SECTION 19. HOW MAY

RETROACTIVE EFFECT BE LIMITED?

Commissioner has .01 Under § 7805(b) the Commissioner or the Commissioner’s delegate has the discretionary authority discretion to prescribe the extent, if any, to which a technical advice memorandum will be under § 7805(b) applied without retroactive effect.

Taxpayer may request .02 A taxpayer who has received a technical advice memorandum or for whom a techCommissioner to exercise nical advice request is pending may request that the Commissioner, Tax Exempt and authority Government Entities Division, the Commissioner’s delegate, exercise the discretionary authority under § 7805(b) to limit the retroactive effect of any holding stated in the technical advice memorandum or to limit the retroactive effect of any subsequent modification or revocation of the technical advice memorandum. Form of request to limit .03 When a technical advice memorandum that concerns a continuing transaction

January 3, 2000 182 2000–1 I.R.B.

retroactivity—before an is modified or revoked by, for example, a subsequent revenue ruling or final regulations, examination a request to limit the retroactive effect of the modification or revocation of the technical advice memorandum must be made in the form of a request for a letter ruling if submitted before examination of the return that contains the transaction that is the subject of the request for the letter ruling. See Rev. Proc. 2000–4.

Form of request to limit .04 When, during the course of an examination of a taxpayer’s return by a EP or EO retroactivity—during course Examinations or consideration by the chief, appeals office, a taxpayer is informed that EP of an examination or EO Examinations or the chief, appeals office, recommends that a technical advice memorandum be modified or revoked, a request to limit the retroactive application of the modification or revocation of the technical advice memorandum must itself be made in the form of a request for technical advice. See sections 7, 8 and 10 of this revenue procedure and sections 19.07 and 19.08 below.

The taxpayer must also submit a statement that the request is being made pursuant to § 7805(b). This statement must also indicate the relief requested and give the reasons and arguments in support of the relief requested. It must also be accompanied by any documents bearing on the request. The explanation should discuss the five items listed in section 18.06 of this revenue procedure as they relate to the taxpayer’s situation.

The taxpayer’s request, including the statement that the request is being made pursuant to § 7805(b), must be forwarded by EP or EO Examinations or the chief, appeals office, to EP or EO Technical for consideration.

Form of request to limit .05 A request to limit the retroactive effect of a holding in a technical advice memoranretroactivity—technical dum that does not modify or revoke a technical advice memorandum may be made as part advice that does not modify of that technical advice request, either initially, or at any time before the technical advice or revoke prior memorandum memorandum is issued by EP or EO Technical. In such a case, the taxpayer must also submit a statement in support of the application of § 7805(b), as described in section 19.04 above.

Taxpayer’s right .06 When a request for technical advice concerns only the application of § 7805(b), the to a conference taxpayer has the right to a conference in EP or EO Technical in accordance with the provisions of section 14 of this revenue procedure.

If the request for application of § 7805(b) is included in the request for technical advice on the substantive issues or is made before the conference of right on the substantive issues, the § 7805(b) issues will be discussed at the taxpayer’s one conference of right.

If the request for the application of § 7805(b) is made as part of a pending technical advice request after a conference has been held on the substantive issues, and the Service determines that there is justification for having delayed the request, then the taxpayer will have the right to one conference of right concerning the application of § 7805(b), with the conference limited to discussion of this issue.

Exhaustion of administrative .07 Where the applicant has requested EP Determinations to seek technical advice on the remedies — employee plans applicability of § 7805(b) relief to a qualification issue under § 401(a) pursuant to a deterdetermination letter requests mination letter request, the applicant’s administrative remedies will not be considered exhausted until EP Technical has a reasonable time to act on the request for technical advice. ( See section 20 of Rev. Proc. 2000–6.)

Exhaustion of administrative .08 Where technical advice has been requested pursuant to an exempt organization’s remedies — exempt request for § 7805(b) relief from the retroactive application of an adverse determination organization matters within the meaning of § 7428(a)(1), the exempt organization’s administrative remedies will not be considered exhausted, within the meaning of § 7428(b)(2), until EO Technical has a reasonable time to act on the request for technical advice.