IRS REVISES PROCEDURES FOR FURNISHING INTERNATIONAL TECHNICAL ADVICE.

Rev. Proc. 91-28

                              CONTENTS

01 The purpose of this revenue procedure is to provide procedures for furnishing technical advice to District Directors, the Assistant Commissioner (International), and Chiefs, Appeals Offices (collectively referred to as "Submitting Office"), on specific federal tax issues under the jurisdiction of the Associate Chief Counsel (International). In addition, it provides information to taxpayers about their rights when a District Director, the Assistant Commissioner (International), or a Chief, Appeals Office, requests technical advice. 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).

02 The procedures for obtaining technical advice on issues under the jurisdiction of the Associate Chief Counsel (Technical) are currently found in Rev. Proc. 91-2, 1991-1 I.R.B. 38. The procedures for obtaining technical advice on issues under the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations) are found in Rev. Proc. 91-5, 1991-4 I.R.B. 44.

SEC. 2. NATURE OF TECHNICAL ADVICE

01 "Technical advice" means advice or guidance in the form of a memorandum furnished by the Office of Associate Chief Counsel (International) (hereafter referred to as the "National Office") upon the request of the Submitting Office, submitted in accordance with section 3 of this revenue procedure, in response to any technical or procedural question that develops during any proceeding on the interpretation and proper application to a specific set of facts of tax law, tax treaties, regulations, revenue rulings, notices or other precedents published by the National Office. Such proceedings include (1) the examination of a taxpayer's return, (2) consideration of a taxpayer's claim for refund or credit, or (3) any other matter involving a specific taxpayer under the jurisdiction of the Examination Division. Technical advice is furnished as a way of helping Service personnel close cases and establish and maintain consistent holdings throughout the Internal Revenue Service. A District Director or an Appeals Office may raise an issue in any tax period, even though technical advice may have been asked for and furnished for the same or a similar issue for another tax period. Technical advice does not include informal legal memoranda furnished to the Submitting Office.

02 Only the National Office can revoke a ruling letter. Therefore, if the Submitting Office believes that a ruling letter previously issued to a taxpayer should be modified or revoked, the procedures in section 3 of this revenue procedure must be followed.

03 The provisions of this revenue procedure apply only to a case under the jurisdiction of a District Director, the Assistant Commissioner (International), or of a Chief, Appeals Office. Technical advice may be requested on issues considered in a prior Appeals disposition for the same taxable year, not based on mutual concessions for the same tax period of the same taxpayer, if the Appeals Office that had the case concurs in the request. A District Director or the Assistant Commissioner (International) may not request technical advice on an issue if an Appeals Office is currently considering an identical issue of the same taxpayer (or of a related taxpayer within the meaning of section 267 of the Internal Revenue Code or a member of an affiliated group within the meaning of section 1504 of which the taxpayer is also a member), in the same or a prior taxable year. A case remains under the jurisdiction of the District Director or the Assistant Commissioner (International) even though an Appeals Office has the identical issue under consideration in the case of another taxpayer (not related within the meaning of sections 267 and 1504, respectively) in an entirely different transaction. With respect to the same taxpayer or the same transaction, when an issue is under the jurisdiction of an Appeals Office, and the applicability of more than one kind of federal tax is dependent upon the resolution of that issue, a District Director or the Assistant Commissioner (International) may not request technical advice on the applicability of any of the taxes involved.

SEC. 3. REQUESTING TECHNICAL ADVICE

01 The Submitting Office is responsible for determining whether to request technical advice on any issue considered. Each request must be signed by a person who is authorized to sign for the Submitting Office. It should include, in writing, a statement of applicable law and the arguments submitted by the Submitting Office in support of its position on the issues. All requests for technical advice from Appeals Offices should be submitted to the Associate Chief Counsel (International) through the National Director of Appeals, CC:AP. All requests for technical advice should be made at the earliest possible stage of the proceedings. The grounds for a request are that a lack of uniformity exists on the disposition of the issue or that the issue is sufficiently unusual or complex to warrant consideration by the National Office. Form 4463, Request for Technical Advice, should be used for transmitting requests for technical advice to the National Office.

02 The taxpayer may request the Submitting Office to refer an issue under its jurisdiction to the National Office for technical advice. However, taxpayers may not seek section 1.9100 relief in a request for technical advice. In such case, the National Office will consider issuing a ruling, and will so notify the District Office or the Assistant Commissioner (International) that has examination jurisdiction over the taxpayer's return. See section 3.06 of this section.

Although taxpayers are encouraged to make written requests setting forth the facts, law, and argument on the issue, and reasons for requesting National Office technical advice, they may make the request orally. If, after considering the taxpayer's request, the Examining Officer or Appeals Officer thinks that the circumstances do not warrant referral of the case to the National Office, the Examining Officer or Appeals Officer will so notify the taxpayer. See section 4 of this revenue procedure for taxpayer's appeal rights when an Examining Officer or an Appeals Officer declines to request technical advice.

03 When technical advice is going to be requested, whether or not at the request of the taxpayer, the taxpayer will be told about it, and will be given a copy of the arguments submitted by the Submitting Office, in support of its position on the issue or issues, except as noted in section 7.06. If the Service initiates the request for technical advice, the Service will give the taxpayer a copy of the statement of the pertinent facts, the issues proposed for submission to the National Office, and the arguments supporting the position of the Submitting Office. The taxpayer has 10 calendar days after receiving the statement of facts and issues to indicate in writing any disagreement. Every effort should be made to reach agreement on the facts and issues. If agreement cannot be reached, the taxpayer may send, within 10 calendar days after receipt of notice from the Service, a statement of the taxpayer's understanding of the specific points at issue. This statement will be forwarded to the National Office with the request for technical advice. When the Submitting Office and the taxpayer cannot agree on material facts, or when there are factual discrepancies in the submission, the National Office, at its discretion, may refuse to provide technical advice.

04 If the taxpayer initiates the request for technical advice and the taxpayer's statement of the facts and proposed issues is not wholly acceptable to the Submitting Office, it will notify the taxpayer in writing setting forth the areas of disagreement and provide the taxpayer with a copy of its arguments in support of its position. The taxpayer has 10 calendar days after receiving the written notice to reply to it. If an agreement cannot be reached, the statements of both the taxpayer and the Submitting Office will be forwarded to the National Office with the request for technical advice. When the disagreement involves material facts essential to the preliminary assessment of the case, the Submitting Office, may, at its discretion, refuse referral to the National Office of the taxpayer's request for technical advice, or alternatively, the National Office may refuse to provide technical advice. The taxpayer must submit, at the time of the request, a statement explaining the taxpayer's position and discussing any relevant statutory provisions, tax treaties, court decisions, regulations, revenue rulings, revenue procedures, or notices supporting the taxpayer's position. This statement will be forwarded to the National Office with the request for technical advice. Taxpayers are encouraged to comment on any legislation, tax treaties, regulations, revenue rulings, revenue procedures, or court decisions contrary to the taxpayer's position. If contrary authority is not furnished with the 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 exist.

05 At the time the taxpayer is notified that the matter is being referred to the National Office, the taxpayer also will be notified of the right to a conference in the National Office if an adverse decision is indicated.

06 For rules concerning applications for extension of the time for making an election or application for relief pursuant to section 1.9100-1 of the regulations, see Rev. Proc. 79-63, 1979-2 C.B. 578. If a taxpayer requests an extension of time under section 1.9100-1 during an examination or during consideration by the Appeals Office, the procedures of section 2.02 of Rev. Proc. 91-27, page __,* this Bulletin, are applicable.

The National Office will consider a ruling 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. The Examining Officer or Appeals Officer is not authorized to deny consideration of a request that involves section 1.9100-1 relief. All such requests must be referred to the National Office. See section 4.03 of Rev. Proc. 79-63 and section 2.02 of Rev. Proc. 91-27.

07 Any authorized representative, as defined in section 6.11 of Rev. Proc. 91-27, whether or not enrolled to practice, must comply with the conference and practice requirements of the Statement of Procedural Rules (26 CFR 601). Form 2848, Power of Attorney, and Form 2848-D, Authorization and Declaration, must be used with regard to requests for technical advice under this revenue procedure.

SEC. 4. APPEAL BY TAXPAYER OF DISTRICT OR APPEALS OFFICE DETERMINATION NOT TO SEEK TECHNICAL ADVICE

01 If the Examining Officer or Appeals Officer concludes that a taxpayer's request for referral of an issue to the National Office for technical advice does not warrant referral, the Examining Officer or Appeals Officer shall so notify the taxpayer. A taxpayer's request for referral to the National Office will not be denied merely because the National Office furnished informal legal memoranda to the Submitting Office on the matter.

02 The taxpayer may appeal the decision of the Examining Officer or the Appeals Officer not to request technical advice by submitting to that official, within 10 calendar days after being notified of the decision, a statement of the facts, law, and arguments on the issue, and the reasons why the taxpayer believes the matter should be referred to the National Office for technical advice. The taxpayer must justify in writing a request for an extension of time beyond the 10 calendar days. An extension must be approved by the Chief, Examination Division, the Assistant Commissioner (International), or the Chief, Appeals Office.

03 The Examining Officer or the Appeals Officer will submit the taxpayer's statement to the Chief, Examination Division, the Assistant Commissioner (International), or the Chief, Appeals Office, along with the Examining Officer's or the Appeals Officer's statement of why the issue should not be referred to the National Office. The Chief or the Assistant Commissioner will determine, on the basis of the statement, whether technical advice will be requested. If the Chief or the Assistant Commissioner determines that technical advice s not warranted and proposes to deny the request, the taxpayer will be notified in writing of the reasons for the proposed denial (except in unusual situations when doing so would be prejudicial to the best interests of the Government). The taxpayer has 10 calendar days after receiving the letter to notify the Chief or the Assistant Commissioner of any disagreement with the proposed denial.

04 The taxpayer may not appeal the decision of the Chief, Examination Division, the Assistant Commissioner (International), or the Chief, Appeals Office, not to request technical advice from the National Office. However, if the taxpayer does not agree with the proposed denial, the technical advice file, including the taxpayer's written request and statements, will be referred by the Submitting Office to the Assistant Commissioner (International) or the National Director of Appeals, respectively, for review. The Examining Officer or the Appeals Officer will suspend action on the issue while the denial of technical advice is under review (except when delay would be prejudicial to the best interests of the Government). The Assistant Commissioner (International) or the National Director of Appeals may consult with the Associate Chief Counsel (International), if appropriate, and will notify the District or the Appeals Office within 45 days after the receipt of the file whether the proposed denial is approved or disapproved. The review will be based solely on the written record, and no conference will be held on the matter. The taxpayer will be notified of the decision by the District Director or the Appeals Office.

SEC. 5. WITHDRAWAL OF REQUESTS

01 Only the Submitting Office may withdraw a request for technical advice, including requests initiated by the taxpayer. The withdrawal request may be made at any time before the responding transmittal memorandum is signed. The District Director or Appeals Office must notify the taxpayer in writing of intent to withdraw the request for technical advice except (1) when the period of limitation on assessment is about to expire and the taxpayer has declined to sign a consent to extend the period, or (2) when such notification would be prejudicial to the best interests of the government. If the taxpayer does not agree that the request for technical advice should be withdrawn, the procedure in section 4 of this revenue procedure applies.

02 When a request for technical advice is withdrawn, the National Office may send its views to the Submitting Office when acknowledging the withdrawal request. In an Appeals case, acknowledgement of the withdrawal request will be sent to the appropriate Appeals Office through the National Director of Appeals, CC:AP.

SEC. 6. PREPARATION OF TECHNICAL ADVICE MEMORANDUM BY THE NATIONAL OFFICE

01 Requests for technical advice generally are given priority and processed expeditiously. As soon as the request for technical advice is received, the attorney/tax law specialist to whom the request is assigned will examine the file to make certain that it is sufficiently complete to process the request. If it does not comply with the requirements of section 7.02 relating to the statement of proposed deletions, the National Office will make the deletions from the technical advice memorandum that the Commissioner determines are required by section 6110(c) of the Code.

02 Within 21 calendar days after the technical advice request has been received, the Submitting Office will be contacted to discuss the following procedural and substantive issues: (1) whether the case is being returned; (2) whether additional information is necessary to enable the National Office to rule on the matter; (3) what tentative conclusions, if any, have been reached and the estimated date that the technical advice memorandum will be mailed; and (4) if no conclusions have been reached because of the complexity of the issues, the estimated date that the tentative conclusions will be reached.

03 Because the tentative conclusions of the National Office may change during the preparation and review of the technical advice memorandum, they should not, under any circumstances, be considered final. The Submitting Office may not advise the taxpayer of tentative conclusions.

04 A request for technical advice may be returned because substantial additional information is required to resolve an issue, because significant unresolved factual variances exist between the statements of facts submitted by the Submitting Office and the taxpayer, or because major procedural problems cannot be resolved by telephone. A request for technical advice will not be returned or a reply delayed merely because additional information not essential to the preliminary assessment of the case is needed or because of minor procedural deficiencies.

Within 21 calendar days after the Branch receives the additional information requested, the Branch representative will telephone the Submitting Office to discuss the procedural and substantive issues in the request that come within the jurisdiction of the Branch. The representative will indicate either (1) the tentative conclusion and the estimated date that the technical advice memorandum will be mailed, or (2) the fact that a tentative conclusion has not been reached because of the complexity of the issue and the estimated date that the tentative conclusion will be made.

05 If during the analysis and development of the case it is determined, after discussion with the Branch Chief, Senior Technical Reviewer, or reviewer, that additional information essential to the preliminary assessment of the case is needed, the attorney/tax law specialist will obtain the additional information in the most expeditious manner possible from the taxpayer or the Submitting Office. Any additional material submitted by the taxpayer must be sent to the National Office and a copy sent either to the Submitting Office for comment on the facts contained in the additional information. If the Submitting Office has comments, the comments must be furnished promptly to the National Office.

06 Any additional information requested from the taxpayer 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. 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, 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 2l 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, Senior Technical Reviewer, or reviewer, the National Office will issue the technical advice memorandum based on the existing record.

07 When the technical advice request concerns matters outside the jurisdiction of the Associate Chief Counsel (International), the representative of the branch that received the original technical advice request will notify the Submitting Office within the initial 21 calendar day period that: (1) the matters outside the jurisdiction of the Associate Chief Counsel (International) have been referred to the appropriate office for consideration; and (2) a representative of the other office will contact the Submitting Office concerning the technical advice request within 21 calendar days after receiving the referral in accordance with section 6.02 of this revenue procedure.

08 A taxpayer must obtain information on the status of the request for technical advice by contacting the office that requested the technical advice. The Submitting Office may get current information on the status of the request for technical advice by calling the Branch representative whose name and telephone number are shown on the acknowledgment of receipt of the technical advice request.

09 Replies to requests for technical advice will be addressed to the Submitting Office. When a request for technical advice is from an Appeals Office, the reply will be routed through the National Director of Appeals, CC:AP. The reply to technical advice requests consists of two parts. Each part identifies the taxpayer by name, address, identification number, and year or years involved. The first part of the reply is a transmittal memorandum (Form M-6000), which in unusual cases may provide the originating office administrative information or other information that, under the nondisclosure statutes or for other reasons, may not be discussed with the taxpayer. The second part is the technical advice memorandum, which contains: (1) a statement of the issues; (2) a statement of facts pertinent to the issues; (3) a statement of the pertinent law; (4) a discussion of the rationale underlying the conclusions reached by the National Office; and (5) the conclusions of the National Office.

10 After the technical advice memorandum has been issued to the Submitting Office the National Office will not discuss the contents of it with the taxpayer until the taxpayer has been given a copy.

11 A copy of the technical advice memorandum will be given to the taxpayer only after it has been adopted by the Submitting Office. However, in the case of technical advice memoranda described in section 6110(g)(5)(A) of the Code, relating to cases involving criminal or civil fraud investigations and jeopardy or termination assessments, a copy of the technical advice memorandum will not be given to the taxpayer until all of the proceedings in the investigations or assessments are completed.

SEC. 7. PUBLIC DISCLOSURE AND DELETIONS 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 technical advice memorandum prior to making it available for public inspection under section 6110(a), a deletions statement must accompany each request, whether initiated by the Service or the taxpayer. Where the Service initiates the request, the taxpayer must submit a statement of proposed deletions under section 6110(c) to the Submitting Office within 10 days after receiving the Service's statement of facts and issues. If the taxpayer does not submit a deletions statement, the Submitting Office will notify the taxpayer that a statement is required. If the Submitting Office does not receive that statement within 10 days after such notification, the National Office will make those deletions that the Commissioner determines are required by section 6110(c). Where the taxpayer initiates the request for technical advice and fails to submit a deletions statement, the Submitting Office, after notifying the taxpayer, may decline to submit the request if the taxpayer does not provide the required statement within 10 days after such notification.

02 The statement of proposed deletions must either state that no information other than names, addresses, and identifying numbers need be deleted or, if more information is proposed to be deleted, indicate the deletions proposed by the taxpayer. If the latter alternative is chosen, the statement must be made in a separate document accompanied by a copy of all statements of facts and supporting documents submitted to the National Office, showing in brackets the deletions proposed by the taxpayer. The statement also must indicate the statutory basis under section 6110(c) for each proposed deletion. The statement of proposed deletions must not appear or be referred to anywhere in the request for technical advice. If the taxpayer decides to request additional deletions under section 6110(c) before the National Office replies to the request for technical advice, the taxpayer may submit additional statements. The procedures in this paragraph also apply to additional information submitted during consideration of the technical advice request.

03 Before replying to the request for technical advice, the National Office generally will inform the taxpayer orally or in writing of the material likely to appear in the technical advice memorandum which the taxpayer proposed to be deleted but which the Service determined should not be deleted. The taxpayer may submit within 10 calendar days any further arguments supporting the taxpayer's proposed deletions. The Service will attempt, if possible, to resolve all disagreements about proposed deletions before the National Office replies to the request for technical advice. However, the taxpayer does not have the right to a conference to resolve any disagreements about material to be deleted from the text of the technical advice memorandum. These matters, however, may be considered at any conference otherwise scheduled for the request.

04 Accompanying the technical advice memorandum is a notice, under section 6110(f)(1) of the Code, of intention to disclose a technical advice memorandum (including a copy of the version proposed to be open to public inspection and notations of third party communications under section 6110(d)). The Submitting Office will give this notice to the taxpayer when it gives a copy of the technical advice memorandum to the taxpayer according to section 6.10 of this revenue procedure.

05 If, after receiving the notice under section 6110(f)(1) of the Code of intention to disclose the technical advice memorandum, the taxpayer wants to protest the disclosure of certain information contained therein, the taxpayer must submit a written statement within 20 calendar days identifying those deletions not made by the Service that the taxpayer believes should have been made. The taxpayer also must submit a copy of the version of the technical advice memorandum proposed to be open to public inspection with brackets around deletions that ace proposed by the taxpayer but that have not been made by the National Office. Generally, the National Office does not consider the deletion of any material that the taxpayer has not proposed to be deleted before the National Office reply to the request for technical advice is sent to the Submitting Office. Within 20 days after it receives the taxpayer's response to the notice under section 6110(f)(1), the National Office must mail the taxpayer its final administrative conclusions regarding the deletions to be made.

06 The provisions of this section do not apply to technical advice memoranda, described in section 6110(g)(5)(A) of the Code, relating to cases involving criminal or civil fraud investigations and jeopardy or termination assessments. However, in these cases the taxpayer must provide the statement of proposed deletions to the National Office after all proceedings in the investigations or assessments are complete but before the Commissioner mails the notice, under section 6110(f)(1), of intention to disclose the technical advice memorandum.

07 The requirements for submitting statements and other material for proposed deletion in technical advice memoranda before public inspection is allowed do not apply to requests for any documents to which section 6104 of the Code applies.

SEC. 8. CONFERENCES IN THE NATIONAL OFFICE

01 A taxpayer may request a conference in connection with a request for technical advice. A conference is scheduled as a matter of right when an adverse decision is indicated. Otherwise, a conference will be scheduled only when the National Office considers it to be helpful in deciding the case. If a conference is appropriate, the taxpayer will be notified by telephone. The conference must be held within 2l calendar days after the taxpayer has been notified unless an extension of the 21 day period is granted by the Branch Chief, Senior Technical Reviewer, or reviewer of the Branch to which the case is assigned. If conferences are being arranged for more than one request for technical advice for the same taxpayer, they will be scheduled to cause the least inconvenience to the taxpayer.

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 8.06 of this revenue procedure develops. This conference normally will be held at the Branch level. The Examining Officer or the Appeals Officer may also attend the conference. 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 proposed holding under section 7805(b) of the Code, the Service representative will discuss the tentative recommendation concerning the request for 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 limitation on the number of conferences to which a taxpayer is entitled does not prevent inviting a taxpayer to attend further conferences when National Office personnel think that the conferences are necessary. These additional conferences are held only at the invitation of the National Office.

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 previously or adequately presented in writing. The taxpayer must furnish the additional information within 21 calendar days after the conference. A copy of the additional material submitted by the taxpayer must be sent by the taxpayer to the Submitting Office for comment. If the additional information is not received within that time, the technical advice memorandum will be issued on the basis of the existing record. 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 6.06 of this revenue procedure.

07 In order to issue technical advice memoranda in a more efficient manner, the Branch representative may offer the taxpayer an option of delaying the conference in order to submit a brief requesting section 7805(b) relief, discussed in section 10 of this revenue procedure, in the event of a final adverse determination by the Service. In such cases, a conference on both the tentatively adverse position and the section 7805(b) relief request will be scheduled within 10 days of receipt of the taxpayer's section 7805(b) request.

SEC. 9. EFFECT OF TECHNICAL ADVICE

01 Other persons may not rely on a technical advice memorandum issued with respect to a taxpayer.

02 The Submitting Office must process the taxpayer's case on the basis of the conclusions in the technical advice memorandum unless (1) the Submitting Office believes that the conclusions reached by the National Office in the technical advice memorandum should be reconsidered, or (2) the Chief, Appeals Office, in the case of technical advice unfavorable to the taxpayer, decides to settle the issue in the usual manner under existing authority.

03 The Submitting Office will send the taxpayer (1) a copy of the technical advice memorandum and (2) the notice under section 6110(f)(1) of the Code of intention to disclose the technical advice memorandum (including a copy of the version proposed to be open to public inspection and notations of third-party communications under section 6110(d)). This requirement does not apply to technical advice memorandum involving civil fraud or criminal investigations, jeopardy or termination assessments, as described in section 7.06, or documents to which section 6104 applies.

04 In those cases in which the National Office informs the Submitting Office that a copy of the technical advice memorandum should not be given to the taxpayer, the Submitting Office will so inform the taxpayer if the taxpayer requests a copy.

05 Except in rare or unusual circumstances, a holding in a technical advice memorandum that is favorable to the taxpayer is applied retroactively. Moreover, since technical advice, as described in section 2.01 of this revenue procedure, is issued only on closed transactions, a holding that is adverse to the taxpayer is also applied retroactively unless the Associate Chief Counsel (International) exercises the discretionary authority under section 7805(b) of the Code to limit the retroactive effect of the holding.

06 If a technical advice memorandum relates to a continuing action or a series of actions, it is ordinarily applied until specifically withdrawn or until the conclusion is modified or revoked by enactment of legislation, ratification of a tax treaty, a decision of the United States Supreme Court, or the issuance of regulations (temporary or final), a revenue ruling, a notice, or other statement published in the Internal Revenue Bulletin. Publication of a notice of proposed rulemaking does not affect the application of a technical advice memorandum.

07 Generally, a technical advice memorandum that revokes or modifies a letter ruling or another technical advice memorandum is not applied retroactively with respect to a taxpayer whose tax liability was directly addressed in the ruling or memorandum 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 or memorandum was based; (3) there has been no change in the applicable law; (4) in the case of a ruling, it was originally issued on a prospective or proposed transaction; and (5) the taxpayer directly involved in the ruling or memorandum acted in good faith in relying on the ruling or memorandum and the retroactive revocation would be to the taxpayer's detriment. When a ruling or a memorandum is revoked by a technical advice memorandum with retroactive effect, the notice to the taxpayer, except in fraud cases, sets forth the grounds on which the revocation is being made and the reasons why the revocation is being applied retroactively.

SEC. 10. PROCEDURES FOR REQUESTING APPLICATION OF SECTION 7805(b) IN THE CASE OF TECHNICAL ADVICE

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 technical advice memorandum will be applied without retroactive effect. A taxpayer who has received a technical advice memorandum or to whom a technical advice request is pending 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 holding stated in the technical advice memorandum or to limit the retroactive effect of any subsequent modification or revocation of the technical advice memorandum.

02 When a technical advice memorandum that concerns a continuing transaction is modified or revoked by an action other than the issuance of another technical advice memorandum (for example, a subsequent revenue ruling or final regulations), a request to limit the retroactive effect of the modification or revocation of the technical advice memorandum must be made in the form of a request for a ruling if the request is submitted before examination of the return that contains the transaction that was the subject of the technical advice memorandum. See section 13.02 of Rev. Proc. 91-27.

03 When a taxpayer is informed of the modification or revocation of a technical advice memorandum, ruling letter, or determination letter during the course of an examination of the taxpayer's return by a District Director, the Assistant Commissioner (International) or during consideration by a Chief, Appeals Office, a request to limit the retroactive application of the modification or revocation of the technical advice memorandum, ruling letter, or determination letter must itself be made in the form of a request for technical advice. See section 3 of this revenue procedure. The taxpayer must submit a statement that the request for technical advice is being made pursuant to section 7805(b) of the Code. This statement must also set forth the relief sought and an explanation of the reasons and arguments in support of the relief requested, and it must be accompanied by any documents bearing on the request. The explanation in support of the application of section 7805(b) should include a discussion of the five items enumerated in section 9.07 of this revenue procedure as they relate to the taxpayer's particular situation. The taxpayer's request for relief pursuant to section 7805(b) must be forwarded by the Submitting Office to the National Office for consideration.

04 A request to limit the retroactive effect of a holding in a technical advice memorandum that does not modify or revoke a technical advice memorandum may be made as part of that technical advice request either initially or at any time before the technical advice memorandum is issued by the National Office. In such a case, the taxpayer must also submit a statement in support of the application of section 7805(b) of the Code, as described in section 10.03 of this revenue procedure.

05 When a request for technical advice concerns only the application of section 7805(b) of the Code, the taxpayer has the right to a conference in the National Office in accordance with the provisions of section 8 of this revenue procedure. If the request for application of section 7805(b) is included in the request for technical advice on the substantive issues, the section 7805(b) issue will be discussed at the taxpayer's one conference of right. If the request for the application of section 7805(b) is made as part of a pending technical advice 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).

SEC. 11. CHANGES

Section 2.01 is amended to provide a clarifying definition of the term "technical advice." The term excludes informal legal memoranda furnished to the submitting office. In this connection see the last sentence of section 4.01.

Section 3.04 now contains language encouraging the taxpayer to inform the National Office about, and discuss the implications of, any authority contrary to the taxpayer's position. In complex or novel cases, the Service may request such submission of contrary authorities or a statement that there are no contrary authorities.

SEC. 12. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 87-5, 1987-I C.B. 535, is superseded.

SEC. 13. EFFECTIVE DATE

This revenue procedure is effective with respect to requests for technical advice received on or after June 13, 1991.