7.1.5 Employee Plans Technical Advice Procedures

Manual Transmittal

August 29, 2016

Purpose

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

Material Changes

(1) This IRM has been updated to clarify that references to the annual Revenue Procedures (2016-1 and, 2016-2) should be interpreted to mean references to their successors.

(2) Section 7.1.5.2.1 has been revised to eliminate redundant information addressed in section 7.1.5.2.4 of this IRM.

(3) Other editorial changes have been made throughout.

Effect on Other Documents

This supersedes IRM 7.1.5, dated September 17, 2015.
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

(08-29-2016)

Robert Choi
Director, Employee Plans
Tax Exempt and Government Entities

Overview

  1. Effective January 2, 2015, authority to issue technical advice memoranda (TAMs) has been transferred from the Tax Exempt and Government Entities Division (TE/GE) to Office of Associate Chief Counsel (Tax Exempt and Government Entities) (TEGE Counsel). This IRM section sets forth the applicable procedures for Employee Plans (EP) Technical to request technical advice from TEGE Counsel.

  2. The procedures for EP Determinations and EP Examinations to request technical advice from TEGE Counsel are set forth in IRM 7.11.12, Employee Plans Determination Letter Program, Preparing Technical Advice Requests and IRM 4.71.13, Employee Plans Examination of Returns, Technical Assistance and Technical Advice Requests, respectively.

  3. TEGE Counsel’s procedures for requesting technical advice are set forth in the second revenue procedure each year (that is, Rev. Proc. 2016-2, 2016-1 IRB 102 and its successors). Throughout this IRM, any references to Rev. Proc. 2016-2 should be interpreted to also refer to its most recent successor. The procedures are also discussed in Chief Counsel Directives Manual (CCDM) 33.2.1, Legal Advice, Issuing Technical Advice Memorandum and Technical Expedited Advice Memoranda.

  4. 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.

Technical Advice

  1. Technical advice is written guidance issued in the form of a legal memorandum by TEGE Counsel in response to any technical or procedural question that develops during any proceeding on the interpretation and proper application of the tax laws, 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 or determination. Proceedings before the Service 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.

  2. A TAM may not be requested for prospective or hypothetical transactions (except for TAMs in connection with a taxpayer’s request for a determination letter on a matter within the jurisdiction of the Commissioner, TE/GE Division see section 3.01 of Rev. Proc. 2016-2).

Mandatory Issues

  1. Technical advice is encouraged on any technical or procedural question that cannot be resolved based on law, regulations, or a clearly applicable revenue ruling or other published precedent. However, technical advice must be requested on the following matters:

    1. Any request for relief under IRC 7805(b) for a ruling letter or technical advice previously issued to a taxpayer.

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

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

    4. Amendments to defined contribution plans pursuant to Rev. Proc. 2004-15, 2004-1 C.B. 490, in connection with a waiver of the minimum funding standard and a request for a determination letter.

  2. Section 3.04 of Rev. Proc. 2016-2 includes a list of mandatory technical advice issues. Review the current version of the revenue procedure for any revisions.

  3. Refer technical advice cases to TEGE Counsel for legal advice on issues within its jurisdiction. See Rev. Proc. 2016-1, 2016-1 IRB 1.

Annual Revenue Procedure for Requesting Technical Advice

  1. Rev. Proc. 2016-2 provides the administrative procedures for submitting requests for technical advice to TEGE Counsel. It also explains the rights that a taxpayer has when a field office requests a TAM regarding a tax matter.

Procedural Matters

  1. Instructions for initiating and submitting a request for technical advice are located in sections 5, 6 and 7 of Rev. Proc. 2016-2.

  2. Before requesting technical advice, EP Technical should consider whether other forms of guidance, e.g., published guidance, generic advice, or some other form of advice, would be more appropriate.

  3. When requesting technical advice, EP Technical must request assistance and a recommendation from Division Counsel.

  4. Any request for technical advice from EP Technical must be approved in writing by the Director, EP Rulings and Agreements.

  5. If technical advice is requested for a case with either an unagreed prohibited transaction, as defined in 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), a Form 6212-B, Examination Referral Checksheet B, must be submitted to the Department of Labor prior to submitting the request to TEGE Counsel for technical advice.

  6. After securing approval to initiate the request for a TAM, EP Technical should notify the taxpayer by mail or fax transmission in writing that he or she intends to request technical advice, using Letter 1399, Letter to Inform Taxpayer of Technical Advice Request. See additional information in IRM 7.1.5.2.4.

Taxpayer May Request Technical Advice

  1. A taxpayer whose case is under the jurisdiction of EP Technical may request that an issue be referred to TEGE Counsel for technical advice. EP Technical will notify the taxpayer if it determines that the taxpayer’s request for a referral is not appropriate.

  2. The taxpayer may appeal the denial of the referral by submitting to EP Technical a written statement as to why the matter should be referred to TEGE Counsel. The statement of appeal must be submitted no later than 30 calendar days after the date that the taxpayer is notified that the request was denied. The statement of appeal must include all of the following:

    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. The taxpayer’s statement of appeal will be forwarded to the Director of EP Rulings and Agreements for review. If the Director of EP Rulings and Agreements disagrees with the taxpayer, the taxpayer will be informed 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.

  4. If the taxpayer disagrees with the proposed denial, the denial will be reviewed by the Commissioner, TE/GE through the Director of Employee Plans. The review process is not available for frivolous issues.

Mandatory Pre-submission Conference

  1. A pre-submission conference with TEGE Counsel, the taxpayer, Division Counsel and EP Technical is mandatory prior to the submission of a request for technical advice.

  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, and any other background information that the parties believe would facilitate TEGE Counsel understanding of the issues to be discussed during the conference.

  3. TEGE Counsel must receive the pre-submission materials at least 10 business days before the conference is to be held. The pre-submission materials must be electronically transmitted by Division Counsel to the Technical Services Support Branch (TSS4510). TSS4510 will ensure delivery of the pre-submission materials to TEGE Counsel. The TSS4510 email box cannot accept encrypted mail.

  4. If documents are not electronically available, or if documents cannot reasonably be transmitted electronically, the request may be sent by fax to TSS4510 at 202-317-6718. All supporting and additional documents sent 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

  5. Section 6 of Rev. Proc. 2016-2 sets forth TEGE Counsel’s procedures for pre- submission conferences.

Submission of the Request for Technical Advice

  1. Every request for technical advice 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 will prepare the memorandum with the assistance of Division Counsel. A copy of the memorandum will be sent to the taxpayer. The taxpayer will then have five calendar days from the date of mailing or fax transmission to respond by providing a written statement specifying any disagreement on the facts and issues. The taxpayer 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.

  3. After the taxpayer’s response is received by EP Technical, the parties will have 10 calendar days to resolve remaining disagreements. If all disagreements about the statement of facts and issues are resolved, EP Technical will prepare a single statement of those agreed facts and issues. If disagreements continue, both versions of the facts and issues will be forwarded to TEGE Counsel. EP Technical and Counsel will also prepare a memorandum that highlights the material factual differences. The taxpayer will be provided with a copy of the memorandum and will be allowed to respond to it in writing, under penalty of perjury. A copy of the memorandum will be provided to TEGE Counsel along with the request for technical advice.

  4. 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 section 7.05 of Rev. Proc. 2016-2.

  5. EP Technical will prepare Form 4463, Request for Technical Advice Memorandum, which in turn is submitted by Division Counsel along with the request for technical advice.

  6. EP Technical will submit one paper copy of the request for Technical Assistance to Division Counsel and one paper copy to the following address:

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

Additional Procedures Under Rev. Proc. 2016-2

  1. Rev. Proc. 2016-2 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 in accordance with Section 10.08 of Rev. Proc. 2016-2 whether the result should be modified or stay the same.

  2. EP Technical will give the taxpayer a copy of the final TAM. If the TAM is subject to IRC 6110, the taxpayer will also be given a copy of the notice of intention to disclose under IRC 6110(f)(1) and a copy of the proposed redacted TAM.

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