SECTION 15. WHAT IS THE

EFFECT OF A TAM OR A TEAM?

Applies only to the taxpayer for whom the TAM or the TEAM was requested

If a formal request for reconsideration is made and ruled upon, the director or the Appeals area director will provide the taxpayer with the reconsidered TAM or TEAM only. The TAM or the TEAM drafted prior to the ruling on the request for reconsideration must not be forwarded to the taxpayer. Additionally, if a formal request for reconsideration is made and ruled upon, only the reconsidered TAM or TEAM will be open to public inspection and notations of third party communications under § 6110(d).

In the event that a TAM or a TEAM request pertains to more than one taxpayer ( see section 1.03 of this revenue procedure), the director or the Appeals area director will provide each pertinent taxpayer with a copy of the TAM or the TEAM, in accordance with this section of the revenue procedure.

The requirement to give a taxpayer a copy of the TAM or the TEAM does not apply to a TAM or a TEAM involving civil fraud or a criminal investigation, or a jeopardy or termination assessment, as described in section 10.11 of this revenue procedure.

The director or Appeals officer must notify the Associate office when the TAM or the TEAM is given to the taxpayer. This requirement does not apply to a TAM or a TEAM involving civil fraud or a criminal investigation, or a jeopardy or termination assessment, as described in section 10.11 of this revenue procedure.

In the event of a TAM or a TEAM adverse to the taxpayer, in whole or in part, the taxpayer may request § 7805(b) relief. Such a request will be treated as a separate request for a TAM or a TEAM.

.05 After receiving the notice under § 6110(f)(1) of intention to disclose the TAM or the TEAM, the taxpayer may protest the disclosure of certain information in it. The taxpayer must submit a written statement within 20 calendar days identifying those deletions not made by the Service that the taxpayer believes should have been made. The taxpayer must also submit a copy of the version of the TAM or the TEAM proposed to be open to public inspection with brackets around the deletions proposed by the taxpayer that have not been made by the Associate office.

Generally, the Associate office considers only the deletion of material that the taxpayer has proposed be deleted or other deletions as required under § 6110(c) before the Associate office reply is sent to the director or the Appeals area director. Within 20 calendar days after it receives the taxpayer’s response to the notice under § 6110(f)(1), the Associate office must mail to the taxpayer its final administrative conclusion about the deletions to be made.

.06 If the Associate office tells the director or the Appeals area director that a copy of the TAM or the TEAM should not be given to the taxpayer and the taxpayer requests a copy, the director or the Appeals area director will tell the taxpayer that no copy will be given.

.01 A taxpayer may not rely on a TAM or a TEAM issued by the Service for another taxpayer. See § 6110(k)(3).

Usually applies retroactively .02 Except in rare or unusual circumstances, a holding in a TAM or a TEAM that is favorable to the taxpayer is applied retroactively.

Moreover, because a TAM or a TEAM, as described in section 3 of this revenue procedure, is issued only on a closed transaction, a holding that is adverse to the taxpayer is also applied retroactively, unless the Associate Chief Counsel with jurisdiction over the TAM or the TEAM, as appropriate, exercises the discretionary authority under § 7805(b) to limit the retroactive effect of the holding.

Sec. 15.02 2006–1 I.R.B. 115 January 3, 2006

Generally applied retroactively to modify or revoke a prior TAM or TEAM

Applies to continuing action or series of actions until specifically withdrawn, modified, or revoked

Applies to continuing action or series of actions until material facts change

Does not apply retroactively under certain conditions

.03 A holding that modifies or revokes a holding in a prior TAM or TEAM is generally applied retroactively, unless the Associate Chief Counsel with jurisdiction over the TAM or the TEAM, as appropriate, exercises the discretionary authority under § 7805(b) to limit the retroactive effect of the holding. See sections 15.05 and 15.06 of this revenue procedure, however, for situations when the retroactive effect of the holding will not be limited.

.04 If a TAM or a TEAM relates to a continuing action or a series of actions, ordinarily it is applied until specifically withdrawn or until the conclusion is modified or revoked by the enactment of legislation, the ratification of a tax treaty, a decision of the United States Supreme Court, or the issuance of regulations (temporary or final), a revenue ruling, or other statement published in the Internal Revenue Bulletin. Publication of a notice of proposed rulemaking does not affect the application of a TAM or a TEAM.

.05 If the new holding in a TAM or a TEAM is less favorable to the taxpayer than the holding in an earlier TAM or TEAM, it generally is not applied to the period when the taxpayer relied on the prior holding in situations involving a continuing action or a series of actions. A taxpayer is not protected, however, against retroactive modification or revocation of a TAM or a TEAM involving a continuing action or a series of actions for any actions occurring after the material facts on which the earlier TAM or TEAM was based have changed.

.06 In the case of a TAM or a TEAM revoking or modifying a letter ruling, TAM, or TEAM, the TAM or the TEAM will be applied retroactively to the taxpayer for whom the letter ruling was issued or to a taxpayer whose tax liability was directly involved in a letter ruling, TAM, or TEAM if:

(1) there has been a misstatement or omission of controlling facts; or

(2) the facts at the time of the transaction are materially different from the controlling facts on which the letter ruling, TAM, or TEAM was based.

Generally, in all other circumstances, a TAM or a TEAM revoking or modifying a letter ruling or another TAM or a TEAM will not be applied retroactively to the taxpayer for whom the letter ruling, TAM, or TEAM was issued or to a taxpayer whose tax liability was directly involved in the letter ruling, TAM, or TEAM, provided that:

(1) there has been no change in the applicable law;

(2) in the case of a letter ruling, it was originally issued for a proposed transaction; and

(3) the taxpayer directly involved in the letter ruling, TAM, or TEAM acted in good faith in relying on the letter ruling, TAM, or TEAM and revoking or modifying it retroactively would be to the taxpayer’s detriment. For example, the tax liability of each shareholder in a corporation is directly involved in a letter ruling on the reorganization of the corporation. The shareholders’ reliance on the letter ruling may, depending on all facts and circumstances, be in good faith. The tax liability of a member of an industry, however, is not directly involved in a letter ruling, TAM, or TEAM issued to another member of the same industry and, therefore, a nonretroactive revocation or modification of a letter ruling, TAM, or TEAM to one member of an industry will not extend to other members of the industry who have not received letter rulings. By the same reasoning, a tax practitioner may not extend to one client the nonretroactive application of a revocation or modification of a letter ruling, TAM, or TEAM previously issued to another client.

When a letter ruling to a taxpayer or a TAM or a TEAM involving a taxpayer is modified or revoked with retroactive effect, the notice to the taxpayer, except in fraud cases, sets forth the grounds on which the modification or revocation is being made and the reason why the modification or revocation is being applied retroactively.

Sec. 15.03 January 3, 2006 116 2006–1 I.R.B.