7.11.12 Preparing Technical Advice Requests

Manual Transmittal

November 18, 2016

Purpose

(1) This transmits revised IRM 7.11.12, Employee Plans Determination Letter Program, Preparing Technical Advice Requests.

Material Changes

(1) Updated to meet the requirements of P.L. 111-274 (H.R. 946), the Plain Writing Act of 2010. The Act provides that writing must be clear, concise, well-organized, and follow other best practices appropriate to the subject or field and intended audience.

(2) Updated to reflect current versions of annual revenue procedures.

(3) Updated IRM 7.11.12.3.3, Letter 1399, Taxpayer Notification - Specialist's Responsibilities, to note that specialists must create the Letter 1399 on the Forms/Pubs/Products Repository.

Effect on Other Documents

This supersedes IRM 7.11.12 dated September 18, 2015.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(11-18-2016)

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

Introduction

  1. This IRM contains the procedures for requesting technical advice (tech advice) for an Employee Plans (EP) Determination Letter (DL) application.

  2. These procedures and guidance apply to EP Determinations:

    • Specialists.

    • Quality Assurance Staff (QA) reviewers.

    • Group Managers.

  3. Rev. Proc. 2016-2 (revised annually) lists the administrative procedures for requesting tech advice on matters under the jurisdiction of the Director, Employee Plans Rulings & Agreements of the Office of the Commissioner. IRM 7.11.12.1.1 (2), When to Request a Technical Advice, for EP Determination issues which are required to be submitted for tech advice.

  4. The Office of Associate Chief Counsel for TE/GE (ACC) in Washington, D.C.:

    1. Reviews all tech advice requests.

    2. Is responsible for determining the resolution and guidance for the specific set of facts in the request. They issue a resolution in the form of written guidance called a Technical Advice Memorandum (TAM).

    Reminder:

    Before January 1, 2015, EP Technical issued TAMs.

  5. Tech advice requests help to:

    1. Resolve complex issues.

    2. Establish and maintain consistent holdings throughout the IRS.

  6. The issuance of tech advice resolution on the qualified status of a plan prevents the requesting plan sponsor from appealing within the IRS for issues addressed by the TAM. The IRS issues a TAM for to a specific plan sponsor, and no other plan sponsor can rely on that TAM.

  7. A request for tech advice can be initiated by EP Determinations or a plan sponsor. See IRM 7.11.12.1.1 (2), When to Request Technical Advice. The decision on whether or not to pursue tech advice is made by the group manager. Obtain assistance, if necessary, from the EP QA Manager.

  8. Submit your consideration for any tech advice to the EP QA Manager after your manager agrees. EP QA:

    1. Helps address the potential issues.

    2. Gives support in preparing the tech advice request.

  9. The EP QA Manager acts as the designee for the Director, Employee Plans Rulings & Agreements and must approve the request before information is sent to TEGEDC Division Counsel (Division Counsel).

  10. Division Counsel reviews the request for tech advice and must recommend that the request be submitted to the ACC.

  11. Division Counsel’s denials for a recommendation for tech advice request follow the reconciliation procedures in Rev. Proc. 2016-2, section 5.01. If the specialist decides that a request for tech advice from a plan sponsor is unwarranted, the plan sponsor may appeal that decision using the steps in Rev. Proc. 2016-2, section 5.03.

When to Request Technical Advice

  1. Request tech advice:

    1. For complex or unusual issues which cannot be resolved on the basis of law, regulations, or clearly applicable published precedent, such as a revenue ruling.

    2. When there is a lack of uniformity for issue resolution.

  2. Request mandatory tech advice for all DL applications which involve the following:

    1. Collectively-bargained plans’ proposed adverse or proposed revocation letters.

    2. 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. 93-406, 1974-3 CB 1, 43.

    3. Amendments to a defined contribution plan under Rev. Proc. 2004-15, 2004-1 CB 490, in connection with a DL application that also requests a waiver of the minimum funding standard.

    4. Requests for IRC 7805(b) relief.

      Note:

      IRC 7805(b) is not listed as mandatory in Rev. Proc. 2016-2, section 3.04 but is listed in section 14.02.

  3. Before a tech advice request is sent to the ACC, make a referral per IRM 4.71.6.8, Making Referrals to the Department of Labor (DOL) on Form 6212-B, Examination Referral Checksheet B, to the U.S. Department of Labor if the tech advice request is for a case with either:

    • An unagreed prohibited transaction, as defined in IRC 4975(c)(1) .

    • A violation of the exclusive benefit rule of IRC 401(a)(2).

    QA will provide instructions on when to send the referral.

  4. Tech advice may be requested based on a plan sponsor’s oral or written request. The request must to be submitted through the specialist.

  5. Tech advice can’t be requested until all other case issues have been resolved. Before you request tech advice and during the tech advice process, keep the plan sponsor informed of:

    1. The issues discovered by the IRS.

    2. The IRS’s supporting authority for the its position.

    Note:

    If the case is still being worked on TEDS, close case off TEDS and convert to paper case.

Initiating a Technical Advice Request

  1. Resolve all other case issues before you submit a case to your manager for tech advice consideration.

  2. The group manager must concur (and the case file documented) that a tech advice is:

    1. Required or appropriate.

    2. Mandatory, if applicable.

  3. The plan sponsor should be made aware that tech advice is being requested and given an opportunity to participate in the process.

  4. As stated in IRM 7.11.12.1.1 (4), the plan sponsor may request that an issue be referred for tech advice. Although the request for tech advice may be oral or written, the plan sponsor is required to submit a written statement of issues and facts. See Rev. Proc. 2016-2, section 5.02.

    Note:

    The plan sponsor’s statement of issues and facts 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 tech advice, and such facts are true, correct and complete." Rev. Proc. 2016-2, section 7.06.

  5. If the case is being worked on Tax Exempt Determination System (TEDS), close case off TEDS and convert to paper case. Prepare the case to submit to QA for review per IRM 7.11.1, IRM Exhibit 7.11.1-2, Case File Assembly Guide.

Preparing a Draft Proposed Statement of Issues and Facts

  1. Prepare a draft proposed Statement of Issues and Facts (Draft Statement). The Draft Statement includes these sections:

    • Issues - specific questions or issues to be addressed by the ACC.

    • Facts - a synopsis of the relevant background or history of the plan and the specific plan provisions in dispute. Include any information that would help the ACC understand the issues to be discussed during the conference.

    • Law - legal analysis including relevant statutory provisions, regulations, revenue rulings, revenue procedures, notices, or any other authority.

    • Plan Sponsor’s Position - arguments presented by the plan sponsor (if available).

    • IRS’s Position - analysis and arguments in support of the IRS’s position. Coordinate with your group manager to get QA’s help in forming the position.

  2. Once the Draft Statement is ready, get your group manager's agreement. Ask your manager to initial and date the top right-hand corner of the file copy of the Draft Statement to document the file.

  3. Send a copy of the Draft Statement to the plan sponsor for their review and to provide comments. Prepare a cover letter which states that comments are welcome but not required and that the draft is subject to change.

    Note:

    If the plan sponsor doesn’t provide a response in a reasonable amount of time, as determined by the specialist, don’t delay the process.

  4. If the plan sponsor submits a Draft Statement, the plan sponsor is required to submit it under penalties of perjury in accordance with IRM 7.11.12.2 (4).

    Note:

    If the plan sponsor disagrees with the IRS, then include those statements in the "Plan Sponsor’s Position."

Forwarding the Draft Proposed Statement of Issues and Facts to Quality Assurance

  1. Prepare the case file and Draft Statement for QA to review and approve. Include:

    1. A cover memo signed by the group manager requesting review of the Draft Statement and data related to the request. Include in the cover memo: your contact information and a list of the items that you are sending.

    2. The Draft Statement. Secure email the QA reviewer a copy.

    3. If the plan sponsor initiated the request for tech advice, the written Draft Statement from the plan sponsor per Rev. Proc. 2016-2, section 6.03 and 7.01.

    4. The physical, paper case file, assembled per IRM 7.11.1, IRM Exhibit 7.11.1-2, Case File Assembly Guide.

  2. Prepare Form 3198-A, "Special Handling Notice," select the "Other" box and cite "Potential Technical Advice Request – Request for review of Draft Statement of issues and facts document."

  3. Manually update the case to QA. Update EDS with closing code ‘01’, the applicable vesting code and law indicator; the case will automatically update to status 55 for manager approval. After the group manager's approval, the secretary enters the EDS case number and places an "x" on the EDS ‘08’ "Approval of Closed Cases" screen to update the case to status 31 (Send to Review).

  4. Mail the case file using a Form 3210, Document Transmittal to QA at the address listed in Exhibit 7.11.12-1, Mailing Address List.

  5. If the case is returned from QA, complete Form 5457, Response to Reviewer’s Memorandum EP/EO, with comments addressing all issues raised by the QA reviewer. Mail the case and attached memo to QA. Keep the case in status 32.

Assistance from Quality Assurance

  1. The QA reviewer will:

    • Evaluate Draft Statement for technical soundness.

    • Review the completeness, clarity and adequacy of the case file.

  2. Return the case for additional development, if needed, using Form 5456, Reviewer’s Memorandum – EP/EO, and Form 3210. After review and any needed additional development, submit the Draft Statement and the case to the EP QA manager for approval.

  3. Contact Division Counsel (follow instructions in the QA drive to contact Division Counsel) for consultation and recommendation that a tech advice request is warranted.

    1. Secure email the Draft Statement of issues and facts to Division Counsel, along with a memo giving QA contact information and any additional information relevant to the request.

    2. Division Counsel’s office gives the QA reviewer a designated contact.

    3. QA helps Division Counsel answer questions about the request and updates the Draft Statement for any additions, deletions or correction based on the review.

  4. Follow these procedures depending on Division Counsel decision:

    If Division Counsel... Then...
    Requests extensive changes or additional case development
    • QA returns the case, Draft Statement and instructions to the specialist on Form 5456 via Form 3210.

    • The specialist reviews QA and Division Counsel’s instructions and makes any necessary changes.

    • If the Draft Statement is modified, the specialist shares the new version with the Plan sponsor after QA review.

    • Send case and Draft Statement back to QA for further processing.

    Approves the request
    • QA returns the case, Draft Statement and instructions to the specialist on Form 5456 via Form 3210.

    • Keep the case in status 32 (update if necessary)

    • Instruct the specialist to complete the steps for the pre-submission conference in IRM 7.11.12.3.1.

    Denies the request and QA doesn’t agree The respective managers reconcile the issues within a reasonable time.
    Denies the request and QA agrees QA instructs the specialist how to close the case.

    Note:

    The plan sponsor may appeal the decision per Rev. Proc. 2016-2, section 5.03.

Pre-Submission Conference Overview

  1. A pre-submission conference is required under Rev. Proc. 2016-2, section 6 before a request for tech advice is sent to the ACC.

  2. The purpose of the conference is to reach agreement on the:

    1. Scope of the tech advice request.

    2. Factual information and documents that must be included in the formal request.

    Note:

    A pre-submission conference isn’t intended to create an alternate procedure for evaluating the merits of the positions presented. The conference is intended only to facilitate the overall process.

  3. The conference is held by telephone with:

    • Specialist and their manager

    • QA

    • Division Counsel

    • ACC

    • Plan sponsor

    • Plan sponsor’s representative, if any

  4. The request for tech advice can proceed if the plan sponsor declines to participate.

  5. No taping, stenographic or other type of verbatim recording of the conference may be done by any party.

  6. Any discussion of substantive issues at the pre-submission conference:

    1. Is advisory only.

    2. Is not binding on the IRS or on the ACC.

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

Pre-Submission Conference Preparations - Specialist's Responsibilities

  1. After you receive the case from QA, inform the plan sponsor that the request to proceed with the tech advice request has been approved and send them a revised copy of the Draft Statement, if any.

  2. Give the plan sponsor 10 calendar days to respond to the revised Draft Statement and submit his or her own.

    Note:

    If the plan sponsor delays responding, don’t delay the process.

  3. Prepare the pre-submission conference package. Include:

    1. A cover memo signed by the group manager requesting a tech advice request pre-submission conference. Include in the cover memo: your contact information and a list of the material included in the pre-submission package.

    2. The latest Draft Statement. Secure email the QA reviewer a copy.

    3. Form 2848, Power of Attorney and Declaration of Representative (if applicable). Form 8821, Tax Information Authorization, is not acceptable. Rev. Proc. 2016-2, section 6.03.

    4. Copies of any relevant information, including workpapers and the plan document needed to evaluate the latest Draft Statement.

      Note:

      The case file won’t be sent to ACC, so include copies of any relevant information needed to support the Draft Statement in the pre-submission package.

    5. If the plan sponsor initiated the request for tech advice, the written statement from the plan sponsor per Rev. Proc. 2016-2, section 7.01.

  4. Prepare Form 3198-A, select the "Other" box and cite "Technical Advice - Pre-Submission Conference Request."

  5. Update EDS to status 41 (Proposed Technical Advice) which automatically updates to status 55 for manager approval. After the group manager's approval, the secretary enters an "x" on the EDS approval screen to update the case to status 31 (In Review).

  6. Mail the pre-submission conference request and the above information via Form 3210 to QA at the address listed in Exhibit 7.11.12-1, Mailing Address List.

Pre-Submission Conference Preparations - QA Responsibilities

  1. Review and evaluate the pre-submission package for technical soundness and uniformity.

  2. Review the completeness, clarity and adequacy of the case file.

  3. Contact the specialist and request clarification of the pre-submission package and the case file, if required. If necessary, return both the package and case file for additional development using a Form 5456.

  4. After review and any needed additional development, email the EP QA manager notifying them that the case is ready for a conference and give a short summary of the issues.

  5. After you notify the EP QA Manager, submit a request for a pre-submission conference in writing to the ACC, in consultation with Division Counsel.

  6. Email the written request and the following items to Division Counsel who forwards the items to the ACC’s Technical Services Support Branch (TSS4510):

    1. Cover memo briefly explaining the primary issue so Division Counsel can determine which ACC office has jurisdiction over the tech advice request.

    2. Form 2848, Power of Attorney and Declaration of Representation.

    3. Plan sponsor’s statement of proposed deletions, if any. See Rev. Proc. 2016-2, section 7.05.

    4. The latest Draft Statement.

    5. A separate Draft Statement submitted by the plan sponsor, if available. This statement and the declaration under penalties of perjury is required if the plan sponsor initiated the request for tech advice.

    6. Copies of any important information, workpapers, relevant sections of the plan document, etc. that may be needed to evaluate the latest Draft Statement.

      Note:

      To the extent that supporting materials cannot be submitted electronically, such materials should be sent by fax, express mail or private delivery service to Division Counsel. The Division Counsel point of contact will provide the address upon request.

  7. Division Counsel mails the original pre-submission package items to the ACC at the address in Exhibit 7.11.12-1, Mailing Address List.

  8. Participate in the pre-submission conference after the ACC notifies you of the time and date. The conference should be held 15 to 30 calendar days from the notification date.

  9. Follow these procedures depending on the pre-submission conference results:

    If, as a result of the conference, it’s decided: Then:
    Tech advice shouldn’t be requested
    • QA returns the case file/materials to the specialist.

    • Instruct the specialist how to close the case.

    The issue needs further development
    • QA returns the case file/materials via Form 5456 with instructions for further development or other required actions.

    • The specialist responds to QA on Form 5457 and returns the case.

    Tech advice will be requested
    • QA updates the case status to 32 (Returned on Review Memo)

    • Return the case to the specialist to issue Letter 1399 per IRM 7.11.12.3.3, Letter 1399, Taxpayer Notification - Specialist's Responsibilities.

Letter 1399, Taxpayer Notification - Specialist's Responsibilities

  1. If it is determined during the pre-submission conference that tech advice is warranted, resolve any issues identified during the conference and issue Letter 1399.

  2. Create the Letter 1399 using the version on the Forms/Pubs/Products Repository:

    Note:

    Select the appropriate selective paragraph for the disclosure requirements and enter the date five calendar days from the date of the letter for the "Required Response Date."

    1. Attach the latest Draft Statement to Letter 1399.

    2. Mail the letter and statement to the plan sponsor and representative, if applicable.

  3. The plan sponsor has five calendar days to provide a written statement specifying any disagreement on the issues and facts but may request an extension under Rev. Proc. 2016-2, section 7.06.

  4. If a plan sponsor responds with disagreements on the issues and facts, resolve the disagreements within 10 calendar days. If all disagreements are resolved, consult with the QA reviewer to prepare a single combined statement of the agreed issues and facts.

  5. If the disagreement can’t be resolved, send both the plan sponsor's set of issues and facts and the IRS’s latest Draft Statement to QA.

    1. QA helps the specialist to prepare a "Reconciliation" memo detailing items of disagreement.

    2. The Specialist prepares the Reconciliation Memo and attaches it to the IRS’s statement.

  6. The Reconciliation Memo should include:

    1. Discrepancies in facts that can’t be reconciled or resolved.

    2. Relevant rebuttal of arguments presented by the plan sponsor or an explanation of how the arguments were previously considered in developing the latest Draft Statement.

    3. Any new information presented by the plan sponsor that was not previously included in the case file.

Prepare Technical Advice Package - Specialist's Responsibilities

  1. Prepare the tech advice package:

    1. If you don’t receive a response by the 5-day deadline described in IRM 7.11.12.3.3 (3).

    2. If the plan sponsor agrees with the Draft Statement.

    3. After you (with QA’s help) complete the Reconciliation Memo.

  2. The package should consist of copies of the relevant documents. Keep all original documents in the case file.

  3. Prepare Form 4463, Request for Technical Advice or Technical Expedited Advice, for the request for tech advice. Find the form in the Forms/Pubs/Products Repository. Complete all parts (including the applicable exhibit attachment spaces) except for the Approving Official section which is completed by the Manager, EP QA.

    Note:

    To ensure that a copy of the reply to the request for tech advice is sent to the Manager of EP QA, enter the address in Exhibit 7.11.12-1, Mailing Address List, in the first box on Form 4463.

    Note:

    Complete Part 3: Case Information – "Statutory period expires" by inserting "N/A." Generally, determination cases don’t have a statute of limitations.

  4. Prepare one tech advice package with copies of the following:

    1. Completed Form 4463.

    2. Copy of Form 2848 (if applicable).

    3. Plans sponsor’s statement of proposed deletions, if any. See Rev. Proc. 2016-2, section 7.05.

    4. Letter 1399 and the latest Draft Statement.

    5. Plan sponsor's response to Letter 1399.

    6. Copy of the pertinent case file documents tabbed and indexed to Form 4463. This includes copies of the application, prior DLs, correspondence, specific plan provisions, plan document or amendment(s), and other relevant information in IRM 7.11.12.3.1 (3)(d), Pre-Submission Conference Preparation - Specialist's Responsibilities.

  5. Prepare a Form 3198-A and place it on the front of the case file, cite "Technical Advice Request" in the "Other" box.

  6. Submit the assembled and tabbed tech advice request package, along with the case file, to your manager for review and approval. After receiving approval, make one copy of the package.

  7. Send the original and the copy of the tech advice package to QA, using Form 3210 to the address in Exhibit 7.11.12-1, Mailing Address List. Keep the case in status 32.

Technical Advice Package - QA Responsibilities

  1. Conduct a final technical and procedural review of the package. Get the case file if significant changes were made to the Draft Statement.

  2. Review and complete Form 4463:

    1. Verify specialists’ entries and correct, if necessary.

    2. Secure the signature and date of the EP QA manager as the Approving Official.

  3. Update the case to status to 56, (Technical Advice Transfer (suspense)) on EDS. Notify the specialist and group manager, via secure messaging, of the update from status 32 to status 56.

  4. Email the original Form 4463 and any electronic documents in the tech advice request package to Division Counsel who will forward the information to the ACC according to Rev. Proc. 2016-2, section 7.07. Mail any hardcopies of documents that can’t be emailed to Division Counsel (ask them for the address).

    Note:

    When possible, list the case number and assigned pre-submission conference ACC attorney’s name on all documents.

  5. Return the copy of the tech advice package and case file if applicable, via Form 3210 to the specialist. Prepare a memo:

    1. Instruct the specialist to associate the copy of the tech advice package with the case file.

    2. Give any further instructions.

    3. Confirm that the case has been updated to status 56.

Completed Technical Advice Memorandum From the Office of Associate Chief Counsel - QA Responsibilities

  1. When QA receives the TAM, the QA manager reviews it to determine whether:

    1. To distribute or post (to the intranet) a redacted version.

    2. Reconsideration is warranted.

  2. QA’s receipt of a TAM begins a 30-day period for requesting reconsideration of the advice due to specific errors in the TAM analysis and conclusions.

    1. Requests for reconsideration may not re-argue points raised in the initial request, but should focus on any points that the TAM overlooked or misconstrued.

    2. The plan sponsor is not entitled to be informed that a request for reconsideration is being considered. See Rev. Proc. 2016-2, section 10.

  3. After reconsideration, or if no reconsideration is requested, send the TAM and completed tech advice package to the originating group, via Form 5456, with instructions for sending the TAM to the plan sponsor and processing the case. Update the case status from 56 to the appropriate status before you send the case back to the group.

Completed Technical Advice Memorandum From the Office of Associate Chief Counsel - Specialist Responsibilities

  1. When you receive the case back, follow any instructions in the Form 5456 and the Transmittal Memo from the ACC. If the Transmittal Memo directs us to share the TAM with the plan sponsor, mail it to the plan sponsor. See Rev. Proc. 2016-2, section 10.03.

  2. Close the case to your manager using the normal procedures.

Mailing Address List

Division Address
EP Determinations QA express mail or private delivery address Internal Revenue Service
550 Main Street
EP Determinations Quality Assurance - Room 7008
Cincinnati, OH 45202
EP Determinations QA address Internal Revenue Service
PO Box 2508
EP Determinations Quality Assurance - Room 7008
Cincinnati, OH 45201
ACC express mail or private delivery address Internal Revenue Service,
Attn: CC:PA:LPD:TSS, Room 5336
1111 Constitution Avenue, NW
Washington, DC 20224