SECTION 1. PURPOSE

.01 This revenue procedure permits a taxpayer subject to the jurisdiction of the Large and Mid-Size Business Division (LMSB) of the Internal Revenue Service (Service) to request the examination of specific issues relating to a tax return before the return is timely filed. This revenue procedure also establishes a framework within which the taxpayer and the Service can work together in a cooperative environment to resolve the examined issues. Finally, if the taxpayer and the Service are able to resolve the examined issues prior to the filing of the return, this revenue procedure authorizes the taxpayer and the Service to finalize their resolution by executing an LMSB Pre-Filing Agreement (LMSB PFA).

.02 The purpose of this revenue procedure is to facilitate and encourage the use of pre-filing examinations to resolve issues involving factual questions under well settled principles of law. Apre-filing examination can often resolve such issues more effectively and efficiently than a post-filing examination because the taxpayer and the Service have more timely access to the records and personnel relevant to the issue.

A pre-filing examination also provides the taxpayer with a greater level of certainty regarding the examined issue at an earlier point in time than a post-filing examination. Thus, the use of pre-filing examinations will benefit both taxpayers and the Service by improving the quality of tax compliance while reducing its costs, burdens and delays.

.03 This revenue procedure applies only to issues involving the application of well settled principles of law. This revenue procedure is not intended to resolve issues involving questions of law that are not well settled with respect to the material facts of the issue. Such issues are more appropriately resolved through the private letter ruling process. See Rev. Proc. 2001–1, 2001–1 I.R.B. 1 (or successor). .04 This revenue procedure is not intended to resolve disputes between the taxpayer and the Service regarding the correct interpretation of the law, except as authorized by Delegation Order Nos. 236 (Application of Appeals Settlement to Coordinated Examination Program Taxpayers) or 247 (Authority of Examination Case Managers to Accept Settlement Offers and Execute Closing Agreements on Industry Specialization Program and International Field Assistance Program Issues).