SECTION 7. UNDER WHAT

CIRCUMSTANCES DO KEY DISTRICT DIRECTORS ISSUE DETERMINATION LETTERS?

Circumstances under which letters are issued by the key district director

.01 Key district directors issue determination letters only if the question presented is specifically answered by a statute, tax treaty, or regulation, or by a conclusion stated in a revenue ruling, opinion, or court decision published in the Internal Revenue Bulletin.

In general .02 In employee plans and exempt organizations matters, key district directors issue determination letters in response to taxpayers’ written requests on completed transactions that affect returns over which they have examination jurisdiction. However, see section 12.08 of this revenue procedure. A determination letter usually is not issued for a question concerning a return to be filed by the taxpayer if the same question is involved in a return under examination.

In situations involving continuing transactions, such as whether an ongoing activity is an unrelated trade or business, the national office would issue a ruling covering future tax periods and periods for which a return had not yet been filed.

Key district directors do not issue determination letters on the tax consequences of proposed transactions, except as provided in sections 7.03 and 7.04 below.

In employee plans matters .03 In employee plans matters, key district directors issue determination letters on the qualified status of employee plans under §§ 401, 403(a), 409 and 4975(e)(7), and the exempt status of any related trust under § 501. See Rev. Proc. 96–6, this Bulletin, Rev. Proc. 93–10, Rev. Proc. 93–12, and Rev. Proc. 93–39 (as superseded in part by Rev. Proc. 96–6; see section 2.19 of this revenue procedure).

In exempt organizations matters .04 In exempt organizations matters, the key district directors issue determination letters involving:

(1) Qualification for exempt status of organizations described in §§ 501 and 521 to the extent provided in Rev. Proc. 90–27, 1990–1 C.B. 514;

(2) Classification of private foundation status as provided in Rev. Proc. 76–34, 1976–2 C.B. 656;

(3) Recognition of unusual grants to certain organizations under §§ 170(b)(1)(A)(vi) and 509(a)(2);

(4) Requests for relief under § 301.9100–1 of the Procedure and Administration Regulations in connection with applications for recognition of exemption; and

(5) Advance approval under § 4945 of organizations’ grant making procedures whose determination letter requests or applications disclose (or who have otherwise properly disclosed) a grant program or plans to conduct such a program. If questions arise regarding grant-making procedures that cannot be resolved on the basis of law, regulations, a clearly applicable revenue ruling, or other published precedent, the key district director will forward the matter to the national office for technical advice.

Circumstances under which letters are not issued by the key district director

.05 A key district director will not issue a determination letter in response to any request if—

(1) it appears that the taxpayer has directed a similar inquiry to the national office;

(2) the same issue involving the same taxpayer or a related taxpayer is pending in a case in litigation or before an appeals office;

(3) the determination letter is requested by an industry, trade association, or similar group on behalf of individual taxpayers within the group (other than subordinate organizations covered by a group exemption letter); or

(4) the request involves an industry-wide problem.

Under no circumstances will a key district director issue a determination letter unless it is clearly shown that the request concerns a return that has been filed or is required to be filed and over which the key district director has or will have examination jurisdiction.

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Requests involving returns already filed

Attach a copy of determination letter to taxpayer’s return

.06 A request received by a key district director on a question concerning a return that is under examination, will be, in general, considered in connection with the examination of the return. If a response is made to the request before the return is examined, it will be considered a tentative finding in any later examination of that return.

.07 A taxpayer who, before filing a return, receives a determination letter about any transaction that has been consummated and that is relevant to the return being filed should attach a copy of the determination letter to the return when it is filed.

Review of determination letters .08 Determination letters issued under sections 7.02 through 7.04 of this revenue procedure are not reviewed by the national office before they are issued. If a taxpayer believes that a determination letter of this type is in error, the taxpayer may ask the key district director to reconsider the matter or to request technical advice from the national office as explained in Rev. Proc. 96–5, also in this Bulletin.

(1) In employee plans matters, the procedures for review of determination letters relating to the qualification of employee plans involving §§ 401 and 403(a) of the Code are provided in Rev. Proc. 96–6, Rev. Proc. 93–10, Rev. Proc. 93–12, and Rev. Proc. 93–39 (as superseded in part by Rev. Proc. 96–6; see section 2.19 of this revenue procedure).

(2) In exempt organizations matters, the procedures for the review of determination letters relating to the exemption from federal income tax of certain organizations under §§ 501 and 521 of the Code are provided in Rev. Proc. 90–27.