SECTION 5. UNDER WHAT

CIRCUMSTANCES DO THE ASSOCIATE OFFICES ISSUE LETTER RULINGS?

.01 The procedures for obtaining letter rulings, etc., that apply to Federal alcohol, tobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction of the Alcohol and Tobacco Tax and Trade Bureau of the Department of the Treasury.

.02 The procedures for obtaining letter rulings, determination letters, etc., on employee plans and exempt organizations are under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. See Rev. Proc. 2009–4, this Bulletin. See also Rev. Proc. 2009–6, this Bulletin, for the procedures for issuing determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under §§ 401, 403(a), 409, and 4975(e)(7), and the status for exemption of any related trusts or custodial accounts under § 501(a).

For the user fee requirements applicable to requests for letter rulings, determination letters, etc., under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, see Rev. Proc. 2009–8, this Bulletin.

In income and gift tax matters .01 In income and gift tax matters, an Associate office generally issues a letter ruling on a proposed transaction or on a completed transaction if the letter ruling request is submitted before the return is filed for the year in which the transaction is completed.

Special relief for late S corporation and related elections in lieu of letter ruling process

A § 301.9100 request for extension of time for making an election or for other relief

.02 In lieu of requesting a letter ruling under this revenue procedure, a taxpayer may obtain relief for certain late S corporation and related elections by following the procedures in Rev. Proc. 2004–49, 2004–2 C.B. 210; Rev. Proc. 2004–48, 2004–2 C.B. 172; Rev. Proc. 2003–43, 2003–1 C.B. 998, or Rev. Proc. 97–48, 1997–2 C.B. 521. These procedures are in lieu of the letter ruling process and do not require payment of any user fee. See section 4.04 of Rev. Proc. 2004–49, section 3.01 of Rev. Proc. 2004–48, section 3.01 of Rev. Proc. 2003–43, section 3 of Rev. Proc. 97–48, and section 15.03(3) of this revenue procedure.

.03 An Associate office will consider a request for an extension of time for making an election or other application for relief under § 301.9100–3 of the Regulations on Procedure and Administration, even if submitted after the return covering the issue presented in the § 301.9100 request has been filed, an examination of the return has begun, or the issues in the return are being considered by Appeals or a Federal court. A § 301.9100 request is a letter ruling request. Therefore, the § 301.9100 request should be submitted pursuant to this revenue procedure. An election made pursuant to § 301.9100–2 for an automatic extension of time is not a letter ruling request and does not require payment of any user fee. See § 301.9100–2(d) and section 15.03(1) of this revenue procedure.

(1) Format of request. A § 301.9100 request (other than an election made pursuant to § 301.9100–2) must be in the general form of, and meet the general requirements for, a letter ruling request. These requirements are given in section 7 of this revenue procedure. In addition, a § 301.9100 request must include the information required by § 301.9100–3(e).

(2) Period of limitations. The filing of a request for relief under § 301.9100 does not suspend the running of any applicable period of limitations. See § 301.9100–3(d)(2). The Associate office ordinarily will not issue a § 301.9100 ruling if the period of limitation on assessment under § 6501(a) for the taxable year in which an election should have been made, or for any taxable year that would have been affected by the election had it been timely made, will expire before receipt of a § 301.9100 letter ruling. See § 301.9100–3(c)(1)(ii). If, however, the taxpayer consents to extend the period of limitations on assessment under § 6501(c)(4), the

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Associate office may issue the letter ruling. Note that the filing of a claim for refund under § 6511 does not extend the period of limitation on assessment. If § 301.9100 relief is granted, the Associate office may require the taxpayer to consent to an extension of the period of limitation on assessment. See § 301.9100–3(d)(2).

(3) Taxpayer must notify the Associate office if examination of its return begins while the request is pending. The taxpayer must notify the Associate office if the Service begins an examination of the taxpayer’s return for the taxable year in which an election should have been made, or for any taxable year that would have been affected by the election had it been timely made, while a § 301.9100 request is pending. This notification must include the name and telephone number of the examining agent. See § 301.9100–3(e)(4)(i) and section 7.04(1)(b) of this revenue procedure.

(4) Associate office will notify examination agent, appeals officer, or counsel attorney of a § 301.9100 request if the taxpayer’s return is being examined by a field office or is being considered by Appeals or a Federal court. If the taxpayer’s return for the taxable year in which an election should have been made, or for any taxable year that would have been affected by the election had it been timely made, is being examined by a field office or considered by Appeals or a Federal court, the Associate office will notify the appropriate examination agent, appeals officer, or counsel attorney that a § 301.9100 request has been submitted to the Associate office. The examination agent, appeals officer, or counsel attorney is not authorized to deny consideration of a § 301.9100 request. The letter ruling will be mailed to the taxpayer and a copy will be sent to the appeals officer, counsel attorney, or appropriate Service official in the operating division that has examination jurisdiction over the taxpayer’s tax return.

(5) Relief for late initial classification election. In lieu of requesting a letter ruling under § 301.9100–1 through § 301.9100–3 and this revenue procedure, an entity newly formed under local law may apply for late classification election relief under Rev. Proc. 2002–59, 2002–2 C.B. 615. Requests for such relief are not subject to user fees. See section 3 of Rev. Proc. 2002–59 and section 15.03(2) of this revenue procedure.

Determinations under § 999(d) .04 As provided in Rev. Proc. 77–9, 1977–1 C.B. 542, the Associate Chief Counsel (International) issues determinations under § 999(d) that may deny certain benefits of the foreign tax credit and the deferral of earnings of foreign subsidiaries and domestic international sales corporations (DISCs) to a person if that person is a member of a controlled group (within the meaning of § 993(a)(3)) that includes the person, or a foreign corporation of which a member of the controlled group is a United States shareholder, that agrees to participate in, or cooperate with, an international boycott. The same principles shall apply with respect to exclusions under § 114 for exterritorial income (ETI) pursuant to § 941(a)(5)(A). Requests for determinations under Rev. Proc. 77–9 are letter ruling requests and should be submitted to the Associate office pursuant to this revenue procedure.

In matters involving § 367 .05 Unless the issue is covered by section 6 of this revenue procedure, the Associate Chief Counsel (International) may issue a letter ruling under § 367 even if the taxpayer does not request a letter ruling as to the characterization of the transaction under the reorganization provisions of the Code. The Associate office will determine the § 367 consequences of a transaction based on the taxpayer’s characterization of the transaction but will indicate in the letter ruling that it expresses no opinion as to the characterization of the transaction under the reorganization. The Associate office may decline to issue a § 367 ruling in situations in which the taxpayer inappropriately characterizes the transaction under the reorganization provisions.

In estate tax matters .06 In general, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on transactions affecting the estate tax on the prospective estate of a living person. The Associate office will not issue letter rulings for prospective estates on computations of tax, actuarial factors, and factual matters. With respect to the transactions affecting the estate tax of the decedent’s estate, generally the Associate office issues letter rulings before the decedent’s estate tax return is filed.

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In matters involving additional estate tax under § 2032A(c)

In matters involving qualified domestic trusts under § 2056A

In generation-skipping transfer tax matters

In employment and excise tax matters

In administrative provisions matters

In Indian tribal government matters

If the taxpayer is requesting a letter ruling regarding a decedent’s estate tax and the estate tax return is due to be filed before the letter ruling is expected to be issued, the taxpayer should obtain an extension of time for filing the return and should notify the Associate office branch considering the letter ruling request that an extension has been obtained.

If the return is filed before the letter ruling is received from the Associate office, the taxpayer must disclose on the return that a letter ruling has been requested, attach a copy of the pending letter ruling request to the return, and notify the Associate office that the return has been filed. See section 7.04 of this revenue procedure. The Associate office will make every effort to issue the letter ruling within 3 months of the date the return was filed.

If the taxpayer requests a letter ruling after the return is filed, but before the return is examined, the taxpayer must notify the field office having jurisdiction over the return that a letter ruling has been requested, attach a copy of the pending letter ruling request, and notify the Associate office that a return has been filed. See section 7.04 of this revenue procedure. The Associate office will make every effort to issue the letter ruling within 3 months of the date the return has been filed.

If the letter ruling cannot be issued within that 3-month period, the Associate office will notify the field office having jurisdiction over the return, which may, by memorandum to the Associate office, grant an additional period for the issuance of the letter ruling.

.07 In matters involving additional estate tax under § 2032A(c), the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on proposed transactions and on completed transactions that occurred before the return is filed.

.08 In matters involving qualified domestic trusts under § 2056A, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on proposed transactions and on completed transactions that occurred before the return is filed.

.09 In general, the Associate Chief Counsel (Passthroughs and Special Industries) issues letter rulings on proposed transactions that affect the generation-skipping transfer tax and on completed transactions that occurred before the return is filed. In the case of a generationskipping trust or trust equivalent, letter rulings are issued either before or after the trust or trust equivalent has been established.

.10 In employment and excise tax matters, the Associate offices issue letter rulings on proposed transactions and on completed transactions either before or after the return is filed for those transactions.

Requests regarding employment status (employer/employee relationship) from Federal agencies and instrumentalities must be submitted directly to the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). Requests regarding employment status from other taxpayers must first be submitted to the appropriate Service office listed on the current Form SS–8. See section 12.04 of this revenue procedure. Generally, the employer is the taxpayer and requests the letter ruling. If the worker requests the letter ruling, both the worker and the employer are considered to be the taxpayer and both are entitled to the letter ruling.

.11 The Associate Chief Counsel (Procedure and Administration) issues letter rulings on matters arising under the Code and related statutes and regulations that involve-

(1) the time, place, manner, and procedures for reporting and paying taxes; or

(2) the filing of information returns.

.12 Pursuant to Rev. Proc. 84–37, 1984–1 C.B. 513, as modified by Rev. Proc. 86–17, 1986–1 C.B. 550, and this revenue procedure, the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) issues determinations recognizing a tribal entity as an Indian tribal government within the meaning of § 7701(a)(40) or as a political subdivision of an Indian tribal government under § 7871(d) if it determines, after consultation with

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On constructive sales price under § 4216(b) or § 4218(c)

Under some circumstances before the issuance of a regulation or other published guidance

the Secretary of the Interior, that the entity satisfies the statutory definition of an Indian tribal government or has been delegated governmental functions of an Indian tribal government. Requests for determinations under Rev. Proc. 84–37 are letter ruling requests, and, therefore, should be submitted to the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) pursuant to this revenue procedure.

(1) Definition of Indian tribal government. The term ”Indian tribal government” is defined under § 7701(a)(40) to mean the governing body of any tribe, band, community, village or group of Indians, or (if applicable) Alaska Natives, that is determined by the Secretary of the Treasury, after consultation with the Secretary of the Interior, to exercise governmental functions. Section 7871(d) provides that, for purposes of § 7871, a subdivision of an Indian tribal government shall be treated as a political subdivision of a state if the Secretary of the Treasury determines, after consultation with the Secretary of the Interior, that the subdivision has been delegated the right to exercise one or more of the substantial governmental functions of the Indian tribal government.

(2) Inclusion in list of tribal governments. Rev. Proc. 2008–55, 2008–39 I.R.B. 768, designates the Indian tribal entities that appear on the current or future lists of federally recognized Indian tribes published annually by the Department of the Interior, Bureau of Indian Affairs, as Indian tribal governments that are treated similarly to states for certain Federal tax purposes. Rev. Proc. 84–36, 1984–1 C.B. 510, as modified by Rev. Proc. 86–17, provides a list of political subdivisions of Indian tribal governments that are treated as political subdivisions of states for certain Federal tax purposes. Under Rev. Proc. 84–37, tribal governments or subdivisions recognized under § 7701(a)(40) or § 7871(d) will be included in the list of recognized tribal government entities in future lists of federally recognized Indian tribes published annually by the Department of the Interior, Bureau of Indian Affairs, or revised versions of Rev. Proc. 84–36.

.13 The Associate Chief Counsel (Passthroughs and Special Industries) will issue letter rulings in all cases on the determination of a constructive sales price under § 4216(b) or § 4218(c) and in all other cases on prospective transactions if the law or regulations require a determination of the effect of a proposed transaction for Federal tax purposes.

.14 Unless the issue is covered by section 6 of this revenue procedure, Rev. Proc. 2009–3, this Bulletin, or Rev. Proc. 2009–7, this Bulletin, a letter ruling may be issued before the issuance of a temporary or final regulation or other published guidance that interprets the provisions of any act.

In such situations, an Associate office may issue letter rulings under the following conditions:

(1) Answer is clear or is reasonably certain. If the letter ruling request presents an issue for which the answer seems clear by applying the statute to the facts or for which the answer seems reasonably certain but not entirely free from doubt.

(2) Answer is not reasonably certain. If the letter ruling request presents an issue for which the answer does not seem reasonably certain, the Associate office may issue the letter ruling, using its best efforts to arrive at a determination, if it is in the best interests of tax administration. But see section 6.09 of this revenue procedure.

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