SECTION 5. EXAMPLES

The following examples illustrate the exhaustion of administrative remedies requirement, but do not address any other possible jurisdictional defects.

.01 Example 1 : The executor timely files a Form 706 and makes an election under section 6166(a)(1). The Service issues a preliminary determination letter, tentatively granting the election. The Service subsequently conducts an examination of the estate’s Form 706, determines that the estate is not entitled to pay the tax in installments pursuant to section 6166, and sends a second preliminary determination letter to the executor denying the election. The applicant, within 30 calendar days after the mailing date of the second preliminary determination letter, submits a written request for an Appeals conference. The applicant provides all materials requested by Appeals in a timely fashion. Appeals denies the election and sends the applicant a final determination letter. Upon the issuance of the final determination letter, the applicant has exhausted all available administrative remedies within the Service.

.02 Example 2 : The executor timely files a Form 706, makes elections under section 6166(a) and section 6166(b)(8), and tenders with the return the first installment payment of the tax. The executor receives evidence of the Service’s receipt of the Form 706 ( i.e., a date-stamped receipt from hand-carrying the return in accordance with Treas. Reg. §§ 20.6091–1 or 20.6091–2, a return receipt from certified or registered mail, a certification by a private delivery service of receipt of a signature upon delivery to the Service, or a written or other subsequent acknowledgment of receipt from the Service). The applicant does not receive any correspondence from the Service relating to the request for a determination. On the 181st calendar day after the filing of the Form 706, the applicant files a petition with the Tax Court requesting a declaratory judgment pursuant to section 7479. Due to the failure

2005–24 I.R.B. 1233 June 13, 2005

(3) A list of the issues that the taxpayer is contesting and an explanation of the basis for the taxpayer’s disagreement. The explanation should include the following:

(a) The taxpayer’s duties and responsibilities during the tax periods listed in the notice of proposed assessment. In particular, the taxpayer should describe whether the taxpayer had the duty and authority to collect, account for, and pay over trust fund taxes; and

(b) If the taxpayer contests the Service’s calculation of the penalty, the taxpayer should identify the dates and amounts of payments that the taxpayer believes the Service failed to consider and/or any computational errors made by the Service.

.02 Large Case Appeals . If the proposed penalty for any tax period is more than $25,000, the taxpayer may appeal the proposed assessment by submitting a formal written protest. In addition to the items required by section 5.01(1) and (2) of this revenue procedure, the formal written protest must include the following:

(1) The tax period(s) involved; (2) A list of the findings the taxpayer is contesting;

(3) A statement of facts that describes the following:

(a) The basis for the taxpayer’s disagreement with the proposed assessment, including specific facts that support the taxpayer’s arguments;

(b) The taxpayer’s duties and responsibilities during the tax periods listed in the notice of proposed assessment. In particular, the taxpayer should describe whether the taxpayer had the duty and authority to collect, account for, and pay trust fund taxes; and

(c) If the taxpayer contests the Service’s calculation of the penalty, the dates and amounts of payments that the taxpayer believes the Service failed to consider and/or any computational errors made by the Service;

(4) An explanation of any law or other supporting authorities on which the taxpayer relies; and

(5) The following signed declaration under penalties of perjury that the statement of facts required by section 5.02(3) is true:

“Under penalties of perjury, I declare that I have examined the facts presented in this statement and any accompanying information, and to the best of my knowl