SECTION 12. HOW DOES A

TAXPAYER APPEAL AN EP OR EO MANAGER’S OR AN APPEALS AREA DIRECTOR’S DECISION NOT TO SEEK TECHNICAL ADVICE?

Taxpayer notified of decision not to seek a TAM or TEAM

Taxpayer may request review of decision not to seek a TAM or a TEAM

EP or EO Examinations Area manager or EP or EO Determinations manager or Appeals Area Director, Area 7, determines whether technical advice will be sought

Manager or area director’s decision may be reviewed but not appealed

.01 If the EP or EO specialist’s or the appeal’s referral of an issue to EP or EO Technical for a TAM or a TEAM does not warrant referral, the EP or EO specialist or the appeals officer will tell the taxpayer. A taxpayer’s request for such a referral will not be denied merely because EP or EO Technical provided legal advice, other than advice furnished pursuant to this revenue procedure, to the EP or EO Examinations or EP or EO Determinations or appeals office on the matter.

.02 The taxpayer may request review of the decision of the EP or EO specialist or the appeals officer not to request a TAM or a TEAM in all instances. To do so, the taxpayer must submit to that specialist or 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 EP or EO Technical for a TAM or a TEAM. 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 EP or EO Examinations Area manager or EP or EO Determinations manager or the appropriate appeals office.

.03 The EP or EO specialist or the appeals officer submits the taxpayer’s statement through proper channels to the EP or EO Examinations Area manager or the EP or EO Determinations manager or the Appeals Area Director, Area 7, along with the EP or EO specialist’s or the appeals officer’s statement of why the issue should not be referred to EP or EO Technical. The manager or chief determines, on the basis of the statements, whether a TAM or a TEAM will be requested.

If the manager or chief determines that a TAM or a TEAM 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 manager or chief 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 manager or chief of agreement or disagreement with the proposed denial.

.04 The taxpayer may not appeal the decision of the EP or EO Examinations Area manager or the EP or EO Determinations manager or the Appeals Area Director, Area 7, not to request a TAM or a TEAM from EP or EO Technical. However, if the taxpayer does not agree with the proposed denial, all data on the issue for which the TAM or the TEAM has been sought, including the taxpayer’s written request and statements, will be submitted to the Commissioner,

2004-1 I.R.B. 181 January 5, 2004

Tax Exempt and Government Entities Division or the Director, Appeals, Technical Services as appropriate.

The Commissioner, Tax Exempt and Government Entities Division through the Director, Employee Plans, or the Director, Exempt Organizations or, if appropriate, the Chief, Appeals 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 appropriate Director or Chief or his or her representative may consult with EP or EO Technical and the Office of Chief Counsel, if necessary, and will notify the EP or EO Examinations or the EP or EO Determinations or the area appeals office within 45 calendar days of receiving all the data regarding the request for a TAM or a TEAM whether the proposed denial is approved or disapproved. The EP or EO Examinations or the EP or EO Determinations or area appeals office will then notify the taxpayer.

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

The provisions of this revenue procedure regarding review of the proposed denial of a request for a TAM or a TEAM continue to be applicable in those situations in which the authority normally exercised by the EP or EO Examinations Area manager, the EP or EO Determinations manager, or the Appeals Area Director, Area 7, has been delegated to another official.