technical Advice.

(4) Updated IRM 4.75.36.4, Initiating a Request for Technical Advice, to reflect the requirement to obtain Area Counsel’s recommendation before submitting the initial request to seek a TAM to the Director, EO Exam. In addition, changed text to show the Director, EO Exam, must approve all TAM requests.

(5) Updated IRM 4.75.36.5.1, Taxpayer Appeals Field Office’s Denial of TAM Request, to show the Director, EO Exam, must approve the taxpayer’s appeal of denial and any extension of the 30-day period.

(6) Updated IRM 4.75.36.6, Pre-Submission Conference, to show that a pre-submission conference is required for all TAM requests.

(7) Updated IRM 4.75.36.7, TAM Request Package, to show a listing of the current forms and items required to be submitted in the TAM package. It also informs the agent that Area Counsel will help prepare the package for submission to Associate Counsel.

(8) Updated IRM 4.75.36.8, Submitting the TAM Request Package, to show the proper routing of the TAM request package.

(9) Added IRM 4.75.36.9, Withdrawal of a Request for Technical Advice, to address withdrawal of a request for technical advice.

(10) Updated IRM 4.75.36.10, Final TAM, to show the routing of the final TAM by Associate Counsel to the Director, EO Exam, and to the area.

(11) Updated IRM 4.75.36.10.2, Responsibilities of the Director, EO Exam’s Office Upon Receipt of the TAM, to address the SRS’s responsibilities upon receipt of the TAM.

(12) Updated IRM 4.75.36.10.3, Responsibilities of the Agent Upon Receipt of the TAM, to address the agent’s responsibilities upon receipt of the TAM.

(13) Updated IRM 4.75.36.10.5, EO Exam Does Not Concur with TAM - Requests for Reconsideration, to show that the Memorandum of Request for Reconsideration is addressed and routed to Associate Counsel through the SPS.

(14) Added IRM 4.75.36.10.5.1, Director, EO Exam and Area Manager Disagree Over Whether to Protest, to show procedures to follow when the Director and the area disagree whether to protest.

(15) Updated Exhibit 4.75.36-1, 10-Day Letter of Intent.

(16) Added Exhibit 4.75.36-2, Notice of Withdrawal of Request for Technical Advice.

Effect on Other Documents

This manual supersedes IRM 4.75.36, Procedures for Processing Technical Advice Cases, dated June 8, 2010.

Audience

Tax Exempt and Government Entities
Exempt Organizations
Examinations

Effective Date

(06-08-2017)

Margaret Von Lienen
Acting Director, Exempt Organizations
Tax Exempt And Government Entities

Program Scope and Objectives

  1. Purpose: This manual provides guidance to agents when requesting a Technical Advice Memorandum from Associate Counsel. Based on the procedures described in Rev. Proc. 2017-2, 2017-01 I.R.B. 2017-1 (republished annually), this IRM describe the agent’s responsibilities:

    • Before submitting the TAM request

    • During Associate Counsel’s consideration of the TAM

    • After the TAM is returned to the group

  2. Audience: The procedures in this manual apply to Exempt Organizations Examination employees in the following series:

    • GS-512

    • GS-526

    • GS-987

  3. Policy Owner: Director, Exempt Organizations

  4. Program Owner: Exempt Organizations

Background

  1. Technical advice is advice furnished by Associate Counsel in a memorandum that responds to a request, submitted under Rev. Proc. 2017-2, update annually, for assistance on any technical or procedural question that develops during a proceeding before the IRS. The field office may request a TAM when the application of the law to the facts involved is unclear.

  2. "Proceedings before the IRS" include:

    • the audit of a taxpayer’s return

    • the consideration of a taxpayer’s claim for credit or refund

    • any matter under audit or in Appeals pertaining to tax-exempt bonds, tax credit bonds, or mortgage credit certificates

    • any other matter involving a specific taxpayer under the jurisdiction of a Director

  3. Technical advice doesn’t include any oral or written legal advice furnished to the field office that isn’t submitted and processed under Rev. Proc. 2017-2.

Authority

  1. Policy Statement 4-119 states that the primary objective of the EO audit program is regulatory, with emphasis on continued qualification of exempt organizations. IRM 1.2.13.1.36

  2. IRC 7602 gives agents the authority to:

    1. Audit any books, papers, records or other data necessary to complete an audit.

    2. Issue a summons for information necessary to complete an audit.

    3. Take testimony under oath to secure additional information needed.

    4. Ask about any offense connected to administering or enforcing the Internal Revenue laws.

Responsibilities

  1. During an audit, agents are responsible for determining if the organization:

    1. Meets the requirements for exemption.

    2. Has the proper foundation status (501(c)(3) organizations only).

    3. Filed all required tax and information returns.

    4. Reported information and tax liabilities correctly.

  2. Agents are also responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3).

Terms/Definitions/Acronyms

  1. Associate Counsel - Office of Associate Chief Counsel (TE/GE).

  2. Field Office - EO Exam employees (agent, group manager, area manager).

  3. Area Counsel - The TE/GE Division Counsel Area Counsel for the area where the taxpayer is located. Any attorney in the Area Counsel’s group who is assigned to a particular case.

    Acronyms

    Acronyms Definitions
    AIMS Audit Information Management System
    EO Exempt Organization
    K-Net Knowledge Networks
    MRTAC Mandatory Review Technical Advice Coordinator
    RCCMS Reporting Compliance Case Management System
    SPS Senior Program Specialist
    TAM Technical Advice Memorandum
    TE/GE Tax Exempt/Government Entities

Technical Advice

  1. Rev. Proc. 2017-2, updated annually, defines a TAM as "advice furnished by an Associate office in a memorandum that responds to any request, submitted under (Rev. Proc. 2017-2), for assistance on any technical or procedural question that develops during any proceeding before the IRS. The question must be on the interpretation and proper application of any legal authority, including legislation, tax treaties, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements to a specific set of facts that concerns the treatment of an item in a tax period under examination or in Appeals. "

  2. Proceedings before the IRS include: (1) the examination of a taxpayer’s return; (2) the consideration of a taxpayer’s claim for credit or refund; (3) any matter under examination or in Appeals pertaining to tax-exempt bonds, tax credit bonds, or mortgage credit certificates; and (4) any other matter involving a specific taxpayer under the jurisdiction of a Director.

  3. Technical advice does not include any oral legal advice or any written legal advice furnished to the field office that is not submitted and processed under Rev. Proc. 2017-2.

  4. The field office or taxpayer may request a TAM when the application of the law to the facts involved is unclear.

  5. You may raise an issue in any tax period, even if a TAM was furnished for the same or similar issue for another tax period.

  6. You may also request a TAM on an issue even if Appeals disposed of the same or similar issue for another tax period of the same taxpayer.

  7. Taxpayer participation is preferred, but not required, to process a request for technical advice.

Initiating a Request for Technical Advice

  1. Before considering a TAM request, attempt to resolve technical questions by doing research and seeking help from:

    • Experienced peers

    • On-the-job instructors

    • Group manager

    • K-Nets

    • Area Counsel

    • EO Review Staff

  2. If you still have technical questions after exhausting the above options, discuss requesting technical advice with your group manager. It’s important to initiate a request for a TAM at the earliest stage of the audit as possible.

  3. If your group manager agrees that technical advice may be warranted, he/she will contact Area Counsel to discuss the issue. You must receive a recommendation from Area Counsel before proceeding.

  4. After obtaining Area Counsel’s recommendation to request a TAM, the group manager emails the request through the area manager to the Director, EO Exam for approval. The group manager should cc the MRTAC.

    Note:

    The Director, EO Exam must approve, in writing, all requests for technical advice. MRTAC approval isn’t required; the information is provided to them for tracking purposes only.

  5. If the Director, EO Exam, approves the TAM request, notify the taxpayer of your intent to request a TAM. See IRM 4.75.36.3.1.

  6. If the Director, EO Exam doesn’t approve the TAM request, continue to work your case using normal case procedures.

Notifying the Taxpayer of Intent to Request TAM

  1. Notify the taxpayer of your intent to request technical advice. For a sample of the 10-day notice of intent letter, see Exhibit 4.75.36-1.

  2. Prepare a statement of the issues, facts, law, and arguments supporting the IRS’ position and include it with the notice of intent letter.

  3. Per Rev. Proc. 2017-2, Section 7.(01), the taxpayer has 10 calendar days to respond, in writing, and address any factual disagreement(s). Their written statement should explain:

    1. Their position.

    2. The law that supports their position.

  4. Strive to reach agreement on the facts and specific points at issue.

  5. The taxpayer has no authority to bar your decision to seek technical advice; however, consider and document their objections.

Taxpayer Request for Technical Advice

  1. A taxpayer may request, orally or in writing, that an issue be referred for technical advice.

  2. The taxpayer should submit the request to you.

  3. You must discuss the request with your group manager.

  4. If you and the group manager decide that a taxpayer’s request for a TAM is unwarranted, notify the taxpayer of the decision.

    Note:

    You shouldn’t deny a taxpayer’s request for technical advice based solely on the fact Associate Counsel has already provided legal advice other than a TAM on the matter.

Taxpayer Appeals Field Office’s Denial of TAM Request

  1. The taxpayer may appeal your denial of their TAM request.

  2. Within 30 calendar days after being notified that their request was denied, the taxpayer should submit a written statement of the reasons why the matter should be referred to Associate Counsel. The statement must include:

    • An explanation of the need for technical advice.

    • A description of all pertinent facts (including any facts in dispute).

    • A statement of the issue that the taxpayer would like to have addressed.

    • A discussion of any relevant legal authority including legislation, tax treaties, case law, and other authorities.

    • An explanation of the taxpayer’s position.

    Note:

    Any extensions of the 30-day period must be requested in writing and approved by the Director, EO Exam. The Director’s decision is final and may not be appealed.

  3. Upon receipt, forward the taxpayer’s written statement, along with your statement of why the issue shouldn’t be referred for technical advice, to the Director, EO Exam. Email a copy to the MRTAC.

  4. The Director, EO Exam, determines if the issue should be referred for technical advice based on your statements and the taxpayer’s; no conference is held with the taxpayer/representative.

  5. If the Director, EO Exam, determines that a TAM isn’t warranted, the SPS notifies the taxpayer in writing of the proposed denial and the reasons (unless doing so would prejudice the Government’s interests).

  6. The taxpayer may not appeal the Director, EO Exam’s decision.

  7. Although the Taxpayer does not have the Appeals rights regarding the decision of the Director, EO Exam, if the taxpayer disagrees with the Director, EO Exam's decision to deny the TAM request, the taxpayer may request a review by the Commissioner, TE/GE Division (Commissioner).

  8. The Commissioner (through the Director, EO) will review the proposed denial. All data on the issue for which a TAM has been sought, including the taxpayer’s written request and statements, will be submitted for review to the Director, EO. Review of the proposed denial will be based solely on the written record. No conference will be held with the taxpayer or the taxpayer’s representative.

  9. The Director, EO may consult with the Associate office, if appropriate, and will notify the field office whether the proposed denial of the taxpayer’s request is approved or denied within 45 days of receiving all information. While the matter is under review, the field office suspends any final decision on the issue (except when the delay would prejudice the Government’s interests).

  10. The MRTAC will notify the taxpayer of the Commissioner’s decision.

Pre-Submission Conference

  1. A pre-submission conference is mandatory for all TAM requests. If you submit a request for technical advice before a pre-submission conference is held, Associate Counsel will return it.

  2. A pre-submission conference helps the parties involved discuss and agree on:

    • Background information.

    • Documents that should be included in the formal submission of the request for technical advice.

    • The appropriate scope of the request for technical advice.

    • The framing of the issues.

  3. A pre-submission conference is held with:

    1. Associate Counsel attorney

    2. Area Counsel attorney

    3. Agent

    4. Group manager

    5. Taxpayer/representative

      Note:

      You may proceed with your requests for technical advice even if a taxpayer declines to participate in a pre-submission conference.

  4. Counsel may raise new issues during the pre-submission conference.

  5. Neither party is allowed to record the conference.

Before Requesting a Pre-Submission Conference

  1. Before requesting a pre-submission conference, you must exchange proposed statements of the pertinent facts and issues with the taxpayer. The proposed statements should include:

    1. Any facts in dispute.

    2. The issues the parties intend to discuss.

    3. Legal analysis and supporting authorities.

    4. Any other background information believed to be useful.

Submitting Request for Pre-Submission Conference

  1. You must prepare a written request for a pre-submission conference; Area Counsel will assist you. The request should:

    1. Identify the Associate Counsel branch expected to have jurisdiction over the request for a TAM.

    2. Include a brief explanation of the primary issue.

  2. Email the following to Area Counsel:

    • The written request for pre-submission conference

    • The exchanged proposed statements of pertinent facts and issues

    • A copy of any Form 2848, Power of Attorney and Declaration of Representative

  3. After review, Area Counsel submits the information to Associate Counsel to request the pre-submission conference.

Scheduling of the Pre-Submission Conference

  1. Associate Counsel will contact you, the taxpayer, and the Area Counsel attorney to arrange a time for the pre-submission conference. The conference is generally held 15 - 30 calendar days after Associate Counsel contacts you.

  2. Any discussion of substantive issues at a pre-submission conference:

    • Is advisory only.

    • Is not binding on the IRS or the Office of Chief Counsel.

    • Can’t be relied upon as a basis for obtaining retroactive relief under IRC 7805(b).

  3. If it’s determined during the pre-submission conference that technical advice:

    1. Isn’t warranted, complete the case under normal procedures.

    2. Is warranted, prepare and submit the formal TAM request package.

TAM Request Package

  1. At a minimum, the TAM request package contains:

    1. A memorandum with detailed explanation of the issues, facts, law, and arguments

    2. Deletion statement

    3. Penalties of perjury statement signed by the taxpayer

    4. Form 4463, Request for Technical Advice Memorandum, approved by the Director, EO Exam

    5. Supporting documentation

    6. Copy of any Form 2848

  2. Area Counsel helps you prepare the TAM request package.

  3. Once complete, submit the TAM request package through Area Counsel to Associate Counsel.

Memorandum of Facts, Law, and Arguments

  1. Every request for technical advice must include a memorandum of facts, law, and arguments. Area Counsel will help you prepare the memorandum.

  2. The memorandum must fully describe the:

    1. Facts

    2. Issues

    3. Applicable law, and

    4. Supporting arguments for both you and the taxpayer

  3. Include a discussion of:

    • Relevant statutory provisions

    • Tax treaties

    • Court decisions

    • Regulations

    • Revenue rulings

    • Revenue procedures

    • Notices

    • Other authorities

  4. Include an explanation of disagreement on any facts between you and the taxpayer.

  5. Both you and the taxpayer must comment on any authorities contrary to your perspective positions. Make note if none are found.

  6. Once prepared, send a draft of the memorandum of facts, law, and arguments to the taxpayer by mail or fax for comment and review.

  7. The taxpayer has 10 calendar days to provide a written statement identifying any disagreement on the facts and issues.

    Note:

    If the taxpayer needs more than 10 calendar days to respond, he/she must submit a written request for extension to you. If an extension is warranted, secure group manager approval and notify the taxpayer as soon as possible. The extension request is considered denied unless you inform the taxpayer otherwise. Your decision is final and can’t be appealed.

  8. After you receive the taxpayer’s response, the parties have 10 calendar days to resolve remaining disagreements.

  9. If all disagreements are resolved, prepare a single statement of the agreed facts and issues.

  10. If disagreements continue, prepare a statement that highlights the material factual differences and provide a copy of the statement to the taxpayer for review.

    Note:

    The taxpayer’s statement of facts and issues must be accompanied by the following penalties of perjury statement: "Under penalties of perjury, I declare that I have examined this information, including accompanying documents, and, to the best of my knowledge and belief, the information contains all the relevant facts relating to the request for technical advice, and such facts are true, correct, and complete." This declaration must be signed by the taxpayer, not the representative. See Rev. Proc. 2017-1 section 7.01(15)(b) for requirements.

Deletion Statement

  1. The text of TAMs and background file documents are open to public inspection under IRC 6110(a).

  2. To help the IRS make the necessary deletions, the taxpayer or authorized representative must provide a statement indicating the deletions desired.

  3. The deletion statement must be:

    1. A separate document from the memorandum of facts, law, and arguments described in IRM 4.75.36.6.1.

    2. Signed and dated by the taxpayer or the taxpayer’s authorized representative. A stamped signature or faxed signature isn’t permitted.

  4. If the taxpayer wants only names, addresses, and identifying numbers deleted, they should state this in the deletion statement.

  5. If the taxpayer wants more information deleted they must provide both a:

    1. Copy of the TAM request and supporting documents on which they have placed brackets around the material to be deleted and

    2. Statement giving the statutory basis under IRC 6110(c) for each proposed deletion.

  6. Notify the taxpayer the deletion statement is required.

  7. If the taxpayer doesn’t provide the deletion statement within 10 calendar days of the notice, inform Associate Counsel. Advise Associate Counsel of any information in addition to names, addresses, and identifying numbers that should be deleted.

  8. The deletion statement requirements don’t apply if the TAM is open to public inspection under IRC 6104.

Form 4463, Request for Technical Advice

  1. The request for technical advice must include Form 4463, Request for Technical Advice Memorandum.

  2. Complete Form 4463. Include the mailing address of the Director, EO Exam.

  3. Route the completed Form 4463 through your manager to the Director, EO Exam for approval.

  4. The Director, EO Exam returns the approved Form 4463 to the agent to include in the TAM request package.

    Note:

    Form 4463 has an “Employee Checklist” in Part 5. Review the checklist as you prepare the TAM request package to make sure you’ve included all required items.

Submitting the TAM Request Package

  1. When possible, list the case number and name of the Associate Counsel attorney assigned to the pre-submission conference on all documents.

  2. Unless specifically requested, don’t send the exam case file with the TAM request.

  3. Keep original documents in the exam case file. Use copies of these documents for the TAM request package.

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

  5. Keep a copy of the TAM request package for reference if Associate Counsel has any questions.

  6. Make sure that a minimum of one year remains on the statute of limitations for all returns before submitting the request. This includes returns for all subsequent tax periods even if the subsequent tax periods weren’t included in the audit.

  7. Once the TAM request package is fully assembled, route:

    1. A paper copy through your group manager to the Area Counsel attorney.

    2. A paper copy through your group manager to Division Counsel.

    3. An electronic copy of the entire file to MRTAC.

    Note:

    Area Counsel submits the TAM request package to Associate Counsel. Associate Counsel contacts you to acknowledge receipt.

  8. Issue Letter 3617, Action on Return - Exempt Organization, to the taxpayer to formally notify them of the technical advice request and the corresponding delay in audit.

  9. Update the returns under audit to AIMS status 39, Suspense in Group, using RCCMS. You may keep returns that aren’t ready to be closed due to other undeveloped issues in AIMS status 12, Started.

    Example:

    You’re auditing Z’s 2015 Form 990, Return of Organization Exempt From Income Tax. You identify two issues in the audit. The first is an exemption issue involving private benefit through Z's complex partnership arrangement. You request technical advice on the first issue due to lack of published precedent. However, you need to further develop a second exemption issue on the CEO’s excessive compensation. The case isn’t ready to close because of the second issue. Z's Form 990 return should remain in AIMS status 12.

    Example:

    Assume the same facts in the above example, except that the second issue you need to further develop is an employment tax issue involving understated wages on Form 941, Employer's Quarterly Federal Tax Return. You may update Z's Form 990 return to AIMS status 39 while you seek technical advice on the exemption issue. Keep Z's Forms 941 in status 12 while you continue the audit of separate employment tax returns.

  10. Keep the returns in your inventory on RCCMS, AIMS, and Form 6490, EP/EO Technical Time Report, during the technical advice process.

  11. While technical advice is pending, you are responsible for monitoring statutes and securing extensions as needed.

  12. The Associate Counsel attorney assigned to the TAM request will give frequent status updates. Keep the taxpayer/representative informed of any updates. Contact the taxpayer/representative at least quarterly.

Withdrawal of a Request for Technical Advice

  1. Only the Director, EO Exam may withdraw the request for a TAM after Associate Counsel receives the request. The Director sends a memorandum to Associate Counsel to request the withdrawal.

    Note:

    The taxpayer may not withdraw a request for a TAM, but if you receive a withdrawal request, consider and document it. If warranted, the withdrawal request should be elevated to the EO Exam Director’s office through the area manager.

  2. Associate Counsel must receive the withdrawal request before the transmittal memorandum for the TAM is signed.

  3. Notify the taxpayer of the intent to withdraw in writing by issuing the letter in Exhibit 4.75.36-2, unless the:

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

    2. Notification would be prejudicial to the best interests of the Government.

  4. If the taxpayer doesn’t agree with the decision to withdraw the TAM request, they may request review of the Director, EO Exam’s decision. See procedures in Rev. Proc. 2017-2, section 5.04.

Final TAM

  1. Associate Counsel addresses the final TAM to the Director, EO Exam, and provides a copy to the:

    • Field Office

    • Area Counsel attorney

    • Area Counsel’s Associate Area Counsel

    • Division Counsel

  2. The TAM contains:

    1. A statement of the facts and issues.

    2. A statement of relevant legal authority such as regulations, revenue rulings, and court cases.

    3. The conclusions of Associate Counsel.

    4. A discussion of the rationale behind the conclusions reached.

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

Receipt and Management of the TAM

  1. The Area and the field group have 30 days from the date the Director, EO Exam, receives the TAM to ensure either:

    1. The TAM is mailed to the taxpayer.

    2. A written protest (request for reconsideration) is sent to Associate Counsel.

Responsibilities of the Director, EO Exam’s Office Upon Receipt of the TAM

  1. Upon receipt of the TAM, the SPS to the Director, EO Exam, immediately overnights or faxes an advanced unofficial copy of the TAM to the EO group. The SPS must mark on the advanced unofficial copy "DO NOT RELEASE TO TAXPAYER" .

  2. The SPS prepares a Transmittal Memo recommending either adopting the TAM or requesting reconsideration of the TAM. The SPS includes the date the Director, EO Exam received the TAM and the date the agent must either send the TAM via certified mail to the taxpayer, or send a Memorandum of Request for Reconsideration to the SPS. This date is known as the agent’s "Performance Date" .

    Note:

    The agent’s Performance Date should be no later than 21 days after the Director, EO Exam’s office received the TAM.

  3. Within 14 days of receiving the TAM, the SPS sends the official TAM along with the Transmittal Memo (collectively the TAM Package) to the EO group, with a copy to the area manager.

Responsibilities of the Agent Upon Receipt of the TAM

  1. Update AIMS and RCCMS to status 12 when you receive the TAM Package from the SPS. By the time you receive the TAM Package you should’ve already:

    • Reviewed the advanced non-releasable copy of the TAM,

    • Consulted with the group manager, the area manager and Area Counsel where appropriate, and

    • Taken steps to decide whether to adopt or protest the TAM.

  2. Consider the SPS’s recommendations when determining whether to adopt the TAM or submit a Memorandum of Request for Reconsideration. Don’t share the conclusions of the TAM with the taxpayer until you mail the official TAM by certified mail.

EO Exam Concurs with TAM

  1. If the SPS, area manager, and group manager agree with the TAM, you must, by the Performance Date, send to the taxpayer/representative by certified mail:

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

    2. A copy of the version proposed to be open to public inspection.

    3. Notice 438, Notice of Intent to Disclose.

    4. Waiver form(s) soliciting agreement for the issues covered by the TAM (if applicable), including Form 4549-E , Income Tax Discrepancy Adjustments, Form 870, 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 3363, Acceptance of Proposed Disallowance of Claim for Refund or Credit, or Form 2504, Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment.

  2. Before you mail the TAM Package, complete Notice 438 by filling in the name of the taxpayer, and the required dates. The Dating Schedules are based on the following rules:

    Note:

    Get the dating schedule from Associate Counsel.

    Notice 438 Block To be filled in by Agent
    Mailing date of the notice Enter the mailing date by certification
    Last date to request IRS review Enter the 20th day after the date of mailing the notice. If the 20th day falls on a weekend or holiday, then enter the next business day.
    Last date to petition Tax Court Enter the 60th day after the date of mailing the notice. If the 60th day falls on a weekend or holiday, then enter the previous business day
    Date Open to Public Inspection Enter the Friday preceding the 90th day after the date of mailing the notice. If that Friday falls on a holiday, then enter the previous business day.
  3. On the same day you mail the TAM is mailed to the taxpayer, the EO group mails a copy of the Modified TAM Package (items listed in IRM 4.75.36.10.4(1)(a)-(c)) to:
    Internal Revenue Service
    Attention: CC:PA:LPD:DLS, Room 5201
    Ben Franklin Station
    Post Office Box 7604
    Washington, D.C. 20044

    Caution:

    Do not send this package piecemeal.

  4. Instead of mailing, you can send the copy of the Modified TAM Package including Notice 438 electronically by secured email to mailto:6110.Disclosure@irscounsel.treas.gov.

  5. Type in the subject line of the secured email in all caps, "IRC 6110(f)(1) NOTICE MAILED TO TAXPAYER – SEE ATTACHED"

  6. Notice 438 informs taxpayers of their right to request additional deletions from the sanitized TAM. Per Notice 438, the Office of Chief Counsel for Disclosure is the primary contact for the taxpayer to do this.

  7. You will not be involved in the IRC 6110 deletion process after mailing Notice 438 except to provide direction to the taxpayer as needed.

  8. Send an electronic copy of the TAM package to the Manager, Mandatory Review.

  9. The TAM takes effect when the taxpayer receives it; notify Associate Counsel through Area Counsel when you deliver the TAM.

EO Exam Does Not Concur with TAM - Requests for Reconsideration

  1. If EO Exam doesn’t agree with the TAM, do not inform the taxpayer that the TAM is subject to a Request for Reconsideration or of any other similar internal disagreements over the TAM.

  2. If the area manager agrees to protest the TAM, the agent immediately prepares a Memorandum of Request for Reconsideration addressed to Associate Counsel that signed the TAM in question. Include in the memorandum:

    1. The name and phone number of the agent.

    2. A signature block for the group manager (electronic signature permitted).

    3. A signature block for the area manager (electronic signature permitted).

    4. A description of the specific errors in the TAM analysis and conclusions. Don’t re-argue points raised in the initial request. Instead focus on points the TAM overlooked or misconstrued. Attach a copy of the TAM in question

    5. Attach other pages from the technical advice case file that have a direct bearing on the issues or arguments that are being made in the request for reconsideration.

  3. The agent sends the Memorandum of Request for Reconsideration to the SPS by no later than the Performance Date.

  4. The agent updates the case back to AIMS status 39," Suspense in Group" , unless there are certain other issues being developed.

  5. Upon receipt the SPS sends the completed Memorandum of Request for Reconsideration and its attachments to Associate Counsel who signed the TAM in question.

  6. Associate Counsel sends their reply in response to the Director, EO Exam’s office with instructions. The reply will either include a re-issued TAM, or confirm the initial TAM in question.

  7. The SPS forwards the reply and its attachments to the agent with instructions.

  8. The agent updates the case to AIMS status 12 when he or she receives the reply with a re-issued TAM, or a confirmation of the initial TAM in question.

  9. If Associate Counsel re-issues a new TAM, the agent follows the procedures in IRM 4.75.36.9.4. There will generally not be another request for reconsideration (protest).

  10. If Associate Counsel denies the Request for Reconsideration and confirms the initial TAM, the agent follows the procedures in IRM 4.75.36.9.4 on sending the initial TAM and other documents to the taxpayer and to the Office of Chief Counsel for Disclosure.

Director, EO Exam and Area Manager Disagree Over Whether to Protest
  1. If the EO group doesn’t agree with SPS’s recommendations, and requests reconsideration, the group manager through the area manager, immediately contacts the SPS to discuss the TAM.

  2. If the SPS agrees to reconsideration, the agent must prepare the Memorandum of Request for Reconsideration addressed to Associate Counsel who signed the TAM in question and follow the procedures in IRM 4.75.36.9.5.

  3. If the SPS recommends adoption of the TAM, but the area manager insists on protesting the TAM, a protest can’t be submitted unless the SPS subsequently agrees to submit a protest, or the Director, EO Exam, approves it.

  4. The final decision can be made at anytime up to 28 calendar days after the SPS receives the initial TAM, but must be in time to allow the agent to submit the Memorandum of Request for Reconsideration with appropriate signatures.

  5. If the final decision is to adopt the TAM in question, follow the procedures in IRM 4.75.36.9.4 to send the official TAM to the taxpayer and to the Office of Chief Counsel for Disclosure.

  6. A TAM is issued whether Associate Counsel accepts or denies a Memorandum of Request for Reconsideration of the initial TAM. A request for Technical Advice can’t be withdrawn after the initial TAM has been issued.

Conclusion of the Case

  1. After you issue the TAM to the taxpayer:

    1. Close the case based on the conclusions of the TAM.

    2. Attach a copy of the TAM to the RAR.

    3. Attach Suspense Cover sheet to front of case file. See Exhibit 4.75.36-3.

    4. Follow normal agreed or unagreed closing procedures as applicable.

  2. Use disposal code 10 to close a case involving an unagreed issue. The taxpayer is unable to file a protest to Appeals when revocation or private foundation reclassification is the subject of the TAM.

  3. Not all cases involving technical advice are subject to mandatory review, unless they meet one of the other criteria for mandatory review. See IRM 4.75.17.1.6 for mandatory review criteria.

10-Day Letter of Intent

DEPARTMENT OF THE TREASURY
Internal Revenue Service
TE/GE EO Examinations Group 7XXX
Street Address, Suite No./Mail Stop
City, State ZIP Code
Date:
Form Number:
[Insert number]
Tax Year Ended:
[Insert tax period]
Taxpayer Identification number:
[Insert number]
Person To Contact:
[Insert name]
Employee Identification number:
[Insert taxpayer’s name] [Insert number]
[Insert care of/attention and name] Employee Telephone number:
[Insert street address] Phone: [Insert number]
[Insert city, state, and ZIP code] Fax: [Insert number]
Dear [Insert name]
We’re requesting a Technical Advice Memorandum from the Office of Associate Chief Counsel (Associate Counsel) in connection with the audit of the return(s) for the period(s) shown above. We request Technical Advice from Associate Counsel when the application of the law to the facts involved is unclear or there’s no published precedent.
We have attached a statement of the facts, the applicable law, and our position on the issues for which we are seeking Technical Advice. See ATTACHMENT.
If you disagree with the facts as stated in the attachment please respond to us in writing within 10 calendar days. The written statement should include an explanation of your position and the law that supports it. We also ask that you comment on any legislation, tax treaties, regulations, revenue rulings, revenue procedures, or court decisions contrary to your position. If you determine that there are no contrary authorities, please provide a statement to this effect. If you need more time to respond to this Letter of Intent, you must request it in writing and state your reasons.
The text of Technical Advice Memoranda are open to public inspection under Internal Revenue Code (IRC) §6110(a). We delete certain information from the text before it’s made available to the public in order to protect the privacy of taxpayers. To help us make the necessary deletions, you or your authorized representative must provide a statement indicating the deletions desired. Under a letter of separate cover, please indicate whether you request deletions other than names, addresses, and identifying numbers. If you want additional deletions, the deletion statement must be accompanied by a copy of the proposed facts, law, and position (yours and ours), on which you clearly bracket the information you want to delete. The deletion statement must indicate the specific paragraph under IRC §6110(c) upon which each deletion is based.
If you do not respond to this Letter of Intent, Associate Counsel may use the facts stated in the ATTACHMENT and its accompanying exhibits to base a ruling. We will however present your arguments as we understand them. [If the issue is a declaratory judgment issue, include the following statement: "Because the issue(s) involved [is/are] subject to Declaratory Judgment under section 7428, we have attached a notice of Declaratory Judgment" ]
If you have any questions, you can call me at the number indicated at the heading of this letter. Thank you for your cooperation.
Sincerely,
[Insert name]
[Insert title]
Enclosures:
ATTACHMENT
Declaratory Judgement
Section 7428(a) provides that the Tax Court, the United States Claims Court, or the District Court of the United States for the District of Columbia may make a declaration with respect to a continuing qualification of an organization as an organization described in section 501(c) or 501(d) and exempt from taxation under 501(a) in the case of actual controversy involving a determination by the Secretary.
Section 7428(b)(2) of the Internal Revenue Code provides that a declaratory judgment shall not be issued in any proceeding unless the Tax Court, the Claims Court, or the District Court of the United States for the District of Columbia determines that the organization involved has exhausted administrative remedies available to it within the Internal Revenue Service.

Notice of Withdrawal of Request for Technical Advice

DEPARTMENT OF THE TREASURY
Internal Revenue Service
TE/GE EO Examinations Group 7XXX
Street Address, Suite No./Mail Stop
City, State ZIP Code
Date:
Form Number:
[Insert number]
Tax Year Ended:
[Insert tax period]
Taxpayer Identification number:
[Insert number]
Person To Contact:
[Insert name]
Employee Identification number:
[Insert taxpayer’s name] [Insert number]
[Insert care of/attention and name] Employee Telephone number:
[Insert street address] Phone: [Insert number]
[Insert city, state, and ZIP code] Fax: [Insert number]
Dear [Insert name]
This letter is your official notification of the withdrawal of request for technical advice from the Office of Associate Chief Counsel (Associate Counsel) in connection with the audit of the return(s) for the period(s) shown above.
Since a technical advice memorandum was not issued by Associate Counsel, all administrative appeal rights are still available.
If you have any questions, you may contact the person shown at the top of this letter.
Sincerely,
[Insert name]
Director, Exempt Organizations Examinations

Suspense Case Cover Sheet

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