7.1.5 Employee Plans Technical Advice Procedures

Manual Transmittal

September 21, 2017

Purpose

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

Material Changes

(1) Updated and restructured section 7.1.5.1, added section 7.1.5.2 and renumbered section 7.5.1.2 as 7.5.1.3, to reflect the requirements of IRM 1.11.2.2.5.

(2) Added paragraph 7.1.5.1.2(4) to reflect changes in the procedures for requesting relief under IRC 7805(b).

(3) Updated paragraph 7.1.5.2.4(2) to reflect a change in the time allowed for a taxpayer to respond to a field office memorandum when technical advice is requested.

(4) Other editorial changes have been made throughout.

Effect on Other Documents

This supersedes IRM 7.1.5, dated August 29, 2016.
This incorporates interim guidance memorandum TEGE-07-0115-0001, Realignment of Technical Work between the Tax Exempt and Government Entities Division (TE/GE) and Office of Associate Chief Counsel (Tax Exempt and Government Entities).

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(09-21-2017)

Robert Choi
Director, Employee Plans
Tax Exempt and Government Entities

Program Scope and Objectives

  1. Purpose: This IRM helps Employee Plans (EP) tax law specialists, actuaries, and other personnel understand the procedures for requesting technical advice from TEGE Counsel

  2. Audience: EP Tax Law Specialists, Actuaries and other EP Technical employees

  3. Policy Owner: Director, EP

  4. Program Owner: EP

  5. Program Goal: To ensure accuracy and consistency in processing EP Technical cases by ensuring employee have access to technical advice and understand the procedures to request such advice.

Background

  1. Sometimes, legal issues arise in EP Technical work that can’t be resolved based on law, regulations, or a clearly applicable revenue ruling or other published precedent. In this case, EP Technical may need to request technical advice.

  2. Technical advice is a written advice or guidance memo given by the Office of Associate Chief Counsel (Tax Exempt and Government Entities) (TEGE Counsel) as to:

    1. Any technical or procedural question that develops during any proceeding.

    2. The interpretation and proper application of the tax laws, regulations, revenue rulings, notices, or other precedents.

    3. A specific set of facts that concerns the treatment of an item in a period under examination or determination.

      Reminder:

      Effective January 2, 2015, TEGE Counsel assumed the authority for issuing tech advice (Technical Advice Memoranda (TAMs)).

  3. Proceedings before the IRS include:

    1. The examination of a taxpayer’s return.

    2. Consideration of taxpayer’s claim for refund or credit.

    3. A request for a determination letter.

    4. Any other matter involving a specific taxpayer under the jurisdiction of EP Rulings and Agreements or EP Examination.

    5. Processing and considering non-docketed cases in an Appeals office.

  4. This IRM section gives procedures for EP Technical to request technical advice from TEGE Counsel.

Authority

  1. TEGE Counsel’s procedures for requesting technical advice are in the second revenue procedure each year (that is, Rev. Proc. 2017-2, 2017-1 IRB 106 and its successors). Throughout this IRM, refer to the most recent revenue procedure for references to Rev. Proc. 2017-2 and another annually-updated revenue procedures.

  2. TEGE Counsel’s procedures are also discussed in Chief Counsel Directives Manual (CCDM) 33.2.1, Legal Advice, Issuing Technical Advice Memorandum and Technical Expedited Advice Memoranda.

Responsibilities

  1. EP Technical employees:

    • Review ruling requests and other submissions.

    • Evaluate whether the law and guidance support the taxpayer’s position.

    • If warranted, request technical advice following the procedures in this IRM and/or other guidance.

Terms and Acronyms

  1. The following table lists commonly used acronyms and their definitions.

    Acronym Definition
    TE/GE Tax Exempt and Government Entities Division
    EP Employee Plans
    TAM Technical Advice Memorandum
    TEGE Counsel Office of Associate Chief Counsel (Tax Exempt and Government Entities)
    CCDM Chief Counsel Directives Manual

Related Resources

  1. The procedures for EP Determinations to request technical advice from TEGE Counsel are in IRM 7.11.12, Employee Plans Determination Letter Program, Preparing Technical Advice Requests.

  2. The procedures for EP Examinations to request technical advice from TEGE Counsel are in IRM 4.71.13, Employee Plans Examination of Returns, Technical Assistance and Technical Advice Requests.

  3. This IRM section does not include instructions on processing unagreed cases to Appeals. For additional information on Appeals procedures see IRM 8.6.3, Conference and Settlement Practices, Appeals Rulings.

When to Request a TAM

  1. Ask for tech advice on any technical or procedural question that you can’t resolve based on law, regulations, or a clearly applicable revenue ruling or other published precedent.

  2. Technical advice must be requested on:

    1. Any request for IRC 7805(b) relief for a prior ruling letter or tech advice issued to a taxpayer.

    2. Certain exclusive benefit violations under IRC 401(a).

    3. Proposed adverse or proposed revocation letters on collectively bargained plans.

  3. See Rev. Proc. 2017-2 (or its successor), Section 3.04 for a list of mandatory technical advice issues.

  4. Refer tech advice cases to TEGE Counsel for legal advice on issues within its jurisdiction. See Rev. Proc. 2017-1, 2017-1 IRB 1.

  5. Submit requests for IRC 7805(b) relief to the Director of Employee Plans, who (if he/she believes the request has merit), forwards it to Division Counsel for their consideration. See Rev. Proc. 2017-42017-1 IRB 146, Sections 23 and 29 and Rev. Proc. 2017-5, 2017‑1 IRB 230, Section 12 for the procedures for these requests.

  6. A TAM may not be requested for prospective or hypothetical transactions (except for TAMs for a taxpayer’s request for a determination letter on a matter within the Commissioner, TE/GE Division’s jurisdiction. See Rev. Proc. 2017-2, Section 3.01).

Annual Revenue Procedure for Requesting Technical Advice

  1. Rev. Proc. 2017-2 describes the administrative procedures to submit requests for technical advice to TEGE Counsel. It also explains taxpayer rights when a field office requests a TAM on a tax matter.

Procedural Matters

  1. See Rev. Proc. 2017-2, Sections 5, 6 and 7 for instructions for initiating and submitting a request for technical advice.

  2. EP Technical follows these procedures to request tech advice:

    1. Consider first, whether other forms of guidance, such as, published guidance, generic advice, or some other form of advice, would be more appropriate.

    2. Request Division Counsel’s help and recommendation.

    3. Get the Director, EP Rulings and Agreements’ written approval.

  3. If the TAM request is for a case with either an unagreed prohibited transaction, per IRC 4975(c)(1) and ERISA 406(a), or a violation of the exclusive benefit rule of IRC 401(a)(2) or ERISA 404(a)(1)(A), refer it to the Department of Labor on Form 6212-B, Examination Referral Checksheet B, before submitting the TAM to TEGE Counsel.

  4. Notify the taxpayer in writing that you intend to request technical advice, using Letter 1399, Letter to Inform Taxpayer of Technical Advice Request when you get approval to initiate the TAM request. See additional information in IRM 7.1.5.3.4.

Taxpayer May Request Technical Advice

  1. A taxpayer whose case is under the jurisdiction of EP Technical may request a TAM either orally or in writing. Notify the taxpayer if you determine that the taxpayer’s request for a referral is not appropriate.

  2. The taxpayer may appeal our decision to deny the TAM request by submitting, within 30 calendar days of the denied request, a written statement of the reasons it should be referred to TEGE Counsel. The statement should include a/an:

    1. Description of all pertinent facts (including any facts in dispute).

    2. Statement of the issue that the taxpayer would like to have addressed.

    3. Discussion of any relevant statutory, regulatory or administrative provisions, tax treaties, case law, or other authority.

    4. An explanation of the taxpayer’s position and the need for technical advice.

  3. If the taxpayer disagrees with our TAM denial:

    1. The group manager forwards their appeal statement to the Director, EP Rulings and Agreements for review. If the Director of EP Rulings and Agreements disagrees with the taxpayer, inform the taxpayer in writing of the denial and the reasons for the denial (unless doing so will prejudice the government’s interest). The decision may not be appealed.

    2. The Commissioner, TE/GE through the Director of Employee Plans reviews the denial. While under review, suspend any final decision on the issue (except when the delay would prejudice the Government’s interests). The review process is not available for frivolous issues.

Mandatory Pre-submission Conference

  1. You must have a pre-submission conference before submitting a request for tech advice with:

    • TEGE Counsel

    • the taxpayer

    • Division Counsel

    • EP Technical

  2. Before requesting a pre-submission conference, EP Technical 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

    • any other background information that the parties believe would facilitate TEGE Counsel’s understanding of the issues to discuss during the conference.

  3. EP Technical submits the request for a pre-submission conference with Division Counsel’s assistance. The request must include a brief explanation of the primary issue.

  4. TEGE Counsel must receive the pre-submission materials (including the request for a pre-submission conference) at least 10 business days before the conference is held. Division Counsel emails the pre-submission materials to the Technical Services Support Branch (TSS4510). TSS4510 ensures that the pre-submission materials are delivered to TEGE Counsel.

    Note:

    The TSS4510 email box can’t accept encrypted mail

    .

  5. If Division Counsel can’t email the documents or the documents aren’t electronically available, they may fax them to TSS4510 at 855-592-8976 and send all supporting and additional documents 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

  6. See Rev. Proc. 2017-2, Section 6 for TEGE Counsel’s procedures for pre-submission conferences.

Submission of the Request for Technical Advice

  1. Every tech advice request must include a memorandum that describes:

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

    2. Statement of the taxpayer's position.

    3. Statement of EP Technical’s position.

    4. Transmittal Form 4463, Request for Technical Advice Memorandum.

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

    6. Supporting case files.

  2. EP Technical:

    1. Prepares the memorandum with Division Counsel’s help.

    2. Sends a copy of the memorandum to the taxpayer.

  3. The taxpayer:

    1. Has 10 calendar days from the letter or fax date to respond by providing a written statement specifying any disagreement on the facts and issues.

    2. May request an extension of time in writing from EP Technical. A request for an extension will be deemed to be denied unless the taxpayer receives notification that the extension has been approved.

  4. When EP Technical receives the taxpayer’s response, the parties have 10 calendar days to resolve remaining disagreements. If all disagreements about the statement of facts and issues are resolved, EP Technical prepares a single statement of those agreed facts and issues.

  5. If disagreements continue, both versions of the facts and issues are forwarded to TEGE Counsel.

    1. EP Technical and Division Counsel prepare a memorandum that highlights the material factual differences.

    2. EP Technical sends the taxpayer a copy of the memorandum and the taxpayer may respond to it in writing, under penalty of perjury.

    3. EP Technical provides TEGE Counsel a copy of the memorandum with the request for technical advice.

  6. Every request for technical advice that is subject to IRC 6110 must include a statement of proposed deletions from public inspection in order to protect the privacy of taxpayer. See Rev. Proc. 2017-2, Section 7.05.

  7. EP Technical prepares Form 4463, Request for Technical Advice Memorandum, which Division Counsel submits with the request for technical advice.

  8. EP Technical submits one paper copy of the request for Technical Assistance to Division Counsel and one paper copy to:

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

Additional Procedures Under Rev. Proc. 2017-2

  1. Rev. Proc. 2017-2 outlines additional procedures:

    1. Section 8 provides TEGE Counsel’s procedures for initially processing the request for technical advice.

    2. Section 9 discusses TEGE Counsel’s procedures for taxpayer conferences in the event of a proposed adverse response.

    3. Section 10 discusses the preparation of the TAM by the TEGE Counsel.

    4. Section 11 provides procedures for withdrawing a request for technical advice from TEGE Counsel.

    5. Section 12 describes the use of a TAM after it has been issued.

    6. Section 13 describes the reliance a taxpayer has on a TAM as well as the retroactive effect of a TAM.

    7. Section 14 describes IRC 7805(b), which limits the retroactive effect of a TAM.

Issuance of TAM

  1. The TAM will be addressed to EP Technical. EP Technical may request that TEGE Counsel reconsider the result. Requests for reconsideration should focus on points that the TAM overlooked or misconstrued rather than simply re-argue points raised in the initial request. TEGE Counsel will determine per Rev. Proc. 2017-2, Section 10.07 whether the result should be modified or stay the same.

  2. EP Technical will give a copy of the final TAM to the taxpayer. If the TAM is subject to IRC 6110, also give the taxpayer a copy of:

    • The notice of intention to disclose under IRC 6110(f)(1)

    • The proposed redacted TAM

  3. EP Technical must process the taxpayer’s case based on the conclusions in the TAM. However, see IRM 8.6.3, Conference and Settlement Practices, Appeals Rulings, for Appeals’ settlement authority for a TAM that is unfavorable to the taxpayer.