SECTION 10. HOW DOES

THE NATIONAL OFFICE HANDLE LETTER RULING REQUESTS?

Controls request and refers it to appropriate Associate Chief Counsel’s office or Assistant Chief Counsel’s office

Branch representative contacts taxpayer within 21 days

Notifies taxpayer if any issues have been referred to another branch or office

Determines if transaction can be modified to obtain favorable letter ruling

The national office will issue letter rulings on the matters and under the circumstances explained in sections 3 and 5 of this revenue procedure and in the manner explained in this section and section 11 of this revenue procedure.

.01 All requests for letter rulings will be controlled by the Technical Services staff of the Associate Chief Counsel (Procedure and Administration) (CC:PA:T). That office will examine the incoming documents for completeness, process the user fee, and forward the file to the appropriate Associate Chief Counsel’s office for assignment.

.02 Within 21 calendar days after a letter ruling request has been received in the branch having jurisdiction, a representative of the branch will discuss the procedural issues in the letter ruling request with the taxpayer or, if the request includes a properly executed power of attorney, with the authorized representative unless the power of attorney provides otherwise. If the case is complex or a number of issues are involved, it may not be possible for the branch representative to discuss the substantive issues during this initial contact. When possible, for each issue within the branch’s jurisdiction, the branch representative will tell the taxpayer—

(1) whether the branch representative will recommend that the Service rule as the taxpayer requested, rule adversely on the matter, or not rule;

(2) whether the taxpayer should submit additional information to enable the Service to rule on the matter; or

(3) whether, because of the nature of the transaction or the issue presented, a tentative conclusion on the issue cannot be reached.

Except for cases involving a request for change in accounting method or account- ing period, the 21 calendar day procedure applies to: all matters within the jurisdic- tion of the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (International), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Proce- dure and Administration), and the Division Counsel/Associate Chief Counsel (Tax Ex- empt and Government Entities); and all matters within the jurisdiction of the Associate Chief Counsel (Financial Institutions and Products), except cases concerning insur- ance issues requiring actuarial computations.

.03 If the letter ruling request involves matters within the jurisdiction of more than one branch or office, a representative of the branch that received the original request will tell the taxpayer within the initial 21 days—

(1) that the matters within the jurisdiction of another branch or office have been referred to that branch or office for consideration; and

(2) that a representative of that branch or office will contact the taxpayer within 21 calendar days after receiving the referral to discuss informally the procedural and, to the extent possible, the substantive issues in the request.

.04 If a less than a fully favorable letter ruling is indicated, the branch representative will tell the taxpayer whether minor changes in the transaction or adherence to certain published positions would bring about a favorable ruling. The branch representative may also tell the taxpayer the facts that must be furnished in a document to comply with Service requirements. The branch representative will not suggest precise changes that would materially alter the form of the proposed transaction or materially alter a taxpayer’s proposed accounting method or accounting period.

If, at the end of this discussion, the branch representative determines that a meeting in the national office would be more helpful to develop or exchange information, a meeting will

Sec. 10.04 2003–1 I.R.B. 37 January 6, 2003

Is not bound by informal opinion expressed

Tells taxpayer if request lacks essential information during initial contact

Information must be submitted within 21 calendar days

21-day period will be extended if justified and approved

Letter ruling request closed if the taxpayer does not submit information

Letter ruling request mistakenly sent to a director

Requires prompt submission of additional information requested after initial contact

be offered and an early meeting date arranged. When offered, this meeting is in addition to the taxpayer’s conference of right that is described in section 11.02 of this revenue procedure.

.05 The Service will not be bound by the informal opinion expressed by the branch representative or any other authorized Service representative, and such an opinion cannot be relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).

.06 If a request for a letter ruling does not comply with all the provisions of this revenue procedure, the branch representative will tell the taxpayer during the initial contact which requirements have not been met.

(1) If the request lacks essential information, which may include additional information needed to satisfy the procedural requirements of this revenue procedure as well as substantive changes to transactions or documents needed from the taxpayer, the branch representative will tell the taxpayer during the initial contact that the request will be closed if the Service does not receive the information within 21 calendar days unless an extension of time is granted. See sections 10.07(1), (2), and (3) of this revenue procedure for instructions on submissions of additional information. To facilitate prompt action on letter ruling requests, taxpayers are encouraged to request that the Service request additional information by fax. See section 8.02(5) of this revenue procedure.

(2) An extension of the 21-day period will be granted only if justified in writing by the taxpayer and approved by the branch chief, senior technician reviewer (or senior technical reviewer), or assistant to the branch chief (or assistant branch chief) of the branch to which the case is assigned. A request for extension should be submitted before the end of the 21day period. If unusual circumstances close to the end of the 21-day period make a written request impractical, the taxpayer should notify the national office within the 21-day period that there is a problem and that the written request for extension will be coming soon. The taxpayer will be told promptly, and later in writing, of the approval or denial of the requested extension. If the extension request is denied, there is no right of appeal.

(3) If the taxpayer does not submit the information requested during the initial contact within the time provided, the letter ruling request will be closed and the taxpayer will be notified in writing. If the information is received after the request is closed, the request will be reopened and treated as a new request as of the date the information is received. The taxpayer must pay another user fee before the case can be reopened.

(4) A request for a letter ruling sent to a director will be returned by the director so that the taxpayer can send it to the national office.

.07

(1) Material facts furnished to the Service by telephone or fax, or orally at a conference, must be promptly confirmed by letter to the Service. This confirmation and any additional information requested by the Service that is not part of the information requested during the initial contact must be furnished within 21 calendar days to be considered part of the request.

Additional information submitted to the Service must be accompanied by the following declaration: “Under penalties of perjury, I declare that I have examined this informa- tion, including accompanying documents, and, to the best of my knowledge and be- lief, the information contains all the relevant facts relating to the request for the information, and such facts are true, correct, and complete.” This declaration must be signed in accordance with the requirements in section 8.01(15)(b) of this revenue procedure. A taxpayer who submits additional factual information on several occasions may provide one declaration subsequent to all submissions that refers to all submissions.

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Address to send additional information

Number of copies of additional information to be submitted

21-day period will be extended if justified and approved

To facilitate prompt action on letter ruling requests, taxpayers are encouraged to request that the Service request additional information by fax. See section 8.02(5) of this revenue procedure. Taxpayers also are encouraged to submit additional information by fax as soon as the information is available. The Service representative who requests additional information can provide a telephone number to which the information can be faxed. A copy of this information and a signed perjury statement must be mailed or delivered to the Service.

(2)(a) If a private delivery service is not used, the additional information should be sent to:

Internal Revenue Service ADDITIONAL INFORMATION Attn: [Name, office symbols, and room number of the Service representative who requested the information] P.O. Box 7604 Ben Franklin Station Washington, D.C. 20044

For cases involving a request for change in accounting method or period under the jurisdiction of the Associate Chief Counsel (Income Tax and Accounting), and a § 301.9100 request for an extension of time on such cases, the additional information should be sent to:

Internal Revenue Service ADDITIONAL INFORMATION Attn: [Name, office symbols, and room number of the Service representative who requested the information] P.O. Box 14095 Ben Franklin Station Washington, D.C. 20044

(b) If a private delivery service is used, the additional information for all cases should be sent to:

Internal Revenue Service ADDITIONAL INFORMATION Attn: [Name, office symbols, and room number of the Service representative who requested the information] 1111 Constitution Avenue, N.W. Washington, D.C. 20224

(c) For all cases, the additional information should include the name, office symbols, and room number of the Service representative who requested the information, and the taxpayer’s name and the case control number, which the Service representative can provide.

(3) Generally, a taxpayer needs only to submit one copy of the additional information, although in appropriate cases, the national office may request additional copies of the information.

(4) An extension of the 21-day period will be granted only if justified in writing by the taxpayer and approved by the branch chief, senior technician reviewer (or senior technical reviewer), or assistant to the branch chief (or assistant branch chief) of the branch to which the case is assigned. A request for extension should be submitted before the end of the 21day period. If unusual circumstances close to the end of the 21-day period make a written

Sec. 10.07(4) 2003–1 I.R.B. 39 January 6, 2003

If taxpayer does not submit additional information

Near the completion of the ruling process, advises the taxpayer of conclusions and, if the Service will rule adversely, offers the taxpayer the opportunity to withdraw the letter ruling request

May request draft of proposed letter ruling near the completion of the ruling process

Taxpayer may also submit draft on a computer disk in a word processing format

Issues separate letter rulings for substantially identical letter rulings and generally issues a single letter ruling for identical accounting method changes

request impractical, the taxpayer should notify the national office within the 21-day period that there is a problem and that the written request for extension will be coming soon. The taxpayer will be told promptly, and later in writing, of the approval or denial of the requested extension. If the extension request is denied, there is no right of appeal.

(5) If the taxpayer does not follow the instructions for submitting additional information or requesting an extension within the time provided, a letter ruling will be issued on the basis of the information on hand or, if appropriate, no letter ruling will be issued.

When the Service decides not to issue a letter ruling because additional information was not timely submitted, the case will be closed and the taxpayer notified in writing. If the Ser- vice receives the information after the letter ruling request is closed, the request may be reopened and treated as a new request. The taxpayer must pay another user fee be- fore the case can be reopened.

.08 Generally, after the conference of right is held but before the letter ruling is issued, the branch representative will inform the taxpayer or the taxpayer’s representative of the Service’s conclusions. If the Service is going to rule adversely, the taxpayer will be offered the opportunity to withdraw the letter ruling request. Unless an extension is granted, if the taxpayer or the taxpayer’s representative does not notify the branch representative of a decision to withdraw the ruling request within 10 days of the notification, the adverse letter ruling will be issued. The user fee will not be refunded for a letter ruling request that is withdrawn. See section 8.07 of this revenue procedure.

.09 To accelerate the issuance of letter rulings, in appropriate cases near the completion of the ruling process, the Service representative may request that the taxpayer or the taxpayer’s representative submit a proposed draft of the letter ruling on the basis of discussions of the issues. The taxpayer is not required to prepare a draft letter ruling to receive a letter ruling.

The format of the submission should be discussed with the Service representative who requests the draft letter ruling. The representative usually can provide a sample format of a letter ruling and will discuss the facts, analysis, and letter ruling language to be included.

In addition to a typed draft, taxpayers are encouraged to submit this draft on a computer disk in a word processing format acceptable to the Service. The typed draft will become part of the permanent files of the national office, and the computer disk will not be returned. If the Service representative requesting the draft letter ruling cannot answer specific questions about the word processing format, the questions can be directed to the Technical Services Staff at 202–622–7560 (not a toll-free call).

The proposed letter ruling (both typed draft and computer disk) should be sent to the same address as any additional information and contain in the transmittal the information that should be included with any additional information (for example, a penalties of perjury statement is required). See section 10.07 of this revenue procedure.

.10

(1) Substantially identical letter rulings. For letter ruling requests qualifying for the user fee provided in paragraph (A)(5)(a) of Appendix A of this revenue procedure for substantially identical letter rulings, a separate letter ruling will be issued for each entity with a common member or sponsor, or for each member of a common entity.

(2) Identical accounting method changes and related § 301.9100 letter rulings. For letter ruling requests qualifying for the user fee provided in paragraphs (A)(5)(b) and (c) of Appendix A of this revenue procedure for identical accounting method changes and related § 301.9100 letter rulings, a single letter ruling generally will be issued on behalf of all members of a consolidated group that file a Form 3115, Application for Change in Accounting Method, or that file a § 301.9100 request for an extension of time to file a Form 3115. The

Sec. 10.07(4) January 6, 2003 40 2003–1 I.R.B.

Sends a copy of the letter ruling to appropriate Service official