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									            SUBCHAPTER H—INTERNAL REVENUE PRACTICE

          PART 600—[RESERVED]                        601.507 Evidence required to substantiate
                                                         facts alleged by a recognized representa-
                                                         tive.
      PART 601—STATEMENT OF                          601.508 Dispute between recognized rep-
        PROCEDURAL RULES                                 resentatives of a taxpayer.
                                                     601.509 Power of attorney not required in
   Subpart A—General Procedural Rules                    cases docketed in the Tax Court of the
                                                         United States.
Sec.
601.101 Introduction.                                 REQUIREMENTS FOR ALCOHOL, TOBACCO, AND
601.102 Classification of taxes collected by                   FIREARMS ACTIVITIES
    the Internal Revenue Service.                    601.521 Requirements for conference and
601.103 Summary of general tax procedure.                representation in conference.
601.104 Collection functions.                        601.522 Power of attorney.
601.105 Examination of returns and claims            601.523 Tax information authorization.
    for refund, credit or abatement; deter-
                                                     601.524 Execution and filing powers of attor-
    mination of correct tax liability.
                                                         ney and tax information authorizations.
601.106 Appeals functions.
                                                     601.525 Certification of copies of documents.
601.107 Criminal investigation functions.
                                                     601.526 Revocation of powers of attorney
601.108 Review of overpayments exceeding
                                                         and tax information authorizations.
    $200,000.
                                                     601.527 Other provisions applied to represen-
601.109 Bankruptcy and receivership cases.
                                                         tation in alcohol, tobacco, and firearms
                                                         activities.
   Subpart B—Rulings and Other Specific
                 Matters                              Subpart F—Rules, Regulations, and Forms
601.201 Rulings and determinations letters.
                                                     601.601   Rules and regulations.
601.202 Closing agreements.
601.203 Offers in compromise.                        601.602   Tax forms and instructions.
601.204 Changes in accounting periods and
    in methods of accounting.                                  Subpart G—Records (Note)
601.205 Tort claims.
                                                     601.701   Publicity of information.
601.206 Certification required to obtain re-
                                                     601.702   Publication and public inspection.
    duced foreign tax rates under income tax
    treaties.
                                                      Subpart H—Tax Counseling for the Elderly
            Subpart C [Reserved]                     601.801 Purpose and statutory authority.
                                                     601.802 Cooperative agreements.
 Subpart D—Provisions Special to Certain
                                                     601.803 Program operations and require-
          Employment Taxes                               ments.
601.401   Employment taxes.                          601.804 Reimbursements.
                                                     601.805 Miscellaneous administrative provi-
   Subpart E—Conference and Practice                     sions.
             Requirements                            601.806 Solicitation of applications.

601.501 Scope of rules; definitions.                   AUTHORITY: 5 U.S.C. 301 and 552, unless oth-
                                                     erwise noted.
601.502 Recognized representative.
601.503 Requirements of power of attorney,             SOURCE: 32 FR 15990, Nov. 22, 1967, unless
    signatures, fiduciaries and Commis-              otherwise noted.
    sioner’s authority to substitute other re-
    quirements.
601.504 Requirements for filing power of at-           Subpart A—General Procedural
    torney.                                                       Rules
601.505 Revocation, change in representa-
    tion and substitution or delegation of           § 601.101    Introduction.
    representative.
                                                       (a) General. The Internal Revenue
601.506 Notices to be given to recognized
    representative; direct contact with tax-         Service is a bureau of the Department
    payer; delivery of a check drawn on the          of the Treasury under the immediate
    United States Treasury to recognized             direction of the Commissioner of Inter-
    representative.                                  nal Revenue. The Commissioner has

                                                 5
§ 601.102                                                  26 CFR Ch. I (4–1–99 Edition)

general superintendence of the assess-         the assessment, collection, and en-
ment and collection of all taxes im-           forcement functions are separately de-
posed by any law providing internal            scribed in Subpart B of this part. A de-
revenue. The Internal Revenue Service          scription of the rule making functions
is the agency by which these functions         of the Department of the Treasury
are performed. Within an internal rev-         with respect to internal revenue tax
enue district the internal revenue laws        matters is contained in Subpart F of
are administered by a district director        this part. Subpart G of this part relates
of internal revenue. The Director, For-        to matters of official record in the In-
eign Operations District, administers          ternal Revenue Service and the extent
the internal revenue laws applicable to        to which records and documents are
taxpayers residing or doing business           subject to publication or open to public
abroad, foreign taxpayers deriving in-         inspection. This part does not contain
come from sources within the United            a detailed discussion of the substantive
States, and taxpayers who are required         provisions pertaining to any particular
to withhold tax on certain payments to         tax or the procedures relating thereto,
nonresident aliens and foreign corpora-        and for such information it is nec-
tions, provided the books and records          essary that reference be made to the
of those taxpayers are located outside         applicable provisions of law and the
the United States. For purposes of             regulations promulgated thereunder.
these procedural rules any reference to        The regulations relating to the taxes
a district director or a district office       administered by the Service are con-
includes the Director, Foreign Oper-           tained in Title 26 of the Code of Federal
ations District, or the District Office,       Regulations.
Foreign Operations District, if appro-
                                               [38 FR 4955, Feb. 23, 1973 and 41 FR 20880, May
priate. Generally, the procedural rules        21, 1976, as amended at 45 FR 7251, Feb. 1,
of the Service are based on the Internal       1980; 49 FR 36498, Sept. 18, 1984; T.D. 8685, 61
Revenue Code of 1939 and the Internal          FR 58008, Nov. 12, 1996]
Revenue Code of 1954, and the proce-
dural rules in this part apply to the          § 601.102 Classification of taxes col-
taxes imposed by both Codes except to              lected by the Internal Revenue
the extent specifically stated or where            Service.
the procedure under one Code is incom-           (a) Principal divisions. Internal rev-
patible with the procedure under the           enue taxes fall generally into the fol-
other Code. Reference to sections of           lowing principal divisions:
the Code are references to the Internal          (1) Taxes collected by assessment.
Revenue Code of 1954, unless otherwise           (2) Taxes collected by means of rev-
expressly indicated.                           enue stamps.
  (b) Scope. This part sets forth the
                                                 (b) Assessed taxes. Taxes collected
procedural rules of the Internal Rev-
                                               principally by assessment fall into the
enue Service respecting all taxes ad-
                                               following two main classes:
ministered by the Service, and super-
sedes the previously published state-            (1) Taxes within the jurisdiction of
ment (26 CFR (1949 ed., Part 300-End)          the U.S. Tax Court. These include:
Parts 600 and 601) with respect to such          (i) Income and profits taxes imposed
procedural rules. Subpart A provides a         by Chapters 1 and 2 of the 1939 Code and
descriptive statement of the general           taxes imposed by subtitle A of the 1954
course and method by which the Serv-           Code, relating to income taxes.
ice’s functions are channeled and deter-         (ii) Estate taxes imposed by Chapter
mined, insofar as such functions relate        3 of the 1939 Code and Chapter 11 of the
generally to the assessment, collection,       1954 Code.
and enforcement of internal revenue              (iii) Gift tax imposed by Chapter 4 of
taxes. Certain provisions special to           the 1939 Code and Chapter 12 of the 1954
particular taxes are separately de-            Code.
scribed in Subpart D of this part. Con-          (iv) The tax on generation-skipping
ference and practice requirements of           transfers imposed by Chapter 13 of the
the Internal Revenue Service are con-          1954 Code.
tained in Subpart E of this part. Spe-           (v) Taxes imposed by Chapters 41
cific matters not generally involved in        through 44 of the 1954 Code.

                                           6
Internal Revenue Service, Treasury                                                  § 601.103

  (2) Taxes not within the jurisdiction               (b) Examination and determination of
of the U.S. Tax Court. Taxes not im-                tax liability. After the returns are filed
posed by Chapter 1, 2, 3, or 4 of the 1939          and processed in internal revenue serv-
Code or Subtitle A or Chapter 11 or 12              ice centers, some returns are selected
of the 1954 Code are within this class,             for examination. If adjustments are
such as:                                            proposed with which the taxpayer does
  (i) Employment taxes.                             not agree, ordinarily the taxpayer is
  (ii) Miscellaneous excise taxes col-              afforded certain appeal rights. If the
lected by return.                                   taxpayer agrees to the proposed adjust-
  (3) The difference between these two              ments and the tax involved is an in-
main classes is that only taxes de-                 come, profits, estate, gift, generation–
scribed in subparagraph (1) of this                 skipping transfer, or Chapter 41, 42, 43,
paragraph, i.e., those within the juris-            or 44, tax, and if the taxpayer waives
diction of the Tax Court, may be con-               restrictions on the assessment and col-
tested before an independent tribunal               lection of the tax (see § 601.105(b)(4)),
prior to payment. Taxes of both classes             the deficiency will be immediately as-
may be contested by first making pay-               sessed.
ment, filing claim for refund, and then               (c) Disputed liability—(1) General. The
bringing suit to recover if the claim is            taxpayer is given an opportunity to re-
disallowed or no decision is rendered               quest that the case be considered by an
thereon within six months.                          Appeals Office provided that office has
[32 FR 15990, Nov. 22, 1967, as amended at 35       jurisdiction (see § 601.106(a)(3)). If the
FR 7111, May 6, 1970; 46 FR 26053, May 11,          taxpayer requests such consideration,
1981; T.D. 8685, 61 FR 58008, Nov. 12, 1996]        the case will be referred to the Appeals
                                                    Office, which will afford the taxpayer
§ 601.103 Summary of general tax pro-               the opportunity for a conference. The
     cedure.                                        determination of tax liability by the
   (a) Collection procedure. The Federal            Appeals Office is final insofar as the
tax system is basically one of self-as-             taxpayer’s appeal rights within the
sessment. In general each taxpayer (or              Service are concerned. Upon protest of
person required to collect and pay over             cases under the jurisdiction of the Di-
the tax) is required to file a prescribed           rector, Foreign Operations District, ex-
form of return which shows the facts                clusive settlement authority is vested
upon which tax liability may be deter-              in the Appeals Office having jurisdic-
mined and assessed. Generally, the tax-             tion of the place where the taxpayer re-
payer must compute the tax due on the               quests the conference. If the taxpayer
return and make payment thereof on                  does not specify a location for the con-
or before the due date for filing the re-           ference, or if the location specified is
turn. If the taxpayer fails to pay the              outside the territorial limits of the
tax when due, the district director of              United States, the Washington, D.C.
internal revenue, or the director of the            Appeals Office of the Mid-Atlantic Re-
regional service center after assess-               gion assumes jurisdiction.
ment issues a notice and demands pay-                 (2) Petition to the U.S. Tax Court. In
ment within 10 days from the date of                the case of income, profits, estate, and
the notice. In the case of wage earners,            gift taxes, imposed by Subtitles A and
annuitants,      pensioners,  and    non-           B, and excise taxes under Chapters 41
resident aliens, the income tax is col-             through 44 of the 1954 Code, before a de-
lected in large part through with-                  ficiency may be assessed a statutory
holding at the source. Another means                notice of deficiency (commonly called
of collecting the income tax is through             a ‘‘90-day letter’’) must be sent to the
payments of estimated tax which are                 taxpayer by certified mail or registered
required by law to be paid by certain               mail unless the taxpayer waives this
individual and corporate taxpayers.                 restriction on assessment. See, how-
Neither withholding nor payments of                 ever, §§ 601.105(h) and 601.109 for excep-
estimated tax relieves a taxpayer from              tions. The taxpayer may then file a pe-
the duty of filing a return otherwise re-           tition for a redetermination of the pro-
quired. Certain excise taxes are col-               posed deficiency with the U.S. Tax
lected by the sale of internal revenue              Court within 90 days from the date of
stamps.                                             the mailing of the statutory notice. If

                                                7
§ 601.104                                                    26 CFR Ch. I (4–1–99 Edition)

the notice is addressed to a person out-         district director a claim for refund of
side the States of the Union and the             all or any part of the amount paid, ex-
District of Columbia, the period within          cept with respect to certain taxes de-
which a petition may be filed in the             termined by the Tax Court, the deci-
Tax Court is 150 days in lieu of 90 days.        sion of which has become final. If the
In other words, the taxpayer has the             claim is allowed, the overpayment of
right in respect of these taxes to con-          tax and allowable interest thereon will
test any proposed deficiency before an           be credited against other liabilities of
independent tribunal prior to assess-            the taxpayer, or will be refunded to the
ment or payment of the deficiency. Un-           taxpayer. Generally, if the claim for
less the taxpayer waives the restric-            refund is rejected in whole or in part,
tions on assessment and collection               the taxpayer is notified of the rejection
after the date of the mailing of the             by certified mail or registered mail.
statutory notice, no assessment or col-          The taxpayer may then bring suit in
lection of a deficiency (not including           the United States District Court or in
the correction of a mathematical                 the United States Claims Court for re-
error) may be made in respect of these           covery of the tax. Suit may not be
taxes until the expiration of the appli-         commenced before the expiration of six
cable period or, if a petition is filed          months from the date of filing of the
with the Tax Court, until the decision           claim for refund, unless a decision is
of the Court has become final. If, how-          rendered thereon within that time, nor
ever, the taxpayer makes a payment               after the expiration of two years from
with respect to a deficiency, the                the date of mailing by certified mail or
amount of such payment may be as-                registered mail to the taxpayer of a no-
sessed. See, however, § 601.105(h). If the       tice of the disallowance of the part of
taxpayer fails to file a petition with           the claim to which the suit relates.
the Tax Court within the applicable pe-          Under the 1954 Code, the 2-year period
riod, the deficiency will be assessed            of limitation for bringing suit may be
upon the expiration of such period and           extended for such period as may be
notice and demand for payment of the             agreed upon in a properly executed
amount thereof will be mailed to the             Form 907. Also, under the 1954 Code, if
taxpayer. If the taxpayer files a peti-          the taxpayer files a written waiver of
tion with the Tax Court, the entire              the requirement that the taxpayer be
amount redetermined as the deficiency            sent a notice of disallowance, the 2-
by a final decision of the Tax Court             year period for bringing suit begins to
will be assessed and is payable upon no-         run on the date such waiver is filed.
tice and demand. There are no restric-           See section 6532(a) of the Code.
tions on the timely assessment and col-          [32 FR 15990, Nov. 22, 1967, as amended at 38
lection of the amount of any deficiency          FR 4955, Feb. 23, 1973; 43 FR 44497, Sept. 28,
determined by the Tax Court, and a no-           1978; 45 FR 7251, Feb. 1, 1980; 46 FR 26053, May
tice of appeal of the Court’s decision           11, 1981; 49 FR 36498, Sept. 18, 1984]
will not stay the assessment and col-
lection of the deficiency so determined,         § 601.104 Collection functions.
unless on or before the time the notice             (a) Collection methods—(1) Returns.
of appeal is filed the taxpayer files            Generally, an internal revenue tax as-
with the Tax Court a bond in a sum               sessment is based upon a return re-
fixed by the Court not exceeding twice           quired by law or regulations to be filed
the portion of the deficiency in respect         by the taxpayer upon which the tax-
of which the notice of appeal is filed.          payer computes the tax in the manner
No part of an amount determined as a             indicated by the return. Certain tax-
deficiency but disallowed as such by a           payers who choose to use the Optional
decision of the Tax Court which has be-          Tax Tables may elect to have the In-
come final may be assessed or collected          ternal Revenue Service compute the
by levy or by proceeding in court with           tax and mail them a notice stating the
or without assessment.                           amount of tax due. If a taxpayer fails
  (3) Claims for refund. After payment           to make a return it may be made for
of the tax a taxpayer may, within the            the taxpayer by a district director or
applicable period of limitations, con-           other duly authorized officer or em-
test the assessment by filing with the           ployee. See section 6020 of the Code and

                                             8
Internal Revenue Service, Treasury                                                § 601.104

the regulations thereunder. Returns             than wages, in excess of amounts speci-
must be made on the forms prescribed            fied by law, and who can reasonably ex-
by the Internal Revenue Service.                pect his or her estimated tax to be at
Forms are obtainable at the principal           least $200 in 1982, $300 in 1983, $400 in
and branch offices of district directors        1984, and $500 in 1985 and later is re-
of internal revenue. Taxpayers over-            quired to make estimated tax pay-
seas may also obtain forms from any             ments. Payments of estimated tax are
U.S. Embassy or consulate. Forms are            applied in payment of the tax for the
generally mailed to persons whom the            taxable year. A husband and wife may
Service has reason to believe may be            jointly make a single payment which
required to file returns, but failure to        may be applied in payment of the in-
receive a form does not excuse failure          come tax liability of either spouse in
to comply with the law or regulations
                                                any proportion they may specify. For
requiring a return. Returns, supple-
                                                taxable years ending on or after De-
mentary returns, statements or sched-
                                                cember 31, 1955, the law requires pay-
ules, and the time for filing them, may
sometimes be prescribed by regulations          ments of estimated tax by certain cor-
issued under authority of law by the            porations. See section 6154 of the Code.
Commissioner with the approval of the              (b) Extension of time for filing returns—
Secretary of the Treasury or the Sec-           (1)    General.    Under      certain    cir-
retary’s delegate. A husband and wife           cumstances the district directors or di-
may make a single income tax return             rectors of service centers are author-
jointly. Certain affiliated groups of           ized to grant a reasonable extension of
corporations may file consolidated in-          time for filing a return or declaration.
come tax returns. See section 1501 of           The maximum period for extensions
the Code and the regulations there-             cannot be in excess of 6 months, except
under.                                          in the case of taxpayers who are
  (2) Withholding of tax at source. With-       abroad. With an exception in the case
holding at the source of income pay-            of estate tax returns, written applica-
ments is an important method used in            tion for extension must be received by
collecting taxes. For example, in the           the appropriate director on or before
case of wage earners, the income tax is         the date prescribed by law for filing the
collected in large part through the             return or declaration.
withholding by employers of taxes on               (2) Corporations. On or before the date
wages paid to their employees. The tax          prescribed by law for filing its income
withheld at the source on wages is ap-          tax return, a corporation may obtain
plied as a credit in payment of the indi-       an automatic 6-month extension of
vidual’s income tax liability for the           time (a 3-month extension in the case
taxable year. In no case does with-             of taxable years ending before Decem-
holding of the tax relieve an individual
                                                ber 31, 1982) for filing the income tax
from the duty of filing a return other-
                                                return by filing Form 7004 and paying
wise required by law. The chief means
                                                the full amount of the properly esti-
of collecting the income tax due from
nonresident alien individuals and for-          mated unpaid tax liability. For taxable
eign corporations having United States          years beginning before 1983, however,
source gross income which is not effec-         the corporation must remit with Form
tively connected with the conduct of a          7004 an estimated amount not less than
trade or business in the United States          would be required as the first install-
is the withholding of the tax by the            ment of tax should the corporation
persons paying or remitting the income          elect to pay the tax in installments.
to the recipients. The tax withheld is             (3) Individuals. On or before the date
allowed as a credit in payment of the           prescribed for the filing of the return of
tax imposed on such nonresident alien           an individual, such individual may ob-
individuals and foreign corporations.           tain an automatic 4-month extension
  (3) Payments of estimated tax. Any in-        of time for filing his or her return by
dividual who may reasonably expect to           filing Form 4868 accompanied by pay-
receive gross income for the taxable            ment of the full amount of the esti-
year from wages or from sources other           mated unpaid tax liability.


                                            9
§ 601.104                                                    26 CFR Ch. I (4–1–99 Edition)

  (c) Enforcement procedure—(1) General.          turns out to be less valuable than the
Taxes shown to be due on returns, defi-           purchaser expected will not be regarded
ciencies in taxes, additional or delin-           as giving the purchaser any claim
quent taxes to be assessed, and pen-              against the Government.
alties, interest, and additions to taxes,            (3) Liens. The United States’ claim
are recorded by the district director or          for taxes is a lien on the taxpayer’s
the director of the appropriate service           property at the time of assessment.
center as ‘‘assessments.’’ Under the law          Such lien is not valid as against any
an assessment is prima facie correct              purchaser, holder of a security inter-
for all purposes. Generally, the tax-             est, mechanic’s lienor, or judgment
payer bears the burden of disproving              lien creditor until notice has been filed
the correctness of an assessment. Upon            by the district director. Despite such
assessment, the district director is re-          filing, the lien is not valid with respect
quired to effect collection of any                to certain securities as against any
amounts which remain due and unpaid.              purchaser of such security who, at the
Generally, payment within 10 days                 time of purchase, did not have actual
from the date of the notice and demand            notice or knowledge of the existence of
for payment is requested; however,                such lien and as against a holder of a
payment may be required in a shorter              security interest in such security who,
period if collection of the tax is consid-        at the time such interest came into ex-
ered to be in jeopardy. When collection           istence, did not have actual notice or
of income tax is in jeopardy, the tax-            knowledge of the existence of such
payer’s taxable period may be termi-              lien. Certain motor vehicle purchases
nated under section 6851 of the Code              are similarly protected. Even though a
and assessment of the tax made expedi-            notice of lien has been filed, certain
tiously under section 6201 of the Code.           other categories are afforded addi-
  (2) Levy. If a taxpayer neglects or re-         tional protection. These categories are:
fuses to pay any tax within the period            Retail     purchases,     casual     sales,
provided for its payment, it is lawful            possessory liens, real property taxes
for the district director to make collec-         and property assessments, small re-
tion by levy on the taxpayer’s prop-              pairs and improvements, attorneys’
erty. However, unless collection is in            liens, certain insurance contracts and
jeopardy, the taxpayer must be fur-               passbook loans. A valid lien generally
nished written notice of intent to levy           continues until the liability is satis-
no fewer than 10 days before the date of          fied, becomes unenforceable by reason
the levy. See section 6331 of the Code.           of lapse of time or is discharged in
No suit for the purpose of restraining            bankruptcy. A certificate of release of
the assessment or collection of an in-            lien will be issued not later than 30
ternal revenue tax may be maintained              days after the taxpayer furnishes prop-
in any court, except to restrain the as-          er bond in lieu of the lien, or 30 days
sessment or collection of income, es-             after it is determined that the liability
tate, Chapters 41 through 44, or gift             has been satisfied, has become unen-
taxes during the period within which              forceable by reason of lapse of time, or
the assessment or collection of defi-             has been discharged in bankruptcy. If a
ciencies in such taxes is prohibited.             certificate has not been issued and one
See section 7421 of the Code. Property            of the foregoing criteria for release has
taken under authority of any revenue              been met, a certificate of release of
law     of   the    United    States    is        lien will be issued within 30 days after
irrepleviable. 28 U.S.C. 2463. If the             a written request by a taxpayer, speci-
Service sells property, and it is subse-          fying the grounds upon which the
quently determined that the taxpayer              issuance of release is sought. The Code
had no interest in the property or that           also contains additional provisions
the purchaser was misled by the Serv-             with respect to the discharge of spe-
ice as to the value of the taxpayer’s in-         cific property from the effect of the
terest, immediate action will be taken            lien. Also, under certain conditions, a
to refund any money wrongfully col-               lien may be subordinated. The Code
lected if a claim is made and the perti-          also contains additional provisions
nent facts are present. The mere fact             with respect to liens in the case of es-
that a taxpayer’s interest in property            tate and gift taxes. For the specific

                                             10
Internal Revenue Service, Treasury                                                       § 601.105

rules with respect to liens, see Sub-              revenue laws. See section 7623 of the
chapter C of Chapter 64 of the Code and            Code and the regulations thereunder.
the regulations thereunder.                        Claims for rewards should be made on
   (4) Penalties. In the case of failure to        Form 211. Relevant facts should be
file a return within the prescribed                stated on the form, which after execu-
time, a certain percentage of the                  tion should be forwarded to the district
amount of tax (or a minimum penalty)               director of internal revenue for the dis-
is, pursuant to statute, added to the              trict in which the informer resides, or
tax unless the failure to file the return          to the Commissioner of Internal Rev-
within the prescribed time is shown to             enue, Washington, DC 20224.
the satisfaction of the district director          [32 FR 15990, Nov. 22, 1967, as amended at 32
or the director of the appropriate serv-           FR 20645, Dec. 21, 1967; 33 FR 17234, Nov. 21,
ice center to be due to reasonable cause           1968; 34 FR 6424, Apr. 12, 1969; 35 FR 7112, May
and not neglect. In the case of failure            6, 1970; 36 FR 7584, Apr. 22, 1971; 38 FR 4956,
to file an exempt organization informa-            Feb. 23, 1973; 45 FR 7251, Feb. 1, 1980; 49 FR
tion return within the prescribed time,            36499, Sept. 18, 1984; 49 FR 40809, Oct. 18, 1984;
                                                   T.D. 8685, 61 FR 58008, Nov. 12, 1996]
a penalty of $10 a day for each day the
return is delinquent is assessed unless            § 601.105 Examination of returns and
the failure to file the return within the               claims for refund, credit or abate-
prescribed time is shown to be due to                   ment; determination of correct tax
reasonable cause and not neglect. In                    liability.
the case of failure to pay or deposit                 (a) Processing of returns. When the re-
taxes due within the prescribed time, a            turns are filed in the office of the dis-
certain percentage of the amount of                trict director of internal revenue or the
tax due is, pursuant to statute, added             office of the director of a regional serv-
to the tax unless the failure to pay or            ice center, they are checked first for
deposit the tax due within the pre-                form, execution, and mathematical ac-
scribed time is shown to the satisfac-             curacy. Mathematical errors are cor-
tion of the district director or the di-           rected and a correction notice of any
rector of the appropriate service center           such error is sent to the taxpayer. No-
to be due to reasonable cause and not              tice and demand is made for the pay-
neglect. Civil penalties are also im-              ment of any additional tax so result-
posed for fraudulent returns; in the               ing, or refund is made of any overpay-
case of income and gift taxes, for inten-          ment. Returns are classified for exam-
tional disregard of rules and regula-              ination at regional service centers.
tions or negligence; and additions to              Certain individual income tax returns
the tax are imposed for the failure to             with potential unallowable items are
comply with the requirements of law                delivered to Examination Divisions at
with respect to the estimated income               regional service centers for correction
tax. There are also civil penalties for            by correspondence. Otherwise, returns
filing false withholding certificates, for         with the highest examination potential
substantial understatement of income               are delivered to district Examinations
tax, for filing a frivolous return, for or-        Divisions based on workload capacities.
ganizing or participating in the sale of           Those most in need of examination are
abusive tax shelters, and for aiding and           selected for office or field examination.
abetting in the understatement of tax                 (b) Examination of returns—(1) Gen-
liability. See Chapter 68 of the Code. A           eral. The original examination of in-
50 percent penalty, in addition to the             come (including partnership and fidu-
personal liability incurred, is imposed            ciary), estate, gift, excise, employ-
upon any person who fails or refuses               ment, exempt organization, and infor-
without reasonable cause to honor a                mation returns is a primary function of
levy. Criminal penalties are imposed               examiners in the Examination Division
for willful failure to make returns,               of the office of each district director of
keep records, supply information, etc.             internal revenue. Such examiners are
See Chapter 75 of the Code.                        organized in groups, each of which is
   (5) Informants’ rewards. Payments to            under the immediate supervision of a
informers are authorized for detecting             group supervisor designated by the dis-
and bringing to trial and punishment               trict director. Revenue agents (and
persons guilty of violating the internal           such other officers or employees of the

                                              11
§ 601.105                                                      26 CFR Ch. I (4–1–99 Edition)

Internal Revenue Service as may be                  velops that a field examination is nec-
designated for this purpose by the                  essary, the examiner may conduct such
Commissioner) are authorized to exam-               examination.
ine any books, papers, records, or                    (3) Field examination. Certain returns
memoranda bearing upon matters re-                  are examined by field examination
quired to be included in Federal tax re-            which involves an examination of the
turns and to take testimony relative                taxpayer’s books and records on the
thereto and to administer oaths. See                taxpayer’s premises. An examiner will
section 7602 of the Code and the regula-            check the entire return filed by the
tions thereunder. There are two gen-                taxpayer and will examine all books,
eral types of examination. These are                papers, records, and memoranda deal-
commonly called ‘‘office examination’’              ing with matters required to be in-
and ‘‘field examination’’. During the               cluded in the return. If the return pre-
examination of a return a taxpayer                  sents an engineering or appraisal prob-
may be represented before the exam-                 lem (e.g., depreciation or depletion de-
iner by an attorney, certified public ac-           ductions, gains or losses upon the sale
countant, or other representative. See              or exchange of property, or losses on
Subpart E of this part for conference               account of abandonment, exhaustion,
and practice requirements.                          or obsolescence), it may be inves-
  (2) Office examination—(i) Adjustments            tigated by an engineer agent who
by Examination Division at service center.          makes a separate report.
Certain individual income tax returns                 (4) Conclusion of examination. At the
identified as containing potential unal-            conclusion of an office or field exam-
lowable items are examined by Exam-                 ination, the taxpayer is given an oppor-
ination Divisions at regional service               tunity to agree with the findings of the
centers. Correspondence examination                 examiner. If the taxpayer does not
techniques are used. If the taxpayer re-            agree, the examiner will inform the
quests an interview to discuss the pro-             taxpayer of the appeal rights. If the
posed adjustments, the case is trans-               taxpayer does agree with the proposed
ferred to the taxpayer’s district office.           changes, the examiner will invite the
If the taxpayer does not agree to pro-              taxpayer to execute either Form 870 or
posed adjustments, regular appellate                another appropriate agreement form.
procedures apply.                                   When the taxpayer agrees with the pro-
  (ii) Examinations at district office. Cer-        posed changes but does not offer to pay
tain returns are examined at district               any deficiency or additional tax which
offices by office examination tech-                 may be due, the examiner will also in-
niques. These returns include some                  vite payment (by check or money
business returns, besides the full range            order), together with any applicable in-
of nonbusiness individual income tax                terest or penalty. If the agreed case in-
returns. Office examinations are con-               volves income, profits, estate, gift,
ducted primarily by the interview                   generation–skipping transfer, or Chap-
method. Examinations are conducted                  ter 41, 42, 43, or 44 taxes, the agreement
by correspondence only when war-                    is evidenced by a waiver by the tax-
ranted by the nature of the question-               payer of restrictions on assessment and
able items and by the convenience and               collection of the deficiency, or an ac-
characteristics of the taxpayer. In a               ceptance of a proposed overassessment.
correspondence examination, the tax-                If the case involves excise or employ-
payer is asked to explain or send sup-              ment taxes or 100 percent penalty, the
porting evidence by mail. In an office              agreement is evidenced in the form of a
interview examination, the taxpayer is              consent to assessment and collection of
asked to come to the district director’s            additional tax or penalty and waiver of
office for an interview and to bring cer-           right to file claim for abatement, or
tain records in support of the return.              the acceptance of the proposed over-
During the interview examination, the               assessment. Even though the taxpayer
taxpayer has the right to point out to              signs an acceptance of a proposed over-
the examiner any amounts included in                assessment the district director or the
the return which are not taxable, or                director of the regional service center
any deductions which the taxpayer                   remains free to assess a deficiency. On
failed to claim on the return. If it de-            the other hand, the taxpayer who has

                                               12
Internal Revenue Service, Treasury                                                  § 601.105

given a waiver may still claim a refund             Only the National Office can revoke a
of any part of the deficiency assessed              ruling letter. Before referral to the Na-
against, and paid by, the taxpayer, or              tional Office, the district director
any part of the tax originally assessed             should inform the taxpayer of his opin-
and paid by the taxpayer. The tax-                  ion that the ruling letter should be re-
payer’s acceptance of an agreed over-               voked. The district director, after de-
assessment does not prevent the tax-                velopment of the facts and consider-
payer from filing a claim and bringing              ation of the taxpayer’s arguments, will
a suit for an additional sum, nor does              decide whether to recommend revoca-
it preclude the Government from main-               tion of the ruling to the National Of-
taining suit to recover an erroneous re-            fice. For procedures relating to a re-
fund. As a matter of practice, however,             quest for a ruling, see § 601.201.
waivers or acceptances ordinarily re-                  (d) The Assistant Commissioner
sult in the closing of a case insofar as            (Technical), acting under a delegation
the Government is concerned.                        of authority from the Commissioner of
  (5) Technical advice from the National            Internal Revenue, is exclusively re-
Office—(i) Definition and nature of tech-           sponsible for providing technical ad-
nical advice. (a) As used in this subpara-          vice in any issue involving the estab-
graph, ‘‘technical advice’’ means ad-               lishment of basic principles and rules
vice or guidance as to the interpreta-              for the uniform interpretation and ap-
tion and proper application of internal             plication of tax laws other than those
revenue laws, related statutes, and reg-            which are under the jurisdiction of the
ulations, to a specific set of facts, fur-          Bureau of Alcohol, Tobacco, and Fire-
nished by the National Office upon re-              arms. This authority has been largely
quest of a district office in connection            redelegated to subordinate officials.
with the examination of a taxpayer’s                   (e) The provisions of this subpara-
return or consideration of a taxpayer’s             graph apply only to a case under the
return claim for refund or credit. It is            jurisdiction of a district director but
furnished as a means of assisting Serv-             do not apply to an Employee Plans
ice personnel in closing cases and es-              case under the jurisdiction of a key dis-
tablishing and maintaining consistent               trict director as provided in § 601.201(o)
holdings in the several districts. It               or to an Exempt Organization case
does not include memorandums on                     under the jurisdiction of a key district
matters of general technical applica-               director as provided in § 601.201(n). The
tion furnished to district offices where            technical advice provisions applicable
the issues are not raised in connection             to Employee Plans and Exempt Organi-
with the examination of the return of a             zation     cases     are   set   forth  in
specific taxpayer.                                  § 601.201(n)(9). The provisions of this
  (b) The consideration or examination              subparagraph do not apply to a case
of the facts relating to a request for a            under the jurisdiction of the Bureau of
determination letter is considered to               Alcohol, Tobacco, and Firearms. They
be in connection with the examination               also do not apply to a case under the
or consideration of a return of the tax-            jurisdiction of an Appeals office, in-
payer. Thus, a district director may, in            cluding a case previously considered by
his discretion, request technical advice            Appeals. The technical advice provi-
with respect to the consideration of a              sions applicable to a case under the ju-
request for a determination letter.                 risdiction of an Appeals office, other
  (c) If a district director is of the opin-        than Employee Plans and Exempt Or-
ion that a ruling letter previously                 ganizations cases, are set forth in
issued to a taxpayer should be modified             § 601.106(f)(10). A case remains under the
or revoked, and requests the National               jurisdiction of the district director
Office to reconsider the ruling, the ref-           even though an Appeals office has the
erence of the matter to the National                identical issue under consideration in
Office is treated as a request for tech-            the case of another taxpayer (not re-
nical advice and the procedures speci-              lated within the meaning of section 267
fied in subdivision (iii) of this subpara-          of the Code) in an entirely different
graph should be followed in order that              transaction. Technical advice may not
the National Office may consider the                be requested with respect to a taxable
district director’s recommendation.                 period if a prior Appeals disposition of

                                               13
§ 601.105                                                     26 CFR Ch. I (4–1–99 Edition)

the same taxable period of the same                the opinion that the circumstances do
taxpayer’s case was based on mutual                not warrant referral of the case to the
concessions (ordinarily with a Form                National Office, he/she will so advise
870–AD, Offer of Waiver of Restrictions            the taxpayer. (See subdivision (iv) of
on Assessment and Collection of Defi-              this subparagraph for taxpayer’s appeal
ciency in Tax and of Acceptance of                 rights where the examiner declines to
Overassessment). However, technical                request technical advice.)
advice may be requested by a district                (b) When technical advice is to be re-
director on issues previously consid-              quested, whether or not upon the re-
ered in a prior Appeals disposition, not           quest of the taxpayer, the taxpayer
based on mutual concessions, of the                will be so advised, except as noted in
same taxable periods of the same tax-              (g) of this subdivision. If the examiner
payer with the concurrence of the Ap-              initiates the action, the taxpayer will
peals office that had the case.                    be furnished a copy of the statement of
  (ii) Areas in which technical advice             the pertinent facts and the question or
may be requested. (a) District directors           questions proposed for submission to
may request technical advice on any                the National Office. The request for ad-
technical or procedural question that              vice submitted by the district director
develops during the audit or examina-              should be so worded as to avoid pos-
tion of a return, or claim for refund or           sible misunderstanding, in the Na-
credit, of a taxpayer. These procedures            tional Office, of the facts or of the spe-
are applicable as provided in subdivi-             cific point or points at issue.
sion (i) of this subparagraph.                       (c) After receipt of the statement of
  (b) District directors are encouraged            facts and specific questions from the
to request technical advice on any                 district office, the taxpayer will be
technical or procedural question aris-             given 10 calendar days in which to indi-
ing in connection with any case of the             cate in writing the extent, if any, to
type described in subdivision (i) of this          which he may not be in complete
subparagraph, which cannot be re-                  agreement. An extension of time must
solved on the basis of law, regulations,           be justified by the taxpayer in writing
or a clearly applicable revenue ruling             and approved by the Chief, Examina-
or other precedent issued by the Na-               tion Division. Every effort should be
tional Office. This request should be              made to reach agreement as to the
made at the earliest possible stage of             facts and specific point at issue. If
the examination process.                           agreement cannot be reached, the tax-
  (iii) Requesting technical advice. (a) It        payer may submit, within 10 calendar
is the responsibility of the district of-          days after receipt of notice from the
fice to determine whether technical ad-            district office, a statement of his un-
vice is to be requested on any issue be-           derstanding as to the specific point or
fore that office. However, while the               points at issue which will be forwarded
case is under the jurisdiction of the              to the National Office with the request
district director, a taxpayer or his/her           for advice. An extension of time must
representative may request that an                 be justified by the taxpayer in writing
issue be referred to the National Office           and approved by the Chief, Examina-
for technical advice on the grounds                tion Division.
that a lack of uniformity exists as to               (d) If the taxpayer initiates the ac-
the disposition of the issue, or that the          tion to request advice, and his state-
issue is so unusual or complex as to               ment of the facts and point or points at
warrant consideration by the National              issue are not wholly acceptable to the
Office. This request should be made at             district officials, the taxpayer will be
the earliest possible stage of the exam-           advised in writing as to the areas of
ination process. While taxpayers are               disagreement. The taxpayer will be
encouraged to make written requests                given 10 calendar days after receipt of
setting forth the facts, law, and argu-            the written notice to reply to the dis-
ment with respect to the issue, and                trict official’s letter. An extension of
reason for requesting National Office              time must be justified by the taxpayer
advice, a taxpayer may make the re-                in writing and approved by the Chief,
quest orally. If, after considering the            Examination Division. If agreement
taxpayer’s request, the examiner is of             cannot be reached, both the statements

                                              14
Internal Revenue Service, Treasury                                                 § 601.105

of the taxpayer and the district official          copy of all statements of facts and sup-
will be forwarded to the National Of-              porting documents which are sub-
fice.                                              mitted to the National Office pursuant
   (e)(1) In the case of requests for tech-        to (c) or (d) of this subdivision, on
nical advice the taxpayer must also                which shall be indicated, by the use of
submit, within the 10-day period re-               brackets, the material which the tax-
ferred to in (c) and (d) of this subdivi-          payer indicates should be deleted pur-
sion, whichever applicable (relating to            suant to section 6110(c) of the Code.
agreement by the taxpayer with the                 The statement of proposed deletions
statement of facts submitted in con-               shall indicate the statutory basis,
nection with the request for technical             under section 6110(c) of the Code, for
advice), the statement described in (f)            each proposed deletion. The statement
of this subdivision of proposed dele-              of proposed deletions shall not appear
tions pursuant to section 6110(c) of the           or be referred to anywhere in the re-
Code. If the statement is not sub-                 quest for technical advice. If the tax-
mitted, the taxpayer will be informed              payer decides to request additional de-
by the district director that such a               letions pursuant to section 6110(c) of
statement is required. If the district di-         the Code prior to the time the National
rector does not receive the statement              Office replies to the request for tech-
within 10 days after the taxpayer has              nical advice, additional statements
been informed of the need for such                 may be submitted.
statement, the district director may                  (g) If the taxpayer has not already
decline to submit the request for tech-
                                                   done so, the taxpayer may submit a
nical advice. If the district director de-
                                                   statement explaining the taxpayer’s
cides to request technical advice in a
                                                   position on the issues, citing prece-
case where the taxpayer has not sub-
                                                   dents which the taxpayer believes will
mitted the statement of proposed dele-
                                                   bear on the case. This statement will
tions, the National Office will make
                                                   be forwarded to the National Office
those deletions which in the judgment
                                                   with the request for advice. If it is re-
of the Commissioner are required by
                                                   ceived at a later date, it will be for-
section 6110(c) of the Code.
                                                   warded for association with the case
   (2) The requirements included in
§ 601.105(b)(5) with respect to submis-            file.
sions of statements and other material                (h) At the time the taxpayer is in-
with respect to proposed deletions to              formed that the matter is being re-
be made from technical advice memo-                ferred to the National Office, the tax-
randa before public inspection is per-             payer will also be informed of the tax-
mitted to take place do not apply to re-           payer’s right to a conference in the Na-
quests made by the district director be-           tional Office in the event an adverse
fore November 1, 1976, or requests for             decision is indicated, and will be asked
any document to which section 6104 of              to indicate whether such a conference
the Code applies.                                  is desired.
   (f) In order to assist the Internal                (i) Generally, prior to replying to the
Revenue Service in making the dele-                request for technical advice, the Na-
tions, required by section 6110(c) of the          tional Office shall inform the taxpayer
Code, from the text of technical advice            orally or in writing of the material
memoranda which are open to public                 likely to appear in the technical advice
inspection pursuant to section 6110(a)             memorandum which the taxpayer pro-
of the Code, there must accompany re-              posed be deleted but which the Internal
quests for such technical advice either            Revenue Service determined should not
a statement of the deletions proposed              be deleted. If so informed, the taxpayer
by the taxpayer and the statutory basis            may submit within 10 days any further
for each proposed deletion, or a state-            information, arguments or other mate-
ment that no information other than                rial in support of the position that
names, addresses, and taxpayer identi-             such material be deleted. The Internal
fying numbers need be deleted. Such                Revenue Service will attempt, if fea-
statements shall be made in a separate             sible, to resolve all disagreements with
document. The statement of proposed                respect to proposed deletions prior to
deletions shall be accompanied by a                the time the National Office replies to

                                              15
§ 601.105                                                    26 CFR Ch. I (4–1–99 Edition)

the request for technical advice. How-              (c) The examining officer will submit
ever, in no event shall the taxpayer              the statement of the taxpayer through
have the right to a conference with re-           channels to the Chief, Examination Di-
spect to resolution of any disagree-              vision, accompanied by a statement of
ments concerning material to be de-               his reasons why the issue should not be
leted from the text of the technical ad-          referred to the National Office. The
vice memorandum, but such matters                 Chief, Examination Division, will de-
may be considered at any conference               termine, on the basis of the statements
otherwise scheduled with respect to the           submitted, whether technical advice
request.                                          will be requested. If he determines that
  (j) The provisions of (a) through (i) of        technical advice is not warranted, he
this subdivision, relating to the refer-          will inform the taxpayer in writing
ral of issues upon request of the tax-            that he proposes to deny the request.
payer, advising taxpayers of the refer-
                                                  In the letter to the taxpayer the Chief,
ral of issues, the submission of pro-
                                                  Examination Division, will (except in
posed deletions, and the granting of
                                                  unusual situations where such action
conferences in the National Office, are
                                                  would be prejudicial to the best inter-
not applicable to technical advice
memoranda        described   in   section         ests of the Government) state specifi-
611(g)(5)(A) of the Code, relating to             cally the reasons for the proposed de-
cases involving criminal or civil fraud           nial. The taxpayer will be given 15 cal-
investigations and jeopardy or termi-             endar days after receipt of the letter in
nation assessments. However, in such              which to notify the Chief, Examination
cases the taxpayer shall be allowed to            Division, whether he agrees with the
provide the statement of proposed dele-           proposed denial. The taxpayer may not
tions to the National Office upon the             appeal the decision of the Chief, Exam-
completion of all proceedings with re-            ination Division, not to request tech-
spect to the investigations or assess-            nical advice from the National Office.
ments, but prior to the date on which             However, if he does not agree with the
the Commissioner mails the notice                 proposed denial, all data relating to
pursuant to section 6110(f)(1) of the             the issue for which technical advice
Code of intention to disclose the tech-           has been sought, including taxpayer’s
nical advice memorandum.                          written request and statements, will be
  (k) Form 4463, Request for Technical            submitted to the National Office, At-
Advice, should be used for transmitting           tention: Director, Examination Divi-
requests for technical advice to the Na-          sion, for review. After review in the
tional Office.                                    National Office, the district office will
  (iv) Appeal by taxpayers of determina-          be notified whether the proposed denial
tions not to seek technical advice. (a) If        is approved or disapproved.
the taxpayer has requested referral of              (d) While the matter is being re-
an issue before a district office to the          viewed in the National Office, the dis-
National Office for technical advice,             trict office will suspend action on the
and after consideration of the request
                                                  issue (except where the delay would
the examiner is of the opinion that the
                                                  prejudice the Government’s interests)
circumstances do not warrant such re-
                                                  until it is notified of the National Of-
ferral, he will so advise the taxpayer.
                                                  fice decision. This notification will be
  (b) The taxpayer may appeal the de-
cision of the examining officer not to            made within 30 days after receipt of the
request technical advice by submitting            data in the National Office. The review
to that official, within 10 calendar days         will be solely on the basis of the writ-
after being advised of the decision, a            ten record and no conference will be
statement of the facts, law, and argu-            held in the National Office.
ments with respect to the issue, and                (v) Conference in the National Office.
the reasons why he believes the matter            (a) If, after a study of the technical ad-
should be referred to the National Of-            vice request, it appears that advice ad-
fice for advice. An extension of time             verse to the taxpayer should be given
must be justified by the taxpayer in              and a conference has been requested,
writing and approved by the Chief, Ex-            the taxpayer will be notified of the
amination Division.                               time and place of the conference. If

                                             16
Internal Revenue Service, Treasury                                                             § 601.105

conferences are being arranged with re-          of this type discussed are held only at
spect to more than one request for ad-           the invitation of the Service.
vice involving the same taxpayer, they             (d) It is the responsibility of the tax-
will be so scheduled as to cause the             payer to furnish to the National Office,
least inconvenience to the taxpayer.             within 21 calendar days after the con-
The conference will be arranged by               ference, a written record of any addi-
telephone, if possible, and must be held         tional data, line of reasoning, prece-
within 21 calendar days after contact            dents, etc., that were proposed by the
has been made. Extensions of time will           taxpayer and discussed at the con-
be granted only if justified in writing          ference but were not previously or ade-
by the taxpayer and approved by the              quately presented in writing. Exten-
appropriate Technical branch chief.              sions of time will be granted only if
  (b) A taxpayer is entitled, as a mat-          justified in writing by the taxpayer and
ter of right, to only one conference in          approved by the appropriate Technical
the National Office unless one of the            branch chief. Any additional material
circumstances discussed in (c) of this           and a copy thereof should be addressed
subdivision exists. This conference will         to and sent to the National Office
usually be held at the branch level in           which will forward the copy to the ap-
the appropriate division (Corporation            propriate district director. The district
Tax Division or Individual Tax Divi-             director will be requested to give the
sion) in the office of the Assistant             matter his prompt attention. He may
Commissioner (Technical), and will               verify the additional facts and data and
usually be attended by a person who              comment upon it to the extent he
has authority to act for the branch              deems it appropriate.
chief. In appropriate cases the exam-              (e) A taxpayer or a taxpayer’s rep-
ining officer may also attend the con-           resentative desiring to obtain informa-
ference to clarify the facts in the case.        tion as to the status of the case may do
If more than one subject is discussed at         so by contacting the following offices
the conference, the discussion con-              with respect to matters in the areas of
stitutes a conference with respect to            their responsibility:
each subject. At the request of the tax-
                                                                                        Telephone numbers,
payer or his representative, the con-                         Official                   (Area Code 202)
ference may be held at an earlier stage
in the consideration of the case than            Director, Corporation Tax Division   566–4504, 566–4505.
                                                 Director, Individual Tax Division    566–3767 or 566–3788.
the Service would ordinarily designate.
A taxpayer has no ‘‘right’’ of appeal               (vi) Preparation of technical advice
from an action of a branch to the direc-         memorandum by the National Office. (a)
tor of a division or to any other Na-            Immediately upon receipt in the Na-
tional Office official.                          tional Office, the technical employee
  (c) In the process of review of a hold-        to whom the case is assigned will ana-
ing proposed by a branch, it may ap-             lyze the file to ascertain whether it
pear that the final answer will involve          meets the requirements of subdivision
a reversal of the branch proposal with           (iii) of this subparagraph. If the case is
a result less favorable to the taxpayer.         not complete with respect to any re-
Or it may appear that an adverse hold-           quirement in subdivisions (iii) (a)
ing proposed by a branch will be ap-             through (d) of this subparagraph, ap-
proved, but on a new or different issue          propriate steps will be taken to com-
or on different grounds than those on            plete the file. If any request for tech-
which the branch decided the case.               nical advice does not comply with the
Under either of these circumstances,             requirements of subdivision (iii)(e) of
the taxpayer or his representative will          this subparagraph, relating to the
be invited to another conference. The            statement of proposed deletions, the
provisions of this subparagraph lim-             National Office will make those dele-
iting the number of conferences to               tions from the technical advice memo-
which a taxpayer is entitled will not            randum which in the judgment of the
foreclose inviting a taxpayer to attend          Commissioner are required by section
further conferences when, in the opin-           6110(c) of the Code.
ion of National Office personnel, such              (b) If the taxpayer has requested a
need arises. All additional conferences          conference in the National Office, the

                                            17
§ 601.105                                                   26 CFR Ch. I (4–1–99 Edition)

procedures in subdivision (v) of this              (f) After receiving the notice pursu-
subparagraph will be followed.                   ant to section 6110(f)(1) of the Code of
  (c) Replies to requests for technical          intention to disclose the technical ad-
advice will be addressed to the district         vice memorandum, if the taxpayer de-
director and will be drafted in two              sires to protest the disclosure of cer-
parts. Each part will identify the tax-          tain information in the technical ad-
payer by name, address, identification           vice memorandum, the taxpayer must
number, and year or years involved.              within 20 days after the notice is
The first part (hereafter called the             mailed submit a written statement
‘‘Technical Advice Memorandum’’) will            identifying those deletions not made
contain (1) a recitation of the pertinent        by the Internal Revenue Service which
facts having a bearing on the issue; (2)         the taxpayer believes should have been
a discussion of the facts, precedents,           made. The taxpayer shall also submit a
and reasoning of the National Office;            copy of the version of the technical ad-
and (3) the conclusions of the National          vice memorandum proposed to be open
Office. The conclusions will give direct         to public inspection on which the tax-
answers, whenever possible, to the spe-          payer indicates, by the use of brackets,
cific questions of the district office.          the deletions proposed by the taxpayer
The discussion of the issues will be in          but which have not been made by the
such detail that the district officials          Internal Revenue Service. Generally
are apprised of the reasoning under-             the Internal Revenue Service will not
lying the conclusion. There shall ac-            consider the deletion under this sub-
company the technical advice memo-               paragraph of any material which the
randum a notice pursuant to section              taxpayer did not, prior to the time
6110 (f)(1) of the Code of intention to          when the National Office sent its reply
disclose the technical advice memo-              to the request for technical advice to
randum (including a copy of the                  the district director, propose be de-
version proposed to be open to public            leted. The Internal Revenue Service
inspection and notations of third party          shall, within 20 days after receipt of
communications pursuant to section               the response by the taxpayer to the no-
6110 (d) of the Code) which the district         tice pursuant to section 6110(f)(1) of the
director shall forward to the taxpayer           Code, mail to the taxpayer its final ad-
at such time that the district director          ministrative conclusion with respect to
furnishes a copy of the technical advice         the deletions to be made.
memorandum to the taxpayer pursuant                (vii) Action on technical advice in dis-
to (e) of this subsection.                       trict offices. (a) Unless the district di-
  (d) The second part of the reply will          rector feels that the conclusions
consist of a transmittal memorandum.             reached by the National Office in a
In the unusual cases it will serve as a          technical advice memorandum should
vehicle for providing the district office        be reconsidered and promptly requests
administrative information or other in-          such reconsideration, his office will
formation which, under the nondisclo-            proceed to process the taxpayer’s case
sure statutes, or for other reasons, may         on the basis of the conclusions ex-
not be discussed with the taxpayer.              pressed in the technical advice memo-
  (e) It is the general practice of the          randum.
Service to furnish a copy of the tech-             (b) The district director will furnish
nical advice memorandum to the tax-              to the taxpayer a copy of the technical
payer after it has been adopted by the           advice memorandum described in sub-
district director. However, in the case          division (vi)(c) of this subparagraph
of technical advice memoranda de-                and the notice pursuant to section
scribed in section 6110(g)(5)(A) of the          6110(f)(1) of the Code of intention to
Code, relating to cases involving crimi-         disclose the technical advice memo-
nal or civil fraud investigations and            randum (including a copy of the
jeopardy or termination assessments, a           version proposed to be open to public
copy of the technical advice memo-               inspection and notations of third party
randum shall not be furnished the tax-           communications pursuant to section
payer until all proceedings with re-             6110(d) of the Code). The preceding sen-
spect to the investigations or assess-           tence shall not apply to technical ad-
ments are completed.                             vice memoranda involving civil fraud

                                            18
Internal Revenue Service, Treasury                                                     § 601.105

or criminal investigations, or jeopardy                 (c) District procedure—(1) Office exam-
or termination assessments, as de-                    ination. (i) In a correspondence exam-
scribed in subdivision (iii)(j) of this sub-          ination the taxpayer is furnished with
paragraph or to documents to which                    a report of the examiner’s findings by a
section 6104 of the Code applies.                     form letter. The taxpayer is asked to
   (c) In those cases in which the Na-                sign and return an agreement if the
tional Office advises the district direc-             taxpayer accepts the findings. The let-
tor that he should not furnish a copy of              ter also provides a detailed explanation
the technical memorandum to the tax-                  of the alternatives available if the tax-
payer, the district director will so in-              payer does not accept the findings, in-
form the taxpayer if he requests a                    cluding consideration of the case by an
copy.                                                 Appeals office, and requests the tax-
   (viii) Effect of technical advice. (a) A           payer to inform the district director,
technical advice memorandum rep-                      within the specified period, of the
resents an expression of the views of                 choice of action. An Appeals office con-
the Service as to the application of                  ference will be granted to the taxpayer
law, regulations, and precedents to the               upon request without submission of a
facts of a specific case, and is issued               written protest.
primarily as a means of assisting dis-                  (ii) If, at the conclusion of an office
trict officials in the examination and                interview examination, the taxpayer
closing of the case involved.                         does not agree with the adjustments
   (b) Except in rare or unusual cir-                 proposed, the examiner will fully ex-
cumstances, a holding in a technical                  plain the alternatives available which
advice memorandum that is favorable                   include, if practicable, an immediate
to the taxpayer is applied retro-                     interview with a supervisor or an im-
actively. Moreover, since technical ad-               mediate conference with an Appeals Of-
vice, as described in subdivision (i) of              ficer. If an immediate interview or Ap-
this subparagraph, is issued only on                  peals office conference is not prac-
closed transactions, a holding in a                   ticable, or is not requested by the tax-
technical advice memorandum that is                   payer, the examination report will be
adverse to the taxpayer is also applied               mailed to the taxpayer under cover of
retroactively unless the Assistant                    an appropriate transmittal letter. This
Commissioner (Technical) exercises the                letter provides a detailed explanation
discretionary authority under section                 of the alternatives available, including
7805(b) of the Code to limit the retro-               consideration of the case by an Appeals
active effect of the holding. Likewise, a             office, and requests the taxpayer to in-
holding in a technical advice memo-                   form the district director, within the
randum that modifies or revokes a                     specified period, of the choice of ac-
holding in a prior technical advice                   tion. An appeals office conference will
memorandum will also be applied                       be granted to the taxpayer upon re-
retroactively, with one exception. If                 quest without submission of a written
the new holding is less favorable to the              protest.
taxpayer, it will generally not be ap-                  (2) Field examination. (i) If, at the con-
plied to the period in which the tax-                 clusion of an examination, the tax-
payer relied on the prior holding in sit-             payer does not agree with the adjust-
uations involving continuing trans-                   ments proposed, the examiner will pre-
actions of the type described in                      pare a complete examination report
§§ 601.201(1) (7) and 601.201(1) (8).                 fully explaining all proposed adjust-
   (c) Technical advice memoranda                     ments. Before the report is sent to the
often form the basis for revenue rul-                 taxpayer, the case file will be sub-
ings. For the description of revenue                  mitted to the district Centralized Serv-
rulings and the effect thereof, see                   ices and, in some cases, Quality Review
§§ 601.601(d)(2)(i)(a) and 601.601(d) (2) (v).        function for appropriate review. Fol-
   (d) A district director may raise an               lowing such review, the taxpayer will
issue in any taxable period, even                     be sent a copy of the examination re-
though he or she may have asked for                   port under cover of a transmittal (30-
and been furnished technical advice                   day) letter, providing a detailed expla-
with regard to the same or a similar                  nation of the alternatives available, in-
issue in any other taxable period.                    cluding consideration of the case by an

                                                 19
§ 601.105                                                     26 CFR Ch. I (4–1–99 Edition)

Appeals office, and requesting the tax-            any tax). The 30-day letter is a form
payer to inform the district director,             letter which states the determination
within the specified period, of the                proposed to be made. It is accompanied
choice of action.                                  by a copy of the examiner’s report ex-
   (ii) If the total amount of proposed            plaining the basis of the proposed de-
additional tax, proposed overassess-               termination. It suggests to the tax-
ment, or claimed refund (or, in an offer           payer that if the taxpayer concurs in
in compromise, the total amount of as-             the recommendation, he or she indicate
sessed tax, penalty, and interest sought           agreement by executing and returning
to be compromised) does not exceed                 a waiver or acceptance. The prelimi-
$2,500 for any taxable period, the tax-            nary letter also informs the taxpayer
payer will be granted an Appeals office            of appeal rights available if he or she
conference on request. A written pro-              disagrees with the proposed determina-
test is not required.                              tion. If the taxpayer does not respond
   (iii) If for any taxable period the             to the letter within 30 days, a statu-
total amount of proposed additional                tory notice of deficiency will be issued
tax including penalties, proposed over-            or other appropriate action taken, such
assessment, or claimed refund (or, in              as the issuance of a notice of adjust-
an offer in compromise, the total                  ment, the denial of a claim in income,
amount of assessed tax, penalty, and               profits, estate, and gift tax cases, or an
interest sought to be compromised) ex-             appropriate adjustment of the tax li-
ceeds $2,500 but does not exceed $10,000,          ability or denial of a claim in excise
the taxpayer, on request, will be grant-           and employment tax cases.
ed an Appeals office conference, pro-                (2) Protests. (i) No written protest or
vided a brief written statement of dis-            brief written statement of disputed
puted issues is submitted.                         issues is required to obtain an Appeals
   (iv) If for any taxable period the total        office conference in office interview
amount of proposed additional tax in-              and correspondence examination cases.
cluding penalties, proposed overassess-              (ii) No written protest or brief writ-
ment, or claimed refund (or, in an offer           ten statement of disputed issues is re-
in compromise, the total amount of as-             quired to obtain an Appeals office con-
sessed tax, penalty, and interest sought           ference in a field examination case if
to be compromised) exceeds $10,000, the            the total amount of proposed addi-
taxpayer, on request, will be granted              tional tax including penalties, pro-
an Appeals office conference, provided             posed overassessment, or claimed re-
a written protest is filed.                        fund (or, in an offer in compromise, the
   (d) Thirty-day letters and protests—(1)         total amount of assessed tax, penalty,
General. The report of the examiner, as            and interest sought to be compromised)
approved after review, recommends one              is $2,500 or less for any taxable period.
of four determinations:                              (iii) A written protest is required to
   (i) Acceptance of the return as filed           obtain Appeals consideration in a field
and closing of the case;                           examination case if the total amount
   (ii) Assertion of a given deficiency or         of proposed tax including penalties,
additional tax;                                    proposed overassessment, or claimed
   (iii) Allowance of a given overassess-          refund (or, in an offer in compromise,
ment, with or without a claim for re-              the total amount of assessed tax, pen-
fund, credit, or abatement;                        alty, and interest sought to be com-
   (iv) Denial of a claim for refund,              promised) exceeds $10,000 for any tax-
credit, or abatement which has been                able period.
filed and is found wholly lacking in                 (iv) A written protest is optional (al-
merit. When a return is accepted as                though a brief written statement of
filed (as in subdivision (i) of this sub-          disputed issues is required) to obtain
paragraph), the taxpayer is notified by            Appeals consideration in a field exam-
appropriate ‘‘no change’’ letter. In an            ination case if for any taxable period
unagreed case, the district director               the total amount of proposed addi-
sends to the taxpayer a preliminary or             tional tax including penalties, pro-
‘‘30-day letter’’ if any one of the last           posed overassessment, or claimed re-
three determinations is made (except a             fund (or, in an offer in compromise, the
full allowance of a claim in respect of            total amount of assessed tax, penalty,

                                              20
Internal Revenue Service, Treasury                                                   § 601.105

and interest sought to be compromised)               highway purposes, for use in commer-
exceeds $2,500 but does not exceed                   cial aircraft, or used by local transit
$10,000.                                             systems, see sections 39, 6420, and 6421
   (v) Instructions for preparation of               of the Code and § 601.402(c)(3). For spe-
written protests are sent to the tax-                cial procedure applicable to claims for
payer with the transmittal (30-day) let-             payment or credit in respect of lubri-
ter.                                                 cating oil used otherwise than in a
   (e) Claims for refund or credit. (1) After        highway motor vehicle, see sections 39
payment of the tax a taxpayer may                    and 6424 of the Code and § 601.402(c)(3).
(unless he has executed an agreement                 For special procedure applicable for
to the contrary) contest the assess-                 credit or refund of aircraft use tax, see
ment by filing a claim for refund or                 section     6426    of   the   Code   and
credit for all or any part of the amount             § 601.402(c)(4). For special procedure ap-
paid, except as provided in section 6512             plicable for payment or credit in re-
of the Code with respect to certain                  spect of special fuels not used for tax-
taxes determined by the Tax Court, the               able purposes, see sections 39 and 6427
decision of which has become final. A                of the Code and § 601.402(c)(5).
claim for refund or credit of income                    (7) For special procedure applicable
taxes shall be made on Form 1040X,                   in certain cases to adjustment of over-
1120X, or an amended income tax re-                  payment of estimated tax by a corpora-
turn, in accordance with § 301.6402–3. In            tion see section 6425 of the Code.
the case of taxes other than income                     (f) Interruption of examination proce-
taxes, a claim for refund or credit shall            dure. The process of field examination
be made on Form 843. The appropriate                 and the course of the administrative
forms are obtainable from district di-               procedure described in this section and
rectors or directors of service centers.             in the following section may be inter-
Generally, the claim, together with ap-              rupted in some cases by the imminent
propriate supporting evidence, must be               expiration of the statutory period of
filed at the location prescribed in                  limitations for assessment of the tax.
§ 301.6402–2(a) (2). A claim for refund or           To protect the Government’s interests
credit must be filed within the applica-             in such a case, the district director of
ble statutory period of limitation. In               internal revenue or other designated
certain cases, a properly executed in-               officer may be required to dispatch a
come tax return may operate as a                     statutory notice of deficiency (if the
claim for refund or credit of the                    case is within jurisdiction of U.S. Tax
amount of the overpayment disclosed                  Court), or take other appropriate ac-
by such return. (See § 301.6402–3).                  tion to assess the tax, even though the
   (2) When claims for refund or credit              case may be in examination status. In
are examined by the Examination Divi-                order to avoid interruption of the es-
sion, substantially the same procedure               tablished procedure (except in estate
is followed (including appeal rights af-             tax cases), it is suggested to the tax-
forded to taxpayers) as when tax-                    payer that he execute an agreement on
payers’ returns are originally exam-                 Form 872 (or such other form as may be
ined. But see § 601.108 for procedure for            prescribed for this purpose). To be ef-
reviewing proposed overpayment ex-                   fective this agreement must be entered
ceeding $200,000 of income, estate, and              into by the taxpayer and the district
gift taxes.                                          director or other appropriate officer
   (3) As to suits for refund, see § 601.103         concerned prior to the expiration of the
(c).                                                 time otherwise provided for assess-
   (4) [Reserved]                                    ment. Such a consent extends the pe-
   (5) There is also a special procedure             riod for assessment of any deficiency,
applicable to applications for tentative             or any additional or delinquent tax,
carryback adjustments under section                  and extends the period during which
6411 of the Code (consult Forms 1045                 the taxpayer may claim a refund or
and 1139).                                           credit to a date 6 months after the
   (6) For special procedure applicable              agreed time of extension of the assess-
to claims for payment or credit in re-               ment period. When appropriate, a con-
spect of gasoline used on a farm for                 sent may be entered into restricted to
farming purposes, for certain non-                   certain issues.

                                                21
§ 601.105                                                      26 CFR Ch. I (4–1–99 Edition)

  (g) Fraud. The procedure described in           make an adjustment unfavorable to the
this section does not apply in any case           taxpayer unless:
in which criminal prosecution is under              (i) There is evidence of fraud, malfea-
consideration. Such procedure does ob-            sance, collusion, concealment, or mis-
tain, however, in cases involving the             representation of a material fact; or
assertion of the civil fraud penalty                (ii) The prior closing involved a
after the criminal aspects of the case            clearly defined substantial error based
have been closed.                                 on an established Service position ex-
  (h) Jeopardy assessments. If the dis-           isting at the time of the previous ex-
trict director believes that the assess-          amination; or
ment or collection of a tax will be                 (iii) Other circumstances exist which
jeorpardized by delay, he/she is author-          indicate failure to reopen would be a
ized and required to assess the tax im-           serious administrative omission.
mediately, together with interest and               (2) All reopenings are approved by
other additional amounts provided by              the Chief, Examination Division (Dis-
law, notwithstanding the restrictions             trict Director in streamlined districts),
on assessment or collection of income,            or by the Chief, Compliance Division,
estate, gift, generation–skipping trans-          for cases under his/her jurisdiction. If
fer, or Chapter 41, 42, 43, or 44 taxes           an additional inspection of the tax-
contained in section 6213(a) of the               payer’s books of account is necessary,
Code. A jeopardy assessment does not              the notice to the taxpayer required by
deprive the taxpayer of the right to file         Code section 7605(b) will be delivered to
a petition with the Tax Court. Collec-            the taxpayer at the time the reexam-
tion of a tax in jeopardy may be imme-            ination is begun.
diately enforced by the district direc-             (k) Transfer of returns between dis-
tor upon notice and demand. To stay               tricts. When request is received to
collection, the taxpayer may file with            transfer returns to another district for
the district director a bond equal to             examination or the closing of a cased,
the amount for which the stay is de-              the district director having jurisdic-
sired. The taxpayer may request a re-             tion may transfer the case, together
view in the Appeals office of whether             with pertinent records to the district
the making of the assessment was rea-             director of such other district. The
sonable under the circumstances and               Service will determine the time and
whether the amount assessed or de-                place of the examination. In deter-
manded was appropriate under the cir-             mining whether a transfer should be
cumstances. See section 7429. This re-            made, circumstances such as the fol-
quest shall be made, in writing, within           lowing will be considered:
30 days after the earlier of—                       (1) Change of the taxpayer’s domicile,
  (1) The day on which the taxpayer is            either before or during examination.
furnished the written statement de-                 (2) Discovery that taxpayer’s books
scribed in section 7429(a)(1); or                 and records are kept in another dis-
  (2) The last day of the period within           trict.
which this statement is required to be              (3) Change of domicile of an executor
furnished.                                        or administrator to another district be-
                                                  fore or during examination.
An Appeals office conference will be
                                                    (4) The effective administration of
granted as soon as possible and a deci-
                                                  the tax laws.
sion rendered without delay.
                                                    (l) Special procedures for crude oil
  (i) Regional post review of examined
                                                  windfall profit tax cases. For special pro-
cases. Regional Commissioners review
                                                  cedures relating to crude oil windfall
samples of examined cases closed in
                                                  profit tax cases, see § 601.405.
their district offices to insure uni-
formity throughout their districts in             (5 U.S.C. 301 and 552) 80 Stat. 379 and 383; sec.
applying Code provisions, regulations,            7805 of the Internal Revenue Code of 1954, 68A
and rulings, as well as the general poli-         Stat. 917 (26 U.S.C. 7805))
cies of the Service.                              [32 FR 15990, Nov. 22, 1967]
  (j) Reopening of Cases Closed After Ex-           EDITORIAL NOTE: For FEDERAL REGISTER ci-
amination. (1) The Service does not re-           tations affecting § 601.105, see the List of CFR
open any case closed after examination            Sections Affected in the Finding Aids sec-
by a district office or service center, to        tion of this volume.

                                             22
Internal Revenue Service, Treasury                                                § 601.106

§ 601.106 Appeals functions.                      missioner in his/her exclusive and final
                                                  authority for the determination of—
  (a) General. (1)(i) There are provided
in each region Appeals offices with of-             (a) Federal income, profits, estate
fice facilities within the region. Unless         (including extensions for payment
they otherwise specify, taxpayers liv-            under section 6161(a)(2)), gift, genera-
ing outside the United States use the             tion–skipping transfer, or Chapter 41,
facilities of the Washington, DC, Ap-             42, 43, or 44 tax liability (whether be-
peals Office of the the Mid-Atlantic Re-          fore or after the issuance of a statutory
gion. Subject to the limitations set              notice of deficiency);
forth in subparagraphs (2) and (3) of               (b) Employment or certain Federal
this paragraph, the Commissioner has              excise tax liability; and
delegated to certain officers of the Ap-            (c) Liability for additions to the tax,
peals offices authority to represent the          additional amounts, and assessable
regional commissioner in those mat-               penalties provided under Chapter 68 of
ters set forth in subdivisions (ii)               the Code,
through (v) of this subparagraph. If a            in any case originating in the office of
statutory notice of deficiency was                any district director situated in the re-
issued by a district director or the Di-
                                                  gion, or in any case in which jurisdic-
rector, Foreign Operations District,
                                                  tion has been transferred to the region.
the Appeals office may waive jurisdic-
                                                    (iii) The taxpayer must request Ap-
tion to the director who issued the
statutory notice during the 90-day (or            peals consideration.
150-day) period for filing a petition               (a) An oral request is sufficient to ob-
with the Tax Court, except where                  tain Appeals consideration in (1) all of-
criminal prosecution has been rec-                fice interview or correspondence exam-
ommended and not finally disposed of,             ination cases or (2) a field examination
or the statutory notice includes the ad           case if the total amount of proposed
valorem fraud penalty. After the filing           additional tax including penalties, pro-
of a petition in the Tax Court, the Ap-           posed overassessment, or claimed re-
peals office will have exclusive settle-          fund (or, in an offer in compromise, the
ment jurisdiction, subject to the provi-          total amount of assessed tax, penalty,
sions of subparagraph (2) of this para-           and interest sought to be compromised)
graph, for a period of 4 months (but no           is $2,500 or less for any taxable period.
later than the receipt of the trial cal-          No written protest or brief statement
endar in regular cases and no later               of disputed issues is required.
than 15 days before the calendar call in            (b) A brief written statement of dis-
S cases), over cases docketed in the              puted issues is required (a written pro-
Tax Court. Subject to the exceptions              test is optional) to obtain Appeals con-
and limitations set forth in subpara-             sideration in a field examination case
graph (2) of this paragraph, there is             if the total amount of proposed addi-
also vested in the Appeals offices au-            tional tax including penalties, pro-
thority to represent the regional com-            posed overassessment, or claimed re-
missioner in his/her exclusive author-
                                                  fund (or, in an offer in compromise, the
ity to settle (a) all cases docketed in
                                                  total amount of assessed tax, penalty,
the Tax Court and designated for trial
                                                  and interest sought to be compromised)
at any place within the territory com-
prising the region, and (b) all docketed          exceeds $2,500 but does not exceed
cases originating in the office of any            $10,000 for any taxable period.
district director situated within the re-           (c) A written protest is required to
gion, or in which jurisdiction has been           obtain Appeals consideration in a field
transferred to the region, which are              examination case if the total amount
designated for trial at Washington, DC,           of proposed additional tax including
unless the petitioner resides in, and             penalties, proposed overassessment, or
his/her books and records are located             claimed refund (or, in an offer in com-
or can be made available in, the region           promise, the total amount of assessed
which includes Washington, DC.                    tax, penalty, and interest sought to be
  (ii) Certain officers of the Appeals of-        compromised) exceeds $10,000 for any
fices may represent the regional com-             taxable period.

                                             23
§ 601.106                                                     26 CFR Ch. I (4–1–99 Edition)

   (d) A written protest is required to           ognition of tax exemption and founda-
obtain Appeals consideration in all em-           tion classification. See § 601.201(n)(5)
ployee plan and exempt organization               and (n)(6). The Appeals office also con-
cases.                                            siders cases involving the initial or
   (e) A written protest is required to           continuing determination of employee
obtain Appeals consideration in all               plan qualification under Subchapter D
partnership and S corporation cases.              of Chapter 1 of the Code. See
   (iv) Sections 6659(a)(1) and 6671(a)           § 601.201(o)(6). However, the jurisdiction
provide that additions to the tax, addi-          of the Appeals office in these cases is
tional amounts, penalties and liabil-             limited as follows:
ities (collectively referred to in this              (a) In cases under the jurisdiction of
subdivision as ‘‘penalties’’) provided by         a key district director (or the National
Chapter 68 of the Code shall be paid              Office) which involve an application
upon notice and demand and shall be               for, or the revocation or modification
assessed and collected in the same                of, the recognition of exemption or the
manner as taxes. Certain Chapter 68               determination of qualification, if the
penalties may be appealed after assess-           determination concerning exemption is
ment to the Appeals office. This post-            made by a National Office ruling, or if
assessment appeal procedure applies to            National Office technical advice is fur-
all but the following Chapter 68 pen-             nished concerning exemption or quali-
alties:                                           fication, the decision of the National
   (a) Penalties that are not subject to          Office is final. The organization/plan
a reasonable cause or reasonable basis            has no right of appeal to the Appeals
determination (examples are additions             office or any other avenue of adminis-
to the tax for failure to pay estimated           trative     appeal.     See      § 601.201(n)(i),
income tax under sections 6654 and                (n)(6)(ii)(b), (n)(9)(viii)(a), (o)(2)(iii), and
6655);
                                                  (o)(6)(i).
   (b) Penalties that are subject to the
deficiency procedures of subchapter B                (b) In cases already under the juris-
of Chapter 63 of the Code (because the            diction of an Appeals office, if the pro-
taxpayer has the right to appeal such             posed disposition by that office is con-
penalties, such as those provided under           trary to a National Office ruling con-
section 6653 (a) and (b), prior to assess-        cerning exemption, or to a National Of-
ment):                                            fice technical advice concerning ex-
   (c) Penalties that are subject to an           emption or qualification, issued prior
administratively                  granted         to the case, the proposed disposition
preassessment appeal procedure such               will be submitted, through the Office of
as that provided in § 1.6694–2(a)(1) be-          the Regional Director of Appeals, to
cause taxpayers are able to protest               the Assistant Commissioner (Employee
such penalties prior to assessment;               Plans and Exempt Organizations) or, in
   (d) The penalty provided in section            section 521 cases, to the Assistant Com-
6700 for promoting abusive tax shelters           missioner (Technical). The decision of
(because the penalty is subject to the            the Assistant Commissioner will be fol-
procedural rules of section 6703 which            lowed by the Appeals office. See
provides for an extension of the period           § 601.201(n)(5)(iii), (n)(6)(ii)(d), (n)(6)(iv),
of collection of the penalty when a per-          and (o)(6)(iii).
son pays not less than 15 percent of the             (2) The authority described in sub-
amount of such penalty); and                      paragraph (1) of this paragraph does
   (e) The 100 percent penalty provided           not include the authority to:
under section 6672 (because the tax-                 (i) Negotiate or make a settlement in
payer has the opportunity to appeal               any case docketed in the Tax Court if
this penalty prior to assessment).                the notice of deficiency, liability or
The appeal may be made before or after            other determination was issued by Ap-
payment, but shall be made before the             peals officials;
filing of a claim for refund. Technical              (ii) Negotiate or make a settlement
advice procedures are not applicable to           in any docketed case if the notice of
an appeal made under this subdivision.            deficiency, liability or other deter-
   (v) The Appeals office considers cases         mination was issued after appeals con-
involving the initial or continuing rec-          sideration of all petitioned issues by

                                             24
Internal Revenue Service, Treasury                                                § 601.106

the Employee Plans/Exempt Organiza-                advised by the district director) of ad-
tions function;                                    ministrative appeal to the Appeals or-
   (iii) Negotiate or make a settlement            ganization. However, the appeal proce-
in any docketed case if the notice of              dures do not extend to cases involving
deficiency, liability or final adverse de-         solely the failure or refusal to comply
termination letter was issued by a Dis-            with the tax laws because of moral, re-
trict Director and is based upon a Na-             ligious, political, constitutional, con-
tional Office ruling or National Office            scientious, or similar grounds. Organi-
technical advice in that case involving            zations such as labor unions and trade
a qualification of an employee plan or             associations which have been examined
tax exemption and/or foundation status             by the district director to determine
of an organization (but only to the ex-            the amounts expended by the organiza-
tent the case involves such issue);                tion for purposes of lobbying, pro-
   (iv) Negotiate or make a settlement             motion or defeat of legislation, polit-
if the case was docketed under Code                ical campaigns, or propaganda related
sections 6110, 7477, or 7478;                      to those purposes are treated as ‘‘tax-
   (v) Eliminate the ad valorem fraud              payers’’ for the purpose of this right of
penalty in any case in which the pen-              administrative appeal. Thus, upon re-
alty was determined by the district of-            questing appellate consideration and
fice or service center office in connec-           filing a written protest, when required,
tion with a tax year or period, or which           to the district director’s findings that
is related to or affects such year or pe-          a portion of member dues is to be dis-
riod, for which criminal prosecution               allowed as a deduction to each member
against the taxpayer (or related tax-              because expended for such purposes,
payer involving the same transaction)              the organization will be afforded full
has been recommended to the Depart-                rights of administrative appeal to the
ment of Justice for willful attempt to             Appeals activity similar to those rights
evade or defeat tax, or for willful fail-          afforded to taxpayers generally. After
ure to file a return, except upon the              review of any required written protest
recommendation or concurrence of                   by the district director, the case and
Counsel; or                                        its administrative record are referred
   (vi) Act in any case in which a rec-            to Appeals. Appeals may refuse to ac-
ommendation for criminal prosecution               cept a protested nondocketed case
is pending, except with the concurrence            where preliminary review indicates it
of Counsel.                                        requires further consideration or devel-
   (3) The authority vested in Appeals             opment. No taxpayer is required to
does not extend to the determination               submit a case to Appeals for consider-
of liability for any excise tax imposed            ation. Appeal is at the option of the
by Subtitle E or by Subchapter D of                taxpayer. After the issuance by the dis-
chapter 78, to the extent it relates to            trict director of a statutory notice of
Subtitle E.                                        deficiency, upon the taxpayer’s re-
   (4) In cases under Appeals jurisdic-            quest, Appeals may take up the case
tion, the Appeals official has the au-             for settlement and may grant the tax-
thority to make and subscribe to a re-             payer a conference thereon.
turn under the provisions of section                  (c) Nature of proceedings before Ap-
6020 of the Code where taxpayer fails to           peals. Proceedings before Appeals are
make a required return.                            informal. Testimony under oath is not
   (b) Initiation of proceedings before Ap-        taken, although matters alleged as
peals. In any case in which the district           facts may be required to be submitted
director has issued a preliminary or               in the form of affidavits, or declared to
‘‘30-day letter’’ and the taxpayer re-             be true under the penalties of perjury.
quests Appeals consideration and files             Taxpayers may represent themselves
a written protest when required (see               or designate a qualified representative
paragraph (c)(1) of §§ 601.103, (c)(1) and         to act for them. See Subpart E of this
(c)(2) of 601.105 and 601.507) against the         part for conference and practice re-
proposed determination of tax liabil-              quirements. At any conference granted
ity, except as to those taxes described            by Appeals on a nondocketed case, the
in paragraph (a)(3) of this section, the           district director will be represented if
taxpayer has the right (and will be so             the Appeals official having settlement

                                              25
§ 601.106                                                     26 CFR Ch. I (4–1–99 Edition)

authority and the district director                or certified mail any statutory notice
deem it advisable. At any such con-                of deficiency prescribed in sections 6212
ference on a case involving the ad valo-           and 6861 of the Code, and in cor-
rem fraud penalty for which criminal               responding provisions of the Internal
prosecution against the taxpayer (or a             Revenue Code of 1939. Within 90 days,
related taxpayer involving the same                or 150 days if the notice is addressed to
transaction) has been recommended to               a person outside of the States of the
the Department of Justice for willful              Union and the District of Columbia,
attempt to evade or defeat tax, or for             after such a statutory notice of defi-
willful failure to file a return, the Dis-         ciency is mailed (not counting Satur-
trict Counsel will be represented if he            day, Sunday, or a legal holiday in the
or she so desires.                                 District of Columbia as the last day),
   (d) Disposition and settlement of cases         the taxpayer may file a petition with
before Appeals—(1) In general. During
                                                   the U.S. Tax Court for a redetermina-
consideration of a case, the Appeals of-
                                                   tion of the deficiency. In addition, if a
fice should neither reopen an issue as
                                                   claim for refund is disallowed in full or
to which the taxpayer and the office of
                                                   in part by the Appelate Division and
the district director are in agreement
nor raise a new issue, unless the ground           the taxpayer does not sign Form 2297,
for such action is a substantial one and           Appeals will prepare the statutory no-
the potential effect upon the tax liabil-          tice of claim disallowance and send it
ity is material. If the Appeals raises a           to the taxpayer by certified mail (or
new issue, the taxpayer or the tax-                registered mail if the taxpayer is out-
payer’s representative should be so ad-            side the United States), with a carbon
vised and offered an opportunity for               copy to the taxpayer’s representative
discussion prior to the taking of any              by regular mail, if appropriate. In any
formal action, such as the issuance of a           other unagreed case, the case and its
statutory notice of deficiency.                    administrative file will be forwarded to
   (2) Cases not docketed in the Tax Court.        the appropriate function with direc-
(i) If after consideration of the case by          tions to take action with respect to the
Appeals a satisfactory settlement of               tax liability determined in Appeals.
some or all the issues is reached with             Administrative appeal procedures will
the taxpayer, the taxpayer will be re-             apply to 100-percent penalty cases, ex-
quested to sign Form 870–AD or other               cept where an assessment is made be-
appropriate agreement form waiving                 cause of Chief Counsel’s request to sup-
restrictions on the assessment and col-            port a third-party action in a pending
lection of any deficiency and accepting            refund suit. See Rev. Proc. 69–26.
any overassessment resulting under                   (iii) Taxpayers desiring to further
the agreed settlement. In addition, in             contest unagreed excise (other than
partially unagreed cases, a statutory              those under Chapters 41 through 44 of
notice of deficiency will be prepared              the Code) and employment tax cases
and issued in accordance with subdivi-             and 100-percent penalty cases must pay
sion (ii) of this subparagraph with re-
                                                   the additional tax (or portion thereof
spect to the unagreed issue or issues.
                                                   of divisible taxes) when assessed, file
   (ii) If after consideration of the case
                                                   claim for refund within the applicable
by Appeals it is determined that there
                                                   statutory period of limitations (ordi-
is a deficiency in income, profits, es-
tate, gift tax, generation–skipping                narily 3 years from time return was re-
transfer, or Chapter 41, 42, 43, or 44 tax         quired to be filed or 2 years from pay-
liability to which the taxpayer does               ment, whichever expires later), and
not agree, a statutory notice of defi-             upon disallowance of claim or after 6
ciency will be prepared and issued by              months from date claim was filed, file
Appeals. Officers of the Appeals office            suit in U.S. District Court or U.S.
having authority for the administra-               Claims Court. Suits for refund of taxes
tive determination of tax liabilities re-          paid are under the jurisdiction of the
ferred to in paragraph (a) of this sec-            Department of Justice.
tion are also authorized to prepare,                 (3) Cases docketed in the Tax Court. (i)
sign on behalf of the Commissioner,                If the case under consideration in Ap-
and send to the taxpayer by registered             peals is docketed in the Tax Court and

                                              26
Internal Revenue Service, Treasury                                                § 601.106

agreement is reached with the tax-                 Counsel. Thereafter, Counsel will have
payer with respect to the issues in-               exclusive authority to dispose of the
volved, the disposition of the case is ef-         case. If, at the end of the 4-month pe-
fected by a stipulation of agreed defi-            riod, there is substantial likelihood
ciency or overpayment to be filed with             that a settlement of the entire case can
the Tax Court and in conformity with               be effected in a reasonable period of
which the Court will enter its order.              time, Counsel may extend Appeals set-
   (ii) If the case under consideration in         tlement jurisdiction for a period not to
Appeals is docketed in the Tax Court               exceed 60 days, but not beyond the date
and the issues remain unsettled after              of the receipt of a trial calendar upon
consideration and conference in Ap-                which the case appears. Extensions be-
peals, the case will be referred to the            yond the 50-day period or after the
appropriate district counsel for the re-           event indicated will be granted only
gion for defense of the tax liability de-          with the personal approval of regional
termined.                                          counsel and will be made only in those
   (iii) If the deficiency notice in a case        cases in which the probability of settle-
docketed in the Tax Court was not                  ment of the case in its entirety by Ap-
issued by the Appeals office and no rec-           peals clearly outweighs the need to
ommendation for criminal prosecution               commence trial preparation.
is pending, the case will be referred by             (c) During the period of Appeals juris-
the district counsel to the Appeals of-            diction, Appeals will make available
fice for settlement as soon as it is at            such files and information as may be
issue in the Tax Court. The settlement             necessary for Counsel to take any ac-
procedure shall be governed by the fol-            tion required by the Court or which is
lowing rules:                                      in the best interests of the Govern-
   (a) The Appeals office will have ex-            ment. When a case is referred by Coun-
clusive settlement jurisdiction for a              sel to Appeals, Counsel may indicate
period of 4 months over certain cases              areas of needed factual development or
docketed in the Tax Court. The 4-                  areas of possible technical uncertain-
month period will commence at the                  ties. In referring a case to Counsel, Ap-
time Appeals receives the case from                peals will furnish its summary of the
Counsel, which will be after the case is           facts and the pertinent legal authori-
at issue. Appeals will arrange settle-             ties.
ment conferences in such cases within                (d) The Appeals office may specify
45 days of receipt of the case. In the             that proposed Counsel settlements be
event of a settlement, Appeals will pre-           referred back to Appeals for its views.
pare and forward to Counsel the nec-               Appeals may protest the proposed
essary computations and any stipula-               Counsel settlements. If Counsel dis-
tion decisions secured. Counsel will               agrees with Appeals, the Regional
prepare any needed settlement docu-                Counsel will determine the disposition
ments for execution by the parties and             of the cases.
filing with the Tax Court. Appeals will              (e) If an offer is received at or about
also have authority to settle less than            the time of trial in a case designated
all the issues in the case and to refer            by the Appeals office for settlement
the unsettled issues to Counsel for dis-           consultation, Counsel will endeavor to
position. In the event of a partial set-           have the case placed on a motions cal-
tlement, Appeals will inform Counsel               endar to permit consultation with and
of the agreement of the petitioner(s)              review by Appeals in accordance with
and Appeals may secure and forward to              the foregoing procedures.
Counsel a stipulation covering the                   (f) For issues in docketed and non-
agreed issues. Counsel will, if nec-               docketed cases pending with Appeals
essary, prepare documents reflecting               which are related to issues in docketed
settlement of the agreed issues for exe-           cases over which Counsel has jurisdic-
cution by the parties and filing with              tion, no settlement offer will be ac-
the Tax Court at the appropriate time.             cepted by either Appeals or Counsel un-
   (b) At the end of the 4-month period,           less both agree that the offer is accept-
or before that time if Appeals deter-              able. The protest procedure will be
mines the case is not susceptible of set-          available to Appeals and regional coun-
tlement, the case will be returned to              sel will have authority to resolve the

                                              27
§ 601.106                                                     26 CFR Ch. I (4–1–99 Edition)

issue with respect to both the Appeals             she may, by order in writing, withdraw
and Counsel cases. If settlement of the            any case not docketed before the Tax
docketed case requires approval by re-             Court from the jurisdiction of the Ap-
gional counsel or Chief Counsel, the               peals office, and provide for its disposi-
final decision with respect to the issues          tion under his or her personal direc-
under the jurisdiction of both Appeals             tion.
and Counsel will be made by regional                 (f) Conference and practice require-
counsel or Chief Counsel. See Rev.                 ments. Practice and conference proce-
Proc. 79–59.                                       dure before Appeals is governed by
  (g) Cases classified as ‘‘Small Tax’’            Treasury Department Circular 230 as
cases by the Tax Court are given expe-             amended (31 CFR Part 10), and the re-
ditious consideration because such                 quirements of Subpart E of this part.
cases are not included on a Trial Sta-             In addition to such rules but not in
tus Request. These cases are considered            modification of them, the following
by the Court as ready for placing on a             rules are also applicable to practice be-
trial calendar as soon as the answer               fore Appeals:
has been filed and are given priority by
                                                     (1) Rule I. An exaction by the U.S.
the Court for trial over other docketed
                                                   Government, which is not based upon
cases. These cases are designated by
                                                   law, statutory or otherwise, is a taking
the Court as small tax cases upon re-
                                                   of property without due process of law,
quest of petitioners and will include
                                                   in violation of the Fifth Amendment to
letter ‘‘S’’ as part of the docket num-
                                                   the U.S. Constitution. Accordingly, an
ber.
                                                   Appeals representative in his or her
  (e) Transfer and centralization of cases.
                                                   conclusions of fact or application of
(1) An Appeals office is authorized to
                                                   the law, shall hew to the law and the
transfer settlement jurisdiction in a
non-docketed case or in an excise or               recognized standards of legal construc-
employment tax case to another re-                 tion. It shall be his or her duty to de-
gion, if the taxpayer resides in and the           termine the correct amount of the tax,
taxpayer’s books and records are lo-               with strict impartiality as between the
cated (or can be made available) in                taxpayer and the Government, and
such other region. Otherwise, transfer             without favoritism or discrimination
to another region requires the approval            as between taxpayers.
of the Director of the Appeals Division.             (2) Rule II. Appeals will ordinarily
  (2) An Appeals office is authorized to           give serious consideration to an offer
transfer settlement jurisdiction in a              to settle a tax controversy on a basis
docketed case to another region if the             which fairly reflects the relative mer-
location for the hearing by the Tax                its of the opposing views in light of the
Court has been set in such other re-               hazards which would exist if the case
gion, except that if the place of hearing          were litigated. However, no settlement
is Washington, DC, settlement jurisdic-            will be made based upon nuisance value
tion shall not be transferred to the re-           of the case to either party. If the tax-
gion in which Washington, DC, is lo-               payer makes an unacceptable proposal
cated unless the petitioner resides in             of settlement under circumstances in-
and the petitioner’s books and records             dicating a good faith attempt to reach
are located (or can be made available)             an agred disposition of the case on a
in that region. Otherwise, transfer to             basis fair both to the Government and
another region requires the approval of            the taxpayer, the Appeals official gen-
the Director of the Appeals Division.              erally should give an evaluation of the
Likewise, the Chief Counsel has cor-               case in such a manner as to enable the
responding authority to transfer the               taxpayer to ascertain the kind of set-
jurisdiction, authority, and duties of             tlement that would be recommended
the regional counsel for any region to             for acceptance. Appeals may defer ac-
the regional counsel of another region             tion on or decline to settle some cases
within which the case has been des-                or issues (for example, issues on which
ignated for trial before the Tax Court.            action has been suspended nationwide)
  (3) Should a regional commissioner               in order to achieve greater uniformity
determine that it would better serve               and enhance overall voluntary compli-
the interests of the Government, he or             ance with the tax laws.

                                              28
Internal Revenue Service, Treasury                                                § 601.106

  (3) Rule III. Where the Appeals officer         diction has completed any necessary
recommends acceptance of the tax-                 action. The Director, Appeals Division,
payer’s proposal of settlement, or, in            may authorize the regional Appeals of-
the absence of a proposal, recommends             fice to accept jurisdiction (after any
action favorable to the taxpayer, and             necessary action by office having origi-
said recommendation is disapproved in             nal jurisdiction) in specified classes of
whole or in part by a reviewing officer           cases without written protests pro-
in Appeals the taxpayer shall be so ad-           vided written or oral requests for Ap-
vised and upon written request shall be           peals consideration are submitted by or
accorded a conference with such re-               for each taxpayer.
viewing officer. The Appeals office may             (6) Rule VI. A taxpayer cannot with-
disregard this rule where the interest            hold evidence from the district director
of the Government would be injured by             of internal revenue and expect to intro-
delay, as for example, in a case involv-          duce it for the first time before Ap-
ing the imminent expiration of the pe-            peals, at a conference in nondocketed
riod of limitations or the dissipation of         status, without being subject to having
assets.                                           the case returned to the district direc-
  (4) Rule IV. Where the Appeals offi-            tor for reconsideration. Where newly
cial having settlement authority and              discovered evidence is submitted for
the district director deem it advisable,          the first time to Appeals, in a case
the district director may be rep-                 pending in nondocketed status, that of-
resented at any Appeals conferences on            fice, in the reasonable exercise of its
a nondocketed case. This rule is also             discretion, may transmit same to the
applicable to the Director, Foreign Op-           district director for his or her consider-
erations District in the event his or her         ation and comment.
office issued the preliminary or ‘‘30-day
                                                    (7) Rule VII. Where the taxpayer has
letter’’.
                                                  had the benefit of a conference before
  (5) Rule V. In order to bring an
                                                  the Appeals office in the prestatutory
unagreed income, profits, estate, gift,
                                                  notice status, or where the opportunity
or Chapter 41, 42, 43, or 44 tax case in
                                                  for such a conference was accorded but
prestatutory notice status, an employ-
                                                  not availed of, there will be no con-
ment or excise tax case, a penalty case,
                                                  ference granted before the Appeals of-
an Employee Plans and Exempt Orga-
nization case, a termination of taxable           fice in the 90-day status after the mail-
year assessment case, a jeopardy as-              ing of the statutory notice of defi-
sessment case, or an offer in com-                ciency, in the absence of unusual cir-
promise before the Appeals office, the            cumstances.
taxpayer or the taxpayer’s representa-              (8) Rule VIII. In cases not docketed in
tive should first request Appeals con-            the United States Tax Court on which
sideration and, when required, file with          a conference is being conducted by the
the district office (including the For-           Appeals office, the district counsel
eign Operations District) or service              may be requested to attend and to give
center a written protest setting forth            legal advice in the more difficult cases,
specifically the reasons for the refusal          or on matters of legal or litigating pol-
to accept the findings. If the protest in-        icy.
cludes a statement of facts upon which              (9) Rule IX—Technical advice from the
the taxpayer relies, such statement               National Office—(i) Definition and nature
should be declared, to be true under the          of technical advice. (a) As used in this
penalties of perjury. The protest and             subparagraph,       ‘‘technical   advice’’
any new facts, law, or arguments pre-             means advice or guidance as to the in-
sented therewith will be reviewed by              terpretation and proper application of
the receiving office for the purpose of           internal revenue laws, related statutes,
deciding whether further development              and regulations, to a specific set of
or action is required prior to referring          facts, furnished by the National Office
the case to Appeals. Where Appeals has            upon request of an Appeals office in
an issue under consideration it may,              connection with the processing and
with the concurrence of the taxpayer,             consideration of a nondocketed case. It
assume jurisdiction in a related case,            is furnished as a means of assisting
after the office having original juris-           Service personnel in closing cases and

                                             29
§ 601.106                                                     26 CFR Ch. I (4–1–99 Edition)

establishing and maintaining con-                  or revoked and it requests the National
sistent holdings in the various regions.           Office to reconsider the ruling, the ref-
It does not include memorandum on                  erence of the matter to the National
matters of general technical applica-              Office is treated as a request for tech-
tion furnished to Appeals offices where            nical advice. The procedures specified
the issues are not raised in connection            in subdivision (iii) of this subparagraph
with the consideration and handling of             should be followed in order that the
a specific taxpayer’s case.                        National Office may consider the rec-
  (b) The provisions of this subpara-              ommendation. Only the National Office
graph do not apply to a case under the             can revoke a ruling letter. Before refer-
jurisdiction of a district director or the         ral to the National Office, the Appeals
Bureau of Alcohol, Tobacco, and Fire-              office should inform the taxpayer of its
arms, to Employee Plans, Exempt Or-                opinion that the ruling letter should be
ganization, or certain penalty cases               revoked. The Appeals office, after de-
being considered by an Appeals office,             velopment of the facts and consider-
or to any case previously considered by            ation of the taxpayer’s arguments, will
an Appeals office. The technical advice            decide whether to recommend revoca-
provisions applicable to cases under               tion of the ruling to the National Of-
the jurisdiction of a district director,           fice. For procedures relating to a re-
other than Employee Plans and Ex-                  quest for a ruling, see § 601.201.
empt Organization cases, are set forth               (e) The Assistant Commissioner
in § 601.105(b)(5). The technical advice           (Technical), acting under a delegation
provisions applicable to Employee                  of authority from the Commissioner of
Plans and Exempt Organization cases                Internal Revenue, is exclusively re-
are set forth in § 601.201(n)(9). Technical        sponsible for providing technical ad-
advice may not be requested with re-               vice in any issue involving the estab-
spect to a taxable period if a prior Ap-           lishment of basic principles and rules
peals disposition of the same taxable              for the uniform interpretation and ap-
period of the same taxpayer’s case was             plication of tax laws in cases under
based on mutual concessions (ordi-
                                                   this subparagraph. This authority has
narily with a form 870–AD, Offer of
                                                   been largely redelegated to subordinate
Waiver of Restrictions on Assessment
                                                   officials.
and Collection of Deficiency in Tax and
of Acceptance of Overassessment).                    (ii) Areas in which technical advice
However, technical advice may be re-               may be requested. (a) Appeals offices
quested by a district director on issues           may request technical advice on any
previously considered in a prior Ap-               technical or procedural question that
peals disposition, not based on mutual             develops during the processing and con-
concessions, of the same taxable peri-             sideration of a case. These procedures
ods of the same taxpayer with the con-             are applicable as provided in subdivi-
currence of the Appeals office that had            sion (i) of this subparagraph.
the case.                                            (b) As provided in § 601.105(b)(5) (ii)(b)
  (c) The consideration or examination             and (iii)(a), requests for technical ad-
of the facts relating to a request for a           vice should be made at the earliest pos-
determination letter is considered to              sible stage of the examination process.
be in connection with the consider-                However, if identification of an issue
ation and handling of a taxpayer’s                 on which technical advice is appro-
case. Thus, an Appeals office may,                 priate is not made until the case is in
under this subparagraph, request tech-             Appeals, a decision to request such ad-
nical advice with respect to the consid-           vice (in nondocketed cases) should be
eration of a request for a determina-              made prior to or at the first con-
tion letter. The technical advice provi-           ference.
sions applicable to a request for a de-              (c) Subject to the provisions of (b) of
termination letter in Employee Plans               this subdivision, Appeals Offices are
and Exempt Organization cases are set              encouraged to request technical advice
forth in § 601.201(n)(9).                          on any technical or procedural ques-
  (d) If an Appeals office is of the opin-         tion arising in connection with a case
ion that a ruling letter previously                described in subdivision (i) of this sub-
issued to a taxpayer should be modified            paragraph which cannot be resolved on

                                              30
Internal Revenue Service, Treasury                                                 § 601.106

the basis of law, regulations, or a clear-         payer may submit, within 10 calendar
ly applicable revenue ruling or other              days after receipt of notice from the
precedent issued by the National Of-               Appeals Office, a statement of his/her
fice.                                              understanding as to the specific point
  (iii) Requesting technical advice. (a) It        or points at issue which will be for-
is the responsibility of the Appeals Of-           warded to the National Office with the
fice to determine whether technical ad-            request for advice. An extension of
vice is to be requested on any issue               time must be justified by the taxpayer
being considered. However, while the               in writing and approved by the Chief,
case is under the jurisdiction of the Ap-          Appeals Office.
peals Office, a taxpayer or his/her rep-             (d) If the taxpayer initiates the ac-
resentative may request that an issue              tion to request advice, and his/her
be referred to the National Office for             statement of the facts and point or
technical advice on the grounds that a             points at issue are not wholly accept-
lack of uniformity exists as to the dis-           able to the Appeals Office, the taxpayer
position of the issue, or that the issue           will be advised in writing as to the
is so unusual or complex as to warrant             areas of disagreement. The taxpayer
consideration by the National Office.              will be given 10 calendar days after re-
While taxpayers are encouraged to                  ceipt of the written notice to reply to
make written requests setting forth                such notice. An extension of time must
the facts, law, and argument with re-              be justified by the taxpayer in writing
spect to the issue, and reason for re-             and approved by the Chief, Appeals Of-
questing National Office advice, a tax-
                                                   fice. If agreement cannot be reached,
payer may make the request orally. If,
                                                   both the statements of the taxpayer
after considering the taxpayer’s re-
                                                   and the Appeals Office will be for-
quest, the Appeals Officer is of the
                                                   warded to the National Office.
opinion that the circumstances do not
warrant referral of the case to the Na-              (e) (1) In the case of requests for tech-
tional Office, he/she will so advice the           nical advice, the taxpayer must also
taxpayer. (See subdivision (iv) of this            submit, within the 10-day period re-
subparagraph for taxpayer’s appeal                 ferred to in (c) and (d) of this subdivi-
rights where the Appeals Officer de-               sion, whichever is applicable (relating
clines to request technical advice.)               to agreement by the taxpayer with the
  (b) When technical advice is to be re-           statement of facts and points sub-
quested, whether or not upon the re-               mitted in connection with the request
quest of the taxpayer, the taxpayer                for technical advice), the statement de-
will be so advised, except as noted in (j)         scribed in (f) of this subdivision of pro-
of this subdivision. If the Appeals Of-            posed deletions pursuant to section
fice initiates the action, the taxpayer            6110(c) of the Code. If the statement is
will be furnished a copy of the state-             not submitted, the taxpayer will be in-
ment of the pertinent facts and the                formed by the Appeals Office that the
question or questions proposed for sub-            statement is required. If the Appeals
mission to the National Office. The re-            Office does not receive the statement
quest for advice should be so worded as            within 10 days after the taxpayer has
to avoid possible misunderstanding, in             been informed of the need for the state-
the National Office, of the facts or of            ment, the Appeals Office may decline
the specific point or points at issue.             to submit the request for technical ad-
  (c) After receipt of the statement of            vice. If the Appeals Office decides to re-
facts and specific questions, the tax-             quest technical advice in a case where
payer will be given 10 calendar days in            the taxpayer has not submitted the
which to indicate in writing the extent,           statement of proposed deletions, the
if any, to which he/she may not be in              National Office will make those dele-
complete agreement. An extension of                tions which in the judgment of the
time must be justified by the taxpayer             Commissioner are required by section
in writing and approved by the Chief,              6110(c) of the Code.
Appeals Office. Every effort should be               (2) The requirements included in this
made to reach agreement as to the                  subparagraph relating to the submis-
facts and specific points at issue. If             sion of statements and other material
agreement cannot be reached, the tax-              with respect to proposed deletions to

                                              31
§ 601.106                                                    26 CFR Ch. I (4–1–99 Edition)

be made from technical advice memo-                 (i) Generally, prior to replying to the
randa before public inspection is per-            request for technical advice, the Na-
mitted to take place do not apply to re-          tional Office shall inform the taxpayer
quests for any document to which sec-             orally or in writing of the material
tion 6104 of the Code applies.                    likely to appear in the technical advice
  ( f ) In order to assist the Internal           memorandum which the taxpayer pro-
Revenue Service in making the dele-               posed be deleted but which the Internal
tions required by section 6110(c) of the          Revenue Service determined should not
Code, from the text of technical advice           be deleted. If so informed, the taxpayer
memoranda which are open to public                may submit within 10 days any further
inspection pursuant to section 6110(a)            information, arguments, or other ma-
of the Code, there must accompany re-             terial in support of the position that
quests for such technical advice either           such material be deleted. The Internal
a statement of the deletions proposed             Revenue Service will attempt, if fea-
by the taxpayer, or a statement that              sible, to resolve all disagreements with
no information other than names, ad-              respect to proposed deletions prior to
dresses, and taxpayer identifying num-            the time the National Office replies to
bers need be deleted. Such statements             the request for technical advice. How-
shall be made in a separate document.             ever, in no event shall the taxpayer
The statement of proposed deletions               have the right to a conference with re-
shall be accompanied by a copy of all             spect to resolution of any disagree-
statements of facts and supporting doc-           ments concerning material to be de-
                                                  leted from the text of the technical ad-
uments which are submitted to the Na-
                                                  vice memorandum, but such matters
tional Office pursuant to (c) or (d) of
                                                  may be considered at any conference
this subdivision, on which shall be indi-
                                                  otherwise scheduled with respect to the
cated, by the use of brackets, the mate-
                                                  request.
rial which the taxpayer indicates
                                                    (j) The provisions of (a) through (i) of
should be deleted pursuant to section
                                                  this subdivision, relating to the refer-
6110(c) of the Code. The statement of
                                                  ral of issues upon request of the tax-
proposed deletions shall indicate the
                                                  payer, advising taxpayers of the refer-
statutory basis for each proposed dele-
                                                  ral of issues, the submission of pro-
tion. The statement of proposed dele-
                                                  posed deletions, and the granting of
tions shall not appear or be referred to          conferences in the National Office, are
anywhere in the request for technical             not applicable to technical advice
advice. If the taxpayer decides to re-            memoranda described in section 6110
quest additional deletions pursuant to            (g)(5)(A) of the Code, relating to cases
section 6110(c) of the Code prior to the          involving criminal or civil fraud inves-
time the National Office replies to the           tigations and jeopardy or termination
request for technical advice, additional          assessments. However, in such cases,
statements may be submitted.                      the taxpayer shall be allowed to pro-
  (g) If the taxpayer has not already             vide the statement of proposed dele-
done so, he/she may submit a state-               tions to the National Office upon the
ment explaining his/her position on the           completion of all proceedings with re-
issues, citing precedents which the tax-          spect to the investigations or assess-
payer believes will bear on the case.             ments, but prior to the date on which
This statement will be forwarded to               the Commissioner mails the notice
the National Office with the request for          pursuant to section 6110 (f)(1) of the
advice. If it is received at a later date,        Code of intention to disclose the tech-
it will be forwarded for association              nical advice memorandum.
with the case file.                                 (k) Form 4463, Request for Technical
  (h) At the time the taxpayer is in-             Advice, should be used for transmitting
formed that the matter is being re-               requests for technical advice to the Na-
ferred to the National Office, he/she             tional Office.
will also be informed of the right to a             (iv) Appeal by taxpayers of determina-
conference in the National Office in the          tions not to seek technical advice. (a) If
event an adverse decision is indicated,           the taxpayer has requested referral of
and will be asked to indicate whether a           an issue before an Appeals Office to the
conference is desired.                            National Office for technical advice,

                                             32
Internal Revenue Service, Treasury                                               § 601.106

and after consideration of the request,          issue (except where the delay would
the Appeals Officer is of the opinion            prejudice the Government’s interests)
that the circumstances do not warrant            until it is notified of the National Of-
such referral, he/she will so advise the         fice decision. This notification will be
taxpayer.                                        made within 30 days after receipt of the
  (b) The taxpayer may appeal the de-            data in the National Office. The review
cision of the Appeals Officer not to re-         will be solely on the basis of the writ-
quest technical advice by submitting             ten record and no conference will be
to that official, within 10 calendar days        held in the National Office.
after being advised of the decision, a             (v) Conference in the National Office.
statement of the facts, law, and argu-           (a) If, after a study of the technical ad-
ments with respect to the issue, and             vice request, it appears that advice ad-
the reasons why the taxpayer believes            verse to the taxpayer should be given
the matter should be referred to the             and a conference has been requested,
National Office for advice. An exten-            the taxpayer will be notified of the
sion of time must be justified by the            time and place of the conference. If
taxpayer in writing and approved by              conferences are being arranged with re-
the Chief, Appeals Office.                       spect to more than one request for ad-
  (c) The Appeals Officer will submit            vice involving the same taxpayer, they
the statement of the taxpayer to the             will be so scheduled as to cause the
chief, Appeals Office, accompanied by a          least inconvenience to the taxpayer.
statement of the officer’s reasons why           The conference will be arranged by
the issue should not be referred to the          telephone, if possible, and must be held
National Office. The Chief will deter-           within 21 calendar days after contact
mine, on the basis of the statements             has been made. Extensions of time will
submitted, whether technical advice              be granted only if justified in writing
will be requested. If the Chief deter-           by the taxpayer and approved by the
mines that technical advice is not war-          appropriate Technical branch chief.
ranted, that official will inform the              (b) A taxpayer is entitled, as a mat-
taxpayer in writing that he/she pro-             ter of right, to only one conference in
poses to deny the request. In the letter         the National Office unless one of the
to the taxpayer the Chief will (except           circumstances discussed in (c) of this
in unusual situations where such ac-             subdivision exists. This conference will
tion would be prejudicial to the best in-        usually be held at the branch level in
terests of the Government) state spe-            the appropriate division (Corporation
cifically the reasons for the proposed           Tax Division or Individual Tax Divi-
denial. The taxpayer will be given 15            sion) in the Office of the Assistant
calendar days after receipt of the letter        Commissioner (Technical), and will
in which to notify the Chief whether             usually be attended by a person who
the taxpayer agrees with the proposed            has authority to act for the branch
denial. The taxpayer may not appeal              chief. In appropriate cases the Appeals
the decision of the Chief, Appeals Of-           Officer may also attend the conference
fice not to request technical advice             to clarify the facts in the case. If more
from the National Office. However, if            than one subject is discussed at the
the taxpayer does not agree with the             conference, the discussion constitutes
proposed denial, all data relating to            a conference with respect to each sub-
the issue for which technical advice             ject. At the request of the taxpayer or
has been sought, including the tax-              the taxpayer’s representative, the con-
payer’s written request and state-               ference may be held at an earlier stage
ments, will be submitted to the Na-              in the consideration of the case than
tional Office, Attention: Director, Ap-          the Service would ordinarily designate.
peals Division, for review. After review         A taxpayer has no ‘‘right’’ of appeal
in the National Office, the Appeals Of-          from an action of a branch to the direc-
fice will be notified whether the pro-           tor of a division or to any other Na-
posed denial is approved or dis-                 tional Office official.
approved.                                          (c) In the process of review of a hold-
  (d) While the matter is being re-              ing proposed by a branch, it may ap-
viewed in the National Office, the Ap-           pear that the final answer will involve
peals Office will suspend action on the          a reversal of the branch proposal with

                                            33
§ 601.106                                                                    26 CFR Ch. I (4–1–99 Edition)

a result less favorable to the taxpayer.                          (iii) of this subparagraph. If the case is
Or it may appear that an adverse hold-                            not complete with respect to any re-
ing proposed by a branch will be ap-                              quirement in subdivision (iii) (a)
proved, but on a new or different issue                           through (d) of this subparagraph, ap-
or on different grounds than those on                             propriate steps will be taken to com-
which the branch decided the case.                                plete the file. If any request for tech-
Under either of these circumstances,                              nical advice does not comply with the
the taxpayer or the taxpayer’s rep-                               requirements of subdivision (iii)(e) of
resentative will be invited to another                            this subparagraph, relating to the
conference. The provisions of this sub-                           statement of proposed deletions, the
paragraph limiting the number of con-                             National Office will make those dele-
ferences to which a taxpayer is entitled                          tions from the technical advice memo-
will not foreclose inviting a taxpayer                            randum which in the judgment of the
to attend further conferences when, in                            Commissioner are required by section
the opinion of National Office per-
                                                                  6110(c) of the Code.
sonnel, such need arises. All additional
                                                                     (b) If the taxpayer has requested a
conferences of this type discussed are
held only at the invitation of the Serv-                          conference in the National Office, the
ice.                                                              procedures in subdivision (v) of this
  (d) It is the responsibility of the tax-                        subparagraph will be followed.
payer to furnish to the National Office,                             (c) Replies to requests for technical
within 21 calendar days after the con-                            advice will be addressed to the Appeals
ference, a written record of any addi-                            office and will be drafted in two parts.
tional data, line of reasoning, prece-                            Each part will identify the taxpayer by
dents, etc., that were proposed by the                            name, address, identification number,
taxpayer and discussed at the con-                                and year or years involved. The first
ference but were not previously or ade-                           part (hereafter called the ‘‘technical
quately presented in writing. Exten-                              advice memorandum’’) will contain (1)
sions of time will be granted only if                             a recitation of the pertinent facts hav-
justified in writing by the taxpayer and                          ing a bearing on the issue; (2) a discus-
approved by the appropriate Technical                             sion of the facts, precedents, and rea-
branch chief. Any additional material                             soning of the National Office; and (3)
and a copy thereof should be addressed                            the conclusions of the National Office.
to and sent to the National Office                                The conclusions will give direct an-
which will forward the copy to the ap-                            swers, whenever possible, to the spe-
propriate Appeals Office. The Appeals                             cific questions of the Appeals office.
Office will be requested to give the                              The discussion of the issues will be in
matter prompt attention, will verify                              such detail that the Appeals office is
the additional facts and data, and will                           apprised of the reasoning underlying
comment on it to the extent deemed                                the conclusion. There shall accompany
appropriate.                                                      the technical advice memorandum a
  (e) A taxpayer or the taxpayer’s rep-                           notice, pursuant to section 6110(f)(1) of
resentative desiring to obtain informa-                           the Code, of intention to disclose the
tion as to the status of the case may do
                                                                  technical advice memorandum (includ-
so by contacting the following offices
                                                                  ing a copy of the version proposed to be
with respect to matters in the areas of
                                                                  open to public inspection and notations
their responsibility:
                                                                  of third party communications pursu-
             Official                  Telephone numbers,         ant to section 6110(d) of the Code)
                                        (Area Code 202)
                                                                  which the Appeals office shall forward
Director, Corporation Tax Division   566–4504, 566–4505.          to the taxpayer at such time that it
Director, Individual Tax Division    566–3767 or 566–3788.        furnishes a copy of the technical advice
  (vi) Preparation of technical advice                            memorandum to the taxpayer pursuant
memorandum by the National Office. (a)                            to (e) of this subdivision and subdivi-
Immediately upon receipt in the Na-                               sion (vii)(b) of this subparagraph.
tional Office, the technical employee                                (d) The second part of the reply will
to whom the case is assigned will ana-                            consist of a transmittal memorandum.
lyze the file to ascertain whether it                             In the unusual cases it will serve as a
meets the requirements of subdivision                             vehicle for providing the Appeals office

                                                             34
Internal Revenue Service, Treasury                                                § 601.106

administrative information or other in-           payer’s case taking into account the
formation which, under the nondisclo-             conclusions expressed in the technical
sure statutes, or for other reasons, may          advice memorandum. The effect of
not be discussed with the taxpayer.               technical advice on the taxpayer’s case
  (e) It is the general practice of the           is set forth in subdivision (viii) of this
Service to furnish a copy of the tech-            subparagraph.
nical advice memorandum to the tax-                  (b) The Appeals office will furnish the
payer after it has been adopted by the            taxpayer a copy of the technical advice
Appeals office. However, in the case of           memorandum described in subdivision
technical advice memorandums de-                  (vi)(c) of this subparagraph and the no-
scribed in section 6110(g)(5)(A) of the           tice pursuant to section 6110(f)(1) of the
Code, relating to cases involving crimi-          Code of intention to disclose the tech-
nal or civil fraud investigations and             nical advice memorandum (including a
jeopardy or termination assessments, a            copy of the version proposed to be open
copy of the technical advice memo-                to public inspection and notations of
randum shall not be furnished the tax-            third-party communications pursuant
payer until all proceedings with re-              to section 6110(d) of the Code). The pre-
spect to the investigations or assess-            ceding sentence shall not apply to
ments are completed.                              technical advice memorandums involv-
  (f) After receiving the notice pursu-           ing civil fraud or criminal investiga-
ant to section 6110(f)(1) of the Code of          tions, or jeopardy or termination as-
intention to disclose the technical ad-           sessments, as described in subdivision
vice memorandum, the taxpayer, if de-             (iii)(j) of this subparagraph (except to
siring to protest the disclosure of cer-          the extent provided in subdivision
tain information in the memorandum,               (vi)(e) of this subparagraph) or to docu-
must, within 20 days after the notice is          ments to which section 6104 of the Code
mailed, submit a written statement                applies.
identifying those deletions not made                 (c) In those cases in which the Na-
by the Internal Revenue Service which             tional Office advises the Appeals office
the taxpayer believes should have been            that it should not furnish a copy of the
made. The taxpayer shall also submit a            technical advice memorandum to the
copy of the version of the technical ad-          taxpayer, the Appeals office will so in-
vice memorandum proposed to be open               form the taxpayer if he/she requests a
to public inspection on which the tax-            copy.
payer indicates, by the use of brackets,             (viii) Effect of technical advice. (a) A
the deletions proposed by the taxpayer            technical advice memorandum rep-
but which have not been made by the               resents an expression of the views of
Internal Revenue Service. Generally,              the Service as to the application of
the Internal Revenue Service will not             law, regulations, and precedents to the
consider the deletion of any material             facts of a specific case, and is issued
which the taxpayer did not, prior to              primarily as a means of assisting Serv-
the time when the National Office sent            ice officials in the closing of the case
its reply to the request for technical            involved.
advice to the Appeals office, propose be             (b) Except in rare or unusual cir-
deleted. The Internal Revenue Service             cumstances, a holding in a technical
shall, within 20 days after receipt of            advice memorandum that is favorable
the response by the taxpayer to the no-           to the taxpayer is applied retro-
tice pursuant to section 6110(f)(1) of the        actively. Moreover, since technical ad-
Code, mail to the taxpayer its final ad-          vice, as described in subdivision (i) of
ministrative conclusion regarding the             this subparagraph, is issued only on
deletions to be made.                             closed transactions, a holding in a
  (vii) Action on technical advice in Ap-         technical advice memorandum that is
peals offices. (a) Unless the Chief, Ap-          adverse to the taxpayer is also applied
peals Office, feels that the conclusions          retroactively unless the Assistant
reached by the National Office in a               Commissioner or Deputy Assisitant
technical advice memorandum should                Commissioner (Technical) exercises the
be reconsidered and promptly requests             discretionary authority under section
such reconsideration, the Appeals of-             7805(b) of the Code to limit the retro-
fice will proceed to process the tax-             active effect of the holding. Likewise, a

                                             35
§ 601.106                                                      26 CFR Ch. I (4–1–99 Edition)

holding in a technical advice memo-                 compromise of tax liabilities, see
randum that modifies or revokes a                   § 601.203.
holding in a prior technical advice                    (3) Closing agreements. For jurisdic-
memorandum will also be applied                     tion of Appeals with respect to closing
retroactively, with one exception. If               agreements under section 7121 of the
the new holding is less favorable to the            Code relating to any internal revenue
taxpayer, it will generally not be ap-              tax liability, see § 601.202.
plied to the period in which the tax-                  (h) Reopening closed cases not docketed
payer relied on the prior holding in sit-           in the Tax Court. (1) A case not dock-
uations involving continuing trans-                 eted in the Tax Court and closed by Ap-
actions of the type described in                    peals on the basis of concessions made
§ 601.201(l)(7) and § 601.201(l)(8).                by both the Appeals and the taxpayer
   (c) The Appeals office is bound by               will not be reopened by action initiated
technical advice favorable to the tax-              by the Service unless the disposition
payer. However, if the technical advice             involved fraud, malfeasance, conceal-
is unfavorable to the taxpayer, the Ap-             ment or misrepresentation of material
peals office may settle the issue in the            fact, or an important mistake in math-
usual manner under existing authority.              ematical calculations, and then only
For the effect of technical advice in               with the approval of the Regional Di-
Employee Plans and Exempt Organiza-                 rector of Appeals.
tion cases see § 601.201(n)(9)(viii).                  (2) Under certain unusual cir-
   (d) In connection with section 446 of            cumstances favorable to the taxpayer,
the Code, taxpayers may request per-                such as retroactive legislation, a case
mission from the Assistant Commis-                  not docketed in the Tax Court and
sioner (Technical) to change a method               closed by Appeals on the basis of con-
of accounting and obtain a 10-year (or              cessions made by both Appeals and the
less) spread of the resulting adjust-               taxpayer may be reopened upon writ-
                                                    ten application from the taxpayer, and
ments. Such a request should be made
                                                    only with the approval of the Regional
prior to or at the first Appeals con-
                                                    Director of Appeals. The processing of
ference. The Appeals office has author-
                                                    an     application     for    a   tentative
ity to allow a change and the resulting
                                                    carryback adjustment or of a claim for
spread without referring the case to
                                                    refund or credit for an overassessment
Technical.
                                                    (for a year involved in the prior clos-
   (e) Technical advice memorandums                 ing) attributable to a claimed deduc-
often form the basis for revenue rul-               tion or credit for a carryback provided
ings. For the description of revenue                by law, and not included in a previous
rulings and the effect thereof, see                 Appeals determination, shall not be
§§ 601.601(d)(2)(i)(a) and 601.601(d)(2)(v).        considered a reopening requiring ap-
   (f) An Appeals office may raise an               proval. A subsequent assessment of an
issue in a taxable period, even though              excessive tentative allowance shall
technical advice may have been asked                likewise not be considered such a re-
for and furnished with regard to the                opening. The Director of the Appeals
same or a similar issue in any other                Division may authorize, in advance,
taxable period.                                     the reopening of similar classes of
   (g) Limitation on the jurisdiction and           cases where legislative enactments or
function of Appeals—(1) Overpayment of              compelling administrative reasons re-
more than $200,000. If Appeals deter-               quire such advance approval.
mines that there is an overpayment of                  (3) A case not docketed in the Tax
income, war profits, excess profits, es-            Court and closed by Appeals on a basis
tate, generation–skipping transfer, or              not involving concessions made by
gift tax, or any tax imposed by chap-               both Appeals and the taxpayer will not
ters 41 through 44, including penalties             be reopened by action initiated by the
and interest, in excess of $200,000, such           Service unless the disposition involved
determination will be considered by                 fraud, malfeasance, concealment or
the Joint Committee on Taxation, See                misrepresentation of material fact, an
§ 601.108                                           important mistake in mathematical
   (2) Offers in compromise. For jurisdic-          calculation,     or    such     other  cir-
tion of Appeals with respect to offers in           cumstance that indicates that failure

                                               36
Internal Revenue Service, Treasury                                                           § 601.108

to take such action would be a serious                  to necessitate temporarily withholding
administrative omission, and then only                  a copy.
with the approval of the Regional Di-                     (2) A taxpayer who may be the sub-
rector of Appeals.                                      ject of a criminal recommendation will
  (4) A case not docketed in the Tax                    be afforded a district Criminal Inves-
Court and closed by the Appeals on a                    tigation conference when he requests
basis not involving concessions made                    one or where the Chief, Criminal Inves-
by both Appeals and the taxpayer may                    tigation Division, makes a determina-
be reopened by the taxpayer by any ap-                  tion that such a conference will be in
propriate means, such as by the filing                  the best interests of the Government.
of a timely claim for refund.                           At the conference, the IRS representa-
  (i) Special procedures for crude oil                  tive will inform the taxpayer by a gen-
windfall profit tax cases. For special pro-             eral oral statement of the alleged
cedures relating to crude oil windfall                  fraudulent features of the case, to the
profit tax cases, see § 601.405.                        extent consistent with protecting the
((5 U.S.C. 301 and 552) 80 Stat. 379 and 383;           Government’s interests, and, at the
sec. 7805 of the Internal Revenue Code of               same time, making available to the
1954, 68A Stat. 917 (26 U.S.C. 7805))                   taxpayer sufficient facts and figures to
[32 FR 15990, Nov. 22, 1967]                            acquaint him with the basis, nature,
                                                        and other essential elements of the
  EDITORIAL NOTE: For FEDERAL REGISTER ci-
tations affecting § 601.106, see the List of CFR
                                                        proposed criminal charges against him.
Sections Affected in the Finding Aids sec-                (c) Processing of cases after investiga-
tion of this volume.                                    tion. The Chief, Criminal Investigation
                                                        Division, shall ordinarily notify the
§ 601.107 Criminal investigation func-                  subject of an investigation and his au-
    tions.                                              thorized representative, if any, when
  (a) General. Each district has a Crimi-               he forwards a case to the Regional
nal Investigation function whose mis-                   Counsel with a recommendation for
sion is to encourage and achieve the                    prosecution. The rule will not apply if
highest possible degree of voluntary                    the case is with a United States Attor-
compliance with the internal revenue                    ney.
laws by: Enforcing the statutory sanc-
                                                        [33 FR 17235, Nov. 21, 1968, as amended at 38
tions applicable to income, estate, gift,
                                                        FR 9227, Apr. 12, 1973; 39 FR 8917, Mar. 7, 1974;
employment, and certain excise taxes                    43 FR 53029, Nov. 15, 1978]
through the investigation of possible
criminal violations of such laws and                    § 601.108 Review of overpayments ex-
the recommendation (when warranted)                         ceeding $200,000.
of prosecution and/or assertion of the
50 percent ad valorem addition to the                     (a) General. Section 6405(a) of the
tax; developing information concerning                  Code provides that no refund or credit
the extent of criminal violations of all                of income, war profits, excess profits,
Federal tax laws (except those relating                 estate, or gift taxes or any tax imposed
to alcohol, tobacco, narcotics, and fire-               by Chapters 41 through 44, including
arms); measuring the effectiveness of                   penalties and interest, in excess of
the investigation process; and pro-                     $200,000 may be made until after the ex-
viding protection of persons and of                     piration of 30 days from the date a re-
property and other enforcement coordi-                  port is made to the Joint Committee
nation as required.                                     on Taxation. Taxpayers, in cases re-
  (b) Investigative procedure. (1) A wit-               quiring review by the Joint Com-
ness when questioned in an investiga-                   mittee, are afforded the same appeal
tion conducted by the Criminal Inves-                   rights as other taxpayers. In general,
tigation Division may have counsel                      these cases follow regular procedures,
present to represent and advise him.                    except for preparation of reports to and
Upon request, a copy of an affidavit or                 review by the Joint Committee.
transcript of a question and answer                       (b) Reports to Joint Committee. In any
statement will be furnished a witness                   case in which no protest is made to Ap-
promptly, except in circumstances                       peals and no petition docketed in the
deemed by the Regional Commissioner                     Tax Court, the report to the Joint

                                                   37
§ 601.109                                                          26 CFR Ch. I (4–1–99 Edition)

Committee is prepared by a Joint Com-                   rangement, or wage earner pro-
mittee Coordinator, who is an Exam-                     ceedings, under Chapters I to VII, sec-
ination Division regional specialist. In                tion 77, Chapters X, XI, XII, and XIII of
cases in which a protest has been made,                 the Bankruptcy Act. The term ‘‘ap-
the report to the Joint Committee is                    proval of a petition in any other pro-
prepared by an Appeals officer; in cases                ceeding under the Bankruptcy Act’’ in-
in which a petition is docketed, either                 cludes the filing of a petition under
an Appeals officer or a Counsel attor-                  Chapters XI to XIII of the Bankruptcy
ney prepares the report, depending on                   Act with a court of competent jurisdic-
the circumstances.                                      tion. A fiduciary in any proceeding
  (c) Procedure after report to Joint Com-              under the Bankruptcy Act (including a
mittee. After compliance with section                   trustee, receiver, debtor in possession,
6405 of the Code, the case is processed                 or other person designated by the court
for issuance of a certificate of over-                  as in control of the assets or affairs of
assessment, and payment or credit of                    a debtor) or a receiver in any receiver-
any overpayment. If the final deter-                    ship proceeding may be required, as
mination involves a rejection of a                      provided in regulations prescribed
claimed overpayment in whole or in                      under section 6036 of the Code, to give
part, a statutory notice of disallowance                notice in writing to the district direc-
will be sent by certified or registered                 tor of his qualification as such. Failure
mail to the taxpayer, except where the                  on the part of such fiduciary in a re-
taxpayer has filed a written waiver of                  ceivership proceeding or a proceeding
such notice of disallowance.                            under the Bankruptcy Act to give such
[32 FR 15990, Nov. 22, 1967, as amended at 42           notice, when required, results in the
FR 46519, Sept. 16, 1977; 43 FR 44503, Sept. 28,        suspension of the running of the period
1978; 43 FR 53030, Nov. 15, 1978; 45 FR 7255,           of limitations on the making of assess-
Feb. 1, 1980]                                           ments from the date of the institution
                                                        of the proceeding to the date upon
§ 601.109 Bankruptcy and receivership                   which such notice is received by the
     cases.                                             district director, and for an additional
   (a) General. (1) Upon the adjudication               30 days thereafter. However, in no case
of bankruptcy of any taxpayer in any                    where the required notice is not given
liquidating proceeding, the filing or                   shall the suspension of the running of
(where approval is required by the                      the period of limitations on assessment
Bankruptcy Act) the approval of a peti-                 exceed 2 years. See section 6872 of the
tion of, or the approval of a petition                  Code.
against, any taxpayer in any other pro-                   (2) Except in cases where depart-
ceeding under the Bankruptcy Act or                     mental instructions direct otherwise,
the appointment of a receiver for any                   the district director will, promptly
taxpayer in any receivership pro-                       after ascertaining the existence of any
ceeding before a court of the United                    outstanding     Federal    tax   liability
States or of any State or Territory or                  against a taxpayer in any proceeding
of the District of Columbia, the assess-                under the Bankruptcy Act or receiver-
ment of any deficiency in income, prof-                 ship proceeding, and in any event with-
its, estate, or gift tax (together with                 in the time limited by appropriate pro-
all interests, additional amounts, or                   visions of law or the appropriate orders
additions to the tax provided for by                    of the court in which such proceeding
law) shall be made immediately. See                     is pending, file a proof of claim cov-
section 6871 of the Code. In such cases                 ering such liability in the court in
the restrictions imposed by section                     which the proceeding is pending. Such
6213(a) of the Code upon assessments                    a claim may be filed regardless of
are not applicable. (In the case of an                  whether the unpaid taxes involved have
assignment for the benefit of creditors,                been assessed. Whenever an immediate
the assessment will be made under sec-                  assessment is made of any income, es-
tion 6861, relating to jeopardy assess-                 tate, or gift tax after the commence-
ments. See § 601.105(h).) Cases in which                ment of a proceeding the district direc-
immediate assessment will be made in-                   tor will send to the taxpayer notice
clude those of taxpayers in receivership                and demand for payment together with
or in bankruptcy, reorganization, ar-                   a copy of such claim.

                                                   38
Internal Revenue Service, Treasury                                                  § 601.109

  (b) Procedure in office of district direc-        bearing upon the tax liability, in which
tor. (1) While the district director is re-         event the conference will be continued
quired by section 6871 of the Code to               to a later date.
make immediate assessment of any de-                   (c) Procedure before the Appeals office.
ficiency in income, estate, or gift                 If an income, estate, or gift tax case is
taxes, such assessment is not made as               under consideration by an Appeals of-
a jeopardy assessment (see paragraph                fice (whether before or after issuance
(h) of § 601.105), and the provisions of            of a statutory notice of deficiency) at
section 6861 of the Code do not apply to            the time of either: (i) The adjudication
any assessment made under section                   of bankruptcy of the taxpayer in any
6871. Therefore, the notice of deficiency           liquidating proceeding; (ii) the filing
provided for in section 6861(b) will not            with a court of competent jurisdiction
be mailed to the taxpayer. Neverthe-                or (where approval is required by the
less, Letter 1005 (DO) will be prepared             Bankruptcy Act) the approval of a peti-
and addressed in the name of the tax-               tion of, or against, the taxpayer in any
payer, immediately followed by the                  other proceeding under the Bankruptcy
name of the trustee, receiver, debtor in            Act; or (iii) the appointment of any re-
possession, or other person designated              ceiver, then the case will be returned
to be in control of the assets or affairs           to the district director for assessment
of the debtor by the court in which the             (if not previously made), for issuance of
bankruptcy or receivership proceeding               the Letter 1005 (DO), and for filing
is pending. Such letter will state how              proof of claim in the proceeding. Excise
the deficiency was computed, advise                 and employment tax cases pending in
that within 30 days a written protest               the Appeals office at such time will
under penalties of perjury may be filed             likewise be returned to the district di-
with the district director showing                  rector for assessment (if not previously
wherein the deficiency is claimed to be             made) and for filing proof of claim in
incorrect, and advise that upon request             the proceeding. A petition for redeter-
an Appeals office conference will be                mination of a deficiency may not be
granted with respect to such defi-                  filed in the Tax Court after the adju-
ciency. If, after protest is filed (in trip-        dication of bankruptcy, the filing or
licate), and an Appeals office con-                 (where approval is required by the
ference is held, adjustment appears                 Bankruptcy Act) the approval of a peti-
necessary in the deficiency, appro-                 tion of, or the approval of a petition
priate action will be taken. Except                 against, the taxpayer in any other
where the interests of the Government               bankruptcy proceeding, or the appoint-
require otherwise, Letters 1005 (DO) are            ment of a receiver. See section 6871(b)
issued by the office of the district di-            of the Code. However, the Tax Court is
rector.                                             not deprived of jurisdiction where the
  (2) The immediate assessment re-                  adjudication of bankruptcy, the filing
quired by section 6871 of the Code rep-             or (where approval is required by the
resents an exception to the usual re-               Bankruptcy Act) the approval of a peti-
strictions on the assessment of Federal             tion of, or the approval of a petition
income, estate, and gift taxes. Since               against, the taxpayer in any other
there are no restrictions on the assess-            bankruptcy proceeding, or the appoint-
ment of Federal excise or employment                ment of a receiver, occurred after the
taxes, immediate assessment of such                 filing of the petition. In such a case,
taxes will be made in any case where                the jurisdiction of the bankruptcy or
section 6871 of the Code would require              receivership court and the Tax Court is
immediate assessment of income, es-                 concurrent.
tate, or gift taxes.                                   (d) Priority of claims. Under section
  (3) If after such assessment a claim              3466 of the Revised Statutes and sec-
for abatement is filed and such claim is            tion 3467 of the Revised Statutes, as
accompanied by a request in writing                 amended, taxes are entitled to priority
for a conference, an Appeals office con-            over other claims therein stated and
ference will be granted. Ordinarily,                the receiver or other person designated
only one conference will be held, unless            as in control of the assets or affairs of
it develops that additional information             the debtor by the court in which the
can be furnished which has a material               receivership proceeding is pending may

                                               39
§ 601.201                                                          26 CFR Ch. I (4–1–99 Edition)

be held personally liable for failure on                   Subpart B—Rulings and Other
his part to protect the priority of the                         Specific Matters
Government respecting taxes of which
he has notice. Under section 64 of the                  § 601.201 Rulings and determinations
Bankruptcy Act, taxes may be entitled                       letters.
to priority over other claims therein                     (a) General practice and definitions. (1)
stated and the trustee, receiver, debtor                It is the practice of the Internal Rev-
in possession or other person des-                      enue Service to answer inquiries of in-
ignated as in control of the assets or                  dividuals and organizations, whenever
affairs of the debtor by the court in                   appropriate in the interest of sound tax
which the bankruptcy proceeding is                      administration, as to their status for
pending may be held personally liable                   tax purposes and as to the tax effects
for any failure on his part to protect a                of their acts or transactions. One of the
priority of the Government respecting                   functions of the National Office of the
taxes of which he has notice and which                  Internal Revenue Service is to issue
are entitled to priority under the                      rulings in such matters. If a taxpayer’s
Bankruptcy Act. Sections 77(e), 199,                    request for a ruling concerns an action
337(2), 455, and 659(6) of the Bankruptcy               that may have an impact on the envi-
Act also contain provisions with re-                    ronment, compliance by the Service
spect to the rights of the United States                with the requirements of the National
                                                        Environmental Policy Act of 1969 (Pub.
relative to priority of payment. Bank-
                                                        L. 91–190) may result in delaying
ruptcy courts have jurisdiction under
                                                        issuing the ruling. Accordingly, tax-
the Bankruptcy Act to determine all
                                                        payers requesting rulings should take
disputes regarding the amount and the                   this factor into account. District direc-
validity of tax claims against a bank-                  tors apply the statutes, regulations,
rupt or a debtor in a proceeding under                  Revenue Rulings, and other precedents
the Bankruptcy Act. A receivership                      published in the Internal Revenue Bul-
proceeding or an assignment for the                     letin in the determination of tax liabil-
benefit of creditors does not discharge                 ity, the collection of taxes, and the
any portion of a claim of the United                    issuance of determination letters in an-
States for taxes and any portion of                     swer to taxpayers’ inquiries or re-
such claim allowed by the court in                      quests. For purposes of this section any
which the proceeding is pending and                     reference to district director or district
which remains unsatisfied after the                     office also includes, where appropriate,
termination of the proceeding shall be                  the Office of the Director, Office of
collected with interest in accordance                   International Operations.
with law. A bankruptcy proceeding                         (2) A ruling is a written statement
under Chapters I through VII of the                     issued to a taxpayer or his authorized
Bankruptcy Act does discharge that                      representative by the National Office
portion of a claim of the United States                 which interprets and applies the tax
which became legally due and owning                     laws to a specific set of facts. Rulings
more than three years preceding bank-                   are issued only by the National Office.
ruptcy, with certain exceptions pro-                    The issuance of rulings is under the
vided in the Bankruptcy Act as does a                   general supervision of the Assistant
                                                        Commissioner (Technical) and has been
proceeding under section 77 or Chapter
                                                        largely redelegated to the Director,
X of the Bankruptcy Act. Any taxes
                                                        Corporation Tax Division and Director,
which are dischargeable under the
                                                        Individual Tax Division.
Bankruptcy        Act     which    remain
                                                          (3) A determination letter is a written
unsatisfied after the termination of the                statement issued by a district director
proceeding may be collected only from                   in response to a written inquiry by an
exempt or abandoned property.                           individual or an organization that ap-
[32 FR 15990, Nov. 22, 1967, as amended at 33           plies to the particular facts involved,
FR 6821, May 4, 1968; 35 FR 15917, Oct. 9, 1970;        the principles and precedents pre-
43 FR 44503, Sept. 28, 1978; 45 FR 7255, Feb. 1,        viously announced by the National Of-
1980]                                                   fice. A determination letter is issued



                                                   40
Internal Revenue Service, Treasury                                                 § 601.201

only where a determination can be                  entered into on the basis of the holding
made on the basis of clearly estab-                of the ruling letter. Closing agreements
lished rules as set forth in the statute,          are final and conclusive except upon a
Treasury decision, or regulation, or by            showing of fraud, malfeasance, or mis-
a ruling, opinion, or court decision               representation of material fact. They
published in the Internal Revenue Bul-             may be entered into where it is advan-
letin. Where such a determination can-             tageous to have the matter perma-
not be made, such as where the ques-               nently and conclusively closed, or
tion presented involves a novel issue or           where a taxpayer can show good and
the matter is excluded from the juris-             sufficient reasons for an agreement and
diction of a district director by the              the Government will sustain no dis-
provisions of paragraph (c) of this sec-           advantage by its consummation. In ap-
tion, a determination letter will not be           propriate cases, taxpayers may be re-
issued. However, with respect to deter-            quired to enter into a closing agree-
mination letters in the pension trust              ment as a condition to the issuance of
area, see paragraph (o) of this section.           a ruling. Where in a single case, closing
  (4) An opinion letter is a written state-        agreements are requested on behalf of
ment issued by the National Office as              each of a number of taxpayers, such
to the acceptability of the form of a              agreements are not entered into if the
master or prototype plan and any re-               number of such taxpayers exceed 25.
lated trust or custodial account under             However, in a case where the issue and
sections 401 and 501(a) of the Internal
                                                   holding are identical as to all of the
Revenue Code of 1954.
                                                   taxpayers and the number of taxpayers
  (5) An information letter is a state-
                                                   is in excess of 25, a Mass Closing Agree-
ment issued either by the National Of-
                                                   ment will be entered into with the tax-
fice or by a district director which does
                                                   payer who is authorized by the others
no more than call attention to a well-
established interpretation or principle            to represent the entire group. See, for
of tax law, without applying it to a               example, Rev. Proc. 78–15, 1978–2 C.B.
specific set of facts. An information              488, and Rev. Proc. 78–16, 1978–2 C.B.
letter may be issued when the nature               489.
of the request from the individual or                 (b) Rulings issued by the National Of-
the organization suggests that it is               fice. (1) In income and gift tax matters
seeking general information, or where              and matters involving taxes imposed
the request does not meet all the re-              under Chapter 42 of the Code, the Na-
quirements of paragraph (e) of this sec-           tional Office issues rulings on prospec-
tion, and it is believed that such gen-            tive transactions and on completed
eral information will assist the indi-             transactions before the return is filed.
vidual or organization.                            However, rulings will not ordinarily be
  (6) A Revenue Ruling is an official in-          issued if the identical issue is present
terpretation by the Service which has              in a return of the taxpayer for a prior
been published in the Internal Revenue             year which is under active examination
Bulletin. Revenue Rulings are issued               or audit by a district office, or is being
only by the National Office and are                considered by a branch office of the Ap-
published for the information and guid-            pellate Division. The National Office
ance of taxpayers, Internal Revenue                issues rulings involving the exempt
Service officials, and others concerned.           status of organizations under section
  (7) A closing agreement, as the term is          501 or 521 of the Code, only to the ex-
used herein, is an agreement between               tent provided in paragraph (n) of this
the Commissioner of Internal Revenue               section, Revenue Procedure 72–5, Inter-
or his delegate and a taxpayer with re-            nal Revenue Bulletin No. 1972–1, 19, and
spect to a specific issue or issues en-            Revenue Procedure 68–13, C.B. 1968–1,
tered into pursuant to the authority               764. The National Office issues rulings
contained in section 7121 of the Inter-            as to the foundation status of certain
nal Revenue Code. Such a closing                   organizations under sections 509(a) and
agreement is based on a ruling which               4942(j) (3) of the Code only to the extent
has been signed by the Commissioner                provided in paragraph (r) of this sec-
or his delegate and in which it is indi-           tion. The National Office issues rulings
cated that a closing agreement will be             involving qualification of plans under

                                              41
§ 601.201                                                   26 CFR Ch. I (4–1–99 Edition)

section 401 of the Code only to the ex-          sion) in connection with an examina-
tent provided in paragraph (o) of this           tion or audit of the liability of the
section. The National Office issues              same taxpayer for the same or a prior
opinion letters as to the acceptability          period.
of the form of master or prototype                  (5) Pending the adoption of regula-
plans and any related trusts or custo-           tions (either temporary or final) that
dial accounts under sections 401 and             reflect the provisions of any Act, con-
501(a) of the Code only to the extent            sideration will be given to the issuance
provided in paragraphs (p) and (q) of            of rulings under the conditions set
this section. The National Office will           forth below.
not issue rulings with respect to the re-           (i) If an inquiry presents an issue on
placement of involuntarily converted             which the answer seems to be clear
property, even though replacement has            from an application of the provisions of
not been made, if the taxpayer has filed         the statute to the facts described, a
a return for the taxable year in which           ruling will be issued in accordance with
the property was converted. However,             usual procedures.
see paragraph (c)(6) of this section as             (ii) If an inquiry presents an issue on
to the authority of district directors to        which the answer seems reasonably
issue determination letters in this con-         certain but not entirely free from
nection.                                         doubt, a ruling will be issued only if it
  (2) In estate tax matters, the Na-             is established that a business emer-
tional Office issues rulings with respect        gency requires a ruling or that unusual
to transactions affecting the estate tax         hardship will result from failure to ob-
of a decedent before the estate tax re-          tain a ruling.
turn is filed. It will not rule with re-            (iii) If an inquiry presents an issue
spect to such matters after the estate           that cannot be reasonably resolved
tax return has been filed, nor will it           prior to the issuance of regulations, a
rule on matters relating to the applica-         ruling will not be issued.
tion of the estate tax to property or               (iv) In any case in which the tax-
the estate of a living person.                   payer believes that a business emer-
  (3) In employment and excise tax               gency exists or that an unusual hard-
matters (except taxes imposed under              ship will result from failure to obtain a
Chapter 42 of the Code), the National            ruling, he should submit with the re-
Office issues rulings with respect to            quest a separate letter setting forth
prospective transactions and to com-             the facts necessary for the Service to
pleted transactions either before or             make a determination in this regard.
after the return is filed. However, the          In this connection, the Service will not
National Office will not ordinarily rule         deem a ‘‘business emergency’’ to result
with respect to an issue, whether re-            from circumstances within the control
lated to a prospective or a completed            of the taxpayer such as, for example,
transaction, if it knows or has reason           scheduling within an inordinately
to believe that the same or an identical         short time the closing date for a trans-
issue is before any field office (includ-        action or a meeting of the board of di-
ing any branch office of the Appellate           rectors or the shareholders of a cor-
Division) in connection with an exam-            poration.
ination or audit of the liability of the            (c) Determination letters issued by dis-
same taxpayer for the same or a prior            trict directors. (1) In income and gift tax
period.                                          matters, and in matters involving
  (4) The Service will not issue rulings         taxes imposed under Chapter 42 of the
to business, trade, or industrial asso-          Code, district directors issue deter-
ciations or to other similar groups re-          mination letters in response to tax-
lating to the application of the tax             payers’ written requests submitted to
laws to members of the group. How-               their offices involving completed trans-
ever, rulings may be issued to such              actions which affect returns over which
groups or associations relating to their         they have audit jurisdiction, but only
own tax status or liability provided             if the answer to the question presented
such tax status or liability is not an           is covered specifically by statute,
issue before any field office (including         Treasury Decision or regulation, or
any branch office of the Appellate Divi-         specifically by a ruling, opinion, or

                                            42
Internal Revenue Service, Treasury                                                § 601.201

court decision published in the Internal          letin, where (i) it appears that the tax-
Revenue Bulletin. A determination let-            payer has directed a similar inquiry to
ter will not usually be issued with re-           the National Office, (ii) the identical
spect to a question which involves a re-          issue involving the same taxpayer is
turn to be filed by the taxpayer if the           pending in a case before the Appellate
identical question is involved in a re-           Division, (iii) the determination letter
turn or returns already filed by the              is requested by an industry, trade asso-
taxpayer. District directors may not              ciation, or similar group, or (iv) the re-
issue determination letters as to the             quest involves an industrywide prob-
tax consequence of prospective or pro-            lem. Under no circumstances will a dis-
posed transactions, except as provided            trict director issue a determination
in subparagraphs (5) and (6) of this              letter unless it is clearly indicated that
paragraph.                                        the inquiry is with regard to a tax-
  (2) In estate and gift tax matters, dis-        payer or taxpayers who have filed or
trict directors issue determination let-          are required to file returns over which
ters in response to written requests              his office has or will have audit juris-
submitted to their offices affecting the          diction. Notwithstanding the provi-
estate tax returns of decedents that              sions of subparagraph (3) of this para-
will be audited by their offices, but             graph, a district director will not issue
only if the answer to the questions pre-          a determination letter on an employ-
sented are specifically covered by stat-          ment tax question when the specific
ute, Treasury Decision or regulation,             question involved has been or is being
or by a ruling, opinion, or court deci-           considered by the Central Office of the
sion published in the Internal Revenue            Social Security Administration. Nor
Bulletin. District directors will not             will district directors issue determina-
issue determination letters relating to           tion letters on excise tax questions if a
matters involving the application of              request is for a determination of a con-
the estate tax to property or the estate          structive sales price under section
of a living person.                               4216(b) or 4218(e) of the Code. However,
  (3) In employment and excise tax                the National Office will issue rulings in
matters (except excise taxes imposed              this area. See paragraph (d)(2) of this
under Chapter 42 of the Code), district           section.
directors issue determination letters in            (5) District directors issue determina-
response to written requests from tax-            tion letters as to the qualification of
payers who have filed or who are re-              plans under sections 401 and 405(a) of
quired to file returns over which they            the Code, and as to the exempt status
have audit jurisdiction, but only if the          of related trusts under section 501 of
answers to the questions presented are            the Code, to the extent provided in
specifically covered by statute, Treas-           paragraphs (o) and (q) of this section.
ury Decision or regulation, or a ruling,          Selected district directors also issue
opinion, or court decision published in           determination letters as to the quali-
the Internal Revenue Bulletin. Because            fication of certain organizations for ex-
of the impact of these taxes upon the             emption from Federal income tax
business operation of the taxpayer and            under sections 501 and 521 of the Code,
because of special problems of adminis-           to the extent provided in paragraph (n)
tration both to the Service and to the            of this section. Selected district direc-
taxpayer, district directors may take             tors also issue determination letters as
appropriate action in regard to such re-          to the qualification of certain organi-
quests, whether they relate to com-               zations for foundation status under
pleted or prospective transactions or             sections 509(a) and 4942(j)(3) of the
returns previously filed or to be filed.          Code, to the extent provided in para-
  (4) Notwithstanding the provisions of           graph (r) of this section.
subparagraphs (1), (2), and (3), of this            (6) District directors issue determina-
paragraph, a district director will not           tion letters with regard to the replace-
issue a determination letter in re-               ment of involuntarily converted prop-
sponse to an inquiry which presents a             erty under section 1033 of the Code
question specifically covered by stat-            even though the replacement has not
ute, regulations, rulings, etc., pub-             been made, if the taxpayer has filed his
lished in the Internal Revenue Bul-               income tax return for the year in

                                             43
§ 601.201                                                     26 CFR Ch. I (4–1–99 Edition)

which the property was involuntarily               (i) more than one issue is presented in
converted.                                         the request or (ii) a closing agreement
  (7) A request received by a district di-         is requested with respect to the issue
rector with respect to a question in-              presented. There shall accompany the
volved in an income, estate, or gift tax           request a declaration, in the following
return already filed will, in general, be          form: ‘‘Under penalties of perjury, I de-
considered in connection with the ex-              clare that I have examined this re-
amination of the return. If response is            quest, including accompanying docu-
made to such inquiry prior to an exam-             ments, and to the best of my knowl-
ination or audit, it will be considered a          edge and belief, the facts presented in
tentative finding in any subsequent ex-            support of the requested ruling or de-
amination or audit of the return.                  termination letter are true, correct,
  (d) Discretionary authority to issue rul-        and complete’’. The declaration must
ings and determination letters. (1) It is          accompany requests that are post-
the practice of the Service to answer              marked or hand delivered to the Inter-
inquiries of individuals and organiza-             nal Revenue Service after October 31,
tions, whenever appropriate in the in-             1976. The declaration must be signed by
terest of sound tax administration, as             the person or persons on whose behalf
to their status for tax purposes and the           the request is made.
tax effect of their acts or transactions.             (2) Each request for a ruling or a de-
  (2) There are, however, certain areas            termination letter must contain a com-
where, because of the inherently fac-              plete statement of all relevant facts re-
tual nature of the problem involved, or            lating to the transaction. Such facts
for other reasons, the Service will not            include names, addresses, and taxpayer
issue rulings or determination letters.            identifying numbers of all interested
A ruling or determination letter is not            parties; the location of the district of-
issued on alternative plans of proposed            fice that has or will have audit juris-
transactions or on hypothetical situa-             diction over the return or report of
tions. A specific area or a list of these          each party; a full and precise state-
areas is published from time to time in            ment of the business reasons for the
the Internal Revenue Bulletin. Such                transaction; and a carefully detailed
list is not all inclusive since the Serv-          description of the transaction. In addi-
ice may decline to issue rulings or de-            tion, true copies of all contracts, wills,
termination letters on other questions             deeds, agreements, instruments, and
whenever warranted by the facts or cir-            other documents involved in the trans-
cumstances of a particular case. The               action must be submitted with the re-
National Office and district directors             quest. However, relevant facts reflected
may, when it is deemed appropriate                 in documents submitted must be in-
and in the best interest of the Service,           cluded in the taxpayer’s statement and
issue information letters calling atten-           not merely incorporated by reference,
tion to well-established principles of             and must be accompanied by an anal-
tax law.                                           ysis of their bearing on the issue or
  (3) The National Office will issue rul-          issues, specifying the pertinent provi-
ings in all cases on prospective or fu-            sions. (The term ‘‘all interested par-
ture transactions when the law or reg-             ties’’ is not to be construed as requir-
ulations require a determination of the            ing a list of all shareholders of a widely
effect of a proposed transaction for tax           held corporation requesting a ruling re-
purposes, as in the case of a transfer             lating to a reorganization, or a list of
coming within the provisions of sec-               employees where a large number may
tions 1491 and 1492 of the Code, or an             be involved in a plan.) The request
exchange coming within the provisions              must contain a statement whether, to
of section 367 of the Code. The National           the best of the knowledge of the tax-
Office will issue rulings in all cases in-         payer or his representative, the iden-
volving the determination of a con-                tical issue is being considered by any
structive sales price under section                field office of the Service in connection
4216(b) or 4218(e) of the Code.                    with an active examination or audit of
  (e) Instructions to taxpayers. (1) A re-         a tax return of the taxpayer already
quest for a ruling or a determination              filed or is being considered by a branch
letter is to be submitted in duplicate if          office of the Appellate Division. Where

                                              44
Internal Revenue Service, Treasury                                               § 601.201

the request pertains to only one step of         information to be included in the rul-
a larger integrated transaction, the             ing request.
facts, circumstances, etc., must be sub-           (v) See Rev. Proc. 77–30, 1977–2 C.B.
mitted with respect to the entire trans-         539, and Rev. Proc. 78–18, 1978–2 C.B.
action. The following list contains ref-         491, relating to rules for the issuance of
erences to revenue procedures for ad-            an advance ruling that a proposed sale
vance ruling requests under certain              of employer stock to a related qualified
sections of the Code.                            defined contribution plan of deferred
  (i) For ruling requests under section          compensation will be a sale of the
103 of the Code, see Rev. Proc. 79–4,            stock rather than a distribution of
1979–1 C.B. 483, as amplified by Rev.            property.
Proc. 79–12, 1979–1 C.B. 492. Revenue              (vi) For ruling requests under section
Procedure 79–12 sets forth procedures            302 or section 311 of the Code, see Rev.
for submitting ruling requests to which          Proc. 73–35, 1973–2 C.B. 490. Revenue
sections 103 and 7478 of the Code apply.         Procedure 73–35 sets forth the informa-
  (ii) For ruling requests under section         tion to be included in the ruling re-
367 of the Code, see Rev. Proc. 68–23,           quest.
1968–1 C.B. 821, as amplified by Rev.              (vii) For ruling requests under sec-
Proc. 76–20, 1976–1 C.B. 560, Rev. Proc.         tion 337 of the Code (and related sec-
77–5, 1977–1 C.B. 536, Rev. Proc. 78–27,         tion 331) see Rev. Proc. 75–32, 1975–2
1978–2 C.B. 526, and Rev. Proc. 78–28,           C.B. 555. Revenue Procedure 75–32 sets
1978–2 C.B. 526. Revenue Procedure 68–23         forth the information to be included in
                                                 the ruling request.
contains guidelines for taxpayers and
                                                   (viii) For ruling requests under sec-
their representatives in connection
                                                 tion 346 of the Code (and related sec-
with issuing rulings under section 367.
                                                 tions 331 and 336), see Rev. Proc. 73–36,
Revenue Procedure 76–20 explains the
                                                 1973–2 C.B. 496. Revenue Procedure 73–36
effect of Rev. Rul. 75–561, 1975–2 C.B.
                                                 sets forth the information to be in-
129, on transactions described in sec-
                                                 cluded in the ruling request.
tion 3.03(1)(c) of Rev. Proc. 68–23. Rev-
                                                   (ix) For ruling requests under section
enue Procedure 77–5 sets forth proce-
                                                 355 of the Code, see Rev. Proc. 75–35,
dures for submitting ruling requests
                                                 1975–2 C.B. 561. Revenue Procedure 75–35
under section 367, and the administra-
                                                 sets forth the information to be in-
tive remedies available to a taxpayer            cluded in the ruling request.
within the Service after such rulings              (x) For ruling requests under section
have been issued. Revenue Procedure              368(a)(1)(E) of the Code, see Rev. Proc.
78–27 relates to the notice requirement          78–33, 1978–2 C.B. 532. Revenue Proce-
set forth in the setion 367(b) temporary         dure 78–33 sets forth the information to
regulations. Revenue Procedure 78–28             be included in the ruling request.
relates to the timely filing of a section          (xi) For ruling requests concerning
367(a) ruling request.                           the classification of an organization as
  (iii) For ruling requests under section        a limited partnership where a corpora-
351 of the Code, see Rev. Proc. 73–10,           tion is the sole general partner, see
1973–1 C.B. 760, and Rev. Proc. 69–19,           Rev. Proc. 72–13, 1972–1 C.B. 735. See
1969–2 C.B. 301. Revenue Procedure 73–10         also Rev. Proc. 74–17, 1974–1 C.B. 438,
sets forth the information to be in-             and Rev. Proc. 75–16, 1975–1 C.B. 676.
cluded in the ruling request. Revenue            Revenue Procedure 74–17 announces
Procedure 69–19 sets forth the condi-            certain operating rules of the Service
tions and circumstances under which              relating to the issuance of advance rul-
an advance ruling will be issued under           ing letters concerning the classifica-
section 367 of the Code that an agree-           tion of organizations formed as limited
ment which purports to furnish tech-             partnerships. Revenue Procedure 75–16
nical know-how in exchange for stock             sets forth a checklist outlining re-
is a transfer of property within the             quired information frequently omitted
meaning of section 351.                          from requests for rulings relating to
  (iv) For ruling requests under section         classification of organizations for Fed-
332, 334(b)(1), or 334(b)(2) of the Code,        eral tax purposes.
see Rev. Proc. 73–17, 1973–2 C.B. 465.             (xii) For ruling requests concerning
Revenue Procedure 73–17 sets forth the           the creditability of a foreign tax under

                                            45
§ 601.201                                                  26 CFR Ch. I (4–1–99 Edition)

section 901 or 903 of the Code, see Rev.           (i) A complete statement of facts re-
Rul. 67–308, 1967–2 C.B. 254, which sets         lating to the transaction, together
forth requirements for establishing              with related documents, as required by
that translations of foreign law are             subparagraph (2) of this paragraph; and
satisfactory as evidence for purposes of           (ii) A summary statement of the
determining the creditability of a par-          facts which he believes should be con-
ticular foreign tax.                             trolling in reaching the requested con-
Original documents should not be sub-            clusion.
mitted because documents and exhibits            Where the taxpayer’s statement of con-
become a part of the Internal Revenue            trolling facts is accepted, the ruling
Service file which cannot be returned.           will be based on those facts and only
If the request is with respect to a cor-         this statement will ordinarily be incor-
porate distribution, reorganization, or          porated in the ruling letter. It is em-
other similar or related transaction,            phasized, however, that:
the corporate balance sheet nearest the            (a) This procedure for a ‘‘two-part’’
date of the transaction should be sub-           ruling request is elective with the tax-
mitted. (If the request relates to a pro-        payer and is not to be considered a re-
spective transaction, the most recent            quired substitute for the regular proce-
balance sheet should be submitted.) In           dure contained in paragraphs (a)
the case of requests for rulings or de-          through (m) of this section;
termination letters, other than those              (b) Taxpayers’ rights and responsibil-
to which section 6104 of the Code ap-            ities are the same under the ‘‘two-
                                                 part’’ ruling request procedure as those
plies, postmarked or hand delivered to
                                                 provided in paragraphs (a) through (m)
the Internal Revenue Service after Oc-
                                                 of this section;
tober 31, 1976, there must accompany
                                                   (c) The Service reserves the right to
such requests a statement, described in
                                                 rule on the basis of a more complete
paragraph (5) of this paragraph, of pro-
                                                 statement of facts it considers control-
posed deletions pursuant to section
                                                 ling and to seek further information in
6110(c) of the Code. Such statement is
                                                 developing facts and restating them for
not required if the request is to secure
                                                 ruling purposes; and
the consent of the Commissioner with               (d) The ‘‘two-part’’ ruling request
respect to the adoption of or change in          procedure will not apply where it is in-
accounting or funding periods or meth-           consistent with other procedures appli-
ods pursuant to section 412, 442, 446(e),        cable to specific situations such as: Re-
or 706 of the Code. If, however, the per-        quests for permission to change ac-
son seeking the consent of the Commis-           counting method or period; application
sioner receives from the Internal Rev-           for recognition of exempt status under
enue Service a notice that proposed de-          section 501 or 521; or rulings on employ-
letions should be submitted because              ment tax status.
the resulting ruling will be open to               (4) If the taxpayer is contending for a
public inspection under section 6110,            particular determination, he must fur-
the statement of proposed deletions              nish an explanation of the grounds for
must be submitted within 20 days after           his contentions, together with a state-
such notice is mailed.                           ment of relevant authorities in support
  (3) As an alternative procedure for            of his views. Even though the taxpayer
the issuance of rulings on prospective           is urging no particular determination
transactions, the taxpayer may submit            with regard to a proposed or prospec-
a summary statement of the facts he              tive transaction, he must state his
considers controlling the issue, in addi-        views as to the tax results of the pro-
tion to the complete statement re-               posed action and furnish a statement of
quired for ruling requests by subpara-           relevant authorities to support such
graph (2) of this paragraph. Assuming            views.
agreement with the taxpayer’s sum-                 (5) In order to assist the Internal
mary statement, the Service will use it          Revenue Service in making the dele-
as the basis for the ruling. Any tax-            tions, required by section 6110(c) of the
payer wishing to adopt this procedure            Code, from the text of rulings and de-
should submit with the request for rul-          termination letters, which are open to
ing:                                             public inspection pursuant to section

                                            46
Internal Revenue Service, Treasury                                                § 601.201

6110(a) of the Code, there must accom-            rently qualified as an attorney and he
pany requests for such rulings or deter-          is authorized to represent the prin-
mination letters either a statement of            cipal,
the deletions proposed by the person                 (ii) A certified public accountant who
requesting the ruling or determination            is duly qualified to practice in any
letter and the statutory basis for each           State, possession, territory, Common-
proposed deletion, or a statement that            wealth, or the District of Columbia,
no information other than names, ad-              and who files with the Service a writ-
dresses, and taxpayer identifying num-            ten declaration that he is currently
bers need be deleted. Such statement              qualified as a certified public account-
shall be made in a separate document.             ant and he is authorized to represent
The statement of proposed deletions               the principal, or
shall be accompanied by a copy of the                (iii) A person, other than an attorney
request for a ruling or determination             or certified public accountant, enrolled
letter and supporting documents, on               to practice before the Service, and who
which shall be indicated, by the use of           files with the Service a written dec-
brackets, the material which the per-             laration that he is currently enrolled
son making such request indicates                 (including in the declaration either his
should be deleted pursuant to section             enrollment number or the expiration
6110(c) of the Code. The statement of             date of his enrollment card) and that
proposed deletions shall indicate the             he is authorized to represent the prin-
statutory basis, under section 6110(c) of         cipal. (See Treasury Department Cir-
the Code, for each proposed deletion.             cular No. 230, as amended, C.B. 1966–2,
The statement of proposed deletions               1171, for the rules on who may practice
shall not appear or be referred to any-           before the Service. See § 601.503(c) for
where in the request for a ruling of de-          the statement required as evidence of
termination letter. If the person mak-            recognition as an enrollee.)
ing the request decides to request addi-             (8) A request for a ruling or an opin-
tional deletions pursuant to section              ion letter by the National Office should
6110(c) of the Code prior to the time the         be addressed to the Commissioner of
ruling or determination letter is                 Internal Revenue, Attention: T:FP:T.
issued, additional statements may be              Washington, DC 20224. A request for a
submitted.                                        determination letter should be ad-
  (6) If the request is with respect to           dressed to the district director of inter-
the qualification of a plan under sec-            nal revenue whose office has or will
tion 401 or 405(a) of the Code, see para-         have audit jurisdiction of the tax-
graphs (o) and (p) of this section. If the        payer’s return. See also paragraphs (n)
request is with respect to the qualifica-         through (q) of this section.
tion of an organization for exemption                (9) Any request for a ruling or deter-
from Federal income tax under section             mination letter that does not comply
501 or 521 of the Code, see paragraph (n)         with all the provisions of this para-
of this section, Revenue Procedure 72–            graph will be acknowledged, and the re-
5, Internal Revenue Bulletin No. 1972–1,          quirements that have not been met will
19, and Revenue Procedure 68–13, C.B.             be pointed out. If a request for a ruling
1968–1, 764.                                      lacks essential information, the tax-
  (7) A request by or for a taxpayer              payer or his representative will be ad-
must be signed by the taxpayer or his             vised that if the information is not
authorized representative. If the re-             forthcoming within 30 days, the re-
quest is signed by a representative of            quest will be closed. If the information
the taxpayer, or if the representative is         is received after the request is closed,
to appear before the Internal Revenue             the request will be reopened and treat-
Service in connection with the request,           ed as a new request as of the date of
he must either be:                                the receipt of the essential informa-
  (i) An attorney who is a member in              tion. Priority treatment of such re-
good standing of the bar of the highest           quest will be granted only in rare cases
court of any State, possession, terri-            upon the approval of the division direc-
tory, Commonwealth, or the District of            tor.
Columbia, and who files with the serv-               (10) A taxpayer or his representative
ice a written declaration that he is cur-         who desires an oral discussion of the

                                             47
§ 601.201                                                        26 CFR Ch. I (4–1–99 Edition)

issue or issues involved should indicate         obtain a ruling, opinion letter, or de-
such desire in writing when filing the           termination letter will not be deemed
request or soon thereafter in order that         sufficient reason for handling a request
the conference may be arranged at that           ahead of its regular order. Neither will
stage of consideration when it will be           the possible effect of fluctuation in the
most helpful.                                    market price of stocks on a transaction
   (11) Generally, prior to issuing the          be deemed sufficient reason for han-
ruling or determination letter, the Na-          dling a request out of order. Requests
tional Office or district director shall         by telegram will be treated in the same
inform the person requesting such rul-           manner as requests by letter. Rulings,
ing or determination letter orally or in         opinion letters, and determination let-
writing of the material likely to ap-            ters ordinarily will not be issued by
pear in the ruling or determination let-         telegram. A taxpayer or his representa-
ter which such person proposed be de-            tive desiring to obtain information as
leted but which the Internal Revenue             to the status of his case may do so by
Service determines should not be de-             contacting the appropriate division in
leted. If so informed, the person re-            the office of the Assistant Commis-
questing the ruling or determination             sioner (Technical).
letter may submit within 10 days any               (13) The Director, Corporation Tax
further information, arguments or                Division, has responsibility for issuing
other material in support of the posi-           rulings in areas involving the applica-
tion that such material be deleted. The          tion of Federal income tax to tax-
Internal Revenue Service will attempt,           payers; those involving income tax
if feasible, to resolve all disagreements        conventions or treaties with foreign
with respect to proposed deletions               countries; those involving deprecia-
prior to the issuance of the ruling or           tion, depletion, and valuation issues;
determination letter. However, in no             and those involving the taxable status
event shall the person requesting the            of exchanges and distributions in con-
ruling or determination letter have the          nection with corporate reorganiza-
right to a conference with respect to            tions, organizations, liquidations, etc.
resolution of any disagreements con-               (14) The Director, Individual Tax Di-
cerning material to be deleted from the          vision, has responsibility for issuing
text of the ruling or determination let-         rulings with respect to the application
ter, but such matters may be consid-             of Federal income tax to taxpayers (in-
ered at any conference otherwise                 cluding individuals, partnerships, es-
scheduled with respect to the request.           tates and trusts); areas involving the
   (12) It is the practice of the Service        application of Federal estate and gift
to process requests for rulings, opinion         taxes including estate and gift tax con-
letters, and determination letters in            ventions or treaties with foreign coun-
regular order and as expeditiously as            tries; areas involving certain excise
possible. Compliance with a request for          taxes; the provisions of the Internal
consideration of a particular matter             Revenue Code dealing with procedure
ahead of its regular order, or by a spec-        and administration; and areas involv-
ified time, tends to delay the disposi-          ing employment taxes.
tion of other matters. Requests for                (15) A taxpayer or the taxpayer’s rep-
processing ahead of the regular order,           resentative desiring to obtain informa-
made in writing in a separate letter             tion as to the status of the taxpayer’s
submitted with the request or subse-             case may do so by contacting the fol-
quent thereto and showing clear need             lowing offices with respect to matters
for such treatment, will be given con-           in the areas of their responsibility:
sideration as the particular cir-
                                                                                        Telephone numbers,
cumstances warrant. However, no as-                           Official                   (Area Code 202)
surance can be given that any letter
will be processed by the time re-                Director, Corporation Tax Division   566–4504, 566–4505.
                                                 Director, Individual Tax Division    566–3767 or 566–3788.
quested. For example, the scheduling of
a closing date for a transaction or a              (16) After receiving the notice pursu-
meeting of the Board of Directors or             ant to section 6110(f)(1) of the Code of
shareholders of a corporation without            intention to disclose the ruling or de-
due regard to the time it may take to            termination letter (including a copy of

                                            48
Internal Revenue Service, Treasury                                              § 601.201

the version proposed to be open to pub-          transaction     that   has   been   con-
lic inspection and notations of third-           summated and that is relevant to the
party communications pursuant to sec-            return being filed, he should attach a
tion 6110(d) of the Code), if the person         copy of the ruling or determination let-
requesting the ruling or determination           ter to the return.
letter desires to protest the disclosure           (19) A taxpayer may protest an ad-
of certain information in the ruling or          verse ruling letter, or the terms and
determination letter, such person must           conditions contained in a ruling letter,
within 20 days after the notice is               issued after January 30, 1977, under sec-
mailed submit a written statement                tion 367(a)(1) of the Code (including a
identifying those deletions not made             ruling with respect to an exchange de-
by the Internal Revenue Service which            scribed in section 367(b) which begins
such person believes should have been            before January 1, 1978) or section
made. Such person shall also submit a            1042(e)(2) of the Tax Reform Act of 1976,
copy of the version of the ruling or de-         not later than 45 days after the date of
termination letter proposed to be open           the ruling letter. (For rulings issued
to public inspection on which such per-          under these sections prior to January
son indicates, by the use of brackets,           31, 1977, see section 4.01 of Revenue
the deletions proposed by the taxpayer           Procedure 77–5.) The Assistant Com-
but which have not been made by the              missioner (Technical) will establish an
Internal Revenue Service. Generally,             ad hoc advisory board to consider each
the Internal Revenue Service will not            protest, whether or not a conference is
consider the deletion under this sub-            requested. A protest is considered made
paragraph of any material which the              on the date of the postmark of a letter
taxpayer did not, prior to the issuance          of protest or the date of the postmark
of the ruling or determination letter,           of a letter of protest or the date that
propose be deleted. The Internal Rev-            such letter is hand delivered to any In-
enue Service shall, within 20 days after         ternal Revenue Service office, includ-
receipt of the response by the person            ing the National Office. The protest
requesting the ruling or determination           letter must be addressed to the Assist-
letter to the notice pursuant to section         ant Commissioner (Technical), Atten-
6110(f)(1) of the Code, mail to such per-        tion: T:FP:T. The taxpayer will be
son its final administrative conclusion          granted one conference upon request.
with respect to the deletions to be              Whether or not the request is made the
made.                                            board may request one or more con-
   (17) After receiving the notice pursu-        ferences or written submissions. The
ant to section 6110(f)(1) of the Code of         taxpayer will be notified of the time,
intention to disclose (but no later than         date, and place of the conference, and
60 days after such notice is mailed), the        the names of the members of the board.
person requesting a ruling or deter-             The board will consider all materials
mination letter may submit a request             submitted in writing by the taxpayer
for delay of public inspection pursuant          and oral arguments presented at the
to either section 6110(g)(3) or section          conference. Any oral arguments made
6110(g) (3) and (4) of the Code. The re-         at a conference by the taxpayer, which
quest for delay shall be submitted to            have not previously been submitted to
the office to which the request for a            the Service in writing, may be sub-
ruling or determination letter was sub-          mitted to the Service in writing if
mitted. A request for delay shall con-           postmarked not later than seven days
tain the date on which it is expected            after the day of the conference.
that the underlying transaction will be          The Board will make its recommenda-
completed. The request for delay pur-            tion to the Assistant Commissioner
suant to section 6110(g)(4) of the Code          (Technical) and the Assistant Commis-
shall contain a statement from which             sioner will make the decision. The tax-
the Commissioner may determine that              payer will be informed of the decision
good cause exists to warrant such                of the Assistant Commissioner by cer-
delay.                                           tified or registered mail. The specific
   (18) When a taxpayer receives a rul-          procedures to be used by a taxpayer in
ing or determination letter prior to the         protesting an adverse ruling letter, or
filing of his return with respect to any         the terms and conditions contained in

                                            49
§ 601.201                                                     26 CFR Ch. I (4–1–99 Edition)

a ruling letter, under section 367 will           branch decided the case. Under either
be published from time to time in the             of these circumstances, the taxpayer of
Internal Revenue Bulletin (see, for ex-           his representative will be invited to an-
ample, Revenue Procedure 77–5).                   other conference. The provisions of this
   (f) Conferences in the National Office.        section limiting the number of con-
(1) If a conference has been requested,           ferences to which a taxpayer is entitled
the taxpayer will be notified of the              will not foreclose the invitation of a
time and place of the conference. A               taxpayer to attend further conferences
conference is normally scheduled only             when, in the opinion of National Office
when the Service deems it will be help-           personnel, such need arises. All addi-
ful in deciding the case or an adverse            tional conferences of the type discussed
decision is indicated. If conferences are         in this paragraph are held only at the
being arranged with respect to more               invitation of the Service.
than one request for a ruling involving             (4) It is the responsibility of the tax-
the same taxpayer, they will be so                payer to add to the case file a written
scheduled as to cause the least incon-            record of any additional data, lines of
venience to the taxpayer.                         reasoning, precedents, etc., which are
   (2) A taxpayer is entitled, as a matter        proposed by the taxpayer and discussed
of right, to only one conference in the           at the conference but which were not
National Office unless one of the cir-            previously or adequately presented in
cumstances discussed in subparagraph              writing.
(3) of this paragraph develops. This                (g) Referral of matters to the National
conference will usually be held at the            Office. (1) Requests for determination
branch level of the appropriate division          letters received by the district direc-
in the office of the Assistant Commis-            tors that, in accordance with para-
sioner (Technical) and will usually be            graph (c) of this section, may not be
attended by a person who has authority            acted upon by a district office, will be
to act for the branch chief. (See                 forwarded to the National Office for
§ 601.201(a) (2) for the divisions in-            reply and the taxpayer advised accord-
volved.) If more than one subject is to           ingly. District directors also refer to
be discussed at the conference, the dis-          the National Office any request for a
cussion will constitute a conference              determination letter that in their
with respect to each subject. In order            judgement warrants the attention of
to promote a free and open discussion             the National Office. See also the provi-
of the issues, the conference will usu-           sions of paragraphs (o), (p), and (q) of
ally be held after the branch has had             this section, with respect to requests
an opportunity to study the case. How-            relating to qualification of a plan
ever, at the request of the taxpayer or           under sections 401 and 405(a) of the
his representative, the conference may            Code, and paragraph (n) of this section,
be held at an earlier stage in the con-           Revenue Procedure 72–5, Internal Rev-
sideration of the case than the Service           enue Bulletin No. 1972–1, 19, and Rev-
would ordinarily designate. No tax-               enue Procedure 68–13, C.B. 1968–1, 764,
payer has a ‘‘right’’ to appeal the ac-           with respect to application for recogni-
tion of a branch to a division director           tion of exempt status under sections
or to any other official of the Service,          501 and 521 of the Code.
nor is a taxpayer entitled, as a matter             (2) If the request is with regard to an
of right, to a separate conference in the         issue or an area with respect to which
Chief Counsel’s office on a request for a         the Service will not issue a ruling or a
ruling.                                           determination letter, such request will
   (3) In the process of review in Tech-          not be forwarded to the National Of-
nical of a holding proposed by a                  fice, but the district office will advise
branch, it may appear that the final              the taxpayer that the Service will not
answer will involve a reversal of the             issue a ruling or a determination letter
branch proposal with a result less fa-            on the issue. See paragraph (d) (2) of
vorable to the taxpayer. Or it may ap-            this section.
pear that an adverse holding proposed               (h) Referral of matters to district offices.
by a branch will be approved, but on a            Requests for rulings received by the
new or different issue or on different            National Office that, in accordance
grounds than those on which the                   with the provisions of paragraph (b) of

                                             50
Internal Revenue Service, Treasury                                                 § 601.201

this section, may not be acted upon by             will be retained in the Service and may
the National Office will be forwarded              not be returned to the taxpayer.
for appropriate action to the district               (k) Oral advice to taxpayers. (1) The
office that has or will have audit juris-          Service does not issue rulings or deter-
diction of the taxpayer’s return and               mination letters upon oral requests.
the taxpayer advised accordingly. If               Furthermore, National Office officials
the request is with respect to an issue            and employees ordinarily will not dis-
or an area of the type discussed in                cuss a substantive tax issue with a tax-
paragraph (d)(2) of this section, the              payer or his representative prior to the
taxpayer will be so advised and the re-            receipt of a request for a ruling, since
quest may be forwarded to the appro-               oral opinions or advice are not binding
priate district office for association             on the Service. This should not be con-
with the related return or report of the           strued as preventing a taxpayer or his
taxpayer.                                          representative from inquiring whether
  (i) Review of determination letters. (1)         the Service will rule on a particular
Determination letters issued with re-              question. In such cases, however, the
spect to the types of inquiries author-            name of the taxpayer and his identi-
ized by paragraphs (c) (1), (2), and (3) of        fying number must be disclosed. The
this section are not generally reviewed            Service will also discuss questions re-
by the National Office as they merely              lating to procedural matters with re-
inform a taxpayer of a position of the             gard to submitting a request for a rul-
Service which has been previously es-              ing, including the application of the
tablished either in the regulations or             provisions of paragraph (e) to the par-
in a ruling, opinion, or court decision            ticular case.
published in the Internal Revenue Bul-
                                                     (2) A taxpayer may, of course, seek
letin. If a taxpayer believes that a de-
                                                   oral technical assistance from a dis-
termination letter of this type is in
                                                   trict office in the preparation of his re-
error, he may ask the district director
to reconsider the matter. He may also              turn or report, pursuant to other estab-
ask the district director to request ad-           lished procedures. Such oral advice is
vice from the National Office. In such             advisory only and the Service is not
event, the procedures in paragraphs (b)            bound to recognize it in the examina-
(5) of § 601.105 will be followed.                 tion of the taxpayer’s return.
  (2) The procedures for review of de-               (l) Effect of rulings. (1) A taxpayer
termination letters relating to the                may not rely on an advance ruling
qualification of employers’ plans under            issued to another taxpayer. A ruling,
section 401(a) of the Code are provided            except to the extent incorporated in a
in paragraph (o) of this section.                  closing agreement, may be revoked or
  (3) The procedures for review of de-             modified at any time in the wise ad-
termination letters relating to the ex-            ministration of the taxing statutes.
emption from Federal income tax of                 See paragraph (a)(6) of this section for
certain organizations under sections               the effect of a closing agreement. If a
501 and 521 of the Code are provided in            ruling is revoked or modified, the rev-
paragraph (n) of this section.                     ocation or modification applies to all
  (j) Withdrawals of requests. The tax-            open years under the statutes, unless
payer’s request for a ruling or a deter-           the Commissioner or his delegate exer-
mination letter may be withdrawn at                cises the discretionary authority under
any time prior to the signing of the let-          section 7805(b) of the Code to limit the
ter of reply. However, in such a case,             retroactive effect of the revocation or
the National Office may furnish its                modification. The manner in which the
views to the district director whose of-           Commissioner or his delegate generally
fice has or will have audit jurisdiction           will exercise this authority is set forth
of the taxpayer’s return. The informa-             in this section. With reference to rul-
tion submitted will be considered by               ings relating to the sale or lease of ar-
the district director in a subsequent              ticles subject to the manufacturers ex-
audit or examination of the taxpayer’s             cise tax and the retailers excise tax,
return. Even though a request is with-             see specifically subparagraph (8) of this
drawn, all correspondence and exhibits             paragraph.

                                              51
§ 601.201                                                    26 CFR Ch. I (4–1–99 Edition)

  (2) As part of the determination of a           the ruling acted in good faith in reli-
taxpayer’s liability, it is the responsi-         ance upon the ruling and the retro-
bility of the district director to ascer-         active revocation would be to his det-
tain whether any ruling previously                riment. To illustrate, the tax liability
issued to the taxpayer has been prop-             of each employee covered by a ruling
erly applied. It should be determined             relating to a pension plan of an em-
whether the representations upon                  ployer is directly involved in such rul-
which the ruling was based reflected an           ing. Also, the tax liability of each
accurate statement of the material                shareholder is directly involved in a
facts and whether the transaction ac-             ruling related to the reorganization of
tually was carried out substantially as           a corporation. However, the tax liabil-
proposed. If, in the course of the deter-         ity of members of an industry is not di-
mination of the tax liability, it is the          rectly involved in a ruling issued to
view of the district director that a rul-         one of the members, and the position
ing previously issued to the taxpayer             taken in a revocation or modification
should be modified or revoked, the                of ruling to one member of an industry
findings and recommendations of that              may be retroactively applied to other
office will be forwarded to the National          members of that industry. By the same
Office for consideration prior to further         reasoning, a tax practitioner may not
action. Such reference to the National            obtain the nonretroactive application
Office will be treated as a request for           to one client of a modification or rev-
technical advice and the procedures of            ocation of a ruling previously issued to
paragraph (b)(5) of § 601.105 will be fol-        another client. Where a ruling to a tax-
lowed. Otherwise, the ruling is to be             payer is revoked with retroactive ef-
applied by the district office in its de-         fect, the notice to such taxpayer will,
termination of the taxpayer’s liability.          except in fraud cases, set forth the
  (3) Appropriate coordination with the           grounds upon which the revocation is
National Office will be undertaken in             being made and the reasons why the
the event that any other field official           revocation is being applied retro-
having jurisdiction of a return or other          actively.
matter proposes to reach a conclusion               (6) A ruling issued to a taxpayer with
contrary to a ruling previously issued            respect to a particular transaction rep-
to the taxpayer.                                  resents a holding of the Service on that
  (4) A ruling found to be in error or            transaction only. However, the applica-
not in accord with the current views of           tion of that ruling to the transaction
the Service may be modified or re-                will not be affected by the subsequent
voked. Modification or revocation may             issuance of regulations (either tem-
be effected by a notice to the taxpayer           porary or final), if the conditions speci-
to whom the ruling originally was                 fied in subparagraph (5) of this para-
issued, or by a Revenue Ruling or other           graph are met. If the ruling is later
statement published in the Internal               found to be in error or no longer in ac-
Revenue Bulletin.                                 cord with the holding of the Service, it
  (5) Except in rare or unusual cir-              will afford the taxpayer no protection
cumstances, the revocation or modi-               with respect to a like transaction in
fication of a ruling will not be applied          the same or subsequent year, except to
retroactively with respect to the tax-            the extent provided in subparagraphs
payer to whom the ruling was origi-               (7) and (8) of this paragraph.
nally issued or to a taxpayer whose tax             (7) If a ruling is issued covering a
liability was directly involved in such           continuing action or a series of actions
ruling if (i) there has been no                   and it is determined that the ruling
misstatement or omission of material              was in error or no longer in accord
facts, (ii) the facts subsequently devel-         with the position of the Service, the
oped are not materially different from            Assistant Commissioner (Technical)
the facts on which the ruling was                 ordinarily will limit the retroactivity
based, (iii) there has been no change in          of the revocation or modification to a
the applicable law, (iv) the ruling was           date not earlier than that on which the
originally issued with respect to a pro-          original ruling was modified or re-
spective or proposed transaction, and             voked. To illustrate, if a taxpayer ren-
(v) the taxpayer directly involved in             dered service or provided a facility

                                             52
Internal Revenue Service, Treasury                                                    § 601.201

which is subject to the excise tax on             and (8) of this paragraph, taxpayers
services or facilities, and in reliance on        will not be afforded the protection
a ruling issued to the same taxpayer              against retroactive revocation pro-
did not pass the tax on to the user of            vided in subparagraph (5) of this para-
the service or the facility, the Assist-          graph in the case of proposed trans-
ant Commissioner (Technical) ordi-                actions since they will not have en-
narily will restrict the retroactive ap-          tered into the transactions in reliance
plication of the revocation or modifica-          on the rulings.
tion of the ruling. Likewise, if an em-             (m) Effect of determination letters. A
ployer incurred liability under the Fed-          determination letter issued by a dis-
eral Insurance Contributions Act, but             trict director in accordance with this
in reliance on a ruling made to the               section will be given the same effect
same employer neither collected the               upon examination of the return of the
employee tax nor paid the employee                taxpayer to whom the determination
and employer taxes under the Act, the             letter was issued as is described in
Assistant Commissioner (Technical)                paragraph (l) of this section, in the
ordinarily will restrict the retroactive          case of a ruling issued to a taxpayer,
application of the revocation or modi-            except that reference to the National
fication of the ruling with respect to            Office is not necessary where, upon ex-
both the employer tax and the em-                 amination of the return, it is the opin-
ployee tax. In the latter situation,              ion of the district director that a con-
however, the restriction of retroactive           clusion contrary to that expressed in
application ordinarily will be condi-             the determination letter is indicated. A
tioned on the furnishing by the em-               district director may not limit the
ployer of wage data, or of such correc-           modification or revocation of a deter-
tions of wage data as may be required             mination letter but may refer the mat-
by § 31.6011(a)–1(c) of the Employment            ter to the National Office for exercise
Tax Regulations. Consistent with these            by the Commissioner or his delegate of
provisions, if a ruling relates to a con-         the authority to limit the modification
tinuing action or a series of actions,            or revocation. In this connection see
the ruling will be applied until the date         also paragraphs (n) and (o) of this sec-
of issuance of applicable regulations or          tion.
the publication of a Revenue Ruling                 (n) Organization claiming exemption
holding otherwise, or until specifically          under section 501 or 521 of the Code—(1)
withdrawn. Publication of a notice of             Filing applications for exemption. (i) An
proposed rulemaking will not affect               organization seeking recognition of ex-
the application of any ruling issued              empt status under section 501 or 521 of
under the procedures set forth herein.            the Code is required to file an applica-
(As to the effective date in cases in-            tion with the key district director for
volving revocation or modification of             the Internal Revenue district in which
rulings or determination letters recog-           the principal place of business or prin-
nizing exemption, see paragraph (n)(1)            cipal office of the organization is lo-
of this section.)                                 cated. Following are the 19 key district
  (8) A ruling holding that the sale or           offices that process the applications
lease of a particular article is subject          and the Internal Revenue districts cov-
to the manufacturers excise tax or the            ered by each:
retailers excise tax may not revoke or               Key district(s) and IRS districts covered
modify retroactively a prior ruling
                                                  Central Region:
holding that the sale or lease of such               Cincinnati: Cincinnati, Louisville, Indi-
article was not taxable, if the taxpayer               anapolis.
to whom the ruling was issued, in reli-              Cleveland: Cleveland, Parkersburg.
ance upon such prior ruling, parted                  Detroit: Detroit.
with possession or ownership of the ar-           Mid-Atlantic Region:
ticle without passing the tax on to his              Baltimore: Baltimore (which includes
customer. Section 1108(b), Revenue Act                 the District of Columbia and Office of
                                                       International Operations), Pittsburgh,
of 1926.                                               Richmond.
  (9) In the case of rulings involving               Philadelphia: Philadelphia, Wilmington.
completed transactions, other than                   Newark: Newark.
those described in subparagraphs (7)              Midwest Region:

                                             53
§ 601.201                                                      26 CFR Ch. I (4–1–99 Edition)
   Chicago: Chicago.                                under section 501 (c) (3) of the Code, the
   St. Paul: St. Paul, Fargo, Aberdeen, Mil-        applicant will also be informed of the
     waukee.
                                                    time within which the completed appli-
   St. Louis: St Louis, Springfield, Des
     Moines, Omaha.                                 cation must be resubmitted in order for
North-Atlantic Region:                              the application to be considered as
   Boston: Boston, Augusta, Burlington,             timely notice within the meaning of
     Providence, Hartford, Portsmouth.              section 508(a) of the Code.
   Manhattan: Manhattan.                               (iv) A ruling or determination letter
   Brooklyn: Brooklyn, Albany, Buffalo.
Southeast Region:                                   recognizing exemption will not ordi-
   Atlanta: Atlanta, Greensboro, Columbia,          narily be issued if an issue involving
     Nashville.                                     the organization’s exempt status under
   Jacksonville: Jacksonville, Jackson Bir-         section 501 or 521 of the Code is pending
     mingham.                                       in litigation or on appeal within the
Southwest Region:
                                                    Service.
   Austin: Austin, New Orleans, Albu-
     querque, Denver, Cheyenne.                        (2) Processing applications and requests
   Dallas: Dallas, Oklahoma City, Little            for determination of foundation status. (i)
     Rock, Wichita.                                 Under the general procedures outlined
Western Region:                                     in paragraphs (a) through (m) of this
   Los Angeles: Los Angeles, Phoenix, Hon-          section, key district directors are au-
     olulu.
                                                    thorized to issue determination letters
   San Francisco: San Francisco, Salt Lake
     City, Reno.                                    involving applications for exemption
   Seattle: Seattle, Portland, Anchorage,           under sections 501 and 521 of the Code,
     Boise, Helena.                                 and requests for foundation status
                                                    under sections 509 and 4942 (j)(3).
  (ii) A ruling or determination letter
will be issued to an organization pro-                 (ii) A key district director will refer
vided its application and supporting                to the National Office those applica-
documents establish that it meets the               tions that present questions the an-
particular requirements of the section              swers to which are not specifically cov-
under which exemption is claimed. Ex-               ered by statute, Treasury decision or
empt status will be recognized in ad-               regulation, or by a ruling, opinion, or
vance of operations if proposed oper-               court decision published in the Internal
ations can be described in sufficient de-           Revenue Bulletin. The National Office
tail to permit a conclusion that the or-            will consider each such application,
ganization will meet the particular re-             issue a ruling directly to the organiza-
quirements of the section under which               tion, and send a copy of the ruling to
exemption is claimed. A mere restate-               the key district director. Where the
ment of purposes or a statement that                issue of exemption under section
proposed activities will be in further-             501(c)(3) of the Code is referred to the
ance of such purposes will not satisfy              National Office for decision under this
these requirements. The organization                subparagraph, the foundation status
must fully describe the activities in               issue will also be the subject of a Na-
which it expects to engage, including               tional Office ruling. In the event of a
the standards, criteria, procedures, or             conclusion unfavorable to the appli-
other means adopted or planned for                  cant, it will be informed of the basis
carrying out the activities; the antici-            for the conclusion and of its rights to
pated sources to receipts; and the na-              file a protest and to a conference in the
ture of contemplated expenditures.                  National Office. If a conference is re-
Where the Service considers it war-                 quested, the conference procedures set
ranted, a record of actual operations               forth in subparagraph (9)(v) of this
may be required before a ruling or de-              paragraph will be followed. After re-
termination letter will be issued.                  consideration of the application in the
  (iii) Where an application for rec-               light of the protest and any informa-
ognition of exemption does not contain              tion developed in conference, the Na-
the required information, the applica-              tional Office will affirm, modify, or re-
tion may be returned to the applicant               verse the original conclusion, issue a
without being considered on its merits              ruling to the organization, and send a
with an appropriate letter of expla-                copy of the ruling to the key district
nation. In the case of an application               director.

                                               54
Internal Revenue Service, Treasury                                                 § 601.201

  (iii) Key district directors will issue         district director shall advise the orga-
determination letters on foundation               nization of its right to request referral
status. All adverse determinations                of the issue to the National Office for
issued by key district directors (includ-         technical advice. The technical advice
ing adverse determinations on the                 provisions applicable to these cases are
foundation status under section 509(a)            set forth in subparagraph (9) of this
of the Code of nonexempt charitable               paragraph. The effect on an organiza-
trusts described in section 4947(a)(1))           tion’s appeal rights of technical advice
are subject to the protest and con-               or a National Office ruling issued under
ference procedures outlined in subpara-           this subparagraph are set forth in
graph (5) of this paragraph. Key dis-             § 601.106(a)(1)(iv)(a) and in subparagraph
trict directors will issue such deter-            (5)(i) of this paragraph.
minations in response to applications                (3) Effect of exemption rulings or deter-
for recognition of exempt status under            mination letters. (i) A ruling or deter-
section 501(c)(3). They will also issue           mination letter recognizing exemption
such determinations in response to re-            is usually effective as of the date of
quests for determination of foundation            formation of an organization, if its pur-
status by organizations presumed to be            poses and activities during the period
private foundations under section                 prior to the date of the ruling or deter-
508(b), requests for new determinations           mination letter were consistent with
of foundation status by organizations             the requirements for exemption. How-
previously classified as other than pri-          ever, with respect to organizations
vate foundations, and, subject to the
                                                  formed after October 9, 1969, applying
conditions set forth in subdivision (vi)
                                                  for recognition of exemption under sec-
of subparagraph (6) of this paragraph,
                                                  tion 501(c)(3) of the Code, the provi-
requests to reconsider status. The re-
                                                  sions of section 508(a) apply. If the or-
quests described in the preceding sen-
                                                  ganization is required to alter its ac-
tence must be made in writing. For in-
                                                  tivities or make substantive amend-
formation     relating    to   the    cir-
                                                  ments to its enabling instrument, the
cumstances under which an organiza-
                                                  ruling or determination letter recog-
tion presumed to be a private founda-
                                                  nizing its exemption will be effective
tion under section 508(b) may request a
                                                  as of the date specified therein.
determination of its status as other
than a private foundation, see Revenue               (ii) A ruling or determination letter
Ruling 73–504, 1973–2 C.B. 190. All re-           recognizing exemption may not be re-
quests for determinations referred to in          lied upon if there is a material change
this paragraph should be made to the              inconsistent with exemption in the
key district director for the district in         character, the purpose, or the method
which the principal place of business or          of operation of the organization.
principal office of the organization is              (iii) (a) When an organization that
located.                                          has been listed in IRS Publication No.
  (iv) If the exemption application or            78, ‘‘Cumulative List of Organizations
request for foundation status involves            described in section 170 (c) of the Inter-
an issue which is not covered by pub-             nal Revenue Code of 1954,’’ as an orga-
lished precedent or on which there may            nization contributions to which are de-
be nonuniformity between districts, or            ductible under section 170 of the Code
if the National Office had issued a pre-          subsequently ceases to qualify as such,
vious contrary ruling or technical ad-            and the ruling or determination letter
vice on the issue, the key district di-           issued to it is revoked, contributions
rector must request technical advice              made to the organization by persons
from the National Office. If, during the          unaware of the change in the status of
consideration of its application or re-           the organization generally will be con-
quest by a key district director, the or-         sidered allowable until (1) the date of
ganization believes that the case in-             publication of an announcement in the
volves an issue with respect to which             Internal Revenue Bulletin that con-
referral for technical advice is appro-           tributions are no longer deductible, or
priate, the organization may ask the              (2) a date specified in such an an-
district director to request technical            nouncement where deductibility is ter-
advice from the National Office. The              minated as of a different date.

                                             55
§ 601.201                                                    26 CFR Ch. I (4–1–99 Edition)

  (b) In appropriate cases, however,              quest for technical advice and the pro-
this advance assurance of deductibility           cedures of subparagraph (a) of this
of contributions made to such an orga-            paragraph will be followed.
nization may be suspended pending                    (5) Protest of adverse determination let-
verification of continuing qualification          ters. (i) Upon the issuance of an adverse
under section 170 of the Code. Notice of          determination letter, the key district
such suspension will be made in a pub-            director will advise the organization of
lic announcement by the Service. In               its right to protest the determination
such cases allowance of deductions for            by requesting Appeals office consider-
contributions made after the date of              ation. However, if the determination
the announcement will depend upon                 was made on the basis of National Of-
statutory qualification of the organiza-          fice technical advise the organization
tion under section 170.                           may not appeal the determination to
  (c) If an organization, whose status            the          Appeals        office.     See
under section 170 (c)(2) of the Code is           § 601.106(a)(1)(iv)(a). To request Appeals
revoked, initiates within the statutory           consideration, the organization shall
time limit a proceeding for declaratory           submit to the key district director,
judgment under section 7428, special re-          within 30 days from the date of the let-
liance provisions apply. If the decision          ter, a statement of the facts, law, and
of the court is adverse to the organiza-          arguments in support of its position.
tion, it shall nevertheless be treated as         The organization must also state
having been described in section 170 (c)          whether it wishes an Appeals office
(2) for purpose of deductibility of con-          conference. Upon receipt of an organi-
tributions from other organizations de-           zation’s request for Appeals consider-
scribed in section 170 (c) (2) and indi-          ation, the key district director will, if
viduals (up to a maximum of $1,000), for          it maintains its position, forward the
the period beginning on the date that             request and the case file to the Appeals
notice of revocation was published and            office.
ending on the date the court first de-               (ii) Except as provided in subdivi-
termines that the organization is not             sions (iii) and (iv) of this subparagraph,
described in section 170 (c)(2).                  the Appeals office, after considering
  (d) In any event, the Service is not            the organization’s protest and any ad-
precluded from disallowing any con-               ditional information developed, will
tributions made after an organization             advise the organization of its decision
ceases to qualify under section 170 of            and issue an appropriate determination
the Code where the contributor (1) had            letter. Organizations should make full
knowledge of the revocation of the rul-           presentation       of    the    facts,  cir-
ing or determination letter, (2) was              cumstances, and arguments at the ini-
aware that such revocation was immi-              tial level of consideration, since sub-
nent, or (3) was in part responsible for,         mission of additional facts, cir-
or was aware of, the activities or defi-          cumstances, and arguments at the Ap-
ciencies on the part of the organization          peals office may result in suspension of
which gave rise to the loss of qualifica-         Appeals procedures and referral of the
tion.                                             case back to the key district for addi-
  (4) National Office review of determina-        tional consideration.
tion letters. The National Office will re-           (iii) If the proposed disposition by the
view determination letters on exemp-              Appeals office is contrary to a National
tion issues under sections 501 and 521 of         Office technical advice or ruling con-
the Code and foundation status under              cerning tax exemption, issued prior to
sections 509(a) and 4942(j)(3) to assure          the case, the proposed disposition will
uniformity in the application of the es-          be submitted, through the Office of the
tablished principles and precedents of            Regional Director of Appeals, to the
the Service. Where the National Office            Assistant Commissioner (Employee
takes exception to a determination let-           Plans and exempt Organizations) or, in
ter the key district director will be ad-         a section 521 case, to the Assistant
vised. If the organization protests the           Commissioner (Technical). The deci-
exception taken, the file and protests            sion of the Assistant Commissioner
will be returned to the National Office.          will be followed by the Appeals office.
The referral will be treated as a re-             See § 601.106(a)(1)(iv)(b).

                                             56
Internal Revenue Service, Treasury                                                 § 601.201

  (iv) If the case involves an issue that          therefor. If hte case involves an issue
is not covered by published percedent              not covered by published precedent or
or on which there may be nonuni-                   on which there may be nonuniformity
formity between regions, and on which              between districts, or if the National Of-
the National Office has not previously             fice has issued a previous contrary rul-
rules, the Appeals office must request             ing or technical advice on the issue,
technical advice from the National Of-             the district director must seek tech-
fice. If, during the Consideration of its          nical advice from the Nation Office. If
case by Appeals the Organization be-               the organization believes that the case
lieves that the case involves an issue             involves an issue with respect to which
with respect to which referal for tech-            referral for technical advice is appro-
nical advice is appropriate, the organi-           priate, the organization may ask the
zation may ask the Appeals office to               district director to request technical
request technical advice from the Na-              advice from the national Office. The
tional Office. The Appeals office shall            district director shall advise the orga-
advise the organization of its right to            nization of its right to request referral
request referral of the issue to the Na-           of the issue to the National Office for
tional Office for technical advice. If the         technical advice.
Appeals office requests technical ad-
                                                     (b) The key district director will ad-
vice, the decision of the Assistant Com-
                                                   vise the organization of its right to
missioner (Employee Plans and Ex-
                                                   protest the proposed revocation or
empt Organizations) or, in a section 521
                                                   modification by requesting Appeals of-
case, the decision of the Assistant
                                                   fice consideration. However, if Na-
Commissioner (Technical), in a tech-
                                                   tional Office technical advice was fur-
nical advice memorandum is final and
                                                   nished concerning revocation or modi-
the Appeals office must dispose of the
case in accordance with that decision.             fication under (a) of this subdivision,
See subparagraph (9)(viii)(a) of this              the decision of the Assistant Commis-
paragraph.                                         sioner in the technical advice memo-
  (6) Revocation of modification of rulings        randum is final and the organization
or determination letters on exemption and          has no right of appeal to the Appeals
foundation status. (i) An exemption rul-           office. See § 601.106(a)(1)(iv)(a) to re-
ing or determination letter may be re-             quest Appeals consideration, the orga-
voked or modified by a ruling or deter-            nization must submit to the key dis-
mination letter addressed to the orga-             trict director, within 30 days from the
nization, or by a revenue ruling or                date of the letter, a statment of the
other statement published in the Inter-            facts, law, and arguments in support of
nal Revenue Bulletin. The revocation               its continued exemption. The organiza-
or modification may be retroactive if              tion must also state whether it wishes
the organization omitted or misstated              an Appeals office conference. Upon re-
a material fact, operated in a manner              ceipt of an organization’s request for
materially different from that origi-              Appeals consideration, the key district
nally represented, or engaged in a pro-            office, will, if it maintains its position,
hibited transaction of the type de-                forward the request and the case file to
scribed in subdivision (vii) of this sub-          the Appeals office.
paragraph. In any event, revocation or               (c) Except as provided in (d) and (e) of
modification will ordinarily take effect           this subdivision, the Appeals office,
no later than the time at which the or-            after considering the organization’s
ganization received written notice that            protest and any additional information
its exemption ruling of determination              developed, will advise the organization
letter might be revoked or modified.               of its decision and issue an appropriate
  (ii)(a) If a key district director con-          determination letter. Organizations
cludes as a result of examining an in-             should make full presentation of the
formation return, or considering infor-            facts, circumstances, and arguments at
mation from any other source, that an              the initial level of consideration, since
exemption ruling or determination let-             submission of additional facts, cir-
ter should be revoked or modified, the             cumstances, and arguments at the Ap-
organization will be advised in writing            peals office may result in suspension of
of the proposed action and the reasons             Appeals procedures and referral of the

                                              57
§ 601.201                                                   26 CFR Ch. I (4–1–99 Edition)

case back to the key district for addi-           paragraph of section 509(a) to another
tional consideration.                             paragraph of that section, the proce-
   (d) If the proposed disposition by the         dures described in subdivision (iv) of
Appeals office is contrary to a National          this paragraph will be followed to mod-
Office technical advice or ruling con-            ify the ruling or determination letter.
cerning tax exemption, issued prior to              (iv) If a dey district director con-
the case, the proposed disposition will           cludes that a ruling or determination
be submitted, through the Office of the           letter concerning private foundation or
Regional Director of Appeals, to the              operating foundation status should be
Assistant Commissioner (Employee                  revoked or modified. The organization
Plans and Exempt Organizations) or, in            will be advised in writing of the pro-
a section 521 case, to the Assisant Com-          posed adverse action, the reasons
missioner (Technical). The decision of            therefor, and the propsoed new deter-
the Assistant Commissioner will be fol-           mination of foundation status. The
lowed by the Appeals office. See                  procedures set forth in subdivision (ii)
§ 601.106(a)(1)(iv)(b).                           of this subparagraph apply to a pro-
   (e) If the case involves an issue that         posed revocation or modification under
is not covered by published precedent             this subdivision. Unless the effective
or on which there may be nonuni-                  date or revocation or modification of a
formity between regions, and on which             ruling or determination letter con-
the National Office has not previously            cerning private foundation or oper-
rules, the Appeals office must request            ating foundation status is expressly
technicla advice from the National Of-
                                                  covered by statute or regulations, the
fice. If the organization believes that
                                                  effective date generally is the same as
the case involves an issue with respect
                                                  the effective date of revocation or
to which referral for technical advice is
                                                  modification of exemption rulings or
appropriate, the organization may ask
                                                  determination letters as provided in
the Appeals office to request technical
                                                  subdivision (i) of this subparagraph.
advice from the National Office. The
Appeals office shall advice the organi-             (v) If the key district director con-
zation of tis right to request referral of        cludes that a ruling or determination
the isue to the National Office for tech-         letter concerning private foundation or
nical advice.                                     operating foundation status should be
   (iii) A ruling or determination letter         revoked or modified and that such rev-
respecting private foundations or oper-           ocation of modification will not be ad-
ating foundation status may be re-                verse to the organization, the key dis-
voked or modified by a ruling or deter-           trict director will issue a determina-
mination letter addressed to the orga-            tion letter revoking or modifying foun-
nization, or by a revenue ruling or               dation status. The determination letter
other statement published in the Inter-           will also serve to notify the organiza-
nal Revenue Bulletin. If a key district           tion of its foundation status as redeter-
director concludes, as a result of exam-          mined. A nonadverse revocation or
ining an information return or consid-            modification as to private foundation
ering information from any other                  or operating foundation status will or-
source, that a ruling or determination            dinarily be retroactive if the initial
letter concerning private foundation              ruling or determination letter was in-
status (including foundation status               correct.
under section 509(a)(3) of the Code of a            (vi) In cases where an organization
nonexempt charitable trust described              believes that it received an incorrect
in section 4947(a)(1)) or operating foun-         ruling or determination letter as to its
dation status should be modified or re-           private foundation or operating foun-
voked, the procedures in subdivision              dation status, the organization may re-
(iv) or (v) of this subparagraph should           quest a key district director to recon-
be followed depending on whether the              sider such ruling or determination let-
revocation or modification is adverse             ter. Except in are circumstances, the
or non-adverse to the affected organi-            key district director will only consider
zation. Where there is a proposal by              such requests where the organization
the Service to change foundation sta-             had not exercised any protest or con-
tus classification from one particular            ference rights with respect to the

                                             58
Internal Revenue Service, Treasury                                                § 601.201

issuance of such ruling or determina-              tion 7428(b)(2) will be considered by the
tion letter. If a key district director            Service to begin on the date a substan-
decides that reconsideration is war-               tially completed Form 1023 is sent to
ranted, the request will be treated as             the appropriate key district director. A
an initial request for a determination             substantially completed Form 1023 is
of foundation status, and the key dis-             one that:
trict director will issue a determina-               (a) Is signed by an authorized indi-
tion on foundation status or operating             vidual;
foundation status under the procedures               (b) Includes an Employer Identifica-
of subparagrph (2) of this paragraph. If           tion Number (EIN) or a completed
a nonadverse determination is issued,              Form SS–4, Application of Employer
it will also inform the organization               Identification Number;
that the prior ruling or determination               (c) Includes a statement of receipts
letter is revoked or modified. Adverse             and expenditures and a balance sheet
determinations are subject to the pro-             for the current year and the three pre-
cedures set out in subparagraph (5) of             ceding years or the years the organiza-
this paragraph. If the key district di-            tion was in existence, if less then four
rector decides that reconsideration is             years (if the organization has not yet
not warranted, the organization will be            commenced operations, a proposed
notified accordingly. The organization             budget for two full accounting periods
does not have a right to protest the               and a current statement of assets and
key district director’s decision not to            liabilities will be acceptable);
reconsider.                                          (d) Includes a statement of proposed
  (vii) If it is concluded that an organi-         activities and a description of antici-
zation that is subject to the provisions           pated receipts and contemplated ex-
of section 503 of the Code intered into            penditures;
a prohibited transaction for the                     (e) Includes a copy of the organizing
prupose of diverting corpus or income              or enabling document that the orga-
from its exempt purpose, and if the                nizing or enabling document that is
tranaction involved a substantial part             signed by a principal officer or is ac-
of the corpus or income of the organi-             companied by written declaration
zation, its exemption is revoked effec-            signed by an officer authorized to sign
tive as of the beginning of the taxable            for the organization certifying that the
year during which the prohibited trans-            document is a complete and accurate
action was commenced.                              copy of the original; and
  (viii) The provisions of this subpara-             (f) If the organization is a corpora-
graph relating to protests, conferences,           tion or unincorporated association and
and the rights of organizations to ask             it has adopted bylaws, includes a copy
the technical advice be requested be-              that is signed or otherwise verified as
fore a revocation (or modification) no-            current by an authorized officer.
tice is issued are not applicable to mat-            If an application does not contain all
ters where delay would be prejudicial              of the above items, it will not be fur-
to the interests of the Internal Rev-              ther processed and may be returned to
enue Service (such as in cases involv-             the applicant for completion. The 270-
ing fraud, jeopardy, the imminence of              day period will not be considered as
the expiration of the period of limita-            starting until the date the application
tions, or where immediate action is                is remailed to the Service with the re-
necessary to protect the interests of              quested information, or, if a postmark
the Government).                                   is not evident, on the date the Service
  (7) Declaratory judgments relating to            receives a substantially completed ap-
status and classification of organizations         plication.
under section 501(c)(3) of the Code. (i) An          (ii) Generally, rulings and determi-
organization seeking recognition of ex-            nation letters in cases subject to de-
empt status under section 501(c)(3) of             claratory judgment are issued under
the Code must follow the procedures of             the procedures outlined in the para-
subparagraph (1) of this paragraph re-             graph. In National Office exemption
garding the filing of Form 1023, Appli-            application cases, proposed adverse rul-
cation of Recognition of Exemption.                ings will be issued by the rulings sec-
The 270-day period referred to in sec-             tions in the Exempt organizations

                                              59
§ 601.201                                                   26 CFR Ch. I (4–1–99 Edition)

Technical Branch. Applicants shall ap-             (a) The sending by certified or reg-
peal these proposed adverse rulings to           istered mail of a notice of final deter-
the Conference and Review Staff of the           mination; or
Exempt       organizations     Technical           (b) The expiration of the 270-day pe-
Branch. In those cases where an orga-            riod described in section 7428(b)(2) of
nization is unable to describe fully its         the Code, in a case in which the Service
purposes and activities (see subpara-            has not issued a notice of final deter-
graph (1)(ii) of this paragraph), a re-          mination and the organization has
fusal to rule will be considered an ad-          taken, in a timely manner, all
verse determination ofr which adminis-           reasonble steps to secrue a ruling or
trative appeal rights will be afforded.          determination.
Any oral representation of additional              (vi) The steps described in subdivi-
facts or modification of the facts as            sion (iv) of this subparagraph will not
represented or alleged in the aplication         be considered completed until the In-
for a ruling or determination letter             ternal Revenue Service has had a rea-
must be reduced to writing.                      sonable time to act upon the appeal or
  (iii) If an organization withdraws in          request for consideration, as the case
writing its request for a ruling or de-          may be.
termination letter, the withdrawal will            (vii) A notice of final determination
not be considered by the Service as ei-          to which section 7428 of the Code ap-
ther a failure to make a determination
                                                 plies is a ruling or determination let-
within the meaning of section 7428(a)(2)
                                                 ter, sent by certified or registered
of the Code or as an exhaustion of ad-
                                                 mail, which holds that the organiza-
ministrative remedies within the
                                                 tion is not described in section 501(c)(3)
meaning of section 7428(b)(2).
                                                 or section 170(c)(2), is a private founda-
  (iv) Section 7428(b)(2) of the Code re-
                                                 tion as defined in section 509(a), or is
quires that an organization must ex-
                                                 not a private operating foundation as
haust its administrative remedies by
                                                 defined in section 4942(j)(3).
taking timely, reasonable steps to se-
cure a determination. Those steps and              (8) Group exemption letters—(i) Gen-
administrative remedies that must be             eral. (a) A group exemption letter is a
exhausted within the Intereal Revenue            ruling issued to a central organization
Service are:                                     recognizing on a group basis the ex-
  (a) The filing of a substantially com-         emption under section 501(c) of the
pleted application form 1023 pursuant            Code of subordinate organizations on
to subdivision (i) of this subparagraph,         whose behalf the central organization
or the filing of a request for a deter-          has applied for exemption in accord-
mination of foundation status pursuant           ance with this subparagraph.
to subparagrpah (2) of this paragraph;             (b) A central organization is an orga-
  (b) The timely submission of all addi-         nization which has one or more subor-
tional information requested to perfect          dinates under its general supervision or
an exemption application or request for          control.
determination of private foundation                (c) A subordinate is a chapter, local,
status; and                                      post, or unit of a central organization.
  (c) Exhaustion of all administrative           It may or may not be incorporated. A
appeals available within the Service             central organization may be a subordi-
pursuant to subparagraphs (5) and (6) of         nate itself, such as a state organization
this paragraph, as well as appeal of a           which has subordinate units and is
proposed adverse ruling to the Con-              itself affiliated with a national organi-
ference and Review Staff of the Exempt           zation.
Organizations Technical Branch in Na-              (d) A subordinate included in a group
tional Office original jurisdiction ex-          exemption letter should not apply sep-
emption application cases.                       arately for an exemption letter, unless
  (v) An organization will in no event           it no longer wants to be included in the
be deemed to have exhausted its ad-              group exemption letter.
ministrative remedies prior to the                 (e) A subordinate described in section
completion of the steps described in             501(c)(3) of the Code may not be in-
subdivision (iv) of this subparagraph            cluded in a group exemption letter if it
and the earlier of:                              is a private foundation as defined in

                                            60
Internal Revenue Service, Treasury                                                § 601.201

section 509(a) of the Code. Such an or-           ments or internal regulations as well
ganization should apply separately for            as any information regarding any
exempt status under the procedures                change in its character, purposes, or
outlined in subparagraph (1) of this              method of operation.
paragraph.                                           (c) In addition to the information re-
  (ii) Requirements for inclusion in a            quired to establish its own exemption,
group exemption letter. (a) A central or-         the central organization must submit
ganization applying for a group exemp-            to the district director the following
tion letter must establish its own ex-            information, in duplicate, on behalf of
empt status.                                      those subordinates to be included in
  (b) It must also establish that the             the group exemption letter:
subordinates to be included in the                   (1) A letter signed by a principal offi-
group exemption letter are:                       cer of the central organization setting
  (1) Affiliated with it;                         forth or including as attachments:
  (2) Subject to its general supervision             (i) Information verifying the exist-
or control;                                       ence of the relationships required by
  (3) Exempt under the same paragraph             subdivision (ii)(b) of this subparagraph;
of section 501(c) of the Code, though
                                                     (ii) A description of the principal pur-
not necessarily the paragraph under
                                                  poses and activities of the subordi-
which the central organization is ex-
                                                  nates;
empt; and
                                                     (iii) A sample copy of a uniform gov-
  (4) Not private foundations if applica-
                                                  erning instrument (charter, trust in-
tion for a group exemption letter in-
                                                  denture, articles of association, etc.), if
volves section 501(c)(3) of the Code.
                                                  such an instrument has been adopted
  (c) Each subordinate must authorize
                                                  by the subordinates; or, in the absence
the central organization to include it
                                                  of a uniform governing instrument,
in the application for the group exemp-
                                                  copies of representative instruments;
tion letter. The authorization must be
signed by a duly authorized officer of               (iv) An affirmation to the effect that,
the subordinate and retained by the               to the best of his knowledge, the subor-
central organization while the group              dinates are operating in accordance
exemption letter is in effect.                    with the stated purposes;
  (iii) Filing application for a group ex-           (v) A statement that each subordi-
emption letter. (a) A central organiza-           nate to be included in the group exemp-
tion seeking a group exemption letter             tion letter has furnished written au-
for its subordinates must obtain rec-             thorization to the central organization
ognition of its own exemption by filing           as described in subdivision (ii)(c) of
an application with the District Direc-           this subparagraph; and
tor of Internal Revenue for the district             (vi) A list of subordinates to be in-
in which is located the principal place           cluded in the group exemption letter to
of business or the principal office of            which the Service has issued an out-
the organization. For the form of orga-           standing ruling or determination letter
nization see § 1.501(a)–1 of the Income           relating to exemption.
Tax Regulations. Any application re-                 (vii) If the application for a group ex-
ceived by the National Office or by a             emption        letter   involves    section
district director other than as provided          501(c)(3) of the Code, an affirmation to
above will be forwarded, without any              the effect that, to the best of his
action thereon, to the appropriate dis-           knowledge and belief, no subordinate
trict director.                                   to be included in the group exemption
  (b) If the central organization has             letter is a private foundation as defined
previously established its own exemp-             in section 509(a) of the Code.
tion, it must indicate its employer                  (2) A list of the names, mailing ad-
identification number, the date of the            dresses (including Postal ZIP Codes),
exemption letter, and the Internal Rev-           and employer identification numbers
enue Office that issued it. It need not           (if required for group exemption letter
resubmit documents already sub-                   purposes by paragraph (e) of this sub-
mitted. However, if it has not already            division) of subordinates to be included
done so, it must submit a copy of any             in the group exemption letter. A cur-
amendments to its governing instru-               rent directory of subordinates may be

                                             61
§ 601.201                                                  26 CFR Ch. I (4–1–99 Edition)

furnished in lieu of the list if it in-         numbers of the affected subordinates.
cludes the required information and if          An annotated directory of subordinates
the subordinates not to be included in          will not be acceptable for this purpose.
the group exemption letter are identi-          If there were none of the above
fied.                                           changes, the central organization must
  (d) If the central organization does          submit a statement to that effect.
not have an employer identification               (3) The information required by sub-
number, it must submit a completed              division (iii)(c)(l) of this subparagraph,
Form SS–4, Application for Employer             with respect to subordinates to be
Identification Number, with its exemp-          added to the group exemption letter.
tion application. See Rev. Rul. 63–247,         However, if the information upon
C.B. 1963–2, 612.                               which the group exemption letter was
  (e) Each subordinate required to file         based is applicable in all material re-
an annual information return, Form              spects to such subordinates, a state-
990 or 990–A, must have its own em-             ment to this effect may be submitted
ployer identification number, even if it        in lieu of the information required by
has no employees. The central organi-           subdivision (iii)(c)(l)(i) through (v) of
zation must submit with the exemption           this subparagraph.
application a completed Form SS–4 on              (b) Submission of the information re-
behalf of each subordinate not having a         quired by this subdivision does not re-
number. Although subordinates not re-           lieve the central organization or any of
quired to file annual information re-           its subordinates of the duty to submit
turns, Form 990 or 990–A, need not have         such additional information as a key
employer identification numbers for             district director may require to enable
group exemption letter purposes, they           him to determine whether the condi-
may need such numbers for other pur-            tions for continued exemption are
poses.                                          being met. See sections 6001 and 6033 of
  (iv) Information required annually to         the Code and the regulations there-
maintain a group exemption letter. (a)          under.
The central organization must submit              (v) Termination of a group exemption
annually within 45 days after the close         letter. (a) Termination of a group ex-
of its annual accounting period the in-         emption letter will result in non-
formation set out below to the Phila-           recognition of the exempt status of all
delphia Service Center, 11601 Roosevelt         included subordinates. To establish an
Boulevard, Philadelphia, PA 19155, At-          exempt status in such cases, each sub-
tention: EO: R Branch:                          ordinate must file an exemption appli-
  (1) Information regarding all changes         cation under the procedures outlined in
in the purposes, character, or method           subparagraph (1) of this paragraph, or a
of operation of subordinates included           new group exemption letter must be
in the group exemption letter.                  applied for under this subparagraph.
  (2) Lists of—                                   (b) If a central organization dissolves
  (i) Subordinates which have changed           or ceases to exist, the group exemption
their names or addresses during the             letter will be terminated, notwith-
year,                                           standing that the subordinates con-
  (ii) Subordinates no longer to be in-         tinue to exist and operate independ-
cluded in the group exemption letter            ently.
because they have ceased to exist, dis-           (c) Failure of the central organiza-
affiliated, or withdrawn the authoriza-         tion to submit the information re-
tion to the central organization, and           quired by subdivision (iv) of this sub-
  (iii) Subordinates to be added to the         paragraph, or to file a required infor-
group exemption letter because they             mation return. Form 990 or 990–A, or to
are newly organized or affiliated or            otherwise comply with section 6001 or
they have newly authorized the central          6033 of the Code and the regulations
organization to include them. A sepa-           thereunder, may result in termination
rate list must be submitted for each of         of the group exemption letter on the
the three categories set out above.             grounds that the conditions required
Each list must show the names, mail-            for the continuance of the group ex-
ing addresses (including Postal ZIP             emption letter have not been met. See
Codes), and employer identification             Rev. Rul. 59–95, C.B. 1959–1, 627.

                                           62
Internal Revenue Service, Treasury                                                    § 601.201

  (d) The dissolution of a subordinate              time it submits the information re-
included in a group exemption letter                quired by subdivision (iv) of this sub-
will not affect the exempt status of the            paragraph, submit detailed informa-
other included subordinates.                        tion relating to the subordinate’s qual-
  (e) If a subordinate covered by a                 ification for reinclusion in the group
group exemption letter fails to comply              exemption letter.
with section 6001 or 6033 of the Code                  (vii) Instrumentalities or agencies of po-
and the regulations thereunder (for ex-             litical subdivisions. An instrumentality
ample, by failing to file a required in-            or agency of a political subdivision
formation return) and the Service ter-              that exercises control or supervision
minates its recognition of the subordi-             over a number of organizations similar
nate’s status, a copy of the termi-                 in purposes and operations, each of
nation letter to the subordinate will be            which may qualify for exemption under
furnished to the central organization.              the same paragraph of section 501(c) of
The group exemption letter will no                  the Code, may obtain a group exemp-
longer be applicable to such subordi-               tion letter covering those organiza-
nate, but will otherwise remain in ef-              tions in the same manner as a central
fect. (It should be noted that if Form              organization. However, the instrumen-
990 is required to be filed, failure to file        tality or agency must furnish evidence
such return on time may also result in              that it is a qualified governmental
the imposition of a penalty of $10 for              agency. Examples of organizations over
each day the return is late, up to a                which governmental agencies exercise
maximum of $5,000. See section 6652 of              control or supervision are Federal cred-
the Code and the regulations there-                 it unions, State chartered credit
under.)                                             unions, and Federal land bank associa-
  (vi) Revocation of a group exemption              tions.
letter. (a) If the Service determines,                 (viii) Listing in cumulative list of orga-
under the procedures described in sub-              nizations to which charitable contribu-
paragraph (6) of this paragraph, that a             tions are deductible. If a central organi-
central organization no longer qualifies            zation to which a group exemption let-
for exemption under section 501(c) of               ter has been issued is eligible to re-
the Code, the group exemption letter                ceive deductible charitable contribu-
will be revoked. The revocation will re-            tions as provided in section 107 of the
sult in nonrecognition of the exempt                Code, it will be listed in Publication
status of all included subordinates. To             No. 78, Cumulative List—organizations
reestablish an exempt status in such                Described in section 170(c) of the Inter-
cases, each subordinate must file an ex-            nal Revenue Code of 1954. The names of
emption application under the proce-                the subordinates covered by the group
dures outlined in subparagraph (1) of               exemption letter will not be listed indi-
this paragraph or a new group exemp-                vidually. However, the identification of
tion letter must be applied for under               the central organization will indicate
this subparagraph.                                  whether contributions to its subordi-
  (b) If the Service determines, under              nates are also deductible.
the procedures described in subpara-                   (9) Technical advice from the National
graph (6) of this paragraph, that a sub-            Office—(i) Definition and nature of tech-
ordinate included in a group exemption              nical advice. (a) As used in this subpara-
letter no longer qualifies for exemption            graph, technical advice means advice or
under section 501(c) of the Code, the               guidance as to the interpretation and
central organization and the subordi-               proper application of internal revenue
nate will be notified accordingly, and              laws, related statutes, and regulations,
the group exemption letter will no                  to a specific set of facts, in Employee
longer apply to such subordinate, but               Plans and Exempt Organization mat-
will otherwise remain in effect.                    ters, furnished by the National Office
  (c) Where a subordinate organization              upon request of a key district office or
has been disqualified for inclusion in a            Appeals office in connection with the
group exemption letter as described in              processing and consideration of a non-
(b) of this subdivision, and thereafter             docketed case. It is furnished as a
wishes to reestablish its exempt status,            means of assisting Service personnel in
the central organization should, at the             closing cases and establishing and

                                               63
§ 601.201                                                     26 CFR Ch. I (4–1–99 Edition)

maintaining consistent holdings. It                vice should be revoked. The key dis-
does not include memorandums on                    trict director, after development of the
matters of general technical applica-              facts and consideration of the argu-
tion furnished to key district offices or          ments, will decide whether to rec-
to Appeals offices where the issues are            ommend revocation of the ruling or
not raised in connection with the con-             technical advice to the National Office.
sideration and handling of a specific                 (e) The Assistant Commissioner (Em-
case.                                              ployee Plans and Exempt Organiza-
   (b) The provisions of this subpara-             tions) and, in section 521 cases, the As-
graph only apply to Employee Plans                 sistant Commissioner (Technical), act-
and Exempt Organization cases being                ing under a delegation of authority
considered by a key district director or           from the Commissioner of Internal
Appeals office. They do not apply to               Revenue, are exclusively responsible
any other case under the jurisdiction of           for providing technical advice in any
a district director or Appeals office or           issue involving the establishment of
to a case under the jurisdiction of the            basic principles and rules for the uni-
Bureau of Alcohol, Tobacco, and Fire-              form interpretation and application of
arms. The technical advice provisions              tax laws in cases under this subpara-
applicable to cases under the jurisdic-            graph. This authority has been largely
tion of a district director, other than            redelegated to subordinate officials.
Employee Plans and Exempt Organiza-                   (ii) Areas in which technical advice
tion      cases,   are    set   forth    in        may be requested. (a) Key district direc-
§ 601.105(b)(5). The technical advice pro-         tors and Appeals offices may request
visions applicable to cases under the              technical advice on any technical or
jurisdiction of an Appeals office, other           procedural question that develops dur-
than Employee Plans and Exempt Or-                 ing the processing and consideration of
ganization cases are set forth in                  a case. These procedures are applicable
§ 601.106(f)(10).                                  as provided in subdivision (i) of this
   (c) A key district director or an Ap-           subparagraph.
peals office may, under this subpara-                 (b) Key district directors and Appeals
graph, request technical advice with               offices are encouraged to request tech-
respect to the consideration of a re-              nical advice on any technical or proce-
quest for a determination letter. If the           dural question arising in connection
case involves certain Exempt Organiza-             with any case described in subdivision
tion issues that are not covered by pub-           (i) of this subparagraph which cannot
lished precedent or on which there may             be resolved on the basis of law, regula-
be nonuniformity, requesting technical             tions, or a clearly applicable revenue
advice is mandatory rather than dis-               ruling or other precedent issued by the
cretionary. See subparagraphs (2)(iv)              National Office. However, in Exempt
and (5)(iii) of this paragraph.                    Organization cases concerning quali-
   (d) If a key district director is of the        fication for exemption or foundation
opinion that a National Office ruling              status, key district directors and Ap-
letter or technical advice previously              peals offices must request technical ad-
issued should be modified or revoked               vice on any issue that is not covered by
and it requests the National Office to             published precedent or on which non-
reconsider the ruling or technical ad-             uniformity may exist. Requests for
vice, the reference of the matter to the           technical advice should be made at the
National Office is treated as a request            earliest possible stage of the pro-
for technical advice. The procedures               ceedings.
specified in subdivision (iii) of this sub-           (iii) Requesting technical advice. (a) It
paragraph should be followed in order              is the responsibility of the key district
that the National Office may consider              office or the Appeals office to deter-
the recommendation. Only the Na-                   mine whether technical advice is to be
tional Office can revoke a National Of-            requested on any issue before that of-
fice ruling letter or technical advice.            fice. However, while the case is under
Before referral to the National Office,            the jurisdiction of the key district di-
the key district director should inform            rector or the Appeals office, an em-
the plan/organization of its opinion               ployee plan/organization or its rep-
that the ruling letter or technical ad-            resentative may request that an issue

                                              64
Internal Revenue Service, Treasury                                                § 601.201

be referred to the National Office for            director or the Appeals office, a state-
technical advice on the grounds that a            ment of its understanding as to the
lack of uniformity exists as to the dis-          specific point or points at issue which
position of the issue, or that the issue          will be forwarded to the National Of-
is so unusual or complex as to warrant            fice with the request for advice. An ex-
consideration by the National Office.             tension of time must be justified by the
This request should be made at the ear-           plan/organization in writing and ap-
liest possible stage of the proceedings.          proved by the Chief, Employee Plans
While plans/organizations are encour-             and Exempt Organizations Division or
aged to make written requests setting             the Chief, Appeals Office.
forth the facts, law, and argument with             (d) If the plan/organization initiates
respect to the issue, and reason for re-          the action to request advice, and its
questing National Office advice, a plan/          statement of the facts and point or
organization may make the request                 points at issue are not wholly accept-
orally. If, after considering the plan’s/         able to the key district office or the
organization’s request, the examiner or           Appeals office, the plan/organization
the Appeals Officer is of the opinion             will be advised in writing as to the
that the circumstances do not warrant             areas of disagreement. The plan/organi-
referral of the case to the National Of-          zation will be given 10 calendar days
fice, he/she will so advise the plan/orga-        after receipt of the written notice to
nization. (See subdivision (iv) of this           reply to such notice. An extension of
subparagraph for a plan’s/organiza-               time must be justified by the plan/or-
tion’s appeal rights where the exam-              ganization in writing and approved by
iner or Appeal Officer declines to re-            the Chief, Employee Plans and Exempt
quest technical advice.)                          Organizations Division or the Chief,
  (b) When technical advice is to be re-          Appeals Office. If agreement cannot be
quested, whether or not upon the re-              reached, both the statements of the
quest of the plan/organization, the               plan/organization and the key district
plan/organization will be so advised,             office or the Appeals office will be for-
except as noted in (j) of this subdivi-           warded to the National Office.
sion. If the key district office or the             (e)(1) In the case of requests for tech-
Appeals office initiates the action, the          nical advice subject to the disclosure
plan/organization will be furnished a             provisions of section 6110 of the Code,
copy of the statement of the pertinent            the plan/organization must also sub-
facts and the question or questions pro-          mit, within the 10-day period referred
posed for submission to the National              to in (c) and (d) of this subdivision,
Office. The request for advice should be          whichever applicable (relating to
so worded as to avoid possible mis-               agreement by the plan/organization
understanding, in the National Office,            with the statement of facts and points
of the facts or of the specific point or          submitted in connection with the re-
points at issue.                                  quest for technical advice) the state-
  (c) After receipt of the statement of           ment described in (f) of this subdivision
facts and specific questions, the plan/           of proposed deletions pursuant to sec-
organization will be given 10 calendar            tion 6110(c) of the Code. If the state-
days in which to indicate in writing              ment is not submitted, the plan/organi-
the extent, if any, to which it may not           zation will be informed by the key dis-
be in complete agreement. An exten-               trict director or the Appeals office that
sion of time must be justified by the             the statement is required. If the key
plan/organization in writing and ap-              district director or the Appeals office
proved by the Chief, Employee Plans               does not receive the statement within
and Exempt Organizations Division (in             10 days after the plan/organization has
the district office) or the Chief, Ap-            been informed of the need for the state-
peals Office, as the case may be. Every           ment, the key district director or the
effort should be made to reach agree-             Appeals office may decline to submit
ment as to the facts and specific points          the request for technical advice. If the
at issue. If agreement cannot be                  key district director or the Appeals of-
reached, the plan/organization may                fice decides to request technical advice
submit, within 10 calendar days after             in a case where the plan/organization
receipt of notice from the key district           has not submitted the statement of

                                             65
§ 601.201                                                   26 CFR Ch. I (4–1–99 Edition)

proposed deletions, the National Office          forwarded for association with the case
will make those deletions which in the           file.
judgment of the Commissioner are re-                (h) At the time the plan/organization
quired by section 6110(c) of the Code.           is informed that the matter is being re-
  (2) The requirements included in this          ferred to the National Office, it will
subparagraph, relating to the submis-            also be informed of the right to a con-
sion of statements and other material            ference in the National Office in the
with respect to proposed deletions to            event an adverse decision is indicated,
be made from technical advice memo-              and will be asked to indicate whether a
randa before public inspection is per-           conference is desired.
mitted to take place, do not apply to               (i) Generally, prior to replying to the
requests made by the key district di-            request for technical advice, the Na-
rector before November 1, 1976, or re-           tional Office shall inform the plan/or-
quests for any document to which sec-            ganization orally or in writing of the
tion 6104 of the Code applies.                   material likely to appear in the tech-
  (f) In order to assist the Internal            nical advice memorandum which the
Revenue Service in making the dele-              plan/organization proposed be deleted
tions, required by section 6110(c) of the        but which the Internal Revenue Serv-
Code, from the text of technical advice          ice determined should not be deleted. If
memoranda which are open to public               so informed, the plan/organization may
inspection pursuant to section 6110(a)           submit within 10 days any further in-
of the Code, there must accompany re-            formation, arguments, or other mate-
quests for such technical advice either          rial in support of the position that
a statement of the deletions proposed            such material be deleted. The Internal
by the plan/organization, or a state-            Revenue Service will attempt, if fea-
ment that no information other than              sible, to resolve all disagreements with
names, addresses, and identifying num-           respect to proposed deletions prior to
bers need be deleted. Such statements            the time the National Office replies to
shall be made in a separate document.            the request for technical advice. How-
The statement of proposed deletions              ever, in no event shall the plan/organi-
shall be accompanied by a copy of all            zation have the right to a conference
statements of facts and supporting doc-          with respect to resolution of any dis-
uments which are submitted to the Na-            agreements concerning material to be
tional Office pursuant to (c) or (d) of          deleted from the text of the technical
this subdivision, on which shall be indi-        advice memorandum, but such matters
cated, by the use of brackets, the mate-         may be considered at any conference
rial which the plan/organization indi-           otherwise scheduled with respect to the
cates should be deleted pursuant to              request.
section 6110(c) of the Code. The state-             (j) The provisions of (a) through (i) of
ment of proposed deletions shall indi-           this subdivision, relating to the refer-
cate the statutory basis for each pro-           ral of issues upon request of the plan/
posed deletion. The statement of pro-            organization, advising plans/organiza-
posed deletions shall not appear or be           tions of the referral of issues, the sub-
referred to anywhere in the request for          mission of proposed deletions, and the
technical advice. If the plan/organiza-          granting of conferences in the National
tion decides to request additional dele-         Office, are not applicable to technical
tions pursuant to section 6110(c) of the         advice memoranda described in section
Code prior to the time the National Of-          6110(g)(5)(A) of the Code, relating to
fice replies to the request for technical        cases involving criminal or civil fraud
advice, additional statements may be             investigations and jeopardy or termi-
submitted.                                       nation assessments. However, in such
  (g) If the plan/organization has not           cases the plan/organization shall be al-
already done so, it may submit a state-          lowed to provide the statement of pro-
ment explaining its position on the              posed deletions to the National Office
issues, citing precedents which it be-           upon the completion of all proceedings
lieves will bear on the case. This state-        with respect to the investigations or
ment will be forwarded to the National           assessments, but prior to the date on
Office with the request for advice. If it        which the Commissioner mails the no-
is received at a later date, it will be          tice pursuant to section 6110(f)(1) of the

                                            66
Internal Revenue Service, Treasury                                                § 601.201

Code of intention to disclose the tech-           nial. The plan/organization may not
nical advice memorandum.                          appeal the decision of the Chief, Em-
  (k) Form 4463, Request for Technical            ployee Plans and Exempt Organiza-
Advice, should be used for transmitting           tions Division, or of the Chief, Appeals
requests for technical advice to the Na-          Office, not to request technical advice
tional Office.                                    from the National Office. However, if
  (iv) Appeal by plans/organizations of           the plan/organization does not agree
determinations not to seek technical ad-          with the proposed denial, all data re-
vice. (a) If the plan/organization has re-        lating to the issue for which technical
quested referral of an issue before a             advice has been sought, including the
key district office or an Appeals office          plan’s/organization’s written request
to the National Office for technical ad-          and statements, will be submitted to
vice, and after consideration of the re-          the National Office, Attention: Direc-
quest the examiner or the Appeals Offi-           tor, Exempt Organizations or Em-
cer is of the opinion that the cir-               ployee Plans Division or Actuarial Di-
cumstances do not warrant such refer-             vision or, in a section 521 case, Atten-
ral, he/she will so advise the plan/orga-         tion: Director, Corporation Tax Divi-
nization.                                         sion for review. After review in the Na-
  (b) The plan/organization may appeal            tional Office, the submitting office will
the decision of the examiner or the Ap-           be notified whether the proposed denial
peals Officer not to request technical            is approved or disapproved.
advice by submitting to the relevant                (d) While the matter is being re-
official, within 10 calendar days after
                                                  viewed in the National Office, the key
being advised of the decision, a state-
                                                  district office or the Appeals office will
ment of the facts, law, and arguments
                                                  suspend action on the issue (except
with respect to the issue, and the rea-
                                                  where the delay would prejudice the
sons why the plan/organization believes
                                                  Government’s interests) until it is no-
the matter should be referred to the
                                                  tified of the National Office decision.
National Office for advice. An exten-
                                                  This notification will be made within
sion of time must be justified by the
                                                  30 days after receipt of the data in the
plan/organization in writing and ap-
                                                  National Office. The review will be
proved by the Chief, Employee Plans
and Exempt Organizations Division of              solely on the basis of the written
the Chief, Appeals Office.                        record and no conference will be held in
  (c) The examiner or the Appeals Offi-           the National Office.
cer will submit the statement of the                (v) Conference in the National Office.
plan/organization to the Chief, Em-               (a) If, after a study of the technical ad-
ployee Plans and Exempt Organiza-                 vice request, it appears that advice ad-
tions Division or the Chief, Appeals Of-          verse to the plan/organization should
fice, accompanied by a statement of               be given and a conference has been re-
the official’s reasons why the issue              quested, the plan/organization will be
should not be referred to the National            notified of the time and place of the
Office. The Chief will determine, on the          conference. If conferences are being ar-
basis of the statements submitted,                ranged with respect to more than one
whether technical advice will be re-              request for advice involving the same
quested. If the Chief determines that             plan/organization, they will be so
technical advice is not warranted, that           scheduled as to cause the least incon-
official will inform the plan/organiza-           venience to the plan/organization. The
tion in writing that he/she proposes to           conference will be arranged by tele-
deny the request. In the letter to the            phone, if possible, and must be held
plan/organization the Chief will (except          within 21 calendar days after contact
in unusual situations where such ac-              has been made. Extensions of time will
tion would be prejudicial to the best in-         be granted only if justified in writing
terests of the Government) state spe-             by the plan/organization and approved
cifically the reasons for the proposed            by the appropriate branch chief.
denial. The plan/organization will be               (b) A plan/organization is entitled, as
given 15 calendar days after receipt of           a matter of right, to only one con-
the letter in which to notify the Chief           ference in the National Office unless
whether it agrees with the proposed de-           one of the circumstances discussed in

                                             67
§ 601.201                                                           26 CFR Ch. I (4–1–99 Edition)

(c) of this subdivision exists. This con-           zation and approved by the appropriate
ference will usually be held at the                 branch chief. Any additional material
branch level in the appropriate division            and a copy thereof should be addressed
in the Office of the Assistant Commis-              to and sent to the National Office
sioner (Employee Plans and Exempt                   which will forward the copy to the ap-
Organizations) or, in section 521 cases,            propriate key district director or Ap-
in the Office of the Assistant Commis-              peals office. The key district director
sioner (Technical), and will usually be             or the Appeals office will be requested
attended by a person who has authority              to give the matter prompt attention,
to act for the branch chief. In appro-              will verify the additional facts and
priate cases the examiner or the Ap-                data, and will comment on it to the ex-
peals Officer may also attend the con-              tent deemed appropriate.
ference to clarify the facts in the case.             (e) A plan/organization or its rep-
If more than one subject is discussed at            resentative desiring to obtain informa-
the conference, the discussion con-                 tion as to the status of its case (other
stitutes a conference with respect to               than a section 521 case) may do so by
each subject. At the request of the                 contacting the following offices with
plan/organization or its representative,            respect to matters in the areas of their
the conference may be held at an ear-               responsibility:
lier stage in the consideration of the
case than the Service would ordinarily                           Official                   Telephone numbers,
                                                                                             (Area Code 202)
designate. A plan/organization has no
‘‘right’’ of appeal from an action of a             Chief, Employee Plans Technical       566–3871.
                                                      Branch
branch to the director of a division or
                                                    Chief,    Exempt      Organizations   566–3856 or 566–3593.
to any other National Office official.                Technical Branch
   (c) In the process of review of a hold-          Director, Actuarial Division          566–4311
ing proposed by a branch, it may ap-
pear that the final answer will involve             An organization or its representative
a reversal of the branch proposal with              desiring to obtain information as to
a result less favorable to the plan/orga-           the status of its section 521 case may
nization. Or it my appear that an ad-               do so by contacting the Director, Cor-
verse holding proposed by a branch will             poration Tax Division (202–566–4504 or
be approved, but on a new or different              566–4505).
issue or on different grounds than                     (vi) Preparation of technical advice
those on which the branch decided the               memorandum by the National Office. (a)
case. Under either of these cir-                    Immediately upon receipt in the Na-
cumstances, the plan/organization or                tional Office, the employee to whom
its representative will be invited to an-           the case is assigned will analyze the
other conference. The provisions of this            file to ascertain whether it meets the
subparagraph limiting the number of                 requirements of subdivision (iii) of this
conferences to which a plan/organiza-               subparagraph. If the case is not com-
tion is entitled will not foreclose invit-          plete with respect to any requirement
ing the plan/organization to attend fur-            in subdivision (iii) (a) through (d) of
ther conferences when, in the opinion               this subparagraph, appropriate steps
of National Office personnel, such need             will be taken to complete the file. If
arises. All additional conferences of               any request for technical advice does
this type discussed are held only at the            not comply with the requirements of
invitation of the Service.                          subdivision (iii)(e) of this subpara-
   (d) It is the responsibility of the plan/        graph, if applicable, relating to the
organization to furnish to the National             statement of proposed deletions, the
Officer; within 21 calendar days after              National Office will make those dele-
the conference, a written record of any             tions from the technical advice memo-
additional data, line of reasoning,                 randum which in the judgment of the
precedents, etc., that were proposed by             Commissioner are required by section
the plan/organization and discussed at              6110(c) of the Code.
the conference but were not previously                 (b) If the plan/organization has re-
or adequately presented in writing. Ex-             quested a conference in the National
tensions of time will be granted only if            Office, the procedures in subdivision (v)
justified in writing by the plan/organi-            of this subparagraph will be followed.

                                               68
Internal Revenue Service, Treasury                                                § 601.201

  (c) Replies to requests for technical          the technical advice memorandum
advice will be addressed to the key dis-         shall not be furnished the plan/organi-
trict director or to the Appeals office          zation until all proceedings with re-
and will be drafted in two parts. Each           spect to the investigations or assess-
part will identify the plan/organization         ments are completed.
by name, address, identification num-              (f) After receiving the notice, pursu-
ber, and year or years involved. The             ant to section 6110 (f)(1) of the Code, of
first part (hereafter called the ‘‘tech-         intention to disclose the technical ad-
nical advice memorandum’’) will con-             vice memorandum (if applicable), the
tain (1) a recitation of the pertinent           plan/organization, if desiring to protest
facts having a bearing on the issue; (2)         the disclosure of certain information in
a discussion of the facts, precedents,           the memorandum, must, within 20 days
and reasoning of the National Office;
                                                 after the notice is mailed, submit a
and (3) the conclusions of the National
                                                 written statement identifying those de-
Office. The conclusions will give direct
                                                 letions not made by the Internal Rev-
answers, whenever possible, to the spe-
cific questions of the key district di-          enue Service which the plan/organiza-
rector or the Appeals office. The dis-           tion believes should have been made.
cussion of the issues will be in such de-        The plan/organization shall also submit
tail that the key district director or           a copy of the version of the technical
the Appeals office is apprised of the            advice memorandum proposed to be
reasoning underlying the conclusion.             open to public inspection on which it
There shall accompany the technical              indicates, by the use of brackets, the
advice memorandum, where applicable,             deletions proposed by the plan/organi-
a notice, pursuant to section 6110(f)(1)         zation but which have not been made
of the Code, of intention to disclose the        by the Internal Revenue Service. Gen-
technical advice memorandum (includ-             erally, the Internal Revenue Service
ing a copy of the version proposed to be         will not consider the deletion of any
open to public inspection and notations          material which the plan/organization
of third party communications pursu-             did not, prior to the time when the Na-
ant to section 6110 (d) of the Code)             tional Office sent its reply to the re-
which the key district director or the           quest for technical advice to the key
Appeals office will forward to the plan/         district director or the Appeals office,
organization at such time that it fur-           propose be deleted. The Internal Rev-
nishes a copy of the technical advice            enue Service shall, within 20 days after
memorandum to the plan/organization              receipt of the response by the plan/or-
pursuant to (e) of this subdivision and          ganization to the notice pursuant to
subdivision (vii)(b) of this subpara-            section 6110(f)(1) of the Code (if applica-
graph.                                           ble), mail to the plan/organization its
  (d) The second part of the reply will          final administrative conclusion regard-
consist of a transmittal memorandum.             ing the deletions to be made.
In the unusual cases it will serve as a
                                                   (vii) Action on technical advice in key
vehicle for providing the key district
                                                 district offices and in Appeals offices. (a)
office or Appeals office administrative
                                                 Unless the key district director or the
information or other information
which, under the nondisclosure stat-             Chief, Appeals office, feels that the
utes, or for other reasons, may not be           conclusions reached by the National
discussed with the plan/organization.            Office in a technical advice memo-
  (e) It is the general practice of the          randum should be reconsidered and
Service to furnish a copy of the tech-           promptly requests such reconsider-
nical advice memorandum to the plan/             ation, the key district office or the Ap-
organization after it has been adopted           peals office will proceed to process the
by the key district director or the Ap-          case on the basis of the conclusions ex-
peals office. However, in the case of            pressed in the technical advice memo-
technical advice memoranda described             randum. The effect of technical advice
in section 6110(g)(5)(A) of the Code, re-        on the plan’s/organization’s case once
lating to cases involving criminal or            the technical advice memorandum is
civil fraud investigations and jeopardy          adopted is set forth in subdivision (viii)
or termination assessments, a copy of            of this subparagraph.

                                            69
§ 601.201                                                     26 CFR Ch. I (4–1–99 Edition)

  (b) The key district director or the            Commissioner or Deputy Assistant
Appeals office will furnish the plan/or-          Commissioner (Employee Plans and
ganization a copy of the technical ad-            Exempt Organizations) or, in a section
vice memorandum described in subdivi-             521 case, the Assistant Commissioner
sion (vi)(c) of this subparagraph and             or Deputy Assistant Commissioner
the notice pursuant to section 6110(f)(1)         (Technical) exercises the discretionary
of the Code (if applicable) of intention          authority under section 7805(b) of the
to disclose the technical advice memo-            Code to limit the retroactive effect of
randum (including a copy of the                   the holding as illustrated, in the case
version proposed to be open to public             of rulings, in paragraph (l)(5) of this
inspection and notations of third party           section.
communications pursuant to section                   (c) Technical advice memoranda
6110(d) of the Code). The preceding sen-          often form the basis for revenue rul-
tence shall not apply to technical ad-            ings. For the description of revenue
vice memoranda involving civil fraud              rulings and the effect thereof, see
or criminal investigations, or jeopardy           §§ 601.601 (d)(2)(i)(a) and 601.601 (d)(2)(v).
or termination assessments, as de-                   (d) A key district director or an Ap-
scribed in subdivision (iii)(j) of this           peals office may raise an issue in a tax-
subparagraph (except to the extent pro-           able period, even though technical ad-
vided in subdivision (vi)(e) of this sub-         vice may have been asked for and fur-
paragraph) or to documents to which               nished with regard to the same or a
section 6104 of the Code applies.                 similar issue in any other taxable pe-
  (c) In those cases in which the Na-             riod. However, if the proposal by the
tional Office advises the key district            key district director or the Appeals of-
director or the Appeals office that it            fice is contrary to a prior technical ad-
should not furnish a copy of the tech-            vice or ruling issued to the same plan/
nical advice memorandum to the plan/              organization, the proposal must be sub-
organization, the key district director           mitted to the National Office. See
or the Appeals office will so inform the          § 601.106(a)(1)(iv)(b)    and    subdivision
plan/organization if it requests a copy.          (i)(d) of this subparagraph.
  (viii) Effect of technical advice. (a) A           (o) Employees’ trusts or plans—(1) In
technical advice memorandum rep-                  general. Paragraph (o) provides proce-
resents an expression of the views of             dures relating to the issuance of deter-
the Service as to the application of              mination letters with respect to the
law, regulations, and precedents to the           qualification of retirement plans. Para-
facts of a specific case, and is issued           graph (o)(2) of this section sets forth
primarily as a means of assisting Serv-           the authority of key district directors
ice officials in the examination and              to issue determination letters. Para-
closing of the case involved. In cases            graph (o)(3) provides instructions to ap-
under this subparagraph concerning a              plicants, including which forms to file,
plan’s/organization’s qualification or            where such forms must be filed, and re-
an organization’s status, the conclu-             quirements for giving notice to inter-
sions expressed in a technical advice             ested parties. Paragraph (o)(5) de-
memorandum are final and will be fol-             scribes the administrative remedies
lowed by the key district office or the           available to interested parties and the
Appeals office.                                   Pension Benefit Guaranty Corporation.
  (b) Unless otherwise stated, a hold             Paragraphs (o)(6) describes the admin-
ing in a technical advice memorandum              istrative appeal rights available to ap-
will be applied retroactively. Moreover,          plicants. Paragraph (o)(7) provides for
where the plan/organization had pre-              the issuance of notice of final deter-
viously been issued a favorable ruling            mination. Paragraph (o)(8) describes
or determination letter (whether or not           the documents which will make up the
it was based on a previous technical ad-          administrative record. Paragraph (o)(9)
vice memorandum) concerning that                  describes the notice of final determina-
transaction, its purpose, or method of            tion. Paragraph (o)(10) sets forth the
operation, the holding in a technical             actions that will be necessary on the
advice memorandum that is adverse to              part of applicants, interested parties,
the plan/organization is also applied             and the Pension Benefit Guaranty Cor-
retroactively unless the Assistant                poration in order for each to exhaust

                                             70
Internal Revenue Service, Treasury                                                § 601.201

the administrative remedies within the           issue to the National Office for tech-
meaning of section 7476(b)(3) of the             nical advice. The technical advice pro-
Code.                                            visions applicable in these cases are set
  (2) Determination letters. (i) The dis-        forth in paragraph (n)(9) of this sec-
trict directors of the key district of-          tion. If technical advice is issued, the
fices (described in paragraph (o)(4) of          decision of the National Office is final
this section) shall have the authority           and the applicant may not thereafter
to issue determination letters involv-           appeal the issue to the Appeals office.
ing the provisions of sections 401, 403          See § 601.106(a)(1)(iv)(a) and paragrph
(a), 405, and 501(a) of the Internal Rev-        (o)(6) of this section
enue Code of 1954 with respect to:                 (3) Instructions to taxpayers. (i) If an
  (a) Initial qualification of stock             applicant for a determination letter
bonus, pension, profit-sharing, annuity,         does not comply with all the provisions
and bond purchase plans;                         of this paragraph, the district director,
  (b) Initial exemption from Federal in-         in his discretion, may return the appli-
come tax under section 501(a) of trusts          cation and point out to the applicant
forming a part of such plans, provided           those provisions which have not been
that the determination does not in-              met. If such a request is returned to
volve application of section 502 (feeder         the applicant, the 270 day period de-
organizations) or section 511 (unrelated         scribed in section 7476(b)(3) will not
business income), or the question of             begin to run until such time as the pro-
whether a proposed transaction will be           visions of this paragraph are complied
a prohibited transaction under section           with.
503;                                               (ii) An applicant requesting a deter-
  (c) Compliance with the applicable             mination letter must file with the ap-
requirements of foreign situs trusts as          propriate district director specified in
to taxability of beneficiaries (section          paragraph (o)(3)(xii) of this section the
402(c)) and deductions for employer              application form required by para-
contributions (section 404(a)(4)) in con-        graphs (o)(3) (iii) through (x) of this
nection with a request for a determina-          section including all information and
tion letter as to the qualification of a         documents required by such form. (See
retirement plan;                                 section 6104 and the regulations there-
  (d) Amendments, curtailments, or               under for provisions relating to the ex-
terminations of such plans and trusts.           tent to which information submitted to
  (ii) Determination letters authorized          the Internal Revenue Service in con-
by paragraph (o)(2)(i) of this section do        nection with the application for deter-
not include determinations or opinions           mination may be subject to public in-
relating to other inquiries with respect         spection.) However, before filing such
to plans or trusts. Thus, except as spe-         application, the applicant must comply
cifically provided in paragraph (o)(2)(i)        with the provisions of paragraphs (o)(3)
of this section, key district directors          (xiv) through (xx) of this section (relat-
may not issue determination letters re-          ing to notification of interested par-
lating to issues under other sections of         ties). (See paragraph (o)(5)(vi) of this
the Code, such as sections 72, 402               section with respect to the effective
through 404, 412, 502, 503, and 511              date of paragraphs (o) (3) (xiv) through
through 515, unless such determination           (xx) of this section.)
letters are otherwise authorized under             (iii) Paragraphs (o)(3) (iv)–(vi), (viii),
paragraph (c) of this section.                   and (ix) apply only to applications for
  (iii) If, during the consideration of a        determinations in respect of plan years
case described in paragraph (o)(2)(i) of         to which section 410 of the Code does
this section by a key district director,         not apply. Paragraph (o)(3)(x) applies
the applicant believes that the case in-         only to applications for determinations
volves an issue with respect to which            in respect of plan years to which sec-
referral for technical advice is appro-          tion 410 applies. Paragraph (o)(3)(vii)
priate, the applicant may ask the dis-           applies whether or not the application
trict director to request technical ad-          is for a determination in respect of
vice from the National Office. The dis-          plan years to which section 410 applies.
trict director shall advise the applicant        For this purpose, section 410 will be
of its right to request referral of the          considered to apply with respect to a

                                            71
§ 601.201                                                    26 CFR Ch. I (4–1–99 Edition)

plan year if an election has been made            which includes self-employed individ-
under section 1017(d) of the Employee             uals, the applicant should file, in dupli-
Retirement Income Security Act of                 cate, Form 4578, Application for Ap-
1974 to have section 410 apply to such            proval of Bond Purchase Plan that in-
plan year, whether or not the election            cludes      Self-Employed      Individuals.
is conditioned upon the issuance by the           When properly completed, Form 4578
Commissioner of a favorable deter-                will constitute a bond purchase plan.
mination. For purposes of this para-              (See paragraph (o)(3)(iii) for plan years
graph (o)(3), in the case of an organiza-         to which this section (o)(3)(vii) ap-
tion described in section 410(c)(1), sec-         plies.)
tion 410 will be considered to apply to             (viii) An employer who desires a de-
a plan year of such organization for              termination letter on his adoption of a
any plan year to which section 410(c)(2)          master or prototype plan which is de-
applies to such plan.                             signed to satisfy section 401(a) or 403(a)
   (iv) If the request relates to the ini-        but which is not designed to include
tial qualification of an individually de-         self-employed individuals within the
signed plan, a subsequent amendment               meaning of section 401(c)(1) must file
thereto, or compliance with the re-               Form 4462, Employer Application—De-
quirements for a foreign situs trust,             termination as to Qualification of Pen-
the employer should (a) if the plan does          sion, Annuity, or Profit-sharing Plan
not include self-employed individuals,            and Trust, and furnish a copy of the
file Form 4573, Application for Deter-            adoption agreement or other evidence
mination—Individually Designed Plan               of adoption of the plan and such addi-
(not covering self-employed individ-              tional information as the district di-
uals), or (b) if the plan includes self-          rector may require. (See paragraph
employed individuals, file Form 4574,             (o)(3)(iii) of this section for plan years
Application for Determination—Indi-               to which this paragraph (o)(3)(viii) ap-
vidually Designed Plan Covering Self-             plies.)
Employed Individuals, except that                   (ix) An applicant who amends his
where a bond purchase plan includes a             adoption agreement under a master or
self-employed individual, file Form               prototype plan may request a deter-
4578, Application for Approval of Bond            mination letter as to the effect of such
Purchase       Plan.    (See    paragraph         amendment by filing Form 4462 with
(o)(3)(iii) for plan years to which this          his district director, together with a
paragraph (o)(3)(iv) applies.)                    copy of the amendment and a summary
   (v) If the request involves a curtail-         of the changes. However, in the event
ment or termination of the plan (or               an applicant desires to amend his adop-
complete discontinuance of contribu-              tion agreement under a master or pro-
tions), the applicant should file Form            totype plan and such amendment is not
4576, Application for Determination—              contemplated or permitted under the
Termination or Curtailment of Plan.               plan, then such amendment will in ef-
This form will also be applicable to the          fect substitute an individually designed
termination of a plan that includes               plan for the master or prototype plan.
self-employed individuals. (See para-             (See paragraph (o)(3)(iii) of this section
graph (o)(3)(iii) of this section for plan        for plan years to which this paragraph
years to which this paragraph (o)(3)(v)           (o)(3)(ix) applies.)
applies.)                                           (x) An applicant requesting a deter-
   (vi) An association of employers or a          mination letter relating to a defined
board of trustees should file Form 4577,          contribution plan, other than a letter
Application for Determination—Indus-              on the qualification of a bond purchase
try-Wide Plan and Trust, if the request           plan, shall file in duplicate, Form 5301,
relates to the initial qualification or           Application for Determination of De-
subsequent amendments of an indus-                fined Contribution Plan, and Form
try-wide or area-wide union negotiated            5302, Employee Census. Those forms are
plan. (See paragraph (o)(3)(iii) of this          to be filed in accordance with the in-
section for plan years to which this              structions therefor and accompanied
paragraph (o)(3)(vi) applies.)                    by any schedules or additional mate-
   (vii) If the request relates to the            rial prescribed in those instructions.
qualification of a bond purchase plan,            (See paragraph (o)(3)(iii) of this section

                                             72
Internal Revenue Service, Treasury                                                § 601.201

for plan years to which this paragraph              (c) In the case of a plan established or
(o)(3)(x) applies.)                               proposed for an industry by all sub-
   (xi) When, in connection with an ap-           scribing employers whose principal
plication for a determination on the              places of business are located within
qualification of the plan, it is nec-             more than one district, the request
essary to determine whether an organi-            shall be addressed to the district direc-
zation (including a professional service          tor for the district in which is located
organization) is a corporation or an as-          the principal place of business of the
sociation classified as a corporation             trustee, or if more than one trustee,
under § 301.7701–2 of this chapter of the         the usual meeting place of the trustees.
Regulations on Procedure and Admin-                 (d) In the case of a pooled fund ar-
istration, and whether an employer-               rangement (individual trusts under
employee relationship exists between              separate plans pooling their funds for
it and its associates, the district direc-        investment purposes through a master
tor will make such determination. In              trust), the request on behalf of the
such cases, the application with re-              master trust shall be addressed to the
spect to the qualification of the plan            district director for the district where
should be filed in accordance with the            the principal place of business of such
provisions herein set forth and should            trust is located. Requests on behalf of
contain the information and docu-                 the participating trusts and related
ments specified in the application. It            plans will be addressed as otherwise
should also be accompanied by such in-            provided herein.
formation and copies of documents as                (e) In the case of a plan of multiple
the organization deems appropriate to             employers (other than a master or pro-
establish its status. The Service may,            totype plan) not otherwise herein pro-
in addition, require any further infor-           vided for, the request shall be ad-
mation that is considered necessary to            dressed to the district director for the
determine the status of the organiza-             district in which is located the prin-
tion, the employment status of the in-            cipal place of business of the trustee,
dividuals involved, or the qualification          or if not trusteed or if more than one
of the plan. After the taxable status of          trustee, the principal or usual meeting
the organizations and the employer-               place of the trustees or plan super-
employee relationship have been deter-            visors.
mined, the key district director may                (xiii) The applicant’s request for a
issue a determination letter as to the            determination letter may be with-
qualification of the plan.                        drawn by a written request at any time
   (xii) Requests for determination let-          prior to appealing a proposed deter-
ters on matters authorized by para-               mination to the regional office as de-
graph (o)(2) of this section, and the             scribed in paragraph (o)(6) of this sec-
necessary supporting data, are to be              tion. In the case of such a withdrawal
addressed to the district director                the Service will not render a deter-
(whether or not such district director            mination of any type. A failure to
is the director of a key district) speci-         render a determination as a result of
fied below (determined without regard             such a withdrawal will not be consid-
to the application of section 414 (b) or          ered a failure of the Secretary or his
(c) to the plan):                                 delegate to make a determination
   (a) In the case of a plan for a single         within the meaning of section 7476. In
employer, the request shall be ad-                the case of a withdrawal the district di-
dressed to the district director for the          rector may consider the information
district in which such employer’s prin-           submitted in connection with the with-
cipal place of business is located.               drawn request in a subsequent audit or
   (b) In the case of a single plan for a         examination.
parent company and its subsidiaries,                (xiv) In the case of an application for
the request shall be addressed to the             a determination for plan years to
district director for the district in             which section 410 applies (see para-
which the principal place of business of          graph (o)(5)(vi) of this section), notice
the parent company is located, whether            that an application for an advance de-
separate or consolidated returns are              termination regarding the qualifica-
filed.                                            tion of plans described in section 401(a),

                                             73
§ 601.201                                                   26 CFR Ch. I (4–1–99 Edition)

403(a), or 405(a) is to be made must be             (f) Whether or not the Service has
given to all interested parties in the            issued a previous determination as to
manner set forth in the regulations               the qualified status of the plan;
under section 7476 of the Code.                     (g) A statement that any person to
  (xv) When the notice referred to in             whom the notice is addressed is enti-
paragraph (o)(3)(xiv) of this section is          tled to submit, or request the Depart-
given by posting or in person, such no-           ment of Labor to submit, to the dis-
tice must be given not less than 7 days           trict director described in paragraph
nor more than 21 days prior to the date           (o)(3)(xvi)(d) of this section, a comment
that application for a determination is           on the question of whether the plan
made. When the notice is given by                 meets the requirements for qualifica-
mailing, it should be given not less              tion under Part I of Subchapter D of
than 10 days nor more than 24 days                Chapter 1 of the Internal Revenue Code
prior to the date the application for a           of 1954; that two or more such persons
determination is made. See paragraph              may join in a single comment or re-
(o)(3)(xxi) of this section for deter-            quest; and that if such a person or per-
mining when an application is made. If,           sons request the Department of Labor
however, an application is returned to            to submit a comment and that depart-
the applicant for failure to adequately           ment declines to do so in respect of one
satisfy the notification requirement              or more matters raised in the request,
with respect to a particular group or             the person or persons so requesting
class of interested parties, the appli-           may submit a comment to the district
                                                  director in respect of the matters on
cant need not cause notice to be given
                                                  which the Department of Labor de-
to those groups or classes of interested
                                                  clines to comment;
parties with respect to which the no-
                                                    (h) That a comment to the district
tice requirement was already satisfied
                                                  director or a request of the Department
merely because, as a result of the re-
                                                  of Labor must be made according to
submission of the application, the time
                                                  the following procedures:
limitations of this paragraph (o)(3)(xv)
would not be met.                                   (1) A comment to the district direc-
                                                  tor must be received on or before the
  (xvi) The notice referred to in para-
                                                  45th day (specified by date) after the
graph (o)(3)(xiv) of this section shall be
                                                  day on which the application for deter-
in writing and shall contain the fol-
                                                  mination is received by the district di-
lowing information:
                                                  rector;
  (a) A brief description identifying the
                                                    (2) Or if the comment is being sub-
class or classes of interested parties to
                                                  mitted on a matter on which the De-
whom the notice is addressed (e.g., all           partment of Labor was first requested
present employees of the employer, all            but declined to comment, on or before
present employees eligible to partici-            the later of such 45th day or the 15th
pate);                                            day after the day on which the Depart-
  (b) The name of the plan, the plan              ment of Labor notifies such person or
identification number, and the name of            persons that it declines to comment,
the plan administrator;                           but in no event later than the 60th day
  (c) The name and taxpayer identifica-           (specified by date) after the day the ap-
tion number of the applicant;                     plication is received by the district di-
  (d) That an application for a deter-            rector; and
mination as to the qualified status of              (3) A request of the Department of
the plan is to be made to the Internal            Labor to submit such a comment must
Revenue Service, stating whether the              be received by such department on or
application relates to an initial quali-          before the 25th day (specified by date)
fication, a plan amendment or a plan              (or if the person or persons requesting
termination, and the address of the dis-          the Department of Labor to submit
trict director to whom the application            such a comment wish to preserve their
will be submitted;                                right to submit a comment to the dis-
  (e) A description of the class of em-           trict director in the event the Depart-
ployees eligible to participate under             ment of Labor declines to comment, on
the plan;                                         or before the 15th day (specified by

                                             74
Internal Revenue Service, Treasury                                               § 601.201

date)) after the day the application is           tributions, if any), then in lieu of mak-
received by the district director;                ing such materials available to inter-
  (i) except to the extent there is in-           ested parties who are not participants
cluded in the notice the additional in-           (as described above), there may be
formational materials which para-                 made available to such interested par-
graphs (o) (3) (xviii), (xix), and (xx) of        ties a document containing the fol-
this section require to be made avail-            lowing information: a description of
able to interested parties, a description         the plan’s requirements respecting eli-
of a reasonable procedure whereby such            gibility for participation and benefits;
additional informational material will            a description of the provisions pro-
be made available to them (see para-              viding for nonforfeitable benefits; a de-
graph (o)(3)(xvii) of this section).              scription of the circumstances which
  (xvii) The procedure referred to in             may result in ineligibility, or denial or
paragraph (o)(3)(xvi)(i) of this section          loss of benefits; a description of the
whereby the additional informational              source of financing of the plan and the
material      required    by   paragraphs         identity of any organization through
(o)(3)(xviii), (xix) and (xx) of this sec-        which benefits are provided; whether
tion will (to the extent not included in          the applicant is claiming in his appli-
this notice) be made available to inter-          cation that the plan meets the require-
ested parties, may consist of making              ments of section 410(b) (1) (A) of the
such material available for inspection            Code, and, if not, the coverage schedule
and copying by interested parties at a            required by the application in the case
place or places reasonably accessible to          of plans not meeting the requirements
such parties, or supplying such mate-             of such section. However, once such an
rial in person or by mail to interested           interested party or his designated rep-
parties requesting the same in person             resentative receives a notice of final
or by mail, or by a combination of the            determination, the applicant must,
foregoing, provided such procedure is             upon request, make available to such
immediately available to all interested           interested party (regardless of whether
parties and is designed to supply them            or not the interested party is a partici-
with such additional informational ma-            pant in the plan and regardless of
terial in time for them to pursue their           whether or not the plan has less than
rights within the time period pre-                26 participants) an updated copy of the
scribed, and is available until the ear-          plan and related trust agreement (if
lier of the filing of a pleading com-             any) and the application for determina-
mencing a declaratory judgement ac-               tion. Information of the type described
tion under section 7476 of the Code with          in section 6104(a) (1) (D) of the Code
respect to the qualification of the plan          should not be included in the applica-
or the ninety-second day after the day            tion, plan, or related trust agreement
the notice of final determination is              submitted to the Internal Revenue
mailed to the applicant.                          Service. Accordingly, such information
  (xviii) Unless provided in the notice,          should not be included in any of the
the following materials shall be made             materials required by this paragraph
available to interested parties under a           (o)(3) to be available to interested par-
procedure described in paragraph                  ties. There may be excluded from such
(o)(3)(xviii) of this section:                    material information contained in
  (a) An updated copy of the plan and             Form 5302 (Employee Census). How-
the related trust agreement (if any);             ever, information showing the number
  (b) The application for determina-              of individuals covered and not covered
tion;                                             in the plan, listed by compensation
Provided, however, That if there would            range, shall not be excluded.
be less than 26 participants in the plan,           (xix) Unless provided in the notice,
as described in the application (includ-          there shall be made available to inter-
ing, as participants, retired employees           ested parties under a procedure de-
and beneficiaries of deceased employ-             scribed in paragraph (o)(3)(xvii) of this
ees who have a nonforefeitable right to           section, any additional document deal-
benefits under the plan and employees             ing with the application which is sub-
who would be eligible to participate              mitted by or for the applicant to the
upon making mandatory employee con-               Internal Revenue Service, or furnished

                                             75
§ 601.201                                                                   26 CFR Ch. I (4–1–99 Edition)

by the Internal Revenue Service to the                the date of postmark, the immediately
applicant; provided, however, if there                preceding sentence shall not apply.
would be less than 26 participants in                   (4) Key district offices. Following are
the plan as described in the application              the 19 key district offices that issue de-
(including, as participants, retired em-              termination letters and the area cov-
ployees and beneficiaries of deceased                 ered:
employees who have a nonforfeitable                         Key district(s)                     IRS districts covered
right to benefits under the plan and
employees who would be eligible to                    Central Region:
                                                        Cincinnati ................     Cincinnati, Louisville, Indianapolis
participate upon making mandatory                       Cleveland ...............       Cleveland, Parkersburg
employee contributions, if any), such                   Detroit .....................   Detroit
additional documents need not be made                 Mid-Atlantic Region:
                                                        Baltimore ................      Baltimore (which includes the District
available to interested parties who are                                                   of Columbia and Office of Inter-
not participants (as described above)                                                     national Operations), Pittsburgh,
until they or their designated rep-                                                       Richmond
                                                        Philadelphia ............       Philadelphia, Wilmington
resentative, receive a notice of final                  Newark ...................      Newark
determination. The applicant may also                 Midwest Region:
withhold from such inspection and                       Chicago ..................      Chicago
                                                        St. Paul ...................    St. Paul, Fargo, Aberdeen, Mil-
copying, information described in sec-                                                    waukee
tion 6104(a) (1) (C) and (D) of the Code                 St. Louis .................    St. Louis, Springfield, Des Moines,
which may be contained in such addi-                                                      Omaha
                                                      North-Atlantic Region:
tional documents.                                       Boston ....................     Boston, Augusta, Burlington, Provi-
  (xx) Unless provided in the notice,                                                     dence, Hartford, Portsmouth
there shall be made available to all in-                Manhattan ..............        Manhattan
                                                        Brooklyn .................      Brooklyn, Albany, Buffalo
terested parties under a procedure de-                Southeast Region:
scribed in paragraph (o)(3)(xvii) of this               Atlanta ....................    Atlanta,   Greensboro,     Columbia,
section, material setting forth the fol-                                                  Nashville
                                                        Jacksonville ............       Jacksonville, Jackson, Birmingham
lowing information:                                   Southwest Region:
  (a) The rights of interested parties                  Austin .....................    Austin, New Orleans, Albuquerque,
described in paragraph (o)(5)(i) of this                                                  Denver, Cheyenne
                                                         Dallas .....................   Dallas, Oklahoma City, Little Rock,
section; and                                                                              Wichita
  (b) The information provided in para-               Western Region:
                                                       Los Angeles ...........          Los Angeles, Phoenix, Honolulu
graphs (o)(5)(ii), (iii), (iv) and (v) of this         San Francisco ........           San Francisco, Salt Lake City, Reno
section.                                               Seattle ....................     Seattle, Portland, Anchorage, Boise,
  (xxi) An application for an advance                                                     Helena
determination, a comment to the dis-                    (5) Administrative remedies of interested
trict director, or a request to the De-               parties and the Pension Benefit Guaranty
partment of Labor, shall be deemed                    Corporation. (i) With respect to plan
made when it is received by the district              years to which section 410 applies (see
director, or the Department of Labor.                 paragraph (o)(5)(vi) of this section),
The notice to interested parties re-                  persons who qualify as interested par-
quired by paragraph (o)(3)(xiv) of this               ties under the regulations issued under
section shall be deemed given when it                 section 7476 and the Pension Benefit
is given in person, posted as prescribed              Guaranty Corporation shall have the
in the regulations under section 7476 or              following rights:
received through the mail. In any case                  (a) To submit to the district director
where such an application, request,                   for the district where an application
comment, or notice is sent by mail, it                for determination is filed, by the 45th
shall be deemed received as of the date               day after the day on which the applica-
of the postmark (or if sent by certified              tion is received by the district director,
or registered mail, the date of certifi-              a written comment on said application,
cation or registration), if it is depos-              with respect to the qualification of the
ited in the mail in the United States in              plan under Subchapter D of Chapter 1
an envelope, or other appropriate wrap-               of the Internal Revenue Code.
per first class postage prepaid, properly               (b) To request the Administrator of
addressed. However, if such an applica-               Pension and Welfare Benefit Programs,
tion, request or comment is not re-                   Department of Labor, 200 Constitution
ceived within a reasonable period from                Avenue, NW, Washington, DC 20210, to

                                                 76
Internal Revenue Service, Treasury                                                § 601.201

submit to such district director such a           trict director described in paragraph
written comment under the provisions              (o)(3)(xvi)(d) of this section, and con-
of section 3001(b) (2) of the Employee            tain the following:
Retirement Income Security Act of                   (a) The name or names of the inter-
1974. Such a request, if made by an in-           ested party or parties making the com-
terested party or parties, must be re-            ment;
ceived by such department on or before              (b) The name of taxpayer identifica-
the 25th day after the day said applica-          tion number of the applicant making
tion is received by the district director.        the application;
However, if such party or parties re-               (c) The name of the plan and the plan
questing the Department of Labor to               identification number;
submit such a comment wish to pre-                  (d) Whether the party or parties sub-
serve their rights to submit a comment            mitting the comments are—
to the district director in the event the           (1) Employees eligible to participate
Department of Labor declines to com-              under the plan,
ment (pursuant to paragraph (o)(5)(i)               (2) Former employees or beneficiaries
(c) of this section), such request must           of deceased former employees who have
be received by such department on or              a vested right to benefits under the
before the 15th day after the day the             plan, or
application is received by the district             (3) Employees not eligible to partici-
director.                                         pate under the plan;
   (c) If a request described in paragraph          (e) The specific matter or matters
(o)(5)(i)(b) of this section is made and          raised by the interested party or par-
the Department of Labor notifies the              ties on the question of whether the
interested party or parties making the            plan meets the requirements for quali-
request that it declines to submit a              fication under Part I of Subchapter D
comment on a matter concerning qual-              of the Code, and how such matter or
ification of the plan which was raised            matters relate to the interests of such
in such request, to submit a written              party or parties making such com-
comment to the district director on               ment.
such matter by the later of the 45th                (f) The address of the interested
day after the day the application for             party submitting the comment to
determination is received by the dis-             which all correspondence, including a
trict director or the 15th day after the          notice of the Internal Revenue Serv-
day on which the Department of Labor              ice’s final determination with respect
notifies such party or parties that it            to qualification, should be sent. (See
declines to submit a comment on such              section 7476(b)(5) of the Code.) If more
matter, but, in no event later than the           than one interested party submits the
60th day after the application for deter-         comment, they must designate a rep-
mination was received. (See paragraph             resentative for receipt of such cor-
(o)(5)(iii) of this section for deter-            respondence and notice on behalf of all
mining when notice that the Depart-               interested parties submitting the said
ment of Labor declines to comment is              comment, and state the address of such
received by an interested party or par-           representative. Such representative
ties.) Such a comment must comply                 shall be one of the interested parties
with the requirements of paragraph                submitting the comment or the author-
(o)(5)(ii) of this section, and include a         ized representative.
statement that the comment is being                 (iii) For purposes of paragraph
submitted on matters raised in a re-              (o)(3)(xvi)(h) and (o)(5)(i)(c), notice by
quest to the Department of Labor on               the Department of Labor that it de-
which that department declined to                 clines to comment shall be deemed
comment.                                          given to the interested party des-
   (ii) A comment submitted by an in-             ignated to receive such notice when re-
terested party or parties to the district         ceived by him.
director must be in writing, signed by              (iv) A request of the Department of
such party or parties or by an author-            Labor to submit a comment to the dis-
ized representative of such party or              trict director must be in writing,
parties (as provided in paragraph (e) (6)         signed, and in addition to the informa-
of this section), be addressed to the dis-        tion prescribed in paragraph (o)(5)(ii) of

                                             77
§ 601.201                                                    26 CFR Ch. I (4–1–99 Edition)

this section must also contain the ad-              (vii) The Internal Revenue Service
dress of the district director to whom            will provide to the applicant a copy of
the application was, or will be, sub-             all comments on the application sub-
mitted. The address designated for no-            mitted       pursuant      to     paragraph
tice by the Internal Revenue Service              (o)(5)(i)(a), (b) or (c) of this section. In
will be used by the Department of                 addition, the Internal Revenue Service
Labor in communicating with the                   will provide to the applicant a copy of
party or parties submitting the re-               all correspondence in respect of a com-
quest.                                            ment between the Internal Revenue
  (v) The contents of written com-                Service and a person submitting the
ments submitted by interested parties             comment.
to the Internal Revenue Service pursu-              (6) Reference of matters to the Appeals
ant to paragraphs (o)(5)(i)(a) and (c)            office. (i) Where issues arise in a dis-
will not be treated as confidential ma-           trict director’s office on matters with-
terial and may be inspected by persons            in the contemplation of paragraph
outside the Internal Revenue Service,             (o)(2)(i) of this section, and the key dis-
including the applicant for the deter-            trict director issues a notice of pro-
mination. Accordingly, designations of            posed determination which is adverse
material as confidential or not to be             to the applicant, the applicant may ap-
disclosed, contained in such comments,            peal the proposed determination to the
will not be accepted. Thus, a person              Appeals office. However, the applicant
submitting a written comment should               may not appeal a determination that is
not include therein material that he              based on a National Office technical
considers to be confidential or inappro-          advice. See § 601.106 (a)(1)(iv)(a) and
priate for disclosure to the public. It           paragraph (o)(2)(iii) of this section. The
will be presumed by the Internal Rev-             applicant shall notify the key district
enue Service that every written com-              director that it intends to request Ap-
ment submitted to it is intended by the           peals office consideration by submit-
party or parties submitting it to be              ting the request, in writing, to the key
subject in its entirety to public inspec-         district director within 30 days from
tion and copying.                                 issuance of the notice of proposed de-
  (vi) (a) Paragraphs (o)(3)(xiv) through         termination. The key district director
(xxi) and (o)(5) of this section apply to         will forward the request and the ad-
an application for an advance deter-              ministrative record to the Appeals of-
mination in respect of a plan year or             fice and will so notify the applicant in
years to which section 410 applies to             writing. A failure by the applicant to
the plan, whether or not such applica-            request
tion is received by the district director
before the first date on which such sec-          Appeals office consideration will con-
tion applies to the plan.                         stitute a failure to exhaust available
  (b) For purposes of paragraph                   administrative remedies as required by
(o)(5)(vi)(a) of this section, section 410        section 7476(b)(3) and will thus preclude
shall be considered to apply to a plan            the applicant from seeking a declara-
year if an election has been made under           tory judgment as provided under sec-
section 1017(d) of the Employee Retire-           tion 7476. (See paragraph (o)(10)(i)(c) of
ment Income Security Act of 1974 to               this section.)
have section 410 apply to such plan                 (ii) The request for Appeals office
year, whether or not the election is              consideration must show the following:
conditioned upon the issuance by the                (a) Date of application for determina-
Commissioner of a favorable deter-                tion letter;
mination.                                           (b) Name and address of the applicant
  (c) For purposes of paragraph                   and the name and address of the rep-
(o)(5)(vi)(a) of this section, in the case        resentative, if any, who has been au-
of an organization described in section           thorized to represent the applicant as
410(c) (1), section 410 will be considered        provided in paragraph (c)(6) of this sec-
to apply to a plan year of such organi-           tion;
zation for any plan year to which sec-              (c) The key district office in which
tion 410(c) (2) applies to such plan.             the case is pending;

                                             78
Internal Revenue Service, Treasury                                                   § 601.201

   (d) Type of plan (pension, annuity,              Appeals procedures and referral of the
profit-sharing, stock bonus, bond pur-              case back to the key district for addi-
chase, and foreign situs trusts), and               tional consideration.
type of action involved (initial quali-               (7) Issuance of the notice of final deter-
fication, amendment, curtailment, or                mination. The key district director or
termination);                                       Appeals office will send notice of the
   (e) Date of filing this request with             final determination to the applicant.
the key district director and the date              The key district director will send no-
and symbols of the letter referred to in            tice of the final determination to the
paragraph (o)(6)(i) of this section;                interested parties who have previously
   (f) A complete statement of the                  submitted comments on the applica-
issues and a presentation of the argu-              tion to the Internal Revenue Service
ments in support of the applicant’s po-             pursuant to paragraph (o)(5)(i) (a) or (c)
sition; and                                         of this section (or to the persons des-
   (g) Whether a conference is desired.             ignated by them to receive such no-
   (iii) After receipt of the administra-           tice), to the Department of Labor in
tive record in the Appeals office, the              the case of a comment submitted by
applicant will be afforded the oppor-               that department upon the request of
tunity for a conference, if a conference            interested parties or the Pension Ben-
was requested. After full consideration             efit Guaranty Corporation pursuant to
of the entire administrative record, the            paragraph (o)(5)(i)(b) of this section,
Appeals office will notify the applicant            and to the Pension Benefit Guaranty
in writing of the proposed decision and             Corporation if it has filed a comment
the reasons therefor and will issue a               pursuant to paragraph (o)(5)(i)(a) of
notice of final determination in accord-            this section.
ance with the decision. However, if the               (8) Administrative record. (i) In the
proposed disposition by the Appeals of-             case of a request for an advance deter-
fice is contrary to a National Office               mination in respect of a retirement
technical advice concerning qualifica-              plan, the determination of the district
tion, issued prior to the case, the pro-            director or Appeals office on the quali-
posed disposition will be submitted to              fication or nonqualification of the re-
the Assistant Commissioner (Employee                tirement plan shall be based solely on
Plans and Exempt Organizations) and                 the facts contained in the administra-
the decision of that official will be fol-          tive record. Such administrative record
lowed by the Appeals office. See                    shall consist of the following:
§ 601.106(a)(1)(iv)(b). Additionally, if the          (a) The request for determination,
applicant believes that the case in-                the retirement plan and any related
volves an issue with respect to which               trust instruments, and any written
referral for technical advice is appro-             modifications or amendments thereof
priate, the applicant may ask the ap-               made by the applicant during the pro-
peals office to request technical advice            ceedings within the Internal Revenue
from the National Office. The Appeals               Service;
office shall advise the applicant of its              (b) All other documents submitted to
right to request referral of the issue to           the Internal Revenue Service by or on
the National Office for technical ad-               behalf of the applicant in respect of the
vice. The technical advice provisions               request for determination;
applicable to these cases are set forth               (c) All written correspondence be-
in paragraph (n)(9) of this section. If             tween the Internal Revenue Service
technical advice is issued, the decision            and the applicant in respect of the re-
of the National Office will be followed             quest for determination and any other
by the Appeals office. See paragraph                documents issued to the applicant from
(n)(9)(viii)(a) of this section.                    the Internal Revenue Service;
   (iv) Applicants are advised to make                (d) All written comments submitted
full presentation of the facts, cir-                to the Internal Revenue Service pursu-
cumstances, the arguments at the ini-               ant to paragraphs (o)(5)(i) (a), (b), and
tial level of consideration, since sub-             (c) of this section, and all correspond-
mission of additional facts, cir-                   ence in respect of comments submitted
cumstances, and arguments at the Ap-                between the Internal Revenue Service
peals office may result in suspension of            and persons (including the Pension

                                               79
§ 601.201                                                    26 CFR Ch. I (4–1–99 Edition)

Benefit Guaranty Corporation and the              exhausted the administrative remedies
Department of Labor) submitting com-              available to him in the Internal Rev-
ments pursuant to paragraphs (o)(5)(i)            enue Service upon the completion of
(a), (b), and (c) of this section;                the steps described in paragraph (o)(10)
  (e) In any case in which the Internal           (i), (ii), or (iii) of this section, subject,
Revenue Service makes an investiga-               however, to paragraphs (o)(10) (iv) and
tion regarding the facts as represented           (v) of this section. If an applicant, in-
or alleged by the applicant in his re-            terested party, or the Pension Benefit
quest for determination or in com-                Guaranty Corporation does not com-
ments submitted pursuant to para-                 plete the applicable steps described
graphs (o)(5)(i) (a), (b), and (c) of this
                                                  below, such ap plicant, interested
section, a copy of the official report of
                                                  party, or the Pension Benefit Guaranty
such investigation.
  (ii) The administrative record shall            Corporation will not have exhausted
be closed upon the earlier of the fol-            available administrative remedies as
lowing events:                                    required by section 7476(b)(3) and will
  (a) The date of mailing of a notice of          thus be precluded from seeking a de-
final determination by the Internal               claratory judgment under section 7476
Revenue Service in respect of the ap-             except to the extent that paragraph
plication for determination; or                   (o)(10) (iv)(b) or (v) of this section ap-
  (b) The filing of a petition with the           plies.
United States Tax Court seeking a de-                (i) The administrative remedies of an
claratory judgment in respect of the              applicant with respect to any matter
retirement plan.                                  relating to the qualification of a plan
Any oral representation or modifica-              are:
tion of the facts as represented or al-              (a) Filing a completed application
leged in the application for determina-           with the appropriate district director
tion or in a comment filed by an inter-           pursuant to paragraphs (o)(3) (iii)
ested party, which is not reduced to              through (xii) of this section;
writing and submitted to the Service                 (b) Compliance with the require-
shall not become a part of the adminis-           ments pertaining to notice to inter-
trative record and shall not be taken             ested parties as set forth in paragraphs
into account in the determination of              (o)(3)(xiv) through (o)(3)(xxi) of this
the qualified status of the retirement
                                                  section;
plan by the district director or Appeals
                                                     (c) An appeal to the Appeals office
office.
  (9) Notice of final determination. For          pursuant to paragraph (o)(6) of this sec-
purposes of this paragraph (o), the no-           tion, in the event of a notice of pro-
tice of final determination shall be—             posed adverse determination from the
  (i) In the case of a final determina-           district director.
tion which is favorable to the appli-                (ii) The administrative remedy of an
cant, the letter issued by the key dis-           interested party with respect to any
trict director or Appeals office (wheth-          matter relating to the qualification of
er or not by certified or registered              the plan is submission to the district
mail) which states that the applicant’s           director of a comment raising such
plan satisfies the qualification require-         matter in accordance with paragraph
ments of the Internal Revenue Code.               (o)(5)(i)(a) of this section or requesting
  (ii) In the case of a final determina-          the Department of Labor to submit to
tion which is adverse to the applicant,           the district director a comment with
the letter issued by certified or reg-            respect to such matter in accordance
istered mail by the key district direc-           with paragraph (o)(5)(i)(b) of this sec-
tor or Appeals office, subsequent to a            tion, and, if such department declines
letter of proposed determination, stat-           to comment, submission of such a com-
ing that the applicant’s plan fails to
                                                  ment in accordance with paragraph
satisfy the qualification requirements
                                                  (o)(5)(i)(c) of this section, so that such
of the Internal Revenue Code.
  (10) Exhaustion of administrative rem-          comment may be considered by the In-
edies. For purposes of section 7476(b)(3),        ternal Revenue Service through the ad-
a petitioner shall be deemed to have              ministrative process.

                                             80
Internal Revenue Service, Treasury                                                 § 601.201

   (iii) The administrative remedy of                (p) Pension plans of self-employed indi-
the Pension Benefit Guaranty Corpora-              viduals—(1) Rulings, determination let-
tion with respect to any matter relat-             ters, and opinion letters. (i) The National
ing to the qualification of the plan is            Office of the Service, upon request, will
submission to the district director of a           furnish a written opinion as to the ac-
comment raising such matter in ac-                 ceptability (for the purpose of sections
cordance with paragraph (o)(5)(i)(a) of            401 and 501(a) of the Code) of the form
this section or requesting the Depart-             of any master or prototype plan de-
ment of Labor to submit to the district            signed to include groups of self-em-
director a comment with respect to                 ployed individuals who may adopt the
such matter in accordance with para-               plan, where the plan is submitted by a
graph (o)(5)(i)(b) of this section, and, if        sponsor that is a trade or professional
such department declines to comment,               association, bank, insurance company,
submission of such a comment to the                or regulated investment company as
Internal Revenue Service directly, so              defined in section 851 of the Code. Each
that such comment may be considered                opinion letter will bear an identifying
by the Internal Revenue Service                    plan serial number. If the trustee or
through the administrative process.                custodian has been designated at the
   (iv) An applicant, or an interested             time of approval of a plan as to form,
party, or the Pension Benefit Guaranty             a ruling will be issued as to the exempt
Corporation shall in no event be                   status of such trust or custodial ac-
deemed to have exhausted his (its) ad-             count which forms part of the master
ministrative remedies prior to the ear-            or prototype plan. As used here, the
lier of:                                           term ‘‘master plan’’ refers to a stand-
   (a) The completion of all the steps             ardized form of plan, with a related
described in paragraph (o)(11) (i), (ii),          trust or custodial agreement, where in-
or (iii) of this section, whichever is ap-         dicated, administered by the spon-
                                                   soring organization for the purpose of
plicable, subject, however, to para-
                                                   providing plan benefits on a standard-
graph (o)(11)(v), or
                                                   ized basis. The term ‘‘prototype plan’’
   (b) The expiration of the 270 day pe-
                                                   refers to a standardized form of plan,
riod described in section 7476(b)(3), in a         with or without a related form of trust
case where the completion of the steps             or custodial agreement, that is made
referred to in paragraph (o)(11)(iv)(a) of         available by the sponsoring organiza-
this section shall not have occurred be-           tion, for use without change by em-
fore the expiration of such 270 day pe-            ployers who wish to adopt such a plan,
riod because of the failure of the Inter-          and which will not be administered by
nal Revenue Service to proceed with                the    sponsoring     organization     that
due diligence.                                     makes such form available. The degree
The step described in paragraph                    of relationship among the separate em-
(o)(10)(i)(c) of this section will not be          ployers adopting either a master plan
considered completed until the Inter-              or prototype plan or to the sponsoring
nal Revenue Service has had a reason-              organization is immaterial.
able time to act upon the appeal. In ad-             (ii) Since a determination as to the
dition, the administrative remedies de-            qualification of a particular employer’s
scribed in paragraphs (o)(11) (ii) and             plan can be made only with regard to
(iii) will not be considered completed             facts peculiar to that employer, a let-
until the Internal Revenue Service has             ter expressing the opinion of the Serv-
had a reasonable time to consider the              ice as to the acceptability of the form
comments submitted pursuant to such                of a master or prototype plan will not
paragraphs at each step of the adminis-            constitute a ruling or determination as
trative process described in paragraph             to the qualification of a plan as adopt-
(o)(11)(i).                                        ed by any individual employer or as to
   (v) The administrative remedy de-               the exempt status of a related trust or
scribed in paragraph (o)(10)(i)(c) of this         custodial account. However, where an
section will not be available to an ap-            employer adopts a master or prototype
plicant with respect to any issue on               plan and any related prototype trust or
which technical advice from the Na-                custodial account previously approved
tional Office has been obtained.                   as to form, and observes the provisions

                                              81
§ 601.201                                                    26 CFR Ch. I (4–1–99 Edition)

thereof, such plan and trust or custo-             made, the procedure will depend on
dial account will be deemed to satisfy             whether the sponsor is authorized to
the requirements of sections 401 and               act on behalf of the subscribers.
501(a) of the Code, provided the eligi-              (a) If the plan provides that each em-
bility requirements and contributions              ployer has delegated to the sponsor the
on benefits under the plan for owner-              power to amend the plan and that each
employees are not more favorable than              employer shall be deemed to have con-
for other employees, including those               sented thereto, the plan may be amend-
required to be covered under plans of              ed by the sponsor. If the plan contains
all businesses controlled by such                  no specific provision permitting the
owner-employees.                                   sponsor to amend such plan, but all
  (iii) Although district directors no             employers consent in writing to permit
longer make advance determinations                 such amendment, the sponsor may
on plans of self-employed individuals              then amend the plan. However, where a
who have adopted previously approved               sponsor is unable to secure the consent
master or prototype plans, they will               of each employer, the plan cannot be
continue, upon request, to issue deter-            amended by the sponsor. In such cases,
mination letters as to the qualification           any change will have to be effected by
of individually designed plans (those              the adoption of a new plan and the sub-
not utilizing a master or prototype                mission of a new Form 3672. The new
plan) and the exempt status of a re-               plan will be complete and separate
lated trust or custodial account, if any,          from the old plan and individual em-
in accordance with the procedures set              ployers may, if they desire, substitute
forth in paragraph (o) of this section.            the new plan for the old plan.
  (2) Determination letters as to qualified          (b) In the first two instances men-
bond purchase plans. A determination               tioned above, where the plan has been
as to the qualification of a bond pur-             properly amended, the sponsor must
chase plan will, upon request, be made             submit Form 3672, a copy of the amend-
by the appropriate district director.              ment and, if required, copies of the
Form 4578, Application for Approval of             signed consent of each participating
Bond Purchase Plan, must be used for               employer.
this purpose. When properly completed,               (c) Upon approval of the amendment
this form will constitute a bond pur-              by the Service, an opinion letter will
chase plan.                                        be issued to the sponsor containing the
  (3) Instructions to sponsoring organiza-         serial number of the original plan fol-
tions and employers. (i) A sponsoring or-          lowed by a suffix: ‘‘A–1’’ for the first
ganization of the type referred to in              amendment, ‘‘A–2’’ for the second
subparagraph (1)(i) of this paragraph,             amendment, etc. Employers adopting
that desires a written opinion as to the           the form of plan subsequent to the date
acceptability of the form of a master or           of the amendment will use the revised
prototype plan (or as to the exempt                serial number.
status of a related trust or custodial               (d) If a new plan is submitted, to-
account) should submit its request to              gether with Form 3672 and copies of all
the National Office. Copies of all docu-           documents evidencing the plan, an
ments, including the plan and trust in-            opinion letter bearing a new serial
struments and all amendments thereto,              number will be issued to the sponsor
together with specimen insurance con-              and all employers who adopt the new
tracts (where applicable) must be sub-             plan shall use the new serial number.
mitted with the request. The request               Employers who adopted the old plan
must be submitted to the Commis-                   will continue to use the original serial
sioner of Internal Revenue Service,                number.
Washington, DC 20224, Attn: T:MS: PT.                (4) Applicability. The general proce-
Form 3672, Application for Approval of             dures of paragraph (a) through (m) and
Master or Prototype Plan for Self-Em-              paragraph (o) of this section, relating
ployed Individuals, is to be used for              to the issuance of rulings and deter-
this purpose.                                      mination letters, are applicable to re-
  (ii) If, subsequent to obtaining ap-             quests relating to the qualification of
proval of the form of a master or proto-           plans covering self-employed individ-
type plan, an amendment is to be                   uals under sections 401 and 405(a) of the

                                              82
Internal Revenue Service, Treasury                                                § 601.201

Code and the exempt status of related             choices permissible under subdivisions
trusts or custodial accounts under sec-           (i) and (iv) of this subparagraph) and
tion 501(a), to the extent that the mat-          contain among other things provisions
ter is not covered by the specific proce-         as to the following requirements:
dures and instructions contained in                  (i) Coverage. The percentage coverage
this paragraph.                                   requirements set forth in section
   (q) Corporate Master and prototype             401(a)(3)(A) of the Code must be satis-
plans— (1) Scope and definitions. (i) The         fied. Provisions may be made, however,
general procedures set forth in this              for an adopting employer to designate
paragraph pertain to the issuance of              such eligibility requirements as are
rulings, determination letters, and               permitted under that section.
opinion letters relating to master and               (ii) Nonforfeitable rights. Each em-
prototype pension, annuity, and profit-           ployee’s rights to or derived from the
sharing plans (except those covering              contributions under the plan must be
self-employed individuals) under sec-             nonforfeitable at the time the con-
tion 401(a) of the Code, and the status           tributions are paid to or under the
for exemption of related trusts or cus-           plan, except to the extent that the lim-
todial accounts under section 501(a). (A          itations set forth in § 1.401–4(c) of the
custodial account described in section            Income Tax Regulations, regarding
401(f) of the Code is treated as a quali-         early termination of a plan, may be ap-
fied trust for purposes of the Code.)             plicable.
These procedures are subject to the                  (iii) Bank trustee. In the case of a
general procedures set forth in para-             trusteed plan, the trustee must be a
graph (o) of this section, and relate             bank.
only to master plans and prototype                   (iv) Definite contribution formula. In
plans that do not include self-employed           the case of a profit-sharing plan, there
individuals and are sponsored by trade            must be a definite formula for deter-
or professional associations, banks, in-          mining the employer contributions to
surance companies, or regulated in-               be made. Provision may be made, how-
vestment companies. These plans are               ever, for an adopting employer to
further identified as ‘‘variable form’’           specify his rate of contribution.
and ‘‘standardized form’’ plans.                     (3) Rulings, determination letters, and
   (ii) A master plan is a form of plan in        opinion letters. (i) A favorable deter-
which the funding organization (trust,            mination letter as to the qualification
custodial account, or insurer) is speci-          of a pension or profit-sharing plan and
fied in the sponsor’s application, and a          the exempt status of any related trust
‘‘prototype plan’’ is a form of plan in           or custodial account, is not required as
which the funding organization is spec-           a condition for obtaining the tax bene-
ified in the adopting employer’s appli-           fits pertaining thereto. However, para-
cation.                                           graph (c)(5) of this section authorizes
   (iii) A variable form plan is either a         district directors to issue determina-
master or prototype plan that permits             tion letters as to the qualification of
an employer to select various options             plans and the exempt status of related
relating to such basic provisions as em-          trusts or custodial accounts.
ployee coverage, contributions, bene-                (ii) In addition, the National Office
fits, and vesting. These options must             upon request from a sponsoring organi-
be set forth in the body of the plan or           zation will furnish a written opinion as
in a separate document. Such plan,                to the acceptability of the form of a
however, is not complete until all pro-           master or prototype plan and any re-
visions necessary for qualification               lated trust or custodial account, under
under section 401(a) of the Code are ap-          sections 401(a) and 501(a) of the Code.
propriately included.                             Each opinion letter will bear an identi-
   (iv) A standardized form plan is either        fying plan serial number. However,
a master or prototype plan that meets             opinion letters will not be issued under
the requirements of subparagraph (2) of           this paragraph as to (a) plans of a par-
this paragraph.                                   ent company and its subsidiaries, (b)
   (2) Standardized form plan require-            pooled      fund    arrangements      con-
ments. A standardized form plan must              templated by Revenue Ruling 56–267,
be complete in all respects (except for           C.B. 1956–1, 206, (c) industry-wide or

                                             83
§ 601.201                                                    26 CFR Ch. I (4–1–99 Edition)

area-wide union-negotiated plans, (d)             basic compensation) on which con-
plans that include self-employed indi-            tributions or benefits are based would
viduals, (e) stock bonus plans, and (f)           result in discrimination in contribu-
bond purchase plans.                              tions or benefits in favor of employees
  (iii) A ruling as to the exempt status          who are officers, shareholders, persons
of a trust or custodial account under             whose principal duties consist in super-
section 501(a) of the Code will be issued         vising the work of other employees, or
to the trustee or custodian by the Na-            highly compensated employees. See
tional Office where such trust or custo-          Revenue Ruling 69–503 C.B. 1969–2, 94.
dial account forms part of a plan de-             Accordingly, opinion letters relating to
scribed in subparagraph (1) of this               master or prototype plans that involve
paragraph and the trustee or custodian
                                                  integration with Social Security bene-
is specified on Form 4461, Sponsor Ap-
                                                  fits will not be issued except for those
plication—Approval of Master or Pro-
totype Plan. Where not so specified, a            plans where annual compensation, for
determination letter as to the exempt             the purposes of §§ 3.01, 5.02, 6.02, 6.03,
status of a trust or custodial account            13.01, 13.02, and 14.02 of Revenue Ruling
will be issued by the district director           69–4 C.B. 1969–1, 118, is defined to be all
for the district in which is located the          of each employee’s compensation that
principal place of business of an em-             would be subject to tax under section
ployer who adopts such trust or custo-            3101(a) of the Code without the dollar
dial account after he furnishes the               limitation of section 3121(a)(1) of the
name of the trustee or custodian.                 Code.
  (iv) Since a determination as to the              (4) Request by sponsoring organizations
qualification of a particular employer’s          and employers. (i) The National Office
plan can be made only with regard to              will consider the request of a spon-
facts peculiar to such employer, a let-           soring organization desiring a written
ter expressing the opinion of the Serv-           opinion as to the acceptability of the
ice as to the acceptability of the form           form of a master or prototype plan and
of a master or prototype plan will not            any related trust or custodial account.
constitute a ruling or determination as           Such request is to be made on Form
to the qualification of a plan as adopt-          4461 and filed with the Commissioner of
ed by any individual employer nor as              Internal Revenue, Washington, DC
to the exempt status of a related trust
                                                  20224, attention T:MS:PT. Copies of all
or custodial account.
                                                  documents, including the plan and
  (v) A determination as to the quali-
                                                  trust or custodial agreement, together
fication of a plan as it relates to a par-
ticular employer will be made by the              with specimen insurance contracts, if
district director for the district in             applicable, are to be submitted with
which each employer’s principal place             the request. In making its determina-
of buisness is located, if the employer           tion, the National Office may require
has adopted a master or prototype plan            additional information as appropriate.
that has been previously approved as to             (ii) Each district director, in whose
form. An employer who desires such a              jurisdiction there are employers who
determination must file Form 4462,                adopt the form of plan, must be fur-
Employer Application—Determination                nished a copy of the previously ap-
as to Qualification of Pension, Annu-             proved form of plan and related docu-
ity, or Profit-Sharing Plan and Trust,            ments by the sponsoring organization.
and furnish a copy of the adoption                The sponsoring organization must also
agreement or other evidence of adop-              furnish such district director a copy of
tion of the plan and such additional in-          all amendments subsequently approved
formation as the district director may            as to form by the National Office.
require.                                            (iii) The sponsoring organization
  (vi) Where master or prototype plans            must furnish copies of opinion letters
involve integration with Social Secu-             as to the acceptability of the form of
rity benefits, it is impossible to deter-
                                                  plan, including amendments (see sub-
mine in advance whether in an indi-
                                                  paragraph (5) of this paragraph), to all
vidual case a particular restrictive def-
inition of the compensation (such as              adopting employers.

                                             84
Internal Revenue Service, Treasury                                                 § 601.201

  (5) Amendments. (i) Subsequent to ob-            continue to use the original serial
taining approval of the form of a mas-             number. However, any employer who
ter or prototype plan, a sponsoring or-            wishes to change to the new plan may
ganization may wish to amend the                   do so by filing with his district director
plan. Whether a sponsoring organiza-               a new Form 4462, indicating the
tion may effect an amendment depends               change.
on the plan’s administrative provi-                   (vi) An employer who amends his
sions.                                             adoption agreement may request a de-
  (ii) If the plan provides that each              termination letter as to the effect of
subscribing employer has delegated au-             such amendment by filing Form 4462
thority to the sponsor to amend the                with his district director, together
plan and that each such employer shall             with a copy of the amendment and a
be deemed to have consented thereto,               summary of the changes. However, in
the plan may be amended by the spon-               the event an employer desires to
sor acting on behalf of the subscribers.           amend his adoption agreement under a
If the plan does not contain such provi-           master or prototype plan, and such
sion but all subscribing employers con-            amendment is not contemplated or per-
sent in a collateral document to permit            mitted under the plan, then such
amendment, the sponsor, acting on                  amendment will in effect substitute an
their behalf, may amend the plan. How-             individually designed plan for the mas-
ever, where a sponsor is unable to se-             ter or prototype plan and the amend-
cure the consent of each such em-                  ment procedure described in paragraph
ployer, the plan cannot be amended. In             (o) of this section will be applicable.
such cases any change can only be ef-                 (6) Effect on other plans. Determina-
fected by the establishment of a new               tion letters previously issued by dis-
plan and the submission of a new Form              trict directors specified in paragraph
4461 by the sponsor. The new plan must             (o)(2)(viii) of this section are not af-
be complete and separate from the old              fected by these procedures even though
plan, and individual employers may, if             the plans covered by the determination
they desire, substitute the new plan for           letters were designed by organizations
the old plan.                                      described in subparagraph (1)(i) of this
  (iii) Where the plan has been amend-             paragraph. However, such organiza-
ed pursuant to subdivision (ii) of this            tions may avail themselves of these
subparagraph, the sponsor is to submit             procedures with respect to any subse-
an application, Form 4461, a copy of the           quent action regarding such plans if
amendment, a description of the                    they otherwise come within the scope
changes, and a statement indicating                of this paragraph.
the provisions in the original plan au-               (r) Rulings and determination letters
thorizing amendments, or a statement               with respect to foundation status classi-
that each participating employer’s con-            fication—(1) Rulings and determination
sent has been obtained.                            letters on private and operating founda-
  (iv) Upon approval of the amendment              tion status. The procedures relating to
by the National Office, an opinion let-            the issuance of rulings and determina-
ter will be issued to the sponsor con-             tion letters on private foundation sta-
taining the serial number of the origi-            tus under section 509(a), and operating
nal plan, followed by a suffix: ‘‘A–1’’ for        foundation      status    under    section
the first amendment, ‘‘A–2’’ for the sec-          4942(j)(3), of organizations exempt from
ond amendment, etc. Employers adopt-               Federal Income Tax under section
ing the form of plan subsequent to the             501(c)(3) of the Code will be published
date of the amendment must use the                 from time to time in the Internal Rev-
revised serial number.                             enue Bulletin (see for example, Rev.
  (v) If a new plan is submitted, to-              Proc. 76–34. 1976–2 C.B. 657, as modified
gether with Form 4461 and copies of all            by Rev. Proc. 80–25, 1980–1 C.B. 667.
documents evidencing the plan, an                  These procedures apply in connection
opinion letter bearing a new serial                with notices filed by the organizations
number will be issued to the sponsor,              on Form 4653, Notification Concerning
and all employers who adopt the new                Foundation Status, or with applica-
plan are to use the new serial number.             tions for recognition of exempt status
Employers who adopted the old plan                 under section 501(c)(3) of the Code.

                                              85
§ 601.201                                                    26 CFR Ch. I (4–1–99 Edition)

Such notices and statements are filed             matter having as a major purpose the
by organizations in accordance with               reduction of Federal taxes. A specific
section 508(a) of the Code in order for           area or a list of these areas is published
an organization to avoid the presump-             from time to time in the Internal Rev-
tion of private foundation status or to           enue Bulletin (see, for example, Rev.
claim status as an operating founda-              Proc. 80–22, 1980–1, C.B. 654). Such list is
tion. In addition, these procedures also          not all inclusive. Whenever a par-
relate to National Office review of de-           ticular item is added to or deleted from
termination letters on foundation sta-            the list, however, appropriate notice
tus under sections 509(a) and 4942(j)(3)          thereof will be published in the Inter-
of the Code and protest of adverse de-            nal Revenue Bulletin. The authority
termination letters regarding founda-             and general procedures of the National
tion status.                                      Office of the Internal Revenue Service
  (2) Nonexempt charitable trusts claiming        and of the offices of the district direc-
nonprivate foundation status under sec-           tors of internal revenue with respect to
tion 509(a)(3) of the Code. A trust de-           the issuance of advance rulings and de-
scribed in section 4947(a)(1) of the Code         termination letters are outlined in
is one that is not exempt from tax                paragraphs (b) and (c) of this section.
under section 501(a) of the Code, has all           (t) Alternative method of depletion—(1)
of its unexpired interests devoted to             In general. Section 1.613–4(d)(1)(i) of the
one or more of the purposes described             regulations, adopted by T.D. 7170,
in section 170(c)(2)(B) of the Code, and          March 10, 1972, provides that in those
is a trust for which a charitable deduc-          cases where it is impossible to deter-
tion was allowed. These trusts are sub-           mine a representative market of field
ject to the private foundation provi-             price under the provisions of § 1.613–
sions (Part II of Subchapter F of Chap-           4(c), gross income from mining shall be
ter 1 and chapter 42 of the Code) except          computed by use of the proportionate
section 508 (a), (b), and (c) of the Code.        profits method set forth in § 1.613–
The procedures to be used by non-                 4(d)(4).
exempt charitable trusts to obtain de-
                                                    (2) Exception. An exception is pro-
terminations of their foundation status
                                                  vided in § 1.613–4(d)(1)(ii) where, upon
under section 509(a)(3) of the Code will
                                                  application, the Office of the Assistant
be published from time to time in the
Internal Revenue Bulletin (see, for ex-           Commissioner (Technical) approves the
ample, Rev. Proc. 72–50, 1972–2 C.B. 830).        use of an alternative method that is
  (s) Advance rulings or determination            more appropriate than the propor-
letters—(1) General. It is the practice of        tionate profits method or the alter-
the Service to answer written inquir-             native method being used by the tax-
ies, when appropriate and in the inter-           payer.
est of sound tax administration, as to              (3) Procedure. The procedure for mak-
the tax effects of acts or transactions           ing application for approval to com-
of individuals and organizations and as           pute gross income from mining by use
to the status of certain organizations            of an alternative method, other than
for tax purposes prior to the filing of           the proportionate profits method; the
returns or reports as required by the             conditions for approval and use of an
Revenue laws.                                     alternative method; changes in an ap-
  (2) Exceptions. There are, however,             proved method; and other pertinent in-
certain areas where, because of the in-           formation with respect thereto, will be
herently factual nature of the problems           published from time to time in the Cu-
involved or for other reasons, the Serv-          mulative Bulletin (see, for example,
ice will not issue advance rulings or de-         Rev. Proc. 74–43, 1974–2 C.B. 496).
termination letters. Ordinarily, an ad-             (u) Conditions for issuing rulings in-
vance ruling or determination letter is           volving bonuses and advanced royalties of
not issued on any matter where the de-            lessors under section 631(c) of IRC of
termination requested is primarily one            1954—(1) In general. Rev. Proc. 77–11,
of fact (e.g., market value of property),         1977–1 C.B. 568, provides that the tax li-
or on the tax effect of any transaction           ability of a lessor who received a bonus
to be consummated at some indefinite              or an advance royalty is required to be
future time or of any transaction or              recomputed for the taxable year or

                                             86
Internal Revenue Service, Treasury                                                    § 601.202

years in which such payment or pay-               lease expires, terminates, or is aban-
ments were received if the right to               doned.
mine coal or iron ore under the lease             [32 FR 15990, Nov. 22, 1967]
expires, terminates, or is abandoned
                                                    EDITORIAL NOTE: For FEDERAL REGISTER ci-
before (with respect to bonuses) any
                                                  tations affecting § 601.201, see the List of CFR
coal or iron ore has been mined; or               Sections Affected in the Finding Aids sec-
(with respect to advance royalties) the           tion of this volume.
coal or iron ore that has been paid for
in advance is mined. In such recompu-             § 601.202 Closing agreements.
tation, the lessor is required to treat              (a) General. (1) Under section 7121 of
the bonus payment or payments or any              the Code and the regulations and dele-
portion of the advance royalty pay-               gations thereunder, the Commissioner,
ment or payments attributable to                  or any officer or employee of the Inter-
unmined coal or iron ore, as ordinary             nal Revenue Service authorized in
income and not as received from the               writing by the Commissioner, may
sale of coal or iron ore under section            enter into and approve a written agree-
631(c) of the Code.                               ment with a person relating to the li-
  (2) Condition for issuing rulings. Prior        ability of such person (or of the person
to issuing a ruling to lessors who re-            or estate for whom he acts) in respect
quest a ruling that they may treat bo-            of any internal revenue tax for any
nuses or advance royalties received               taxable period. Such agreement, except
                                                  upon a showing of fraud or malfea-
under a lease for coal or iron ore as re-
                                                  sance, or misrepresentation of a mate-
ceived from a sale of coal or iron under
                                                  rial fact, shall be final and conclusive.
section 631(c) of the Code, the Internal             (2) Closing agreements under section
Revenue Service will require that the             7121 of the Code may relate to any tax-
lessor enter a closing agreement in               able period ending prior or subsequent
which the lessor agrees that—                     to the date of the agreement. With re-
  (i) If the lease under which the lessor         spect to taxable periods ended prior to
received a bonus or an advance royalty            the date of the agreement, the matter
expires, terminates, or is abandoned              agreed upon may relate to the total tax
before (with respect to a bonus) any              liability of the taxpayer or it may re-
coal or iron ore has been mined or                late to one or more separate items af-
(with respect to an advance royalty)              fecting the tax liability of the tax-
the coal or iron ore that has been paid           payer. A closing agreement may also
for in advance is mined, the tax liabil-          be entered into in order to provide a
ity of the lessor will be recomputed for          ‘‘determination’’, as defined in section
the taxable year or years of receipt of           1313 of the Code, and for the purpose of
(A) the bonus by treating the bonus               allowing a deficiency dividend deduc-
payment or payments as ordinary in-               tion under section 547 of the Code. But
come or (B) the advance royalty by                see also sections 547(c)(3) and 1313(a)(4)
treating any portion or the advance               of the Code and the regulations there-
royalty payment or payments attrib-               under as to other types of ‘‘determina-
                                                  tion’’ agreements. With respect to tax-
utable to unmined coal or iron ore as
                                                  able periods ending subsequent to the
ordinary income;
                                                  date of the agreement, the matter
  (ii) If the recomputation described in          agreed upon may related to one or
paragraph (u)(2)(i) of this section is re-        more separate items affecting the tax
quired, the lessor will pay the addi-             liability of the taxpayer. A closing
tional amount, if any, of all federal in-         agreement with respect to any taxable
come tax finally determined as due and            period ending subsequent to the date of
payable by the lessor for the taxable             the agreement is subject to any change
year or years of the receipt of the               in or modification of the law enacted
bonus or advance royalty; and                     subsequent to the date of the agree-
  (iii) If any of the described events has        ment and applicable to such taxable
occurred, the lessor will notify the ap-          period, and each such closing agree-
propriate district director of such               ment shall so recite. Closing agree-
event in writing within 90 days of the            ments may be entered into even though
close of the taxable year in which the            under the agreement the taxpayer is

                                             87
§ 601.202                                                    26 CFR Ch. I (4–1–99 Edition)

not liable for any tax for the period to          the Director, Bureau of Alcohol, To-
which the agreement relates. There                bacco, and Firearms.
may be a series of agreements relating              (2) Closing agreements relating to
to the tax liability for a single period.         taxes other than those taxes covered in
A closing agreement may be entered                subparagraph (1) of this paragraph in
into in any case in which there appears           respect of any prospective transactions
to be an advantage in having the case             or completed transactions affecting re-
permanently and conclusively closed,              turns to be filed may be entered into
or where good and sufficient reasons              and approved by the Assistant Commis-
are shown by the taxpayer for desiring            sioner (Technical).
a closing agreement and it is deter-                (3) Closing agreements for a taxable
mined by the Commissioner or his rep-             period or periods ended prior to the
resentatives that the Government will             date of agreement and related specific
sustain no disadvantage through con-              items affecting other taxable periods
summation of such an agreement.                   (including those covering competent
  (b) Use of prescribed forms. In cases in        authority determinations in the ad-
which it is proposed to close conclu-             ministration of the operating provi-
sively the total tax liability for a tax-         sions of the tax conventions of the
                                                  United States) may be entered into and
able period ending prior to the date of
                                                  approved by the Assistant Commis-
the agreement, Form 866, Agreement as
                                                  sioner (Compliance).
to Final Determination of Tax Liabil-
                                                    (4) Regional commissioners, assistant
ity generally will be used. In cases in
                                                  regional commissioners (appellate), as-
which agreement has been reached as
                                                  sistant regional commissioners (exam-
to the disposition of one or more issues
                                                  ination), district directors (including
and a closing agreement is considered
                                                  the Director, Foreign Operations Dis-
necessary to insure consistent treat-             trict), chiefs and assistant chiefs of ap-
ment of such issues in any other tax-             pellate branch offices may enter into
able period Form 906, Closing Agree-              and approve closing agreements on
ment as to Final Determination Cov-               cases under their jurisdiction (but ex-
ering Specific Matters, generally will            cluding cases docketed before the U.S.
be used. A request for a closing agree-           Tax Court) for a taxable period or peri-
ment which determines tax liability               ods which end prior to the date of
may be submitted and entered into at              agreement and related specific items
any time before the determination of              affecting other taxable periods.
such liability becomes a matter within              (5) Regional commissioners, assistant
the province of a court of competent              regional commissioners (examination)
jurisdiction and may thereafter be en-            and (appellate), chiefs and assistant
tered    into    in    appropriate    cir-        chiefs of appellate branch offices are
cumstances when authorized by the                 authorized to enter into and approve
court (e.g., in certain bankruptcy situ-          closing agreements in cases under their
ations). The request should be sub-               jurisdiction docketed in the U.S. Tax
mitted to the district director of inter-         Court but only in respect to related
nal revenue with whom the return for              specific items affecting other taxable
the period involved was filed. However,           periods.
if the matter to which the request re-              (6) Closing agreements providing for
lates is pending before an office of the          the mitigation of economic double tax-
Appellate Division, the request should            ation under section 3 of the Revenue
be submitted to that office. A request            Procedure 64–54, C.B. 1964–2, 1008, or
for a closing agreement which relates             under Revenue Procedure 69–13, C.B.
only to a subsequent period should be             1969–1, 402 or for such mitigation and
submitted to the Commissioner of In-              relief under Revenue Procedure 65–17,
ternal Revenue, Washington, DC 20224.             C.B. 1965–1, 833, may be entered into
  (c) Approval. (1) Closing agreements            and approved by the Director, Foreign
relating to alcohol, tobacco, and fire-           Operations District.
arms, taxes in respect of any prospec-              (7) Closing agreements in cases under
tive transactions or completed trans-             the jurisdiction of a district director
actions affecting returns to be filed             providing that the taxability of earn-
may be entered into and approved by               ings from a deposit or account of the

                                             88
Internal Revenue Service, Treasury                                                        § 601.203

type described in Revenue Procedure                       Director, Foreign Operations District),
64–24, C.B. 1964–1 (Part 1), 693, opened                  regional directors of Appeals, and
prior to November 15, 1962, will be de-                   chiefs and associate chiefs, Appeals of-
termined on the basis that earnings on                    fices. The authority concerning offers
such deposits or accounts are not in-                     in compromise of penalties based solely
cludable in gross income until matu-                      on doubt as to liability, if the liability
rity or termination, whichever occurs                     is less than $100,000, has also been dele-
earlier, and that the full amount of                      gated to service center directors and
earnings on the deposit or account will                   assistant service center directors. In
constitute gross income in the year the                   civil cases involving liability of $500 or
plan matures, is assigned, or is termi-                   over and in criminal cases the func-
nated, whichever occurs first, may be
                                                          tions of the General Counsel are per-
entered into and approved by such dis-
                                                          formed by the Chief Counsel for the In-
trict director.
                                                          ternal Revenue Service. These func-
  (d) Applicability of ruling requirements.
The requirement relating to requests                      tions are performed in the District
for rulings (see § 601.291) shall be appli-               Council, Regional Counsel, or National
cable with respect to requests for clos-                  Office as appropriate. (See also para-
ing agreements pertaining to prospec-                     graph (c) of this section.) In cases aris-
tive transactions or completed trans-                     ing under Chapters 51, 52, and 53 of the
actions affecting returns to be filed                     Code, offers are acted upon by the Bu-
(see paragraph (c) (2) of this section).                  reau of Alcohol, Tobacco and Firearms.
                                                            (2) An offer in compromise of taxes,
[32 FR 15990, Nov. 22, 1967, as amended at 32
FR 20647, Dec. 21, 1967; 33 FR 17237, Nov. 21,            interest, delinquency penalties, or spe-
1968; 34 FR 14601, Sept. 19, 1969; 35 FR 15920,           cific penalties may be based on either
Oct. 9, 1970; 38 FR 4967, Feb. 23, 1973; 42 FR            inability to pay or doubt as to liabil-
46520, Sept. 16, 1977; 43 FR 53030, Nov. 15, 1978;        ity. Offers in compromise arise usually
49 FR 36499, Sept. 18, 1984; T.D. 8685, 61 FR             when payments of assessed liabilities
58008, Nov. 12, 1996]
                                                          are demanded, penalties for delin-
§ 601.203 Offers in compromise.                           quency in filing returns are asserted,
                                                          or specific civil or criminal penalties
  (a) General. (1) The Commissioner                       are incurred by taxpayers. A criminal
may compromise, in accordance with                        liability will not be compromised un-
the provisions of section 7122 of the
                                                          less it involves only the regulatory
Code, any civil or criminal case arising
                                                          provisions of the Internal Revenue
under the internal revenue laws prior
to reference to the Department of Jus-                    Code and related statutes. However, if
tice for prosecution or defense. Certain                  the violations involving the regulatory
functions of the Commissioner with re-                    provisions are deliberate and with in-
spect to compromise of civil cases in-                    tent to defraud, the criminal liabilities
volving liability of $100,000 or more,                    will not be compromised.
based solely on doubt as to liability,                      (b) Use of prescribed form. Offers in
have been delegated to regional com-                      compromise are required to be sub-
missioners and, for cases arising in the                  mitted on Form 656, properly executed,
District Office, Foreign Operations Dis-                  and accompanied by a financial state-
trict, to the Assistant Commissioner                      ment on Form 433 (if based on inability
(Compliance). The authority con-                          to pay). Form 656 is used in all cases
cerning liability of $100,000 or more                     regardless of whether the amount of
based on doubt as to collectibility or                    the offer is tendered in full at the time
doubt as to both collectibility and li-                   the offer is filed or the amount of the
ability has been delegated to the Direc-                  offer is to be paid by deferred payment
tor, Collection Division and regional                     or payments. Copies of Form 656 and
commissioners. The authority with re-                     Form 433 may be obtained from district
spect to compromise of civil cases in-                    directors. An offer in compromise,
volving liability under $100,000, and of                  should be filed with the district direc-
certain specific penalties has been dele-
                                                          tor or service center director.
gated to district directors, assistant
                                                            (c) Consideration of offer. (1) An offer
district directors (including the Dis-
trict Director and Assistant District                     in compromise is first considered by

                                                     89
§ 601.203                                                    26 CFR Ch. I (4–1–99 Edition)

the director having jurisdiction. Ex-               (iii) In those cases described in (a) of
cept in certain penalty cases, an inves-          subdivision (i) of this subparagraph no
tigation of the basis of the offer is re-         investigation will be made unless spe-
quired. The examining officer makes a             cifically requested by the office having
written recommendation for accept-                jurisdiction of the criminal case.
ance or rejection of the offer. If the di-          (iv) In those cases described in (b)
rector has jurisdiction over the proc-            through (h) of subdivision (i) of this
essing of the offer he or she will:               subparagraph the district director re-
  (i) Reject the offer, or                        tains the duplicate copy of the offer
  (ii) Accept the offer if it involves a          and the financial statement for inves-
civil liability under $500, or                    tigation. After investigation, the dis-
  (iii) Accept the offer if it involves a         trict director transmits to the appro-
civil liability of $500 or more, but less         priate district counsel for consider-
than $100,000, or involves a specific pen-        ation and processing his or her rec-
alty and the District Counsel concurs             ommendation for acceptance or rejec-
in the acceptance of the offer, or                tion of the offer together with the ex-
  (iv) Recommend to the Regional                  amining officer’s report of the inves-
Commissioner the acceptance of the                tigation.
offer if it involves a civil liability of           (3) The district directors, assistant
$100,000 or over.                                 district directors (including the Dis-
  (2)(i) If the district director does not        trict Director and Assistant District
have jurisdiction over the entire proc-           Director, Foreign Operations District),
essing of the offer, the offer is trans-          service center directors, assistant serv-
mitted to the appropriate District                ice center directors, Regional Directors
Counsel if the case is one in which:              of Appeals, and Chiefs and Associate
                                                  Chiefs, Appeals Offices are authorized
  (a) Recommendations for prosecution
                                                  to reject any offer in compromise re-
are pending in the Office of the Chief
                                                  ferred for their consideration. Unac-
Counsel, the Department of Justice, or
                                                  ceptable offers considered by the Dis-
in an office of a United States attor-
                                                  trict Counsel, Regional Counsel, or Of-
ney, including cases in which criminal
                                                  fice of Chief Counsel in Washington, or
proceedings have been instituted but
                                                  the Appeals office are also rejected by
not disposed of and related cases in
                                                  the district directors (including the Di-
which offers in compromise have been
                                                  rector, Foreign Operations District), as
submitted or are pending;
                                                  applicable. If an offer is not acceptable,
  (b) The taxpayer is in receivership or
                                                  the taxpayer is promptly notified of
is involved in a proceeding under any
                                                  the rejection of that offer. If an offer is
provision of the Bankruptcy Act;
                                                  rejected, the sum submitted with the
  (c) The taxpayer is deceased joint li-          offer is returned to the proponent, un-
ability cases, where either taxpayer is           less the taxpayer authorizes applica-
deceased’’.                                       tion of the sum offered to the tax li-
  (d) A proposal is made to discharge             ability. Each Regional Commissioner
property from the effect of a tax lien or         will perform a post review of offers ac-
to subordinate the lien or liens;                 cepted, rejected, or withdrawn in the
  (e) An insolvent bank is involved;              district director’s office if the offer
  (f) An assignment for the benefit of            covers liabilities of $5,000 or more. The
creditors is involved;                            post review will cover a sampling of
  (g) A liquidation proceeding is in-             cases processed by the Collection func-
volved; or                                        tion and all cases processed by the Ex-
  (h) Court proceedings are pending,              amination function.
except Tax Court cases.                             (4) If an offer involving unpaid liabil-
  (ii) The District Counsel considers             ity of $100,000 or more is considered ac-
and processes offers submitted in cases           ceptable by the office having jurisdic-
described in paragraphs (c)(2)(i) (a)             tion over the offer, a recommendation
through (h) of this section and for-              for acceptance is forwarded to the Na-
wards those offers to the district direc-         tional Office or Regional Office, as ap-
tor, service center director, Regional            propriate for review. If the rec-
Counsel, or Office of Chief Counsel in            ommendation for acceptance is ap-
Washington, as appropriate.                       proved, the offer is forwarded to the

                                             90
Internal Revenue Service, Treasury                                                       § 601.204

Regional Counsel or Office of Chief                      periods. In cases where the regulations
Counsel in Washington, as appropriate,                   require the taxpayer to secure the con-
for approval. After approval by the Re-                  sent of the Commissioner to the
gional Counsel or Office of Chief Coun-                  change, the application for permission
sel in Washington, as appropriate, it is                 to change the accounting period shall
forwarded to the Assistant Commis-                       be made on Form 1128 and shall be sub-
sioner (Compliance), Director, Collec-                   mitted to the Commissioner of Internal
tion Division, or Regional Commis-                       Revenue, Washington, DC 20224, within
sioner, as appropriate for acceptance.                   the period of time prescribed in such
The taxpayer is notified of the accept-                  regulations. See section 442 of the Code
ance of the offer in accordance with its                 and regulations thereunder. If the
terms. Acceptance of an offer in com-                    change is approved by the Commis-
promise of civil liabilities does not                    sioner, the taxpayer shall thereafter
remit criminal liabilities, nor does ac-                 make his returns and compute his net
ceptance of an offer in compromise of                    income upon the basis of the new ac-
criminal liabilities remit civil liabil-                 counting period. A request for permis-
ities.                                                   sion to change the accounting period
  (d) Conferences. Before filing a formal                will be considered by the Corporation
offer in compromise, a taxpayer may                      Tax Division. However, in certain in-
request a meeting in the office which                    stances, Form 1128 may be filed with
would have jurisdiction over the offer                   the Director of the Internal Revenue
to explore the possibilities of compro-                  Service Center in which the taxpayer
mising unpaid tax liability. After all                   files its return. See, for example, Rev.
investigations have been made, the                       Proc. 66–13, 1966–1 C.B. 626; Rev. Proc.
taxpayer may also request a meeting in                   66–50, 1966–2 C.B. 1260, and Rev. Proc.
the office having jurisdiction of the                    68–41, 1968–2 C.B. 943. With respect to
offer to determine the amount which                      partnership adoptions, see § 1.706–1(b) of
may be accepted as a compromise. If                      the Income Tax Regulations.
agreement is not reached at such meet-                      (b) Methods of accounting. A taxpayer
ing and the district director has proc-                  who changes the method of accounting
essing jurisdiction over the offer, the                  employed in keeping his books shall,
taxpayer will be informed that the tax-                  before computing his income upon such
payer may request consideration of the                   method for purposes of income tax-
case by an Appeals Office. The request                   ation, comply with the provisions of
may be in writing or oral. If the tax,                   the income tax regulations relating to
penalty, and assessed (but not accrued)                  changes in accounting methods. The
interest sought to be compromised ex-                    regulations require that, in the ordi-
ceeds $2,500 for any return, taxable                     nary case, the taxpayer secure the con-
year or taxable period, a written pro-                   sent of the Commissioner to the
test is required. Taxpayers and their                    change. See section 446 of the Code and
representatives are required to comply                   the regulations thereunder. Applica-
with the applicable conference and                       tion for permission to change the
practice requirements. See Subpart E                     method of accounting employed shall
of this part.                                            be made on Form 3115 and shall be sub-
                                                         mitted to the Commissioner of Internal
[32 FR 15990, Nov. 22, 1967, as amended at 33
FR 17238, Nov. 21, 1968; 35 FR 7116, May 6,
                                                         Revenue, Washington, DC, 20224, during
1970; 35 FR 15920, Oct. 9, 1970; 43 FR 44510,            the taxable year in which it is desired
Sept. 28, 1978; 45 FR 7255, Feb. 1, 1980; 46 FR          to make the change. Permission to
26054, May 11, 1981; 49 FR 36499, Sept. 18, 1984;        change the method of accounting will
T.D. 8685, 61 FR 58008, Nov. 12, 1996]                   not be granted unless the taxpayer and
                                                         the Commissioner agree to the terms
§ 601.204 Changes in accounting peri-                    and conditions under which the change
    ods and in methods of accounting.                    will be effected. The request will be
  (a) Accounting periods. A taxpayer                     considered by the Corporation Tax Di-
who changes his accounting period                        vision. However, in certain instances,
shall, before using the new period for                   Form 3115 may be filed with the Direc-
income tax purposes, comply with the                     tor of the Internal Revenue Service
provisions of the income tax regula-                     Center. See, for example, Rev. Proc. 74–
tions relating to changes in accounting                  11, 1974–1 C.B. 420.

                                                    91
§ 601.205                                                      26 CFR Ch. I (4–1–99 Edition)

   (c) Verification of changes. Written             must be filed within 2 years after the
permission to a taxpayer by the Na-                 accident or incident occurred.
tional Office consenting to a change in
his annual accounting period or to a                § 601.206 Certification required to ob-
change in his accounting method is a                    tain reduced foreign tax rates
‘‘ruling’’. Therefore, in the examina-                  under income tax treaties.
tion of returns involving changes of an-              (a) Basis of certification. Most of the
nual accounting periods and methods                 income tax treaties between the United
of accounting, district directors must              States and foreign countries provide
determine whether the representations               for either a reduction in the statutory
upon which the permission was granted               rate of tax or an exemption from tax
reflect an accurate statement of the                on certain types of income received
material facts, and whether the agreed              from sources within the foreign treaty
terms, conditions, and adjustments                  country by citizens, domestic corpora-
have been substantially carried out as              tions, and residents of the United
proposed. An application, Form 3115,                States. Some of the treaty countries
filed with the Director of the Internal             reduce the withholding tax on such
Revenue Service Center is also subject              types of income or exempt the income
to similar verification.                            from withholding tax after the claim-
   (d) Instructions to taxpayers. The per-          ant furnishes evidence that he is enti-
son seeking to secure the consent of                tled to the benefits of the treaty. Other
the Commissioner with respect to a                  countries initially withhold the tax at
change of accounting periods or meth-               statutory rates and refund the excess
ods pursuant to section 442 or 446(e) of            tax withheld after satisfactory evi-
the Code need not submit the state-                 dence of U.S. residence has been ac-
ment of proposed deletions described in             cepted. As part of the proof that the
§ 601.201(e)(5) at the time the request is          applicant is a resident of the United
made. If, however, the person seeking               States and thus entitled to the benefits
the consent of the Commissioner re-                 of the treaty, he must usually furnish a
ceives from the National Office a no-               certification from the U.S. Government
tice that proposed deletions should be              that he has filed a U.S. income tax re-
submitted because the resulting ruling              turn as a citizen, domestic corporation,
will be open to public inspection under             or resident of the United States.
section 6110, the statement of proposed               (b) Procedure for obtaining the certifi-
deletions must be submitted within 20               cation. Most of the treaty countries
days after such notice is mailed.                   which require certification have print-
[41 FR 20882, May 21, 1976, as amended at 41        ed special forms. The forms contain a
FR 48742, Nov. 5, 1976; 42 FR 34280, July 5,        series of questions to be answered by
1977; T.D. 8742, 62 FR 68173, Dec. 31, 1997]        the taxpayer claiming the benefits of
                                                    the treaty, followed by a statement
§ 601.205 Tort claims.                              which the foreign governments use for
   Claims for property loss or damage,              the U.S. taxing authority’s certifi-
personal injury, or death caused by the             cation. This certification may be ob-
negligent or wrongful act or omission               tained from the office of the district di-
of any employee of the Service, acting              rector of the district in which the
within the scope of his office or em-               claimant filed his latest income tax re-
ployment, filed under the Federal Tort              turn. Some certification forms are ac-
Claims Act, as amended, must be pre-                ceptable for Service execution; how-
pared and filed in accordance with                  ever, others cannot be executed by the
Treasury Department regulations enti-               Service without revision. In these in-
tled ‘‘Central Office Procedures’’ and              stances the office of the district direc-
‘‘Claims Regulations’’ (31 CFR Parts 1              tor will prepare its own document of
and 3). Such regulations contain the                certification in accordance with inter-
procedural and substantive require-                 nal instructions. This procedure has
ments relative to such claims, and set              been accepted by most treaty countries
forth the manner in which they are                  as a satisfactory substitute.
handled. The claims should be filed                   (c) Obtaining the official certification
with the Commissioner of Internal                   forms. The forms may be obtained from
Revenue, Washington, DC 20224, and                  the foreign payor, the tax authority of

                                               92
Internal Revenue Service, Treasury                                                   § 601.401

the treaty country involved, or the                   ployee tax must be deducted and with-
District Office, Foreign Operations Dis-              held by employers from ‘‘wages’’ or
trict.                                                ‘‘compensation’’ (including tips re-
                                                      ported in writing to employer) paid to
[34 FR 14601, Sept. 19, 1969, as amended at 49
FR 36500, Sept. 18, 1984]                             employees, and the employer is liable
                                                      for the employee tax whether or not it
                                                      is so deducted. For special rules relat-
       Subpart C       [Reserved]                     ing to tips see §§ 31.3102–3 and 31.3402
                                                      (k)–1. Rev. Proc. 81–48, 1981–2 C.B. 623,
 Subpart D—Provisions Special to                      provides guidelines for determining
   Certain Employment Taxes                           wages when the employer pays the em-
                                                      ployee tax imposed by Chapter 21 with-
§ 601.401 Employment taxes.                           out deducting the amount from the em-
   (a) General—(1) Description of taxes.              ployee’s pay. Employee representatives
Federal employment taxes are imposed                  (as defined in the Railroad Retirement
by Subtitle C of the Internal Revenue                 Tax Act) are required to file returns.
Code. Chapter 21 (Federal Insurance                   Employment tax returns must be filed
Contributions Act) imposes a tax on                   with the district director or, if so pro-
employers of one or more individuals                  vided in instructions applicable to a re-
and also a tax on employees, with re-                 turn, with the service center des-
spect to ‘‘wages’’ paid and received.                 ignated in the instructions. The return
Chapter 22 (Railroad Retirement Tax                   of the Federal unemployment tax is re-
Act) imposes (i) an employer tax and                  quired to be filed annually on Form 940
employee tax with respect to ‘‘com-                   with respect to wages paid during the
pensation’’ paid and received, (ii) an                calendar year. All other returns of Fed-
employee representative tax with re-                  eral employment taxes (with the excep-
spect to ‘‘compensation’’ received, and               tion of returns filed for agricultural
(iii) a supplemental tax on employers,                employees) are required to be filed for
measured by man-hours for which                       each calendar quarter except that if
‘‘compensation’’ is paid. Chapter 23                  pursuant to regulations the district di-
(Federal Unemployment Tax Act) im-                    rector so notifies the employer, returns
poses a tax on employers of one or                    on Form 941 are required to be filed on
more individuals with respect to                      a monthly basis. In the case of certain
‘‘wages’’ paid. Chapter 24 (collection of             employers required to report withheld
income tax at source on wages) re-                    income tax but not required to report
quires every employer making pay-                     employer and employee taxes imposed
ment of ‘‘wages’’ to deduct and with-                 by Chapter 21 (for example, state and
hold upon such wages the tax computed                 local government employers), Form
or determined as provided therein. The                941E is prescribed for reporting on a
tax so deducted and withheld is allowed               quarterly basis. The employer and em-
as a credit against the income tax li-                ployee taxes imposed by Chapter 21
ability of the employee receiving such                (other than the employer and employee
wages.                                                taxes on wages paid for agricultural
   (2) Applicable regulations. The descrip-           labor) and the tax required to be de-
tive terms used in this section to des-               ducted and withheld upon wages by
ignate the various classes of taxes are               Chapter 24 are combined in a single re-
intended only to indicate their general               turn on Form 941. In the case of wages
character. Specific information rel-                  paid by employers for domestic service
ative to the scope of each tax, the                   performed in a private home not on a
forms used, and the functioning of the                farm operated for profit, the return of
Service with respect thereto is con-                  both the employee tax and the em-
tained in the applicable regulations.                 ployer tax imposed by Chapter 21 is on
Copies of all necessary forms, and in-                Form 942. However, if the employer is
structions as to their preparation and                required to file a return for the same
filing, may be obtained from the dis-                 quarter on Form 941, the employer may
trict director of internal revenue.                   elect to include the taxes with respect
   (3) Collection methods. Employment                 to such domestic service on Form 941.
taxes are collected by means of returns               The employer and employee taxes im-
and by withholding by employers. Em-                  posed by Chapter 21 with respect to

                                                 93
§ 601.401                                                  26 CFR Ch. I (4–1–99 Edition)

wages paid for agricultural labor are            and the income tax withheld at source
required to be reported annually on              on wages under Chapter 24, exclusive of
Form 943. Under the Railroad Retire-             taxes reportable on Form 942, exceeds
ment Tax Act, the return required of             $200 or (b) at the end of any month or
the employer is on Form CT–1, and the            period of 2 or more months and prior to
return required of each employee rep-            December 1 of any calendar year, the
resentative is on Form CT–2. An em-              total amount of undeposited taxes im-
ployee is not required to file a return          posed by Chapter 21, with respect to
of employee tax, except that the em-             wages paid for agricultural labor, ex-
ployee must include in his or her in-            ceeds $200, it is the duty of the em-
come tax return (as provided in the ap-          ployer to deposit such amount within
plicable instructions) any amount of             15 days after the close of such calendar
employee tax (i) due with respect to             month.
tips that the employee failed to report            (iii) Quarterly and year-end deposits.
to the employer or (ii) shown on the             Whether or not an employer is required
employee’s Form W–2 as ‘‘Uncollected             to make deposits under subdivisions (i)
Employee Tax on Tips’’.                          and (ii) of this subparagraph, if the
  (4) Receipts for employees. Employers          amount of such taxes reportable on
are required to furnish each employee a          Form 941 or 943 (reduced by any pre-
receipt or statement, in duplicate,              vious deposits) exceeds $200, the em-
showing the total wages subject to in-           ployer shall, on or before the last day
come tax withholding, the amount of              of the first calendar month following
income tax withheld, the amount of               the period for which the return is re-
wages subject to tax under the Federal           quired to be filed, deposit such amount
Insurance Contributions Act, and the             with a Federal Reserve bank or author-
amount of employee tax withheld. See             ized financial institution. However, if
section 6051 of the Code.                        the amount of such taxes (reduced by
  (5) Use of Federal Reserve banks and           any previous deposits) does not exceed
authorized financial institutions in con-        $200, the employer may either include
nection with payment of Federal employ-          with his return a direct remittance for
ment taxes. Most employers are re-               the amount of such taxes or, on or be-
quired to deposit employment taxes ei-           fore the last day of the first calendar
ther on a monthly basis, a semi-                 month following the period for which
monthly basis or quarter-monthly pe-             the return is required to be filed, vol-
riod basis as follows:                           untarily deposit such amount with a
  (i) Quarter-monthly period deposits.           Federal Reserve bank or authorized fi-
With respect to wages paid after Janu-           nancial institution.
ary 31, 1971 (March 31, 1971, in the case          (iv) Additional rules. Deposits under
of wages paid for agricultural labor), if        subdivisions (i), (ii) and (iii) of this
at the close of any quarter-monthly pe-          subparagraph are made with a Federal
riod (that ends on the 7th, 15th, 22d, or        Reserve bank or a financial institution
the last day of any month) the aggre-            authorized in accordance with Treas-
gate amount of undeposited taxes, ex-            ury Department Circular No. 1079, re-
clusive of taxes reportable on Form 942,         vised, to accept remittances of these
is $2,000 or more, the employer shall de-        taxes for transmission to a Federal Re-
posit such taxes within 3 banking days           serve bank. The remittance of such
after the close of such quarter-monthly          amount must be accompanied by a Fed-
period.                                          eral Tax Deposit form. Each employer
  (ii) Monthly deposits. With respect to         making deposits shall report on the re-
employers not required to make depos-            turn for the period with respect to
its under subdivision (i) of this sub-           which such deposits are made informa-
paragraph, if after January 31, 1971             tion regarding such deposits in accord-
(March 31, 1971, in the case of income           ance with the instructions applicable
tax withheld from wages paid for agri-           to such return and pay therewith (or
cultural labor) (a) during any calendar          deposit by the due date of such return)
month, other than the last month of a            the balance, if any, of the taxes due for
calendar     quarter,    the   aggregate         such period.
amount of the employee tax deducted                (v) Employers under Chapter 22 of the
and the employer tax under Chapter 21            Code. Depositary procedures similar to

                                            94
Internal Revenue Service, Treasury                                                 § 601.401

those prescribed in this subparagraph              number must file an application on
are prescribed for employers as defined            Form SS–5, a copy of which may be ob-
by the Railroad Retirement Tax Act,                tained from any district office of the
except that railroad retirement taxes              Social Security Administration or
are not requested to be deposited semi-            from a district director of internal rev-
monthly or quarter-monthly. Such                   enue. The form, after execution in ac-
taxes must be deposited by using a                 cordance with the instructions there-
Federal Tax Deposit form.                          on, must be filed with the district of-
  (vi) Employers under chapter 23 of the           fice of the Social Security Administra-
Code. Every person who is an employer              tion, and at a later date the employee
as defined by the Federal Unemploy-                will be furnished an account number.
ment Tax Act shall deposit the tax im-             The employee must furnish such num-
posed under Chapter 23 on or before the            ber to each employer for whom the em-
last day of the first calendar month               ployee works, in order that such num-
following the quarterly period in which            ber may be entered on each tax return
the amount of such tax exceeds $100.               filed thereafter by the employer.
  (6) Separate accounting. If an em-                  (3) Reporting of wages. Forms 941, 942,
ployer fails to withhold and pay over              and 943 each require, as a part of the
income, social security, or railroad re-           return, that the wages of each em-
tirement tax due on wages of employ-               ployee paid during the period covered
ees, the employer may be required by               by the return be reported thereon.
the district director to collect such              Form 941a is available to employers
taxes and deposit them in a separate               who need additional space for the list-
banking account in trust for the                   ing of employees. Employers who meet
United States not later than the sec-              the requirements of the Social Secu-
ond banking day after such taxes are               rity Administration may, with the ap-
collected.                                         proval of the Commissioner of Internal
  (b) Provisions special to the Federal In-        Revenue, submit wage information on
surance Contributions Act—(1) Employers’           reels of magnetic tape in lieu of Form
identification numbers. For purposes of            941a. It is necessary at times that em-
the Federal Insurance Contributions                ployers correct wage information pre-
Act each employer who files Form 941               viously reported. A special form, Form
or Form 943 must have an identifica-               941c, has been adopted for use in cor-
tion number. Any such employer who                 recting erroneous wage information or
does not have an identification number             omissions of such wage information on
must secure a Form SS–4 from the dis-              Form 941, 942, or 943. Instructions on
trict director of internal revenue or              Form 941, 941c, 942, and 943 explain the
from a district office of the Social Se-           manner of preparing and filing the
curity Administration and, after exe-              forms. Any further instructions should
cuting the form in accordance with the             be obtained from the district director.
instructions contained thereon, file it               (c) Adjustments by employers—(1)
with the district director or the dis-             Undercollections and underpayments—(i)
trict office of the Social Security Ad-            Employer tax or employee tax. If a return
ministration. At a subsequent date the             is filed by an employer under the Fed-
district director will assign the em-              eral Insurance Contributions Act or
ployer a number which must appear in               the Railroad Retirement Tax Act, and
the appropriate space on each tax re-              the employer reports and pays less
turn, Form 941 or Form 943, filed there-           than the correct amount of employer
after. The requirement to secure an                tax or employee tax, the employer is
identification number does not apply               required to report and pay the addi-
to an employer who employs only em-                tional amount due. The reporting will
ployees who are engaged exclusively in             be an adjustment without interest only
the performance of domestic service in             if the employer reports and pays the
the employer’s private home not on a               additional amount on or before the last
farm operated for profit.                          day on which the return is required to
  (2) Employees’ account numbers. Each             be filed for the return period in which
employee (or individual making a re-               the error is ascertained. The employer
turn of net earnings from self-employ-             may so report the additional amount
ment) who does not have an account                 either on the return for that period or

                                              95
§ 601.401                                                   26 CFR Ch. I (4–1–99 Edition)

on a supplemental return for the period          ployer repays or reimburses an em-
for which the underpayment was made.             ployee in any calendar year for an
If the employer fails to report the addi-        overcollection which occurred in a
tional amount due within the time so             prior calendar year, the employer is re-
fixed for making an interest-free ad-            quired to obtain and keep the employ-
justment, the employer nevertheless is           ee’s written statement (a) that the em-
required to report the additional                ployee has not claimed refund or credit
amount in the same manner, but inter-            of the amount of the overcollection, or
est will be due. No adjustment of an             if so, such claim has been rejected, and
underpayment may be made under this              (b) that the employee will not claim re-
section or § 31.6205–1(b)(2) if the em-          fund or credit of such amount.
ployer is sent a notice and demand for              (ii) Income tax withholding. If, in any
payment of the additional tax.                   return period in a calendar year, an
  (ii) Income tax withholding. If an em-         employer withholds more than the cor-
ployer files a return reporting and pay-         rect amount of income tax, and pays
ing less than the correct amount of in-          over to the Internal Revenue Service
come tax required to be withheld from            the amount withheld, the employer
wages paid during the return period,             may repay or reimburse the employee
the employer is required to report and           in the excess amount in any subse-
pay the additional amount due, either            quent return period in the same cal-
(a) on a return for any return period in         endar year. If the amount is so repaid,
the calendar year in which the wages             the employer is required to obtain and
were paid, or (b) on a supplemental re-          keep the employee’s written receipt
turn for the return period in which the          showing the date and amount of the re-
wages were paid. The reporting will be           payment.
an adjustment without interest only if              (3) Employer’s claims for credit or re-
the employer reports and pays the ad-            fund of overpayments—(i) Employee tax.
ditional amount on or before the last            If an employer repays or reimburses an
day on which the return is required to           employee for an overcollection of em-
be filed for the return period in which          ployee tax, as described in subpara-
the error was ascertained. If an em-             graph (2)(i) of this paragraph, the em-
ployer reports and pays less than the            ployer may claim credit on a return in
correct amount of income tax required            accordance with the instructions appli-
to be withheld in a calendar year, and           cable to the return. In lieu of claiming
the employer does not correct the un-            credit the employer may claim refund
derpayment in the same calendar year,            by filing Form 843, but the employer
the employer should consult the Dis-             may not thereafter claim credit for the
trict Director of Internal Revenue as to         same overpayment.
the manner of correcting the error.                 (ii) Income tax withholding. If an em-
  (2) Overcollections from employees—(i)         ployer repays or reimburses an em-
Employee tax. If an employer collects            ployee for an excess amount withheld
from an employee more than the cor-              as income tax, as described in subpara-
rect amount of employee tax under the            graph (2)(ii) of this paragraph, the em-
Federal Insurance Contributions Act or           ployer may claim credit on a return for
the Railroad Retirement Act, and the             a return period in the calendar year in
error is ascertained within the applica-         which the excess amount was withheld.
ble period of limitation on credit or re-        The employer is not otherwise per-
fund, the employer is required either to         mitted to claim credit or refund for
repay the amount to the employee, or             any overpayment of income tax that
to reimburse the employee by applying            the employer deducted or withheld
the amount of the overcollection                 from an employee.
against employee tax which otherwise                (d) Special refunds of employee social
would be collected from the employee             security tax. (1) An employee who re-
after the error is ascertained. If the           ceives wages from more than one em-
overcollection is repaid to the em-              ployer during a calendar year may,
ployee, the employer is required to ob-          under certain conditions, receive a
tain and keep the employee’s written             ‘‘special refund’’ of the amount of em-
receipt showing the date and amount of           ployee social security tax (i.e., em-
the repayment. In addition, if the em-           ployee tax under the Federal Insurance

                                            96
Internal Revenue Service, Treasury                                                    § 601.501

Contributions Act) deducted and with-              (4) Employee taxes under the Federal
held from wages that exceed the fol-             Insurance Contributions Act and the
lowing amounts: calendar years 1968              Railroad Retirement Tax Act include a
through 1971, $7,800; calendar year 1972,        percentage rate for hospital insurance.
$9,000; calendar year 1973, $10,800; cal-        If in 1968 or any calendar year there-
endar year 1974, $13,200; calendar years         after employee taxes under both Acts
after 1974, an amount equal to the con-          are deducted from an employee’s wages
tribution and benefit base (as deter-            and compensation aggregating more
mined under section 230 of the Social            than $7,800, the ‘‘special refund’’ provi-
Security Act) effective with respect to          sions may apply to the portion of the
that year. An employee who is entitled           tax that is deducted for hospital insur-
to a special refund of employee tax              ance. The employee may take credit on
with respect to wages received during a          Form 1040 for the amount allowable, in
calendar year, and who is required to            accordance with the instructions appli-
file an income tax return for such cal-          cable to that form.
endar year (or for his last taxable year         [32 FR 15990, Nov. 22, 1967, as amended at 33
beginning in such calendar year), may            FR 6825, May 4, 1968; 33 FR 17239, Nov. 21,
obtain the benefits of such special re-          1968; 36 FR 7586, Apr. 22, 1971; 38 FR 4970, Feb.
fund only by claiming credit for such            23, 1973; 39 FR 8918, Mar. 7, 1974; 41 FR 20883,
                                                 May 21, 1976; 45 FR 7257, Feb. 1, 1980; 49 FR
special refund on such income tax re-            19648, 19649, May 9, 1984; 49 FR 25239, June 20,
turn in the same manner as if such spe-          1984; 49 FR 36500, Sept. 18, 1984]
cial refund were an amount deducted
and withheld as income tax at source                 Subpart E—Conference and
on wages.
                                                       Practice Requirements
   (2) The amount of the special refund
allowed as a credit shall be considered
                                                   AUTHORITY: 68A Stat. 917, 26 U.S.C. 7805; 5
as an amount deducted and withheld as
                                                 U.S.C. 301.
income tax at source on wages. If the
amount of such special refund when               § 601.501   Scope of rules; definitions.
added to amounts deducted and with-
                                                   (a) Scope of rules. The rules prescribed
held as income tax under chapter 24 ex-
                                                 in this subpart concern, among other
ceeds the income tax imposed by chap-
                                                 things, the representation of taxpayers
ter 1, the amount of the excess con-
                                                 before the Internal Revenue Service
stitutes an overpayment of income tax,
                                                 under the authority of a power of at-
and interest on such overpayment is al-          torney. These rules apply to all offices
lowed to the extent provided under sec-          of the Internal Revenue Service in all
tion 6611 of the Code upon an overpay-           matters under the jurisdiction of the
ment of income tax resulting from a              Internal Revenue Service and apply to
credit for income tax withheld at                practice before the Internal Revenue
source on wages.                                 Service (as defined in 31 CFR 10.2(a)
   (3) If an employee entitled to a spe-         and 10.7(a)(7). For special provisions re-
cial refund of employee social security          lating to alcohol, tobacco, and firearms
tax is not required to file an income            activities, see §§ 601.521 through 601.527.
tax return for the year in which such            These rules detail the means by which
special refund may be claimed as a               a recognized representative is author-
credit, the employee may file a claim            ized to act on behalf of a taxpayer.
for refund of the excess social security         Such authority must be evidenced by a
tax on Form 843. Claims must be filed            power of attorney and declaration of
with the district director of internal           representative filed with the appro-
revenue for the district in which the            priate office of the Internal Revenue
employee resides.                                Service. In general, a power of attorney




                                            97
§ 601.501                                                     26 CFR Ch. I (4–1–99 Edition)

must contain certain information con-              the National Office constitute separate
cerning the taxpayer, the recognized               offices of the Internal Revenue Service.
representative, and the specific tax                 (9) Power of attorney. A document
matter(s) for which the recognized rep-            signed by the taxpayer, as principal, by
resentative is authorized to act. (See             which an individual is appointed as at-
§ 601.503(a).) A ‘‘declaration of rep-             torney-in-fact to perform certain speci-
resentative’’ is a written statement               fied act(s) or kinds of act(s) on behalf
made by a recognized representative                of the principal. Specific types of pow-
that he/she is currently eligible to               ers of attorney include the following—
practice before the Internal Revenue                 (i) General power of attorney. The at-
Service and is authorized to represent             torney-in-fact is authorized to perform
the particular party on whose behalf               any or all acts the taxpayer can per-
he/she acts. (See § 601.502(c).)                   form.
   (b) Definitions—(1) Attorney-in-fact.             (ii) Durable power of attorney. A power
An agent authorized by a principal                 of attorney which specifies that the ap-
under a power of attorney to perform               pointment of the attorney-in-fact will
certain specified act(s) or kinds of               not end due to either the passage of
act(s) on behalf of the principal.                 time (i.e., the authority conveyed will
   (2) Centralized Authorization File              continue until the death of the tax-
(CAF) system. An automated file con-               payer) or the incompetency of the prin-
taining information regarding the au-              cipal (e.g., the principal becomes un-
thority of a person appointed under a              able or is adjudged incompetent to per-
power of attorney or designated under              form his/her business affairs).
a tax information authorization.                     (iii) Limited power of attorney. A
   (3) Circular No. 230. Treasury Depart-          power of attorney which is limited in
ment Circular No. 230 codified, at 31              any facet (i.e., a power of attorney au-
CFR part 10, which sets forth the regu-            thorizing the attorney-in-fact to per-
lations governing practice before the              form only certain specified acts as con-
Internal Revenue Service.                          trasted to a general power of attorney
   (4) Declaration of representative. (See         authorizing the representative to per-
§ 601.502(c).)                                     form any and all acts the taxpayer can
   (5) Delegation of authority. An act per-        perform).
formed by a recognized representative                (10) Practice before the Internal Rev-
whereby authority given under a power              enue Service. Practice before the Inter-
of attorney is delegated to another rec-           nal Revenue Service encompasses all
ognized representative. After a delega-            matters connected with presentation
tion is made, both the original recog-             to the Internal Revenue Service or any
nized representative and the recognized            of its personnel relating to a taxpayer’s
representative to whom a delegation is             rights, privileges, or liabilities under
made will be recognized to represent               laws or regulations administered by
the taxpayer. (See § 601.505(b)(2).)               the Internal Revenue Service. Such
   (6) Form 2848, ‘‘Power of Attorney and          presentations include the preparation
Declaration of Representative.’’ The In-           and filing of necessary documents, cor-
ternal Revenue Service power of attor-             respondence with and communications
ney form which may be used by a tax-               to the Internal Revenue Service, and
payer who wishes to appoint an indi-               the representation of a taxpayer at
vidual to represent him/her before the             conferences, hearings, and meetings.
Internal       Revenue     Service.    (See        (See 31 CFR 10.2(a) and 10.7(a)(7).)
§ 601.503(b)(1).)                                    (11) Principal. A person (i.e., tax-
   (7) Matter. The application of each             payer) who appoints an attorney-in-
tax imposed by the Internal Revenue                fact under a power of attorney.
Code and the regulations thereunder                  (12) Recognized representative. An indi-
for each taxable period constitutes a              vidual who is recognized to practice be-
(separate) matter.                                 fore the Internal Revenue Service
   (8) Office of the Internal Revenue Serv-        under the provisions of § 601.502.
ice. The Office of each district director,           (13) Representation. Acts performed on
the office of each service center, the of-         behalf of a taxpayer by a representa-
fice of each compliance center, the of-            tive in practice before the Internal
fice of each regional commissioner, and            Revenue Service. (See § 601.501(b)(10).)

                                              98
Internal Revenue Service, Treasury                                                § 601.502

Representation does not include the              facts or evidence within a reasonable
furnishing of information at the re-             time after the conference.
quest of the Internal Revenue Service            [56 FR 24003, May 28, 1991; amended at 57 FR
or any of its officers or employees. (See        27356, June 19, 1992]
31 CFR 10.7(c).)
  (14) Substitution of representative. An        § 601.502 Recognized representative.
act performed by an attorney-in-fact                (a) A recognized representative is an
whereby authority given under a power            individual who is
of attorney is transferred to another               (1) Appointed as an attorney-in-fact
recognized representative. After a sub-          under a power of attorney, and a
stitution is made, only the newly rec-              (2) Member of one of the categories
ognized representative will be consid-           described in § 601.502(b) and who files a
ered the taxpayer’s representative.              declaration of representative, as de-
(See § 601.505(b)(2).)                           scribed in § 601.502(c).
                                                    (b) Categories—(1) Attorney. Any indi-
  (15) Tax information authorization. A
                                                 vidual who is a member in good stand-
document signed by the taxpayer au-
                                                 ing of the bar of the highest court of
thorizing any individual or entity (e.g.,        any state, possession, territory, com-
corporation, partnership, trust or orga-         monwealth, or the District of Colum-
nization) designated by the taxpayer to          bia;
receive and/or inspect confidential tax             (2) Certified public accountant. Any in-
information in a specified matter. (See          dividual who is duly qualified to prac-
section 6103 of the Internal Revenue             tice as a certified public accountant in
Code and the regulations thereunder.)            any state, possession, territory, com-
  (c) Conferences—(1) Scheduling. The            monwealth, or the District of Colum-
Internal Revenue Service encourages              bia;
the discussion of any Federal tax mat-              (3) Enrolled agent. Any individual who
ter affecting a taxpayer. Conferences            is enrolled to practice before the Inter-
may be offered only to taxpayers and/            nal Revenue Service and is in active
or their recognized representative(s)            status pursuant to the requirements of
acting under a valid power of attorney.          Circular No. 230;
As a general rule, such conferences will            (4) Enrolled actuary. Any individual
                                                 who is enrolled as an actuary by and is
not be held without previous arrange-
                                                 in active status with the Joint Board
ment. However, if a compelling reason
                                                 for the Enrollment of Actuaries pursu-
is shown by the taxpayer that an im-
                                                 ant to 29 U.S.C. 1242.
mediate conference should be held, the              (5) Other individuals—(i) Temporary
Internal Revenue Service official(s) re-         recognition. Any individual who is
sponsible for the matter has the discre-         granted temporary recognition as an
tion to make an exception to the gen-            enrolled agent by the Director of Prac-
eral rule.                                       tice (31 CFR 10.5(c)).
  (2) Submission of information. Every              (ii) Practice based on a relationship or
written protest, brief, or other state-          special status with a taxpayer. Any indi-
ment the taxpayer or recognized rep-             vidual authorized to represent a tax-
resentative wishes to be considered at           payer with whom/which a special rela-
any conference should be submitted to            tionship exists (31 CFR 10.7(a) (1)–(6)).
or filed with the appropriate Internal           (For example, an individual may rep-
Revenue Service official(s) at least five        resent another individual who is his/
business days before the date of the             her regular full-time employer or a
conference. If the taxpayer or the rep-          member of his/her immediate family;
resentative is unable to meet this re-           an individual who is a bona fide officer
quirement, arrangement should be                 or regular full-time employee of a cor-
made with the appropriate Internal               poration or certain other organizations
Revenue Service official for a post-             may represent that entity.)
                                                    (iii) Unenrolled return preparer. Any
ponement of the conference to a date
                                                 individual who signs a return as having
mutually agreeable to the parties. The
                                                 prepared it for a taxpayer, or who pre-
taxpayer or the representative remains           pared a return with respect to which
free to submit additional or supporting          the instructions or regulations do not

                                            99
§ 601.503                                                   26 CFR Ch. I (4–1–99 Edition)

require that the return be signed by                (4) Name and mailing address of the
the preparer. The acts which an                  recognized representative(s);
unenrolled return preparer may per-                 (5) Description of the matter(s) for
form are limited to representation of a          which representation is authorized
taxpayer before revenue agents and ex-           which, if applicable, must include—
amining officers of the Examination                 (i) The type of tax involved;
Division in the offices of District Di-             (ii) The Federal tax form number;
rector with respect to the tax liability            (iii) The specific year(s)/period(s) in-
of the taxpayer for the taxable year or          volved; and
period covered by a return prepared by              (iv) In estate matters, decedent’s
the unenrolled return prepared (31 CFR           date of death; and
10.7(a)(7)).                                        (6) A clear expression of the tax-
  (iv) Special appearance. Any indi-             payer’s intention concerning the scope
vidual who, upon written application,            of authority granted to the recognized
is authorized by the Director of Prac-           representative(s).
tice to represent a taxpayer in a par-              (b) Acceptable power of attorney docu-
ticular matter (31 CFR 10.7(b)).                 ments—(1) Form 2848. A properly com-
  (c) Declaration of representative. A rec-      pleted form 2848 satisfies the require-
ognized representative must attach to            ments for both a power of attorney (as
the power of attorney a written dec-             described in § 601.503(a)) and a declara-
laration (e.g., part II of form 2848) stat-      tion of representative (as described in
ing the following—                               § 601.502(c)).
   (1) I am not currently under suspension or       (2) Other documents. The Internal
disbarment from practice before the Internal     Revenue Service will accept a power of
Revenue Service or other practice of my pro-     attorney other than form 2848 provided
fession by any other authority;                  such document satisfies the require-
   (2) I am aware of the regulations contained   ments of § 601.503(a). However, for pur-
in Treasury Department Circular No. 230 (31
CFR part 10), concerning the practice of at-
                                                 poses of processing such documents
torneys, certified public accountants, en-       onto the Centralized Authorization
rolled agents, enrolled actuaries, and oth-      File (see § 601.506(d)), a completed form
ers);                                            2848 must be attached. (In such situa-
   (3) I am authorized to represent the tax-     tions, form 2848 is not the operative
payer(s) identified in the power of attorney;    power of attorney and need not be
and                                              signed by the taxpayer. However, the
   (4) I am an individual described in
                                                 Declaration of Representative must be
§ 601.502(b).
                                                 signed by the representative.)
If an individual is unable to make such             (3) Special provision. The Internal
declaration, he/she may not engage in            Revenue Service will not accept a
representation of a taxpayer before the          power of attorney which fails to in-
Internal Revenue Service or perform              clude the information required by
the acts described in §§ 601.504(a) (2)          §§ 601.503(a)(1) through (5). If a power of
through (6).                                     attorney fails to include some or all of
[56 FR 24004, May 28, 1991; amended at 57 FR
                                                 the information required by such sec-
27356, June 19, 1992]                            tion, the attorney-in-fact can cure this
                                                 defect by executing a form 2848 (on be-
§ 601.503 Requirements of power of at-           half of the taxpayer) which includes
     torney, signatures, fiduciaries and         the missing information. Attaching a
     Commissioner’s authority to sub-            form 2848 to a copy of the original
     stitute other requirements.                 power of attorney will validate the
   (a) Requirements. A power of attorney         original power of attorney (and will be
must contain the following informa-              treated in all circumstances as one
tion—                                            signed and filed by the taxpayer) pro-
   (1) Name and mailing address of the           vided the following conditions are sat-
taxpayer;                                        isfied—
   (2) Identification number of the tax-            (i) The original power of attorney
payer (i.e., social security number and/         contemplates authorization to handle,
or employer identification number);              among other things, Federal tax mat-
   (3) Employee plan number (if applica-         ters, (e.g., the power of attorney in-
ble);                                            cludes language to the effect that the

                                             100
Internal Revenue Service, Treasury                                           § 601.503

attorney-in-fact has the authority to           (4) Association. In the case of an asso-
perform any and all acts).                   ciation, a power of attorney must be
  (ii) The attorney-in-fact attaches a       executed by an officer of the associa-
statement (signed under penalty of per-      tion having authority to legally bind
jury) to the form 2848 which states that     the association, who must certify that
the original power of attorney is valid      he/she has such authority.
under the laws of the governing juris-          (5) Partnership. In the case of a part-
diction.                                     nership, a power of attorney must be
  (4) Other categories of powers of attor-   executed by all partners, or if executed
ney. Categories of powers of attorney        in the name of the partnership, by the
not addressed in these rules (e.g., dura-    partner or partners duly authorized to
ble powers of attorney and limited           act for the partnership, who must cer-
powers of attorney) will be accepted by      tify that he/she has such authority.
the Internal Revenue Service provided           (6) Dissolved partnership. In the case
such documents satisfy the require-          of a dissolved partnership, each of the
ments of §§ 601.503(b) (2) or (3).           former partners must execute a power
  (c) Signatures. Internal Revenue Serv-     of attorney. However, if one or more of
ice officials may require a taxpayer (or     the former partners is deceased, the
such individual(s) required or author-       following provisions apply—
ized to sign on behalf of a taxpayer) to        (i) The legal representative of each
                                             deceased partner(s) (or such person(s)
submit appropriate identification or
                                             having legal control over the disposi-
evidence of authority. Except when
                                             tion of partnership interest(s) and/or
form 2848 (or its equivalent) is executed
                                             the share of partnership asset(s) of the
by an attorney-in-fact under the provi-
                                             deceased partner(s)) must execute a
sions of § 601.503(b)(3), the individual
                                             power of attorney in the place of such
who must execute a form 2848 depends
                                             deceased             partner(s).       (See
on the type of taxpayer involved—
                                             § 601.503(c)(6)(ii).)
  (1) Individual taxpayer. In matter(s)         (ii) Notwithstanding § 601.503(c)(6)(i),
involving an individual taxpayer, a          if the laws of the governing jurisdic-
power of attorney must be signed by          tion provide that such partner(s) has
such individual.                             exclusive right to control or possession
  (2) Husband and wife. In matters in-       of the firm’s assets for the purpose of
volving a joint return the following         winding up its affairs, the signature(s)
rules apply—                                 of the surviving partner(s) alone will be
  (i) Joint representation. In the case of   sufficient. (If the surviving partner(s)
any matter concerning a joint return         claims exclusive right to control or
in which both husband and wife are to        possession of the firm’s assets for the
be represented by the same representa-       purpose of winding up its affairs, Inter-
tive(s), the power of attorney must be       nal Revenue Service officials may re-
executed by both husband and wife.           quire the submission of a copy of or a
  (ii) Individual representation. In the     citation to the pertinent provisions of
case of any matter concerning a joint        the law of the governing jurisdiction
return in which both husband and wife        upon which the surviving partner(s) re-
are not to be represented by the same        lies.)
recognized representative(s), the power         (d) Fiduciaries. In general, when a fi-
of attorney must be executed by the          duciary is involved in a tax matter, a
spouse who is to be represented. How-        power of attorney is not required. In-
ever, the recognized representative of       stead form 56, ‘‘Notice Concerning Fi-
such spouse cannot perform any act           duciary Relationship’’ should be filed.
with respect to a tax matter that the        Types of taxpayer for which fiduciaries
spouse being represented cannot per-         act are—
form alone.                                     (1) Dissolved corpoority of the voting
  (3) Corporation. In the case of a cor-     stock of the corporation as of the date of
poration, a power of attorney must be        dissolution. Internal Revenue Service
executed by an officer of the corpora-       officials may require submission of a
tion having authority to legally bind        statement showing the total number of
the corporation, who must certify that       outstanding shares of voting stock as
he/she has such authority.                   of the date of dissolution, the number

                                         101
§ 601.503                                              26 CFR Ch. I (4–1–99 Edition)

of shares held by each signatory to a        estate has been distributed to the re-
power of attorney, the date of dissolu-      siduary legatee(s), a form 56, ‘‘Notice
tion, and a representation that no           Concerning Fiduciary Relationship,’’
trustee has been appointed.                  should be filed by the residuary leg-
  (2) Insolvent taxpayer. In the case of     atee(s). Internal Revenue Service offi-
an insolvent taxpayer, form 56, ‘‘Notice     cials may require the submission of a
Concerning Fiduciary Relationship,’’         statement from the court certifying
should be filed by the trustee, receiver,    that no executor, administrator, or
or attorney appointed by the court. In-      trustee named under the will is acting
ternal Revenue Service officials may         or responsible for disposition of the
require the submission of a certified        matter, naming the residuary leg-
order or document from the court hav-        atee(s), and indicating the proper share
ing jurisdiction over the insolvent tax-     to which each is entitled.
payer which shows the appointment              (iv) Distributee(s). In the event that
and qualification of the trustee, re-        the decedent died intestate and the ad-
ceiver, or attorney and that his/her au-     ministrator has been discharged and is
thority has not been terminated. In          not responsible for disposition of the
cases pending before a court of the          matter (or none was ever appointed), a
United States (e.g., U.S. District Court     form 56, ‘‘Notice Concerning Fiduciary
or U.S. Bankruptcy Court), an authen-        Relationship,’’ should be filed by the
ticated copy of the order approving the      distributee(s). Internal Revenue Serv-
bond of the trustee, receiver, or attor-     ice officials may require the submis-
ney will meet this requirement.              sion of evidence of the discharge of the
  (3) Deceased taxpayers—(i) Executor,       administrator (if one had been ap-
personal representative or administrator.    pointed) and evidence that the admin-
In the case of a deceased taxpayer, a        istrator is not responsible for disposi-
form 56, ‘‘Notice Concerning Fiduciary       tion of the matter. It also may require
Relationship,’’ should be filed by the       a statement(s) signed under penalty of
executor, personal representative or         perjury (and such other appropriate
administrator if one has been ap-            evidence as can be produced) to show
pointed and is responsible for disposi-      the relationship of the individual(s)
tion of the matter under consideration.      who sign the form 56, ‘‘Notice Con-
Internal Revenue Service officials may       cerning Fiduciary Relationship,’’ to
require the submission of a short-form       the decedent and the right of each sign-
certificate (or authenticated copy of        er to the respective shares of the assets
letters testamentary or letters of ad-       claimed under the law of the domicile
ministration) showing that such au-          of the decedent.
thority is in full force and effect at the     (4) Taxpayer for whom a guardian or
time the form 56, ‘‘Notice Concerning        other fiduciary has been appointed. In
Fiduciary Relationship,’’ is filed.          the case of a taxpayer for whom a
  (ii) Testamentary trustee(s). In the       guardian or other fiduciary has been
event that a trustee is acting under the     appointed by a court of record, a form
provisions of the will, a form 56, ‘‘No-     56, ‘‘Notice Concerning Fiduciary Rela-
tice Concerning Fiduciary Relation-          tionship,’’ should be filed by the fidu-
ship,’’ should be filed by the trustee,      ciary. Internal Revenue Service offi-
unless the executor, personal rep-           cials may require the submission of a
resentative or administrator has not         court certificate or court order show-
been discharged and is responsible for       ing that the individual who executes
disposition of the matter. Internal Rev-     the form 56, ‘‘Notice Concerning Fidu-
enue Service officials may require ei-       ciary Relationship,’’ has been ap-
ther the submission of evidence of the       pointed and that his/her appointment
discharge of the executor and appoint-       has not been terminated.
ment of the trustee or other appro-            (5) Taxpayer who has appointed a
priate evidence of the authority of the      trustee. In the case of a taxpayer who
trustee.                                     has appointed a trustee, a form 56,
  (iii) Residuary legatee(s). If no execu-   ‘‘Notice Concerning Fiduciary Rela-
tor, administrator, or trustee named         tionship,’’ should be filed by the trust-
under the will is acting or responsible      ee. If there is more than one trustee
for disposition of the matter and the        appointed, all should join unless it is

                                         102
Internal Revenue Service, Treasury                                              § 601.504

shown that fewer than all have author-             (3) Consent. Execution of a consent to
ity to act. Internal Revenue Service of-        extend the statutory period for assess-
ficials may require the submission of           ment or collection of a tax.
documentary evidence of the authority              (4) Closing agreement. Execution of a
of the trustee to act. Such evidence            closing agreement under the provisions
may be either a copy of a properly exe-         of the Internal Revenue Code and the
cuted trust instrument or a certified           regulations thereunder.
copy of extracts from the trust instru-            (5) Check drawn on the United States
ments, showing—                                 Treasury. The authority to receive (but
  (i) The date of the instrument;               not endorse or collect) a check drawn
  (ii) That it is or is not of record in        on the United States Treasury must be
any court;
                                                specifically granted in a power of at-
  (iii) The names of the beneficiaries;
                                                torney. (The endorsement and payment
  (iv) The appointment of the trustee,          of a check drawn on the United States
the authority granted, and other infor-
                                                Treasury are governed by Treasury De-
mation as may be necessary to show
                                                partment Circular No. 21, as amended,
that such authority extends to Federal
tax matters; and                                31 CFR part 240. Endorsement and pay-
  (v) That the trust has not been ter-          ment of such check by any person
minated and the trustee appointed               other than the payee must be made
therein is still legally acting as such.        under one of the special types of pow-
  In the event that the trustee ap-             ers of attorney prescribed by Circular
pointed in the original trust instru-           No. 21, 31 CFR part 240. For restrictions
ment has been replaced by another               on the assignment of claims, see Re-
trustee, documentary evidence of the            vised Statute section 3477, as amended
appointment of the new trustee must             (31 U.S.C. 3727).)
be submitted.                                      (6) Signing tax returns. The filing of a
  (e) Commissioner’s authority to sub-          power of attorney does not authorize
stitute other requirements for power of at-     the recognized representative to sign a
torney. Upon application of a taxpayer          tax return on behalf of the taxpayer
or a recognized representative, the             unless such act is both—
Commissioner of Internal Revenue may               (i) Permitted under the Internal Rev-
substitute a requirement(s) other than          enue Code and the regulations there-
provided herein for a power of attorney         under (e.g., the authority to sign in-
as evidence of the authority of the rep-        come tax returns is governed by the
resentative.                                    provisions of § 1.6012–1(a)(5) of the In-
[56 FR 24005, May 28, 1991; 57 FR 27356, June   come Tax Regulations); and
19, 1992]                                          (ii) Specifically authorized in the
                                                power of attorney.
§ 601.504 Requirements         for     filing      (b) Situations in which a power of at-
    power of attorney.
                                                torney is not required—(1) Disclosure of
  (a) Situations in which a power of at-        confidential tax information. The sub-
torney is required. Except as otherwise         mission of a tax information authoriza-
provided in § 601.504(b), a power of at-        tion to request a disclosure of confiden-
torney is required by the Internal Rev-         tial tax information does not con-
enue Service when the taxpayer wishes           stitute practice before the Internal
to authorize a recognized representa-           Revenue Service. (Such procedure is
tive to perform one or more of the fol-
                                                governed by the provisions of section
lowing acts on behalf of the taxpayer—
                                                6103 of the Internal Revenue Code and
  (1) Representation. (See §§ 601.501(b)(10)
                                                the regulations thereunder.) Neverthe-
and 601.501(b)(13).)
                                                less, if a power of attorney is properly
  (2) Waiver. Offer and/or execution of
either                                          filed, the recognized representative
  (i) A waiver of restriction on assess-        also is authorized to receive and/or in-
ment or collection of a deficiency in           spect confidential tax information con-
tax, or                                         cerning the matter(s) specified (pro-
  (ii) A waiver of notice of disallow-          vided the power of attorney places no
ance of a claim for credit or refund.           limitations upon such disclosure).

                                            103
§ 601.505                                               26 CFR Ch. I (4–1–99 Edition)

   (2) Estate matter. A power of attorney    laration of representative and any
is not required at a conference con-         other required statement(s), must be
cerning an estate tax matter if the in-      submitted with each request or matter.
dividual seeking to act as a recognized        (4) Copy of power of attorney. The In-
representative presents satisfactory         ternal Revenue Service will accept ei-
evidence to Internal Revenue Service         ther the original or a copy of a power
officials that he/she is—                    of attorney. A copy of a power of attor-
   (i) An individual described in            ney received by facsimile transmission
§ 601.502(b); and                            (FAX) also will be accepted.
   (ii) The attorney of record for the ex-     (d) Practice by correspondence. If an
ecutor, personal representative, or ad-      individual desires to represent a tax-
ministrator before the court where the       payer through correspondence with the
will is probated or the estate is admin-     Internal Revenue Service, such indi-
istered.                                     vidual must submit a power of attor-
   (3) Bankruptcy matters. A power of at-    ney, including the declaration of rep-
torney is not required in the case of a      resentative and any other required
trustee, receiver, or an attorney (des-      statement(s), even though no personal
ignated to represent a trustee, re-          appearance is contemplated.
ceiver, or debtor in possession) ap-         [56 FR 24007, May 28, 1991; 57 FR 27356, June
pointed by a court having jurisdiction       19, 1992]
over a debtor. In such a case, Internal
Revenue Service officials may require        § 601.505 Revocation, change in rep-
the submission of a certificate from               resentation and substitution or del-
the court having jurisdiction over the             egation of representative.
debtor showing the appointment and              (a) By the taxpayer—(1) New power of
qualification of the trustee, receiver,      attorney filed. A new power of attorney
or attorney and that his/her authority       revokes a prior power of attorney if it
has not been terminated. In cases pend-      is granted by the taxpayer to another
ing before a court of the United States      recognized representative with respect
(e.g., U.S. District Court or U.S. Bank-     to the same matter. However, a new
ruptcy Court), an authenticated copy         power of attorney does not revoke a
of the order approving the bond of the       prior power of attorney if it contains a
trustee, receiver, or attorney will meet     clause stating that it does not revoke
this requirement.                            such prior power of attorney and there
   (c) Administrative requirements of fil-   is attached to the new power of attor-
ing—(1) General. Except as provided in       ney either—
this section, a power of attorney (in-          (i) A copy of the unrevoked prior
cluding the declaration of representa-       power of attorney; or
tive and any other required state-              (ii) A statement signed by the tax-
ment(s)) must be filed in each office of     payer listing the name and address of
the Internal Revenue Service in which        each recognized representative author-
the recognized representative desires        ized under the prior unrevoked power
to perform one or more of the acts de-       of attorney.
scribed in § 601.504(a).                        (2) Statement of revocation filed. A tax-
   (2) Regional offices. If a power of at-   payer may revoke a power of attorney
torney (including the declaration of         without authorizing a new representa-
representative and any other required        tive by filing a statement of revocation
statement(s)) is filed with the office of    with those offices of the Internal Rev-
a district director or with a service        enue Service where the taxpayer has
center which has the matter under con-       filed the power of attorney to be re-
sideration, it is not necessary to file a    voked. The statement of revocation
copy with the office of a regional com-      must indicate that the authority of the
missioner which subsequently has the         first power of attorney is revoked and
matter under consideration unless re-        must be signed by the taxpayer. Also,
quested.                                     the name and address of each recog-
   (3) National Office. In case of a re-     nized representative whose authority is
quest for a ruling or other matter to be     revoked must be listed (or a copy of the
considered in the National Office, a         power of attorney to be revoked must
power of attorney, including the dec-        be attached).

                                         104
Internal Revenue Service, Treasury                                              § 601.506

   (b) By the recognized representative—       sions of § 601.502(b). However, even if
(1) Revocation of power of attorney. A         such employee is not a recognized rep-
recognized representative may with-            resentative in his/her own capacity
draw from representation in a matter           under the provisions of § 601.502(a), that
in which a power of attorney has been          individual may be authorized by the
filed by filing a statement with those         taxpayer under a tax information au-
offices of the Internal Revenue Service        thorization to receive and/or inspect
where the power of attorney to be re-          confidential tax information under the
voked was filed. The statement must            provisions of section 6103 of the Inter-
be signed by the representative and            nal Revenue Code and the regulations
must identify the name and address of          thereunder.
the taxpayer(s) and the matter(s) from
which the representative is with-              [56 FR 24007, May 28, 1991, amended at 57 FR
drawing.                                       27356,June 19, 1992]
   (2) Substitution or delegation of recog-
nized representative. Any recognized           § 601.506 Notices to be given to recog-
representative appointed in a power of             nized representative; direct contact
                                                   with taxpayer; delivery of a check
attorney may substitute or delegate                drawn on the United States Treas-
authority under the power of attorney              ury to recognized representative.
to another recognized representative if
substitution or delegation is specifi-           (a) General. Any notice or other writ-
cally permitted under the power of at-         ten communication (or a copy thereof)
torney. Unless otherwise provided in           required or permitted to be given to a
the power of attorney, a recognized            taxpayer in any matter before the In-
representative may make a substi-              ternal Revenue Service must be given
tution or delegation without the con-          to the taxpayer and, unless restricted
sent of any other recognized represent-        by the taxpayer, to the representative
ative appointed to represent the tax-          according to the following procedures—
payer in the same matter. A substi-              (1) If the taxpayer designates more
tution or delegation if effected by fil-       than one recognized representative to
ing the following items with offices of        receive notices and other written com-
the Internal Revenue Service where the         munications, it will be the practice of
power of attorney has been filed—              the Internal Revenue Service to give
   (i) Notice of substitution or delegation.   copies of such to two (but not more
A Notice of Substitution or Delegation         than two) individuals so designated.
is a statement signed by the recognized          (2) In a case in which the taxpayer
representative appointed under the             does not designate which recognized
power of attorney. The statement must          representative is to receive notices, it
contain the name and mailing address           will be the practice of the Internal
of the new recognized representative           Revenue Service to give notices and
and, if more than one individual is to         other communications to the first rec-
represent the taxpayer in the matter, a        ognized representative appointed on
designation of which recognized rep-
                                               the power of attorney.
resentative is to receive notices and
                                                 (3) Failure to give notice or other
other written communications;
   (ii) Declaration of representative. A       written communication to the recog-
written declaration which is made by           nized representative of a taxpayer will
the new representative as required by          not affect the validity of any notice or
§ 601.502(c); and                              other written communication delivered
   (iii) Power of attorney. A power of at-     to a taxpayer.
torney which specifically authorizes           Unless otherwise indicated in the docu-
the substitution or delegation.                ment, a power of attorney other than
An employee of a recognized represent-         form 2848 will be presumed to grant the
ative may not be substituted for his/          authority to receive notices or other
her employer with respect to the rep-          written communication (or a copy
resentation of a taxpayer before the In-       thereof) required or permitted to be
ternal Revenue Service unless the em-          given to a taxpayer in any matter(s)
ployee is a recognized representative in       before the Internal Revenue Service to
his/her own capacity under the provi-          which the power of attorney pertains.

                                           105
§ 601.506                                                 26 CFR Ch. I (4–1–99 Edition)

  (b) Cases where taxpayer may be con-         power of attorney authorizes more
tacted directly. Where a recognized rep-       than one recognized representative to
resentative has unreasonably delayed           receive a check on the taxpayer’s be-
or hindered an examination, collection         half, and such representatives have dif-
or investigation by failing to furnish,        ferent addresses, the Internal Revenue
after repeated request, nonprivileged          Service will mail the check diretly to
information necessary to the examina-          the taxpayer, unless a statement
tion, collection or investigation, the         (signed by all of the recognized rep-
Internal Revenue Service employee              resentatives so authorized) is sub-
conducting the examination, collection         mitted which indicates the address to
or investigation may request the per-          which the check is to be mailed.
mission of his/her immediate super-               (4) Cases in litigation. The provisions
visor to contact the taxpayer directly         of § 601.506(c) concerning the issuance of
for such information.                          a tax refund do not apply to the
  (1) Procedure. If such permission is         issuance of a check in payment of
granted, the case file will be docu-           claims which have been either reduced
mented with sufficient facts to show           to judgment or settled in the course (or
how the examination, collection or in-         as a result) of litigation.
vestigation was being delayed or hin-             (d) Centralized Authorization File
dered. Written notice of such permis-          (CAF) system—(1) Information recorded
sion, briefly stating the reason why it        onto the CAF system. Information from
was granted, will be given to both the         both powers of attorney and tax infor-
recognized representative and the tax-         mation authorizations is recorded onto
payer together with a request of the           the CAF system. Such information en-
taxpayer to supply such nonprivileged          ables Internal Revenue Service per-
information. (See 7521(c) of the Inter-        sonnel who do not have access to the
nal Revenue Code and the regulations           actual power of attorney or tax infor-
thereunder.)                                   mation authorizations to—
  (2) Effect of direct notification. Permis-      (i) Determine whether a recognized
sion to by-pass a recognized represent-        representative or an appointee is au-
ative and contact a taxpayer directly          thorized by a taxpayer to receive and/
does not automatically disqualify an           or inspect confidential tax informa-
individual to act as the recognized rep-       tion;
resentative of a taxpayer in a matter.            (ii) Determine, in the case of a recog-
However, such information may be re-           nized representative, whether that rep-
ferred to the Director of Practice for         resentative is authorized to perform
possible disciplinary proceedings under        the acts set forth in § 601,504(a); and
Circular No. 230, 31 CFR part 10.                 (iii) Send copies of computer gen-
  (c) Delivery of a check drawn on the         erated notices and communications to
United States Treasury—(1) General. A          an appointee or recognized representa-
check drawn on the United States               tive so authorized by the taxpayer.
Treasury (e.g., a check in payment of             (2) CAF number. A Centralized Au-
refund of internal revenue taxes, pen-         thorization File (CAF) number gen-
alties, or interest, see § 601.504(a)(5))      erally will be issued to—
will be mailed to the recognized rep-             (i) A recognized representative who
resentative of a taxpayer provided that        files a power of attorney and a written
a power of attorney is filed containing        declaration of representative; or
specific authorization for this to be             (ii) An appointee authorized under a
done.                                          tax information authorization.
  (2) Address of recognized representative.    The issuance of a CAF number does not
The check will be mailed to the address        indicate that a person is either recog-
of the recognized representative listed        nized or authorized to practice before
on the power of attorney unless such           the Internal Revenue Service. Such de-
recognized representative notifies the         termination is made under the provi-
Internal Revenue Service in writing            sions of Circular No. 230, 31 CFR part
that his/her mailing address has been          10. The purpose of the CAF number is
changed.                                       to facilitate the processing of a power
  (3) Authorization of more than one rec-      of attorney or a tax information au-
ognized representative. In the event a         thorization submitted by a recognized

                                           106
Internal Revenue Service, Treasury                                         § 601.508

representative or an appointee. A rec-       years are under consideration by the
ognized representative or an appointee       Internal Revenue Service.
should include the same CAF number             (iv) Limitation on representatives re-
on every power of attorney or tax in-        corded onto the CAF system. No more
formation authorization filed. How-          than three representatives appointed
ever, because the CAF number is not a        under a power of attorney or three per-
substantive requirement (i.e., as listed     sons designated under a tax informa-
in § 601.503(a)), a tax information au-      tion authorization will be recorded
thorization or power of attorney which       onto the CAF system. If more than
does not include such number will not        three representatives are appointed
be rejected based on the absence of a        under a power of attorney or more than
CAF number.                                  three persons designated under a tax
   (3) Tax matters recorded on CAF. Al-      information authorization, only the
though a power of attorney or tax in-        first three names will be recorded onto
formation authorization may be filed         the CAF system.
in all matters under the jurisdiction of     The fact that a power of attorney or
the Internal Revenue Service, only           tax information authorization cannot
those documents which meet each of           be recorded onto the CAF system is not
the following criteria will be recorded      determinative of the (current or fu-
onto the CAF system—                         ture) validity of such document. (For
   (i) Specific tax period. Only documents   example, documents which concern tax
which concern a matter(s) relating to a      periods that end more than three years
specific tax period will be recorded         from the date of receipt by the IRS are
onto the CAF system. A power of attor-       not invalid for the period(s) not re-
ney or tax information authorization         corded onto the CAF system, but can
filed in a matter unrelated to a specific    be resubmitted at a later date.)
period (e.g., the 100% penalty for fail-
                                             [56 FR 24008, May 28, 1991]
ure to pay over withholding taxes im-
posed by section 6672 of the Internal        § 601.507 Evidence required to sub-
Revenue Code, applications for an em-            stantiate facts alleged by a recog-
ployer identification number, and re-            nized representative.
quests for a private letter ruling re-
                                               The Internal Revenue Service may
quest pertaining to a proposed trans-
                                             require a recognized representative to
action) cannot be recorded onto the
                                             submit all evidence, except that of a
CAF system.
                                             supplementary or incidental character,
   (ii) Future three-year limitation. Only
                                             over a declaration (signed under pen-
documents which concern a tax period
                                             alty of perjury) that the recognized
that ends no later than three years
                                             representative prepared such submis-
after the date on a power of attorney is
                                             sion and that the facts contained
received by the Internal Revenue Serv-
                                             therein are true. In any case in which
ice will be recorded onto the CAF sys-
                                             a recognized representative is unable
tem. For example, a power of attorney
                                             or unwilling to declare his/her own
received by the Internal Revenue Serv-
                                             knowledge that the facts are true and
ice on August 1, 1990, which indicates
                                             correct, the Internal Revenue Service
that the authorization applies to form
                                             may require the taxpayer to make such
941 for the quarters ended December 31,
                                             a declaration under penalty of perjury.
1990 through December 31, 2000, will be
recorded onto the CAF system for the         [56 FR 24009, May 28, 1991]
applicable tax periods which end no
later than July 31, 1993 (i.e., three        § 601.508 Dispute between recognized
years after the date of receipt by the           representatives of a taxpayer.
Internal Revenue Service).                     Where there is a dispute between two
   (iii) Documents for prior tax periods.    or more recognized representatives
Documents which concern any tax pe-          concerning who is entitled to represent
riod which has ended prior to the date       a taxpayer in a matter pending before
on which a power of attorney is re-          the Internal Revenue Service (or to re-
ceived by the Internal Revenue Service       ceive a check drawn on the United
will be recorded onto the CAF system         States Treasury), the Internal Revenue
provided that matters concerning such        Service will not recognize any party.

                                         107
§ 601.509                                                26 CFR Ch. I (4–1–99 Edition)

However, if the contesting recognized        for the initial meeting in the office of
representatives designate one or more        an regional regulatory administrator
of their number under the terms of an        in the Bureau of Alcohol, Tobacco, and
agreement signed by all, the Internal        Firearms or of the Director, Bureau of
Revenue Service will recognize such          Alcohol, Tobacco, and Firearms, he
designated recognized representatives        must submit evidence of recognition;
upon receipt of a copy of such agree-        or he should state in his first letter or
ment according to the terms of the           other written communication with
power of attorney.                           such office whether he is recognized to
[56 FR 24009, May 28, 1991]                  practice, and should enclose evidence
                                             of such recognition. In the case of a
§ 601.509 Power of attorney not re-          qualified attorney or a qualified cer-
    quired in cases docketed in the Tax      tified public accountant, the filing of
    Court of the United States.              the applicable written declaration de-
   The petitioner and the Commissioner       scribed in paragraphs (b)(1) (i) and (ii)
of Internal Revenue stand in the posi-       of § 601.502 shall constitute evidence of
tion of parties litigant before a judicial   recognition. In the case of an enrollee,
body in a case docketed in the Tax           the filing of a notification, stating that
Court of the United States. The Tax          he is enrolled to practice and giving his
Court has its own rules of practice and      enrollment number or the expiration
procedure and its own rules respecting       date of his enrollment card, shall con-
admission to practice before it. Accord-     stitute evidence of recognition.
ingly, a power of attorney is not re-
quired to be submitted by an attorney        [34 FR 6432, Apr. 12, 1969, as amended at 45
of record in a case which is docketed in     FR 7259, Feb. 1, 1980]
the Tax Court. Correspondence in con-
                                             § 601.522   Power of attorney.
nection with cases docketed in the Tax
Court will be addressed to counsel of          Except as otherwise provided in this
record before the Court. However, a          section, a power of attorney, or copy
power of attorney is required to be sub-     thereof, will be required for a rep-
mitted by an individual other than the       resentative of a principal (a) to per-
attorney of record in any matter before      form the acts specified in paragraph
the Internal Revenue Service con-            (c)(1) of § 601.502; or (b) to sign any ap-
cerning a docketed case.                     plication, bond, notice, return, report,
[56 FR 24009, May 8, 1991]                   or other document required by, or pro-
                                             vided for in, regulations issued pursu-
REQUIREMENTS FOR ALCOHOL, TOBACCO,           ant to chapter 51 (Distilled Spirits,
      AND FIREARMS ACTIVITIES                Wines, and Beer), Chapter 52 (Cigars,
                                             Cigarettes, and Cigarette Papers and
§ 601.521 Requirements for conference        Tubes), and chapter 53 (Machine Guns,
    and representation in conference.        Destructive Devices, and Certain Other
   Any person desiring a conference in       Firearms), Internal Revenue Code, title
the office of the regional regulatory        1 of the Gun Control Act of 1968, or the
administrator in the Bureau of Alco-         Federal Alcohol Administration Act,
hol, Tobacco, and Firearms of his re-        which is filed with or acted on by (1)
gion or of the Director, Bureau of Alco-     the office of a regional regulatory ad-
hol, Tobacco, and Firearms, in Wash-         ministrator in the Bureau of Alcohol,
ington, DC, relative to any matter aris-     Tobacco, and Firearms, or (2) the Di-
ing in connection with his operations,       rector, Bureau of Alcohol, Tobacco,
will be accorded such a conference           and Firearms. The power of attorney
upon request. No formal requirements         may be executed on Form 1534, copies
are prescribed for such conference.          of which may be obtained from the re-
Where an industry member or other            gional regulatory administrator in the
person is to be represented in con-          Bureau of Alcohol, Tobacco, and Fire-
ference, the representative must be          arms. A power of attorney will not be
recognized to practice as provided in        required for a person authorized to sign
paragraph (b) of § 601.502. When a rep-      on behalf of the principal by articles of
resentative presents himself on behalf       incorporation, bylaws, or a board of di-
of an industry member or other person        rectors, where an acceptable copy of

                                         108
Internal Revenue Service, Treasury                                              § 601.524

such authorization is on file in the of-         filed, a copy of the tax information au-
fice of the regional regulatory adminis-         thorization must be filed in each office
trator or of the Director. A power of            in which the representative inspects or
attorney filed under the provisions of           receives confidential information, or,
this section may cover one or more               where acts requiring a power of attor-
acts for which a power of attorney is            ney or a tax information authorization
required and will continue in effect             are handled by correspondence, the rep-
with respect to such acts until revoked          resentative should enclose a copy of
as provided in § 601.526. The exceptions         the power or authorization with the
to the requirements for a power of at-
                                                 initial correspondence. However, where
torney contained in paragraph (c) (3)
and (4) of § 601.502 are applicable to           a power of attorney or tax information
powers of attorney under this section.           authorization is on file with the re-
                                                 gional regulatory administrator in the
[34 FR 14603, Sept. 19, 1969, as amended at 45   Bureau of Alcohol, Tobacco, and Fire-
FR 7259, Feb. 1, 1980]
                                                 arms, an additional copy thereof will
§ 601.523 Tax information authoriza-             not be required in the office of the re-
     tion.                                       gional counsel of the same region.
   Where any of the acts specified in               (b) Execution. The power of attorney
paragraph (c)(2)(i) of § 601.502 are to be       required by § 601.522, or tax information
performed by a representative, and a             authorization required by § 601.523,
power of attorney for such representa-           shall be executed in the manner pre-
tive has not been filed, a tax informa-          scribed in paragraph (b) of § 601.504;
tion authorization, or copy thereof,             shall indicate all acts to which it re-
will be required. The authorization              lates; should contain the mailing ad-
may be executed on Form 1534–A, cop-             dress of the representative; and, if
ies of which may be obtained from the            more than one representative is au-
regional regulatory administrator in             thorized to perform the same acts on
the Bureau of Alcohol, Tobacco, and              behalf of the industry member or other
Firearms. Such authorization may                 person, a designation as to which rep-
cover one or more of the acts for which          resentative is to receive notices and
a tax information authorization is re-           other written communications. For
quired and will continue in effect with
                                                 rules relating to the mailing of notices
respect to such acts until revoked as
                                                 or other written communications to a
provided in § 601.526. The exceptions to
the requirements for a tax information           representative, see § 601.506.
authorization, provided in paragraphs               (c) Attestation and corporate seal. In
(c) (3) and (4) of § 601.502, are applicable     the case of a corporation, a power of
to such authorizations under this sec-           attorney filed with an officer of the Bu-
tion.                                            reau of Alcohol, Tobacco, and Firearms
                                                 must be attested by the secretary and
[34 FR 6432, Apr. 12, 1969]
                                                 the corporate seal must be affixed. If
§ 601.524 Execution and filing powers            the officer who signs the power of at-
     of attorney and tax information au-         torney is also the secretary, another
     thorizations.                               officer of the corporation, preferably
   (a) Time of filing. A copy of the power       the president, vice president, or treas-
of attorney must be filed in each office         urer, must also sign the power of attor-
(that is, office of a regional regulatory        ney so that two different individuals’
administrator and Office of the Direc-           signatures appear thereon. If the cor-
tor, Bureau of Alcohol, Tobacco, and             poration has no seal, a certified copy of
Firearms), in which a document speci-            a resolution duly passed on by the
fied in § 601.522, covered by the power of       board of directors of the corporation
attorney, is required to be filed, or in         authorizing the execution of powers of
which the representative desires to per-         attorney should be attached.
form one or more of the acts enumer-                (d) Acknowledgment. A power of attor-
ated in paragraph (c)(1) of § 601.502. If a
                                                 ney filed with an office of the Bureau
power of attorney covering an act oth-
                                                 of Alcohol, Tobacco, and Firearms
erwise requiring the filing of a tax in-
formation authorization has not been             must be acknowledged, witnessed, or

                                             109
§ 601.525                                                      26 CFR Ch. I (4–1–99 Edition)

certified as provided in paragraph (d) of           Treasury decisions are forwarded to
§ 601.504.                                          the Secretary or his delegate for fur-
[32 FR 15990, Nov. 22, 1967, as amended at 34
                                                    ther consideration and final approval.
FR 6432, Apr. 12, 1969; 45 FR 7259, Feb. 1, 1980]     (2) Where required by 5 U.S.C. 553 and
                                                    in such other instances as may be de-
§ 601.525 Certification of copies of doc-           sirable, the Commissioner publishes in
     uments.                                        the FEDERAL REGISTER general notice
   The provisions of paragraph (e) of               of proposed rules (unless all persons
§ 601.504 with respect to certification of          subject thereto are named and either
copies are applicable to a power of at-             personally served or otherwise have ac-
torney or a tax information authoriza-              tual notice thereof in accordance with
tion required to be filed under § 601.522           law). This notice includes:
or § 601.523.                                         (i) A statement of the time, place,
                                                    and nature of public rulemaking pro-
§ 601.526 Revocation of powers of at-               ceedings;
    torney and tax information author-                (ii) Reference to the authority under
    izations.
                                                    which the rule is proposed.
   The revocation of the authority of a               (iii) Either the terms or substance of
representative covered by a power of                the proposed rule or a description of
attorney or tax information authoriza-              the subjects and issues involved.
tion filed in an office of the Bureau of              (3)(i) This subparagraph shall apply
Alcohol, Tobacco, and Firearms shall
                                                    where the rules of this subparagraph
in no case be effective prior to the giv-
                                                    are incorporated by reference in a no-
ing of written notice to the proper offi-
                                                    tice of hearing with respect to a notice
cial that the authority of such rep-
                                                    of proposed rule making.
resentative has been revoked.
                                                      (ii) A person wishing to make oral
[34 FR 6432, Apr. 12, 1969, as amended at 45        comments at a public hearing to which
FR 7259, Feb. 1, 1980]                              this subparagraph applies shall file his
                                                    written comments within the time pre-
§ 601.527 Other provisions applied to
     representation in alcohol, tobacco,            scribed by the notice of proposed rule
     and firearms activities.                       making (including any extensions
                                                    thereof) and submit the outline re-
   The provisions of paragraph (b) of
                                                    ferred to in subdivision (iii) of this sub-
§ 601.505, and of §§ 601.506 through 601.508
                                                    paragraph within the time prescribed
of this subpart, as applicable, shall be
                                                    by the notice of hearing. In lieu of the
followed in offices of the Bureau of Al-
                                                    reading of a prepared statement at the
cohol, Tobacco, and Firearms.
                                                    hearing, such person’s oral comments
[34 FR 6433, Apr. 12, 1969, as amended at 34        shall ordinarily be limited to a discus-
FR 14604, Sept. 19, 1969; 45 FR 7259, Feb. 1,       sion of matters relating to such writ-
1980]                                               ten comments and to questions and an-
                                                    swers in connection therewith. How-
Subpart F—Rules, Regulations, and                   ever, the oral comments shall not be
             Forms                                  merely a restatement of matters the
                                                    person has submitted in writing. Per-
§ 601.601 Rules and regulations.                    sons making oral comments should be
   (a) Formulation. (1) Internal revenue            prepared to answer questions not only
rules take various forms. The most im-              on the topics listed in his outline but
portant rules are issued as regulations             also in connection with the matters re-
and Treasury decisions prescribed by                lating to his written comments. Except
the Commissioner and approved by the                as provided in paragraph (b) of this sec-
Secretary or his delegate. Other rules              tion, in order to be assured of the
may be issued over the signature of the             availability of copies of such written
Commissioner or the signature of any                comments or outlines on or before the
other official to whom authority has                beginning of such hearing, any person
been delegated. Regulations and Treas-              who desires such copies should make
ury decisions are prepared in the Office            such a request within the time pre-
of the Chief Counsel. After approval by             scribed in the notice of hearing and
the Commissioner, regulations and                   shall agree to pay reasonable costs for

                                                110
Internal Revenue Service, Treasury                                            § 601.601

coping. Persons who make such a re-         accepted. Thus, a person submitting
quest after the time prescribed in the      written comments in response to a no-
notice of hearing will be furnished cop-    tice of proposed rule making should
ies as soon as they are available, but it   not include therein material that he
may not be possible to furnish the cop-     considers to be confidential or inappro-
ies on or before the beginning of the       priate for disclosure to the public. It
hearing. Except as provided in the pre-     will be presumed by the Internal Rev-
ceding sentences, copies of written         enue Service that every written com-
comments regarding the rules proposed       ment submitted to it in response to a
shall not be made available at the          notice of proposed rule making is in-
hearing.                                    tended by the person submitting it to
  (iii) A person who wishes to be as-       be subject in its entirety to public in-
sured of being heard shall submit,          spection and copying in accordance
within the time prescribed in the no-       with the procedures of paragraph (d)(9)
tice of hearing, an outline of the topics   of § 601.702. The name of any person re-
he or she wishes to discuss, and the        questing a public hearing and hearing
time he or she wishes to devote to each     outlines      described     in    paragraph
topic. An agenda will then be prepared      (a)(3)(iii) of this section are not exempt
containing the order of presentation of     from disclosure.
oral comments and the time allotted to         (2) Effective date. This paragraph (b)
such presentation. A period of 10 min-      applies only to comments submitted in
utes will be the time allotted to each      response to notices of proposed rule
person for making his or her oral com-      making of the Internal Revenue Serv-
ments.                                      ice published in the FEDERAL REGISTER
  (iv) At the conclusion of the presen-     after June 5, 1974.
tations of comments of persons listed          (c) Petition to change rules. Interested
in the agenda, to the extent time per-      persons are privileged to petition for
mits, other persons may be permitted        the issuance, amendment, or repeal of
to present oral comments provided           a rule. A petition for the issuance of a
they have notified, either the Commis-      rule should identify the section or sec-
sioner of Internal Revenue (Attention:      tions of law involved; and a petition for
CC:LR:T) before the hearing, or the         the amendment or repeal of a rule
representative of the Internal Revenue      should set forth the section or sections
Service stationed at the entrance to        of the regulations involved. The peti-
the hearing room at or before com-          tion should also set forth the reasons
mencement of the hearing, of their de-      for the requested action. Such peti-
sire to be heard.                           tions will be given careful consider-
  (v) In the case of unusual cir-           ation and the petitioner will be advised
cumstances or for good cause shown,         of the action taken thereon. Petitions
the application of rules contained in       should be addressed to the Commis-
this subparagraph, including the 10-        sioner of Internal Revenue, Attention:
minute rule in subdivision (iii), above,    CC:LR:T, Washington, DC 20224. How-
may be waived.                              ever, in the case of petitions to amend
  (vi) To the extent resources permit,      the regulations pursuant to subsection
the public hearings to which this sub-      (c)(4)(A)(viii) or (5)(A)(i) of section 23 or
paragraph applies may be transcribed.       former section 44C, follow the proce-
  (b) Comments on proposed rules—(1) In     dure outlined in paragraph (a) of § 1.23–
general. Interested persons are privi-      6.
leged to submit any data, views, or ar-        (d) Publication of rules and regula-
guments in response to a notice of pro-     tions—(1) General. All Internal Revenue
posed rule making published pursuant        Regulations and Treasury decisions are
to 5 U.S.C. 553. Further, procedures are    published in the FEDERAL REGISTER
provided in paragraph (d)(9) of § 601.702   and in the Code of Federal Regulations.
for members of the public to inspect        See paragraph (a) of § 601.702. The
and to obtain copies of written com-        Treasury decisions are also published
ments submitted in response to such         in the weekly Internal Revenue Bul-
notices. Designations of material as        letin and the semiannual Cumulative
confidential or not to be disclosed, con-   Bulletin. The Internal Revenue Bul-
tained in such comments, will not be        letin is the authoritative instrument of

                                        111
§ 601.601                                             26 CFR Ch. I (4–1–99 Edition)

the Commissioner for the announce-          Commissioner of Internal Revenue for
ment of official rulings, decisions,        the publication of official rulings and
opinions, and procedures, and for the       procedures of the Internal Revenue
publication of Treasury decisions, Ex-      Service, including all rulings and
ecutive orders, tax conventions, legis-     statements of procedure which super-
lation, court decisions, and other items    sede, revoke, modify, amend, or affect
pertaining to internal revenue matters.     any previously published ruling or pro-
It is the policy of the Internal Revenue    cedure. The Service also announces in
Service to publish in the Bulletin all      the     Bulletin   the   Commissioner’s
substantive and procedural rulings of       acquiescences and nonacquiescences in
importance or general interest, the         decisions of the U.S. Tax Court (other
publication of which is considered nec-     than decisions in memorandum opin-
essary to promote a uniform applica-        ions), and publishes Treasury decisions,
tion of the laws administered by the        Executive orders, tax conventions, leg-
Service. Procedures set forth in Rev-       islation, court decisions, and other
enue Procedures published in the Bul-       items considered to be of general inter-
letin which are of general applicability    est.    The    Assistant   Commissioner
and which have continuing force and         (Technical) administers the Bulletin
effect are incorporated as amendments       program.
to the Statement of Procedural Rules.         (b) The Bulletin is published weekly.
It is also the policy to publish in the     In order to provide a permanent ref-
Bulletin all rulings which revoke, mod-     erence source, the contents of the Bul-
ify, amend, or affect any published rul-    letin are consolidated semiannually
ing. Rules relating solely to matters of    into an indexed Cumulative Bulletin.
internal practices and procedures are       The Bulletin Index-Digest System pro-
not published; however, statements of       vides a research and reference guide to
internal practices and procedures af-       matters appearing in the Cumulative
fecting rights or duties of taxpayers, or   Bulletins. These materials are sold by
industry regulation, which appear in        the Superintendent of Documents, U.S.
internal management documents, are          Government Printing Office, Wash-
published in the Bulletin. No unpub-        ington, DC 20402.
lished ruling or decision will be relied
                                              (iii) The purpose of publishing rev-
on, used, or cited by any officer or em-
                                            enue rulings and revenue procedures in
ployee of the Internal Revenue Service
                                            the Internal Revenue Bulletin is to
as a precedent in the disposition of
                                            promote correct and uniform applica-
other cases.
                                            tion of the tax laws by Internal Rev-
  (2) Objectives and standards for publi-
cation of Revenue Rulings and Revenue       enue Service employees and to assist
Procedures in the Internal Revenue Bul-     taxpayers in attaining maximum vol-
letin—(i)(a) A Revenue Ruling is an offi-   untary compliance by informing Serv-
cial interpretation by the Service that     ice personnel and the public of Na-
has been published in the Internal Rev-     tional Office interpretations of the in-
enue Bulletin. Revenue Rulings are          ternal revenue laws, related statutes,
issued only by the National Office and      treaties, regulations, and statements of
are published for the information and       Service procedures affecting the rights
guidance of taxpayers, Internal Rev-        and duties of taxpayers. Therefore,
enue Service officials, and others con-     issues and answers involving sub-
cerned.                                     stantive tax law under the jurisdiction
  (b) A Revenue Procedure is a state-       of the Internal Revenue Service will be
ment of procedure that affects the          published in the Internal Revenue Bul-
rights or duties of taxpayers or other      letin, except those involving:
members of the public under the Code          (a) Issues answered by statute, trea-
and related statutes or information         ty, or regulations;
that, although not necessarily affect-        (b) Issues answered by rulings, opin-
ing the rights and duties of the public,    ions, or court decisions previously pub-
should be a matter of public knowl-         lished in the Bulletin;
edge.                                         (c) Issues that are of insufficient im-
  (ii) (a) The Internal Revenue Bulletin    portance or interest to warrant publi-
is the authoritative instrument of the      cation;

                                        112
Internal Revenue Service, Treasury                                         § 601.601

  (d) Determinations of fact rather          sequences to taxpayers. Section 7805(b)
than interpretations of law;                 of the Code provides that the Secretary
  (e) Informers and informers’ rewards;      of the Treasury or his delegate may
or                                           prescribe the extent to which any rul-
  (f) Disclosure of secret formulas,         ing is to be applied without retroactive
processes, business practices, and simi-     effect. The exercise of this authority
lar information.                             requires an affirmative action. For the
Procedures affecting taxpayers’ rights       effect of Revenue Rulings on deter-
or duties that relate to matters under       mination letters and opinion letters
the jurisdiction of the Service will be      issued with respect to the qualification
published in the Bulletin.                   of pension, annuity, profit-sharing,
  (iv) [Reserved]                            stock bonus, and bond purchase plans,
  (v) (a) Rulings and other communica-       see paragraph (o) of § 601.201.
tions involving substantive tax law            (d) Revenue Rulings published in the
published in the Bulletin are published      Bulletin do not have the force and ef-
in the form of Revenue Rulings. The          fect of Treasury Department Regula-
conclusions expressed in Revenue Rul-        tions (including Treasury decisions),
ings will be directly responsive to and      but are published to provide precedents
limited in scope by the pivotal facts        to be used in the disposition of other
stated in the revenue ruling. Revenue        cases, and may be cited and relied upon
Rulings arise from various sources, in-      for that purpose. No unpublished ruling
cluding rulings to taxpayers, technical      or decision will be relied on, used, or
advice to district offices, studies un-      cited, by any officer or employee of the
dertaken by the Office of the Assistant      Service as a precedent in the disposi-
Commissioner (Technical), court deci-        tion of other cases.
sions, suggestions from tax practi-            (e) Taxpayers generally may rely
tioner groups, publications, etc.            upon Revenue Rulings published in the
  (b) It will be the practice of the Serv-   Bulletin in determining the tax treat-
ice to publish as much of the ruling or      ment of their own transactions and
communication as is necessary for an         need not request specific rulings apply-
understanding of the position stated.        ing the principles of a published Rev-
However, in order to prevent unwar-          enue Ruling to the facts of their par-
ranted invasions of personal privacy         ticular cases. However, since each Rev-
and to comply with statutory provi-          enue Ruling represents the conclusion
sions, such as 18 U.S.C. 1905 and 26         of the Service as to the application of
U.S.C. 7213, dealing with disclosure of      the law to the entire state of facts in-
information obtained from members of         volved, taxpayers, Service personnel,
the public, identifying details, includ-     and others concerned are cautioned
ing the names and addresses of persons       against reaching the same conclusion
involved, and information of a con-          in other cases unless the facts and cir-
fidential nature are deleted from the        cumstances are substantially the same.
ruling.                                      They should consider the effect of sub-
  (c) Revenue Rulings, other than those      sequent legislation, regulations, court
relating to the qualification of pension,    decisions, and revenue rulings.
annuity, profit-sharing, stock bonus,          (f) Comments and suggestions from
and bond purchase plans, apply retro-        taxpayers or taxpayer groups on Rev-
actively unless the Revenue Ruling in-       enue Rulings being prepared for publi-
cludes a specific statement indicating,      cation in the Bulletin may be solicited,
under the authority of section 7805(b)       if justified by special circumstances.
of the Internal Revenue Code of 1954,        Conferences on Revenue Rulings being
the extent to which it is to be applied      prepared for publication will not be
without retroactive effect. Where Rev-       granted except where the Service de-
enue Rulings revoke or modify rulings        termines that such action is justified
previously published in the Bulletin         by special circumstances.
the authority of section 7805(b) of the        (vi) Statements of procedures which
Code ordinarily is invoked to provide        affect the rights or duties of taxpayers
that the new rulings will not be applied     or other members of the public under
retroactively to the extent that the         the Code and related statutes will be
new rulings have adverse tax con-            published in the Bulletin in the form of

                                         113
§ 601.602                                                26 CFR Ch. I (4–1–99 Edition)

Revenue Procedures. Revenue Proce-           provision in the tax convention, recon-
dures usually reflect the contents of in-    sideration of that interpretation may
ternal management documents, but,            be requested.
where appropriate, they are also pub-          (2) Conferences in the National Office
lished to announce practices and proce-      of the Service will be granted to rep-
dures for guidance of the public. It is      resentatives of American firms doing
Service practice to publish as much of       business abroad and of American citi-
the internal management document or          zens residing abroad, in order to dis-
communication as is necessary for an         cuss with them foreign tax matters
understanding of the procedure. Rev-         with respect to those countries with
enue Procedures may also be based on
                                             which we have tax treaties in effect.
internal management documents which
should be a matter of public knowledge       [32 FR 15990, Nov. 22, 1967, as amended at 33
even though not necessarily affecting        FR 6826, May 4, 1968; 35 FR 16593, Oct. 24, 1970;
the rights or duties of the public. When     38 FR 4971, Feb. 23, 1973; 39 FR 15755, May 6,
publication of the substance of a Rev-       1974; 41 FR 13611, Mar. 31, 1976; 41 FR 20883,
enue Procedure in the FEDERAL REG-           May 21, 1976; 43 FR 17821, Apr. 26, 1978; 47 FR
ISTER is required pursuant to 5 U.S.C.       56333, Dec. 16, 1982; 48 FR 15624, Apr. 12, 1983;
552, it will usually be accomplished by      52 FR 26673, July 16, 1987]
an amendment of the Statement of pro-
                                             § 601.602   Tax forms and instructions.
cedural Rules (26 CFR Part 601).
  (vii) (a) The Assistant Commissioner         (a) Tax return forms and instructions.
(Technical) is responsible for admin-        The Internal Revenue Service develops
istering the system for the publication      forms and instructions that explain the
of Revenue Rulings and Revenue Proce-        requirements of the Internal Revenue
dures in the Bulletin, including the         Code and regulations. The Service dis-
standards for style and format.              tributes the forms and instructions to
  (b) In accordance with the standards       help taxpayers comply with the law.
set forth in subdivision (iv) of this sub-   The tax system is based on voluntary
paragraph, each Assistant Commis-            compliance, and the taxpayers com-
sioner is responsible for the prepara-       plete and return the forms with pay-
tion and appropriate referral for publi-     ment of any tax owed.
cation of Revenue Rulings reflecting           (b) Other forms and instructions. In ad-
interpretations of substantive tax law
                                             dition to tax return forms, the Internal
made by his office and communicated
                                             Revenue Service furnishes the public
in writing to taxpayers or field offices.
In this connection, the Chief Counsel is     copies of other forms and instructions
responsible for the referral to the ap-      developed for use in complying with
propriate Assistant Commissioner, for        the laws and regulations. These forms
consideration for publication as Rev-        and instructions lead the taxpayer
enue Rulings, of interpretations of sub-     step-by-step through data needed to ac-
stantive tax law made by his Office.         curately report information required
  (c) In accordance with the standards       by law.
set forth in subdivision (iv) of this sub-     (c) Where to get forms and instructions.
paragraph, each Assistant Commis-            The Internal Revenue Service mails
sioner and the Chief Counsel is respon-      tax return forms to taxpayers who
sible for determining whether proce-         have previously filed returns. However,
dures established by any office under        taxpayers can call or write to district
his jurisdiction should be published as      directors or directors of service centers
Revenue Procedures and for the initi-        for copies of any forms they need.
ation, content, and appropriate referral     These forms are described in Publica-
for publication of such Revenue Proce-       tion 676, Catalog of Federal Tax Forms,
dures.                                       Form Letters, and Notices, which the
  (e) Foreign tax law. (1) The Service       public can buy from the Super-
will accept the interpretation placed        intendent of Documents, U.S. Govern-
by a foreign tax convention country on       ment Printing Office, Washington, DC
its revenue laws which do not affect
                                             20402.
the tax convention. However, when
such interpretation conflicts with a         [46 FR 26055, May 11, 1981]

                                         114
Internal Revenue Service, Treasury                                             § 601.701

    Subpart G—Records (Note)                     (ii) Related solely to the internal per-
                                               sonnel rules and practices of the Inter-
  NOTE: The regulations in Subpart G of 26     nal Revenue Service which commu-
CFR Part 601 are superseded in part by 27      nicate to Internal Revenue Service per-
CFR Part 71 to the extent that it applied to   sonnel information or instructions re-
alcohol, tobacco, firearms, and explosives     lating to (A) enforcement tolerances
records, formerly administered by the Inter-   and criteria with respect to the alloca-
nal Revenue Service and transferred to the
Bureau of Alcohol, Tobacco and Firearms.
                                               tion of resources, (B) criteria for deter-
(See 37 FR 13691, July 13, 1972.)              mining whether or not a case merits
                                               further enforcement action, (C) en-
§ 601.701 Publicity of information.            forcement tactics, including but not
                                               limited to investigative techniques, in-
  (a) General. Section 552 of title 5 of
                                               ternal security information, protection
the United States Code, as amended,
                                               of identities of confidential sources of
prescribes rules regarding the publi-
                                               information used by the Service, and
cizing of information by Federal agen-
                                               techniques for evaluating, litigating,
cies. Generally, such section divides
                                               and negotiating cases of possible viola-
agency information into three major
                                               tions of civil or criminal laws, or (D)
categories and provides methods by
                                               use of parking facilities, regulation of
which each category is to be made
                                               lunch hours, statements of policy as to
available to the public. The three
                                               sick leave and the like;
major categories, for which the disclo-
                                                 (iii) Specifically exempted from dis-
sure requirements of the Internal Rev-
                                               closure by statute (other than 5 U.S.C.
enue Service are set forth in § 601.702,
                                               552b), provided that such statute (A) re-
are as follows:
                                               quires that the matters be withheld
  (1) Information required to be pub-          from the public in such a manner as to
lished in the FEDERAL REGISTER:                leave no discretion on the issue, or (B)
  (2) Information required to be made          establishes particular criteria for with-
available for public inspection and            holding or refers to particular types of
copying or, in the alternative, to be          matters to be withheld (e.g., I.R.C. sec-
published and offered for sale; and            tions 6103, 6110, and 4424);
  (3) Information required to be made            (iv) Trade secrets and commercial or
available to any member of the public          financial information obtained from a
upon specific request.                         person and privileged or confidential;
The provisions of section 552 (Freedom           (v) Interagency or intraagency mem-
of Information Act) are intended to as-        orandums or letters which would not
sure the right of the public to informa-       routinely be available by law to a
tion. Section 552 is not authority to          party other than an agency in litiga-
withhold information from Congress.            tion with the agency, including com-
Subject only to the exemptions set             munications (such as internal drafts,
forth in paragraph (b) of this section,        memorandums between officials or
the public generally or any member             agencies, opinions and interpretations
thereof shall be afforded access to in-        prepared by agency staff personnel or
formation or records in the possession         consultants for the use of the agency,
of the Internal Revenue Service. Such          and records of the deliberations of the
access shall be governed by the regula-        agency or staff groups) (A) which the
tions in this subpart and those in 31          Internal revenue Service has received
CFR Part 1 (relating to disclosure of          from another agency, (B) which the In-
Treasury Department records).                  ternal Revenue Service generates in
  (b) Exemptions—(1) In general. Under 5       the process of issuing an order, deci-
U.S.C. 552(b), the disclosure require-         sion, ruling or regulation, drafting pro-
ments of section 552(a), do not apply to       posed legislation, or otherwise carrying
certain matters which are:                     out its functions and responsibilities or
  (i) (A) Specifically authorized under        (C) which is the attorney work product
criteria established by an Executive           of the Office of the Chief Counsel or is
order to be kept secret in the interest        generated by that Office as attorney
of the national defense or foreign pol-        for the Internal Revenue Service;
icy and (B) are in fact properly classi-         (vi) Personnel and medical files and
fied pursuant to such Executive order;         similar files the disclosure of which

                                           115
§ 601.702                                               26 CFR Ch. I (4–1–99 Edition)

would constitute a clearly unwarranted      ‘‘reasonably segregable portion’’ as
invasion of personal privacy;               used in this subparagraph means any
  (vii) Investigatory records compiled      portion of the record requested which
for law enforcement purposes, includ-       is not exempt from disclosure under 5
ing records prepared in connection          U.S.C. 552(b), and which, after deletion
with civil, criminal or administrative      of the exempt material, still conveys
Government litigation and adjudica-         meaningful information which is not
tive proceedings, but only to the extent    misleading.
that the production of such records         [32 FR 15990, Nov. 22, 1967, as amended at 34
would (A) interfere with enforcement        FR 6433, Apr. 12, 1969; 38 FR 4973, Feb. 23,
proceedings, (B) deprive a person of a      1973; 41 FR 19937, May 14, 1976; 41 FR 24704,
right to a fair trial or an impartial ad-   June 18, 1976; 41 FR 48742, Nov. 5, 1976; 45 FR
judication, (C) constitute an unwar-        7259, Feb. 1, 1980]
ranted invasion of personal privacy, (D)
disclose the identity of a confidential     § 601.702 Publication and public in-
source and in the case of a record com-           spection.
piled by a criminal investigation, or by       (a) Publication in the Federal Reg-
an agency conducting a lawful national      ister—(1) Requirement. Subject to the
security intellegence investigation,        application of the exemptions de-
confidential    information     furnished   scribed in paragraph (b)(1) of § 601.701
only by confidential source, (E) dis-       and subject to the limitations provided
close investigative techniques and pro-     in subparagraph (2) of this paragraph,
cedures, or (F) endanger the life or        the Internal Revenue Service is re-
physical safety of law enforcement per-     quired under 5 U.S.C. 552(a)(1) to sepa-
sonnel;                                     rately state and currently publish in
  (viii) Contained in or related to ex-     the FEDERAL REGISTER for the guidance
amination, operating, or condition re-      of the public the following informa-
ports prepared by, on behalf of, or for     tion:
the use of an agency responsible for the       (i) Descriptions of its central and
regulation or supervision of financial      field organization and the established
institutions; or                            places at which, the persons from
  (ix) Geological and geophysical infor-    whom, and the methods whereby, the
mation and data, including maps, con-       public may obtain information, make
cerning wells.                              submittals or requests, or obtain deci-
  (2) Application of exemptions. Even       sions, from the Service;
though an exemption described in sub-          (ii) Statements of the general course
paragraph (1) of this paragraph may be      and method by which its functions are
fully applicable to a matter in a par-      channeled and determined, including
ticular case, the Internal Revenue          the nature and requirements of all for-
Service may, if not precluded by law,       mal and informal procedures which are
elect under the circumstances of that       available;
case not to apply the exemption to             (iii) Rules of procedure, descriptions
such matter. The fact that the exemp-       of forms available or the places at
tion is not applied by the Service in       which forms may be obtained, and in-
that particular case has no preceden-       structions as to the scope and contents
tial significance as to the application     of all papers, reports, or examinations;
of the exemption to such matter in             (iv) Substantive rules of general ap-
other cases but is merely an indication     plicability adopted as authorized by
that in the particular case involved the    law, and statements of general policy
Service finds no compelling necessity       or interpretations of general applica-
for applying the exemption to such          bility formulated and adopted by the
matter.                                     Service; and
  (3) Segregable portions of records. Any      (v) Each amendment, revision, or re-
reasonably segregable portion of a          peal of matters referred to in subdivi-
record shall be provided to any person      sions (i) through (iv) of this subpara-
making a request for such record, after     graph.
deletion of the portions which are ex-      Pursuant to the foregoing require-
empt under 5 U.S.C. 552(b) (see para-       ments, the Commissioner publishes in
graph (b)(1) of this section). The term     the FEDERAL REGISTER from time to

                                        116
Internal Revenue Service, Treasury                                            § 601.702

time a statement, which is not codified       (i) of this subparagraph. Thus, for ex-
in this chapter, on the organization          ample, any such matter which imposes
and functions of the Internal Revenue         an obligation and which is not so pub-
Service, and such amendments as are           lished or incorporated by reference will
needed to keep the statement on a cur-        not adversely change or affect a per-
rent basis. In addition, there are pub-       son’s rights.
lished in the FEDERAL REGISTER the               (b) Public inspection and copying—(1)
rules set forth in this part (Statement       In general. Subject to the application of
of Procedural Rules), such as those in        the exemptions described in paragraph
Subpart E of this part, relating to con-      (b)(1) of § 601.701, the Internal Revenue
ference and practice requirements of          Service is required under 5 U.S.C.
the Internal Revenue Service; the regu-       552(a)(2) to make available for public
lations in Part 301 of this chapter (Pro-     inspection and copying or, in the alter-
cedure and Administration Regula-             native, to promptly publish and offer
tions); and the various substantive reg-      for sale the following information:
ulations under the Internal Revenue              (i) Final opinions, including concur-
Code of 1986, such as the regulations in      ring and dissenting opinions, and or-
Part 1 of this chapter (Income Tax Reg-       ders, if such opinions and orders are
ulations), in Part 20 of this chapter         made in the adjudication of cases;
(Estate Tax Regulations) and, in Part            (ii) Those statements of policy and
31 of this chapter (Employment Tax            interpretations which have been adopt-
Regulations).                                 ed by the Internal Revenue Service but
  (2) Limitations—(i) Incorporation by        are not published in the FEDERAL REG-
reference in the Federal Register. Matter     ISTER; and
which is reasonably available to the             (iii) Its administrative staff manuals
class of persons affected thereby,            and instructions to staff that affect a
whether in a private or public publica-       member of the public.
tion, will be deemed published in the         The Internal Revenue Service is also
FEDERAL REGISTER for purposes of sub-         required by 5 U.S.C. 552(a)(2) to main-
paragraph (1) of this paragraph when it       tain and make available for public in-
is incorporated by reference therein          spection and copying current indexes
with the approval of the Director of the      identifying any matter described in
FEDERAL REGISTER. The matter which            (b)(1) (i) through (iii) of this paragraph
is incorporated by reference must be          which is issued, adopted, or promul-
set forth in the private or public publi-     gated after July 4, 1967, and which is
cation substantially in its entirety and      required to be made available for pub-
not merely summarized or printed as a         lic inspection or published. In addition,
synopsis. Matter, the location and            the Internal Revenue Service will also
scope of which are familiar to only a         promptly publish, quarterly or more
few persons having a special working          frequently, and distribute (by sale or
knowledge of the activities of the In-        otherwise) copies of each index or sup-
ternal Revenue Service, may not be in-        plements thereto unless it determines
corporated in the FEDERAL REGISTER            by order published in the FEDERAL
by reference. Matter may be incor-            REGISTER that the publication would be
porated by reference in the FEDERAL           unnecessary and impracticable, in
REGISTER only pursuant to the provi-          which case the Internal Revenue Serv-
sions of 5 U.S.C. 552(a)(1) and 1 CFR         ice will nonetheless provide copies of
Part 20.                                      such indexes on request at a cost not to
  (ii) Effect of failure to publish. Except   exceed the direct cost of duplication.
to the extent that a person has actual        No matter described in (b)(1) (i)
and timely notice of the terms of any         through (iii) of this paragraph which is
matter referred to in subparagraph (1)        required by this section to be made
of this paragraph which is required to        available for public inspection or pub-
be published in the FEDERAL REGISTER,         lished may be relied upon, used, or
such person is not required in any man-       cited as precedent by the Internal Rev-
ner to resort to, or be adversely af-         enue Service against a party other
fected by, such matter if it is not so        than an agency unless such party has
published or is not incorporated by ref-      actual and timely notice of the terms
erence therein pursuant to subdivision        of such matter or unless the matter

                                          117
§ 601.702                                               26 CFR Ch. I (4–1–99 Edition)

has been indexed and either made             spection and copying. Indexes of such
available for inspection or published,       materials issued by offices other than
as provided by this subparagraph. This       the National Office will be maintained
subparagraph applies only to matters         in the reading room of the region of
which have precedential significance.        issuance as well as in the National Of-
It does not apply, for example, to any       fice reading room, but the material
ruling    or    advisory   interpretation    itself will be available only in the re-
issued to a taxpayer on a particular         gional reading room. Copies of mate-
transaction or set of facts which ap-        rials described in paragraph (b)(1) (i)
plies only to that transaction or set of     through (iii) of this section which are
facts. Rulings, determination letters,       controlled by officers in the National
and technical advice memorandums are         Office (see paragraph (g) of this sec-
open to public inspection and copying        tion) will not be made available in re-
pursuant to section 6110 of the Code         gional office reading rooms. The read-
and not pursuant to 5 U.S.C. 552. This       ing rooms will contain other matters
subparagraph does not apply to mat-          determined to be helpful for the guid-
ters which have been made available          ance of the public, including a com-
pursuant to paragraph (a) of this sec-       plete set of rules and regulations (ex-
tion.                                        cept those pertaining to alcohol, to-
  (2) Deletion of identifying details. To    bacco, firearms, and explosives) con-
prevent a clearly unwarranted invasion       tained in this title, any Internal Rev-
of personal privacy, the Internal Rev-       enue matters which may be incor-
enue Service will, in accordance with 5      porated by reference in the FEDERAL
U.S.C. 552(a)(2), delete identifying de-     REGISTER (but not a copy of the FED-
tails contained in any matter described      ERAL REGISTER so doing) pursuant to
in subparagraphs (1) (i) through (iii) of    paragraph (a)(2)(i) of this section, a set
this paragraph before making such
                                             of Cumulative Bulletins, and copies of
matter available for inspection or pub-
                                             various Internal Revenue Service pub-
lishing it. However, in every case
                                             lications, such as the description of
where identifying details are so de-
                                             forms or publications contained in
leted, the justification for the deletion
                                             Publication No. 676. Fees will be
must be explained in writing. The writ-
                                             charged for copying materials in the
ten justification for deletion will be
                                             reading rooms as provided in paragraph
placed as a preamble to the document
                                             (f) of this section. The public will not
from which the identifying details have
                                             be allowed to remove any record from a
been deleted, except in the case of any
                                             reading room.
matter which is published in the Inter-
nal Revenue Bulletin. An introductory           (ii) Addresses of public reading rooms.
statement will be placed in each Inter-      The addresses of the reading rooms are
nal Revenue Bulletin providing that          as follows:
identifying details, including the                        NATIONAL OFFICE
names and addresses of persons in-
volved, and information of a confiden-         Mailing address: Freedom of Information
tial nature are deleted to prevent un-       Reading Room, Internal Revenue Service,
                                             1111 Constitution Avenue, NW., Washington,
warranted invasions of personal pri-         DC 20224.
vacy and to comply with statutory pro-         Location: Same as mailing address.
visions, such as section 6103 of the In-
ternal Revenue Code.                                   NORTH ATLANTIC REGION
  (3) Public reading rooms—(i) In general.
                                               Mailing address: Freedom of Information
The National Office and each regional        Reading Room, Internal Revenue Service, 120
office of the Internal Revenue Service       Church Street, 11th Floor, New York, NY
will provide a reading room or reading       10007.
area where the matters described in            Location: Same as mailing address.
paragraphs (b)(1) (i) through (iii) of
this section which are required by such                 MID-ATLANTIC REGION
paragraph to be made available for            Mailing address: Freedom of Information
public inspection or published, and the      Reading Room, Internal Revenue Service, 600
current indexes to such matters, will        Arch Street, Philadelphia, PA 19105.
be made available to the public for in-       Location: Same as mailing address.

                                         118
Internal Revenue Service, Treasury                                              § 601.702
            SOUTHEAST REGION                  quest. If the requested reading room
 Mailing address: Freedom of Information      material is not readily available for in-
Reading Room, Internal Revenue Service, 275   spection at the office where the request
Peachtree Street, NE., Room 342, Atlanta,     is made, then the request will be re-
GA 30043.                                     ferred by such office to one of the read-
 Location: Same as mailing address.           ing rooms of the Internal Revenue
             MIDWEST REGION                   Service.
  Mailing address: Freedom of Information
                                                 (c) Specific requests for other records—
Reading Room, Internal Revenue Service, 230   (1) In general. Subject to the applica-
Dearborn Street, Room 1980, Chicago, IL       tion of the exemptions described in
60604.                                        paragraph (b)(1) of § 601.701, the Inter-
  Location: Same as mailing address.          nal Revenue Service will, in conform-
             CENTRAL REGION                   ance with 5 U.S.C. 552(a)(3), make rea-
                                              sonably described records available to
 Mailing address: Freedom of Information      a person making a request for such
Reading Room, Internal Revenue Service, 201
W. Fourth Street, Covington, KY 41019.
                                              records which conforms in every re-
 Location: Same as mailing address.           spect with the rules and procedures set
                                              forth in this subpart. This paragraph
            SOUTHWEST REGION                  applies only to records in being which
  Mailing address: Freedom of Information     are in the possession or control of the
Reading Room, Internal Revenue Service,       Internal Revenue Service.
1100 Commerce Street, Room 11B15, Dallas,        (2) Requests for records not in control of
TX 75242.                                     the Internal Revenue Service. (i) Where
  Location: Same as mailing address.
                                              the request is for a record which is de-
             WESTERN REGION                   termined to be in the possession or
  Mailing address: Freedom of Information
                                              under the control of a constituent unit
Reading Room, Internal Revenue Service, 450   of the Department of the Treasury
Golden Gate Avenue, Room 2307, San Fran-      other than the Internal Revenue Serv-
cisco, CA 94102.                              ice the request for such record will im-
  Location: Same as mailing address.          mediately be transferred to the appro-
   (iii) Copying facilities. The National     priate constituent unit and the re-
Office and each regional office will pro-     quester notified to that effect. Such re-
vide facilities whereby a person may          ferral will not be deemed a denial of ac-
obtain copies of material located on          cess within the meaning of these regu-
the shelves of the reading rooms. (For        lations. The constituent unit of the De-
schedule of fees for copying see para-        partment to which such referral is
graph (f)(5)(iii) of this section.)           made will treat such request as a new
   (iv) Inability to use public reading       request addressed to it and the time
rooms. If persons are unable or unwill-       limits for response set forth in 31 CFR
ing to visit a reading room in person         Part 1.5 (g), (h), and (i) (relating to dis-
but wish to inspect identifiable reading      closure      of   Treasury     Department
room material, they may request per-          records) shall commence when the re-
mission to inspect such material at           ferral is received by the designated of-
any office of the Internal Revenue            fice or officer of the constituent unit.
Service. To the extent that requested         Where the request is for a record which
material is available for inspection at       is determined not to be in the posses-
the reading rooms and is also readily         sion or control of any constituent unit
available for inspection at the office        of the Department of the Treasury, the
where the request is made, such mate-         requester will be so advised and the re-
rial will promptly be made available          quest will be returned to the requester.
for inspection at such office to the per-        (ii) Where the record requested was
son making the request for inspection         created by another agency or Depart-
and, where facilities are available, for      ment of the Treasury constituent unit
copying in accordance with the sched-         (i.e., in its control) and a copy thereof
ule of fees prescribed by subdivision         is in the possession of the Internal Rev-
(iii) of this subparagraph. Copies of the     enue Service, the Internal Revenue
requested material may also be mailed         Service official to whom the request is
to such person by such office upon re-        deivered shall refer the request to the

                                          119
§ 601.702                                              26 CFR Ch. I (4–1–99 Edition)

agency or constituent unit which origi-      mailed or hand delivered to the office
nated the record for direct reply to the     of the director of the Internal Revenue
requester. The requester shall be in-        Service district office in the district
formed of such referral. This referral       where the requester resides.
shall not be considered a denial of ac-         (iv) Reasonably describe the records
cess within the meaning of these regu-       in accordance with subparagraph (4)(i)
lations. However, where the record is        of this paragraph,
determined to be exempt from disclo-            (v) In the case of a request for
sure under 5 U.S.C. 552, the referral        records the disclosure of which is lim-
need not be made, but the Internal           ited by statute or regulations (as, for
Revenue Service shall inform the origi-      example, the Privacy Act (5 U.S.C.
nating agency or constituent unit of         552a), section 6103 of the Internal Rev-
its determination. Where notifying the       enue Code of 1986, or regulations there-
requester of its referral may cause a        under), establish the identity and the
harm to the originating agency or con-       right of the person making the request
stituent unit which would enable the         to the disclosure of the records in ac-
originating agency or constituent unit       cordance with paragraph (c)(4)(ii) of
to withhold the record under 5 U.S.C.        this section,
552, then such referral need not be             (vi) Set forth the address where the
made. In both of these circumstances,        person making the request desires to
the Internal Revenue Service official        be notified of the determination as to
to whom the request is delivered shall       whether the request will be granted,
process the request in accordance with          (vii) State whether the requester
the procedures set forth in this sub-        wishes to inspect the records or desires
part.                                        to have a copy made and furnished
  (iii) When a request is received for a     without first inspecting them,
record created by the Internal Revenue          (viii) State the firm agreement of the
Service (i.e., in its possession and con-    requester to pay the fees for search and
trol) that includes information origi-       duplication ultimately determined in
nated by another agency or Depart-           accordance with paragraph (f) of this
ment of the Treasury constituent unit,       section, or request that such fees be re-
the record shall be referred to the orig-    duced or waived and state the justifica-
inating agency or constituent unit for       tion for such request, and
review, coordination, and concurrence.          (ix) Identify the category of the re-
The Internal Revenue Service official        quester and state how the records will
to whom the request is delivered shall       be used, as required by paragraph (f)(3)
not issue its determination with re-         of this section.
spect to that record without prior con-      Where the initial requests, rather than
sultation with the originating agency        stating a firm agreement to pay the
or constituent unit.                         fees ultimately determined in accord-
  (3) Form of request. The initial request   ance with paragraph (f) of this section,
for records must—                            place an upper limit on the amount the
  (i) Be made in writing and signed by       requesters agree to pay, which upper
the person making the request,               limit is deemed likely to be lower than
  (ii) State that it is made pursuant to     the fees estimated to ultimately be
the Freedom of Information Act, 5            due, or where the requesters ask for an
U.S.C. 552, or regulations thereunder,       estimate of the fees to be charged, the
  (iii) Be addressed to and mailed or        requesters shall be promptly advised of
hand delivered to the office of the In-      the estimate of fees and asked to agree
ternal Revenue Service official who is       to pay such amount. Where the initial
responsible for the control of the           requests include a request for reduc-
records requested (see paragraph (g) of      tion or waiver of fees, the Internal Rev-
this section for the responsible officials   enue Service officials responsible for
and their addresses), regardless of          the control of the requested records (or
where such records are maintained; if        their delegates) will determine whether
the person making the request does not       to grant the requests for reduction or
know the official responsible for the        waiver in accordance with paragraph
control of the records being requested,      (f) of this section and notify the re-
the request should be addressed to and       questers of their decisions and, if their

                                         120
Internal Revenue Service, Treasury                                           § 601.702

decisions result in the requesters being         (B) The Internal Revenue Service
liable for all or part of the fees nor-       will make every reasonable effort to
mally due, ask the requesters to agree        comply fully with all requests for ac-
to pay the amounts so determined. The         cess to records subject only to any ap-
requirements of this subparagraph will        plicable exemption set forth in
not be deemed met until the requesters        § 601.701(b)(1). However, in any situa-
have explicitly agreed to pay the fees        tion in which it is determined that a
applicable to their requests for records,     request for voluminous records would
if any, or have made payment in ad-           unduly burden and interfere with the
vance of the fees estimated to be due.        operations of the Internal Revenue
In addition, requesters are advised that      Service, the person making the request
only requests for records which fully         will be asked to be more specific and to
comply with the requirements of this          narrow the request, and to agree on an
subparagraph can be processed in ac-          orderly procedure for the production of
cordance with this section. Requesters        the requested records, in order to sat-
will be promptly notified in writing of       isfy the request without dispropor-
any requirements which have not been          tionate adverse effects on Internal Rev-
met or any additional requirements to         enue Service operations.
be met. However, every effort will be            (ii) In the case of records containing
made to comply with the requests as           information with respect to particular
written.                                      persons the disclosure of which is lim-
  (4) Reasonable description of records;      ited by statute or regulations, persons
identity and right of the requester. (i)(A)   making requests shall establish their
The request for records must describe         identity and right to access to such
the records in reasonably sufficient de-      records. Persons requesting access to
tail to enable the Internal Revenue           such records which pertain to them-
Service employees who are familiar            selves may establish their identity
with the subject area of the request to       by—
locate the records without placing an            (A) The presentation of a single docu-
unreasonable burden upon the Internal         ment bearing a photograph (such as a
Revenue Service. While no specific for-       passport or identification badge), or
mula for a reasonable description of a        the presentation of two items of identi-
record can be established, the require-       fication which do not bear a photo-
ment will generally be satisfied if the       graph but do bear both a name and sig-
requester gives the name, subject mat-        nature (such as a driver’s license or
ter, location, and years at issue, of the     credit card), in the case of a request
requested records. If the request seeks       made in person,
records pertaining to pending litiga-            (B) The submission of the requester’s
tion, the request should indicate the         signature, address, and one other iden-
title of the case, the court in which the     tifier (such as a photocopy of a driver’s
case was filed, and the nature of the         license) bearing the requester’s signa-
case. However, it is suggested that the       ture, in the case of a request by mail,
person making the request furnish any         or
additional information which will more           (C) The presentation in person or the
clearly identify the requested records.
                                              submission by mail of a notarized
Where the requester does not reason-
                                              statement swearing to or affirming
ably describe the records being sought,
                                              such person’s identity.
the requester shall be afforded an op-
portunity to refine the request. Such         Additional proof of persons’ identity
opportunity may, where desirable, in-         shall be required before the requests
volve a conference with knowledgeable         will be deemed to have met the re-
Internal Revenue Service personnel.           quirement of paragraph (c)(3)(v) of this
The reasonable description require-           section if it is determined that addi-
ment will not be used by officers or em-      tional proof is necessary to protect
ployees of the Internal Revenue as a          against unauthorized disclosure of in-
device for improperly withholding             formation in a particular case. Persons
records from the public.                      who have identified themselves to the


                                          121
§ 601.702                                                26 CFR Ch. I (4–1–99 Edition)

satisfaction of Internal Revenue Serv-        ments of paragraph (c)(3) (i) through
ice officials pursuant to this subdivi-       (vii) of this paragraph have been satis-
sion shall be deemed to have estab-           fied, and, where applicable—
lished their right to access records per-       (i) The requester has agreed in writ-
taining to themselves. Persons request-       ing, by executing a separate contract
ing records on behalf of or pertaining        or otherwise, to pay the fees for search,
to another person must provide ade-           duplication, and review determined due
quate proof of the legal relationship         in accordance with paragraph (f) of this
under which they assert the right to          section, or
access the requested records before the         (ii) The fees have been waived in ac-
requirement of paragraph (c)(3)(v) of         cordance with paragraph (f) of this sec-
this section will be deemed met. In the       tion, or
case of an attorney-in-fact, the re-            (iii) Payment in advance has been re-
quester shall furnish an original of a        ceived from the requester.
properly executed power of attorney           As soon as the date of receipt has been
together with one other identifier bear-      established as provided above, the re-
ing the signature of the person exe-          quester shall be informed and advised
cuting such power of attorney. In the         when a response may be expected with-
case of a corporation, if the requester       in the time limits specified in para-
has the authority to legally bind the         graphs (c) (7) and (8) of this section, un-
corporation under applicable state law,       less extended as provided in paragraph
such as its president or chief executive      (9) of this section, and the title of the
officer, then a written statement that        officer responsible for such response.
the person making the request on be-            (6) Search for records requested. Upon
half of the corporation, on corporate         the receipt of a request, search services
letterhead, shall be sufficient. If the re-   will be performed by Internal Revenue
quester is an officer or an employee of       Service personnel to identify and lo-
a corporation, then such person shall         cate the requested records. Search time
furnish a certification by one of the         includes any and all time spent looking
corporation’s officers (other than the        for material responsive to the request,
requester) that the person making the         including page-by-page or line-by-line
request on behalf of the corporation is       identification     of   material    within
properly authorized to make such re-          records. However, where duplication of
quest. If the requester is other than         an entire record would be less costly
one of the above, then such person            than a line-by-line identification, du-
shall furnish a resolution by the cor-        plication should be substituted for this
poration’s board of directors providing       kind of search. With respect to records
that the person making the request on         maintained in computerized form a
behalf of the corporation is properly         search will include services function-
authorized to make such a request. A          ally analogous to search for records
person requesting access to records of a      which are maintained in a conven-
one-man corporation or a partnership          tional form. However, the Internal
shall provide a notarized statement           Revenue Service is not required under 5
that the requester is in fact an officer      U.S.C. 552 to tabulate or compile infor-
or official of the corporation or a mem-      mation for the purpose of creating a
ber of the partnership.                       record.
  (5) Date of receipt of request. Requests      (7) Initial determination—(i) In general.
for records and any separate agreement        The Director of the Office of Disclosure
to pay, final notification of waiver of       or his/her delegate shall have the au-
fees, or letter transmitting prepayment       thority to make initial determinations
shall be promptly stamped with the            with respect to all requests for records
date of delivery to or dispatch by the        of the Internal Revenue Service. With
office of the Internal Revenue Service        the exception of records which are con-
officials responsible for the control of      trolled by the Assistant Commissioner
the records requested (or their dele-         (Inspection), the Director of the Inter-
gates). The latest of such stamped            nal Revenue Service Data Center, the
dates will be deemed for purposes of          Assistant        Commissioner       (Inter-
this section to be the date of receipt of     national), or the Director of Practice,
the request, provided that the require-       the Director of the Office of Disclosure

                                          122
Internal Revenue Service, Treasury                                            § 601.702

or his/her delegate shall have the sole       person making the request has ex-
authority to make such determinations         pressed a desire to inspect the records
with respect to records controlled by         at another office of the Internal Rev-
the National Office. Except where the         enue Service, every reasonable effort
Director of the Office of Disclosure or       will be made to comply with the re-
his/her delegate has such sole author-        quest. Records will be made available
ity, the initial determination as to          for inspection at such reasonable and
whether to grant the request for              proper times as not to interfere with
records may be made either by the Di-         their use by the Internal Revenue Serv-
rector of the Office of Disclosure or by      ice or to exclude other persons from
the Internal Revenue Service officials        making inspections. In addition, rea-
responsible for the control of the            sonable limitations may be placed on
records requested or their delegates          the number of records which may be in-
(see paragraph (g) of this section), in-      spected by a person on any given date.
cluding those officials mentioned in
                                              The person making the request will not
the preceding sentence. The initial de-
                                              be allowed to remove the records from
termination will be made and notifica-
                                              the office where inspection is made. If,
tion thereof mailed within 10 days (ex-
                                              after making inspection, the person
cepting Saturdays, Sundays, and legal
public holidays) after the date of re-        making the request desires copies of all
ceipt of the request, as determined in        or a portion of the requested records,
accordance with paragraph (c)(5) of this      copies will be furnished upon payment
section or the requester otherwise            of the established fees prescribed by
agrees to an extension of the 10-day          paragraph (f) of this section.
time limitation.                                (iii) Denial of request. If it is deter-
  (ii) Granting of request. If it is deter-   mined that the request for records
mined that the request is to be grant-        should be denied (whether in whole or
ed, and if the person making the re-          in part or subject to conditions or ex-
quest desires a copy of the requested         ceptions), the person making the re-
records, a statement of fees, if any, in      quest will be so notified by mail. The
accordance with paragraph (f) of this         letter of notification will specify the
section, will be mailed to the re-            city or other location where the re-
quester, requesting such payment prior        quested records are situated, contain a
to release of the records determined to       brief statement of the grounds for not
be available. Upon receipt of such fees,      granting the request in full, set forth
the Internal Revenue Service official         the name and title or position of the
responsible for the control of the            official responsible for the denial, and
records (or his/her delegate) will            advise the person making the request
promptly mail such copies to the re-          of the right to appeal to the Commis-
quester, with any explanation of the          sioner in accordance with paragraph
deletions or withholdings, as applica-        (c)(8) of this section.
ble. However, if no fees are due, then a        (iv) Inability to locate and evaluate
copy of the available records will be         within time limits. Where the records re-
promptly mailed to the requester. In          quested cannot be located and evalu-
the case of a request for inspection the      ated within the initial 10-day period or
requester will be notified in writing of      any extension thereof in accordance
the determination, when and where the         with paragraph (c)(9) of this section,
requested records may be inspected and        the search for the records or evaluation
of the fees involved in complying with        will continue, but the requesters will
the request. Any fees involved in com-        be so notified, advised that they may
plying with the request for inspection        consider such notification a denial of
of records shall be submitted prior to        their requests for records, and provided
making the records available for in-          with the address to which an adminis-
spection.                                     trative appeal may be delivered. How-
The records will promptly be made             ever, the requesters may also be in-
available for inspection, at the time         vited, in the alternative, to agree to a
and place stated, normally at the ap-         voluntary extension of time in which
propriate office where the records re-        to locate and evaluate the records.
quested are controlled. However, if the       Such voluntary extension of time will

                                          123
§ 601.702                                                  26 CFR Ch. I (4–1–99 Edition)

not constitute a waiver of the request-         forth in paragraphs (c)(8) (i) through
ers’ right to appeal any denial of access       (vi) of this section will be deemed by
ultimately made or their right to ap-           the Internal Revenue Service to be the
peal in the event of failure to comply          date of their receipt for all purposes of
with the time extension granted.                this section. The Commissioner or his/
  (8) Administrative appeal. The re-            her delegate will acknowledge receipt
quester may submit an administrative            of the appeal and advise the requester
appeal to the Commissioner at any               of the date of receipt and when a re-
time within 35 days after the date of           sponse is due in accordance with this
any notification described in paragraph         paragraph. If an appeal fails to satisfy
(c)(7) (iii) or (iv) of this section or after   any of such requirements the person
receipt of an adverse determination of          making the request will be promptly
the requester’s category described in           advised in writing of the additional re-
paragraph (f)(3) of this section, or the        quirements to be met. The determina-
date of the letter transmitting the last        tion to affirm the initial denial (in
records released, whichever is later.           whole or in part) or to grant the re-
The letter of appeal shall—                     quest for records will be made and noti-
  (i) Be made in writing and signed by          fication of the determination mailed
the requester,                                  within 20 days (exclusive of Saturdays,
  (ii) Be addressed and mailed to the           Sundays, and legal public holidays)
Office of the Commissioner of Internal          after the date of receipt of the appeal
Revenue: to expedite delivery, requests         unless extended pursuant to paragraph
made by mail should be addressed to—            (c)(9)(i) of this section. If it is deter-
Freedom of Information Appeal, Commis
                                                mined that the appeal from the initial
 sioner of Internal Revenue, c/o Ben Frank-     denial is to be denied (in whole or in
 lin Station, P.O. Box 929, Washington, DC      part), the requester will be notified in
 20044, or                                      writing of the denial, the reasons
                                                therefor, of the name and title or posi-
if hand delivered, delivery should be           tion of the official responsible for the
made to the Office of the Director, Dis-        denial on appeal, and of the provisions
closure Litigation Division, Chief              of 5 U.S.C. 552(a)(4) for judicial review
Counsel, National Office of the Internal        of that determination. If a determina-
Revenue Service, 1111 Constitution Av-          tion cannot be made within the 20-day
enue, Washington, DC 20224.                     period (or extension thereof pursuant
  (iii) Reasonably describe the records         to paragraph (c)(9)(i) of this section or
requested to which the appeal pertains          by grant of the requester) the requester
in accordance with paragraph (c)(4)(i)          shall be promptly notified in writing
of this paragraph,                              that the determination will be made as
  (iv) Set forth the address where the          soon as practicable but that the re-
appellant desires to be notified of the         quester is nonetheless entitled to com-
determination on appeal,                        mence an action in a district court as
  (v) Specify the date of the request,          provided in paragraph (c)(11) of this
and the office to which the request was         section. However, the requester may
submitted and, where possible, enclose          also be invited, in the alternative, to
a copy of the initial request and the           agree to a voluntary extension of time
initial determination being appealed,           in which to decide the appeal. Such
and                                             voluntary extension shall not con-
  (vi) Petition the Commissioner to             stitute a waiver of the right of the re-
grant the request for records and state         quester ultimately to commence an ac-
any arguments in support thereof.               tion in a United States district court.
Appeals will be promptly stamped with             (9) Time extensions—(i) 10-day exten-
the date of their delivery to the Office        sion. In unusual circumstances, the
of the Director, Disclosure Litigation          time limitations specified in para-
Division, and the later of this stamped         graphs (7) and (8) of this section may be
date or the stamped date of a document          extended by written notice from the of-
submitted subsequently which supple-            ficial charged with the duty of making
ments the original appeal so that the           the determination to the person mak-
appeal satisfies the requirements set           ing the request or appeal setting forth
                                                the reasons for such extension and the

                                            124
Internal Revenue Service, Treasury                                             § 601.702

date on which the determination is ex-         in which the suit was initiated may re-
pected to be dispatched. Any such ex-          tain jurisdiction and allow the Internal
tension or extensions of time provided         Revenue Service additional time to re-
by statute shall not cumulatively total        view its records, provided that the In-
more than 10 working days. If an exten-        ternal Revenue Service demonstrates
sion pursuant to this subparagraph is          (A) the existence of exceptional cir-
invoked in connection with an initial          cumstances, and (B) the exercise of due
determination any unused days of the           diligence in responding to the request.
extension may be invoked in connec-              (10) Failure to comply. If the Internal
tion with the determination on admin-          Revenue Service fails to comply with
istrative appeal by written notice from        the time limitations specified in para-
the official who is to make the appel-         graphs (c) (7), (8), or (9)(i) of this sec-
late determination to the requester. If        tion, any persons making requests for
no extension is sought for the initial         records satisfying the requirements of
determination, the 10-day extension            subdivisions (i) through (ix) of para-
may be added to the ordinary 20-day            graph (c)(3) of this section, shall be
period for appellate review. As used in        deemed to have exhausted their admin-
this     paragraph,      ‘‘unusual      cir-   istrative remedies with respect to such
cumstances’’ means, but only to the            requests. Accordingly, these persons
extent reasonably necessary to the             may initiate suit in accordance with
proper processing of the particular re-        paragraph (c)(11) of this section.
quest, the following:                            (11) Judicial review. If a request for
  (A) The need to search for and collect       records is denied upon appeal pursuant
the requested records from field facili-       to paragraph (c)(8) of this section, or if
ties or other establishments in build-         no determination is made within the
ings that are separate from that of the        10-day or 20-day periods specified in
office processing the request,                 paragraphs (c) (7) and (8) of this sec-
  (B) The need to search for, collect,         tion, or the period of any extension
and appropriately examine a volumi-            pursuant to paragraph (c)(9)(i) of this
nous amount of separate and distinct           section, or by grant of the requester,
records which are demanded in a single         respectively, the person making the re-
request, or related requests, or               quest may commence an action in a
  (C) The need for consultation, which         U.S. district court in the district in
will be conducted with all practicable         which the requester resides, in which
speed, with another agency having a            the requester’s principal place of busi-
substantial interest in the determina-         ness is located, in which the records
tion of the request or with another            are situated, or in the District of Co-
constituent unit of the Department of          lumbia,     pursuant     to     5   U.S.C.
the Treasury or among two or more              552(a)(4)(B). The statute authorizes an
components of the Internal Revenue             action only against the agency. With
Service (other than the Disclosure Liti-       respect to records of the Internal Rev-
gation Division of the Office of the           enue Service, the agency is the Inter-
Chief Counsel or the Office of Disclo-         nal Revenue Service, not an officer or
sure) having substantial subject-mat-          an employee thereof. Service of process
ter interest therein. Consultations            in such an action shall be in accord-
with personnel of the Department of            ance with the Federal Rules of Civil
Justice, acting in their capacity as           Procedure (28 U.S.C. App.) applicable to
legal counsel to the executive depart-         actions against an agency of the
ments with respect to requests for             United States. Delivery of process upon
records under 5 U.S.C. 552, do not con-        the Internal Revenue Service must be
stitute a basis for an extension under         directed to the Commissioner of Inter-
this paragraph (c)(9)(i)(C).                   nal Revenue, Attention: CC:GLS, 1111
  (ii) Extension by judicial review. If the    Constitution Avenue, NW., Wash-
Internal Revenue Service fails to com-         ington, DC 20224. The Internal Revenue
ply with the time limitations specified        Service will serve an answer or other-
in paragraph (c) (7) or (8) of this section    wise plead to any complaint made
and the person making the request ini-         under this paragraph within 30 days
tiates a suit in accordance with para-         after service upon it, unless the court
graph (c)(11) of this section, the court       otherwise directs for good cause shown.

                                           125
§ 601.702                                                  26 CFR Ch. I (4–1–99 Edition)

The district court will determine the           regulations thereunder. Written re-
matter de novo, and may examine the             quests for this information shall be
contents of the Internal Revenue Serv-          made in accordance with Rev. Proc. 66–
ice records in question in camera to de-        3, as modified by Rev. Proc. 84–71, 1984–
termine whether such records or any             2 C.B. 735 and Rev. Proc. 85–56, 1985–2
part thereof shall be withheld under            C.B. 739.
any of the exemptions described in                 (2) Record of seizure and sale of real es-
paragraph (b)(1) of § 601.701. The burden       tate. Subject to the rules on disclosure
will be upon the Internal Revenue               set forth in section 6103, Record 21,
Service to sustain its action in not            Part 2, ‘‘Record of seizure and sale of
making the requested records avail-
                                                real estate’’, is open for public inspec-
able. The court may assess against the
                                                tion in offices of district directors and
United States reasonable attorney fees
and other litigation costs reasonably           copies are furnished upon application.
incurred by the person making the re-           However, Record 21 does not list real
quest in any case in which the com-             estate seized for forfeiture under the
plainant has substantially prevailed.           internal revenue laws (see IRC 7302).
   (12) Preservation of records. All cor-          (3) Information returns of certain tax-
respondence relating to the requests            exempt organizations and certain trusts.
received by the Internal Revenue Serv-          Information furnished on Form 990,
ice under this chapter, and all records         Form 1041–A, and on the annual report
processed pursuant to such requests,            by private foundations pursuant to sec-
shall be preserved, until such time as          tions 6033, 6034, 6056 (as in effect before
the destruction of such correspondence          its repeal by Pub. L. 96–603), is open to
and records is authorized pursuant to           public inspection. This information
Title 44 of the United States Code.             will be made available for public in-
Under no circumstances shall records            spection in the Freedom of Information
be destroyed while they are the subject         Reading Room, Internal Revenue Serv-
of a pending request, appeal, or lawsuit        ice, 1111 Constitution Avenue, NW.,
under 5 U.S.C. 552.                             Washington, DC 20224, as well as in the
   (13) Proceeding against officer or em-       office of any district director. Copies of
ployee. Under 5 U.S.C. 552(a)(4)(F), the        these records may, upon written re-
Special Counsel is required, upon the
                                                quest, be obtained from these offices or
issuance of a specified finding by a
                                                from the office of any service center di-
court, to initiate a proceeding to deter-
                                                rector. The applicability of this sub-
mine whether disciplinary action is
warranted against an officer or em-             paragraph is subject to the rules on
ployee of the Internal Revenue Service          disclosure set forth in section 6104(b)
who was primarily responsible for a             and § 301.6104(b)–1.
withholding of records. The Special                (4) Applications of certain organizations
Counsel, after investigation and con-           for tax exemption. Subject to the rules
sideration of the evidence submitted,           on disclosure set forth in section
shall submit its findings and rec-              6104(a) and § 301.6104 (a)–1, (a)–5, and (a)–
ommendations to the Special Counsel             6, applications and certain papers sub-
and the Secretary of the Treasury, and          mitted in support of such applications,
shall send copies of the findings and           filed by organizations described in sec-
recommendations to the officer or em-           tion 501 (c) or (d) and determined to be
ployee or his/her representative. (See 5        exempt from taxation under section
CFR Part 294.1201–1207 (relating to dis-        501(a), and any letter or other docu-
ciplinary actions by the Special Coun-          ment issued by the Internal Revenue
sel).)                                          Service with respect to such applica-
   (d) Rules for disclosure of certain speci-   tions, will be made available for public
fied matters—(1) Inspection of tax returns      inspection, upon written request, in
and return information. The inspection          the Freedom of Information Reading
of returns and return information is            Room, Internal Revenue Service, 1111
governed by the provisions of the inter-
                                                Constitution Avenue, NW., Wash-
nal revenue laws and regulations there-
                                                ington, DC 20224, or the office of any
under promulgated by the Secretary of
the Treasury. See section 6103 and the          district director.

                                            126
Internal Revenue Service, Treasury                                             § 601.702

   (5) Applications with respect to certain   the request. Copies of comments may
deferred compensation plans and ac-           be made in the Freedom of Information
counts. Applications and papers sub-          Reading Room by the person making
mitted in support of such applications,       the request or may be requested, in
filed after September 2, 1974, with re-       writing, to the Commissioner of Inter-
spect to the qualification of a pension,      nal Revenue, Attention: CC:LR:T,
profit sharing, or stock bonus plan           Washington, DC 20224. The person mak-
under section 401(a), 403(a), or 405(a), an   ing the request for copies should allow
individual retirement account de-             a reasonable time for processing the re-
scribed in section 408(a), an individual      quest. The provisions of paragraph
retirement annuity described in sec-          (f)(5) of this section, relating to fees,
tion 408(b), or with respect to the ex-       shall apply with respect to requests
emption from tax of an organization           made in accordance with this subpara-
forming part of such a plan or account,       graph.
and any documents issued by the Inter-           (8) Accepted offers in compromise. A
nal Revenue Service dealing with such         copy of the Abstract and Statement
qualification or exemption, are open to       and the attached narrative report for
public inspection. Such material will         each accepted offer in compromise with
be made available for public inspection       respect to any liability for a tax im-
in the Freedom of Information Reading         posed by Title 26 will be made available
Room, Internal Revenue Service, 1111          for inspection and copying in the fol-
Constitution Avenue, NW., Wash-               lowing locations:
ington, DC 20224, as well as in the office       (i) Except for Exempt Organizations,
of any district director regardless of        in the district office (or the Office of
where the applications are filed. This        the Assistant Commissioner (Inter-
subparagraph shall not apply with re-         national)) having jurisdiction over the
spect to plans having not more than 25        place in which the taxpayer resides and
plan participants and its applicability          (ii) For Exempt Organizations, in the
is subject to the rules set forth in sec-     key district which has jurisdiction over
tion 6104(a) and § 301.6104 (a)–1 through     the particular organization.
(a)–6 of this chapter.                           (9) Public inspection of written deter-
   (6) Publication of statistics of income.   minations. Certain rulings, determina-
Statistics with respect to the operation      tion letters, and technical advice mem-
of the income tax laws are published          orandums are open to public inspection
annually in accordance with section           pursuant to section 6110 of the Code.
6108 and § 301.6108–1 of this chapter.           (e) Other disclosure procedures. For
   (7) Comments received in response to a     procedure to be followed by officers
notice of proposed rule making. Written       and employees of the Internal Revenue
comments received in response to a no-        Service upon receipt of a request or de-
tice of proposed rule making may be           mand for certain internal revenue
inspected, upon written request, by any       records or information the disclosure
person upon compliance with the provi-        procedure for which is not covered by
sions of this paragraph. Comments             this section, see § 301.9000–1 of this
which may be inspected are located in         chapter.
the Freedom of Information Reading               (f) Fees for services—(1) In general. The
Room, Internal Revenue Service, 1111          fees to be charged for search, duplica-
Constitution Avenue, NW., Wash-               tion, and review services performed by
ington, DC 20224. The request to inspect      the Internal Revenue Service, whether
comments must be in writing and               or not such services are performed pur-
signed by the person making the re-           suant to the Freedom of Information
quest and should be addressed to the          Act or the regulations thereunder,
Commissioner of Internal Revenue, At-         shall be determined and collected in
tention: CC:LR:T, Washington, DC              accordance with the provisions of this
20224. Upon delivery of such a written        paragraph. A fee shall not be charged
request to the place where the com-           for monitoring a requester’s inspection
ments are located during the regular          of records which contains exempt mat-
business hours of that office, the per-       ter. The Internal Revenue Service may
son making the request may inspect            recover the applicable fees even if
those comments that are the subject of        there is ultimately no disclosure of

                                          127
§ 601.702                                                26 CFR Ch. I (4–1–99 Edition)

records. Should services other than the       tained in the releasable records already
services described in this paragraph be       available to the general public);
requested and rendered, appropriate              (E) The existence and magnitude of
fees will be established by the Commis-       the requester’s commercial interest, as
sioner or his/her delegate, and imposed       that term is used in paragraph
and collected pursuant to 31 U.S.C.           (f)(3)(i)(A) of this section, being
483(a), subject, however, to the con-         furthered by the releasable records;
straint imposed by 5 U.S.C. 552(a)(4)(A).     and
  (2) Waiver or reduction of fees. The fees      (F) Whether the magnitude of the re-
authorized by this paragraph may be           quester’s commercial interest is suffi-
waived or reduced—                            ciently large in comparison to the gen-
  (i) At the discretion of any Internal       eral public’s interest.
Revenue Service official—                        (iii) Requesters asking for reduction
  (A) Who is authorized to make the           or waiver of fees must state the rea-
initial determination pursuant to para-       sons why they believe disclosure meets
graph (c)(7) of this section, in the case     the standards set forth in paragraph
of a record which is not located for any      (f)(2)(ii) of this section.
reason, or
                                                 (iv) Requesters who base their re-
  (B) Who determines any portion of
                                              quest for reduction or waiver of fees
the requested record to be exempt from
                                              solely on the basis of their indigency
disclosure; or
                                              will not be entitled to a reduction or
  (ii) On a case-by-case basis in accord-
                                              waiver of fees.
ance with this subdivision by any In-
ternal Revenue Service official who is           (v) Normally, no charge will be made
authorized to make the initial deter-         for providing records to Federal, state,
mination pursuant to paragraph (c)(7)         or foreign governments, international
of this section, provided such waiver or      governmental organizations, or local
reduction has been requested in writ-         governmental agencies or offices there-
ing. Fees will be waived or reduced by        of. The initial request for waiver or re-
such official when it is determined that      duction of fees should be addressed to
disclosure of the requested information       the official of the Internal Revenue
is in the public interest because it is       Service to whose office the request for
likely to contribute significantly to         disclosure is delivered pursuant to
public understanding of the operations        paragraph (c)(3)(iii) of this section. Ap-
or activities of the Internal Revenue         peals from denials of requests for waiv-
Service and is not primarily in the           er or reduction of fees shall be decided
commercial interest of the requester.         by the Commissioner in accordance
Such officials shall consider several         with the criteria set forth in subdivi-
factors, including, but not limited to,       sion (iii) of this subparagraph. Appeals
those set forth below, in determining         shall be addressed in writing to the Of-
requests for waiver or reduction of           fice of the Commissioner within 35 days
fees—                                         of the denial of the initial request for
  (A) Whether the subject of the releas-      waiver or reduction and shall be de-
able records concerns the agency’s op-        cided promptly. See paragraph (c)(8) of
erations or activities;                       this section for the appropriate ad-
  (B) Whether the releasable records          dress. Upon receipt of the determina-
are likely to contribute to an under-         tion on appeal to deny a request for
standing of the agency’s operations or        waiver of fees, the requester may ini-
activities;                                   tiate an action in U.S. district court to
  (C) Whether the releasable records          review the request for waiver of fees. In
are likely to contribute to the general       such actions, the courts will consider
public’s understanding of the agency’s        the matter de novo, except that the
operations or activities (e.g., how will      court’s review of the matter shall be
the requester convey the information          limited to the record before the Inter-
to the general public);                       nal Revenue Service official to whose
  (D) The significance of the contribu-       office the request for waiver is deliv-
tion to the general public’s under-           ered. Upon receipt of the determination
standing of the agency’s operations or        on appeal to deny a request for reduc-
activities (e.g., is the information con-     tion of fees, the requester may initiate

                                          128
Internal Revenue Service, Treasury                                           § 601.702

an action in U.S. district court to re-        (D) Noncommercial scientific institution
view the request for reduction of fees.      requester. Any person on behalf of an
In such actions, the courts will con-        institution that is not operated on a
sider the matter under the arbitrary         commercial basis, that is operated
and capricious standard.                     solely for the purpose of conducting
  (3) Categories of requesters—(i) In gen-   scientific research whose results are
eral. A request for records under this       not intended to promote any particular
section shall include an attestation,        product or industry.
under penalty of perjury, as to the sta-       (E) Other requester. Any requester
tus of the requester solely for use by       who falls outside the above categories.
the Internal Revenue Service official          (ii) Allowable charges—
to whose office the request is delivered       (A) Commercial use requesters. Records
in determining the appropriate fees to       shall be provided for the cost of search,
be assessed. Requesters shall attest         duplication, and review (including
that they fall into one of the categories    doing all that is necessary to excise
set forth below—                             and otherwise prepare records for re-
  (A) Commercial use requester. Any per-     lease) of records. Commercial use re-
son who seeks information for a use or       questers are not entitled to 2 hours of
purpose that furthers the commercial,        free search time or 100 pages of duplica-
trade, or profit interests of the re-        tion.
quester or the person on whose behalf          (B) Media requesters. Records shall be
the request is made.                         provided for the cost of duplication
  (B) Media requester. Any person ac-        alone, excluding fees for the first 100
tively gathering news for an entity          pages.
that is organized and operated to pub-         (C) Educational institution requesters.
lish or broadcast news (i.e., informa-       Records shall be provided for the cost
tion about current events or of current      of duplication alone, excluding fees for
interest to the public) to the public.       the first 100 pages.
News media entities include, but are           (D) Noncommercial scientific institution
not limited to, television or radio sta-     requesters. Records shall be provided for
tions broadcasting to the public at          the cost of duplication alone, excluding
large, publishers of periodicals, to the     fees for the first 100 pages.
extent they disseminate news, who              (E) Other requesters. Requesters who
make their periodicals available for         do not fit into any of the above cat-
purchase or subscription by the general      egories shall be charged fees that will
public, and telecommunications. Free         cover the full direct cost of searching
lance journalists shall be included as       for and duplicating records, except that
media requesters if they can dem-            the first 2 hours of search time and
onstrate a solid basis for expecting         first 100 pages of duplication shall be
publication through a qualifying news        furnished without charge.
entity (e.g., publication contract, past       (4) Avoidance of unexpected fees. In
publication record). Specialized peri-       order to protect requesters from unex-
odicals, although catering to a nar-         pected fees, all requests for records
rower audience, may be considered            shall state the agreement of the re-
media requesters so long as they are         questers to pay the fees determined in
available to the public generally, via       accordance with paragraph (f)(5) of this
newsstand or subscription.                   section or state the upper limit they
  (C) Educational institution requester.     are willing to pay to cover the costs of
Any person who, on behalf of a pre-          processing their requests. When the
school, public or private elementary or      fees for processing requests are esti-
secondary school, institution of under-      mated by the Internal Revenue Service
graduate or graduate higher education,       to exceed that limit, or when request-
institution or professional or voca-         ers have failed to state a limit and the
tional education, which operates a pro-      costs are estimated to exceed $250, and
gram or programs of scholarly re-            the Internal Revenue Service has not
search, seeks records in furtherance of      then determined to waive or reduce the
the institution’s scholarly research and     fees, a notice shall be sent to the re-
is not for a commercial use.                 questers. This notice shall—

                                         129
§ 601.702                                                26 CFR Ch. I (4–1–99 Edition)

  (i) Inform the requester of the esti-       as that term is defined in paragraph
mated costs;                                  (f)(3)(i)(A) of this section, upon initial
  (ii) Extend an offer to the requester       consideration of the applicability of an
to confer with agency personnel in an         exemption described in paragraph (b)(1)
attempt to reformulate the request in         of § 601.701 to the requested records, be
a manner which will reduce the fees           it at the initial request or administra-
and still meet the needs of the re-           tive appeal level, to determine whether
quester;                                      any portion of any record responsive to
  (iii) If the requester is not amenable      the request is permitted to be with-
to reformulation, which would reduce          held. Review includes doing all that is
fees to under $250, then advance pay-         necessary to excise and otherwise pre-
ment shall be required; and                   pare the records for release. Review
  (iv) Inform the requester that the          does not include the time spent on re-
time period, within which the Internal        solving general legal or policy issues
Revenue Service is obliged to make a          regarding the applicability of exemp-
determination on the request, will not        tions to the requested records.
begin to run, pending a reformulation            (B) Fees charged for review services—
of the request or the receipt of advance      $21.00 for each hour or fraction thereof
payment from the requester, as appro-         for time spent by each clerical, profes-
priate.                                       sional, and supervisor in reviewing the
  (5) Fees for services. The fees for serv-   records for disclosure.
ices performed by the Internal Revenue           (iii) Duplication other than for returns
Service shall be imposed and collected        and related documents. Fees charged for
as set forth in this paragraph. No fees       duplication other than for returns and
shall be charged if the costs of routine      related documents are as follows—(A)
collecting and processing the fees al-        $.15 per copy of each page, up to 81⁄2″ x
lowable under 5 U.S.C. 552(a)(4)(A) are       14″, made by photocopy or similar proc-
likely to equal or exceed the amount of       ess.
the fee.                                         (B) Photographs, films, and other
  (i) Search services. Fees charged for       materials—actual cost of duplication.
search services are as follows—                  (C) Records may be released to a pri-
  (A) Searches other than for comput-         vate contractor for copying and the re-
erized records—$17.00 for each hour or        quester will be charged for the actual
fraction thereof for time spent by each       cost of duplication charged by the pri-
clerical, professional, and supervisor in     vate contractor, so long as the cost to
finding the records and information           the requester is not higher than if the
within the scope of the request.              Internal Revenue Service had dupli-
  (B)     Searches     for   computerized     cated the records itself.
records—Actual direct cost of the                (D) When other duplications not spe-
search. The fee for computer printouts        cifically identified above are requested
will be actual costs.                         and provided pursuant to the Freedom
  (C) Searches requiring travel or            of Information Act their direct cost to
transportation—Shipping charges to            the Internal Revenue Service shall be
transport records from one location to        charged.
another, or for the transportation of an         (iv) Charges for copies of returns and
employee to the site of requested             related documents. Charges for fur-
records when it is necessary to locate        nishing copies of returns and related
rather than examine the records, shall        documents are as follows:
be at the rate of the actual cost of such        (A) A charge of $4.25 will be made for
shipping or transportation.                   each request for a copy of a return or
  (D) Other services and materials re-        other related documents (other than
quested, pursuant to the Freedom of           Employee Plans and Exempt Organiza-
Information Act, which are not covered        tion returns). Payments are to be sub-
by this part are chargeable at the ac-        mitted in advance using IRS Form 4506,
tual cost to the Internal Revenue Serv-       Request for Copy of Tax Form.
ice.                                             (B) A charge of $1.00 for the first page
  (ii) Review services. (A) Review is the     and $.15 for each subsequent page will
process of examining records in re-           be made for copies of Employee Plans
sponse to a commercial use requester,         and Exempt Organizations tax returns

                                          130
Internal Revenue Service, Treasury                                            § 601.702

and related documents. Payments will             (ii) Where it is estimated or deter-
be submitted subsequent to receipt of         mined that allowable fees required to
IRS Form 2860, Document Transmittal           be paid by a requester are likely to ex-
and Bill.                                     ceed $250, the requester will be required
  (6) Printed material. Certain relevant      to make an advance payment of the en-
government publications which will be         tire fee before the Internal Revenue
placed on the shelves of the reading          Service official to whom the request is
rooms and similar public inspection fa-       delivered will begin to process the re-
cilities will not be sold at these loca-      quest.
tions. However, copies of pages of these         (iii) When the Internal Revenue Serv-
publications may be duplicated on the         ice acts pursuant to paragraphs (f)(9)
premises and a fee for such services          (i) or (ii) of this section, the adminis-
may be charged in accordance with             trative time limits prescribed in para-
paragraph (f)(5)(iii) of this section. A      graphs (c)(7) and (8) of this section,
person desiring to purchase the com-          plus permissible extensions of these
plete publication, for example, an In-        time limits as prescribed in paragraph
ternal Revenue Bulletin, should con-          (c)(9)(i) of this section, will begin only
tact the Superintendent of Documents,         after the Internal Revenue Service offi-
U.S. Government Printing Office,              cial to whom the request is delivered
Washington, DC 20402.                         has received the fees described above.
  (7) Search and deletion services with re-      (10) Interest. Interest shall be charged
spect to records open to public inspection    to requesters who fail to pay the fees in
                                              a timely fashion; that is, within 30
pursuant to section 6110 of the Code. Fees
                                              days following the day on which the
charged for searching for and making
                                              statement of fees as set forth in para-
deletions in records open to public in-
                                              graph (c)(7)(i) of this section was sent
spection pursuant to section 6110 of the
                                              by the Internal Revenue Service offi-
Code only upon written request shall
                                              cial to whom the request was delivered.
be at actual cost, as the Commissioner
                                              Interest accrues from the date the
may from time to time establish.
                                              statement of fees was mailed to the re-
  (8) Form of payment. Payment shall be       quester. Interest will be at the rate
made by check or money order, payable         prescribed in 31 U.S.C. 3717. Pursuant
to the order of the Treasury of the           to the Debt Collection Act of 1982, Pub.
United States or the Internal Revenue         L. 97–365, the Internal Revenue Service
Service.                                      may take all steps authorize by the
  (9) Advance payments. (i) If previous       Debt Collection Act of 1982, including
search, review, or duplication fees have      administrative offset, disclosure to
not been paid in a timely fashion as de-      consumer reporting agencies, and use
fined in paragraph (f)(10) of this section    of collection agencies, as otherwise au-
by a person making a request for              thorized by law to encourage repay-
records, the Internal Revenue Service         ment.
shall require that person to remit any           (11) Aggregating requests. When the In-
outstanding balance plus interest as          ternal Revenue Service official to
authorized in paragraph (f)(10) of this       whom a request is delivered reasonably
section, plus payment of estimated fees       believes that a requester or group of re-
in advance before processing the re-          questers is attempting to break down a
quest. The ‘‘person making the re-            request into a series of requests for the
quest’’ for purposes of this paragraph is     purpose of evading the assessment of
the person in whose name a request is         fees, the Internal Revenue Service
made, except that if such person is           shall aggregate such requests and
making the request on behalf of an-           charge accordingly, upon notification
other person whose identity is appar-         to the requester and/or requesters.
ent on the face of the request (includ-          (g) Responsible officials and their ad-
ing attached documents), such other           dresses. For purposes of this section,
person is considered the ‘‘person mak-        the Internal Revenue Service officials
ing the request.’’ The person who made        responsible for the control of records
the prior request to which fees are out-      are the following officials, in the case
standing is identified in the same man-       of records under their jurisdiction: The
ner.                                          Assistant Commissioner (Inspection),

                                          131
§ 601.702                                              26 CFR Ch. I (4–1–99 Edition)

Assistant      Commissioner       (Inter-   Attn: Disclosure Officer
national), the Director of Practice, Re-    Internal Revenue Service
gional Commissioners, District Direc-       FOIA Request
                                            950 L’Enfant Plaza
tors, Service Center Directors, and the     Washington, DC 20024
Director of the Internal Revenue Serv-
                                            Walk-In Address
ice Data Center. In the case of records     Same as mailing address
of the National Office not under the ju-
risdiction of one of the officials re-                NORTH ATLANTIC REGION
ferred to in the preceding sentence (in-                  Regional Office
cluding records of the National Office
of the Chief Counsel), the Director, Of-    Mailing Address
                                            Regional Commissioner
fice of Disclosure is the responsible of-   Internal Revenue Service
ficial. Records of a Regional Counsel’s     FOIA Request
Office shall be deemed to be under the      Attn: Disclosure Officer
jurisdiction of the Regional Commis-        90 Church Street
sioner; records of a District Counsel’s     New York, New York 10007
office shall be deemed to be under the      Walk-in Address
jurisdiction of the District Director.      Same as mailing address
The addresses of these officials are:                     Augusta District
             NATIONAL OFFICE                Mailing Address
Mailing Address                             Director, Augusta District
Director, Office of Disclosure              Internal Revenue Service
Internal Revenue Service                    FOIA Request
FOIA Request                                Attn: Disclosure Officer
P.O. Box 388                                P.O. Box 787
c/o Ben Franklin Station                    Augusta, Maine 04330
Washington, DC 20044                        Walk-in Address
Walk-In Address                             68 Sewall Street
1111 Constitution Avenue NW.                Augusta, Maine
Washington, DC
                                                          Albany District
Mailing Address
Assistant Commissioner (Inspection)         Mailing Address
Internal Revenue Service                    Director, Albany District
FOIA Request                                Internal Revenue Service
Attn: Disclosure Officer                    FOIA Request
1111 Constitution Avenue NW.                Attn: Disclosure Officer
Washington, DC 20224                        Leo O’Brien Fed. Office Bldg.
                                            Clinton Ave. & N. Pearl St.
Walk-in Address
                                            Albany, New York 12207
Same as mailing address
                                            Walk-in Address
Mailing Address
                                            Same as mailing address
Director, IRS Data Center
Attn: Disclosure Officer                                 Brooklyn District
Internal Revenue Service
FOIA Request                                Mailing Address
1300 John C. Lodge Drive                    Director, Brooklyn District
Detroit, Michigan 48226                     Internal Revenue Service
                                            FOIA Request
Walk-in Address                             Attn: Disclosure Officer
Same as mailing address                     35 Tillary Street
Mailing Address                             Brooklyn, New York 11201
Director of Practice                        Walk-in Address
Attn: Disclosure Officer
Internal Revenue Service                    Same as mailing address
FOIA Request
1111 Constitution Avenue NW.                              Boston District
Washington, DC 20224                        Mailing Address
Walk-in Address                             Director, Boston District
1200 Pennsylvania Avenue NW.                Internal Revenue Service
Ariel Rios Bldg. Room 1413                  FOIA Request
Washington, DC                              Attn: Disclosure Officer
Mailing Address                             P.O. Box 9097 JFK Post Office
Assistant Commissioner (Intern’t.)          Boston, Massachusetts 02203

                                        132
Internal Revenue Service, Treasury                                          § 601.702
Walk-in Address                                      Providence District
JFK Federal Building                     Mailing Address
Boston, Massachusetts
                                         Director, Providence District
              Buffalo District           Internal Revenue Service
                                         FOIA Request
Mailing Address                          Attn: Disclosure Officer
Director, Buffalo District               300 Westminister Mall
Internal Revenue Service                 Providence, RI 02903
FOIA Request                             Walk-in Address
Attn: Disclosure Officer
                                         Same as mailing address
P.O. Box 1040 Niagara Square Station
Buffalo, New York 14201                            Andover Service Center
Walk-in Address
                                         Mailing Address
111 West Huron Street
                                         Director, Andover Service Center
Buffalo, New York
                                         Internal Revenue Service
            Burlington District          FOIA Request
                                         Attn: Disclosure Officer
Mailing Address                          310 Lowell Street Stop 218
Director, Burlington District            Andover, Massachusetts 01812
Internal Revenue Service                 Walk-in Address
FOIA Request
                                         Same as mailing address
Attn: Disclosure Officer
11 Elmwood Avenue                                Brookhaven Service Center
Burlington, Vermont 05401
                                         Mailing Address
Walk-in Address
                                         Director, Brookhaven Service Center
Same as mailing address
                                         Internal Revenue Service
             Hartford District           FOIA Request
                                         Attn: Disclosure Officer
Mailing Address                          P.O. Box 400, Stop 241
Director, Hartford District              Brookhaven, New York 11719
Internal Revenue Service                 Walk-in Address
FOIA Request
                                         1040 Waverly Avenue
Attn: Disclosure Officer
                                         Holtsville, New York
135 High Street
Hartford, Connecticut 06103                         MID-ATLANTIC REGION
Walk-in Address
Same as mailing address                                Regional Office
                                         Mailing Address
            Manhattan District
                                         Regional Commissioner
Mailing Address
                                         Internal Revenue Service
Director, Manhattan District             FOIA Request
Internal Revenue Service                 Attn: Disclosure Officer
FOIA Request                             P.O. Box 12010
Attn: Disclosure Officer                 Philadelphia, Pa. 19105
120 Church Street                        Walk-in Address
New York, New York 10007
                                         600 Arch Street, 7th Floor
Walk-in Address
                                         Philadelphia, Pennsylvania
Same as mailing address
                                                       Newark District
            Portsmouth District
                                         Mailing Address
Mailing Address
                                         Director, Newark District
Director, Portsmouth District            Internal Revenue Service
Internal Revenue Service                 FOIA Request
FOIA Request                             Attn: Disclosure Officer
Attn: Disclosure Officer                 P.O. Box 270, Rm. 1535
80 Daniel Street                         Newark, New Jersey 07101
Portsmouth, NH 03801                     Walk-in Address
Walk-in Address
                                         970 Broad Street
Same as mailing address                  Newark, New Jersey

                                       133
§ 601.702                                        26 CFR Ch. I (4–1–99 Edition)
             Baltimore District               Philadelphia Service Center
Mailing Address                       Mailing Address
Director, Baltimore District          Director, Philadelphia Service Center
Internal Revenue Service              Internal Revenue Service
FOIA Request                          FOIA Request
Attn: Disclosure Officer              Attn: Disclosure Officer
P.O. Box 1018                         P.O. Box 245, Drop Point 590A
Baltimore, Maryland 21203             Bensalem, Pennsylvania 19020
Walk-in Address                       Walk-in Address
31 Hopkins Plaza                      11601 Roosevelt Boulevard
Baltimore, Maryland                   Bensalem, Pennsylvania
            Philadelphia District                  SOUTHEAST REGION
Mailing Address
                                                    Regional Office
Director, Philadelphia District
                                      Mailing Address
Internal Revenue Service
FOIA Request                          Regional Commissioner
Attn: Disclosure Officer              Internal Revenue Service
P.O. Box 12010                        FOIA Request
Philadelphia, Pa. 19105               Attn: Disclosure Officer
Walk-in Address                       P.O. Box 926, Room 626
                                      Atlanta, Georgia 30370
600 Arch Street, 7th Floor
Philadelphia, Pennsylvania            Walk-in Address
                                      275 Peachtree Street, NE.,
             Pittsburgh District      Atlanta, Georgia
Mailing Address
                                                    Atlanta District
Director, Pittsburgh District
Internal Revenue Service              Mailing Address
FOIA Request
                                      Director, Atlanta District
Attn: Disclosure Officer
                                      Internal Revenue Service
P.O. Box 2488
                                      FOIA Request
Pittsburgh, Pa. 15230
                                      Attn: Disclosure Officer
Walk-in Address                       P.O. Box 1037, Room 554
1000 Liberty Avenue                   Atlanta, Georgia 30370
Pittsburgh, Pennsylvania              Walk-in Address
             Richmond District        275 Peachtree Street, NE.,
                                      Atlanta, Georgia
Mailing Address
Director, Richmond District                       Birmingham District
Internal Revenue Service              Mailing Address
FOIA Request
Attn: Disclosure Officer              Director, Birmingham District
P.O. Box 10107                        Internal Revenue Service
Richmond, Va. 23240                   FOIA Request
                                      Attn: Disclosure Officer
Walk-in Address                       500 22nd Street So., Rm. 312
400 North Eighth Street               Birmingham, Alabama 35233
Richmond, Virginia                    Walk-in Address
            Wilmington District       Same as mailing address

Mailing Address                                    Columbia District
Director, Wilmington District         Mailing Address
Internal Revenue Service
                                      Director, Columbia District
FOIA Request
                                      Internal Revenue Service
Attn: Disclosure Officer
                                      FOIA Request
P.O. Box 2415
                                      Attn: Disclosure Officer
Wilmington, Delaware 19899
                                      Fed. Office Bldg., Rm. 408
Walk-in Address                       1835 Assembly Street
844 King Street, 2nd Floor            Columbia, S.C. 29202
Wilmington, Delaware                  Walk-in Address

                                    134
Internal Revenue Service, Treasury                                         § 601.702
Same as mailing address                             Nashville District

          Ft. Lauderdale District      Mailing Address

Director, Ft. Lauderdale District      Director, Nashville District
Internal Revenue Service               Internal Revenue Service
                                       FOIA Request
FOIA Request
                                       Attn: Disclosure Officer
Attn: Disclosure Officer
                                       P.O. Box 1107, Room 375
1 University Drive, Suite 220          Nashville, Tennessee 37202
Ft. Lauderdale, Florida 33324
                                       Walk-in Address
Walk-in Address
                                       801 Broadway, Room 375
Same as mailing address                Nashville, Tennessee
            Greensboro District                    New Orleans District
Mailing Address                        Mailing Address
Director, Greensboro District          Director, New Orleans District
Internal Revenue Service               Internal Revenue Service
FOIA Request                           FOIA Request
Attn: Disclosure Officer               Attn: Disclosure Officer
320 Federal Place, Room 240            500 Camp Street
Greensboro, NC 27401                   Room 705, Stop 40
Walk-in Address                        New Orleans, La. 70130
Same as mailing address                Walk-in Address
                                       Same as Mailing address
              Jackson District
                                                  Atlanta Service Center
Mailing Address
                                       Mailing Address
Director, Jackson District
Internal Revenue Service               Director, Atlanta Service Center
FOIA Request                           Internal Revenue Service
Attn: Disclosure Officer               FOIA Request
100 W. Capitol Street                  Attn: Disclosure Officer
Suite 504, Room 31                     4800 Buford Highway
Jackson, Mississippi 39269             Chamblee, Georgia 30006
Walk-in Address                        Walk-in Address
Same as mailing address                Same as mailing address

            Jacksonville District                Memphis Service Center
Mailing Address                        Mailing Address

Director, Jacksonville District        Director, Memphis Service Center
Internal Revenue Service               Internal Revenue Service
FOIA Request                           FOIA Request
Attn: Disclosure Officer               Attn: Disclosure Officer
P.O. Box 35045, Stop 40340             P.O. Box 30309, Stop 30
Jacksonville, Fla. 32202               Memphis, Tennessee 38130
Walk-in Address                        Walk-in Address
                                       3131 Democrat Road, Room 30
Same as mailing address
                                       Memphis, Tennessee
            Little Rock District
                                                     MIDWEST REGION
Mailing Address
                                                      Regional Office
Director, Little Rock District
Internal Revenue Service               Mailing Address
FOIA Request                           Regional Commissioner
Attn: Disclosure Officer               Internal Revenue Service
P.O. Box 3778, Stop 3                  FOIA Request
Little Rock, Arkansas 72203            Attn: Disclosure Officer
Walk-in Address                        One N. Wacker Drive
                                       Chicago, Illinois 60606
700 W. Capitol Avenue
                                       Walk-in Address
Room 1002
Little Rock, Arkansas                  Same as mailing address

                                     135
§ 601.702                                        26 CFR Ch. I (4–1–99 Edition)
             Aberdeen District                    Milwaukee District
Mailing Address                      Mailing Address
Director, Aderdeen District          Director, Milwaukee District
Internal Revenue Service             Internal Revenue Service
FOIA Request                         FOIA Request
Attn: Disclosure Officer             Attn: Disclosure Officer
P.O. Box 370                         P.O. Box 495, Room 436
Aberdeen, SD 57402                   Milwaukee, Wisconsin 53201
Walk-in Address                      Walk-in Address
115 Fourth Avenue, SE                Federal Bldg. & Courthouse
Aberdeen, South Dakota               517 E. Wisconsin Avenue
                                     Milwaukee, Wisconsin
              Chicago District
                                                    Helena District
Mailing Address
                                     Mailing Address
Director, Chicago District
Internal Revenue Service             Director, Helena District
FOIA Request                         Internal Revenue Service
Attn: Disclosure Officer             FOIA Request
230 S. Dearbrn St., Rm. 1980         Attn: Disclosure Officer
                                     301 S. Park Avenue, 2d Floor
Chicago, Illinois 60604
                                     Helena, Montana 59626
Walk-in Address
                                     Walk-in Address
Same as mailing address
                                     Same as mailing address
            Des Moines District
                                                   St. Louis District
Mailing Address
                                     Mailing Address
Director, Des Moines District        Director, St. Louis District
Internal Revenue Service             Internal Revenue Service
FOIA Request                         FOIA Request
Attn: Disclosure Officer             Attn: Disclosure Officer
P.O. Box 1337 Stop 15–1              P.O. Box 1548 Room 935
Des Moines, Iowa 50305               St. Louis, Missouri 63188
Walk-in Address                      Walk-in Address
210 Walnut Street                    1114 Market Street
Des Moines, Iowa                     St. Louis, Missouri
                  Fargo District                   St. Paul District
Mailing Address                      Mailing Address
Director, Fargo District             Director, St. Paul District
Internal Revenue Service             Internal Revenue Service
FOIA Request                         FOIA Request
Attn: Disclosure Officer             Attn: Disclosure Officer
P.O. Box 8                           316 N. Robert Street
Fargo, North Dakota 58107            Stop 2
Walk-in Address                      St. Paul, Minnesota 55101
653 Second Avenue North              Walk-in Address
Fargo, North Dakota                  Same as mailing address
               Omaha District                     Springfield District
Mailing Address                      Mailing Address
Director, Omaha District             Director, Springfield District
Internal Revenue Service             Internal Revenue Service
FOIA Request                         FOIA Request
Attn: Disclosure Officer             Attn: Disclosure Officer
P.O. Box 1052, Downtown Sta.         P.O. Box 19206
Omaha, Nebraska 68101                Springfield, Illinois 62705
Walk-in Address                      Walk-in Address
106 South 15th Street                320 W. Washington Street
Omaha, Nebraska                      Sprinfield, Illinois

                                   136
Internal Revenue Service, Treasury                                           § 601.702
         Kansas City Service Center      477 Michigan Ave. Rm. 2483
                                         Detroit, Michigan
Mailing Address
Director, Kansas City Service Center                 Indianapolis District
Internal Revenue Service                 Mailing Address
FOIA Request
Attn: Disclosure Officer                 Director, Indianapolis District
P.O. Box 24551 Stop 7                    Internal Revenue Service
Kansas City, Missouri 64131              FOIA Request
                                         Attn: Disclosure Officer
Walk-in Address
                                         P.O. Box 44242 Stop 27
2306 East Bannister Road                 Indianapolis, Indiana 46244
Kansas City, Missouri                    Walk-in Address
               Regional Office           Federal Office Building
                                         575 N. Pennsylvania Avenue
Mailing Address
                                         Indianapolis, Indiana
Regional Commissioner
Internal Revenue Service                              Louisville District
FOIA Request                             Mailing Address
Attn: Disclosure Officer
P.O. Box 1818                            Director, Louisville District
Cincinnati, Ohio 45201                   Internal Revenue Service
                                         FOIA Request
Walk-In Address
                                         Attn: Disclosure Officer
550 Main Street                          P.O. Box 1735, Stop 27
Cincinnati, Ohio                         Louisville, Kentucky 40201
                                         Walk-in Address
             Cincinnati District
                                         Post Office Building Seventh & Broadway
Mailing Address
                                         Louisville, Kentucky
Director, Cincinnati District
Internal Revenue Service                             Parkersburg District
FOIA Request
Attn: Disclosure Officer                 Mailing Address
P.O. Box 1818                            Director, Parkersburg District
Cincinnati, Ohio 45201                   Internal Revenue Service
Walk-in Address                          FOIA Request
550 Main Street                          Attn: Disclosure Officer
Cincinnati, Ohio                         P.O. Box 1388
                                         Parkersburg, W. Va. 26102
              CENTRAL REGION
                                         Walk-in Address
             Cleveland District          425 Juliana Street
Mailing Address                          Parkersburg, West Virginia
Director, Cleveland District                      Cincinnati Service Center
Internal Revenue Service
                                         Mailing Address
FOIA Request
Attn: Disclosure Officer                 Director, Cincinnati Service Center
P.O. Box 99181                           Internal Revenue Service
Cleveland, Ohio 44199                    FOIA Request
Walk-in Address                          Attn: Disclosure Officer
                                         P.O. Box 267 Stop 68
1240 East 9th Street                     Covington, Kentucky 41019
Cleveland, Ohio
                                         Walk-in Address
              Detroit District           200 West Fourth Street
Mailing Address                          Covington, Kentucky
Director, Detroit District                            SOUTHWEST REGION
Internal Revenue Service
FOIA Request                                            Regional Office
Attn: Disclosure Officer                 Mailing Address
P.O. Box 32500 Stop 11
Detroit, Michigan 48232                  Regional Commissioner
                                         Internal Revenue Service
Walk-in Address
                                         FOIA Request
Patrick McNamara Bldg.                   Attn: Disclosure Officer

                                       137
§ 601.702                                         26 CFR Ch. I (4–1–99 Edition)
7839 Churchill Way LB–70              Walk-in Address
Dallas, Texas 75222
                                      Same as mailing address
Walk-in Address
                                                   Cheyenne District
Same as mailing address
                                      Mailing Address
                  Dallas District
                                      Director, Cheyenne District
Mailing Address                       Internal Revenue Service
Director, Dallas District             FOIA Request
Internal Revenue Service              Attn: Disclosure Officer
FOIA Request                          308 West 21 Street
Attn: Disclosure Officer              Stop 7000 CHE
1100 Commerce St. Stop 7000 DAL       Cheyenne, Wyoming 82001
Dallas, Texas 75242                   Walk-in Address
Walk-in Address                       Same as mailing address
Same as mailing address                             Phoenix District
            Albuquerque District      Mailing Address
Mailing Address                       Phoenix District
                                      Internal Revenue Service
Director, Albuquerque District
                                      FOIA Request
Internal Revenue Service
                                      Attn: Disclosure Officer
FOIA Request
                                      2120 North Central Avenue
Attn: Disclosure Officer              Mail Stop 7000 PH
P.O. Box 1967 Stop 7000 ALB           Phoenix, Arizona 85004
Albuquerque, N.M. 87103
                                      Walk-in Address
Walk-in Address
                                      Same as mailing address
517 Gold Avenue, S.W.
Albuquerque, New Mexico                         Oklahoma City District
               Austin District        Mailing Address
Mailing Address                       Director, Okla. City District
                                      Internal Revenue Service
Director, Austin District             FOIA Request
Internal Revenue Service              Attn: Disclosure Officer
FOIA Request                          P.O. Box 66 Stop 7000 OKC
Attn: Disclosure Officer              Oklahoma City, OK 73102
P.O. Box 1448 Stop 7000 AUS
                                      Walk-in Address
Austin, Texas 78767
Walk-in Address                       200 N.W. Fourth Street
                                      Oklahoma City, Oklahoma
300 E. 8th Street Stop 100D
Austin, Texas                                    Austin Service Center

               Denver District        Mailing Address

Mailing Address                       Director, Austin Service Center
                                      Internal Revenue Service
Director, Denver District             FOIA Request
Internal Revenue Service              Attn: Disclosure Officer
FOIA Request                          P.O. Box 934 Stop 70000 AUSC
Attn: Disclosure Officer              Austin, Texas 78767
1050 17th St. Stop 7000 DEN           Walk-in Address
Denver, Colorado 80265
Walk-in Address                       3651 S. Interregional Hwy.
                                      Austin, Texas
Same as mailing address
                                                 Salt Lake City District
              Houston District
                                      Mailing Address
Mailing Address
                                      Director, Salt Lake City District
Director, Houston District            Internal Revenue Service
Internal Revenue Service              FOIA Request
FOIA Request                          Attn: Disclosure Officer
Attn: Disclosure Officer              465 S. 400 East Street
3223 Briarpark Stop 7000 H–BP         Mail Stop 70000 SLC
Houston, Texas 77042                  Salt Lake City, Utah 84111

                                    138
Internal Revenue Service, Treasury                                         § 601.702
Walk-in Address                        949 E. 36th Ave., Suite 101
                                       Anchorage, Alaska
Same as mailing address
                                                  Laguna Niguel District
              Wichita District
                                       Mailing Address
Mailing Address
                                       Director, Laguna Niguel District
Director, Wichita District
Internal Revenue Service               Internal Revenue Service
FOIA Request                           FOIA Request
Attn: Disclosure Officer               Attn: Disclosure Officer
412 S. Main St. Stop 7000 WIC          P.O. Box C–8
Wichita, Kansas 67202                  Laguna Niguel, Ca. 92677
Walk-in Address                        Walk-in Address

Same as mailing address                24000 Via Avila Road
                                       Laguna Niguel, California
           Ogden Service Center
                                                     Honolulu District
Mailing Address
                                       Mailing Address
Director, Ogden Service, Ctr.
Internal Revenue Service               Director, Honolulu District
FOIA Request                           Internal Revenue Service
Attn: Disclosure Officer               FOIA Request
P.O. Box 9411 Stop 7000 OSC            Attn: Disclosure Officer
Ogden, Utah 84409                      P.O. Box 50089
                                       Honolulu, Hawaii 96850
              WESTERN REGION           Walk-in Address
Walk-in Address                        300 Ala Moana Blvd.
1160 West 1200 South Street            Federal Bldg. Rm. 2104
Ogden, Utah                            Honolulu, Hawaii

              Regional Office                       Los Angeles District
Mailing Address                        Mailing Address
Regional Commissioner                  Director, Los Angeles District
Internal Revenue Service               Internal Revenue Service
FOIA Request                           FOIA Request
Attn: Disclosure Officer               Attn: Disclosure Officer
450 Golden Gate Avenue                 P.O. Box 391 Room 5202
Room 2301 Stop 2231                    300 N. Los Angeles Street
San Francisco, Ca. 94102               Los Angeles, Ca. 90012
Walk-in Address                        Walk-in Address
Same as mailing address                Same as mailing address
                  Boise District                     Las Vegas District
Mailing Address                        Mailing Address
Director, Boise District               Director, Las Vegas District
Internal Revenue Service               Internal Revenue Service
FOIA Request                           FOIA Request
Attn: Disclosure Officer               Attn: Disclosure Officer
Box 041, Room 291                      P.O. Box 16045
Boise, Idaho 83724                     Las Vegas, Nevada 89101
Walk-in Address                        Walk-in Address
Same as mailing address                300 Las Vegas Blvd. South
                                       Las Vegas, Nevada
             Anchorage District
Mailing Address                                     Sacramento District

Director, Anchorage District           Mailing Address
Internal Revenue Service               Director, Sacramento District
FOIA Request                           Internal Revenue Service
Attn: Disclosure Officer               FOIA Request
P.O. Box 101500                        Attn: Disclosure Officer
Anchorage, Alaska 99510                P.O. Box 2900 Stop 5201
Walk-in Address                        Sacramento, Ca. 95812

                                     139
§ 601.702                                          26 CFR Ch. I (4–1–99 Edition)
Walk-in Address                        San Jose, California 95113
2345 Fair Oaks Blvd.                   Walk-in Address
Sacramento, California                 Same as mailing address
              Portland District          (h) Business information procedures—
Mailing Address                        (1) In general. Business information
Director, Portland District            provided to the Internal Revenue Serv-
Internal Revenue Service               ice by a business submitter shall not be
FOIA Request                           disclosed pursuant to a Freedom of In-
Attn: Disclosure Officer               formation Act request except in ac-
P.O. Box 3341                          cordance with this paragraph.
Portland, Oregon 97208                   (2) Definition. Business information is
Walk-in Address                        any trade secret or other financial,
1220 S.W. Third Ave. Rm. 817           commercial (including research) infor-
Portland Oregon                        mation.
                                         (3) Notice to business submitters. The
            San Francisco District
                                       official having control over the re-
Mailing Address                        quested records, which includes busi-
Director, San Francisco District       ness information, shall provide a busi-
Internal Revenue Service               ness submitter with prompt written
FOIA Request                           notice of a request encompassing its
Attn: Disclosure Officer               business information whenever re-
450 Golden Gate Avenue
                                       quired in accordance with paragraph
Room 2301 Stop 2231
San Francisco, Ca. 94102               (h)(4) of this section. Such written no-
                                       tice shall either describe the exact na-
Walk-in Address
                                       ture of the business information re-
Same as mailing address                quested or provide copies of the records
               Seattle District        or portions thereof containing the busi-
                                       ness information.
Mailing Address                          (4) When notice is required. (i) For
Director, Seattle District             business information submitted to the
Internal Revenue Service               Internal Revenue Service prior to Octo-
FOIA Request                           ber 13, 1987, the official having control
Attn: Disclosure Officer
                                       over the requested records shall pro-
915 Second Avenue
Stop 625 Room 2056                     vide a business submitter with notice
Seattle, Washington 98174              of a request whenever—
Walk-in Address                          (A) The business information is less
                                       than 10 years old;
Same as mailing address
                                         (B) The business information was
            Fresno Service Center      submitted to the Internal Revenue
                                       Service upon a commitment of con-
Mailing Address
                                       fidentiality; or
Director, Fresno Service Center          (C) The Internal Revenue Service has
Internal Revenue Service               reason to believe that disclosure of the
FOIA Request
Attn: Disclosure Officer
                                       information may result in commercial
P.O. Box 24014 Stop 891                or financial injury to the business sub-
Fresno, California 93779               mitter.
Walk-in Address                          (ii) For business information sub-
                                       mitted to the Internal Revenue Service
5045 E. Bulter Avenue
                                       on or after October 13, 1987, the Inter-
Fresno, California
                                       nal Revenue Service shall provide a
              San Jose District        business submitter with notice of a re-
Mailing Address                        quest whenever—
                                         (A) The business submitter has in
Director, San Jose District            good faith designated the information
Internal Revenue Service
FOIA Request                           as commercially or financially sen-
Attn: Disclosure Officer               sitive information; or
55 S. Market Street, 9th Floor           (B) The official has reason to believe
Stop 3246                              that disclosure of the information may

                                     140
Internal Revenue Service, Treasury                                                § 601.702

result in commercial or financial in-         requested records has been mailed to
jury to the business submitter.               the submitter. A copy of the disclosure
  Notice of a request for business infor-     notice shall be forwarded to the re-
mation      falling   within     paragraph    quester at the same time.
(h)(4)(ii)(A) of this section shall be re-       (7) Judicial review. (i) The Internal
quired for a period of not more than          Revenue Service’s disposition of the re-
ten years after the date of submission        quest and the submitter’s objections
unless the business submitter requests,
                                              shall be subject to judicial review
and provides acceptable justification
                                              under paragraph (c)(11) of this section.
for, a specific notice period of greater
duration. Whenever possible, the busi-        A requester is not required to exhaust
ness submitter’s claim of confiden-           administrative remedies if a complaint
tiality should be supported by a state-       has been filed under this subparagraph
ment or certification by an officer or        by a business submitter of the informa-
authorized representative of the busi-        tion contained in the requested
ness that the information in question         records. Likewise, a business submitter
is, in fact, confidential commercial or       is not required to exhaust administra-
financial information and has not been        tive remedies if a complaint has been
disclosed to the public.                      filed by the requester of these records.
  (5) Opportunity to object to disclosure.       (ii) Notice of FOIA lawsuit. Whenever
Through the notice described in para-         a requester brings suit seeking to com-
graph (h)(3) of this section, the official    pel disclosure of business information
having control over the requested             covered by paragraph (h)(4) of this sec-
records shall afford a business sub-          tion, the official having control over
mitter ten working days within which          the requested records shall promptly
to provide the official with a detailed
                                              provide the business submitter with
statement of any objection to disclo-
                                              written notice thereof.
sure. Such statement shall specify all
grounds for withholding any of the in-           (iii) Exception to notice requirement.
formation, with particular attention to       The notice requirements of this para-
why the information is claimed to be a        graph shall not apply if—
trade secret or commercial or financial          (A) The official having control over
information that is privileged and con-       the records determines that the busi-
fidential. Information provided by a          ness information shall not be disclosed;
business submitter pursuant to this              (B) The information lawfully has
paragraph may itself be subject to dis-       been published or otherwise made
closure under 5 U.S.C. 552.                   available to the public;
  (6) Notice of intent to disclose. The In-      (C) Disclosure of the information is
ternal Revenue Service shall carefully        required by law (other than 5 U.S.C.
consider a business submitter’s objec-        552); or
tions and specific grounds for non-              (D) The information was acquired in
disclosure prior to determining wheth-        the course of a lawful investigation of
er to disclose business information.          a possible violation of the internal rev-
Whenever the official having control
                                              enue laws and notice would interfere
over the requested records decides to
                                              with ongoing law enforcement pro-
disclose business information over the
objection of a business submitter, the        ceedings.
official shall forward to the business           (8) Appeals. Procedures for adminis-
submitter a written notice which shall        trative appeals from denials of requests
include—                                      for business information are to be proc-
  (i) Statement of the reasons for            essed in accordance with paragraph
which the business submitter’s disclo-        (c)(8) of this section.
sure objections were not sustained;           [32 FR 15990, Nov. 22, 1967]
  (ii) A description of the business in-
formation to be disclosed; and                  EDITORIAL NOTE: For FEDERAL REGISTER ci-
  (iii) A specified disclosure date,          tations affecting § 601.702, see the List of CFR
which is ten working days after the no-       Sections Affected in the Finding Aids sec-
tice of the final decision to release the     tion of this volume.




                                          141
§ 601.801                                                       26 CFR Ch. I (4–1–99 Edition)

Subpart H—Tax Counseling for the                    sistance to elderly individuals in the
            Elderly                                 preparation of Federal income tax re-
                                                    turns;
  AUTHORITY: Sec. 163(b)(5) of the Revenue
                                                       (3) To provide reimbursement to vol-
Act of 1978, Pub. L. 95–600, Nov. 6, 1978 (92       unteers through such organizations for
Stat. 2811) and Pub. L. 89–554, Sept. 6, 1966 (80   transportation, meals, and other ex-
Stat. 379, 5 U.S.C. 301).                           penses incurred by them in training or
  SOURCE: 44 FR 72113, Dec. 13, 1979, unless        providing tax counseling assistance in
otherwise noted.                                    the preparation of Federal income tax
                                                    returns under this section, and such
§ 601.801 Purpose and statutory au-                 other support and assistance deter-
     thority.                                       mined to be appropriate in carrying
   (a) This Subpart H contains the rules            out the provisions of the section;
for implementation of the Tax Coun-                    (4) To provide for the use of services,
seling for the Elderly assistance pro-              personnel, and facilities of Federal ex-
gram under section 163 of the Revenue               ecutive agencies and State and local
Act of 1978, Pub. L. 95–600, November 6,            public agencies with their consent,
1978 (92 Stat. 2810). Section 163 author-           with or without reimbursement; and
izes the Secretary of the Treasury,                    (5) To prescribe rules and regulations
through the Internal Revenue Service,               necessary to carry out the provisions
to enter into agreements with private               of the section.
or public non-profit agencies or organi-               (d) With regard to the employment
zations for the purpose of providing                status of volunteers, section 163 also
training and technical assistance to                provides that service as a volunteer in
prepare volunteers to provide tax coun-             any program carried out under this
seling assistance for elderly individ-              section shall not be considered service
uals, age 60 and over, in the prepara-              as an employee of the United States.
tion of their Federal income tax re-                Volunteers under such a program shall
turns.                                              not be subject to the provisions of law
   (b) Section 163 provides that the Sec-           relating to Federal employment, ex-
retary may provide:                                 cept that the provisions relating to the
   (1) Preferential access to Internal              illegal disclosure of income or other in-
Revenue Service taxpayer service rep-               formation punishable under section
resentatives for the purpose of making              1905 of Title 18, United States Code,
available technical information needed              shall apply to volunteers as if they
during the course of the volunteers’                were employees of the United States.
work;
   (2) Publicity for making elderly per-            § 601.802   Cooperative agreements.
sons aware of the availability of volun-
teer taxpayer return preparation as-                  (a) General. Tax Counseling for the
sistance programs under this section;               Elderly programs will be administered
and                                                 by sponsor organizations under cooper-
   (3) Technical materials and publica-             ative agreements with the Internal
tions to be used by such volunteers.                Revenue Service. Use of cooperative
   (c) In carrying out responsibilities             agreements is in accordance with the
under section 163, the Secretary,                   Federal Grant and Cooperative Agree-
through the Internal Revenue Service                ment Act of 1977, Pub. L. 95–224, Feb-
is also authorized:                                 ruary 3, 1978 (92 Stat. 3, 41 U.S.C. 501–
   (1) To provide assistance to organiza-           509). Cooperative agreements will be le-
tions which demonstrate, to the satis-              gally binding agreements in document
faction of the Secretary, that their vol-           form.
unteers are adequately trained and                    (b) Nature and contents of cooperative
competent to render effective tax coun-             agreements. Each cooperative agree-
seling to the elderly in the preparation            ment will provide for implementation
of Federal income tax returns;                      of the program in specified geographic
   (2) To provide for the training of such          areas. Cooperative agreements will set
volunteers, and to assist in such train-            forth:
ing, to ensure that such volunteers are               (1) The functions and duties to be
qualified to provide tax counseling as-             performed by the Internal Revenue

                                                142
Internal Revenue Service, Treasury                                          § 601.803

Service and the functions and duties to      Internal Revenue Service and will not
be performed by the program sponsor,         be subject to appeal.
  (2) The maximum amount of the                (f) Renegotiation, suspension, termi-
award available to the program spon-         nation and modification. (1) Cooperative
sor,                                         agreements will be subject to renegoti-
  (3) The services to be provided for        ation (including the maximum amount
each geographical area, and                  of the award available to a sponsor),
  (4) Other requirements specified in        suspension, or termination if perform-
the application.                             ance reports required by the coopera-
  (c) Entry into cooperative agreements.     tive agreement and/or other evalua-
The Commissioner of Internal Revenue,        tions by or audits by the Internal Rev-
the Director, Taxpayer Service Divi-         enue Service or others indicate that
sion, or any other individual des-           planned performance goals or other
ignated by the Commissioner may              provisions of the cooperative agree-
enter into a cooperative agreement for       ment, the regulations, or Section 163 of
the Internal Revenue Service.                the Revenue Act of 1978 are not being
  (d) Competitive award of cooperative       satisfactorily met. The necessity for
agreements. Cooperative agreements           renegotiation, suspension, or termi-
will generally be entered into based         nation, will be determined solely by
upon competition among eligible appli-       the Internal Revenue Service and will
cants.                                       not be subject to appeal.
  (1) To be eligible to enter into a coop-     (2) Cooperative agreements may be
erative agreement, an organization           modified in writing by mutual agree-
must be a private or public non-profit       ment between the Internal Revenue
agency or organization with experience       Service and the program sponsor at
in coordinating volunteer programs.
                                             any time. Modifications will be based
Federal, state, and local governmental
                                             upon factors such as an inability to
agencies and organizations will not be
eligible to become program sponsors.         utilize all funds available under a coop-
                                             erative agreement, the availability of
  (2) Eligible applicants will be se-
lected to enter into cooperative agree-      additional funds and an ability to ef-
ments based on an evaluation by the          fectively utilize additional funds, and
Internal Revenue Service of material         interference of some provisions with
provided in their applications. The          the efficient operation of the program.
Service will set forth the evaluative          (g) Negotiation. If the proposed pro-
criteria in the application instructions.    gram of an eligible applicant does not
  (3) Determinations as to the eligi-        warrant award of an agreement, the In-
bility and selection of agencies and or-     ternal Revenue Service may negotiate
ganizations to enter into cooperative        with the applicant to bring the applica-
agreements will be made solely by the        tion up to a standard that will be ade-
Internal Revenue Service and will not        quate for award. If more than one inad-
be subject to appeal.                        equate application has been received
  (e) Noncompetitive award of cooperative    for the geographic area involved, nego-
agreements. If appropriations to imple-      tiation to bring all such applications
ment the Tax Counseling for the Elder-       up to a standard will be conducted with
ly program are received at a time close      all such applicants unless time does
to when tax return preparation assist-       not permit negotiations with all.
ance must be provided or when other
factors exist which make the use of          § 601.803 Program operations and re-
competition to select agencies and or-           quirements.
ganizations to enter into cooperative          (a) Objective. The objective of the Tax
agreements impracticable, cooperative        Counseling for the Elderly program is
agreements will be entered into with-        to provide free assistance in the prepa-
out competition with eligible agencies
                                             ration of Federal income tax returns to
and organizations selected by the In-
                                             elderly taxpayers age 60 and over, by
ternal Revenue Service. Determination
of when the use of competition is im-        providing training, technical and ad-
practicable will be made solely by the       ministrative support to volunteers

                                         143
§ 601.804                                               26 CFR Ch. I (4–1–99 Edition)

under the direction of non-profit agen-      assistance in the preparation of Fed-
cies and organizations that have coop-       eral income tax returns.
erative agreements with the Internal
Revenue Service.                             § 601.804 Reimbursements.
  (b) Period of program operations. Most        (a) General. When provided for in co-
tax return preparation assistance will       operative agreements, the Internal
be provided to elderly taxpayers during      Revenue Service will provide amounts
the period for filing Federal income tax     to program sponsors for reimbursement
returns, from January 1 to April 15          to     volunteers    for   transportation,
each year. However, the program ac-          meals, and other expenses incurred in
tivities required to ensure elderly tax-     training or providing tax return assist-
payers efficient and quality tax assist-     ance and to program sponsors for reim-
ance will normally be conducted year         bursement of overhead expenses. Coop-
round. Program operations will gen-          erative agreements will establish the
erally be divided into the following         items for which reimbursements will
segments each year: October—recruit          be allowed and the method of reim-
volunteers; November and December—           bursement, e.g., stipend versus actual
set training and testing schedules for       expenses for meals, as well as devel-
volunteers, identify assistance sites,       oping necessary procedures, forms, and
complete publicity plans for sites; De-      accounting and financial control sys-
cember and January—train and test            tems.
volunteers, set volunteer assistance            (b) Direct, reasonable, and prudent ex-
schedules; January through May—pro-          penses. Reimbursements will be allowed
vide tax assistance, conduct publicity       only for direct, reasonable, and prudent
for sites; May and June—prepare final        expenses incurred as a part of a volun-
reports and evaluate program; July and       teer’s service or as a part of the pro-
August—prepare for next year’s pro-          gram sponsor’s overhead.
gram.                                           (c) Limitation. Total reimbursements
  (c) Assistance requirements. All tax re-   provided to a program sponsor shall
turn preparation assistance provided         not exceed the total amount specified
under Tax Counseling for the Elderly         in the cooperative agreement. The In-
programs must be provided free of            ternal Revenue Service shall not be lia-
charge to taxpayers and must be pro-         ble for additional amounts to program
vided only to elderly individuals. An        sponsors, volunteers, or anyone else.
elderly individual is an individual age         (d) Availability of appropriated funds.
60 or over at the close of the individ-      Expense reimbursements and other as-
ual’s taxable year with respect to           sistance to be provided by the Internal
which tax return preparation assist-         Revenue Service under cooperative
ance is to be provided. Where a joint        agreements are contingent upon the
return is involved, assistance may be        availability of appropriated funds for
provided where only one spouse satis-        the Tax Counseling for the Elderly pro-
fies the 60 year age requirement.            gram.
  (d) Training and testing of volunteers.
Volunteers will normally be provided         § 601.805 Miscellaneous administrative
training and will normally be required            provisions.
to pass tests designed to measure their         (a) Responsibilities and relationship of
understanding of Federal tax subjects        Internal Revenue and program sponsor.
on which they will provide tax return        Substantial involvement is anticipated
assistance. Volunteers who do not re-        between the Internal Revenue Service
ceive a satisfactory score will not be       and the program sponsors in con-
eligible to participate in the program.      ducting this program. Specific respon-
  (e) Confidentiality of tax information.    sibilities and obligations of the Inter-
Program sponsors must obtain written         nal Revenue Service and the program
assurance from all volunteers and all        sponsors will be set forth in each coop-
other individuals involved in the pro-       erative agreement.
gram, to respect the confidentiality of         (b) Administrative requirements set
income and financial information             forth in OMB and Treasury Circulars. (1)
known as a result of preparation of a        The basic administrative requirements
return or of providing tax counseling        applicable to individual cooperative

                                         144
Internal Revenue Service, Treasury                                                                                        § 602.101

agreements are contained in Office of           tions are strongly encouraged to con-
Management and Budget Circular No.              tact the Internal Revenue Service at
A–110, Grants and Agreements with In-           the address provided in paragraph (b)
stitutions of Higher Education, Hos-            (2) of this section.
pitals and Other Nonprofit Organiza-              (2) A solicitation of an application is
tions (41 FR 32016). All applicable pro-        not an assurance or commitment that
visions of this circular and any exist-         the Internal Revenue Service will enter
ing and further supplements and revi-           into a cooperative agreement. The In-
sions are incorporated into these regu-         ternal Revenue Service will not pay
lations and into all cooperative agree-         any expenses or other costs incurred by
ments entered into between the Inter-           the applicant in considering, preparing
nal Revenue Service and program spon-           or submitting an application.
sors.                                             (b) Application. (1) In the application
  (2) Additional operating procedures           documents, the Commissioner or the
and instructions may be developed by            Commissioner’s delegate will specify
the Internal Revenue Service to direct          program requirements which the appli-
recipient organizations in carrying out         cant must meet.
the provisions of this subpart, such as           (2) Eligible organizations interested
instructions for using letters of credit.       in participating in the Internal Rev-
Any such operating procedures or in-            enue Service Tax Counseling for the
structions will be incorporated into            Elderly program should request an ap-
each cooperative agreement.                     plication from the:
  (c) Joint funding. Tax Counseling for
the Elderly programs will not be eligi-         Program Manager, Tax Counseling for the
                                                 Elderly, Taxpayer Service Division TX:T:I,
ble for joint funding. Accordingly, the          Internal Revenue Service, 1111 Constitu-
Joint Funding Simplification Act of              tion Ave., N.W., Washington, DC 20224, (202)
1974, Pub. L. 93–510, December 5, 1974 (88       566–4904.
Stat. 1604, 42 U.S.C. 4251–4261) and Of-
fice of Management and Budget Cir-              PART 602—OMB CONTROL NUM-
cular No. A–111, Jointly Funded Assist-
ance to State and Local Governments
                                                  BERS UNDER THE PAPERWORK RE-
and Nonprofit Organizations (41 FR                DUCTION ACT
32039), will not apply.
  (d) Discrimination. No program spon-          § 602.101 OMB Control numbers.
sor shall discriminate against any per-            (a) Purpose. This part collects and
son providing tax return assistance on          displays the control numbers assigned
the basis of age, sex, race, religion or        to collections of information in Inter-
national origin in conducting program           nal Revenue Service regulations by the
operations. No program sponsor shall            Office of Management and Budget
discriminate against any person in pro-         (OMB) under the Paperwork Reduction
viding such assistance on the basis of          Act of 1980. The Internal Revenue Serv-
sex, race, religion or national origin.         ice intends that this part comply with
[44 FR 72113, Dec. 13, 1979, as amended at 49
                                                the requirements of §§ 1320.7(f), 1320.12,
FR 36500, Sept. 18, 1984]                       1320.13, and 1320.14 of 5 CFR part 1320
                                                (OMB regulations implementing the
§ 601.806 Solicitation of applications.         Paperwork Reduction Act), for the dis-
   (a) Solicitation. The Commissioner of        play of control numbers assigned by
Internal Revenue or the Commis-                 OMB to collections of information in
sioner’s delegate may, at any time, so-         Internal Revenue Service regulations.
licit eligible agencies and organiza-           This part does not display control
tions to submit applications. Gen-              numbers assigned by the Office of Man-
erally, applications will be solicited          agement and Budget to collections of
and accepted in June and July of each           information of the Bureau of Alcohol,
year. Deadlines for submitting applica-         Tobacco, and Firearms.
tions and the schedule for selecting               (b) Display.
program sponsors will be provided with                                                                                      Current
                                                  CFR part or section where identified and de-
application documents.                                                                                                     OMB control
                                                                    scribed                                                   No.
   (1) Before preparing and submitting
an unsolicited application, organiza-           1.23–5 ................................................................     1545–0074


                                            145
§ 602.101                                                                                                           26 CFR Ch. I (4–1–99 Edition)

                                                                               Current                                                                                 Current
  CFR part or section where identified and de-                                                CFR part or section where identified and de-
                                                                              OMB control                                                                             OMB control
                    scribed                                                                                     scribed
                                                                                 No.                                                                                     No.

1.25–1T ..............................................................         1545–0922    1.50B–4 ..............................................................     1545–0895
                                                                               1545–0930    1.50B–5 ..............................................................     1545–0895
1.25–2T ..............................................................         1545–0922    1.51–1 ................................................................    1545–0219
                                                                               1545–0930                                                                               1545–0241
1.25–3T ..............................................................         1545–0922                                                                               1545–0244
                                                                               1545–0930                                                                               1545–0797
1.25–4T ..............................................................         1545–0922    1.52–2 ................................................................    1545–0219
1.25–5T ..............................................................         1545–0922    1.52–3 ................................................................    1545–0219
1.25–6T ..............................................................         1545–0922    1.56–1 ................................................................    1545–0123
1.25–7T ..............................................................         1545–0922    1.56(g)–1 ............................................................     1545–1233
1.25–8T ..............................................................         1545–0922    1.56A–1 ..............................................................     1545–0227
1.28–1 ................................................................        1545–0619    1.56A–2 ..............................................................     1545–0227
1.31–2 ................................................................        1545–0074    1.56A–3 ..............................................................     1545–0227
1.32–2 ................................................................        1545–0074    1.56A–4 ..............................................................     1545–0227
1.32–3T ..............................................................         1545–1575    1.56A–5 ..............................................................     1545–0227
1.37–1 ................................................................        1545–0074    1.57–5 ................................................................    1545–0227
1.37–3 ................................................................        1545–0074    1.58–1 ................................................................    1545–0175
1.41–2 ................................................................        1545–0619    1.58–9(c)(5)(iii)(B) ..............................................        1545–1093
1.41–3 ................................................................        1545–0619    1.58–9(e)(3) .......................................................       1545–1093
1.41–4A ..............................................................         1545–0074    1.61–2 ................................................................    1545–0771
1.41–4 (b) and (c) ..............................................              1545–0074    1.61–2T ..............................................................     1545–0771
1.41–8(d) ............................................................         1545–0732    1.61–4 ................................................................    1545–0187
1.41–9 ................................................................        1545–0619    1.61–15 ..............................................................     1545–0074
1.42–1T ..............................................................         1545–0984    1.62–2 ................................................................    1545–1148
                                                                               1545–0988    1.63–1 ................................................................    1545–0074
1.42–2 ................................................................        1545–1005    1.67–2T ..............................................................     1545–0110
1.42–5 ................................................................        1545–1291    1.67–3T ..............................................................     1545–0118
1.42–6 ................................................................        1545–1102    1.67–3 ................................................................    1545–1018
1.42–8 ................................................................        1545–1102    1.71–1T ..............................................................     1545–0074
1.42–10 ..............................................................         1545–1102    1.72–4 ................................................................    1545–0074
1.42–13 ..............................................................         1545–1357    1.72–6 ................................................................    1545–0074
1.42–14 ..............................................................         1545–1423    1.72–9 ................................................................    1545–0074
1.43–3(a)(3) .......................................................           1545–1292    1.72–17 ..............................................................     1545–0074
1.43–3(b)(3) .......................................................           1545–1292    1.72–17A ............................................................      1545–0074
1.44A–1 ..............................................................         1545–0068    1.72–18 ..............................................................     1545–0074
1.44A–3 ..............................................................         1545–0074    1.74–1 ................................................................    1545–1100
1.44B–1 ..............................................................         1545–0219    1.79–2 ................................................................    1545–0074
1.458–1 ..............................................................         1545–0879    1.79–3 ................................................................    1545–0074
1.458–2 ..............................................................         1545–0152    1.83–2 ................................................................    1545–0074
1.46–1 ................................................................        1545–0123    1.83–5 ................................................................    1545–0074
                                                                               1545–0155    1.83–6 ................................................................    1545–1448
1.46–3 ................................................................        1545–0155    1.103–10 ............................................................      1545–0123
1.46–4 ................................................................        1545–0155                                                                               1545–0940
1.46–5 ................................................................        1545–0155    1.103–15AT .......................................................         1545–0720
1.46–6 ................................................................        1545–0155    1.103–18 ............................................................      1545–1226
1.46–8 ................................................................        1545–0155    1.103(n)–2T .......................................................        1545–0874
1.46–9 ................................................................        1545–0155    1.103(n)–4T .......................................................        1545–0874
1.46–10 ..............................................................         1545–0118    1.103A–2 ............................................................      1545–0720
1.46–11 ..............................................................         1545–0155    1.105–4 ..............................................................     1545–0074
1.47–1 ................................................................        1545–0166    1.105–5 ..............................................................     1545–0074
                                                                               1545–0155    1.105–6 ..............................................................     1545–0074
1.47–3 ................................................................        1545–0166    1.108–4 ..............................................................     1545–1539
                                                                               1545–0155    1.108–5 ..............................................................     1545–1421
1.47–4     ................................................................    1545–0123    1.117–5 ..............................................................     1545–0869
1.47–5     ................................................................    1545–0092    1.119–1 ..............................................................     1545–0067
1.47–6     ................................................................    1545–0099    1.120–3 ..............................................................     1545–0057
1.48–3     ................................................................    1545–0155    1.121–1 ..............................................................     1545–0072
1.48–4     ................................................................    1545–0808    1.121–2 ..............................................................     1545–0072
                                                                               1545–0155    1.121–3 ..............................................................     1545–0072
1.48–5 ................................................................        1545–0155    1.121–4 ..............................................................     1545–0072
1.48–6 ................................................................        1545–0155                                                                               1545–0091
1.48–12 ..............................................................         1545–0155    1.121–5 ..............................................................     1545–0072
1.50A–1 ..............................................................         1545–0895    1.127–2 ..............................................................     1545–0768
1.50A–2 ..............................................................         1545–0895    1.132–1T ............................................................      1545–0771
1.50A–3 ..............................................................         1545–0895    1.132–2 ..............................................................     1545–0771
1.50A–4 ..............................................................         1545–0895    1.132–2T ............................................................      1545–0771
1.50A–5 ..............................................................         1545–0895    1.132–5 ..............................................................     1545–0771
1.50A–6 ..............................................................         1545–0895    1.132–5T ............................................................      1545–0771
1.50A–7 ..............................................................         1545–0895                                                                               1545–1098
1.50B–1 ..............................................................         1545–0895    1.141–1 ..............................................................     1545–1451
1.50B–2 ..............................................................         1545–0895    1.141–12 ............................................................      1545–1451
1.50B–3 ..............................................................         1545–0895    1.142–2 ..............................................................     1545–1451


                                                                                        146
Internal Revenue Service, Treasury                                                                                                                              § 602.101

                                                                          Current                                                                                 Current
  CFR part or section where identified and de-                                           CFR part or section where identified and de-
                                                                         OMB control                                                                             OMB control
                    scribed                                                                                scribed
                                                                            No.                                                                                     No.

1.148–0 ..............................................................    1545–1098    1.167(a)–12 ........................................................      1545–0172
1.148–1 ..............................................................    1545–1098    1.167(d)–1 ..........................................................     1545–0172
1.148–2 ..............................................................    1545–1098    1.167(e)–1 ..........................................................     1545–0172
                                                                          1545–1347    1.167(f)–11 .........................................................     1545–0172
1.148–3 ..............................................................    1545–1098    1.167(l)–1 ...........................................................    1545–0172
                                                                          1545–1347    1.168(d)–1 ..........................................................     1545–1146
1.148–4 ..............................................................    1545–1098    1.168(f)(8)–1T ....................................................       1545–0923
                                                                          1545–1347    1.168(i)–1 ...........................................................    1545–1331
1.148–5 ..............................................................    1545–1098    1.168–5 ..............................................................    1545–0172
                                                                          1545–1490    1.169–4 ..............................................................    1545–0172
1.148–6 ..............................................................    1545–1098    1.170–1 ..............................................................    1545–0074
                                                                          1545–1451    1.170–2 ..............................................................    1545–0074
1.148–7 ..............................................................    1545–1098    1.170–3 ..............................................................    1545–0123
1.148–7 ..............................................................    1545–1347    1.170A–1 ............................................................     1545–0074
1.148–8 ..............................................................    1545–1098    1.170A–2 ............................................................     1545–0074
1.148–11 ............................................................     1545–1098    1.170A–4(A)(b) ..................................................         1545–0123
1.148–11 ............................................................     1545–1347    1.170A–8 ............................................................     1545–0074
1.149(e)–1 ..........................................................     1545–0720    1.170A–9 ............................................................     1545–0052
1.150–1 ..............................................................    1545–1347                                                                              1545–0074
1.151–1 ..............................................................    1545–0074    1.170A–11 ..........................................................      1545–0123
1.152–3 ..............................................................    1545–0071                                                                              1545–0074
1.152–4 ..............................................................    1545–0074    1.170A–12 ..........................................................      1545–0020
1.152–4T ............................................................     1545–0074                                                                              1545–0074
1.162–1 ..............................................................    1545–0139    1.170A–13 ..........................................................      1545–0074
1.162–2 ..............................................................    1545–0139                                                                              1545–0754
1.162–3 ..............................................................    1545–0139                                                                              1545–0908
1.162–4 ..............................................................    1545–0139                                                                              1545–1431
1.162–5 ..............................................................    1545–0139    1.170A–13(f) ......................................................       1545–1464
1.162–6 ..............................................................    1545–0139    1.170A–14 ..........................................................      1545–0763
1.162–7 ..............................................................    1545–0139    1.171–4 ..............................................................    1545–1491
1.162–8 ..............................................................    1545–0139    1.171–5 ..............................................................    1545–1491
1.162–9 ..............................................................    1545–0139    1.172–1 ..............................................................    1545–0172
1.162–10 ............................................................     1545–0139    1.172–13 ............................................................     1545–0863
1.162–11 ............................................................     1545–0139    1.173–1 ..............................................................    1545–0172
1.162–12 ............................................................     1545–0139    1.174–3 ..............................................................    1545–0152
1.162–13 ............................................................     1545–0139    1.174–4 ..............................................................    1545–0152
1.162–14 ............................................................     1545–0139    1.175–3 ..............................................................    1545–0187
1.162–15 ............................................................     1545–0139    1.175–6 ..............................................................    1545–0152
1.162–16 ............................................................     1545–0139    1.177–1 ..............................................................    1545–0172
1.162–17 ............................................................     1545–0139    1.179–2 ..............................................................    1545–1201
1.162–18 ............................................................     1545–0139    1.179–3 ..............................................................    1545–1201
1.162–19 ............................................................     1545–0139    1.179–5 ..............................................................    1545–0172
1.162–20 ............................................................     1545–0139    1.180–2 ..............................................................    1545–0074
1.162–27 ............................................................     1545–1466    1.182–6 ..............................................................    1545–0074
1.163–5 ..............................................................    1545–0786    1.183–1 ..............................................................    1545–0195
                                                                          1545–1132    1.183–2 ..............................................................    1545–0195
1.163–8T ............................................................     1545–0995    1.183–3 ..............................................................    1545–0195
1.163–10T ..........................................................      1545–0074    1.183–4 ..............................................................    1545–0195
1.163–13 ............................................................     1545–1491    1.190–3 ..............................................................    1545–0074
1.163(d)–1 ..........................................................     1545–1421    1.194–2 ..............................................................    1545–0735
1.165–1 ..............................................................    1545–0177    1.194–4 ..............................................................    1545–0735
1.165–2 ..............................................................    1545–0177    1.195–1 ..............................................................    1545–1582.
1.165–3 ..............................................................    1545–0177    1.197–1T ............................................................     1545–1425
1.165–4 ..............................................................    1545–0177    1.213–1 ..............................................................    1545–0074
1.165–5 ..............................................................    1545–0177    1.215–1T ............................................................     1545–0074
1.165–6 ..............................................................    1545–0177    1.217–2 ..............................................................    1545–0182
1.165–7 ..............................................................    1545–0177    1.243–3 ..............................................................    1545–0123
1.165–8 ..............................................................    1545–0177    1.243–4 ..............................................................    1545–0123
1.165–9 ..............................................................    1545–0177    1.243–5 ..............................................................    1545–0123
1.165–10 ............................................................     1545–0177    1.248–1 ..............................................................    1545–0172
1.165–11 ............................................................     1545–0074    1.261–1 ..............................................................    1545–1041
                                                                          1545–0177    1.263(e)–1 ..........................................................     1545–0123
                                                                          1545–0786    1.263A–1 ............................................................     1545–0987
1.165–12 ............................................................     1545–0786    1.263A–1T .........................................................       1545–0187
1.166–1 ..............................................................    1545–0123    1.263A–2 ............................................................     1545–0987
1.166–2 ..............................................................    1545–1254    1.263A–3 ............................................................     1545–0987
1.166–4 ..............................................................    1545–0123                                                                              1545–0987
1.166–10 ............................................................     1545–0123    1.263A–8(b)(2)(iii) ..............................................        1545–1265
1.167(a)–5T .......................................................       1545–1021    1.263A–9(d)(1) ...................................................        1545–1265
1.167(a)–7 ..........................................................     1545–0172    1.263A–9(f)(1)(ii) ................................................       1545–1265
1.167(a)–11 ........................................................      1545–0152    1.263A–9(f)(2)(iv) ...............................................        1545–1265
                                                                          1545–0172    1.263A–9(g)(2)(iv)(C) .........................................           1545–1265


                                                                                   147
§ 602.101                                                                                                      26 CFR Ch. I (4–1–99 Edition)

                                                                          Current                                                                                Current
  CFR part or section where identified and de-                                           CFR part or section where identified and de-
                                                                         OMB control                                                                            OMB control
                    scribed                                                                                scribed
                                                                            No.                                                                                    No.

1.263A–9(g)(3)(iv) ..............................................         1545–1265    1.382–2 ..............................................................    1545–0123
1.265–1 ..............................................................    1545–0074    1.382–2T ............................................................     1545–0123
1.265–2 ..............................................................    1545–0123    1.382–3 ..............................................................    1545–1281
1.266–1 ..............................................................    1545–0123                                                                              1545–1345
1.267(f)–1 ...........................................................    1545–0885    1.382–4 ..............................................................    1545–1120
1.268–1 ..............................................................    1545–0184    1.382–6 ..............................................................    1545–1381
1.274–1 ..............................................................    1545–0139    1.382–8T ............................................................     1545–1434
1.274–2 ..............................................................    1545–0139    1.382–9 ..............................................................    1545–1260
1.274–3 ..............................................................    1545–0139                                                                              1545–1120
1.274–4 ..............................................................    1545–0139                                                                              1545–1275
1.274–5A ............................................................     1545–0139                                                                              1545–1324
                                                                          1545–0771    1.382–91 ............................................................     1545–1260
1.274–5T ............................................................     1545–0074                                                                              1545–1324
                                                                          1545–0172    1.383–1 ..............................................................    1545–0074
                                                                          1545–0771                                                                              1545–1120
1.274–6 ..............................................................    1545–0139    1.401(a)–11 ........................................................      1545–0710
                                                                          1545–0771    1.401(a)–20 ........................................................      1545–0928
1.274–6T ............................................................     1545–0074    1.401(a)–31 ........................................................      1545–1341
                                                                          1545–0771    1.401(a)–50 ........................................................      1545–0710
1.274–7 ..............................................................    1545–0139    1.401(a)(31)–1 ...................................................        1545–1341
1.274–8 ..............................................................    1545–0139    1.401(b)–1 ..........................................................     1545–0197
1.279–6 ..............................................................    1545–0123    1.401(f)–1 ...........................................................    1545–0710
1.280C–4 ...........................................................      1545–1155    1.401(k)–1 ..........................................................     1545–1039
1.280F–3T ..........................................................      1545–0074                                                                              1545–1069
1.281–4 ..............................................................    1545–0123    1.401–1 ..............................................................    1545–0020
1.302–4 ..............................................................    1545–0074                                                                              1545–0197
1.305–3 ..............................................................    1545–0123                                                                              1545–0200
1.305–5 ..............................................................    1545–1438                                                                              1545–0534
1.307–2 ..............................................................    1545–0074                                                                              1545–0710
1.312–15 ............................................................     1545–0172    1.401–12(n) ........................................................      1545–0806
1.316–1 ..............................................................    1545–0123    1.401–14 ............................................................     1545–0710
1.331–1 ..............................................................    1545–0074    1.402(c)–2 ..........................................................     1545–1341
1.332–4 ..............................................................    1545–0123    1.402(f)–1 ...........................................................    1545–1341
1.332–6 ..............................................................    1545–0123    1.403(b)–1 ..........................................................     1545–0710
1.337(d)–1 ..........................................................     1545–1160    1.403(b)–2 ..........................................................     1545–1341
1.337(d)–2 ..........................................................     1545–1160    1.404(a)–4 ..........................................................     1545–0710
1.337(d)–4 ..........................................................     1545–1633    1.404(a)–12 ........................................................      1545–0710
1.338–1 ..............................................................    1545–1295    1.404A–2 ............................................................     1545–0123
1.338(b)–1 ..........................................................     1545–1295    1.404A–6 ............................................................     1545–0123
1.338(h)(10)–1 ...................................................        1545–1295    1.408–2 ..............................................................    1545–0390
1.341–7 ..............................................................    1545–0123    1.408–5 ..............................................................    1545–0747
1.351–3 ..............................................................    1545–0074    1.408–6 ..............................................................    1545–0203
1.355–5 ..............................................................    1545–0123                                                                              1545–0390
1.362–2 ..............................................................    1545–0123    1.408–7 ..............................................................    1545–0119
1.367(a)–1T .......................................................       1545–0026    1.408A–2 ............................................................     1545–1616
1.367(a)–2T .......................................................       1545–0026    1.408A–4 ............................................................     1545–1616
1.367(a)–3 ..........................................................     1545–0026    1.408A–5 ............................................................     1545–1616
                                                                          1545–1478    1.408A–7 ............................................................     1545–1616
1.367(a)–6T .......................................................       1545–0026    1.410(a)–2 ..........................................................     1545–0710
1.367(a)–8 ..........................................................     1545–1271    1.410(d)–1 ..........................................................     1545–0710
1.367(d)–1T .......................................................       1545–0026    1.411(a)–11 ........................................................      1545–1471
1.367(e)–1T .......................................................       1545–1487    1.411(d)–4 ..........................................................     1545–1545
1.367(e)–2T .......................................................       1545–1124    1.411(d)–6 ..........................................................     1545–1477
1.368–3 ..............................................................    1545–0123    1.412(b)–5 ..........................................................     1545–0710
1.371–1 ..............................................................    1545–0123    1.412(c)(1)–2 .....................................................       1545–0710
1.371–2 ..............................................................    1545–0123    1.412(c)(2)–1 .....................................................       1545–0710
1.374–3 ..............................................................    1545–0123    1.412(c)(3)–2 .....................................................       1545–0710
1.381(b)–1 ..........................................................     1545–0123    1.414(c)–5 ..........................................................     1545–0797
1.381(c)(4)–1 .....................................................       1545–0123    1.414(r)–1 ..........................................................     1545–1221
                                                                          1545–0152    1.415–2 ..............................................................    1545–0710
                                                                          1545–0879    1.415–6 ..............................................................    1545–0710
1.381(c)(5)–1 .....................................................       1545–0123    1.417(e)–1 ..........................................................     1545–1471
                                                                          1545–0152    1.417(e)–1T .......................................................       1545–1471
1.381(c)(6)–1 .....................................................       1545–0123    1.441–3T ............................................................     1545–0134
                                                                          1545–0152    1.442–1 ..............................................................    1545–0074
1.381(c)(8)–1 .....................................................       1545–0123                                                                              1545–0123
1.381(c)(10)–1 ...................................................        1545–0123                                                                              1545–0134
1.381(c)(11)–1(k) ...............................................         1545–0123                                                                              1545–0152
1.381(c)(13)–1 ...................................................        1545–0123    1.442–2T ............................................................     1545–0134
1.381(c)(17)–1 ...................................................        1545–0045    1.442–3T ............................................................     1545–0134
1.381(c)(25)–1 ...................................................        1545–0045    1.443–1 ..............................................................    1545–0123
1.382–1T ............................................................     1545–0123    1.444–3T ............................................................     1545–1036


                                                                                   148
Internal Revenue Service, Treasury                                                                                                                                        § 602.101

                                                                               Current                                                                                      Current
  CFR part or section where identified and de-                                                CFR part or section where identified and de-
                                                                              OMB control                                                                                  OMB control
                    scribed                                                                                     scribed
                                                                                 No.                                                                                          No.

1.446–1 ..............................................................         1545–0074    1.475(b)–4 ..........................................................           1545–1496
                                                                               1545–0152    1.481–4 ..............................................................          1545–0152
1.446–4(d) ..........................................................          1545–1412    1.481–5 ..............................................................          1545–0152
1.448–1(g) ..........................................................          1545–0152    1.482–1 ..............................................................          1545–1364
1.448–1(h) ..........................................................          1545–0152    1.482–4 ..............................................................          1545–1364
1.448–1(i) ...........................................................         1545–0152    1.482–7 ..............................................................          1545–1364
1.448–2T ............................................................          1545–0152    1.501(a)–1 ..........................................................           1545–0056
1.451–1 ..............................................................         1545–0091                                                                                    1545–0057
1.451–3 ..............................................................         1545–0152    1.501(c)(3)–1 .....................................................             1545–0056
                                                                               1545–0736    1.501(c)(9)–5 .....................................................             1545–0047
1.451–4      ..............................................................    1545–0123    1.501(c)(17)–3 ...................................................              1545–0047
1.451–5      ..............................................................    1545–0074    1.501(e)–1 ..........................................................           1545–0814
1.451–6      ..............................................................    1545–0074    1.503(c)–1 ..........................................................           1545–0047
1.451–7      ..............................................................    1545–0074                                                                                    1545–0052
1.453–1      ..............................................................    1545–0152    1.505(c)–1T ........................................................            1545–0916
1.453–2      ..............................................................    1545–0152    1.507–1 ..............................................................          1545–0052
1.453–8      ..............................................................    1545–0152    1.507–2 ..............................................................          1545–0052
                                                                               1545–0228    1.508–1 ..............................................................          1545–0052
1.453–10 ............................................................          1545–0152                                                                                    1545–0056
1.453A–1 ............................................................          1545–0152    1.509(a)–3       ..........................................................     1545–0047
                                                                               1545–1134    1.509(a)–5       ..........................................................     1545–0047
1.453A–2 ............................................................          1545–0152    1.509(c)–1       ..........................................................     1545–0052
                                                                               1545–1134    1.512(a)–1       ..........................................................     1545–0687
1.453A–3 ............................................................          1545–0963    1.512(a)–4       ..........................................................     1545–0047
1.454–1 ..............................................................         1545–0074                                                                                    1545–0687
1.455–2 ..............................................................         1545–0152    1.521–1 ..............................................................          1545–0051
1.455–6 ..............................................................         1545–0123                                                                                    1545–0058
1.456–2 ..............................................................         1545–0123    1.527–2      ..............................................................     1545–0129
1.456–6 ..............................................................         1545–0123    1.527–5      ..............................................................     1545–0129
1.456–7 ..............................................................         1545–0123    1.527–6      ..............................................................     1545–0129
1.458–1 ..............................................................         1545–0879    1.527–9      ..............................................................     1545–0129
1.458–2 ..............................................................         1545–0152    1.528–8      ..............................................................     1545–0127
1.460–6 ..............................................................         1545–1031    1.533–2      ..............................................................     1545–0123
                                                                               1545–1572    1.534–2      ..............................................................     1545–0123
1.461–1 ..............................................................         1545–0074    1.542–3      ..............................................................     1545–0123
1.461–2 ..............................................................         1545–0096    1.545–2      ..............................................................     1545–0123
1.461–4 ..............................................................         1545–0917    1.545–3      ..............................................................     1545–0123
1.461–5 ..............................................................         1545–0917    1.547–2      ..............................................................     1545–0045
1.463–1T ............................................................          1545–0916                                                                                    1545–0123
1.465–1T ............................................................          1545–0712    1.547–3      ..............................................................     1545–0123
1.466–1T ............................................................          1545–0152    1.551–4      ..............................................................     1545–0074
1.466–4 ..............................................................         1545–0152    1.552–3      ..............................................................     1545–0099
1.468A–3 ............................................................          1545–1269    1.552–4      ..............................................................     1545–0099
                                                                               1545–1378    1.552–5      ..............................................................     1545–0099
                                                                               1545–1511    1.556–2      ..............................................................     1545–0704
1.468A–4 ............................................................          1545–0954    1.561–1      ..............................................................     1545–0044
1.468A–7 ............................................................          1545–0954    1.561–2      ..............................................................     1545–0123
1.468A–8 ............................................................          1545–1269    1.562–3      ..............................................................     1545–0123
1.468B–1(j) ........................................................           1545–1299    1.563–2      ..............................................................     1545–0123
1.468B–2(k) .......................................................            1545–1299    1.564–1      ..............................................................     1545–0123
1.468B–2(l) ........................................................           1545–1299    1.565–1      ..............................................................     1545–0043
1.468B–3(b) .......................................................            1545–1299                                                                                    1545–0123
1.468B–3(e) .......................................................            1545–1299    1.565–2 ..............................................................          1545–0043
1.468B–5(b) .......................................................            1545–1299    1.565–3 ..............................................................          1545–0043
1.469–1 ..............................................................         1545–1008    1.565–5 ..............................................................          1545–0043
1.469–2T ............................................................          1545–0712    1.565–6 ..............................................................          1545–0043
                                                                               1545–1091    1.585–1 ..............................................................          1545–0123
1.469–4T ............................................................          1545–0985    1.585–3 ..............................................................          1545–0123
                                                                               1545–1037    1.585–8 ..............................................................          1545–1290
1.471–2 ..............................................................         1545–0123    1.586–2 ..............................................................          1545–0123
1.471–5 ..............................................................         1545–0123    1.593–1 ..............................................................          1545–0123
1.471–6 ..............................................................         1545–0123    1.593–6 ..............................................................          1545–0123
1.471–8 ..............................................................         1545–0123    1.593–6A ............................................................           1545–0123
1.471–11 ............................................................          1545–0123    1.593–7 ..............................................................          1545–0123
                                                                               1545–0152    1.595–1 ..............................................................          1545–0123
1.472–1 ..............................................................         1545–0042    1.597–2 ..............................................................          1545–1300
                                                                               1545–0152    1.597–4 ..............................................................          1545–1300
1.472–2      ..............................................................    1545–0152    1.597–6 ..............................................................          1545–1300
1.472–3      ..............................................................    1545–0042    1.597–7 ..............................................................          1545–1300
1.472–5      ..............................................................    1545–0152    1.611–2 ..............................................................          1545–0099
1.472–8      ..............................................................    1545–0028    1.611–3 ..............................................................          1545–0007
                                                                               1545–0042                                                                                    1545–0099


                                                                                        149
§ 602.101                                                                                                           26 CFR Ch. I (4–1–99 Edition)

                                                                               Current                                                                                     Current
  CFR part or section where identified and de-                                                CFR part or section where identified and de-
                                                                              OMB control                                                                                 OMB control
                    scribed                                                                                     scribed
                                                                                 No.                                                                                         No.

1.612–4 ..............................................................         1545–0074    1.812–2 ..............................................................         1545–0128
1.612–5 ..............................................................         1545–0099    1.815–6 ..............................................................         1545–0128
1.613–3 ..............................................................         1545–0099    1.818–4 ..............................................................         1545–0128
1.613–4 ..............................................................         1545–0099    1.818–5 ..............................................................         1545–0128
1.613–6 ..............................................................         1545–0099    1.818–8 ..............................................................         1545–0128
1.613–7 ..............................................................         1545–0099    1.819–2 ..............................................................         1545–0128
1.613A–3 ............................................................          1545–0919    1.821–1 ..............................................................         1545–1027
1.613A–3(e) .......................................................            1545–1251    1.821–3 ..............................................................         1545–1027
1.613A–3(l) ........................................................           1545–0919    1.821–4 ..............................................................         1545–1027
1.613A–5 ............................................................          1545–0099    1.822–5 ..............................................................         1545–1027
1.613A–6 ............................................................          1545–0099    1.822–6 ..............................................................         1545–1027
1.614–2 ..............................................................         1545–0099    1.822–8 ..............................................................         1545–1027
1.614–3 ..............................................................         1545–0099    1.822–9 ..............................................................         1545–1027
1.614–5 ..............................................................         1545–0099    1.823–2 ..............................................................         1545–1027
1.614–6 ..............................................................         1545–0099    1.823–5 ..............................................................         1545–1027
1.614–8 ..............................................................         1545–0099    1.823–6 ..............................................................         1545–1027
1.617–1 ..............................................................         1545–0099    1.825–1 ..............................................................         1545–1027
1.617–3 ..............................................................         1545–0099    1.826–1 ..............................................................         1545–1027
1.617–4 ..............................................................         1545–0099    1.826–2 ..............................................................         1545–1027
1.631–1 ..............................................................         1545–0007    1.826–3 ..............................................................         1545–1027
1.631–2 ..............................................................         1545–0007    1.826–4 ..............................................................         1545–1027
1.641(b)–2 ..........................................................          1545–0092    1.826–6 ..............................................................         1545–1027
1.642(c)–1 ..........................................................          1545–0092    1.831–3 ..............................................................         1545–0123
1.642(c)–2 ..........................................................          1545–0092    1.831–4 ..............................................................         1545–0123
1.642(c)–5 ..........................................................          1545–0074    1.832–4 ..............................................................         1545–1227
1.642(c)–6 ..........................................................          1545–0020    1.832–5 ..............................................................         1545–0123
                                                                               1545–0074    1.848–2(g)(8) .....................................................            1545–1287
                                                                               1545–0092    1.848–2(h)(3) .....................................................            1545–1287
1.642(g)–1 ..........................................................          1545–0092    1.848–2(i)(4) ......................................................           1545–1287
1.642(i)–1 ...........................................................         1545–0092    1.851–2 ..............................................................         1545–1010
1.663(b)–2 ..........................................................          1545–0092    1.851–4 ..............................................................         1545–0123
1.664–1 ..............................................................         1545–0196    1.852–1 ..............................................................         1545–0123
1.664–1(a)(7) .....................................................            1545–1536    1.852–4 ..............................................................         1545–0123
1.664–2 ..............................................................         1545–0196                                                                                   1545–0145
1.664–3 ..............................................................         1545–0196    1.852–6 ..............................................................         1545–0123
1.664–4 ..............................................................         1545–0020                                                                                   1545–0144
                                                                               1545–0196    1.852–7 ..............................................................         1545–0074
1.665(a)–0A through                                                                         1.852–9 ..............................................................         1545–0074
1.665(g)–2A .......................................................            1545–0192                                                                                   1545–0123
1.666(d)–1A .......................................................            1545–0092                                                                                   1545–0144
1.671–4 ..............................................................         1545–1442                                                                                   1545–0145
1.701–1 ..............................................................         1545–0099    1.852–11 ............................................................          1545–1094
1.702–1 ..............................................................         1545–0074    1.853–3 ..............................................................         1545–0123
1.703–1 ..............................................................         1545–0099    1.853–4 ..............................................................         1545–0123
1.704–2 ..............................................................         1545–1090    1.854–2 ..............................................................         1545–0123
1.706–1 ..............................................................         1545–0099    1.855–1 ..............................................................         1545–0123
                                                                               1545–0074    1.856–2 ..............................................................         1545–0123
                                                                               1545–0134                                                                                   1545–1004
1.706–1T ............................................................          1545–0099    1.856–6      ..............................................................    1545–0123
1.707–3(c)(2) .....................................................            1545–1243    1.856–7      ..............................................................    1545–0123
1.707–5(a)(7)(ii) .................................................            1545–1243    1.856–8      ..............................................................    1545–0123
1.707–6(c) ..........................................................          1545–1243    1.857–8      ..............................................................    1545–0123
1.707–8 ..............................................................         1545–1243    1.857–9      ..............................................................    1545–0074
1.708–1 ..............................................................         1545–0099    1.858–1      ..............................................................    1545–0123
1.732–1 ..............................................................         1545–0099    1.860–2      ..............................................................    1545–0045
1.736–1 ..............................................................         1545–0074    1.860–4      ..............................................................    1545–0045
1.743–1 ..............................................................         1545–0074                                                                                   1545–1054
1.751–1 ..............................................................         1545–0074                                                                                   1545–1057
                                                                               1545–0099    1.860E–2(a)(5) ...................................................             1545–1276
                                                                               1545–0941    1.860E–2(a)(7) ...................................................             1545–1276
1.752–5 ..............................................................         1545–1090    1.860E–2(b)(2) ...................................................             1545–1276
1.754–1 ..............................................................         1545–0099    1.861–2 ..............................................................         1545–0089
1.755–1 ..............................................................         1545–0099    1.861–3 ..............................................................         1545–0089
1.755–2T ............................................................          1545–1021    1.861–8 ..............................................................         1545–0126
1.761–2 ..............................................................         1545–1338    1.861–8(e)(6) and (g) ........................................                 1545–1224
1.801–1 ..............................................................         1545–0123    1.861–9T ............................................................          1545–0121
                                                                               1545–0128                                                                                   1545–1072
1.801–3      ..............................................................    1545–0123    1.861–18 ............................................................          1545–1594
1.801–5      ..............................................................    1545–0128    1.863–1 ..............................................................         1545–1476
1.801–8      ..............................................................    1545–0128    1.863–3 ..............................................................         1545–1476
1.804–4      ..............................................................    1545–0128                                                                                   1545–1556
1.811–2      ..............................................................    1545–0128    1.863–3A ............................................................          1545–0126


                                                                                        150
Internal Revenue Service, Treasury                                                                                                                                   § 602.101

                                                                          Current                                                                                      Current
  CFR part or section where identified and de-                                           CFR part or section where identified and de-
                                                                         OMB control                                                                                  OMB control
                    scribed                                                                                scribed
                                                                            No.                                                                                          No.

1.863–4 ..............................................................    1545–0126                                                                                    1545–0939
1.863–7 ..............................................................    1545–0132    1.921–2 ..............................................................          1545–0884
1.864–4 ..............................................................    1545–0126    1.921–3T ............................................................           1545–0935
1.871–1 ..............................................................    1545–0096    1.923–1T ............................................................           1545–0935
1.871–6 ..............................................................    1545–0795    1.924(a)–1T .......................................................             1545–0935
1.871–7 ..............................................................    1545–0089    1.925(a)–1T .......................................................             1545–0935
1.871–10 ............................................................     1545–0089    1.925(b)–1T .......................................................             1545–0935
                                                                          1545–0165    1.926(a)–1T .......................................................             1545–0935
1.874–1 ..............................................................    1545–0089    1.927(a)–1T .......................................................             1545–0935
1.881–4 ..............................................................    1545–1440    1.927(b)–1T .......................................................             1545–0935
1.882–4 ..............................................................    1545–0126    1.927(d)–1 ..........................................................           1545–0884
1.884–0 ..............................................................    1545–1070    1.927(d)–2T .......................................................             1545–0935
1.884–1 ..............................................................    1545–1070    1.927(e)–1T .......................................................             1545–0935
1.884–2 ..............................................................    1545–1070    1.927(e)–2T .......................................................             1545–0935
1.884–2T ............................................................     1545–0126    1.927(f)–1 ...........................................................          1545–0884
                                                                          1545–1070    1.931–1 ..............................................................          1545–0074
1.884–4 ..............................................................    1545–1070                                                                                    1545–0123
1.884–5 ..............................................................    1545–1070    1.934–1 ..............................................................          1545–0782
1.892–1T ............................................................     1545–1053    1.935–1 ..............................................................          1545–0074
1.892–2T ............................................................     1545–1053                                                                                    1545–0087
1.892–3T ............................................................     1545–1053                                                                                    1545–0803
1.892–4T ............................................................     1545–1053    1.936–1 ..............................................................          1545–0215
1.892–5T ............................................................     1545–1053                                                                                    1545–0217
1.892–6T ............................................................     1545–1053    1.936–4 ..............................................................          1545–0215
1.892–7T ............................................................     1545–1053    1.936–5 ..............................................................          1545–0704
1.897–2 ..............................................................    1545–0123    1.936–6 ..............................................................          1545–0215
                                                                          1545–0902    1.936–7 ..............................................................          1545–0215
1.897–3 ..............................................................    1545–0123    1.936–10(c) ........................................................            1545–1138
1.897–5T ............................................................     1545–0902    1.952–2 ..............................................................          1545–0126
1.897–6T ............................................................     1545–0902    1.953–2 ..............................................................          1545–0126
1.901–2 ..............................................................    1545–0746    1.954–1 ..............................................................          1545–1068
1.901–2A ............................................................     1545–0746    1.954–2 ..............................................................          1545–1068
1.901–3 ..............................................................    1545–0122    1.955–2 ..............................................................          1545–0123
1.902–1 ..............................................................    1545–0122    1.955–3 ..............................................................          1545–0123
                                                                          1545–1458    1.955A–2 ............................................................           1545–0755
1.904–1 ..............................................................    1545–0121    1.955A–3 ............................................................           1545–0755
                                                                          1545–0122    1.956–1 ..............................................................          1545–0704
1.904–2 ..............................................................    1545–0121    1.956–2 ..............................................................          1545–0704
                                                                          1545–0122    1.959–1 ..............................................................          1545–0704
1.904–3 ..............................................................    1545–0121    1.959–2 ..............................................................          1545–0704
1.904–4 ..............................................................    1545–0121    1.960–1 ..............................................................          1545–0122
1.904–5 ..............................................................    1545–0121    1.962–2 ..............................................................          1545–0704
1.904(f)–1 ...........................................................    1545–0121    1.962–3 ..............................................................          1545–0704
                                                                          1545–0122    1.962–4 ..............................................................          1545–0704
1.904(f)–2 ...........................................................    1545–0121    1.964–1 ..............................................................          1545–0126
1.904(f)–3 ...........................................................    1545–0121                                                                                    1545–0704
1.904(f)–4 ...........................................................    1545–0121                                                                                    1545–1072
1.904(f)–5 ...........................................................    1545–0121    1.964–3 ..............................................................          1545–0126
1.904(f)–6 ...........................................................    1545–0121    1.970–2 ..............................................................          1545–0126
1.904(f)–7 ...........................................................    1545–1127    1.985–2 ..............................................................          1545–1051
1.905–2 ..............................................................    1545–0122                                                                                    1545–1131
1.905–3T ............................................................     1545–1056    1.985–3      ..............................................................     1545–1051
1.905–4T ............................................................     1545–1056    1.988–0      ..............................................................     1545–1131
1.905–5T ............................................................     1545–1056    1.988–1      ..............................................................     1545–1131
1.911–1 ..............................................................    1545–0067    1.988–2      ..............................................................     1545–1131
                                                                          1545–0070    1.988–3      ..............................................................     1545–1131
1.911–2 ..............................................................    1545–0067    1.988–4      ..............................................................     1545–1131
                                                                          1545–0070    1.988–5      ..............................................................     1545–1131
1.911–3 ..............................................................    1545–0067    1.992–1      ..............................................................     1545–0190
                                                                          1545–0070                                                                                    1545–0938
1.911–4 ..............................................................    1545–0067    1.992–2 ..............................................................          1545–0190
                                                                          1545–0070                                                                                    1545–0884
1.911–5 ..............................................................    1545–0067                                                                                    1545–0938
                                                                          1545–0070    1.992–3 ..............................................................          1545–0190
1.911–6 ..............................................................    1545–0067                                                                                    1545–0938
                                                                          1545–0070    1.992–4 ..............................................................          1545–0190
1.911–7 ..............................................................    1545–0067                                                                                    1545–0938
                                                                          1545–0070    1.993–3 ..............................................................          1545–0938
1.913–13 ............................................................     1545–0067    1.993–4 ..............................................................          1545–0938
1.921–1T ............................................................     1545–0190    1.994–1 ..............................................................          1545–0938
                                                                          1545–0884    1.995–5 ..............................................................          1545–0938
                                                                          1545–0935    1.1012–1 ............................................................           1545–0074


                                                                                   151
§ 602.101                                                                                                         26 CFR Ch. I (4–1–99 Edition)

                                                                              Current                                                                               Current
  CFR part or section where identified and de-                                               CFR part or section where identified and de-
                                                                             OMB control                                                                           OMB control
                    scribed                                                                                    scribed
                                                                                No.                                                                                   No.

                                                                              1545–1139                                                                             1545–0184
1.1014–4 ............................................................         1545–0184    1.1251–3 ............................................................    1545–0184
1.1015–1 ............................................................         1545–0020    1.1251–4 ............................................................    1545–0184
1.1017–1. ...........................................................         1545–1539    1.1252–1 ............................................................    1545–0184
1.1031(d)–1T .....................................................            1545–1021    1.1252–2 ............................................................    1545–0184
1.1033(a)–2 ........................................................          1545–0184    1.1254–1(c)(3) ...................................................       1545–1352
1.1033(g)–1 ........................................................          1545–0184    1.1254–4 ............................................................    1545–1493
1.1034–1 ............................................................         1545–0072    1.1254–5(d)(2) ...................................................       1545–1352
1.1039–1 ............................................................         1545–0184    1.1258–1 ............................................................    1545–1452
1.1041–1T ..........................................................          1545–0074    1.1272–3 ............................................................    1545–1353
1.1042–1T ..........................................................          1545–0916    1.1273–2(h)(2) ...................................................       1545–1353
1.1044(a)–1 ........................................................          1545–1421    1.1274–3(d) ........................................................     1545–1353
1.1060–1T ..........................................................          1545–1021    1.1274–5(b) ........................................................     1545–1353
1.1071–1 ............................................................         1545–0184    1.1274A–1(c) .....................................................       1545–1353
1.1071–4 ............................................................         1545–0184    1.1275–2 ............................................................    1545–1450
1.1081–4 ............................................................         1545–0028    1.1275–3 ............................................................    1545–0887
                                                                              1545–0046                                                                             1545–1353
                                                                              1545–0123                                                                             1545–1450
1.1081–11 ..........................................................          1545–0074    1.1275–4 ............................................................    1545–1450
                                                                              1545–0123    1.1275–6 ............................................................    1545–1450
1.1082–1 ............................................................         1545–0046    1.1287–1 ............................................................    1545–0786
1.1082–2 ............................................................         1545–0046    1.1291–9 ............................................................    1545–1507
1.1082–3 ............................................................         1545–0046    1.1291–10 ..........................................................     1545–1507
                                                                              1545–0184                                                                             1545–1304
1.1082–4 ............................................................         1545–0046    1.1294–1T ..........................................................     1545–1002
1.1082–5 ............................................................         1545–0046                                                                             1545–1028
1.1082–6 ............................................................         1545–0046    1.1295–1T ..........................................................     1545–1028
1.1083–1 ............................................................         1545–0123                                                                             1545–1555
1.1092(b)–1T .....................................................            1545–0644    1.1295–3T ..........................................................     1545–1555
1.1092(b)–2T .....................................................            1545–0644    1.1297–3T ..........................................................     1545–1028
1.1092(b)–3T .....................................................            1545–0644    1.1311(a)–1 ........................................................     1545–0074
1.1092(b)–4T .....................................................            1545–0644    1.1361–1 ............................................................    1545–0731
1.1092(b)–5T .....................................................            1545–0644    1.1362–1 ............................................................    1545–1308
1.1211–1 ............................................................         1545–0074    1.1362–2 ............................................................    1545–1308
1.1212–1 ............................................................         1545–0074    1.1362–3 ............................................................    1545–1308
1.1221–2 ............................................................         1545–1403    1.1362–4 ............................................................    1545–1308
1.1221–2(d)(2)(iv) ..............................................             1545–1480    1.1362–5 ............................................................    1545–1308
1.1221–2(e)(5) ...................................................            1545–1480    1.1362–6 ............................................................    1545–1308
1.1221–2(g)(5)(ii) ...............................................            1545–1480    1.1362–7 ............................................................    1545–1308
1.1221–2(g)(6)(ii) ...............................................            1545–1480    1.1367–1(f) .........................................................    1545–1139
1.1221–2(g)(6)(iii) ..............................................            1545–1480    1.1368–1(f)(2) ....................................................      1545–1139
1.1221–2T(c) ......................................................           1545–1403    1.1368–1(f)(3) ....................................................      1545–1139
1.1231–1 ............................................................         1545–0177    1.1368–1(f)(4) ....................................................      1545–1139
                                                                              1545–0184    1.1368–1(g)(2) ...................................................       1545–1139
1.1231–2 ............................................................         1545–0177    1.1374–1A ..........................................................     1545–0130
                                                                              1545–0184    1.1377–1 ............................................................    1545–1462
1.1231–2 ............................................................         1545–0074    1.1383–1 ............................................................    1545–0074
1.1232–3 ............................................................         1545–0074    1.1385–1 ............................................................    1545–0074
1.1237–1 ............................................................         1545–0184                                                                             1545–0098
1.1239–1 ............................................................         1545–0091    1.1388–1 ............................................................    1545–0118
1.1242–1 ............................................................         1545–0184                                                                             1545–0123
1.1243–1 ............................................................         1545–0123    1.1398–1 ............................................................    1545–1375
1.1244(e)–1 ........................................................          1545–0123    1.1398–2 ............................................................    1545–1375
                                                                              1545–1447    1.1402(a)–2 ........................................................     1545–0074
1.1245–1      ............................................................    1545–0184    1.1402(a)–5 ........................................................     1545–0074
1.1245–2      ............................................................    1545–0184    1.1402(a)–11 ......................................................      1545–0074
1.1245–3      ............................................................    1545–0184    1.1402(a)–15 ......................................................      1545–0074
1.1245–4      ............................................................    1545–0184    1.1402(a)–16 ......................................................      1545–0074
1.1245–5      ............................................................    1545–0184    1.1402(b)–1 ........................................................     1545–0171
1.1245–6      ............................................................    1545–0184    1.1402(c)–2 ........................................................     1545–0074
1.1247–1      ............................................................    1545–0122    1.1402(e)(1)–1 ...................................................       1545–0074
1.1247–2      ............................................................    1545–0122    1.1402(e)(2)–1 ...................................................       1545–0074
1.1247–4      ............................................................    1545–0122    1.1402(e)–1A .....................................................       1545–0168
1.1247–5      ............................................................    1545–0122    1.1402(e)–2A .....................................................       1545–0168
1.1248–7      ............................................................    1545–0074    1.1402(e)–3A .....................................................       1545–0168
1.1250–1      ............................................................    1545–0184    1.1402(e)–4A .....................................................       1545–0168
1.1250–2      ............................................................    1545–0184    1.1402(e)–5A .....................................................       1545–0168
1.1250–3      ............................................................    1545–0184    1.1402(f)–1 .........................................................    1545–0074
1.1250–4      ............................................................    1545–0184    1.1402(h)–1 ........................................................     1545–0064
1.1250–5      ............................................................    1545–0184    1.1441–1 ............................................................    1545–1484
1.1251–1      ............................................................    1545–0184    1.1441–2 ............................................................    1545–0795
1.1251–2      ............................................................    1545–0074    1.1441–3 ............................................................    1545–0165


                                                                                       152
Internal Revenue Service, Treasury                                                                                                                            § 602.101

                                                                         Current                                                                                Current
  CFR part or section where identified and de-                                          CFR part or section where identified and de-
                                                                        OMB control                                                                            OMB control
                    scribed                                                                               scribed
                                                                           No.                                                                                    No.

                                                                         1545–0795                                                                              1545–0797
1.1441–4 ............................................................    1545–1484    1.1563–3 ............................................................     1545–0123
1.1441–5 ............................................................    1545–0096    1.6001–1 ............................................................     1545–0058
                                                                         1545–0795                                                                              1545–0074
1.1441–6 ............................................................    1545–0055                                                                              1545–0099
                                                                         1545–0795                                                                              1545–0123
1.1441–7 ............................................................    1545–0795                                                                              1545–0865
1.1441–8 ............................................................    1545–1053    1.6011–1 ............................................................     1545–0055
                                                                         1545–1484                                                                              1545–0074
1.1441–8T ..........................................................     1545–1053                                                                              1545–0085
1.1441–9 ............................................................    1545–1484                                                                              1545–0089
1.1443–1 ............................................................    1545–0096                                                                              1545–0090
1.1445–1 ............................................................    1545–0902                                                                              1545–0091
1.1445–2 ............................................................    1545–0902                                                                              1545–0096
                                                                         1545–1060                                                                              1545–0121
1.1445–3 ............................................................    1545–0902                                                                              1545–0458
                                                                         1545–1060                                                                              1545–0666
1.1445–4 ............................................................    1545–0902                                                                              1545–0675
1.1445–5 ............................................................    1545–0902                                                                              1545–0908
1.1445–6 ............................................................    1545–0902    1.6011–2 ............................................................     1545–0055
                                                                         1545–1060                                                                              1545–0938
1.1445–7 ............................................................    1545–0902    1.6011–3 ............................................................     1545–0238
1.1445–8 ............................................................    1545–0096                                                                              1545–0239
1.1445–9T ..........................................................     1545–0902    1.6012–1 ............................................................     1545–0067
1.1445–10T ........................................................      1545–0902                                                                              1545–0085
1.1451–1 ............................................................    1545–0054                                                                              1545–0089
1.1451–2 ............................................................    1545–0054                                                                              1545–0675
1.1461–1 ............................................................    1545–0054                                                                              1545–0074
                                                                         1545–0055    1.6012–2 ............................................................     1545–0047
                                                                         1545–0795                                                                              1545–0051
1.1461–2 ............................................................    1545–0054                                                                              1545–0067
                                                                         1545–0055                                                                              1545–0123
                                                                         1545–0096                                                                              1545–0126
                                                                         1545–0795                                                                              1545–0130
1.1461–3 ............................................................    1545–0054                                                                              1545–0128
                                                                         1545–0055                                                                              1545–0175
                                                                         1545–0096                                                                              1545–0687
                                                                         1545–0795                                                                              1545–0890
1.1461–4 ............................................................    1545–0054                                                                              1545–1023
                                                                         1545–0055                                                                              1545–1027
                                                                         1545–0096    1.6012–3 ............................................................     1545–0047
1.1462–1 ............................................................    1545–0795                                                                              1545–0067
1.1492–1 ............................................................    1545–0026                                                                              1545–0092
1.1494–1 ............................................................    1545–0026                                                                              1545–0196
1.1502–5 ............................................................    1545–0257                                                                              1545–0687
1.1502–9 ............................................................    1545–0121    1.6012–4 ............................................................     1545–0067
1.1502–13 ..........................................................     1545–0123    1.6012–5 ............................................................     1545–0067
                                                                         1545–0885                                                                              1545–0967
                                                                         1545–1161                                                                              1545–0970
                                                                         1545–1433                                                                              1545–0991
1.1502–16 ..........................................................     1545–0123                                                                              1545–0936
1.1502–18 ..........................................................     1545–0123                                                                              1545–1023
1.1502–19 ..........................................................     1545–0123                                                                              1545–1033
1.1502–20 ..........................................................     1545–1160                                                                              1545–1079
1.1502–21T ........................................................      1545–1237    1.6012–6 ............................................................     1545–0067
1.1502–31 ..........................................................     1545–1344    1.6012–7T ..........................................................      1545–1348
1.1502–32 ..........................................................     1545–1344                                                                              1545–0089
1.1502–33 ..........................................................     1545–1344                                                                              1545–0129
1.1502–47 ..........................................................     1545–0123    1.6013–1 ............................................................     1545–0074
1.1502–75 ..........................................................     1545–0025    1.6013–2 ............................................................     1545–0091
                                                                         1545–0123    1.6013–6 ............................................................     1545–0074
                                                                         1545–0133    1.6013–7 ............................................................     1545–0074
                                                                         1545–0152    1.6015(a)–1 ........................................................      1545–0087
1.1502–76 ..........................................................     1545–1344    1.6015(b)–1 ........................................................      1545–0087
1.1502–77 ..........................................................     1545–0123    1.6015(d)–1 ........................................................      1545–0087
1.1502–77T ........................................................      1545–1046    1.6015(e)–1 ........................................................      1545–0087
1.1502–78 ..........................................................     1545–0582    1.6015(f)–1 .........................................................     1545–0087
1.1502–95T ........................................................      1545–1218    1.6015(g)–1 ........................................................      1545–0087
1.1503–2A ..........................................................     1545–1083    1.6015(h)–1 ........................................................      1545–0087
1.1552–1 ............................................................    1545–0123    1.6015(i)–1 .........................................................     1545–0087
1.1561–3 ............................................................    1545–0123    1.6017–1 ............................................................     1545–0074
1.1563–1 ............................................................    1545–0123                                                                              1545–0087


                                                                                  153
§ 602.101                                                                                                         26 CFR Ch. I (4–1–99 Edition)

                                                                              Current                                                                                    Current
  CFR part or section where identified and de-                                               CFR part or section where identified and de-
                                                                             OMB control                                                                                OMB control
                    scribed                                                                                    scribed
                                                                                No.                                                                                        No.

                                                                              1545–0090                                                                                  1545–0387
1.6031(b)–1T .....................................................            1545–0099                                                                                  1545–0957
1.6031(c)–1T ......................................................           1545–0099    1.6042–4 ............................................................         1545–0110
1.6031–1 ............................................................         1545–0099    1.6043–1 ............................................................         1545–0041
                                                                              1545–0970    1.6043–2 ............................................................         1545–0041
1.6032–1 ............................................................         1545–0099                                                                                  1545–0110
1.6033–2 ............................................................         1545–0047                                                                                  1545–0295
                                                                              1545–0049                                                                                  1545–0387
                                                                              1545–0052    1.6043–3      ............................................................    1545–0047
                                                                              1545–0092    1.6044–1      ............................................................    1545–0118
                                                                              1545–0687    1.6044–2      ............................................................    1545–0118
                                                                              1545–1150    1.6044–3      ............................................................    1545–0118
1.6033–3 ............................................................         1545–0052    1.6044–4      ............................................................    1545–0118
1.6034–1 ............................................................         1545–0092    1.6044–5      ............................................................    1545–0118
                                                                              1545–0094    1.6045–1      ............................................................    1545–0715
1.6035–1      ............................................................    1545–0704    1.6045–2      ............................................................    1545–0115
1.6035–2      ............................................................    1545–0704    1.6045–4      ............................................................    1545–1085
1.6035–3      ............................................................    1545–0704    1.6046–1      ............................................................    1545–0704
1.6037–1      ............................................................    1545–0130                                                                                  1545–0794
                                                                              1545–1023                                                                                  1545–1317
1.6038–2 ............................................................         1545–0704    1.6046–2 ............................................................         1545–0704
                                                                              1545–0805    1.6046–3 ............................................................         1545–0704
                                                                              1545–1317    1.6047–1 ............................................................         1545–0119
1.6038A–2 ..........................................................          1545–1191                                                                                  1545–0295
1.6038A–3 ..........................................................          1545–1191                                                                                  1545–0387
                                                                              1545–1440    1.6049–1 ............................................................         1545–0112
1.6038B–1 ..........................................................          1545–1615                                                                                  1545–0117
1.6038B–1T .......................................................            1545–0026                                                                                  1545–0295
1.6038B–2 ..........................................................          1545–1615                                                                                  1545–0367
1.6039–2 ............................................................         1545–0820                                                                                  1545–0387
1.6041–1 ............................................................         1545–0008                                                                                  1545–0597
                                                                              1545–0108                                                                                  1545–0957
                                                                              1545–0112    1.6049–2 ............................................................         1545–0117
                                                                              1545–0115    1.6049–3 ............................................................         1545–0117
                                                                              1545–0120    1.6049–4 ............................................................         1545–0096
                                                                              1545–0295                                                                                  1545–0112
                                                                              1545–0350                                                                                  1545–0117
                                                                              1545–0367                                                                                  1545–1018
                                                                              1545–0387                                                                                  1545–1050
                                                                              1545–0441    1.6049–5 ............................................................         1545–0096
                                                                              1545–0957                                                                                  1545–0112
1.6041–2 ............................................................         1545–0008                                                                                  1545–0117
                                                                              1545–0119    1.6049–6 ............................................................         1545–0096
                                                                              1545–0350    1.6049–7 ............................................................         1545–1018
                                                                              1545–0441    1.6049–7T ..........................................................          1545–0112
1.6041–3 ............................................................         1545–1148                                                                                  1545–0117
1.6041–4 ............................................................         1545–0115                                                                                  1545–0118
                                                                              1545–0295    1.6050A–1 ..........................................................          1545–0115
                                                                              1545–0367    1.6050B–1 ..........................................................          1545–0120
                                                                              1545–0387    1.6050D–1 .........................................................           1545–0120
                                                                              1545–0957                                                                                  1545–0232
1.6041–5 ............................................................         1545–0295    1.6050E–1 ..........................................................          1545–0120
                                                                              1545–0367    1.6050H–1 .........................................................           1545–0901
                                                                              1545–0387                                                                                  1545–1380
                                                                              1545–0957    1.6050H–2 .........................................................           1545–0901
1.6041–6 ............................................................         1545–0008                                                                                  1545–1339
                                                                              1545–0115                                                                                  1545–1380
1.6041–7 ............................................................         1545–0112    1.6050H–1T .......................................................            1545–0901
                                                                              1545–0295    1.6050I–2 ...........................................................         1545–1449
                                                                              1545–0350    1.6050J–1T ........................................................           1545–0877
                                                                              1545–0367    1.6050K–1 ..........................................................          1545–0941
                                                                              1545–0387    1.6050P–1 ..........................................................          1545–1419
                                                                              1545–0441    1.6050P–1T .......................................................            1545–1419
                                                                              1545–0957    1.6052–1 ............................................................         1545–0008
1.6042–1 ............................................................         1545–0110    1.6052–2 ............................................................         1545–0008
1.6042–2 ............................................................         1545–0110    1.6060–1 ............................................................         1545–0074
                                                                              1545–0295    1.6061–1 ............................................................         1545–0123
                                                                              1545–0367    1.6061–2T ..........................................................          1545–1348
                                                                              1545–0387    1.6062–1 ............................................................         1545–0123
                                                                              1545–0957    1.6063–1 ............................................................         1545–0123
1.6042–3 ............................................................         1545–0295    1.6065–1 ............................................................         1545–0123
                                                                              1545–0367    1.6071–1 ............................................................         1545–0123


                                                                                       154
Internal Revenue Service, Treasury                                                                                                                                      § 602.101

                                                                              Current                                                                                     Current
  CFR part or section where identified and de-                                               CFR part or section where identified and de-
                                                                             OMB control                                                                                 OMB control
                    scribed                                                                                    scribed
                                                                                No.                                                                                         No.

                                                                              1545–0810    1.6655(e)–1 ........................................................           1545–1421
1.6072–1 ............................................................         1545–0074    1.6661–3 ............................................................          1545–0988
1.6072–2 ............................................................         1545–0123                                                                                   1545–1031
                                                                              1545–0807    1.6661–4 ............................................................          1545–0739
1.6073–1      ............................................................    1545–0087    1.6662–3(c) ........................................................           1545–0889
1.6073–2      ............................................................    1545–0087    1.6662–4(e) and (f) ............................................               1545–0889
1.6073–3      ............................................................    1545–0087    1.6662–6 ............................................................          1545–1426
1.6073–4      ............................................................    1545–0087    1.6694–1 ............................................................          1545–0074
1.6074–1      ............................................................    1545–0123    1.6694–2 ............................................................          1545–0074
1.6074–2      ............................................................    1545–0123    1.6694–2(c) ........................................................           1545–1231
1.6081–1      ............................................................    1545–0066    1.6694–3(e) ........................................................           1545–1231
                                                                              1545–0148    1.6695–1 ............................................................          1545–0074
                                                                              1545–0233                                                                                   1545–1385
                                                                              1545–1057    1.6695–2T ..........................................................           1545–1570
                                                                              1545–1081    1.6696–1 ............................................................          1545–0074
1.6081–2 ............................................................         1545–0148                                                                                   1545–0240
                                                                              1545–1054    1.6851–1 ............................................................          1545–0086
                                                                              1545–1036                                                                                   1545–0138
1.6081–3 ............................................................         1545–0233    1.6851–2 ............................................................          1545–0086
1.6081–4 ............................................................         1545–0188                                                                                   1545–0138
                                                                              1545–1479    1.7476–1 ............................................................          1545–0197
1.6081–6 ............................................................         1545–0148    1.7476–2 ............................................................          1545–0197
                                                                              1545–1054    1.7519–2T ..........................................................           1545–1036
1.6081–7 ............................................................         1545–0148    1.7520–1 ............................................................          1545–1343
                                                                              1545–1054    1.7520–2 ............................................................          1545–1343
1.6091–3      ............................................................    1545–0089    1.7520–3 ............................................................          1545–1343
1.6107–1      ............................................................    1545–0074    1.7520–4 ............................................................          1545–1343
1.6109–1      ............................................................    1545–0074    1.9100–1 ............................................................          1545–0074
1.6109–2      ............................................................    1545–0074    1.9101–1 ............................................................          1545–0008
1.6115–1      ............................................................    1545–1464    2.1–4 ..................................................................       1545–0123
1.6151–1      ............................................................    1545–0074    2.1–5 ..................................................................       1545–0123
1.6152–1      ............................................................    1545–0135    2.1–6 ..................................................................       1545–0123
                                                                              1545–0233    2.1–10 ................................................................        1545–0123
1.6153–1      ............................................................    1545–0087    2.1–11 ................................................................        1545–0123
1.6153–4      ............................................................    1545–0087    2.1–12 ................................................................        1545–0123
1.6154–2      ............................................................    1545–0257    2.1–13 ................................................................        1545–0123
1.6154–3      ............................................................    1545–0135    2.1–20 ................................................................        1545–0123
1.6154–5      ............................................................    1545–0976    2.1–22 ................................................................        1545–0123
1.6161–1      ............................................................    1545–0087    2.1–26 ................................................................        1545–0123
1.6162–1      ............................................................    1545–0087    3.2 ......................................................................     1545–0123
1.6164–1      ............................................................    1545–0135    4.954–1 ..............................................................         1545–1068
1.6164–2      ............................................................    1545–0135    4.954–2 ..............................................................         1545–1068
1.6164–3      ............................................................    1545–0135    5.6411–1 ............................................................          1545–0098
1.6164–5      ............................................................    1545–0135                                                                                   1545–0582
1.6164–6      ............................................................    1545–0135                                                                                   1545–0042
1.6164–7      ............................................................    1545–0135                                                                                   1545–0074
1.6164–8      ............................................................    1545–0135                                                                                   1545–0129
1.6164–9      ............................................................    1545–0135                                                                                   1545–0172
1.6302–1      ............................................................    1545–0257                                                                                   1545–0619
1.6302–2      ............................................................    1545–0098    5c.44F–1 ............................................................          1545–0619
                                                                              1545–0257    5c.128–1 ............................................................          1545–0123
1.6411–1 ............................................................         1545–0098    5c.168(f)(8)–1 ....................................................            1545–0123
                                                                              1545–0135    5c.168(f)(8)–2 ....................................................            1545–0123
                                                                              1545–0582    5c.168(f)(8)–6 ....................................................            1545–0123
1.6411–2 ............................................................         1545–0098    5c.168(f)(8)–8 ....................................................            1545–0123
                                                                              1545–0582    5c.305–1 ............................................................          1545–0110
1.6411–3 ............................................................         1545–0098    5c.442–1 ..................................