IRS REVISES PROCEDURES FOR OBTAINING INTERNATIONAL RULING LETTERS.

Rev. Proc. 91-27

CONTENTS

SEC. 1. PURPOSE

01 The purpose of this revenue procedure is to provide procedures for obtaining rulings, closing agreements and information letters on federal tax issues under the jurisdiction of the Associate Chief Counsel (International) and to provide information concerning determination letters under the jurisdiction of the Assistant Commissioner (International) and the District Directors. The Associate Chief Counsel (International) is responsible for the uniform interpretation and application of the federal tax laws and tax treaties relating to international transactions. This revenue procedure is applicable to issues under the jurisdiction of the Associate Chief Counsel (International), regardless of whether other issues relevant to the transaction are not within the jurisdiction of the Associate Chief Counsel (International). (See section 6.02 of this revenue procedure for additional copy requirement.)

02 The procedures for obtaining rulings, closing agreements and information letters under the jurisdiction of the Associate Chief Counsel (Technical) and information concerning determination letters are found in Rev. Proc. 91-1, 1991-1 I.R.B. 9. The procedures for obtaining rulings, closing agreements, and information letters under the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations) are found in Rev. Proc. 91-4, 1991-4 I.R.B. 20.

SEC. 2. RULINGS AND CLOSING AGREEMENTS ISSUED BY THE NATIONAL OFFICE

01 The Office of Associate Chief Counsel (International) (hereafter referred to as the "National Office") generally will issue rulings on prospective transactions and on completed transactions provided, in the case of completed transactions, that the ruling request is submitted before the return is filed for the year in which the transaction occurred.

02 The National Office will consider a request for section 1.9100 relief even if submitted after the return covering the issue presented in the section 1.9100 request has been filed, and even if an examination of the return has begun. In such case, the National Office will notify the District Office or the Assistant Commissioner (International) that has examination jurisdiction over the taxpayer's return. Section 1.9100 requests relate to extensions of time for making an election or application for relief under section 1.9100-1 of the Income Tax Regulations. Section 1.9100 requests permitted under this paragraph should be submitted pursuant to Rev. Proc. 79- 63, 1979-2 C.B. 578, and section 6 of this revenue procedure.

03 The National Office ordinarily does not issue a ruling if, at the time the ruling is requested, an identical issue is involved in the taxpayer's return for an earlier period and (1) that issue is being examined by a District Director or the Assistant Commissioner (International) or is being considered by an Appeals Office, or (2) that issue has been examined by a District Director or the Assistant Commissioner (International) or has been considered by an Appeals Office and the statutory period of limitation on either assessment or for filing a claim for refund or credit of tax has not expired. This limitation does not apply if the issue involved in the prior year return is the subject of a closing agreement. If an examination has begun, the National Office may issue the ruling if the District Director, the Assistant Commissioner (International) or the Appeals Office agrees, by memorandum, to permit the ruling to be issued.

04 The National Office does not issue rulings to business, trade, or industrial associations or to similar groups concerning the application of the tax laws to members of the group. However, it may issue rulings to these groups or associations on their own tax status or liability if the request meets the requirements of this revenue procedure. Furthermore, such groups or associations may submit suggestions of generic issues that would be appropriately addressed in revenue rulings.

05 The National Office will consider issuing rulings involving the interpretation of a statutory provision in areas in which regulatory guidance does not exist, regardless of whether there is an open regulation project. This section is inapplicable to statutory provisions requiring legislative regulations. Taxpayers are advised to contact the National Office orally or in writing to inquire whether the National Office will consider issuing a ruling absent regulatory guidance. Any preliminary decision to rule will not be binding.

06 A ruling will not be issued on alternative plans of proposed transactions or on hypothetical situations. Additionally, a ruling will not be issued on transactions which will not be executed within a reasonable period of time.

07 The National Office ordinarily will not issue letter rulings on only part of an integrated transaction.

08 The National Office will not issue a "comfort" ruling with respect to an issue that is clearly and adequately addressed by statute, regulations, decisions of the Supreme Court, tax treaties, revenue rulings or revenue procedures absent extraordinary circumstances (e.g., a request for a ruling required by a governmental regulatory authority in order to effectuate the transaction). However, in such cases the National Office may respond to the ruling request with a general information letter which either indicates the Service's position with respect to the issue addressed in the ruling request or directs the taxpayer to published guidance relevant to the issue.

09 The National Office ordinarily will not issue a ruling in certain areas because of the factual nature of the issues involved, or for other reasons. Rev. Proc. 91-6, 1991-2 I.R.B. 29, provides a list of these areas. This list is not all inclusive, since the National Office may decline to issue a ruling or a determination letter on other grounds, whenever warranted by the facts or circumstances of a particular case. The National Office and District Directors may, when it is considered appropriate and in the best interest of the Service, issue information letters calling attention to well-established principles of tax law.

10 Subject to other provisions of this section (in particular, paragraph .07), the National Office will issue a ruling under section 367 of the Internal Revenue Code even if the taxpayer does not also request a ruling as to the characterization of the transaction under the reorganization provisions of the Code. The National Office will determine the section 367 consequences of a transaction based on a taxpayer's characterization of the transaction, but indicate in the ruling that no opinion is expressed as to the characterization of the transaction under the reorganization The National Office may decline, however, to issue a section 367 ruling in situations in which the taxpayer's characterization of the transaction under the reorganization provisions is inappropriate.

11 The National Office will not issue a ruling with respect to whether a transaction has a bona fide business purpose or whether its principal purpose is the reduction of federal taxes.

12 The National Office will not issue a ruling on a matter upon which a court decision adverse to the government has been handed down and the question of following the decision or litigating further has not yet been resolved.

13 The National Office will not issue a ruling on a matter involving the federal tax consequences of any proposed federal, state, municipal, or foreign legislation.

14 At the discretion of the National Office, taxpayers may be asked or, at the request of the taxpayer, be permitted to enter into a closing agreement as a condition precedent to the issuance of a ruling. A "closing agreement" is an agreement between the commissioner of Internal Revenue or the Commissioner's delegate and a taxpayer on specific issues or liability that is entered into under the authority in section 7121 of the Code. If closing agreements are requested for each person in a class of taxpayers, such agreements are entered into only if the class consists of 25 or less. If the class numbers more than 25, a "mass closing agreement" may be entered into with the taxpayer who represents the class.

15 The National Office may notify the District Office or the Assistant Commissioner (International) that has examination jurisdiction over the taxpayer's return if either the taxpayer withdraws a request for a ruling or the National Office declines to issue a ruling.

SEC. 3. DETERMINATIONS UNDER SECTION 999(d) OF THE CODE

Under Rev. Proc. 77-9, 1977-1 C.B. 542, the National Office issues determinations under section 999(d) of the Code that may deny certain benefits of the foreign tax credit, deferral of earnings of foreign subsidiaries and domestic international sales corporations (DISC), and tax exemption for foreign trade income of a foreign sales corporation or small foreign sales corporation (FSC or small FSC) to a person, if that person, a member of a controlled group (within the meaning of section 993(a)(3)) that includes that person, or a foreign corporation of which a member of the controlled group is a United States shareholder, agrees to participate in, or cooperate with, an international boycott. Requests for determinations under Rev. Proc. 77-9 shall be submitted to the Associate Chief Counsel (International).

SEC. 4. DETERMINATION LETTERS ISSUED BY DISTRICT DIRECTORS AND THE ASSISTANT COMMISSIONER (INTERNATIONAL)

A "determination letter" is a written statement issued by a District Director or the Assistant Commissioner (International) in response to a written inquiry by a taxpayer that applies the principles and precedents previously announced by the National Office to a specific set of facts. A determination letter is issued only when a determination can be made on the basis of clearly established rules in the statute or regulations, Supreme Court decisions, or a revenue ruling that specifically answers the question presented. A determination letter may be issued only with respect to completed transactions. A determination letter usually is not issued for a question concerning a return if the same question is involved in a prior year's return. Determination letters have the same effect as a ruling, as described in section 12 of this revenue procedure. However, if the District Director is of the opinion that a conclusion contrary to that expressed in the determination letter is indicated, the matter need not be referred to the National Office. A District Director may not limit the modification or revocation of a determination letter but may refer the matter to the National Office for the possible exercise by the Commissioner or the Commissioner's delegate of the authority to limit the modification or revocation. The District Director or Assistant Commissioner (International) may modify or revoke a determination letter. See Rev. Proc. 91-1, 1991-1 I.R.B. 9, for instructions relating to the submission of requests for determination letters.

SEC. 5. INFORMATION LETTERS

An "information letter" is a statement issued by either the Office of Chief Counsel, a District Director, or the Assistant Commissioner (International) that calls attention to a well- established interpretation or principle of tax law, without applying it to a specific set of facts. At the discretion of the National Office, an information letter may be issued if a request for a ruling indicates that the taxpayer is seeking general information or if the request for a ruling fails to meet the requirements of this revenue procedure. An information letter is advisory only and has no binding effect on the Internal Revenue Service.

SEC. 6. INSTRUCTIONS TO TAXPAYERS RELATING TO RULING REQUESTS

01 A request for a ruling or a closing agreement under the jurisdiction of the Associate Chief Counsel (International) must be submitted in duplicate to the Associate Chief Counsel (International), Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044. Requests may be hand delivered to Room 6561, 1111 Constitution Avenue, N.W., Washington, D.C. 20224, between 8:30 a.m. and 4:00 p.m. on working days. If the taxpayer fails to submit duplicate requests, the National Office will process the request in accordance with the provisions of section 6.15 (30-day close-out procedure) of this revenue procedure.

02 Additional copies of the submission should be provided by the taxpayer if there are issues that will require assistance from other offices within Chief Counsel.

03 Each request for ruling must contain a complete statement of all of the facts relating to the transaction, including: names, addresses, telephone numbers, and taxpayer identification numbers of all interested parties; the location of the office (District Director or Assistant Commissioner (International)) that has or will have examination jurisdiction over the return; a full and precise statement of the business reasons for the transaction; and a detailed description of the transaction. If the request deals with only one step of an integrated transaction, the facts relating to the entire transaction must be submitted. In addition, true copies of all contracts, wills, deeds, agreements, instruments and other documents relating to the transaction must be submitted with the request. Original documents, such as contracts and wills, should not be submitted, because they will become part of the Service's file and will not be returned. All material facts and documents must be included in the taxpayer's letter requesting a ruling or in supplemental letters, and not merely incorporated by reference, and must be accompanied by an analysis of their bearing on the issue or issues, specifying the applicable provisions.

The Service will usually not rule on only one step of an integrated transaction. See section 2.07 of this revenue procedure. However, if such a letter ruling is requested, the facts, circumstances, etc. relating to the entire transaction must be submitted.

04 The request must contain a discussion of any relevant statutory provisions, tax treaties, court decisions, regulations, revenue rulings, revenue procedures, or notices supporting the taxpayer's position. A request for a ruling must contain a statement as to why the law in connection with the request is uncertain and specifically why the issue is not adequately addressed by statute, regulations, decisions of the Supreme Court, tax treaties, revenue rulings, revenue procedures, or notices.

If the taxpayer advocates a particular conclusion, an explanation of the grounds for the assertion must be furnished, together with a statement of relevant authorities in support of the taxpayer's views. Even if the taxpayer is urging no particular tax treatment of a proposed or prospective transaction, the taxpayer's views on the tax results of the proposed action and a statement of relevant authorities to support those views must be furnished. In addition, the taxpayer is encouraged to inform the Service about, and discuss the implications of, any authority believed to be contrary to the position advanced, such as legislation (or pending legislation), tax treaties, court decisions, regulations, notices, revenue rulings, revenue procedures, or announcements. If the taxpayer determines that there are no contrary authorities, a statement in the letter ruling request to this effect would be helpful. If contrary authority is not furnished with the letter ruling request and there is no accompanying statement that none exists, the Service in complex cases or those presenting difficult or novel issues may request submission of contrary authorities or a statement that none exists. Failure to comply with this request may result in the Service's refusal to issue a letter ruling.

05 At the time of filing of the request, the taxpayer must identify any pending legislation that may affect the proposed or prospective transaction. In addition, if, after the request is filed but before a ruling is issued, the taxpayer learns that such legislation is pending, the taxpayer must notify the Service.

06 A request for ruling must contain a statement of whether, to the best of the knowledge of the taxpayer and the taxpayer's representative(s), if any, the identical issue is in a prior return of the taxpayer or in a return for any year of a related taxpayer within the meaning of section 267 of the Code or of a member of an affiliated group of which the taxpayer is a member within the meaning of section 1504. If so, the statement must specify whether the issue with respect to the taxpayer or a related taxpayer: (1) is being examined by a District Director or the Assistant Commissioner (International); (2) has been examined and the statutory period of limitation on either assessment or for filing a claim for refund or credit of tax has not expired; (3) is being considered by an Appeals Office or has been considered by an Appeals Office and the statutory period of limitation on either assessment or for filing a claim for refund or credit of tax has not expired; (4) is the subject of a closing agreement; (5) is pending in litigation in a case involving the taxpayer or a related taxpayer; or (6) has been considered by an Appeals Office in connection with a return from an earlier period, but a closing agreement covering the issue or liability has not been entered into by an Appeals Office. The request also must contain a statement whether, to the best of the knowledge of the taxpayer and the taxpayer's representative(s), if any, the identical or similar issue has been: (1) submitted to the service by the taxpayer or its predecessor and withdrawn before a ruling was issued; or (2) ruled on by the Service to the taxpayer or its predecessor. If so, the statement must specify the date of submission, withdrawal, or ruling and other details of the Service's consideration of the issue.

07 If, after the request is filed but before a ruling is issued, the taxpayer knows that an examination of the issue by a District Director has been started, the taxpayer must notify the National Office of such action. If a return is filed before a ruling concerning the issue is received from the National Office, a copy of the request must be attached to the return for purposes of alerting the District Office.

08 A request for a ruling and any accompanying factual information or change in the request submitted subsequent to such initial request must be accompanied by a declaration in the following form: "Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the facts presented in support of the requested ruling letter are true, correct, and complete." The declaration must be signed by the person or persons on whose behalf the request is made and not by the taxpayer's representative. The person signing for a corporate taxpayer must be an officer of the corporate taxpayer who has personal knowledge of the facts. The officer must be one whose duties are not limited to obtaining a ruling or determination letter from the Service. The person signing for a trust or a partnership must be a trustee or general partner who has personal knowledge of the facts.

09 Section 10511 of the Revenue Act of 1987, Pub. L. 100-203, enacted December 22, 1987, as amended by section 11319 of the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, enacted November 5, 1990, requires the payment of user fees for requests for rulings, opinion letters, determination letters and similar requests. Rev. Proc. 90-17, 1990-1 C.B. 471 contains the schedule of fees and provides guidance for administering the user fee requirements. While the fee for most ruling requests is set at $2,500, reduced fees are provided for appropriate subcategories of cases.

10 At the option of the taxpayer, the taxpayer may submit as a part of the ruling request a draft of the desired letter ruling and addenda thereto which the Service may use to prepare the taxpayer's letter ruling. Taxpayers are encouraged to submit this material on a floppy disk. Any materials and disks submitted will become part of the permanent files of the National Office and will not be returned. Taxpayers planning to use the disk submission procedure should contact the National Office to coordinate the taxpayer's software with the software used by the National Office.

11 A request by or for a taxpayer must be signed by the taxpayer or the taxpayer's authorized representative. If the request is signed by a representative, or if the representative is to appear before the Service in connection with the request, the representative must be:

(1) an attorney who is a member in good standing of the bar of any state, possession, territory, commonwealth, or the District of Columbia, and who files with the Service a written declaration that he or she is currently qualified as an attorney and is authorized to represent the taxpayer;

(2) a certified public accountant who is qualified to practice in any state, possession, territory, commonwealth, or the District of Columbia, and who files with the Service a written declaration that he or she is currently qualified as a certified public accountant and is authorized to represent the taxpayer; or

(3) a person, other than an attorney or certified accountant, who is currently enrolled to practice before the Service and who files with the Service a written declaration that he or she is currently enrolled (including in the declaration either the enrollment number or the expiration date of the enrollment card) and is authorized to represent the taxpayer. (For the rules concerning practice before the Service, see Treasury Department Circular No. 230 (31 CFR Part 10), 1985-2 C.B. 742, as amended by regulations (31 CFR Part 10) published on January 22, 1986 and effective as of that same date.)

These requirements do not apply to an individual representing his or her full-time employer, or to a bona fide officer, administrator or administratrix, executor or executrix, trustee, etc., representing a corporation, trust, estate, association, or organized group. An unenrolled preparer of a return (other than an attorney or certified public accountant referred to in (1) or (2) above) who is not a full-time employee or a bona fide officer, administrator or administratrix, executor or executrix, trustee, etc., may not represent a taxpayer in connection with a ruling or a determination letter.

12 Any authorized representative, whether or not enrolled to practice, also must comply with Treasury Department Circular No. 230, as amended on January 22, 1986, regarding rules of practice before the Service and with the conference and practice requirements of the Statement of Procedural Rules (26 CFR 601). If the National Office believes that the taxpayer's representative is not in compliance with Treasury Department Circular No. 230, the National Office will bring the matter to the attention of the Director of Practice. Form 2848, Power of Attorney, and Form 2848-D, Authorization and Declaration, must be used with regard to rulings and closing agreements requested under this revenue procedure.

13 A nonresident alien is not authorized to practice before the Service unless he or she has received a "Letter of Authorization" from the Director, Office of Director of Practice, pursuant to section 10.7(b) of Treasury Department Circular 230. Practitioners may make a written request for a "Letter of Authorization" to: Office of Director of Practice, HR:DP, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, D.C. 20224. Section 10.7(b) of Circular 230 authorizes the Commissioner to allow any person to represent another without enrollment for the purpose of a particular matter. Unless a "Letter of Authorization" is obtained, the foreign representative must withdraw from the case. In such case, the nonresident alien or foreign entity must submit the ruling on its own behalf or through a qualified practitioner.

14 Copies of a ruling will be sent to no more than two representatives. If the original of the ruling is to be sent to a representative, the power of attorney should contain a statement to that effect and designate the mailing address of the representative. In such case, a copy of the ruling will be sent to the taxpayer.

15 If a request for a ruling does not substantially comply with all the provisions of this revenue procedure, the request will be closed. The taxpayer will be notified in a letter which will furnish the name and phone number of a contact person with whom the taxpayer may speak. The determination to close a request will be made at the earliest point practical in the process. If the request is in substantial compliance with the requirements of this revenue procedure but does not comply with all the provisions (for example, it contains an inadequate discussion of the facts or law), a representative will indicate during the initial contact with the taxpayer the specific requirements that have not been met. The taxpayer will be told that if the information is not received within 21 calendar days, the request will be closed. If the information is received after the request is closed, the request will be reopened and treated as a new request as of the date the essential information is received. In the processing of such a request, another user fee will be required before the case can be reopened.

16 The National Office processes requests for rulings in order of receipt. A request for expeditious treatment must be made in writing in a separate letter accompanying the request. The letter in which the request is made should state at the top of the first page: "Expeditious Handling Is Requested." The request should give a compelling need for such treatment. The National Office cannot give assurance that any letter will be processed by the time requested. Accordingly, taxpayers are urged to submit their ruling requests well in advance of the contemplated transaction.

17 Letter rulings ordinarily are not issued by facsimile transmission (fax). However, if the taxpayer requests it, a copy of the final letter ruling may be faxed to the taxpayer or the taxpayer's authorized representative within the United States, U.S. possessions, commonwealths and territories. Such a request must be made in writing, either as part of the original ruling request or prior to the approval of the letter ruling. The request must contain the fax number of the taxpayer or the taxpayer's authorized representative to whom the facsimile copy is to be sent. In addition, because faxed information is not sealed and little protection may be guaranteed at the receiving end, a statement containing a waiver of any disclosure violations must accompany the request. However, the Service will take certain precautions to protect confidential information. For example, a cover sheet, identifying for whom the fax is intended and how many pages are being faxed, will be used. The cover page will not identify the specific taxpayer by name, and it will be the first page covering the faxed ruling letter. Original letter ruling requests by fax are discouraged because such requests must be treated in the same manner as requests by letter; for example, the letter ruling request will not be forwarded to the rulings branch for action until the check for the user fee is received.

18 If a return relating to a transaction is filed while a ruling relating to that transaction is pending, the taxpayer must notify the National Office and attach a copy of the request to the return. A taxpayer who receives a ruling letter relating to a transaction before filing the return relating to that transaction must attach a copy of the ruling letter to the return.

19 The Service will be able to respond more quickly to a taxpayer's ruling request if the request is carefully prepared and complete. The checklist in Appendix A of this revenue procedure is designed to assist taxpayers in preparing a request by reminding them of the essential information and documents to be furnished with the request. For requests received on or after June 13, 1991, the checklist must be completed to the extent required by the instructions in the checklist, signed by the taxpayer or the taxpayer's representative, and placed on top of the ruling request. A photocopy of the checklist in this revenue procedure may be used.

SEC. 7 PUBLIC DISCLOSURE AND DELETION PROCEDURES UNDER SECTION 6110

01 To assist the Service in making the deletions required by section 6110(c) of the Code from the text of a ruling or determination letter prior to making it available for public inspection under section 6110(a), a deletions statement must accompany each request. The statement must either state that no information other than names, addresses, and identifying numbers need be deleted or indicate the deletions proposed by the person requesting the ruling or determination letter. If the latter alternative is chosen, the statement must be made in a separate document and be accompanied by a copy of the request for a ruling or determination letter and supporting documents, showing in brackets the deletions proposed by the person making the request. The statement also must indicate the statutory basis under section 6110(c) for each proposed deletion. The statement of proposed deletions must not be referred to anywhere in the request for a ruling or determination letter. If the person making the request decides to request additional deletions before the ruling letter or determination letter is issued, additional statements may be submitted. The procedures in this paragraph also apply to additional information that is submitted after the initial request.

02 If, after receiving the notice under section 6110(f)(1) of intention to disclose the ruling or determination letter (including a copy of the proposed version to be open to public inspection and notation of third-party communications under section 6110(d)), the person requesting the ruling or determination letter wants to protest the disclosure of certain information in the ruling or determination letter, that person must send a written statement within 20 calendar days to the Service office indicated on the notice of intention to disclosure, identifying those deletions that the Service has not made and that the person requesting the ruling or determination letter believes should be made. That person also must submit a copy of the version of the ruling or determination letter proposed to be disclosed on which the person indicates, by use of brackets, the deletions proposed by the taxpayer that have not been made by the Service. Generally, the Service will not consider the deletion under this subparagraph of any material that the taxpayer did not propose to be deleted before the ruling or determination letter was issued. Within 20 days after it receives the response to the notice under section 6110(f)(1), the Service will mail to that person its final administrative conclusion regarding the deletions to be made. The taxpayer does not have the right to a conference to resolve any disagreements concerning material to be deleted from the text of a ruling or determination letter. However, these matters may be taken up at any conference that is otherwise scheduled regarding the request.

03 After receiving the notice under section 6110(f)(1) of intention to disclose (but not later than 60 calendar days after the notice is mailed), the person requesting a ruling or determination letter may send a request for delay of public inspection under either section 6110(g)(3) or (4). The request for delay must be sent to the Service office indicated on the notice of intention to disclose. A request for delay under section 6110(g)(3) must contain the date on which it is expected that the underlying transaction will be completed. The request for delay under section 6110(g)(4) must contain a statement from which the Commissioner may determine whether there are good reasons for the delay.

SEC. 8 HANDLING OF RULING REQUEST AND 21-DAY CONTACT

01 Within 21 calendar days after a ruling request has been received, the taxpayer will be contacted to discuss the procedural and, if possible, the following substantive issues:

(1) whether the National Office will rule as the taxpayer has requested, will rule adversely on the matter, or will not rule;

(2) whether the taxpayer should submit additional information or representations to enable the National Office to rule on the matter; or

(3) whether, because of the nature of the transaction or the issue presented, a tentative conclusion on the issue has not been reached.

02 When the ruling requested involves matters within the jurisdiction of another office in Chief Counsel, the representative that received the original ruling request will notify the taxpayer within the initial 21 calendar day contact period that: (1) the ruling requested that involves a matter within the jurisdiction of another office has been referred to that office for consideration; and (2) a representative of that other office will contact the taxpayer to discuss informally the procedural and, to the extent possible, the substantive issue within that office's jurisdiction.

03 Any additional information requested by the Service must be submitted by letter appended by a penalties of perjury statement within 21 calendar days after the request for information is made to be considered part of the ruling request. A written request for an extension of time to submit additional material must be received by the National Office within the 21-day period, setting forth compelling facts and circumstances justifying the proposed extension. The Branch Chief, the Senior Technical Reviewer or reviewer of the Branch to which the case is assigned will determine whether to grant or deny the request for an extension of the 21-day period. There is no right to appeal the denial of an extension request. If the National Office does not receive the submission within the period of 21 days, plus any extensions granted by the Branch Chief, the Senior Technical Reviewer or reviewer, the National Office will either process the case on the assumption that no further submission will be received or close out the case on the day following such period. If the case has been closed out, the taxpayer will be advised in writing.

04 When additional information is needed from the taxpayer and the Service's position is tentatively adverse to the taxpayer, the National Office may, at the taxpayer conference, request that additional information be submitted within 21 days of the conference. As a result, the conference need not be delayed until the additional information is submitted. The provisions of section 8.03 will apply to the submission of the requested information.

05 If a fully favorable ruling cannot be issued, the attorney/tax law specialist will tell the taxpayer whether minor modifications of the transaction or adherence to certain published positions would warrant the issuance of a favorable ruling. However, changes that would materially alter the form of the proposed transaction will not be suggested. If, at the conclusion of the discussion, the attorney/tax law specialist determines that a meeting with the National Office would better serve the purpose of developing or exchanging information, a meeting will be arranged. This meeting will not be the taxpayer's conference of right, as described in section 9.02 of this revenue procedure.

06 The Service will not be bound by any informal opinion expressed by the Service's authorized representative in connection with a ruling request. Such an opinion cannot be relied upon as a basis for obtaining retroactive relief under section 7805(b) of the Code.

SEC. 9. CONFERENCES IN THE NATIONAL OFFICE

01 A taxpayer may request a conference in connection with a ruling request. Normally, a conference is scheduled only when the National Office considers it to be helpful in deciding the case or when an adverse decision is indicated. If a conference is appropriate, the taxpayer will be notified by telephone. The conference must be held 21 calendar days after the taxpayer has been notified unless an extension of the 21-day period is granted by the Branch Chief, the Senior Technical Reviewer or reviewer of the Branch to which the case is assigned.

02 A taxpayer is entitled, as a matter of right, to only one conference in the National Office unless one of the circumstances discussed in section 9.05 develops. This conference normally will be held at the Branch level. If more than one subject is to be discussed at the conference, the discussion will constitute a conference on each subject.

03 Since conference procedures are informal, no tape, stenographic, or other verbatim recording of a conference will be made.

04 The taxpayer will be given full opportunity at the conference to present views on all of the issues that are in question. The Service representative will explain the tentative decision of the National Office on the substantive issues and the reasons for those decisions. If the taxpayer requested the prospective application of a ruling under section 7805(b) of the Code, the Service representative will discuss the tentative recommendation concerning the requested section 7805(b) relief and the reason for the tentative recommendation. No commitment will be made as to the conclusion that the National Office will ultimately adopt.

05 An invitation to an additional conference will be extended if, after the conference of right, an adverse holding is proposed on a new issue or on the same issue but on different grounds from those discussed at the first conference. The taxpayer does not have a right to another conference when a proposed holding is changed at a higher level with a result less favorable to the taxpayer if the substantive or procedural grounds for the change were discussed at the conference of right. The provision of this revenue procedure limiting the number of conferences to which a taxpayer is entitled will not prevent a taxpayer from attending further conferences when, in the opinion of the National Office personnel, such conferences are necessary. All additional conferences of the type discussed in this paragraph are held only at the invitation of the Service.

06 It is the responsibility of the taxpayer to furnish in writing to the National Office any additional data, lines of reasoning, precedents, etc., that are proposed by the taxpayer and discussed at the conference but that were not raised prior to the conference by the National Office or the taxpayer. The taxpayer must furnish the additional information within 21 calendar days after the conference. If the additional information is not received within that time, a ruling will be issued on the basis of the information on hand or, if appropriate, no ruling will be issued. Procedures for requesting an extension of the 21-day period and notifying the taxpayer or the taxpayer's representative of the decision of the National Office are the same as those stated in section 8.03.

07 In unusual instances, it will be advantageous to both the Service and the taxpayer to hold a conference prior to submission of a ruling request to discuss substantive or procedural issues relating to a proposed transaction. Where the taxpayer intends to file a ruling request, pre-submission conferences will be held at the discretion of the Branch Chief or Senior Technical Reviewer of the Branch on a time-available basis, and generally the taxpayer will be requested to provide a draft ruling request or other detailed written description of the proposed transaction prior to the conference. Any discussion of substantive issues at a pre-submission conference is advisory only, is not binding on the Service, and cannot be relied upon as a basis for obtaining retroactive relief under the provisions of section 7805(b) of the Code. A ruling request submitted following the pre-submission conference will not necessarily be assigned to the Branch that held the pre-submission conference.

SEC. 10 WITHDRAWAL OF REQUESTS

01 A request for a ruling or determination letter may be withdrawn at any time before the signing of the letter of reply. If a request for a ruling or determination letter is withdrawn, the National office may give its views on the subject matter of the request to the District Director or the Assistant Commissioner (International) whose office will have examination jurisdiction over the taxpayer's return for consideration in connection with any later examination of the taxpayer's return.

02 Even though a request is withdrawn, all correspondence and exhibits will be kept by the Service and will not be returned to the taxpayer. In addition, the user fee will not be returned.

SEC. 11 ORAL ADVICE TO TAXPAYERS

01 The National Office does not issue rulings on oral requests. However, attorneys and tax law specialists ordinarily will discuss with taxpayers or their representatives inquiries regarding: substantive tax issues; whether the Service will rule on a particular issue; and questions relating to procedural matters about submitting a ruling request. Any discussion of a substantive issue will be at the discretion of the National Office on a time-available basis and will not be binding on the Service. Such an opinion cannot be relied upon as a basis for obtaining retroactive relief under section 7805(b) of the Code. The taxpayer's representative may be asked whether the oral request relates to a matter pending before the Service. If the matter is pending, the representative may be advised to contact the Service office with jurisdiction over the matter.

02 A taxpayer may seek oral technical assistance from a Taxpayer Service Representative in a District Office or Service Center when preparing a return or report, under other established procedures. Oral advice is advisory only, and the Service is not bound to recognize it in the examination of the taxpayer's return.

SEC. 12. EFFECT OF RULINGS

01 Other persons may not rely on a ruling issued to a taxpayer. Furthermore, a ruling issued on a particular transaction represents the holding of the National Office on that transaction only. It will not apply to a similar transaction in the same year or later year. Moreover, except in rare or unusual circumstances, the application of that ruling to the transaction will not be affected by the later issuance of regulations (either temporary or final), if the conditions specified in section 8.05 are met. However, if the ruling is later found to be in error or no longer in accord with the position of the Service, it will not give the taxpayer protection for a like transaction in the same year or later year.

02 When determining a taxpayer's liability, the District Director or the Assistant Commissioner (International) must ascertain whether (1) any ruling previously issued to the taxpayer has been properly applied, (2) the representations upon which the ruling was based reflected an accurate statement of the material facts, and (3) the transaction actually carried out was substantially as proposed. If the District Director or the Assistant Commissioner (International) finds that a ruling should be modified or revoked, the findings and recommendations of the District Director or the Assistant Commissioner (International) will be forwarded to the National Office and will be treated by the National Office as a request for technical advice. Otherwise, the ruling must be applied by the District Office or the Assistant Commissioner (International) in determining the taxpayer's liability. Appropriate coordination with the National Office will be undertaken if any field official having jurisdiction over a return or other matter proposes to reach a conclusion contrary to a ruling previously issued to the taxpayer.

In addition, each ruling will contain the following caveat: "The ruling (or rulings) contained in this letter are predicated upon facts and representations submitted by the taxpayer (or taxpayers) and accompanied by a penalty of perjury statement executed by an appropriate party. This office has not verified any of the material submitted in support of the request for a ruling (or rulings). Verification of the factual information, representations, and other data may be required as part of the audit process."

03 Except to the extent incorporated in a closing agreement, a ruling may be revoked or modified at any time by (1) notice to the taxpayer to whom the ruling was issued, (2) enactment of legislation or a ratification of a tax treaty, (3) a decision of the United States Supreme Court, (4) the issuance of temporary or final regulations, or (5) the issuance of a revenue ruling, a revenue procedure, notice, or other statement published in the Internal Revenue Bulletin. Consistent with these provisions, if a ruling relates to a continuing action or a series of actions, the ruling will ordinarily be applied until any one of the actions described above has taken place, or until specifically withdrawn. Publication of a notice of proposed rulemaking will not affect the application of a ruling letter.

04 The revocation or modification applies to all open taxable years unless the Commissioner or the Commissioner's delegate exercises the discretionary authority under section 7805(b) of the Code to limit the retroactive effect of the revocation or modification. Except in rare or unusual circumstances, relief will be granted under section 7805(b) if: (1) there has been no misstatement or omission of material facts; (2) the facts at the time of the transaction are not materially different from the facts on which the ruling was based; (3) there has been no change in the applicable law; (4) the ruling was originally issued with respect to a prospective or proposed transaction; and (5) the taxpayer directly involved in the ruling acted in good faith in reliance upon the ruling and the retroactive revocation would be to the taxpayer's detriment. If a ruling is revoked by letter with retroactive effect, the letter will, except in fraud cases, state the grounds for revocation and the reasons for retroactive application of the revocation. However, the application of a ruling to the transaction covered by the ruling will not be affected by the later issuance of regulations (either temporary or final) if the conditions specified above are met.

SEC. 13. PROCEDURE FOR REQUESTING APPLICATION OF SECTION 7805(b) IN THE CASE OF RULING AND DETERMINATION LETTERS

01 Pursuant to section 7805(b) of the Code, it is within the discretion of the Commissioner or the Commissioner's delegate to prescribe the extent, if any, to which any ruling or determination letter will be applied without retroactive effect. A taxpayer to whom a ruling or determination letter has been issued may request that the Associate Chief Counsel (International), as the Commissioner's delegate, exercise the discretionary authority under section 7805(b) to limit the retroactive effect of any subsequent revocation or modification of a ruling or determination letter.

02 In the case of a ruling, a request to limit the retroactive effect of any subsequent revocation or modification must be in the form of, and meet the requirements for, a ruling request as set forth in section 6. In addition, the request must state: (1) that it is being made pursuant to section 7805(b); (2) the relief sought; and (3) the reasons and arguments in support of the relief requested. The explanation in support of the request for section 7805(b) relief should include a discussion of the five items enumerated in section 12.01 of this revenue procedure as applied to the taxpayer's section.

03 When a request of section 7805(b) relief is made, the taxpayer has a right to a Conference in the National Office in accordance with the provisions of section 9 of this revenue procedure. If the request is made either as part of the initial ruling request or before the conference of right is held on the substantive issues, the section 7805(b) issue will be discussed at the taxpayer's one conference of right. If the request for section 7805(b) relief is made part of a pending ruling request after a conference has been held on the substantive issues, and the National Office determines that there is justification for having delayed the request, then the taxpayer will have the right to an additional conference, which shall be confined to the applicability of section 7805(b).

04 In the case of a determination letter that a District Director or the Assistant Commissioner (International) proposes to modify or revoke, a request to limit the modification or revocation of the determination letter must be made by requesting the District Director or the Assistant Commissioner (International) who issued the determination letter to request technical advice from the National Office, since a District Director or the Assistant Commissioner (International) has not been delegated authority under section 7805(b) to limit the modification or revocation of determination letters. The taxpayer's request must comply with the requirements set forth in 13.02 as well as those set forth in Rev. Proc. 91-28 (relating to the issuance of technical advice) and be accompanied by any documents bearing on the request. The taxpayer has a right to a conference in the National Office to the same extent as does a taxpayer who is the subject of a request for technical advice.

05 If a ruling is issued covering a continuing action or series of actions and it is determined that the ruling is in error, or no longer in accord with the position of the Service, the Associate Chief Counsel (International) ordinarily will limit the retroactivity of the revocation or modification to a date that is not earlier than that on which the ruling is modified or revoked.

SEC. 14. SECTION 482 ADVANCE DETERMINATION AGREEMENTS

For procedures relating to obtaining advance pricing agreements under section 482 of the Code, see Rev. Proc. 91-22, 1991-11 I.R.B. 11.

SEC 15. COMPETENT AUTHORITY

For procedures concerning competent authority relief arising under the application and interpretation of tax treaties between the United States and other countries, see Rev. Proc. 91-23, 1991-11 I.R.B. 18, as clarified by Rev. Proc. 91-26, 1991-17 I.R.B. ___. *

SEC. 16. CHANGES

01 Section 2.02 is amended to require that the National Office issue a private letter ruling, as opposed to a technical advice memorandum, to all taxpayers seeking relief under section 1.9100. This provision will ensure that taxpayers whose returns are already under examination pay the same user fees that are paid by taxpayers requesting relief under section 1.9100 prior to examination.

02 Section 6.04 is amended to encourage the taxpayer or the taxpayer's representative to inform the National Office about, and discuss the implications of, any authority contrary to the taxpayer's position. In addition, in complex or novel cases, the Service may request such comment or statement. Failure to comply with this request may result in the Service's refusal to issue a letter ruling.

03 Section 6.05 is added to require that the taxpayer identify any pending legislation that may affect the proposed transaction.

04 Section 6.09 is added to inform the taxpayer that certain user fees are imposed when a ruling is requested.

05 Section 6.17 is added to permit the taxpayer to request that a copy of the final letter ruling be faxed to the taxpayer or the taxpayer's authorized representative.

06 Section 6.19 is added to require that the taxpayer include a checklist with the ruling request.

SEC. 17. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 87-4, 1987-1 C.B. 33, as modified by Rev. Proc. 88-4, Rev. 1988-1 C.B. 586, and modified and amplified by Rev. Proc. 88-8, 1988-1 C.B. 628 (as modified by Rev. Proc. 88-13, 1988-1 C.B. 639, and Rev. Proc. 88-27, 1988-1 C.B. 804), and Rev. Proc. 89-4, 1989-1 C.B. 767, is superseded.

SEC. 18. EFFECTIVE DATE

This revenue procedure is effective with respect to requests for rulings, closing agreements and information letters received on or after June 13, 1991.

APPENDIX A

CHECKLIST IS YOUR RULING REQUEST COMPLETE?

INSTRUCTIONS

The Service will be able to respond more quickly to your letter ruling request if it is carefully prepared and complete. To ensure that your request is in order, use this checklist. Complete the five items of information requested before the checklist. Answer each question by circling "Yes," "No," or "N/A." When a question contains a place for a page number, insert the page number (or numbers) of the request that gives the information called for by a yes answer to the question. Sign and date the checklist (as taxpayer or authorized representative) and place it on top of your request.

If you are an authorized representative submitting a request for a taxpayer, you must include a completed checklist with the request, or the request will either be returned to you or substantive consideration of it will be deferred until a completed checklist is submitted. If you are a taxpayer preparing your own request without professional assistance, an incomplete checklist will not be cause for returning your request or deferring substantive consideration of the request. However, you should still complete as much of the checklist as possible and submit it with your request.

TAXPAYER'S NAME __________________________________________