SECTION 12. HOW DOES A

TAXPAYER APPEAL A DIRECTOR’S OR AREA DIRECTOR, APPEALS’, DECISION NOT TO SEEK TECHNICAL ADVICE?

Taxpayer notified of decision not to seek technical advice

.01 If the examining officer or appeals officer concludes that a taxpayer’s request for referral of an issue to the national office for technical advice does not warrant referral, the examining officer or appeals officer will tell the taxpayer. A taxpayer’s request for such a referral will not be denied merely because the national office provided legal advice, other than advice furnished pursuant to this revenue procedure, to the field or area office on the matter.

Sec. 12.01 2002–1 I.R.B 99 January 7, 2002

Taxpayer may appeal decision not to seek technical advice

Territory manager or area director, appeals, determines whether technical advice will be sought

Territory manager’s or area director, appeals’, decision may be reviewed but not appealed

.02 The taxpayer may appeal the decision of the examining officer or appeals officer not to request technical advice. To do so, the taxpayer must submit to that officer, within 10 calendar days after being told of the decision, a written statement of the facts, law, and arguments on the issue and the reasons why the taxpayer believes the matter should be referred to the national office for technical advice. A taxpayer who needs more than 10 calendar days must justify in writing the request for an extension of time. The extension is subject to the approval of the territory manager or the area director, appeals.

.03 The examining officer or appeals officer submits the taxpayer’s statement through channels to the territory manager or the area director, appeals, along with the examining officer’s or appeals officer’s statement of why the issue should not be referred to the national office. The territory manager or the area director, appeals, determines on the basis of the statements whether technical advice will be requested.

If the territory manager or the area director, appeals, determines that technical advice is not warranted and proposes to deny the request, the taxpayer is told in writing about the determination. In the letter to the taxpayer, the territory manager or the area director, appeals, states the reasons for the proposed denial (except in unusual situations when doing so would be prejudicial to the best interests of the Government). The taxpayer has 10 calendar days after receiving the letter to notify the territory manager or the area director, appeals, of agreement or disagreement with the proposed denial.

.04 The taxpayer may not appeal the decision of the territory manager or the area director, appeals, not to request technical advice from the national office. However, if the taxpayer does not agree with the proposed denial, all data on the issue for which technical advice has been sought, including the taxpayer’s written request and statements, will be submitted to the Industry Director, LMSB; the Area Director, SB/SE; the Director, Compliance, W&I; the Director, International, LMSB; the Director, Federal, State & Local Governments; the Director, Tax Exempt Bonds; the Director, Indian Tribal Governments; the Director, Appeals LMSB Operating Unit or the Director, Appeals SBSE Operating Unit, as appropriate.

The Industry Director, LMSB; the Area Director, SB/SE; the Director, Compliance, W&I; the Director, International, LMSB; the Director, Federal, State & Local Governments; the Director, Tax Exempt Bonds; the Director, Indian Tribal Governments; the Director, Appeals LMSB Operating Unit or the Director, Appeals SBSE Operating Unit, as appropriate, will review the proposed denial solely on the basis of the written record, and no conference will be held with the taxpayer or the taxpayer’s representative. The Industry Director, LMSB; the Area Director, SB/SE; the Director, Compliance, W&I; the Director, International, LMSB; the Director, Federal, State & Local Governments; the Director, Tax Exempt Bonds; the Director, Indian Tribal Governments; the Director, Appeals LMSB Operating Unit or the Director, Appeals SBSE Operating Unit, as appropriate, may consult with the national office, if necessary, and will notify the field office or area office within 45 calendar days of receiving all the data regarding the request for technical advice whether the proposed denial is approved or disapproved. The field office or area office will then notify the taxpayer.

While the matter is being reviewed, the field office or area office suspends action on the issue (except when the delay would prejudice the Government’s interest).

The provisions of this revenue procedure in regard to review of the proposed denial of a request for technical advice continue to be applicable in those situations in which the authority normally exercised by the director or the area director, appeals, has been delegated to another official.

Sec. 12.04 January 7, 2002 100 2002–1 I.R.B.

Special procedures applicable to appeals regarding frivolous issues