SECTION 4. PROCEDURE

.01 To recover fees under section 7430, a pro bono representative generally should follow the procedures set forth in section 7430, Treas. Reg. § 301.7430–2, and Tax Court Rules 230–233. The additional procedures set forth below apply only to pro bono representatives.

.02 Recordkeeping Requirements. To recover fees, a pro bono representative must maintain contemporaneous activity records of all time spent on a case for which fees are being claimed. The records should be similar to billing records maintained by for-profit law firms for non-pro bono representation, and must show the work performed and the time allocated to each task. The representation must be described in sufficient detail to enable the Service to evaluate the reasonableness of the amount of time expended in relation to the service performed and to identify duplicated efforts, if any. The records must include time spent by all those who provide representation to the taxpayer that is recoverable under this revenue procedure. For each representative for whom fees are claimed, the records must identify the individual’s name and position, such as supervisory attorney, student, or paralegal, and the associated incremental periods of time spent by that individual for which a fee is claimed. For each increment of time for which fees are claimed, the records must identify the date on which the representation was provided and must describe the nature of the representation in detail. The use of classifications to describe the representation is strongly encouraged. Suggested classifications include, but are not limited to, initial client interview, research (identifying the issue), preparing pleadings or other court documents, preparing letters (identifying the recipient and subject matter), investigation of underlying facts (briefly describing the subject matter and information), analysis of taxpayer or third-party records (identifying the records), consultation with tax return preparer (identifying the preparer), consultation or interview of third party (identifying the person), and telephone conversations (identifying with whom the conversation was held and the subject matter). What constitutes sufficient detail will be initially determined by

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the Service based on the facts and circumstances of each case.

.03 Review of Denial. The Service’s denial of an award of fees, in whole or in part, may be challenged in the Tax Court pursuant to section 7430(f).

.04 Rate for Pro Bono Representatives Who Charge an Hourly Rate. The hourly rate used to calculate an attorney fee award for pro bono representatives who charge hourly rates in their ordinary course of business will generally be limited to the lesser of the statutory hourly rate set forth in section 7430(c)(1)(B)(iii) or their hourly billing rate, unless they can establish that a special factor, as described in section 7430(c)(1)(B)(iii), applies.

.05 Fixed Rate for Pro Bono Representatives Who Do Not Charge an Hourly Rate. Some pro bono representatives do not charge hourly rates for representation in the ordinary course of their business. Examples of these pro bono representatives include, but are not limited to, employees of a clinic or organization that provides pro bono representation, and other individuals who perform pro bono representation outside of their professional employment, such as retired representatives or in-house counsel. Since it is often difficult to determine an appropriate hourly rate with respect to these pro bono representatives on a case-by-case basis, and attempting to do so may require the expenditure of significant resources by the parties to the proceeding and possibly a court, this revenue procedure provides a fixed rate for individuals who provide pro bono representation but do not charge an hourly rate for representing taxpayers equal to the statutory hourly rate under section 7430(c)(1)(B)(iii). If an award based on a higher hourly rate is sought, the burden will be on the requester to establish that a higher hourly rate is appropriate.

.06 Fixed Rate for Students and Paralegals. Reasonable fees may be recovered for work performed by students who have been authorized to practice before the Service pursuant to 31 C.F.R. Part 10 (Treasury Department Circular No. 230) or to practice before the United States Tax Court under the supervision of a practitioner through the United States Tax Court’s Clinical, Student Practice and Calendar Call Program, and by paralegals or other

persons qualified to perform paralegal work who are assisting pro bono representatives. For reasons similar to those described in section 4.05 of this revenue procedure, this revenue procedure provides a fixed rate for students authorized as described in this section 4.06, and for paralegals or other persons qualified to perform paralegal work regardless of whether they charge an hourly rate, equal to thirty-five percent of the statutory hourly rate provided for representatives under section 7430(c)(1)(B)(iii). If an award based on a higher hourly rate is sought, the burden will be on the requester to establish that a higher hourly rate is appropriate. Fees are not recoverable for work that is secretarial in nature. See Treas. Reg. § 301.7430–4(c)(2).

.07 Other Volunteers at a Pro Bono Clinic or Organization. Fees for time claimed for other volunteers (e.g., students or professionals who have not been authorized to practice before the Service or the Tax Court or paralegal students) working at a pro bono clinic or organization may be recoverable on a case-by-case basis. The burden will be on the requester to establish an appropriate hourly rate.

.08 Application of Requirements of Section 7430. To be eligible for an award of attorneys’ fees, taxpayers represented by a pro bono representative must meet all applicable requirements of section 7430.

.09 Award of Fees. A fee awarded under section 7430(c)(3)(B) generally will be paid to the pro bono representative, unless the Service is specifically instructed by the representative, in writing, to pay the fee to the representative’s employer, such as a law firm. Fees awarded for services provided by an employee of a pro bono clinic or organization, or a student affiliated with a pro bono clinic or organization, will be paid to the clinic or organization. If, however, an individual representative who is not an employee of a pro bono clinic or organization volunteers to provide services in affiliation with a pro bono clinic or organization, fee awards in that context will be paid to the clinic or organization. Solely for the purpose of determining to whom an award of fees under section 7430 should be paid, the clinic or organization will be considered the employer of the individual who volunteers to provide services for the pro

bono clinic or organization. If the Service is specifically informed in writing by the pro bono clinic or organization that, pursuant to an agreement between the clinic or organization and the representative, some or all of the award should be paid to the representative or to the representative’s employer, that agreement will be honored. For purposes of this section 4.09, a for-profit law firm is not considered to be an organization.