Rev. Proc. 2006-45 — Internal Revenue Bulletin 2023-1

C.B. 818 (certain corporations); Rev. Proc. 2006-46, 2006-2 C.B. 859 (certain partnerships, subchapter S corporations, personal service corporations, and trusts); and Rev. Proc. 2003-62, 2003-2 C.B. 299 (individuals seeking a calendar year). The Commissioner’s consent to an otherwise qualifying automatic change in accounting period is granted only if the taxpayer timely complies with the applicable automatic change revenue procedure.

Bulletin No. 2023–1 109 January 3, 2023

APPENDIX G MEMORANDUM OF UNDERSTANDING ACKNOWLEDGING RISK WITH EMAIL

I acknowledge that there are risks associated with email, such as the possibility that sensitive taxpayer information could be intercepted and viewed by unauthorized persons. I understand the importance of securing email using appropriate encryption, particularly when transmitting sensitive or confidential tax-related information. I understand that encryption programs only encrypt the email attachment and not the subject line or the body of the email itself, and that confidential information should not be included in the subject line, the body of the email itself, or the file name of the attachment. By signing this agreement, I understand that sensitive or confidential information should be sent only by encrypted email attachments in communicating with the IRS.

Even with encryption it is possible electronic communications could be intercepted. I acknowledge that the United States Government does not guarantee the security of data transmitted electronically by email and accepts no liability, regardless of fault, for any loss or damage sustained without negligence of United States Government employees.

(Name of Taxpayer) (Title of Individual Signing Agreement)

SIGNATURE: _______________________________

DATE: _______________________________

January 3, 2023 110 Bulletin No. 2023–1

APPENDIX H MEMORANDUMS OF UNDERSTANDING AGREEING TO USE ENCRYPTED EMAIL ATTACHMENTS

Agreement to use encrypted email attachments (compressed Zip format)

.01 For requesters choosing to use encrypted email attachments in compressed Zip format, submit the following MOU:

Agreement to Use Encrypted Email Attachments (Compressed Zip format)

Generally, the Office of Chief Counsel, Internal Revenue Service (Chief Counsel) communicates with taxpayers or their representatives by sending documents through the mail or via facsimile, or by telephone. In many cases communication by email is more convenient for both the taxpayer and Chief Counsel. There are risks associated with email, such as the possibility sensitive taxpayer information could be intercepted. If an email is intercepted, any personal information in the email could be viewed by unauthorized persons. It is important to secure email using appropriate encryption, particularly when transmitting sensitive or confidential tax-related information. This agreement is intended to enhance the process of securely exchanging taxpayer data and other tax-related information and increase efficiency of interaction between Chief Counsel and taxpayers or their representatives.

Communications

In order to communicate in a formal, efficient manner for tax issues, written communication is essential. Email is one form of written communication; however, in order to protect sensitive information, additional safeguards are necessary for email communications which are not generally required for paper documents. Chief Counsel and the taxpayer, by this agreement, consent to written communications being transmitted via encrypted email attachments. In order to limit access to this information, Chief Counsel and the taxpayer agree to designate participants and provide the list of participants in an addendum to this agreement. Only individuals designated as participants by Chief Counsel and the taxpayer on that list will be included in these communications. The taxpayer will be responsible for providing an updated list when there are changes to their designated participants.

Encrypted Email Attachments

Chief Counsel uses SecureZIP®, a commercial program, to compress and encrypt email attachments that contain sensitive information. The recipient of encrypted email attachments created using this utility may decrypt and view them by entering a password. The recipient must first install a compatible “zip” software utility. In addition to SecureZIP®, compatible utilities include PKZIP®, and ZIP Reader® by PKWARE®, which is a free Windows utility that enables users to process compressed and/or AES passphrase-encrypted files created by SecureZIP®, PKZIP® and other products that support these capabilities. SecureZIP and compatible utilities only encrypt the email attachment and not the subject line nor the body of the email itself. To prevent interception and viewing of sensitive or other confidential tax-related information by unauthorized persons, such information must not be included in the email body or subject line.

Security

Both parties agree to work together to ensure the joint security of the information contained in the encrypted email attachment. Pursuant to this MOU, Chief Counsel certifies that its system used to transmit, store, or process data is designed, managed, and operated in a secure manner in compliance with relevant laws, regulations, and policies. The taxpayer should also undertake steps to ensure proper security protections are employed to transmit, receive, and store this information. By signing this agreement, the taxpayer understands that sensitive or confidential information should be sent only by encrypted email attachment in communicating with the IRS. Even with encryption it is possible electronic communications could be intercepted. By signing this agreement, the taxpayer acknowledges that the United States Government does not guarantee the security of data transmitted electronically by email and accepts no liability, regardless of fault, for any loss or damage sustained without negligence of United States Government employees.

Costs

Both parties agree to bear all of their own costs on a nonreimbursable basis in complying with this agreement.

Timeline

Bulletin No. 2023–1 111 January 3, 2023

addendum and both the MOU and the addendum remain part of the case or administrative file. If either the taxpayer or Chief Counsel wishes to terminate this agreement before it expires, it may be done upon thirty (30) days’ advance notice. In the event of a security incident, Chief Counsel may immediately terminate the agreement.

6 Additional Terms

Nothing in this agreement shall be construed as a waiver of any sovereign immunity of the United States Government. This agreement is not intended to contravene in any way, the precedence or applicability of Federal law and shall be governed by and construed under Federal law of the United States of America.

(Name of Taxpayer) (Title of Individual Signing Agreement)

SIGNATURE: _______________________________

DATE: _______________________________

Office of Chief Counsel, Internal Revenue Service, United States of America (Name of Counsel Employee) (Title of Counsel Employee Signing Agreement)

SIGNATURE: _______________________________

DATE: _______________________________

January 3, 2023 112 Bulletin No. 2023–1

Addendum: Individuals and Email Addresses Authorized

Pursuant to this Memorandum of Understanding

Authorized Person Name Authorized Email Address Phone Number

Bulletin No. 2023–1 113 January 3, 2023

Agreement to use encrypted email attachments (Adobe Acrobat Pro password encryption)

.02 For requesters choosing to use encrypted email attachments with Adobe Acrobat Pro password encryption, submit the following MOU:

Agreement to Use Encrypted Email Attachments (Adobe Acrobat Pro Password Encryption)

Communications

Encrypted Email Attachments

Chief Counsel uses Adobe Acrobat Pro®, a commercial program, to compress and encrypt email attachments in Adobe Portable Document Format (.pdf) that contain sensitive information. The recipient of encrypted email attachments created using this utility may decrypt and view them by entering a password. The recipient must first install a compatible .pdf software reader with password decryption capability. In addition to Adobe Acrobat Pro®, the Adobe Acrobat DC Reader® is a free Windows utility that enables users to decrypt and open AES passphrase-encrypted files created by Adobe Acrobat Pro. Other compatible .pdf decryption utilities may exist.

Acrobat Pro® only encrypts the email attachment and not the subject line nor the body of the email itself. To prevent interception and viewing of sensitive or other confidential tax-related information by unauthorized persons, such information must not be included in the email body or subject line.

Further information about how to encrypt email attachments with Adobe Acrobat products may be found on Adobe’s web site or at this link: https://home.treasury.gov/how-to-encryptpassword-protect-microsoft-office-and-adobe-acrobat-pdf-documents.

Security

Even with encryption it is possible electronic communications could be intercepted. By signing this agreement, the taxpayer acknowledges that the United States Government does not guarantee the security of data transmitted electronically by email and accepts no liability, regardless of fault, for any loss or damage sustained without negligence of United States Government employees.

Costs

Both parties agree to bear all of their own costs on a nonreimbursable basis in complying with this agreement.

January 3, 2023 114 Bulletin No. 2023–1

Timeline

This agreement is effective upon the signatures of both parties and will remain in effect for the duration of the matter in Chief Counsel, including, but not limited to such time as the matter is on appeal or pending before other United States Government agencies such as the Department of the Treasury or Department of Justice. As a new participant is added to the MOU, they are added to the addendum and both the MOU and the addendum remain part of the case or administrative file. If either the taxpayer or Chief Counsel wishes to terminate this agreement before it expires, it may be done upon thirty (30) days’ advance notice.

In the event of a security incident, Chief Counsel may immediately terminate the agreement.

6 Additional Terms

(Name of Taxpayer) (Title of Individual Signing Agreement)

SIGNATURE: _______________________________

DATE: _______________________________

Office of Chief Counsel, Internal Revenue Service, United States of America (Name of Counsel Employee) (Title of Counsel Employee Signing Agreement)

SIGNATURE: _______________________________

DATE: _______________________________

Bulletin No. 2023–1 115 January 3, 2023

Addendum: Individuals and Email Addresses Authorized

Pursuant to this Memorandum of Understanding

Authorized Person Name Authorized Email Address Phone Number

January 3, 2023 116 Bulletin No. 2023–1

Agreement to use encrypted email attachments (Microsoft Office 2016/365 password encryp- tion)

.03 For requesters choosing to use encrypted email attachments with Microsoft Office 2016/365 password encryption, submit the following MOU:

Agreement to Use Encrypted Email Attachments (Microsoft Office 2016/365 Password Encryption)

Communications

Encrypted Email Attachments Chief Counsel uses Microsoft Office 365®, a commercial program, to compress and encrypt email attachments in Microsoft Office formats, including Word, Excel or PowerPoint, that contain sensitive information. The recipient of encrypted email attachments created using this program may decrypt and view them by entering a password. The recipient should use Microsoft 2016® or Microsoft Office 365® to decrypt and open encrypted Office files sent by Chief Counsel as email attachments. Older versions of Microsoft Office may not successfully decrypt these attachments.

Microsoft Office 365 only encrypts the email attachment and not the subject line nor the body of the email itself. To prevent interception and viewing of sensitive or other confidential tax-related information by unauthorized persons, such information must not be included in the email body or subject line.

Further information about how to encrypt email attachments with Microsoft Office products may be found on Microsoft’s web site or at this link: https://home.treasury.gov/how-to-encryptpassword-protect-microsoft-office-and-adobe-acrobat-pdf-documents.

Security

Costs

Both parties agree to bear all of their own costs on a nonreimbursable basis in complying with this agreement.

Bulletin No. 2023–1 117 January 3, 2023

Timeline

In the event of a security incident, Chief Counsel may immediately terminate the agreement.

6 Additional Terms

(Name of Taxpayer) (Title of Individual Signing Agreement)

SIGNATURE: _______________________________

DATE: _______________________________

Office of Chief Counsel, Internal Revenue Service, United States of America (Name of Counsel Employee) (Title of Counsel Employee Signing Agreement)

SIGNATURE: _______________________________

DATE: _______________________________

January 3, 2023 118 Bulletin No. 2023–1

Addendum: Individuals and Email Addresses Authorized

Pursuant to this Memorandum of Understanding

Authorized Person Name Authorized Email Address Phone Number

Bulletin No. 2023–1 119 January 3, 2023

26 CFR 601.105: Examination of returns and claims for refund, credit or abatement; determination of correct tax liability.