Rev. Proc. 70-5

Section 1. Purpose.

The purpose of this Revenue Procedure is to announce procedures for issuance of rulings under the Tax Reform Act of 1969, Public Law 91-172, C.B. 1969-3, 10, pending the adoption of regulations that reflect the various provisions of that Act.

Sec. 2. Background.

The Tax Reform Act of 1969 was signed by the President on December 30, 1969. Regulations will be issued as expeditiously as possible to reflect the provisions of that Act. These regulations will be published as Treasury Decisions in the Federal Register and, in accordance with normal procedures, will be printed in the Internal Revenue Bulletin as an aid to taxpayers, tax practitioners, and employees of the Internal Revenue Service. To the extent practicable a prior notice of proposed rulemaking will be published in the Federal Register to provide an opportunity for comments by the public. However, in some instances the need for early issuance is such that temporary regulations will be promulgated without the prior publication of a notice.

Sec. 3. Issuance of Rulings.

.01 Pending the adoption of regulations (either temporary or final) that reflect the provisions of the Act, consideration will be given to the issuance of rulings under the conditions set forth below.

.02 If an inquiry presents an issue on which the answer seems to be clear from an application of the provisions of the statute to the facts described, a ruling will be issued in accordance with usual procedures.

.03 If an inquiry presents an issue on which the answer seems reasonably certain but not entirely free from doubt, a ruling will be issued only if it is established that a business emergency requires a ruling or that unusual hardship will result from failure to obtain a ruling.

.04 If an inquiry presents an issue that cannot be reasonably resolved prior to the issuance of regulations, a ruling will not be issued.

.05 In any case in which the taxpayer believes that a business emergency exists or that an unusual hardship will result from failure to obtain a ruling, he should submit with the request a separate letter setting forth the facts necessary for the Service to make a determination in this regard. In this connection, the Service will not deem a "business emergency" to result from circumstances within the control of the taxpayer such as, for example, scheduling within an inordinately short time the closing date for a transaction or a meeting of the board of directors or the shareholders of a corporation.

Sec. 4. Effect of Rulings.

Consistent with general procedures, a ruling issued under the foregoing conditions with respect to a particular transaction represents the position of the Service on that transaction only and will not be applied to any other transaction. However, the application of that ruling to the subject transaction will not be affected by the subsequent issuance of regulations (either temporary or final). On the other hand, if such a ruling relates to a continuing action or series of actions, the ruling will be applied until the date of issuance of applicable regulations or until specifically withdrawn. Publication of a notice of proposed rulemaking will not affect the application of any ruling issued under the conditions set forth herein.