SECTION 8. HOW DO THE

ASSOCIATE OFFICES HANDLE LETTER RULING REQUESTS?

Docket, Records, and User Fee Branch receives, initially controls and refers the request to the appropriate Associate office

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(1) In general. A taxpayer may withdraw a request for a letter ruling or determination letter at any time before the letter ruling or determination letter is signed by the Service. Correspondence and exhibits related to a request that is withdrawn or related to a letter ruling request for which an Associate office declines to issue a letter ruling will not be returned to the taxpayer. See section 7.01(2) of this revenue procedure. In appropriate cases, an Associate office may publish its conclusions in a revenue ruling or revenue procedure.

(2) Notification of appropriate Service official.

(a) Letter ruling requests. If a taxpayer withdraws a letter ruling request or if the Associate office declines to issue a letter ruling, the Associate office generally will notify, by memorandum, the appropriate Service official in the operating division that has examination jurisdiction of the taxpayer’s tax return and may give its views on the issues in the request to the Service official to consider in any later examination of the return. This section 7.07(2)(a) generally does not apply if the taxpayer withdraws the letter ruling request and submits a written statement that the transaction has been, or is being, abandoned and if the Associate office has not already formed an adverse opinion. See, in appropriate cases, section 7.07(1) above.

(b) Notification of Service official may constitute Chief Counsel Advice. If the memorandum to the Service official referred to in paragraph (a) of this section 7.07(2) provides more than the fact that the request was withdrawn and the Associate office was tentatively adverse, or that the Associate office declines to issue a letter ruling, the memorandum may constitute Chief Counsel Advice, as defined in § 6110(i)(1), subject to disclosure under § 6110.

(3) Refund of user fee. Ordinarily, the user fee will not be returned for a letter ruling request that is withdrawn. If the Associate office declines to issue a letter ruling on all of the issues in the request, the user fee will be returned. If the Associate office issues a letter ruling on some, but not all, of the issues, the user fee will not be returned. See section 15.10 of this revenue procedure for additional information regarding the refunds of user fees.

The Associate offices 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. See section 9 of this revenue procedure for procedures for change in accounting method requests.

.01 All requests for letter rulings will be received and initially controlled by the Docket, Records, and User Fee Branch of the Legal Processing Division of the Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DRU). That office will process the incoming documents and the user fee, and will forward the file to the appropriate Associate office for assignment to a branch that has jurisdiction over the specific issue involved in the request.

Sec. 8.01 2006–1 I.R.B. 27 January 3, 2006

Branch representative of the Associate office contacts taxpayer within 21 days

Determines if transaction can be modified to obtain favorable letter ruling

Is not bound by informal opinion expressed

.02 Within 21 calendar days after a letter ruling request has been received in the branch of the Associate office that has jurisdiction over the issue, 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 Associate office rule as the taxpayer requested, rule adversely on the matter, or not rule;

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

(3) whether the letter ruling complies with all of the provisions of this revenue procedure, and if not, which requirements have not been met; or

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

If the letter ruling request involves matters within the jurisdiction of more than one branch or Associate 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 Associate office have been referred to that branch or Associate office for consideration, and the date the referral was made, and

(2) that a representative of that branch or Associate 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.

This section 8.02 applies to all matters except for cases involving a request for change in accounting method or accounting period and cases within the jurisdiction of the Associate Chief Counsel (Financial Institutions and Products) concerning insurance issues requiring actuarial computations.

.03 If 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 period.

If, at the end of this discussion, the branch representative determines that a meeting in the Associate office would be more helpful to develop or exchange information, a meeting will 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 10.02 of this revenue procedure.

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

Sec. 8.02 January 3, 2006 28 2006–1 I.R.B.

Additional information .05

Must be submitted within 21 calendar days

Extension of reply period if justified and approved

Letter ruling request closed if the taxpayer does not submit additional information

Penalties of perjury statement for additional information

Faxing request and additional information

(1) Additional information must be submitted within 21 days. 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, or subsequent contacts, that the request will be closed if the Associate office does not receive the information within 21 calendar days from the date of the request for additional information, unless an extension of time is granted. To facilitate prompt action on letter ruling requests, taxpayers are encouraged to request that the Associate office request additional information by fax. See section 7.02(5) of this revenue procedure.

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

The Service will not endeavor to process a ruling request on the expedited basis for requests regarding reorganizations under section 368 and distributions under section 355 provided by section 7.02(4) of this revenue procedure, unless the branch representative in Associate Chief Counsel (Corporate) receives all requested additional information within 10 calendar days from the date of the request for such additional information, unless an extension of time is granted. If the information is not provided within 10 calendar days (with any extension) but is provided within 21 calendar days (with any extension), the letter ruling request will cease to be processed on an expedited basis and instead will be processed in the usual manner.

(2) Extension of reply period. An extension of the 21-day period for providing additional information will be granted only if justified in writing by the taxpayer and approved by the branch reviewer. A request for extension should be submitted before the end of the 21-day period. If unusual circumstances close to the end of the 21-day period make a written request impractical, the taxpayer should notify the Associate 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 of the approval or denial of the requested extension. If the extension request is denied, there is no right of appeal.

(3) Letter ruling request closed if the taxpayer does not submit additional informa- tion. If the taxpayer does not submit the information requested during the initial contact, or subsequent contacts, 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) Penalties of perjury statement. Additional information submitted to the Service must be accompanied by the following declaration: “Under penalties of perjury, I declare that I have examined this information, including accompanying documents, and, to the best of my knowledge and belief, 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 7.01(15)(b) of this revenue procedure.

(5) Faxing request and additional information. To facilitate prompt action on letter ruling requests, taxpayers are encouraged to request that the Associate office request additional information by fax. See section 7.02(5) of this revenue procedure. Taxpayers also are encouraged to submit additional information by fax as soon as the information is available. The Associate office representative who requests additional information can provide a telephone number to which the information can be faxed. The original of the faxed material and a signed perjury statement must be mailed or delivered to the Associate office.

Sec. 8.05 2006–1 I.R.B. 29 January 3, 2006

Address to send additional information

Identifying information included in additional information

Number of copies of additional information to be submitted

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

(6) Address to send additional information.

(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 Associate office representative who requested the information] P.O. Box 7604 Ben Franklin Station Washington, DC 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), or a § 301.9100 request for an extension of time on a request for change in accounting method or period, the additional information should be sent to:

Internal Revenue Service ADDITIONAL INFORMATION Attn: [Name, office symbols, and room number of the Associate office representative who requested the information] P.O. Box 14095 Ben Franklin Station Washington, DC 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 Associate office representative who requested the information] 1111 Constitution Ave., NW Washington, DC 20224

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

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

.06 Generally, after the conference of right as discussed in section 10 of this revenue procedure is held but before the letter ruling is issued, the branch representative will orally inform the taxpayer or the taxpayer’s representative of the Associate office’s conclusions. If the Associate office 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

Sec. 8.05 January 3, 2006 30 2006–1 I.R.B.

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

Taxpayer may also submit draft on a computer disk

Issues separate letter rulings for substantially identical letter rulings and generally issues a single letter ruling for related § 301.9100 letter

Sends a copy of the letter ruling to appropriate Service official