SECTION 15. WHAT

ARE THE USER FEE REQUIREMENTS FOR REQUESTS FOR LETTER RULINGS AND DETERMINATION LETTERS?

Legislation authorizing user fees

.01 Section 7528 was added to the Internal Revenue Code by section 202 of the Extension of the Temporary Assistance for Needy Families Block Grant Program, Pub. L. No. 108-89, amended by section 891(a) of the American Jobs Creation Act of 2004, Pub. L. 108-357, and was made permanent by section 8244 of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, Pub. L. No. 110-28.

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Requests to which a user fee applies

Requests to which a user fee does not apply

Section 7528 provides that the Secretary of the Treasury or delegate (the “Secretary”) shall establish a program requiring the payment of user fees for requests to the Service for letter rulings, opinion letters, determination letters, and other similar requests. The fees charged under the program are to: (1) vary according to categories or subcategories established by the Secretary; (2) be determined after taking into account the average time for, and difficulty of, complying with requests in each category or subcategory; and (3) be payable in advance. The Secretary is to provide for exemptions and reduced fees under the program as the Secretary determines to be appropriate, but the average fee applicable to each category or subcategory must not be less than the amount specified in § 7528(b)(3).

.02 In general, user fees apply to all requests for—

(1) letter rulings (including non-automatic Forms 3115, Application for Change in Accounting Method ), determination letters, and advance pricing agreements;

(2) closing agreements described in paragraph (A)(3)(d) of Appendix A of this revenue procedure and pre-filing agreements described in Rev. Proc. 2016-30, 2016-21 I.R.B. 981 (or its successor);

(3) renewal of advance pricing agreements;

(4) reconsideration of letter rulings or determination letters; and

(5) supplemental letter rulings, determination letters, etc., to correct mistakes in original letter rulings, determination letters, etc.

Requests to which a user fee applies must be accompanied by the appropriate fee as determined from the fee schedule provided in Appendix A of this revenue procedure. The fee may be refunded as provided in section 15.10 of this revenue procedure.

.03 User fees do not apply to—

(1) elections made pursuant to § 301.9100-2, pertaining to automatic extensions of time ( see section 5.03 of this revenue procedure);

(2) late classification elections made pursuant to Rev. Proc. 2009-41, 2009-2 C.B. 439 ( see section 5.03(6) of this revenue procedure);

(3) late S corporation and related elections made pursuant to Rev. Proc. 2013-30, 2013-36 I.R.B. 173 ( see section 5.02 of this revenue procedure);

(4) requests for a change in accounting period or method of accounting permitted to be made by a published automatic change request revenue procedure ( see section 9.01(1) of this revenue procedure);

(5) requests for harassment campaign letter rulings under § 6104(d)(4);

(6) request for Neighborhood Land Use Rule letter rulings under § 514(b)(3);

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Exemptions from the user fee requirements

(7) information letters; or

(8) late elections under § 338 that qualify under the automatic provisions in sections 3, 4, and 5 of Rev. Proc. 2003-33, 2003-1 C.B. 803.

.04 The user fee requirements do not apply to—

(1) departments, agencies, or instrumentalities of the United States if they certify that they are seeking a letter ruling or determination letter on behalf of a program or activity funded by Federal appropriations. The fact that a user fee is not charged does not have any bearing on whether an applicant is treated as an agency or instrumentality of the United States for purposes of any provision of the Code; or

(2) requests as to whether a worker is an employee for Federal employment taxes and income tax withholding purposes (Subtitle C of the Code) submitted on Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, or its equivalent.

Fee schedule .05 The schedule of user fees is provided in Appendix A of this revenue procedure. For the user fee requirements applicable to—

(1) requests for advance pricing agreements or renewals of advance pricing agreements, see section 3.05 of Rev. Proc. 2015-41, 2015-35 I.R.B. 263; or

(2) requests for letter rulings, determination letters, etc., under the jurisdiction of the Commissioner, TE/GE (which no longer include changes in method of accounting), see Rev. Proc. 2023-4 and Rev. Proc. 2023-5, this Bulletin.

Applicable user fee for a request involving multiple offices, fee categories, issues, transactions, or entities

.06

(1) Requests involving several offices. If a request dealing with only one transaction involves more than one office within the Service (for example, one issue is under the jurisdiction of the Associate Chief Counsel (Passthroughs and Special Industries) and another issue is under the jurisdiction of the Commissioner, TE/GE), only one fee applies, namely the highest fee that otherwise would apply to each of the offices involved. See Rev. Proc. 2023-4 and Rev. Proc. 20235, this Bulletin, for the user fees applicable to issues under the jurisdiction of the Commissioner, TE/GE. However, if an additional request is submitted after the original ruling is issued, regardless of whether it relates to the same transaction or facts at issue in the earlier request, a new user fee applies.

(2) Requests involving several fee categories. If a request dealing with only one transaction involves more than one fee category, only one fee applies: the highest fee that otherwise would apply to each of the categories involved.

(3) Requests involving several issues. If a request dealing with only one transaction involves several issues, a request for a change in method of accounting dealing with only one item or submethod of accounting involves several issues, or a request for a change in accounting period dealing with only one item involves several issues, the request is treated as one request. Therefore, only one fee applies, i.e., the fee that applies to the particular category or subcategory involved. The addition of a new issue relating to the same transaction, item, or submethod will not result

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Applicable user fee for requests for substantially identical letter rulings or closing agreements, or identical changes in method of accounting

in an additional fee unless the issue places the transaction, item, or submethod in a higher fee category. So long as the issues all relate to a single transaction, a request that the Service address one or more of the issues in a separate ruling will not result in an additional fee.

(4) Requests involving several unrelated transactions. If a request involves several unrelated transactions, a request for a change in method of accounting involves several unrelated items or submethods of accounting, or a request for a change in accounting period involves several unrelated items, each transaction or item is treated as a separate request. As a result, a separate fee will apply for each unrelated transaction, item, or submethod. An additional fee will apply if the request is changed by the addition of an unrelated transaction, item, or submethod not contained in the initial request. An example of a request involving unrelated transactions is a request involving relief under § 301.9100-3 and the underlying issue.

(5) Requests involving several entities. Each entity involved in a transaction (for example, a reorganization) that desires a separate letter ruling in its own name must pay a separate fee regardless of whether the transaction or transactions may be viewed as related. But see section 15.07 of this revenue procedure (providing a reduced user fee for substantially identical letter rulings or substantially identical changes in method of accounting).

(6) Requests made by married taxpayers who file jointly. A married couple filing a joint return may jointly request a single letter ruling and pay a single user fee if the issues arise from a joint activity or if the spouses would otherwise qualify for substantially identical letter rulings. See section 15.07 of this revenue procedure. If a spouse desires a ruling to be individually issued to him or her, a separate fee must be paid for each individual request.

.07

(1) In general. The user fees provided in paragraph (A)(5) of Appendix A of this revenue procedure apply to the situations described in sections 15.07(2) and 15.07(4) of this revenue procedure. To assist in the processing of these user fee requests, all letter ruling requests submitted under this section 15.07 should—

(a) except for non-automatic Forms 3115, include the following typed or printed language at the top of the letter ruling request: “REQUEST FOR USER FEE UNDER SECTION 15.07 OF REV. PROC. 2023-1”;

(b) list on the first page of the submission all taxpayers and entities, and separate and distinct trades or businesses, including QSubs or single-member LLCs, requesting a letter ruling (including the taxpayer identification number and the amount of user fee submitted for each taxpayer, entity, or separate and distinct trade or business); and

(c) make one payment to cover all user fees.

If the Service determines that the letter ruling requests do not qualify for the user fee provided in paragraph (A)(5) of Appendix A of this revenue procedure, the Service will request the proper fee. See section 15.09 of this revenue procedure.

(2) Substantially identical letter rulings and closing agreements. The user fee provided in paragraph (A)(5)(a) of Appendix A of this revenue procedure applies to a taxpayer or taxpayers requesting substantially identical letter rulings (including accounting period, method of accounting, and earnings and profits requests other than those submitted on Form 1128, Application to Adopt,

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Change, or Retain a Tax Year, Form 2553, Election by a Small Business Corporation, Form 3115, Application for Change in Accounting Method, and Form 5452, Corporate Report of Nondividend Distributions ) in the following situations:

The taxpayers to whom the letter rulings will be issued are multiple entities with a common member, sponsor, or parent, or multiple members of a common entity or consolidated group; or

The taxpayers to whom the letter rulings will be issued are parties engaged together in the same transaction affecting all requesting taxpayers.

To qualify for this reduced user fee, all information and underlying documents must be substantially identical and all letter ruling requests must be submitted at the same time in a single submission. In addition, the taxpayer(s) must state that the letter ruling requests and all information and underlying documents are substantially identical, and must specifically identify the extent to which the letter ruling requests, information, and underlying documents are not identical.

If a taxpayer or taxpayers requesting reduced user fees pursuant to this section 15.07(2) also request a pre-submission conference pursuant to section 10.07, the taxpayer(s) should notify the Associate office at or before the pre-submission conference that the taxpayer(s) intend to request reduced user fees pursuant to this paragraph. At the pre-submission conference, the taxpayer(s) should discuss with the Associate office how the letter ruling requests will satisfy the requirements of this paragraph.

The reduced fee for substantially identical letter rulings is applicable to taxpayers requesting closing agreements as described in section 2.02 of this revenue procedure, assuming they meet the requirements described above for letter rulings.

(3) Substantially identical plans under § 25(c)(2)(B). The user fee provided in paragraph (A)(5)(c) of Appendix A of this revenue procedure shall apply to a taxpayer who submits substantially identical plans for administering the 95-percent requirement of § 143(d)(1) following the submission and approval of an initial plan for administering the requirement. The request for subsequent approvals of substantially identical plans must (1) state that a prior plan was submitted and approved and include a copy of the prior plan and approval; (2) state that the subsequent plan is substantially identical to the approved plan; and (3) describe any differences between the approved plan and the subsequent plan.

(4) Identical changes in method of accounting and related § 301.9100 letter rulings. A common sponsor of multiple entities, common parent of a consolidated group, or other taxpayer, is eligible for the user fees provided in paragraphs (A)(5)(b) and (d) of Appendix A of this revenue procedure when requesting an identical change in method of accounting on a single Form 3115, Application for Change in Accounting Method, or an extension of time to file Form 3115 under § 301.9100-3 for the identical change in method of accounting, for two or more of the following in any combination—

(a) entities of that common sponsor;

(b) members of that consolidated group;

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(c) separate and distinct trades or businesses (for purposes of § 1.446-1(d)) of that taxpayer or member(s) of that consolidated group. Separate and distinct trades or businesses include QSubs and single-member LLCs;

(d) partnerships that are wholly-owned within that consolidated group; or

(e) controlled foreign corporations (CFCs) and noncontrolled 10-percent owned foreign corporations that do not engage in a trade or business within the United States where (i) all controlling U.S. shareholders of the CFCs and all majority domestic corporate shareholders of the noncontrolled 10-percent owned foreign corporations, as applicable, are members of that consolidated group; or (ii) the taxpayer is the sole controlling U.S. shareholder of the CFCs or the sole domestic corporate shareholder of that noncontrolled 10-percent owned foreign corporation.

To qualify as an identical change in method of accounting, the multiple entities with a common sponsor, the multiple entities wholly owned or controlled by a consolidated group or other taxpayer, or separate and distinct trades or businesses (that is, the applicants) must request to change from an identical present method of accounting to an identical proposed method of accounting. All aspects of the requested change in method of accounting must be identical, including the year of change, the present and proposed methods, the underlying facts and the authority for the request, except for the § 481(a) adjustments. If the Associate office determines that the requested changes in method of accounting are not identical, additional user fees will be required before any letter ruling is issued.

The taxpayer, common sponsor, or common parent must, for each applicant for which the change in method of accounting is being requested, attach to the Form 3115 a schedule providing the name, employer identification number (where applicable), and § 481(a) adjustment. If the request is on behalf of eligible CFCs or noncontrolled 10-percent owned foreign corporations, the taxpayer or common parent must attach a statement that “[a]ll controlling U.S. shareholders (as defined in § 1.964-1(c)(5)(i)) of all the CFCs to which the request relates are members of the common parent’s consolidated group,” that “[a]ll majority domestic corporate shareholders (as defined in § 1.964-1(c)(5)(ii)) of all the noncontrolled 10-percent owned foreign corporations to which the request relates are members of the common parent’s consolidated group,” that “[t] he taxpayer filing the request is the sole controlling U.S. shareholder (as defined in § 1.964-1(c) (5)) of the CFCs to which the request relates,” or that “[t]he taxpayer filing the request is the sole domestic corporate shareholder (as defined in § 1.964-1(c)(5)) of the noncontrolled 10-percent owned foreign corporations to which the request relates,” as applicable. If the request is on behalf of eligible partnerships, the common parent must attach a statement that “[a]ll partnerships to which the request relates are wholly-owned by members of the common parent’s consolidated group.”

In the case of a § 301.9100 request for an extension of time to file a Form 3115 requesting an identical change in method of accounting for multiple entities with a common sponsor, multiple members of a consolidated group and/or multiple separate and distinct trades or businesses of a taxpayer or member(s) of the consolidated group, or multiple eligible CFCs or noncontrolled 10-percent owned foreign corporations (applicants), the taxpayer, common sponsor, or common parent must submit the information required in the preceding paragraph in addition to the information required by section 5.03 of this revenue procedure.

Method of payment .08 Each request to the Service that is subject to a user fee under this revenue procedure must be accompanied by full payment. The user fees for all requests must be paid through www. pay.gov, except for requests for a determination letter from a Director (see paragraph (A)(1) of Appendix A), which are payable by check and mailed along with the request for determination letter. Additionally, foreign entities that wish to submit payment from a foreign bank may submit

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Effect of nonpayment or payment of incorrect amount

their payment by check. To locate the appropriate form on www.pay.gov, search for “Counsel Rulings User Fees” or navigate directly to https://www.pay.gov/public/form/start/106105509 (as of November 9, 2022).

.09 If a request is not matched with full payment, the office within the Service that is responsible for issuing the letter ruling, determination letter, advance pricing agreement, closing agreement, or reconsideration of a letter ruling or determination letter generally will exercise discretion in deciding whether to immediately return the request. If a request is not immediately returned, the taxpayer will be contacted and given a reasonable amount of time to submit the proper fee. If the proper fee is not received within a reasonable amount of time, the request will then be returned. The Service will usually defer substantive consideration of a request until proper payment has been received. The return of a request to the taxpayer may adversely affect substantive rights if the request is not perfected and resubmitted to the Service within 30 calendar days of the date of the cover letter returning the request.

If a payment is made for more than the correct amount, the request will be accepted and the amount of the excess payment will be refunded to the taxpayer.

If a ruling is issued and because of the ruling the taxpayer’s gross income is reduced such that the taxpayer would have qualified for a reduced user fee in Appendix A, paragraph (A)(4), the amount of user fee paid in excess of the reduced fee will be refunded to the taxpayer.

Refunds of user fee .10 In general, user fees will not be refunded. User fees, however, will be refunded in the following situations.

(1) A user fee paid with a request to correct a mistake or omission in a prior issued letter ruling, determination letter, etc., will be refunded if the Service determines that the Service was responsible for the mistake or omission.

(2) A user fee paid with a request for relief under § 7805(b) in connection with the revocation in whole or in part, of a previously issued letter ruling, determination letter, etc., will be refunded if the relief is granted. (The user fee paid for the letter ruling, determination letter, etc., that was revoked is never refunded.)

(3) A user fee paid with a request for reconsideration of the Service’s decision not to rule on an issue will be refunded if the Service agrees to rule on the issue and the user fee paid with the initial request was not refunded.

(4) If the requested ruling, determination letter, etc., is not issued for any reason, and the Service determines that a refund is appropriate after taking into account all the facts and circumstances, including the amount of the Service’s time and resources spent on the request, the user fee will be refunded.

Request for reconsideration of user fee

.11 A taxpayer who believes the user fee charged by the Service for its request for a letter ruling, determination letter, advance pricing agreement, or closing agreement is either inapplicable or incorrect and wishes to receive a refund of all or part of the amount paid ( see section 15.10 of this revenue procedure) may request reconsideration and, if desired, the opportunity for an oral discussion by sending a letter to the Service at the appropriate address given in section 7.04 in this revenue procedure. Both the incoming envelope and the letter requesting such reconsideration should be prominently marked “USER FEE RECONSIDERATION REQUEST.” No user fee is required for these requests. The request should be marked for the attention of:

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If the matter involves primarily :

Associate Chief Counsel (Corporate) letter ruling requests

Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes) letter ruling requests

Associate Chief Counsel (Financial Institutions and Products) letter ruling requests

Associate Chief Counsel (Income Tax and Accounting) letter ruling requests

Associate Chief Counsel (International) letter ruling requests

Associate Chief Counsel (Passthroughs and Special Industries) letter ruling requests

Associate Chief Counsel (Procedure and Administration) letter ruling requests

Determination letter requests submitted pursuant to this revenue procedure by taxpayers under the jurisdiction of LB&I

Determination letter requests submitted pursuant to this revenue procedure by taxpayers under the jurisdiction of SB/SE or W&I

Mark for the attention of:

Associate Chief Counsel (Corporate)

Deputy Associate Chief Counsel ( ) (Complete parenthetical by using the applicable designation “Employee Benefits” or “Exempt Organizations and Employment Taxes”)

Associate Chief Counsel (Financial Institutions and Products)

Associate Chief Counsel (Income Tax and Accounting)

Associate Chief Counsel (International)

Associate Chief Counsel (Passthroughs and Special Industries)

Associate Chief Counsel (Procedure and Administration)

Assistant Deputy Commissioner, Compliance Integration

Director, SB/SE Exam, Specialty Policy

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Determination letter requests submitted pursuant to this revenue procedure by taxpayers under the jurisdiction of TE/GE