SECTION 7. UNDER WHAT

CIRCUMSTANCES DOES THE SERVICE HAVE DISCRETION TO ISSUE LETTER RULINGS AND DETERMINATION LETTERS?

Ordinarily not in certain areas .01 The Service ordinarily will not issue letter rulings or determination letters in certain because of factual nature areas because of the factual nature of the problem involved or because of other reasons. of the problem Rev. Proc. 2001–3 and Rev. Proc. 2001–7 provide a list of these areas. This list is not allinclusive because the Service may decline to issue a letter ruling or a determination letter when appropriate in the interest of sound tax administration or on other grounds whenever warranted by the facts or circumstances of a particular case.

Instead of issuing a letter ruling or determination letter, the national office or a director may, when it is considered appropriate and in the best interests of the Service, issue an information letter calling attention to well-established principles of tax law.

Not on alternative plans or .02 A letter ruling or a determination letter will not be issued on alternative plans of prohypothetical situations posed transactions or on hypothetical situations.

Ordinarily not on part of .03 The national office ordinarily will not issue a letter ruling on only part of an intean integrated transaction grated transaction. If, however, a part of a transaction falls under a no-rule area, a letter ruling on other parts of the transaction may be issued. Before preparing the letter ruling request, a taxpayer should call the branch having jurisdiction for the matters on which the taxpayer is seeking a letter ruling to discuss whether the national office will issue a letter ruling on part of the transaction.

If two or more items or sub-methods of accounting are interrelated, the national office ordinarily will not issue a letter ruling on a change in accounting method involving only one of the items or sub-methods.

Sec. 7.04 2001–1 I.R.B. 19 January 2, 2001

Ordinarily not on questions .04 A letter ruling or determination letter ordinarily will not be issued on questions involving the validity of the involving the validity of the federal income tax and other taxes set forth in the Code, quesfederal income tax or tions on the authority or jurisdiction of the Service to enforce the Code or collect inforsimilar matters mation, or similar matters.

On constructive sales price .05 The national office will issue letter rulings in all cases on the determination of a conunder § 4216(b) or § 4218(c) structive sales price under § 4216(b) or § 4218(c) and in all other cases on prospective transactions if the law or regulations require a determination of the effect of a proposed transaction for tax purposes.

Ordinarily not on which of .06 A letter ruling or determination letter ordinarily will not be issued on which of two two entities is a common entities, under common law rules applicable in determining the employer-employee law employer relationship, is the employer, when one entity is treating the worker as an employee.