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4.2.3.2
(10-01-2003)
Taxpayer's Request for Determination Letters
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Determination letters will be issued by each director's office in response
to taxpayer requests. Specific guidance related to the issuance/submission
of determination letters is found in the first revenue procedure issued each
year. This revenue procedure is updated annually, but may be modified or amplified
during the year.
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Definitions:
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Determination Letter: A
"determination letter"
is
a written statement issued by a director that applies the principles and precedents
previously announced by Headquarters to a specific set of facts. It is issued
only when a determination can be made based on clearly established rules in
the statute, a tax treaty, the regulations, or based on a conclusion in a
revenue ruling, opinion, or court decision published in the Internal Revenue
Bulletin that specifically answers the questions presented.
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Director: any reference to director or field office refers to the Director,
Field Operations, LMSB; the Area Director, Field Compliance, SB/SE; or the
Director, Compliance, W&I and their respective offices.
4.2.3.2.1
(10-01-2003)
Determination Letters Issued
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Directors issue determination letters in response to taxpayers' written
requests on completed transactions that affect returns over which they have
examination jurisdiction.
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A director may issue a determination letter on the replacement, even
though not yet made, of involuntarily converted property under IRC §
1033, if the taxpayer has filed an income tax return for the year in which
the property was involuntarily converted.
4.2.3.2.2
(10-01-2003)
Determination Letters Not Issued
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Directors normally do not issue determination letters on the tax consequences
of proposed transactions.
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A Director will not issue a determination letter in response to any
request if --
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It appears that the taxpayer has directed a similar inquiry to Headquarters;
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The same issue involving the same taxpayer or a related taxpayer is pending
in a case in litigation or before an area office;
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The determination letter is requested by an industry, trade association,
or similar group; or
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The request involves an industry-wide problem.
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Under no circumstances will a director issue a determination letter
unless it is clearly shown that the request concerns a return that has been
filed or is required to be filed and over which the director has, or will
have, examination jurisdiction.
4.2.3.2.3
(10-01-2003)
Guidelines to Request a Determination Letter
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The first revenue procedure issued each year (i.e., Rev. Proc. 2003-1)
contains specific information on requesting a determination letter. This section
will provide an overview of the information needed to request a determination
letter.
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Certain information is required in all requests for a determination
letter:
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Names, addresses, telephone numbers, and taxpayer identification numbers
of all interested parties;
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The annual accounting period, and the overall method of accounting for
maintaining the accounting books and the filing of federal income tax returns,
of all interested parties;
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A description of the business reasons for the transaction; and
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A detailed description of the transaction.
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Copies of all contracts, wills, deeds, agreements, instruments, other
documents, and foreign laws.
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All material facts and documents must be included in the taxpayer's
initial request or in supplemental letters. These facts must be accompanied
by an analysis of their bearing on the issue or issues, specifying the provisions
that apply.
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The request must state whether, to the best of knowledge of both the
taxpayer's and the taxpayer's representative, the same issue is in an earlier
return of the taxpayer.
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The request must state whether the same or similar issue was previously
ruled on or requested, or is currently pending.
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The request must state whether it involves an interpretation of a substantive
provision of an income or estate tax treaty.
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The request must state if the taxpayer advocates a particular conclusion,
an explanation of the grounds for that conclusion and the relevant authorities
to support it must be included.
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The request should inform the Service about, and discuss the implications
of, any authority believed to be contrary to the position advanced by the
taxpayer.
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The request should identify any pending legislation that may affect
the proposed transaction.
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The request must be signed and dated by the taxpayer or the taxpayer's
authorized representative. A stamped signature is not permitted.
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The request and any subsequent change submitted must be accompanied
by the following declaration:
"Under penalties of perjury, I
declare that I have examined this request, including accompanying documents,
and, to the best of my knowledge and belief, the request contains all the
relevant facts relating to the request, and such facts are true, correct,
and complete."
The declaration must be signed and dated by the taxpayer,
not the taxpayer's representative. A stamped signature is not permitted.
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A request for a determination letter must be accompanied by a statement
indicating the deletions desired. Because the text of the determination letter
is open to public inspection under IRC § 6110, the Service makes deletions
required by IRC § 6110(c) from the text before it is available for inspection.
If the deletions statement is not submitted with the request, the request
will be closed within 21 days.
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A request generally requires only copy to be submitted.
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SB/SE and W&I taxpayers should send their determination letter requests
to their local SB/SE office. Appendix D of the first revenue procedure issued
each year contains the addresses for the appropriates SB/SE offices.
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LMSB taxpayers should send their request for a determination letter
to the following address:
Attn: Manager, Office of Pre-Filing Services
Large
and Mid-Size Business Division
Washington, D.C. 20002-4503
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Fees are required to be paid with determination letter requests. See
Appendix A of the first revenue procedure issued each year for the required
fee amount. Also see IRM 4.8.8.6, Involuntarily Converted Property.
4.2.3.2.4
(10-01-2003)
Employee Responsibilities
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Compliance employees who handle the determination letter requests need
to ensure that a careful distinction is made between requests for determination
letters and general information requests. If it appears to be a request for
general information, treat it as such and do not apply these provisions. A
general information response should clearly state that it is providing general
information only.
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