Section 4. Required Procedures for

Electing Participants

(a) Notice of Election Taxpayers electing to participate in this initiative must notify the IRS of their election by sending a Notice of Election, as set out below, on or before Tuesday, Feb- ruary 20, 2007 . The Notice of Election must be sent by certified mail or designated delivery service (within the meaning of I.R.C. § 7502(f)) to:

Internal Revenue Service 1111 Constitution Ave., NW LE 4423 Washington, DC 20024 Attn: SE:LM:IN:C:FR:ELECTION

The Notice of Election must be signed and must:

(1) State that the taxpayer elects to participate in the Foreign Embassy/Foreign Consular Office/International Organization Employee Settlement Initiative;

(2) Include the taxpayer’s name, taxpayer’s legal status (U.S. citizen or LPR), taxpayer identification number (TIN), current address, and daytime telephone number. If the taxpayer is under examination, in Appeals, or has filed a petition in Tax Court, the taxpayer must include the name, address, and daytime telephone number of the IRS examiner, IRS Appeals Officer or IRS Attorney. If a tax practitioner represents the taxpayer, the practitioner must provide a completed Form 2848 or other valid power of attorney specifying each taxable year and type of tax covered;

(3) Include copies of all tax returns previously filed with the IRS (with the notation “Copy” written across the top of each return) for the taxable years 2003, 2004, and 2005;

(4) Include an official statement from the foreign embassy, foreign consular office or international organization showing total gross income paid in taxable years 2003, 2004, and 2005; and (5) Include original delinquent or amended tax returns for taxable years 2003, 2004, and 2005 reporting the correct income and claiming only the proper amount of deductions and foreign tax cred

its, which are related to their employment at a foreign embassy, foreign consular office or international organization.

A taxpayer who is under examination, in Appeals, or has filed a petition in Tax Court must send a copy of the Notice of Election to the IRS examiner, IRS Appeals Officer, or IRS Attorney assigned to the matter.

(b) Additional Information and Docu- mentation

Upon receipt of an election to participate, the IRS may send a request for additional information and documentation. Taxpayer must submit all requested information under penalties of perjury to the IRS within 30 days of the date of mailing of the request by the IRS. The IRS may grant an extension for good cause to a taxpayer who requests additional time within the 30-day period. The IRS will treat a taxpayer who fails to provide the requested information within the applicable time as having withdrawn from the initiative.

(c) Closing Agreement and Payment After receiving the requested information, the IRS will prepare a closing agreement under I.R.C. § 7121 reflecting the terms of the settlement. The closing agreement will provide that: (1) all information provided by the taxpayer as required by the settlement is considered material and providing inaccurate information is a misrepresentation of a material fact within the meaning of I.R.C. § 7121(b); and (2) taxpayer waives all defenses to the assessment and collection of the tax, penalties, additions to tax, and statutory interest determined under this initiative.

The IRS will mail the closing agreement to taxpayer who must sign and return it to the IRS within 30 days of the date of mailing by the IRS. The IRS may grant an extension for good cause to a taxpayer who requests additional time within the 30 -day period.

A taxpayer participating in this initiative must fully pay all taxes, additions to tax, penalties, and statutory interest due when the signed closing agreement is returned to the IRS. Any taxpayer unable to make full payment at that time must submit complete financial statements and agree to financial arrangements acceptable to the IRS before the IRS will execute the closing agreement. The IRS will not execute a closing agreement under this initiative

December 11, 2006 1107 2006–50 I.R.B.

Correction of Announcement 2006–61 Fast Track Settlement For SB/SE Taxpayers

Announcement 2006–97

CORRECTION OF CONTACT INFORMATION

This announcement provides the correct contact information for further information regarding Announcement 2006–61, 2006–36 I.R.B. 390, Fast Track Settlement for SB/SE Taxpayers. In that announcement, interested persons were instructed to contact either Thomas S. Ryan, SB/SE Program Analyst or Nancy J. Talajkowski, Appeals Program Analyst, Tax Policy & Procedure (Alternative Dispute Resolution). The telephone number published for Thomas S. Ryan was incorrect. The correct telephone number is (757) 213–3810 (not a toll-free number). The remainder of the contact information is correct as originally published.

drafting this announcement. For further information regarding this announcement, contact Brant Meadows with the Office of Deputy Commissioner, International, at (202) 874–1789 (not a toll-free call) or send an e-mail to embassy@irs.gov .

Correction to High-Low Substantiation Method for Per Diem Allowances in Rev. Proc. 2006–41

Announcement 2006–96

This announcement makes a correction to Rev. Proc. 2006–41, 2006–43 I.R.B. 777 (October 23, 2006), released September 29, 2006, which provides rules under which the amount of ordinary and necessary business expenses of an employee for lodging, meal, and incidental expenses incurred while traveling away from home are deemed substantiated under § 1.274–5 of the Income Tax Regulations.

Section 5 of Rev. Proc. 2006–41 provides rules for the high-low substantia

tion method, which may be used in lieu of the per diem substantiation method of section 4.01 of Rev. Proc. 2006–41 when a payor (the employer, its agent, or a third party) provides a per diem allowance for lodging, meals, and incidental expenses under a reimbursement or other expense allowance arrangement. Section 5.03 of Rev. Proc. 2006–41 identifies localities that are high-cost localities (for all of the calendar year or for a portion of the calendar year) for purposes of the high-low substantiation method. Section 5.03 contains an error in identifying the period for which Martha’s Vineyard, Massachusetts, is a high-cost locality. The correct period is June 1, 2007, through August 31, 2007.

DRAFTING INFORMATION

The principal author of this announcement is Jeffrey T. Rodrick of the Office of the Associate Chief Counsel (Income Tax and Accounting). For further information regarding this announcement, contact Mr. Rodrick at (202) 622–4930 (not a toll-free call).

2006–50 I.R.B. 1108 December 11, 2006