SECTION 3. CHANGES TO REV.

PROC. 97–27

.01 Section 3.07 of Rev. Proc. 97–27 is modified by adding new section 3.07(3) and is clarified by adding a new section 3.07(4) to read as follows: (3) Taxpayer before Joint Committee on Taxation . If an examination of a taxpayer involves a refund or credit in excess of the statutory sum that is subject to review by the Joint Committee on Taxation pursuant to § 6405, then, for purposes of this revenue procedure, the taxpayer is under examination while the taxpayer has a refund or credit under review by the Joint Committee on Taxation and continues to be under examination until Joint Committee on Taxation review procedures and any necessary follow-up are complete. See Rev. Proc. 2005–32, 2005–1 C.B. 1206.

Further, for purposes of section 6.01(5) (issue pending), an issue is pending for a

taxable year under examination if the Service has given the taxpayer written notification indicating an adjustment is being made or will be proposed with respect to the taxpayer’s method of accounting. The notification by the Service may result from an inquiry by the Joint Committee on Taxation. This notification normally will occur after the Service or the Joint Committee on Taxation has gathered information sufficient to determine that an adjustment is appropriate and justified, although the exact amount of the adjustment may not yet be determined.

(4) Taxpayer in Compliance Assurance Process . For purposes of this revenue procedure, a taxpayer participating in the Compliance Assurance Process (CAP) is considered to be under examination as of the date the taxpayer executes the Memorandum of Understanding for the CAP.

.02 Certain Foreign Corporations . With respect to a foreign corporation that is not required to file a federal income tax return, sections 3.07 (definition of under examination), 3.08 (definition of issue under consideration), 4.02(2) (scope, in

2009–38 I.R.B. 385 September 21, 2009

fies the national office that it will convert the Form 3115 under this section 5.02(2), the national office will return the Form 3115 to the taxpayer to make the necessary modifications to comply with the applicable provisions of Rev. Proc. 2008–52, as amplified, clarified, and modified by this revenue procedure, and will refund the user fee submitted with the Form 3115.

A taxpayer may convert a Form 3115 that is returned to the taxpayer under this section 5.02(2) to an application under Rev. Proc. 2008–52, as amplified, clarified, and modified by this revenue procedure, if the taxpayer resubmits the Form 3115 with the necessary modifications, along with a copy of the national office letter sent with the returned Form 3115, to the national office within 30 calendar days after the date of the Service’s letter returning the Form 3115 to the taxpayer. For purposes of the timely duplicate filing requirement in section 6.02(3) of Rev. Proc. 2008–52, the national office copy of the Form 3115 will be considered filed as of the date the taxpayer originally filed the Form 3115 under Rev. Proc. 97–27.

A Form 3115 filed under Rev. Proc. 97–27 that is pending with the national office on August 27, 2009, will be disregarded for purposes of the prior 5 year change rules in sections 4.02(6) and (7) of Rev. Proc. 2008–52, in the following circumstances:

(a) the taxpayer converts the Form 3115 under this section 5.02(2); or

(b) the taxpayer withdraws the Form 3115 and files an application under Rev. Proc. 2008–52, as amplified, clarified, and modified by this revenue procedure, for the same change in method of accounting for a year of change ending on or before December 31, 2009.

(3) Option to amend an application filed under Rev. Proc. 2008–52 before August 27, 2009 . If before August 27, 2009, a taxpayer properly filed an application under Rev. Proc. 2008–52 for a year of change that is the taxpayer’s first taxable year ending on or after December 31, 2008, the taxpayer may choose to file an amended application for that year of change under Rev. Proc. 2008–52, as amplified, clarified, and modified by this revenue procedure (amended application) if, within 6 months from the due date of the federal income tax return for the year of change (excluding any extension), the

(2) Rev. Proc. 97–27 is clarified by replacing the term “district director” wherever it appears with the term “director.”