SECTION 4. APPLICATION PROCESS

.01 An Eligible Taxpayer who wants to participate in one of the resolution methodologies provided under this revenue procedure must mail or deliver to the Service a written application on or before January 2, 2003. The application must be made on a completed Agreement to Participate and Selection of Settlement Option in the form appended to this revenue procedure as Exhibit 1. A separate application must be submitted for each Contingent Liability Transaction for which the Taxpayer elects to participate in one of the resolution methodologies provided for under this

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changes was equal to the average selling price per share of the Sold Stock. For example, if the transferor contributed the stock received to another corporation (“Corporation 2”) in return for stock in Corporation 2, then the transferor’s basis in the stock of Corporation 2 shall be computed as if its basis in the stock contributed to Corporation 2 equaled the average selling price per share of the Sold Stock. This basis redetermination requirement applies to the Electing Taxpayer and to any person within the effective control of the Electing Taxpayer. The closing agreement referenced in Section 5.07 shall ensure that the basis of any property in the hands of any member of the Electing Taxpayer’s consolidated group (including any successor to such group), having a carryover or substituted basis determined directly or indirectly by reference to the basis of the stock received in the purported section 351 exchanges, shall be computed as if the basis of the stock received in the purported section 351 exchanges was equal to the average selling price per share of the Sold Stock. The Electing Taxpayer shall provide all information needed to effect this provision. Taxpayers who cannot or will not provide this information cannot elect to participate under this revenue procedure.

.07 An Electing Taxpayer must enter into a closing agreement with the Commissioner that reflects the terms described above. The Compliance function within the Service will close the case using established issue or case closing procedures, including the preparation of a Form 906, Closing Agreement on Final Determina- tion Covering Specific Matters.