SECTION 11. HOW DOES THE

NATIONAL OFFICE HANDLE LETTER RULING REQUESTS?

In general .01 The national office will issue letter rulings on the matters and under the circumstances explained in sections 4 and 6 of this revenue procedure and in the manner explained in this section.

Is not bound by informal opinion expressed

Tells taxpayer if request lacks essential information during initial contact

Information must be submitted within 30 calendar days

Letter ruling request mistakenly sent to key district director

Requires prompt submission of additional information requested after initial contact

.02 The Service will not be bound by the informal opinion expressed by the branch representative or any other authorized Service representative under this procedure, and such an opinion cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b) of the Code.

.03 If a request for a letter ruling or determination letter does not comply with all the provisions of this revenue procedure, the request will be acknowledged and the Service representative will tell the taxpayer during the initial contact which requirements have not been met.

If the request lacks essential information, which may include additional information needed to satisfy the procedural requirements of this revenue procedure, as well as substantive changes to transactions or documents needed from the taxpayer, the branch representative will tell the taxpayer during the initial contact that the request will be closed if the Service does not receive the information within 30 calendar days. See section 11.04 of this revenue procedure for instructions on submissions of additional information.

If the information is received after the request is closed, the request will be reopened and treated as a new request as of the date the information is received. However, the taxpayer must pay another user fee before the case can be reopened.

A request for a letter ruling sent to the key district director that does not comply with the provisions of this revenue procedure will be returned by the key district director so that the taxpayer can make corrections before sending it to the national office.

.04 Material facts furnished to the Service by telephone or fax, or orally at a conference, must be promptly confirmed by letter to the Service with a declaration that the information is provided under penalties of perjury in the form described in section 9.02(13) of this revenue procedure. This confirmation and any additional information requested by the Service that is not part of the information requested during the initial contact must be furnished within 21 calendar days to be considered part of the request.

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Encourage use of fax (1) To facilitate prompt action on letter ruling requests, taxpayers are encouraged to submit additional information by fax as soon as the information is available. The Service representative who requests additional information can provide a telephone number to which the information can be faxed. A copy of this information and a signed perjury statement, however, must be mailed or delivered to the Service.

Address to send additional information

30-day or 21-day period may be extended if justified and approved

If taxpayer does not submit additional information

Schedules a conference if requested by taxpayer

Permits taxpayer one conference of right

(2) Additional information should be sent to the same address as the original letter ruling request. See section 9.04. However, the additional information should include the name, office symbols, and room number of the Service representative who requested the information and the taxpayer’s name and the case control number (which the Service representative can provide).

(3) An extension of the 30-day period under section 11.03 or the 21-day period under section 11.04, will be granted only if justified in writing by the taxpayer and approved by the branch chief or group manager of the group to which the case is assigned. A request for extension should be submitted before the end of the 30-day or 21-day period. If unusual circumstances close to the end of the 30-day or 21-day period make a written request impractical, the taxpayer should notify the national office within the 30-day or 21-day period that there is a problem and that the written request for extension will be coming soon. The taxpayer will be told promptly, and later in writing, of the approval or denial of the requested extension. If the extension request is denied, there is no right of appeal.

(4) If the taxpayer does not follow the instructions for submitting additional information or requesting an extension within the time provided, a letter ruling will be issued on the basis of the information on hand, or, if appropriate, no letter ruling will be issued. When the Service decides not to issue a letter ruling because essential information is lacking, the case will be closed and the taxpayer notified in writing. If the Service receives the information after the letter ruling request is closed, the request may be reopened and treated as a new request. However, the taxpayer must pay another user fee before the case can be reopened.

.05 A taxpayer may request a conference regarding a letter ruling request. Normally, a conference is scheduled only when the national office considers it to be helpful in deciding the case or when an adverse decision is indicated. If conferences are being arranged for more than one request for a letter ruling involving the same taxpayer, they will be scheduled so as to cause the least inconvenience to the taxpayer. As stated in section 9.03(5) of this revenue procedure, a taxpayer who wants to have a conference on the issue or issues involved should indicate this in writing when, or soon after, filing the request.

If a conference has been requested, the taxpayer will be notified by telephone, if possible, of the time and place of the conference, which must then be held within 21 calendar days after this contact. Instructions for requesting an extension of the 21-day period and notifying the taxpayer or the taxpayer’s representative of the Service’s approval or denial of the request for extension are the same as those explained in section 11.04 of this revenue procedure regarding providing additional information.

.06 A taxpayer is entitled, as a matter of right, to only one conference in the national office, except as explained under section 11.09 of this revenue procedure. This conference normally will be held at the branch level and will be attended by a person who, at the time of the conference, has the authority to sign the ruling letter in his or her own name or for the branch chief.

When more than one branch has taken an adverse position on an issue in a letter ruling request, or when the position ultimately adopted by one branch will affect that adopted by another, a representative from each branch with the authority to sign in his or her own name or for the branch chief will attend the conference. If more than one subject is to be discussed at the conference, the discussion will constitute a conference on each subject.

To have a thorough and informed discussion of the issues, the conference usually will be held after the branch has had an opportunity to study the case. However, at the request of the taxpayer, the conference of right may be held earlier.

No taxpayer has a right to appeal the action of a branch to the division director or to any other official of the Service. But see section 11.09 of this revenue procedure for situations in which the Service may offer additional conferences.

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Disallows verbatim recording of conferences

Makes tentative recommendations on substantive issues

.07 Since conference procedures are informal, no tape, stenographic, or other verbatim recording of a conference may be made by any party.

.08 The senior Service representative present at the conference ensures that the taxpayer has the opportunity to present views on all the issues in question. A Service representative explains the Service’s tentative decision on the substantive issues and the reasons for that decision. If the taxpayer asks the Service to limit the retroactive effect of any letter ruling or limit the revocation or modification of a prior letter ruling, a Service representative will discuss the recommendation concerning this issue and the reasons for the recommendation. The Service representatives will not make a commitment regarding the conclusion that the Service will finally adopt.

May offer additional conferences .09 The Service will offer the taxpayer an additional conference if, after the conference of right, an adverse holding is proposed, but on a new issue, or on the same issue but on different grounds from those discussed at the first conference. There is no right to another conference when a proposed holding is reversed at a higher level with a result less favorable to the taxpayer, if the grounds or arguments on which the reversal is based were discussed at the conference of right.

The limit on the number of conferences to which a taxpayer is entitled does not prevent the Service from offering additional conferences, including conferences with an official higher than the branch level, if the Service decides they are needed. Such conferences are not offered as a matter of course simply because the branch has reached an adverse decision. In general, conferences with higher level officials are offered only if the Service determines that the case presents significant issues of tax policy or tax administration and that the consideration of these issues would be enhanced by additional conferences with the taxpayer.

Requires written confirmation of information presented at conference

May schedule pre-submission conference

May, under limited circumstances, schedule a conference to be held by telephone

May request draft of proposed letter ruling at the completion of the ruling process

.10 The taxpayer should furnish to the national office any additional data, reasoning, precedents, etc., that were proposed by the taxpayer and discussed at the conference but not previously or adequately presented in writing. The taxpayer must furnish the additional information within 21 calendar days from the date of the conference. See section 11.04 of this revenue procedure for instructions on submission of additional information. If the additional information is not received within that time, a ruling will be issued on the basis of the information on hand or, if appropriate, no ruling will be issued.

Procedures for requesting an extension of the 21-day period and notifying the taxpayer or the taxpayer’s representative of the Service’s approval or denial of the requested extension are the same as those stated in section 11.04 of this revenue procedure regarding submitting additional information.

.11 Sometimes it is advantageous to both the Service and the taxpayer to hold a conference before the taxpayer submits the letter ruling request to discuss substantive or procedural issues relating to a proposed transaction. Such conferences are held only when the taxpayer actually intends to make a request and only on a time-available basis. Generally, the taxpayer will be asked to provide a draft of the letter ruling request or other detailed written description of the proposed transaction before the presubmission conference.

Any discussion of substantive issues at a pre-submission conference is advisory only, is not binding on the Service, and cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b). A letter ruling request submitted following a pre-submission conference will not necessarily be assigned to the branch that held the pre-submission conference.

.12 A taxpayer may request that their conference of right be held by telephone. This may occur, for example, where a taxpayer wants a conference of right but believes that the issue involved does not warrant incurring the expense of traveling to Washington, DC. If a taxpayer makes such a request, the branch chief or group manager will decide if it is appropriate in the particular case to hold the conference of right by telephone. If the request is approved by the branch chief or group manager, the taxpayer will be advised when to call the Service representatives (not a toll-free call).

.13 To accelerate issuance of letter rulings, in appropriate cases near the completion of the ruling process, the Service representative may request that the taxpayer or the taxpayer’s representative submit a proposed draft of the letter ruling on the basis of

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Taxpayer may also submit draft on a word processing disk

Advises the taxpayer of final conclusions and, if the Service will rule adversely, offers the taxpayer the opportunity to withdraw the letter ruling request