REVISED PROCEDURES FOR ISSUING RULINGS, DETERMINATION LETTERS, AND CLOSING AGREEMENTS BY ASST. COMMISSIONER (EP/EO).

Rev. Proc. 91-4

TABLE OF CONTENTS

SEC. 1. WHAT IS THE PURPOSE OF THIS REVENUE PROCEDURE?

This revenue procedure explains how the Internal Revenue Service gives guidance to taxpayers on issues under the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations). It explains the kinds of guidance and the manner in which guidance is requested by taxpayers and provided by the Service.

SEC. 2. WHAT CHANGES HAVE BEEN MADE TO THIS REVENUE PROCEDURE SINCE LAST YEAR?

01 The format of the text and the sequence of the sections of Rev. Proc. 90-4 have been changed in an effort to make this document easier to read and apply. This document is now in a question and answer format.

02 Section 8 is amended to provide that the Service will not rule on certain requests under section 404(k) of the Code, and on whether a cafeteria plan satisfies the requirements of section 125 of the Code.

03 Section 9 is amended to include instructions for taxpayers wishing to have ruling letters faxed to them or their authorized representatives.

04 Section 9 is amended by adding the requirement that taxpayers include a checklist with all ruling requests.

05 Section 11 provides that in appropriate cases no ruling will be issued if the taxpayer does not follow the procedures for submitting additional information.

06 Section 11 provides that in appropriate cases the Service may request a draft (typed and on a word processing disk) of the proposed ruling near the completion of the ruling process.

07 Section 12.03 points out that, in determining the tax liability for the transaction to which the ruling applies, the District Director must determine if the law applicable to the period of the transaction changed after the ruling was issued.

SEC. 3. IN WHAT FORM IS GUIDANCE PROVIDED BY THE ASSISTANT COMMISSIONER (EMPLOYEE PLANS AND EXEMPT ORGANIZATIONS)?

The Service provides guidance in the form of rulings, closing agreements, determination letters, opinion letters, notification letters, information letters, revenue rulings, or oral advice.

01 A "letter ruling" is a written statement issued to a taxpayer by the Service's National Office that interprets and applies the tax laws or any non-tax laws applicable to employee benefit plans and exempt organizations to the taxpayer's specific set of facts. Once issued, a letter ruling may be revoked or modified for any number of reasons, as explained in section 12 of this revenue procedure, unless it is accompanied by a "closing agreement."

A closing agreement is a final agreement between the Service and a taxpayer on a specific issue or liability. It is entered into under the authority in section 7121 of the Code. It is final unless fraud, malfeasance, or misrepresentation of a material fact can be shown.

A closing agreement prepared in an office under the responsibility of the Assistant Commissioner (Employee Plans and Exempt Organizations) may be based on a ruling that has been signed by the Commissioner or the Commissioner's delegate that says that a closing agreement will be entered into on the basis of the ruling letter.

Closing agreements may be entered into when it is advantageous to have the matter permanently and conclusively closed, or when a taxpayer can show that there are good reasons for an agreement and that making the agreement will not disadvantage the government. In appropriate cases, taxpayers may be asked to enter into a closing agreement as a condition to the issuance of a ruling.

If, in a single case, closing agreements are requested for each of a number of taxpayers, such agreements are entered into only if the number of taxpayers is 25 or less. However, if the issue and holding are identical for all taxpayers and they number more than 25, a "mass closing agreement" will be entered into with the taxpayer who is authorized by the others to represent the entire group.

In appropriate cases, closing agreements may be made with sponsors of National Office master and prototype plans and sponsors of regional prototype plans.

Key District Directors have authority to enter into closing agreements on employee plans matters, notwithstanding the delegation of authority to the Commissioner's delegate.

02 A "determination letter" is a written statement issued by a Key District Director of the Service that applies the principles and precedents previously announced by the National Office to a specific set of facts. It is issued only when a determination can be made based on clearly established rules in the statute or regulations, or on a position in a ruling, opinion, or court decision published in the Internal Revenue Bulletin that specifically answers the questions presented.

District Directors of Key District Offices issue determination letters involving sections 401, 403(a), 409, and 4975(e)(7) of the Code as provided in Rev. Proc. 91-10, 1991-5 I.R.B.

03 An "opinion letter" is a written statement issued by the National Office to a sponsoring organization as to the acceptability (for purposes of section 401 and 501(a) of the Code) of the form of a master or prototype plan and any related trust or custodial account under sections 401, 403(a), and 501(a) of the Code, or as to the conformance of a prototype trust, custodial account, or individual annuity with the requirements of section 408(a), (b), or (k), as applicable. See Rev. Proc. 87-50, 1987-2 C.B. 647, and Rev. Proc. 89- 9, 1989-1 C.B. 780, modified by Rev. Proc. 90-21, 1990-1 C.B. 499.

04 A "notification letter" is a written statement furnished by the National Office or a Key District Office, upon request, as to the acceptability (for purposes of section 401 and 501(a) of the Code) of the form of a regional prototype plan and any related trust or custodial account. See Rev. Proc. 89-13, 1989-1 C.B. 801, as modified by Rev. Proc. 90-20, 1990-1 C.B. 495, and Rev. Proc. 90-21, 1990-1 C.B. 499.

05 An "information letter" is a statement issued either by the National Office or by a Key District Director. It calls attention to a well-established interpretation or principle of tax law, without applying it to a specific set of facts. An information letter may be issued if the taxpayer's inquiry indicates a need for general information. It may also be issued when the taxpayer's request doesn't meet the requirements for requesting a ruling, and the Service thinks general information will help the taxpayer.

06 A "revenue ruling" is an interpretation by the Service that has been published in the Internal Revenue Bulletin. It is the conclusion of the Service on how the law is applied to a specific set of facts. Revenue rulings are issued only by the National Office and are published for the information and guidance of taxpayers, Internal Revenue Service personnel, and other interested parties.

Because each revenue ruling represents the conclusion of the Service regarding the application of law to the entire statement of facts involved, taxpayers, Service personnel, and others concerned are cautioned against reaching the same conclusion in other cases unless the facts and circumstances are substantially the same. They should consider the effect of subsequent legislation, regulations, court decisions, revenue rulings, notices, and announcements. See Rev. Proc. 89-14, 1989-1 C.B. 814, which states the objectives of and standards for the publication of revenue rulings and revenue procedures in the Internal Revenue Bulletin.

07

(1) No oral rulings, and no written rulings in response to oral requests

The Service does not orally issue rulings, nor does it issue letter rulings or determination letters in response to oral requests from taxpayers. However, employees ordinarily will discuss with taxpayers or their representatives inquiries regarding whether the Service will rule on particular issues and questions relating to procedural matters about submitting ruling requests, determination letter requests, and requests for recognition of exempt status for a particular case.

(2) Discussion possible on substantive issues

At the discretion of the Service, and as time permits, substantive issues may also be discussed. However, such a discussion will not be binding on the Service, and cannot be relied on as a basis for obtaining retroactive relief under the provisions of section 7805(b) of the Code.

Substantive tax issues involving the taxpayer that are under examination or in litigation will not be discussed by Service employees not directly involved in the examination or litigation of such issues. However, a tax issue may be discussed even though the issue is affected by a nontax issue pending in litigation.

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

SEC. 4. ON WHAT ISSUES MAY TAXPAYERS REQUEST WRITTEN GUIDANCE UNDER THIS PROCEDURE?

Taxpayers may request letter rulings and information letters on issues within the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations) under this procedure. They may also request determination letters within the jurisdiction of the appropriate key district director offices that relate to Code sections under the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations).

SEC. 5. ON WHAT ISSUES MUST WRITTEN GUIDANCE BE REQUESTED UNDER DIFFERENT PROCEDURES?

01 The procedures for obtaining opinion letters for master and prototype plans and any related trusts or custodial accounts under sections 401(a), 403(a) and 501(a), and for prototype trusts, custodial accounts or annuities under section 408(a), (b), or (k) are contained in Rev. Proc. 89-9, 1989-1 C.B. 780, and Rev. Proc. 87-50, 1987-2 C.B. 647.

02 The procedures for obtaining notification letters for regional prototype plans under section 401(a) and any related trust or custodial account under section 501, are contained in Rev. Proc. 89-13, 1989-1 C.B. 801.

03 The procedures for obtaining rulings, closing agreements, and information letters on issues within the jurisdiction of the Associate Chief Counsel (Technical) are contained in Rev. Proc. 91-1, 1991-1 I.R.B. 9.

04 The procedures for obtaining rulings, closing agreements, and information letters on tax issues involving interpreting or applying the federal tax laws and income tax treaties relating to international transactions are contained in Rev. Proc. 87-4, 1987-1 C.B. 529, as modified by Rev. Proc. 88-4, 1988-1 C.B. 586. See also Rev. Proc. 90-17, 1990-1 C.B. 479 (user fees).

05 The procedures for obtaining rulings, etc., that apply to federal alcohol, tobacco, and firearms taxes under Subtitle E of the Internal Revenue Code are under the jurisdiction of the Bureau of Alcohol, Tobacco and Firearms. (See 26 CFR 601.328.)

SEC. 6. UNDER WHAT CIRCUMSTANCES DOES THE NATIONAL OFFICE ISSUE RULINGS?

01 In exempt organizations matters, the National Office issues rulings on proposed transactions and on completed transactions if the request is submitted before the return is filed for the year in which the transaction that is the subject of the request was completed. The National Office issues rulings involving:

(1) Organizations exempt from tax under section 501, including private foundations;

(2) Organizations described in section 170(b)(1)(A) (except clause (V));

(3) Political organizations described in section 527;

(4) Organizations described in section 4947(a);

(5) Prepaid legal plans described in section 120; and

(6) Welfare benefit plans described in section 4976.

02 In employee plans matters, the National Office issues rulings on proposed transactions and on completed transactions either before or after the return is filed. The National Office issues rulings involving:

(1) Sections 401 through 419A, except as provided in Rev. Proc. 91-10;

(2) Sections 72, 101(d), 219, 381(c)(11), 511 through 514, 4971, 4972, 4973, 4974, 4978, 4979, 4980, and 4980A;

(3) Waiver of the minimum funding standard, changes in funding method, and changes in the plan year under section 412;

(4) A change in the plan year of an employee retirement plan and the trust year of a tax-exempt employees' trust (See Rev. Proc. 87- 27, 1987-1 C.B. 769);

(5) The tax consequences of prohibited transactions under sections 503 and 4975;

(6) Whether individual retirement accounts established by employers or associations of employees meet the requirements of section 408(c) (See Rev. Proc. 87-50);

(7) With respect to employee stock ownership plans and tax credit employee stock ownership plans, sections 409(l), 409(m), and 4975(d)(3). Other subsections of section 409 and 4975(e)(7) involve qualification issues within the jurisdiction of the Key District Offices.

(8) Where the Assistant Commissioner (Employee Plans and Exempt Organizations) has authority to grant extensions of certain periods of time within which the taxpayer must perform certain transactions (for example, the 90-day period for reinvesting in employer securities under section 1.46-8(e)(10) of the regulations), the taxpayer's request for an extension of such time period must be postmarked (or received, if hand delivered to the National Office) no later than the expiration of the original time period. Thus, for example, a request for an extension of the 90-day period under section 1.46-8(e)(10) must be made before the expiration of this period. However, see section 6.03 with respect to elections under section 1.9100-1 of the regulations.

(9) Although the National Office will not ordinarily issue rulings on matters involving plan qualification, rulings may be issued where (1) the taxpayer has demonstrated to the Service's satisfaction that the qualification issue involved is unique and requires immediate guidance, (2) as a practical matter, it is not likely that such issue will be addressed through the determination letter process, and (3) the Service determines that it is in the interest of good tax administration to provide guidance to the taxpayer with respect to such qualification issue.

03 For requests for relief under section 1.9100 of the regulations, see Rev. Proc. 79-63, 1979-2 C.B. 578, and section 8 of this revenue procedure. If a request for an extension of time under section 1.9100-1 is submitted after the return is filed but before the return is examined, the procedures under this revenue procedure apply. However, if an examination of the return has begun, or is being considered by an Appeals Office, the procedures of Rev. Proc. 91-5, page 44, apply.

04 The National Office ordinarily does not issue rulings if, at the time the ruling is requested, the identical issue is involved in the taxpayer's return for an earlier period, and that issue --

(1) is being examined by a Key District Director,

(2) is being considered by an Appeals Office,

(3) is pending in litigation in a case involving the taxpayer or related taxpayer, or

(4) has been examined by a Key District Director or considered by an Appeals Office, and the statutory period of limitation has not expired for either assessment or filing a claim for a refund or a closing agreement covering the issue of liability has not been entered into by a Key District Director or by an Appeals Office.

If a return dealing with an issue for a particular year is filed while a request for a ruling on that issue is pending, the National Office will issue the ruling unless it is notified by the taxpayer that an examination of that issue or the identical issue on an earlier year's return has been started by a Key District Director. See section 9.04. However, even if an examination has begun, the National Office ordinarily will issue the letter ruling if the Key District Director agrees, by memorandum, to permit the ruling to be issued.

05 The National Office does not issue letter rulings to business, trade, or industrial associations, or to similar groups concerning the application of the tax laws to members of the group. But groups and associations may submit suggestions of generic issues that would be appropriately addressed in revenue rulings. See Rev. Proc. 89-l4, 1989-1 C.B. 814.

The National Office may, however, issue letter rulings to groups or associations on their own tax status or liability if the request otherwise meets the requirements for requesting a ruling.

06 Unless the issue is covered by section 8 of this procedure, pending the adoption of regulations (either temporary or final) that interpret the provisions of any act, a ruling may be issued under the following conditions:

(1) If the letter ruling request presents an issue for which the answer seems clear by applying the statute to the facts, a letter ruling will be issued under the usual procedures.

(2) If the ruling request presents an issue for which the answer seems reasonably certain but not entirely free from doubt, a ruling will be issued.

(3) For Code sections 402(a)(5), 402(a)(6), 402(f)(2)(A), 403(a)(l), 403(b)(1), and 72(t), which were enacted or amended by the Tax Reform Act of 1986, the appropriate Branch will do its best to issue a ruling even if the answer does not seem reasonably certain.

A letter ruling will not be issued if the ruling request presents an issue that cannot be readily resolved before regulations are issued. However, when the Service has closed a regulations project or does not intend to open a regulations project, the appropriate Branch will consider all letter ruling requests unless the issue is covered by section 8 of this revenue procedure.

SEC. 7. UNDER WHAT CIRCUMSTANCES DO KEY DISTRICT DIRECTORS ISSUE DETERMINATION LETTERS?

Key District Directors issue determination letters only if the question presented is specifically answered by statute or regulation, or by a position stated in a ruling, opinion, or court decision published in the Internal Revenue Bulletin.

01 In employee plans and exempt organizations matters, Key District Directors issue determination letters in response to taxpayers' written requests on completed transactions that affect returns over which they have examination jurisdiction. However, see section 8.08 of this revenue procedure. A determination letter usually is not issued for a question concerning a return to be filed by the taxpayer if the same question is involved in a return under examination.

Key District Directors do not issue determination letters on the tax consequences of proposed transactions, except as provided in sections 7.02 and 7.03 below.

02 In employee plans matters, Key District Directors issue determination letters on the qualified status of employee plans under sections 401, 403(a), 409 and 4975(e)(7), and the exempt status of any related trust under section 501. See Rev. Proc. 91-10.

03 In exempt organizations matters, the Key District Directors issue determination letters matters involving:

(1) Qualification for exempt status of organizations described in section 501 and 521 to the extent provided in Rev. Proc. 90-27, 1990-1 C.B. 514;

(2) Classification of private foundation status as provided in Rev. Proc. 76-34, 1976-2 C.B. 656;

(3) Recognition of unusual grants to certain organizations under sections 170(b)(1)(A)(vi) and 509(a)(2); and

(4) Advance approval under section 4945 of organizations' grant making procedures whose applications disclose (or who have otherwise properly disclosed) a scholarship grant program or plans to conduct such a program. If questions arise regarding grant-making procedures that cannot be resolved on the basis of law, regulations, a clearly applicable revenue ruling, or other published precedent, the Key District Director will forward the matter to the National Office for technical advice.

04 A Key District Director will not issue a determination letter in response to any request if --

(1) it appears that the taxpayer has directed a similar inquiry to the National Office;

(2) the same issue involving the same taxpayer or a related taxpayer is pending in a case in litigation or before an Appeals Office;

(3) the determination letter is requested by an industry, trade association, or similar group on behalf of individual taxpayers within the group (other than subordinate organizations covered by a group exemption letter); or

(4) the request involves an industry-wide problem.

Under no circumstances will a Key District Director issue a determination letter unless it is clearly shown that the request concerns a return which has been filed or is required to be filed and over which the Key District Director has or will have examination jurisdiction.

05 A request received by a Key District Director on a question concerning a return that is under examination, will be, in general, considered in connection with the examination of the return. If a response is made to the request before the return is examined, it will be considered a tentative finding in any later examination of that return.

06 A taxpayer who receives a determination letter before filing a return about any transaction that has been consummated and that is relevant to the return being filed should attach a copy of the determination letter to the return when it is filed.

07 Determination letters issued under sections 7.01 through 7.03 above are not reviewed by the National Office before they are issued. If a taxpayer believes that a determination letter of this type is in error, the taxpayer may ask the Key District Director to reconsider the matter. The taxpayer may also ask the Key District Director to request technical advice from the National Office as explained in Rev. Proc. 91-5.

(1) In employee plans matters, the procedures for review of determination letters relating to the qualification of employee plans involving section 401 and 403(a) of the Code are provided in Rev. Proc. 91-10.

(2) In exempt organizations matters, the procedures for the review of determination letters relating to the exemption from federal income tax of certain organizations under sections 501 and 521 of the Code are provided in Rev. Proc. 90-27.

SEC. 8. UNDER WHAT CIRCUMSTANCES DOES THE SERVICE ISSUE RULINGS AND DETERMINATION LETTERS?

01 The Service ordinarily will not issue letter rulings or determination letters in certain areas because of the factual nature of the problem involved or because of other reasons. The Service may decline to issue a ruling or a determination letter on other grounds, whenever warranted by the facts or circumstances of a particular case.

Instead of issuing a letter ruling or determination letter, the National Office or a Key District Director may, when it is considered appropriate and in the best interest of the Service, issue an information letter calling attention to well established principles of tax law.

02 A letter ruling or a determination letter will not be issued on alternative plans of proposed transactions or on hypothetical situations.

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

04 The National Office will issue rulings in all cases on prospective or future transactions if the law or regulations require a determination of the effect of a proposed transaction for tax purposes.

05 A ruling or determination letter relating to an issue that is being considered by the Pension Benefit Guaranty Corporation or the Department of Labor, and involves the same taxpayer, shall be issued at the discretion of the Service.

06 Until further notice, the National Office will not consider ruling requests on whether dividends that are used to repay an exempt loan (within the meaning of section 4975(d)(3)) are deductible under section 404(k), where such dividends are paid with respect to employer securities that were not acquired with the proceeds of the exempt loan being repaid, and which were acquired prior to August 5, 1989.

07 The Service does not issue ruling letters or determination letters on whether a cafeteria plan satisfies the requirements of section 125 of the Code. See also Rev. Proc. 90-54, 1990-44 I.R.B. 13, for areas under the jurisdiction of the Associate Chief Counsel (Technical) involving cafeteria plans in which advance rulings or determination letters will not be issued.

08 See section 3.02 of Rev. Proc. 91-10 for employee plans matters on which determination letters will not be issued.

SEC. 9. WHAT ARE THE GENERAL INSTRUCTIONS FOR REQUESTING RULINGS AND DETERMINATION LETTERS?

This section explains the general instructions for requesting letter rulings and determination letters on all matters. Specific and additional procedures also apply to requesting letter rulings and determination letters on certain matters. Those matters are listed in section 10 followed by a reference (usually to another revenue procedure) where more information can be obtained.

01

(1) Complete statement of facts and other information required. Each request for a letter ruling or a determination letter must contain a complete statement of all facts relating to the transaction. These facts include: names, addresses, telephone numbers, and taxpayer identification numbers of all interested parties; the location of the Key District Office that has or will have examination jurisdiction over the return (not the Service Center where the return is filed); a complete statement of the business reasons for the transaction; and a detailed description of the transaction. (The term "all interested parties" does not mean all shareholders of a widely held corporation requesting a ruling relating to a reorganization, or all employees where a large number may be involved.)

The Service will usually not rule on only one step of a larger integrated transaction. See section 8.03 of this revenue procedure. However, if such a letter ruling is requested, the facts, circumstances, etc. relating to the entire transaction must be submitted.

(2) Copies of all contracts, wills, deeds, agreements, instruments, plan documents, and other documents. True copies of all contracts, wills, deeds, agreements, instruments, plan documents, trust documents and proposed disclaimers, and other documents in the transaction must be submitted with the request. Each document, other than the request, should be labelled and attached to the request in alphabetical order. Original documents, such as contracts, wills, etc., should not be submitted because they become part of the Service's file and will not be returned.

(3) All material facts in documents must be included in the taxpayer's letter requesting a ruling or in supplemental letters, and not merely incorporated by reference. These facts must be accompanied by an analysis of their bearing on the issue or issues, specifying the provisions that apply.

(4) The request must contain a statement of whether, to the best of the knowledge of the taxpayer and/or the taxpayer's representatives, the same issue is in an earlier 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 also a member within the meaning of section 1504).

If the same issue is in an earlier return, the statement must specify whether the issue --

(a) is being examined by a Key District Director,

(b) has been examined, but the statutory period of limitation has not expired for either assessing tax or filing a claim for refund or credit of tax,

(c) has been examined, but a closing agreement covering the issue or liability has not been entered into by a Key District Director,

(d) is being considered by an Appeals Office in connection with a return from an earlier period,

(e) has been considered by an Appeals Office in connection with a return from an earlier period, but the statutory period of limitation has not expired for either assessing tax or filing a claim for refund or credit of tax,

(f) 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,

(g) is pending in litigation in a case involving the taxpayer or a related taxpayer, or

(h) in employee plans matters, is being considered by the Pension Benefit Guaranty Corporation or the Department of Labor.

(5) The request must also state whether, to the best of the knowledge of the taxpayer and the taxpayer's representatives, the Service previously ruled on the same or similar issue for the taxpayer or a predecessor, or whether the taxpayer or any representatives previously submitted the same or similar issue to the Service but withdrew it before a ruling was issued.

If the same issue was previously submitted, the statement must give the date it was submitted, withdrawn, or ruled on, and other details of the Service's consideration of the issue.

(6) If the taxpayer advocates that the Service reach a particular conclusion, an explanation of the grounds for that conclusion and the relevant authorities to support it must be included. Even if not advocating a particular tax treatment of a proposed transaction, the taxpayer must still furnish views on the tax results of the proposed transaction and a statement of relevant authorities to support those views.

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, revenue rulings, revenue procedures or announcements. If the taxpayer determines that there are no contrary authorities, a statement in the ruling request to this effect would be helpful.

Identifying and discussing contrary authorities will generally enable Service personnel to understand the issue and relevant authorities more quickly. When Service personnel receive the request, they will have before them the taxpayer's thinking on the effect and applicability of contrary authorities. This information should make research easier and lead to earlier action by the Service. If the taxpayer does not disclose and distinguish significant contrary authorities, the Service may need to request additional memorandums, which will delay action on the request.

At the time of filing the letter ruling request, the taxpayer should include in the request a statement identifying any pending legislation that may affect the proposed transaction. In addition, if, after the request is filed but before a letter ruling is issued, legislation is introduced, the taxpayer should notify the Service.

(7) The text of certain rulings and determination letters is open to public inspection under section 6110 of the Code. The Service makes deletions from the text before it is made available for inspection. To help the Service make the deletions required by section 6110(c), the taxpayer should provide a statement indicating the deletions desired.

A taxpayer who wants only names, addresses, and identifying numbers to be deleted should state this in the request. A taxpayer who wants more information deleted should submit a separate document indicating those deletions. The document must be accompanied by a copy of the request and supporting documents on which the taxpayer should bracket the material to be deleted. The deletions statement must indicate the statutory basis, under section 6110(c) of the Code, for each proposed deletion.

The deletions statement must not appear or be referred to anywhere in the request for a letter ruling or determination letter. If the taxpayer decides to ask for additional deletions before the ruling or determination letter is issued, additional statements may be submitted.

The deletions statement may be signed by either the taxpayer or the authorized representative.

The taxpayer should follow the same procedures to propose deletions from any additional information submitted after the initial request.

After receiving from the Service the notice under section 6110(f)(1) of the Code of intent to disclose the ruling or determination letter (including a copy of the version proposed to be open to public inspection and notation of third-party communications under section 6110(d)), the taxpayer may protest the disclosure of certain information in the ruling or determination letter. The taxpayer must send a written statement within 20 calendar days to the Internal Revenue Service office indicated on the notice of intent to disclose. The statement must identify those deletions that the Service has not made, and that the taxpayer believes should have been made. The taxpayer must also submit a copy of the version of the ruling or determination letter and bracket the deletions proposed that have not been made by the Service. Generally, the Service will not consider deleting any material that the taxpayer did not propose to be deleted before the ruling or determination letter was issued.

Within 20 days after the Service receives the response to the notice under section 6110(f)(1) of the Code, the Service will mail to the taxpayer 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 the ruling. However, these matters may be taken up at any conference that is otherwise scheduled regarding the request.

After receiving the notice under section 6110(f)(1) of the Code of intent to disclose, but within 60 calendar days after the date of notice, the taxpayer 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 Internal Revenue Service office indicated on the notice of intent 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 that there are good reasons for the delay.

Section 6110(k)(1) states that section 6110 disclosure provisions do not apply to any matter to which section 6104 applies. Therefore, rulings, determinations letters, technical advice memoranda, and related background file documents dealing with the following matters (covered by section 6104) are not subject to section 6110 disclosure provisions:

(a) An application for exemption under section 501(a) as an organization described in section 501(c) or (d), or any application filed with respect to the qualification of a pension, profit-sharing or stock bonus plan, or an individual retirement account, whether the plan or account has more than 25 or less than 26 participants, or any application for exemption under section 501(a) by an organization forming part of such a plan or account;

(b) Any document issued by the Internal Revenue Service in which the qualification or exempt status of an organization, plan, or account is granted, denied, or revoked or the portion of any document in which technical advice with respect thereto is given to a Key District Director;

(c) Any application filed and any document issued by the Internal Revenue Service with respect to the qualification or status of National Office master and prototype plans and regional prototype plans;

(d) The portion of any document issued by the Internal Revenue Service with respect to the qualification or exempt status of an organization, plan, or account, of a proposed transaction by such organizations, plan, or account; and

(e) Any document issued by the Internal Revenue Service in which is discussed the status of an organization under section 509(a) or 4942(j)(3), other than one issued to a nonexempt charitable trust described in section 4947(a)(1). This includes documents discussing the termination of private foundation status under section 507.

(8) The request must be signed by the taxpayer or the taxpayer's authorized representative.

(9) To sign the request or to appear before the Service in connection with the request, the representative must be:

(a) An attorney who is a member in good standing of the bar of the highest court of any state, possession, territory, commonwealth, or the District of Columbia. He or she must file a written declaration with the Service showing current qualification as an attorney and current authorization to represent the taxpayer.

(b) A certified public accountant who is qualified to practice in any state, possession, territory, commonwealth, or the District of Columbia. He or she must file a written declaration with the Service showing current qualification as a certified public accountant and current authorization to represent the taxpayer.

(c) An enrolled agent is a person other than an attorney or certified public accountant that is enrolled to practice before the Service, including a person enrolled to practice only for employee plans matters. He or she must file a written declaration with the Service showing current enrollment and authorization to represent the taxpayer. Either the enrollment number or the expiration date of the enrollment card must be included in the declaration. (See Treasury Department Circular No. 230 for the rules on who may practice before the Service).

(d) A foreign representative with a "Letter of Authorization" from the Director of Practice. A foreign representative must have received a "Letter of Authorization" from the Director of Practice under section 10.7(b) of Treasury Department Circular No. 230. Foreign representatives may make a written request for a "Letter of Authorization" to: Office of Director of Practice, PM:HR:DP, Internal Revenue Service, 1111 Constitution Ave., N.W., Washington, DC 20224. Section 10.7(b) of Circular No. 230 authorizes the Commissioner to allow any person to represent another without enrollment for the purpose of a particular matter.

(e) Sponsors of regional prototype plans. Certain individuals, partnerships or corporations may sponsor regional prototype plans according to the procedures of Rev. Proc. 89-13. See section 4 of Rev. Proc. 89-13.

Any authorized representative, listed in (a) through (e), whether or not enrolled to practice, must also comply with the conference and practice requirements of the statement of procedural rules (26 C.F.R. section 601.501-.509 (1990)).

The requirements of (a) through (e), above, do not apply to an individual representing his or her full-time employer, or to a bona fide officer, administrator, trustee, etc., representing a corporation, trust, estate, association, or organized group.

It is preferred that either Form 2848, Power of Attorney, or Form 2828-D, Tax Information Authorization, be used to provide the representative's authorization. The name of the person signing this document should also be typed or printed on the power of attorney form.

(10) A request for a ruling or determination letter and any factual information or change in the ruling request submitted at a later time must be accompanied by the following declaration: "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 or determination letter are true, correct, and complete." A taxpayer who submits additional factual information on several occasions may provide one declaration that refers to each submission.

The declaration must be signed by the taxpayer, not the representative. The person who signs for a corporate taxpayer must be an officer of the corporate taxpayer who has personal knowledge of the facts, and whose duties are not limited to obtaining a ruling or determination letter from the Service. If the corporate taxpayer is a member of an affiliated group filing consolidated returns, a penalties-of-perjury statement must also be signed and submitted by an officer of the common parent of the group.

The person signing for a trust or partnership must be a trustee or general partner who has personal knowledge of the facts.

(11) Section 10511 of the Revenue Act of 1987, Pub. L. 100-203, enacted December 22, 1987, requires taxpayers to pay user fees for requests for rulings, opinion letters, determination letters, and similar requests. Rev. Proc. 90-17, 1990-1 C.B. 479, contains the schedule of fees for each type of request under the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations) and provides guidance for administering the user fee requirements.

(12) Generally taxpayers need only submit one copy of the request for a ruling or determination letter. However, two copies are required if:

(a) the taxpayer is requesting separate rulings or letters on different issues as explained later under section 9.02,

(b) the taxpayer is requesting deletions other than names, addresses, and identifying numbers, as explained in section 9.01(7), or

(c) a closing agreement (as defined in section 3.01) is being requested on the issue presented.

(13) The Service will be able to respond more quickly to a taxpayer's ruling request if it 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. 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. Copies of the checklist can be obtained from any Rulings Branch in the office of the Employee Plans Technical and Actuarial Division or the Exempt Organizations Technical Division by calling (202) 566-3672 (Employee Plans), or (202) 566-4451 or (202) 566-3856 (Exempt Organizations) (not toll-free calls). A photocopy of the checklist in this revenue procedure may be used.

02

(1) To request separate letter rulings for multiple issues in single situation. If more than one issue is presented in a request for a letter ruling, the Service generally will issue a single ruling letter covering all the issues. However, if the taxpayer requests separate rulings on any of the issues (because, for example, one letter ruling is needed sooner than another), the Service will usually comply with the request unless it is not feasible or not in the best interest of the Service to do so. A taxpayer who wants separate letter rulings on multiple issues should make this clear in the request and submit two copies of the request.

In issuing each letter ruling, the Service will state that it has issued separate rulings or that requests for other rulings are pending.

(2) To have copies sent to other representatives. A taxpayer who has more than one representative should designate which representatives are to receive a copy of the ruling. Copies of letter rulings will be sent to no more than two representatives, but only if they are located at different mailing addresses. If a taxpayer does not designate which representative is to receive a copy of the letter ruling, the Service will send a copy of the letter ruling to the first representative named on the most recent power of attorney.

If the original of the letter ruling is to be sent to a representative, the power of attorney should contain a statement to that effect and give the representative's mailing address.

(3) To request expeditious handling. The Service processes requests for letter rulings and determination letters in order of the date received, and as expeditiously as possible. A taxpayer who has a compelling need to have a request processed ahead of the regular order must request expeditious handling. The request may be made in writing, preferably in a separate letter with, or soon after, the request for the letter ruling or determination letter. It must explain the need for special handling.

If the request for expeditious handling is not made in a separate letter, then the letter in which the letter ruling or determination letter request is made should say, at the top of the first page: "Expeditious Handling Is Requested. See page ____ of this letter."

A request for expeditious handling will not be forwarded to a rulings branch for action until the check or money order for the user fee in the correct amount is received.

The Service cannot give assurance that any letter ruling will be processed by the time requested. For example, the scheduling of a closing date for a transaction or a meeting of the board of directors or shareholders of a corporation, without regard for the time it may take to obtain a letter ruling or determination letter, will not be considered sufficient reason to process a request ahead of its regular order. Nor will the possible effect of fluctuation in the market price of stocks on a transaction be considered sufficient reason to process a request out of order.

(4) To receive or submit letter rulings by facsimile transmission. Letter rulings and determination letters ordinarily are not issued by facsimile transmission (fax). However, if the taxpayer requests it, an advance copy of a letter ruling or determination letter may be faxed to the taxpayer or the taxpayer's authorized representative if the Branch Chief or Assistant Branch Chief, in his or her sole discretion, determines such action is warranted. Such a request must be made in writing, either as part of the original ruling or determination request or prior to the approval of the letter ruling or determination letter. 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. Original letter ruling requests by fax are discouraged because such requests must be treated in the same manner as requests by letter; for example, in certain cases the letter ruling request will not be forwarded to the rulings branch for action until the check for the user fee is received.

(5) To request a conference. A taxpayer who wants to have a conference on the issues involved should indicate this in writing when, or soon after, filing the request. See also sections 11.04, 11.05, and 12.09(2) of this revenue procedure.

03

(1) Requests for letter rulings from the National Office should be sent to the following offices:

Employee Plans Rulings

(2) Requests for information letters on either exempt organizations matters or employee plan matters should be sent to:

Internal Revenue Service

04 If, after the request is filed but before a letter ruling is issued, the taxpayer knows that an examination of the issue by a Key District Director has been started, the taxpayer must notify the National Office of such action. If the taxpayer files a return before a letter ruling is received from the National Office concerning the issue, the taxpayer must attach a copy of the request to the return. This alerts the Key District Office and may avoid premature District action on the issue.

A taxpayer who receives a letter ruling before filing a return about any transaction that has been consummated and that is relevant to the return being filed should attach a copy of the ruling to the return when it is filed.

05 A taxpayer may obtain information regarding the status of a request by calling the person whose name and telephone number are shown on the acknowledgment of receipt of the request.

06 A taxpayer may withdraw a request for a letter ruling or determination letter at any time before the letter of reply is signed by the Service. If a request for a letter ruling is withdrawn, the National Office may give its view on the issues in the request to the appropriate Key District Director to consider in any later examination of the return. Correspondence and exhibits related to a request that is withdrawn will not be returned to the taxpayer. The user fee will not be returned, except as provided in Rev. Proc. 90- 17. In appropriate cases, the Service may publish its conclusions in a revenue ruling or revenue procedure.

A request for a ruling will not be suspended in the National Office at the request of a taxpayer.

07 In those situations where the National Office believes that the taxpayer's representative is not in compliance with Treasury Department Circular 230, the rules for practice before the Service, (31 CFR Part 10), 1985-2 C.B. 742, as amended by regulations (31 CFR Part 10) published January 22, 1986, and effective as of that same date, the National Office will bring the matter to the attention of the Director of Practice.

SEC. 10. WHAT SPECIFIC, ADDITIONAL PROCEDURES APPLY TO CERTAIN REQUESTS?

Specific revenue procedures supplement the general procedures for requests explained in section 9 and apply to requests for rulings regarding the Code sections and matters listed in this section.

01 If the request is for the qualification of an organization for exemption from federal income tax under section 501 or 521, see Rev. Procs. 72-5, 1972-1 C.B. 709; 80-27, 1980-1 C.B. 677; and 90-27 1990-1 C.B. 514.

02

(1) For requests for a waiver of the minimum funding standard, see Rev. Proc. 83-41, 1983-2 C.B. 775.

(2) For requests for the return to the employer of certain nondeductible contributions, see Rev. Proc. 90-49, 1990-39 I.R.B. 52.

(3) For requests for determination letters for plans under sections 401, 403(a), 409, and 4975(e)(7) of the Code, and for the exempt status of any related trust under section 502, see Rev. Proc. 91-10.

SEC. 11. HOW DOES THE NATIONAL OFFICE HANDLE RULING REQUESTS?

The National Office will issue letter rulings on the matters and under the circumstances explained in sections 4 and 6 of this revenue procedure and in the manner explained in this section.

01 In processing the request, the Service will not be bound by the informal opinion expressed by the Branch representative or any other authorized Service representative under this procedure, and such an opinion cannot be relied upon as a basis for obtaining retroactive relief under the provisions of section 7805(b) of the Code.

02 If a request for a letter ruling or determination letter does not comply with all the provisions of this revenue procedure, the request will be acknowledged and the requirements that have not been met will be pointed out.

If the request lacks essential information, which may include additional information needed to satisfy the procedural requirements of this revenue procedure, as well as substantive changes to transactions or documents needed from the taxpayer, the Service representative will tell the taxpayer that the request will be closed if the Service does not receive the information within 30 calendar days. See section 11.03 for instructions on submissions of additional information. 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 information is received. However, the taxpayer must pay another user fee before the case can be reopened.

A request for a letter ruling sent to the Key District Director that does not comply with the provisions of this revenue procedure will be returned by the Key District Director so that the taxpayer can make corrections before sending it to the National Office.

03 Material facts furnished to the Service by telephone, fax or orally at a conference must be promptly confirmed by letter to the Service with a declaration that the information is provided under penalties of perjury in the form described in section 9.01(10). This confirmation and any additional information requested by the Service must be furnished within 21 calendar days to be considered part of the request.

(1) To speed up work on ruling requests, taxpayers are encouraged to submit additional information by fax as soon as the information is available. The Service representative who requests information can provide a phone number to which the information can be faxed. A copy of this information and a signed perjury statement must, however, be mailed or delivered to the Service.

(2) Additional information should be sent to the same address as the original ruling request. See section 9.03. However, the additional information should include the name, office symbols, and room number of the Service representative who requested the information. In addition, the taxpayer's name and the case control number (which the Service representative can provide) should be included.

(3) An extension of the 21-day period will be granted only if justified in writing by the taxpayer and approved by the Branch Chief or group manager of the group to which the case is assigned. A request for extension should be submitted before the end of the 21- day period. If unusual circumstances close to the end of the 21-day period make a written request impractical, the taxpayer should notify the National Office within the 21-day period that there is a problem, and that the written request for extension will be coming soon. The taxpayer will be told promptly, and later in writing, of the approval or denial of the requested extension. If the extension request is denied, there is no right of appeal.

(4) If the taxpayer does not follow the procedures for submitting additional information or requesting an extension within the time provided, a ruling will be issued on the basis of the information on hand, or, if appropriate, no ruling will be issued.

04 A taxpayer may request a conference regarding 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 conferences are being arranged for more than one request for a ruling involving the same taxpayer, they will be scheduled so as to cause the least inconvenience to the taxpayer. As stated in section 9.02(5), a taxpayer who wants to have a conference on the issue or issues involved should indicate this in writing when, or soon after, filing the request.

If a conference has been requested, the taxpayer will be notified by telephone, if possible, of the time and place of the conference, which must then be held within 21 calendar days after this contact. Procedures for requesting an extension of the 21-day period and notifying the taxpayer or the taxpayer's representative of the Service's approval or denial of the request for extension are the same as those explained earlier in section 11.03 regarding providing additional information.

05 A taxpayer is entitled, as a matter of right, to only one conference in the National Office, except as explained under "additional conferences" below. This conference normally will be held at the Branch level and will be attended by a person who, at the time of the conference, has the authority to sign the ruling letter in his or her own name or for the Branch Chief.

When more than one Branch has taken an adverse position on an issue in a ruling request, or when the position ultimately adopted by one Branch will affect that adopted by another, a representative from each Branch with the authority to sign in his or her own name or for the Branch Chief will attend the conference. If more than one subject is to be discussed at the conference, the discussion will constitute a conference on each subject.

To promote open discussion of the issues, the conference usually will be held after the Branch has had an opportunity to study the case. However, at the request of the taxpayer, the conference of right may be held earlier. No taxpayer has a right to appeal the action of a Branch to the Division Director or to any other official of the Service.

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

06 The senior Service representative present at the conference ensures that the taxpayer has the opportunity to present views on all the issues in question. A Service representative explains the Service's tentative decision on the substantive issues and the reason for that decision. If the taxpayer asks the Service to limit the retroactive effect of any ruling or limit the revocation or modification of a prior ruling, a Service representative will discuss the recommendation concerning this issue and the reason for the recommendation. The Service representatives will not make a commitment regarding the conclusion that the Service will finally adopt.

07 The Service will offer the taxpayer an additional conference if, after the conference of right, an adverse holding is proposed, but on a new issue, or on the same issue but on different grounds from those discussed at the first conference. There is no right to another conference when a proposed holding is reversed at a higher level with a result less favorable to the taxpayer, if the grounds or arguments on which the reversal is based were discussed at the conference of right.

The limit on the number of conferences to which a taxpayer is entitled does not prevent the Service from offering further conferences if it decides they are needed.

08 The taxpayer should furnish to the National Office any additional data, reasoning, precedents, etc., that were proposed by the taxpayer and discussed at the conference but not previously or adequately presented in writing. The taxpayer must furnish the additional information within 21 calendar days of the conference. See section 11.03 for instructions on submission of additional information. 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 of the Service's approval or denial of the requested extension are the same as those stated in section 11.03 earlier regarding submitting additional information.

09 Sometimes it will be advantageous to both the Service and the taxpayer to hold a conference before the taxpayer submits the ruling request to discuss substantive or procedural issues relating to a proposed transaction. Such conferences are held only when the taxpayer actually intends to make a request and only on a time- available basis. Generally, the taxpayer will be asked to provide a draft ruling request or other detailed written description of the proposed transaction before the conference.

Any discussion of substantive issues at such a 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 such a conference will not necessarily be assigned to the Branch that held that conference.

10 Infrequently, taxpayers request that their conference of right be held by telephone. This may occur, for example, where a taxpayer wants a conference of right but believes that the issue involved does not warrant incurring the expense of traveling to Washington, D.C. If a taxpayer makes such a request, the Branch Chief or group manager will decide if it is appropriate in the particular case to hold the conference of right by telephone. If the request is approved by the Branch Chief or group manager, the taxpayer will be advised of the time when the Service representatives will be available to discuss the tentative adverse position so that the taxpayer can arrange to call at that time.

11 To accelerate issuance of letter rulings, in appropriate cases near the completion of the ruling process, the Service representative may request that the taxpayer or the taxpayer's representative submit a proposed draft of the letter ruling on the basis of discussions of the issues. The taxpayer, however, is not required to prepare a draft letter ruling in order to receive a letter ruling.

The format of the submission should be discussed with the Service representative who requests the draft ruling. The representative usually can provide a model of the letter ruling to be submitted and will discuss the facts, analysis, and letter ruling language to include.

In addition to a typed draft, taxpayers are encouraged to submit this draft on a floppy disk in a word processing format. The typed draft will become part of the permanent files of the National Office; the word processing disk will not be returned. If the Service representative requesting the draft ruling cannot answer specific questions about the format of the word processing disk, the questions can be directed to Alan Pipkin or George Katras at (202) 343-0729 (Employee Plans), or Robert Harper at (202) 566-4134 (Exempt Organizations) (not toll-free calls).

The proposed ruling (both typed draft and floppy disk) should be sent to the same address as any additional information and contain in the transmittal the information that should be included with any additional information (for example, a penalties of perjury statement is required). See section 11.03.

SEC. 12. WHAT EFFECT WILL A RULING HAVE?

01 A taxpayer ordinarily may rely on a letter ruling received from the Service subject to the conditions and limitations described in this section.

02 A taxpayer may not rely on a letter ruling issued to another taxpayer. See Section 6110(j)(3) of the Code.

03 When determining a taxpayer's liability, the Key District Director must ascertain whether:

(1) the conclusions stated in the letter ruling are properly reflected in the return,

(2) the representations upon which the letter ruling was based reflected an accurate statement of the material facts,

(3) the transaction was carried out substantially as proposed, and

(4) there has been any change in the law that applies to the period during which the transaction or continuing series of transactions were consummated.

If, when determining the liability, the Key District Director finds that a letter ruling should be modified or revoked, the findings and recommendations of the Key District Director will be forwarded to the National Office for consideration before further action. Such a referral to the National Office will be treated as a request for technical advice and the procedures of Rev. Proc. 91-5 will be followed. Otherwise, the letter ruling is to be applied by the Key District Office in its determination of 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 letter ruling previously issued to the taxpayer.

04 Unless it was part of a closing agreement as described in section 3.01, a letter ruling found to be in error or not in accord with the current views of the Service may be modified or revoked. If a letter ruling is revoked or modified, the revocation or modification applies to all years open under the statutes, unless the Service uses its discretionary authority under section 7805(b) of the Code to limit the retroactive effect of the revocation or modification.

A letter ruling may be revoked or modified by --

(1) a notice to the taxpayer to whom the letter ruling was issued,

(2) the enactment of legislation or 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, or other statement published in the Internal Revenue Bulletin.

Consistent with these provisions, if a letter ruling relates to a continuing action or a series of actions, it ordinarily will be applied until any one of the events described above occurs or until it is specifically withdrawn. Publication of a notice of proposed rulemaking will not affect the application of any letter ruling issued under the procedures in this revenue procedure.

05 Except in rare or unusual circumstances, the revocation or modification of a letter ruling will not be applied retroactively to the taxpayer for whom the ruling was issued or to a taxpayer whose tax liability was directly involved in the ruling provided that --

(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 letter ruling was based,

(3) there has been no change in the applicable law,

(4) the letter ruling was originally issued for a prospective transaction, and

(5) the taxpayer directly involved in the letter ruling acted in good faith in relying on the letter ruling, and revoking the ruling retroactively would be to the taxpayer's detriment. For example, the tax liability of each employee covered by a ruling relating to a qualified plan of an employer is directly involved in such ruling. However, the tax liability of members of an industry is not directly involved in a letter ruling issued to one of the members, and the holding in a revocation or modification of a letter ruling to one member of an industry may be retroactively applied to other members of the industry. By the same reasoning, a tax practitioner may not extend to one client the non-retroactive application of a modification or revocation of a letter ruling previously issued to another client.

If a letter ruling is revoked by letter with retroactive effect, the letter will, except in fraud cases, state the grounds on which the ruling is being revoked and explain the reasons why it is being revoked retroactively.

06 A letter ruling issued on a particular transaction represents a holding of the Service on that transaction only. And, except in 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 conditions (1) through (5) in section 12.05 above are met.

However, if a letter ruling on a transaction is later found to be in error or no longer in accord with the position of the Service, it will not protect a similar transaction of the taxpayer in the same year or later year.

07 If a letter ruling is issued covering a continuing action or series of actions, and the ruling is later found to be in error, or no longer in accord with the position of the Service, the Assistant Commissioner (Employee Plans and Exempt Organizations) ordinarily will limit the retroactive effect of the revocation or modification to a date that is not earlier than that on which the ruling is modified or revoked.

08 Taxpayers are not protected against retroactive revocation of letter rulings involving completed transactions other than those described in section 12.07, because they did not enter into the transactions relying on a ruling.

09 Under section 7805(b) of the Code, the Service may prescribe any extent to which a letter ruling or determination letter will be applied without retroactive effect.

A taxpayer to whom a letter ruling or determination letter has been issued may request that the Assistant Commissioner (Employee Plans and Exempt Organizations) limit the retroactive effect of any revocation or modification of the letter ruling or determination letter.

(1) Request for section 7805(b) relief must be made in required format

A request to limit the retroactive effect of the revocation or modification of a letter ruling must be in the general form of, and meet the general requirements for, a ruling request. These requirements are given in section 9. Specifically, the request must --

(a) state that it is being made under section 7805(b) of the Code,

(b) contain a statement of the relief sought,

(c) give an explanation of the reasons and arguments in support of the relief requested, and

(d) be accompanied by any documents bearing on the request.

The explanation in support of the relief sought under section 7805(b) should include a discussion of the five items listed in section 12.05 of this revenue procedure as they relate to the taxpayer's particular situation.

A request that the Service limit the retroactive effect of revocation or modification of a letter ruling may be made in the form of a separate request for a ruling when, for example, a revenue ruling has the effect of modifying or revoking a ruling previously issued to the taxpayer, or when the Service notifies the taxpayer of a change in position that will have the effect of revoking or modifying the ruling. However, when notice is given by the Key District Director during an examination of the taxpayer's return, or during consideration by the Chief, Appeals Office, a request to limit retroactive effect must be made in the form of a request for technical advice as explained in section 15.04 of Rev. Proc. 91-5.

When germane to a pending letter ruling request, a request to limit the retroactive effect of a modification or revocation of a ruling may be made as part of the request for the letter ruling, either initially or at any time before the letter ruling is issued. When a letter ruling that concerns a continuing transaction is modified or revoked by, for example, a subsequent revenue ruling, a request to limit retroactive effect must be made before the examination of the return that contains the transaction that is the subject of the letter ruling request.

(2) Taxpayer may request conference on retroactive effect

A taxpayer who requests the application of section 7805(b) of the Code in a separate letter ruling request has the right to a conference in the National Office as explained in sections 11.04, 11.05 and 11.06 of this revenue procedure. If the request is made initially as part of a pending letter ruling request or is made 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 as explained in section 11.05. If the request for the application of section 7805(b) relief is made as part of a pending letter ruling request after a conference has been held on the substantive issue, and the Service determines that there is justification for having delayed the request, the taxpayer is entitled to one conference of right concerning the application of section 7805(b), with the conference limited to discussion of this issue only.

SEC. 13. WHAT EFFECT WILL A DETERMINATION LETTER HAVE?

01 A determination letter issued by a Key District Director has the same effect as a letter ruling issued to a taxpayer under section 12 of this revenue procedure.

If a Key District Director proposes to reach a conclusion contrary to that expressed in a determination letter, he or she need not refer the matter to the National Office as is required for a letter ruling found to be in error. However, the Key District Director must refer the matter to the National Office if the Key District Director desires to have the modification or revocation of the determination letter limited under section 7805(b) of the Code.

02 If a Key District Director proposes to modify or revoke a determination letter, the taxpayer may request limitation of the retroactive effect of modification or revocation by asking the Key District Director who issued the determination letter to seek technical advice from the National Office, since a Key District Director does not have authority under section 7805(b) of the Code to limit modification or revocation. See section 10.03 of Rev. Proc. 91- 5.

(1) Request must be made in required form

The taxpayer's request must --

(a) state that it is being made under section 7805(b),

(b) contain a statement of the relief sought,

(c) contain an explanation of the reasons and arguments in support of the relief sought (including a discussion of the five items listed in section 12.05 of this revenue procedure as they relate to the taxpayer's situation), and

(d) include any documents bearing on the request.

(2) Taxpayer may request a conference on limitation of retroactive effect

When technical advice is requested regarding limiting modification or revocation of a determination letter, the taxpayer has the right to a conference in the National Office to the same extent as does any taxpayer who is the subject of a technical advice request. See section 6 of Rev. Proc. 91-5.

SEC. 14. UNDER WHAT CIRCUMSTANCES ARE MATTERS REFERRED BETWEEN A KEY DISTRICT OFFICE AND THE NATIONAL OFFICE?

01 Requests for determination letters received by Key District Directors that, under the provisions of this revenue procedure, may not be issued by a Key District Office, will be forwarded to the National Office for reply. The Key District Office will let the taxpayer know that the matter has been referred. Key District Directors will also refer to the National Office any request for a determination letter that in their judgement should have the attention of the National Office.

02 If the request involves an issue on which the Service will not issue a letter ruling or determination letter, the request will not be forwarded to the National Office. The Key District Office will let the taxpayer know that the Service will not issue a letter ruling or a determination letter on the issue. See section 8 of this revenue procedure for a description of no rule areas.

03 Requests for letter rulings received by the National Office that, under section 6 of this revenue procedure, may not be acted upon by the National Office will be forwarded to the Key District Office that has examination jurisdiction over the taxpayer's return. The taxpayer will be notified of this action. If the request is on an issue or in an area of the type discussed in section 8, and it is decided not to issue a letter ruling or an information letter, the National Office will let the taxpayer know, and the request will then be forwarded to the appropriate Key District Office for association with the related return.

SEC. 15. WHAT IS THE EFFECT OF THIS REVENUE PROCEDURE ON OTHER DOCUMENTS?

Rev. Proc. 90-4 is superseded.

SEC. 16. EFFECTIVE DATE

This revenue procedure is effective January 28, 1991, the date of its publication in the Internal Revenue Bulletin.

The principal authors of this revenue procedure are Dave Flavin of the Exempt Organizations Technical Division and Steve Linder of the Employee Plans Technical and Actuarial Division. For further information regarding this revenue procedure, contact the Employee Plans Technical and Actuarial telephone assistance service between the hours of 1:30 and 4:00 p.m., Eastern Time, Monday through Friday, on (202) 566-6783/6784 (not a toll-free call). Mr. Flavin's telephone number is 566-4332 (not a toll-free call). Mr. Linder's telephone number is (202) 343-0729 (not a toll-free call).

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 a 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 __________________________________________________