SECTION 6. UNDER WHAT

CIRCUMSTANCES DOES TE/GE ISSUE LETTER RULINGS?

.06 The procedures for obtaining letter rulings, etc., that apply to federal alcohol, tobacco, and firearms taxes under subtitle E of the Internal Revenue Code are under the jurisdiction of the Bureau of Alcohol, Tobacco and Firearms.

In exempt organizations matters .01 In exempt organizations matters, the Exempt Organizations Technical Office issues letter rulings on proposed transactions and on completed transactions if the request is submitted before the return is filed for the year in which the transaction that is the subject of the request was completed. Exempt Organizations Technical issues letter rulings involving:

(1) Organizations exempt from tax under § 501, including private foundations;

(2) Organizations described in § 170(b)(1)(A) (except clause (v));

(3) Political organizations described in § 527;

(4) Qualified state tuition programs described in § 529;

(5) Trusts described in § 4947(a);

(6) Welfare benefit plans described in § 4976; and

(7) Other matters including issues under §§ 501 through 514, 4911, 4912, 4940 through 4948, 4955, 4958, 6033, 6104, 6113, and 6115.

In employee plans matters .02 In employee plans matters, the Employee Plans Technical Office issues letter rulings on proposed transactions and on completed transactions either before or after the return is filed. Employee Plans Technical issues letter rulings involving:

(1) §§ 72, 101(d), 219, 381(c)(11), 402, 403(b), 404, 408, 408A, 412, 414(d), 414(e), 419, 419A, 511 through 514, 4971, 4972, 4973, 4974, 4978, 4979, and 4980;

(2) Waiver of the minimum funding standard ( See Rev. Proc. 94–41, 1994–1 C.B. 711), and changes in funding methods and actuarial assumptions under § 412(c)(5);

(3) Waiver of the liquidity shortfall (as that term is defined in § 412(m)(5)) excise tax under § 4971(f)(4);

(4) Waiver under § 4980F(c)(4) of all or part of the excise tax imposed for failure to satisfy the notice requirements described in § 4980F(e) as added by section 659 of EGTRRA;

(5) Whether a plan amendment is reasonable and provides for only de minimis increases in plan liabilities in accordance with §§ 401(a)(33) and 412(f)(2)(A) of the Code ( See Rev. Proc. 79–62, 1979–2 C.B. 576);

(6) A change in the plan year of an employee retirement plan and the trust year of a taxexempt employees’ trust ( See Rev. Proc. 87–27, 1987–1 C.B. 769);

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(7) The tax consequences of prohibited transactions under §§ 503 and 4975;

(8) Whether individual retirement accounts established by employers or associations of employees meet the requirements of § 408(c). ( See Rev. Proc. 87–50, as modified by Rev. Proc. 91–44 (as modified by Rev. Proc. 2002–8) and Rev. Proc. 92–38);

(9) With respect to employee stock ownership plans and tax credit employee stock ownership plans, §§ 409(l), 409(m), and 4975(d)(3). Other subsections of §§ 409 and 4975(e)(7) involve qualification issues within the jurisdiction of EP Determinations.

(10) Where the Commissioner, Tax Exempt and Government Entities Division has authority to grant extensions of certain periods of time within which the taxpayer must perform certain transactions (for example, the 90-day period for reinvesting in employer securities under § 1.46–8(e)(10) of the regulations), the taxpayer’s request for an extension of such time period must be postmarked (or received, if hand delivered to the headquarters office) no later than the expiration of the original time period. Thus, for example, a request for an extension of the 90-day period under § 1.46–8(e)(10) must be made before the expiration of this period. However, see section 6.04 below with respect to elections under § 301.9100–1 of the Procedure and Administration Regulations.

In qualifications matters .03 The Employee Plans Technical office ordinarily will not issue letter rulings on matters involving a plan’s qualified status under §§ 401 through 420 and § 4975(e)(7). These matters are generally handled by the Employee Plans Determinations program as provided in Rev. Proc. 2003–6, this Bulletin, Rev. Proc. 93–10 and Rev. Proc. 93–12. Although the Employee Plans Technical office will not ordinarily issue rulings on matters involving plan qualification, a ruling may be issued where, (1) the taxpayer has demonstrated to the Service’s satisfaction that the qualification issue involved is unique and requires immediate guidance, (2) as a practical matter, it is not likely that such issue will be addressed through the determination letter process, and (3) the Service determines that it is in the interest of good tax administration to provide guidance to the taxpayer with respect to such qualification issue.

Request for extension of time for making an election or for other relief under § 301.9100–1 of the Procedure and Administration Regulations

Issuance of a letter ruling before the issuance of a regulation or other published guidance

.04 Employee Plans Technical or Exempt Organizations Technical will consider a request for an extension of time for making an election or other application for relief under § 301.9100–1 of the Procedure and Administration Regulations even if submitted after the return covering the issue presented in the § 301.9100–1 request has been filed and even if submitted after an examination of the return has begun or after the issues in the return are being considered by an appeals office or a federal court. In such a case, EP or EO Technical will notify the Director, EP or EO Examinations.

Except for those requests pertaining to applications for recognition of exemption, § 301.9100–1 requests, even those submitted after the examination of the taxpayer’s return has begun, are letter ruling requests and therefore should be submitted pursuant to this revenue procedure, and require payment of the applicable user fee, referenced in section 9.02(14) of this revenue procedure. In addition, the taxpayer must include the information required by § 301.9100–3(e).

However, an election made pursuant to § 301.9100–2 is not a letter ruling and does not require payment of any user fee. See § 301.9100–2(d). Such an election pertains to an automatic extension of time under § 301.9100–1.

.05 Unless the issue is covered by section 8 of this procedure, a letter ruling may be issued before the issuance of a temporary or final regulation or other published guidance that interprets the provisions of any act under the following conditions:

(1) Answer is clear or is reasonably certain. If the letter ruling request presents an issue for which the answer seems clear by applying the statute to the facts or for which the answer seems reasonably certain but not entirely free from doubt, a letter ruling will be issued.

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(2) Answer is not reasonably certain. The Service will consider all letter ruling requests and use its best efforts to issue a letter ruling even if the answer does not seem reasonably certain where the issuance of a letter ruling is in the best interest of tax administration.

(3) Issue cannot be readily resolved before a regulation or any other published guid- ance is issued. A letter ruling will not be issued if the letter ruling request presents an issue that cannot be readily resolved before a regulation or any other published guidance is issued.

Issues in prior return .06 The Service ordinarily does not issue rulings if, at the time the ruling is requested, the identical issue is involved in the taxpayer’s return for an earlier period, and that issue—

(1) is being examined by the Director, EP or EO Examinations,

(2) is being considered by an appeals office,

(3) is pending in litigation in a case involving the taxpayer or related taxpayer, or

(4) has been examined by the Director, EP or EO Examinations or considered by an appeals office, and the statutory period of limitation has not expired for either assessment or filing a claim for a refund or a closing agreement covering the issue of liability has not been entered into by the Director, EP or EO Rulings and Agreements or by an appeals office.

If a return dealing with an issue for a particular year is filed while a request for a ruling on that issue is pending, EP or EO Technical will issue the ruling unless it is notified by the taxpayer that an examination of that issue or the identical issue on an earlier year’s return has been started by the Director, EP or EO Examinations. See section 9.05. However, even if an examination has begun, EP or EO Technical ordinarily will issue the letter ruling if the Director, EP or EO Examinations agrees, by memorandum, to permit the ruling to be issued.

Generally not to business associations or groups

Generally not to foreign governments

Generally not on federal tax consequences of proposed legislation

Not on certain matters under § 53.4958–6 of the Foundation Regulations

.07 EP or EO Technical does not issue letter rulings to business, trade, or industrial associations or to similar groups concerning the application of the tax laws to members of the group. But groups and associations may submit suggestions of generic issues that would be appropriately addressed in revenue rulings. See Rev. Proc. 89–14, which states objectives of, and standards for, the publication of revenue rulings and revenue procedures in the Internal Revenue Bulletin.

EP or EO Technical, however, may issue letter rulings to groups or associations on their own tax status or liability if the request meets the requirements of this revenue procedure.

.08 EP or EO Technical does not issue letter rulings to foreign governments or their political subdivisions about the U.S. tax effects of their laws. However, EP or EO Technical may issue letter rulings to foreign governments or their political subdivisions on their own tax status or liability under U.S. law if the request meets the requirements of this revenue procedure.

.09 EP or EO Technical does not issue letter rulings on a matter involving the federal tax consequences of any proposed federal, state, local, municipal, or foreign legislation. EP or EO Technical, however, may provide general information in response to an inquiry.

.10 EO Technical does not issue letter rulings as to whether a compensation or property transaction satisfies the rebuttable presumption that the transaction is not an excess benefit transaction as described in § 53.4958–6 of the Foundation and Similar Excise Taxes Regulations.

Not on stock options .11 EP Technical does not issue letter rulings on the income tax (including unrelated business income tax) or excise tax consequences of the contribution of stock options to, or their subsequent exercise from, plans described in Part I of Subchapter D of the Code.

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