TEB – Communicating Identified Issues

If you conclude, after verifying the relevant facts and establishing the issuer's position, that the bonds fail to comply with one or more requirements, discuss the noncompliance with your manager.

If your manager concurs with your determination of noncompliance, consider whether the legal issue warrants technical assistance or technical advice, see IRM 4.70.16, Technical Assistance and Technical Advice Requests and Request for 7805(b), for procedures to request technical assistance and technical advice (tech advice). The issuer may also request technical advice on an identified area of noncompliance, see. Rev. Proc. 2021-2 (updated annually) and IRM 4.70.16.

Follow your manager’s instructions on how to address the noncompliance. This may include preparing Form 5701-B, Notice of Proposed Issue, and Form 886-A, Explanation of Items.

Include a description of the identified noncompliance, relevant facts, applicable law and analysis, and a conclusion on Form 886-A.

Issue the Form 5701-B, Notice of Proposed Issue, if applicable, to the issuer after your manager reviews and approves it along with Letter 5943, Form 5701-B Cover Letter.

If the issuer’s response to the Form 5701-B indicates that they’d like to enter into a closing agreement, discuss any proposed resolution with the group manager. If the manager concurs with your determination of noncompliance, discuss the proposed resolution with the issuer. If a closing agreement is warranted, see IRM 4.81.6, Closing Agreements, for closing agreement procedures.

If the issuer’s response to the Form 5701-B indicates that they can’t expeditiously resolve the noncompliant issue(s), including via a closing agreement, discuss the need for technical assistance or technical advice with your group manager.