Rev. Proc. 68-3

SECTION 1. PURPOSE.

This issuance announces procedures under which the scope of a consent, Form 872, extending the limitation period for assessment under Section 6501(c) of the Internal Revenue Code of 1954 may be restricted to one or more issues.

SEC. 2. BACKGROUND.

.01 Occasionally in the course of examination of a tax return or during Appellate proceedings, issues are confronted which cannot be resolved within the normal limitation period or prior extensions thereof, because of the need to await establishment of an interpretative position through court decision, regulation, ruling, or other National Office action.

.02 Generally, in cases described in .01 above, where there is agreement on other issues, if any, it serves the interests of both the taxpayer and the Service to conclude action on agreed issues and to restrict the scope of extensions of the period for assessment to the issue or issues held in suspense.

SEC. 3. PROCEDURE.

.01 Restricted consents referred to herein will be entered into only under circumstances described in section 2.01.

.02 The use of a restricted consent at the district level must be approved by the Chief, Audit Division, and at the Appellate level by the Chief, Associate Chief, or Assistant Chief of the Branch Office.

.03 Where there are issues other than the one or more subject to the restricted consent such issues must be agreed and a partial waiver executed on Form 870 (or Form 870 AD where appropriate).

.04 Where resolution of the principal issues subject to the restricted consent has an automatic effect on other items (e.g., foreign tax credit which may be changed in reaching a decision on an international issue; medical expense or contribution deductions which must be changed upon an increase or decrease in income), the restricted consent will cover both the principal issues and the related or automatic items.