Internal Revenue Bulletin 1998-1 (PDF rendition): IRS Revenue Procedures

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

EMPLOYEE PLANS
Rev. Proc. 98–4, page 113.
Rulings and determination letters; issuance proce-
dures.
Revised procedures are provided for furnishing ruling
letters, information letters, etc., on matters relating to sec-
tions of the Code under the jurisdiction of the Assistant Com-
missioner (Employee Plans and Exempt Organizations). Rev.
Proc. 97–4 superseded.
Rev. Proc. 98–5, page 155.
Technical advice.Revised procedures are provided for fur-
nishing technical advice to key district directors and chiefs,
appeals offices, by the Assistant Commissioner (Employee
Plans and Exempt Organizations) regarding issues in the em-
ployee plans areas (including actuarial matters) and exempt
organizations areas. Rev. Proc. 97–5 superseded.
Rev. Proc. 98–6, page 183.
Employee plans determination letters.Revised proce-
dures are provided for issuing determination letters on the
qualified status of employee plans under sections 401(a),
403(a), 409, and 4975 of the Code. Rev. Proc. 97–6 super-
seded.
Rev. Proc. 98–8, page 225.
User fees for employee plans and exempt organiza-
tions.Up-to-date guidance for complying with the user fee
program of the Service as it pertains to requests for letter
rulings, determination letters, etc., on matters under the ju-
risdiction of the Assistant Commissioner (Employee Plans
and Exempt Organizations), is provided. Rev. Proc. 97–8 su-
perseded.
EXEMPT ORGANIZATIONS
Rev. Proc. 98–4, page 113.
Rulings and determination letters; issuance proce-
dures.Revised procedures are provided for furnishing ruling
letters, information letters, etc., on matters relating to sec-
tions of the Code under the jurisdiction of the Assistant Com-
missioner (Employee Plans and Exempt Organizations). Rev.
Proc. 97–4 superseded.
Rev. Proc. 98–5, page 155.
Technical advise.Revised procedures are provided for fur-
nishing technical advice to key district directors and chiefs,
appeals offices, by the Assistant Commissioner (Employee
Plans and Exempt Organizations) regarding issues in the em-
ployee plans areas (including actuarial matters) and exempt
organizations areas. Rev. Proc. 97–5 superseded.
Rev. Proc. 98–8, page 225.
User fees for employee plans and exempt organiza-
tions.Up-to-date guidance for complying with the user fee
program of the Service as it pertains to requests for letter
rulings, determination letters, etc., on matters under the ju-
risdiction of the Assistant Commissioner (Employee Plans
and Exempt Organizations), is provided. Rev. Proc. 97–8 su-
perseded.
ADMINISTRATIVE
Rev. Proc. 98–1, page 7.
Letter rulings, determination letters, and information
letters issued by the Associate Chief Counsel
(Domestic), Associate Chief Counsel (Employee
Benefits and Exempt Organizations), Associate Chief
Counsel (Enforcement Litigation), and Associate Chief
Internal Revenue
bbuulllleettiinn
Bulletin No. 1998–1
January 5, 1998
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
Department of the Treasury
Internal Revenue Service
Cumulative List of Actions Relating to Decisions of the Tax Court published in the Bulletin from January through December
1997 begins on page 5.
Finding List of Revenue Rulings, Revenue Procedures, Treasury Decisions, etc., published in the Bulletin from July through
December 1997 begins on page 239.
Finding List of Previously Published Items currently mentioned in the Bulletin from July through December 1997 begins on
page 241.
Cumulative List of Declaratory Judgment Proceedings Under Section 7428 begins on page 237.
Index of Items Published in the Bulletin from July through December 1997 begins on page 242.
Continued on page 4

Mission of the Service
The purpose of the Internal Revenue Service is to collect
the proper amount of tax revenue at the least cost; serve
the public by continually improving the quality of our prod-
ucts and services; and perform in a manner warranting
the highest degree of public confidence in our integrity, effi-
ciency, and fairness.
2
Statement of Principles
of Internal Revenue
Tax Administration
The function of the Internal Revenue Service is to adminis-
ter the Internal Revenue Code. Tax policy for raising revenue
is determined by Congress.
With this in mind, it is the duty of the Service to carry out that
policy by correctly applying the laws enacted by Congress;
to determine the reasonable meaning of various Code provi-
sions in light of the Congressional purpose in enacting them;
and to perform this work in a fair and impartial manner, with
neither a government nor a taxpayer point of view.
At the heart of administration is interpretation of the Code. It
is the responsibility of each person in the Service, charged
with the duty of interpreting the law, to try to find the true
meaning of the statutory provision and not to adopt a
strained construction in the belief that he or she is “protect-
ing the revenue.” The revenue is properly protected only
when we ascertain and apply the true meaning of the statute.
The Service also has the responsibility of applying and
administering the law in a reasonable, practical manner.
Issues should only be raised by examining officers when
they have merit, never arbitrarily or for trading purposes.
At the same time, the examining officer should never hesi-
tate to raise a meritorious issue. It is also important that
care be exercised not to raise an issue or to ask a court to
adopt a position inconsistent with an established Service
position.
Administration should be both reasonable and vigorous. It
should be conducted with as little delay as possible and
with great courtesy and considerateness. It should never
try to overreach, and should be reasonable within the
bounds of law and sound administration. It should, howev-
er, be vigorous in requiring compliance with law and it
should be relentless in its attack on unreal tax devices and
fraud.

The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly and may be obtained
from the Superintendent of Documents on a subscription
basis. Bulletin contents of a permanent nature are consoli-
dated semiannually into Cumulative Bulletins, which are sold
on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of in-
ternal management are not published; however, statements
of internal practices and procedures that affect the rights
and duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings
to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature
are deleted to prevent unwarranted invasions of privacy and
to comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have
the force and effect of Treasury Department Regulations,
but they may be used as precedents. Unpublished rulings
will not be relied on, used, or cited as precedents by Service
personnel in the disposition of other cases. In applying pub-
lished rulings and procedures, the effect of subsequent leg-
islation, regulations, court decisions, rulings, and proce-
dures must be considered, and Service personnel and oth-
ers concerned are cautioned against reaching the same con-
clusions in other cases unless the facts and circumstances
are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions, and Subpart B, Legislation and Related
Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to
these subjects are contained in the other Parts and Sub-
parts. Also included in this part are Bank Secrecy Act Admin-
istrative Rulings. Bank Secrecy Act Administrative Rulings
are issued by the Department of the Treasury’s Office of the
Assistant Secretary (Enforcement).
Part IV.—Items of General Interest.
With the exception of the Notice of Proposed Rulemaking
and the disbarment and suspension list included in this part,
none of these announcements are consolidated in the Cumu-
lative Bulletins.
The first Bulletin for each month includes a cumulative index
for the matters published during the preceding months.
These monthly indexes are cumulated on a quarterly and
semiannual basis, and are published in the first Bulletin of the
succeeding quarterly and semiannual period, respectively.
3
Introduction
The contents of this publication are not copyrighted and may be reprinted freely. Acitation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

ADMINISTRATIVE—Continued
Counsel (International).Revised procedures are provided
for issuing letter rulings, determination letters, and informa-
tion letters on specific issues under the jurisdiction of the
Associate Chief Counsel (Domestic), the Associate Chief
Counsel (Employee Benefits and Exempt Organizations), the
Associate Chief Counsel (Enforcement Litigation), and the
Associate Chief Counsel (International). Rev. Proc. 97–1
superseded.
Rev. Proc. 98–2, page 74.
Technical advice to the district directors and chiefs,
appeals offices, from the Associate Chief Counsel
(Domestic), Associate Chief Counsel (Employee
Benefits and Exempt Organizations), Associate Chief
Counsel (Enforcement Litigation), and Associate Chief
Counsel (International).Revised procedures are provided
for furnishing technical advice to the district directors and
chiefs, appeals offices, in areas under the jurisdiction of the
Associate Chief Counsel (Domestic), the Associate Chief
Counsel (Employee Benefits and Exempt Organizations), the
Associate Chief Counsel (Enforcement Litigation), and the
Associate Chief Counsel (International). Taxpayers’ rights
when technical advice has been requested also are provided.
Rev. Procs. 97–2 and 97–21 superseded.
Rev. Proc. 98–3, page 100.
Areas in which advance rulings will not be issued; Asso-
ciate Chief Counsel (Domestic), Associate Chief Coun-
sel (Employee Benefits and Exempt Organizations). This
procedure provides a revised list of those provisions of the
Code under the jurisdiction of the Associate Chief Counsel
(Domestic) and the Associate Chief Counsel (Employee Bene-
fits and Exempt Organizations), relating to matters where the
Service will not issue advance rulings or determination letters.
Rev. Procs. 97–3 and 97–53 superseded.
Rev. Proc. 98–7, page 222.
Areas in which advance rulings will not be issued; As-
sociate Chief Counsel (International). This procedure
lists the Code provisions under the jurisdiction of the Associ-
ate Chief Counsel (International) that advance letter rulings
or determination letters will not be issued. Rev. Proc. 97–7
superseded.
January 5, 199841998–1 I.R.B.
HIGHLIGHTS
OF THIS ISSUE—Continued

1998–1 I.R.B.5January 5, 1998
It is the policy of the Internal Revenue
Service to announce at an early date
whether it will follow the holdings in cer-
tain cases. An Action on Decision is the
document making such an announcement.
An Action on Decision will be issued at
the discretion of the Service only on un-
appealed issues decided adverse to the
government. Generally, an Action on De-
cision is issued where its guidance would
be helpful to Service personnel working
with the same or similar issues. Unlike a
Treasury Regulation or a Revenue Ruling,
an Action on Decision is not an affirma-
tive statement of Service position. It is not
intended to serve as public guidance and
may not be cited as precedent.
Actions on Decisions shall be relied
upon within the Service only as conclu-
sions applying the law to the facts in the
particular case at the time the Action on
Decision was issued. Caution should be
exercised in extending the recommenda-
tion of the Action on Decision to similar
cases where the facts are different. More-
over, the recommendation in the Action
on Decision may be superseded by new
legislation, regulations, rulings, cases, or
Actions on Decisions.
Prior to 1991, the Service published ac-
quiescence or nonacquiescence only in
certain regular Tax Court opinions. The
Service has expanded its acquiescence
program to include other civil tax cases
where guidance is determined to be help-
ful. Accordingly, the Service now may ac-
quiesce or nonacquiesce in the holdings
of memorandum Tax Court opinions, as
well as those of the United States District
Courts, Claims Court, and Circuit Courts
of Appeal. Regardless of the court decid-
ing the case, the recommendation of any
Action on Decision will be published in
the Internal Revenue Bulletin.
The recommendation in every Action
on Decision will be summarized as ac-
quiescence, acquiescence in result only,
or nonacquiescence. Both “acquies-
cence” and “acquiescence in result only”
mean that the Service accepts the holding
of the court in a case and that the Service
will follow it in disposing of cases with
the same controlling facts. However, “ac-
quiescence” indicates neither approval
nor disapproval of the reasons assigned
by the court for its conclusions; whereas,
“acquiescence in result only” indicates
disagreement or concern with some or all
of those reasons. Nonacquiescence signi-
fies that, although no further review was
sought, the Service does not agree with
the holding of the court and, generally,
will not follow the decision in disposing
of cases involving other taxpayers. In ref-
erence to an opinion of a circuit court of
appeals, a nonacquiescence indicates that
the Service will not follow the holding on
a nationwide basis. However, the Service
will recognize the precedential impact of
the opinion on cases arising within the
venue of the deciding circuit.
The announcements published in the
weekly Internal Revenue Bulletins are
consolidated semiannually and annually.
The semiannual consolidation appears in
the first Bulletin for July and in the Cu-
mulative Bulletin for the first half of the
year, and the annual consolidation ap-
pears in the first Bulletin for the follow-
ing January and in the Cumulative Bul-
letin for the last half of the year.
The Commissioner ACQUIESCESin
the following decisions:
Buckeye Countrymark v. Commis-
sioner,
1
103 T.C. 547 (1994)
Robert E. and Geneva U. Duncan v.
United States,
2
Docket No. 95–338
Cheng C. and Susan L. Kao v. United
States,
3
81 F.3d 114 (9th Cir. 1996)
The Edna Louise Dunn Trust, Morgan
Guaranty Trust Company, Trustee v.
Commissioner,
4
86 T.C. 745 (1986)
The May Department Stores Co. v.
United States,
5
36 Fed. C1. 680 (1996)
Sun Microsystems, Inc. v. Commis-
sioner,
6
T.C.M. 1995–69
Royal Caribbean Cruises, Ltd. v.
United States,
7
108 F.3d 290 (11th Cir. 1997)
Pacific Enterprises and Subsidiaries v.
Commissioner,
8
101 T.C. 1 (1993)
William R. Jackson v. Commissioner,
9
108 T.C. 130
The Commissioner does not ACQUI-
ESCEin the following decisions:
Xerox Corporation v. United States,
10
41 F.3d 647 (Fed. Cir. 1994)
Charles E. Hurt v. United States,
11
70 F.3d 1261, 76 AFTR2d 95–7815 (4th
Cir. 1995)
Robert B. and EleanorRisman v. Com-
missioner,
12
100 T.C. 191 (1993)
Trans City Life Insurance Company v.
Commissioner,
13
106 T.C. 274 (1996)
Transwestern Pipeline Co. v. United
States,
14
639 F.2d 679 (Ct.Cl. 1980)
Cumulative List of Actions Relating to Court Decisions Published in the
Internal Revenue Bulletin From January 1997 through December 1997
1
Acquiescence relating to whether section 277 of the Internal Revenue Code applies to nonexempt cooperatives subject to subchapter Tof the Code.
2
Acquiescence relating to whether disability benefits paid to taxpayer from the Policemen and Firefighter’s Retirement Fund of the Lexington-Fayette Urban County
Government can be excluded from gross income under Internal Revenue Code section 104(a)(1) as benefits paid under a statute in the nature of a workmen’s com-
pensation act.
3
Acquiescence in result only relating to whether the Service can issue summonses to compel a taxpayer to sign consent directives which authorize the release of
records from unidentified domestic and foreign banks, consistent with the requirements of Internal Revenue Code section 7609.
4
Acquiescence in result only relating to whether a portion of the stock of a subsidiary distributed to petitoner in a spinoff constituted taxable “other property” under
section 355(a)(3)(B) of the Internal Revenue Code.
5
Acquiescence relating to whether interest accrued on the taxpayers’underpayments of tax for 1983 and 1984 from the due date of the first or third estimated tax
payment for the next succeeding years.

6
Acquiescence relating to whether the spread income realized from a disqualifying disposition of stock purchased through the taxpayer’s incentive stock option
(“ISO”) plan constitutes wages under section 41(b)(2)(D) in determining whether certain qualified research expenses qualify for the credit for increasing research
activities under section 41.
7
Acquiescence relating to whether section 4471 of the Internal Revenue Code which imposes a one-time excise tax of $3 for each passenger who “embarks” or “dis-
embarks” a commercial vessel in the United States, applies where the voyage begins and ends outside the United States, but make intermediate stops in the United
States, where passengers temporarily leave the ship.
8
Acquiescence relating to whether the cost of recoverable cushion gas and recoverable line pack gas, the gas used to maintain adequate pressure in a gas storage
facility and a pipeline, respectively, is properly treated as (i) merchandise and thus included in inventory; (ii) a depreciable capital asset; or (iii) a nondepreciable cap-
ital asset.
9
Acquiescence in result only relating to whether Termination Payments from an insurance company to a former insurance agent constitute net earnings from self-
employment within the meeting of section 1402(a) of the Internal Revenue Code (the Code) so as to be subject to tax under the Self-Employment Contributions Act
(SECA).
10
Nonacquiescence relating to whether, under Article 23(1)(c) of the U.S.–U.K. Income Tax Treaty, a U.S. corporation is entitled to continue to treat U.K. Advance
Corporation Tax (ACT) as a creditable tax paid by a U.K. subsidiary in computing the allowable credit for foreign taxes deemed paid under section 902(a) of the
Internal Revenue Code for the year in which the ACTwas paid, when the subsidiary subsequently surrenders all or part of the ACTto lower-tier U.K. subsidiaries
for use to satisfy their U.K. corporate tax liabilities.
11
Nonacquiescence relating to whether the Service was entitled to assess and collect statutory interest on the amount of tax and additions to tax embodied in a Tax
Court decision that resulted from a settlement agreement entered into by the taxpayers and the Service.
12
Continued nonacquiescence, but that this action on decision be substituted for the action on decision reported at Risman v. Commissioner,AOD CC–1996–003
(March 4, 1996), relating to whether a remittance forwarded to the Service with a Form 4868,Application for Automatic Extension of Time to File U.S. Individual
Income Tax Return, constitutes a payment of tax or a deposit in the nature of a cash bond for purposes of the period of limitations for seeking a refund of such remit-
tance.
13
Nonacquiescence relating to whether the Commissioner committed an abuse of discretion in determining that certain reinsurance agreements between unrelated
parties had a “significant tax avoidance effect” within the meaning of Internal Revenue Code section 845(b).
14
Nonacquiescence relating to whether the cost of recoverable line pack gas, the gas used to charge and operate an interstate natural gas pipeline system, is proper-
ly treated as (i) merchandise and thus included in inventory; (ii) a depreciable capital asset, or (iii) a nondepreciable capital asset.
January 5, 199861998–1 I.R.B.

26 CFR 601.201: Rulings and determination letters.
Rev. Proc. 98–1
TABLE OFCONTENTS
SECTION 1. WHATIS
THE PURPOSE OFTHIS
REVENUE PROCEDURE?p. 13
SECTION 2. IN WHAT
FORM IS GUIDANCE
PROVIDED BYTHE p. 13
OFFICES OFASSOCIATE
CHIEFCOUNSEL.01 Letter ruling
(DOMESTIC), ASSOCIATE
CHIEFCOUNSEL.02 Closing agreement
(EMPLOYEE BENEFITS
AND EXEMPT.03 Determination letter
ORGANIZATIONS),
ASSOCIATE CHIEF.04 Information letter
COUNSEL(ENFORCEMENT
LITIGATION), AND .05 Revenue ruling
ASSOCIATE CHIEF
COUNSEL.06 Oral guidance
(INTERNATIONAL)?
(1) No oral rulings, and no written rulings in response to oral requests
(2) Discussion possible on substantive issues
SECTION 3. ON WHATp. 15
ISSUES MAYTAXPAYERS
REQUESTWRITTEN .01 Issues under the jurisdiction of the Associate Chief Counsel (Domestic)
GUIDANCE UNDER THIS
PROCEDURE?
(1) Issues under the Assistant Chief Counsel (Corporate)
(2) Issues under the Assistant Chief Counsel (Financial Institutions and
Products)
(3) Issues under the Assistant Chief Counsel (Income Tax and Accounting)
(4) Issues under the Assistant Chief Counsel (Passthroughs and Special
Industries)
.02 Issues under the jurisdiction of the Associate Chief Counsel (Employee
Benefits and Exempt Organizations)
.03 Issues under the jurisdiction of the Associate Chief Counsel (Enforcement
Litigation)
.04 Issues under the jurisdiction of the Associate Chief Counsel (International)
SECTION 4. ON WHATp. 17
ISSUES MUSTWRITTEN
GUIDANCE BE REQUESTED .01 Alcohol, tobacco, and firearms taxes
1998–1 I.R.B.7January 5, 1998
Part III. Administrative, Procedural, and Miscellaneous

UNDER DIFFERENT
PROCEDURES?.02 Employee plans and exempt organizations
SECTION 5. UNDER WHATp. 17
CIRCUMSTANCES DOES
THE NATIONALOFFICE .01 In income and gift tax matters
ISSUE LETTER RULINGS?
.02 A§ 301.9100 request for extension of time for making an election or for
other relief
.03 Determinations under § 999(d) of the Internal Revenue Code
.04 In matters involving § 367
.05 In estate tax matters
.06 In matters involving additional estate tax under § 2032A(c)
.07 In matters involving qualified domestic trusts under § 2056A
.08 In generation-skipping transfer tax matters
.09 In employment and excise tax matters
.10 In administrative provisions matters
.11 Generally not to business associations or groups
.12 Generally not to foreign governments
.13 Generally not on federal tax consequences of proposed legislation
.14 Issuance of a letter ruling before the issuance of a regulation or other
published guidance
SECTION 6. UNDER WHATp. 22
CIRCUMSTANCES DO
DISTRICTDIRECTORS .01 In income and gift tax matters
ISSUE DETERMINATION
LETTERS?.02 In estate tax matters
.03 In generation-skipping transfer tax matters
.04 In employment and excise tax matters
.05 Circumstances under which determination letters are not issued by district
director
.06 Requests concerning income, estate, or gift tax returns
.07 Attach a copy of determination letter to taxpayer’s return
.08 Review of determination letters
SECTION 7. UNDER WHATp. 23
CIRCUMSTANCES DOES
THE SERVICE HAVE .01 Ordinarily not in certain areas because of factual nature of the problem
DISCRETION TO ISSUE
LETTER RULINGS AND.02 Not on alternative plans or hypothetical situations
January 5, 199881998–1 I.R.B.

DETERMINATION
LETTERS?.03 Ordinarily not on part of an integrated transaction
.04 Ordinarily not on questions involving the validity of the federal income tax
or similar matters
.05 On constructive sales price under § 4216(b) or § 4218(c)
SECTION 8. WHATARE p. 24
THE GENERAL
INSTRUCTIONS FOR .01 Certain information required in all requests
REQUESTING LETTER
RULINGS AND (1) Complete statement of facts and other information
DETERMINATION
LETTERS?(2) Copies of all contracts, wills, deeds, agreements, instruments, other
documents, and foreign laws
(3) Analysis of material facts
(4) Statement regarding whether same issue is in an earlier return
(5) Statement regarding whether same or similar issue was previously ruled
on or requested, or is currently pending
(6) Statement of supporting authorities
(7) Statement of contrary authorities
(8) Statement identifying pending legislation
(9) Statement identifying information to be deleted from copy of letter
ruling or determination letter for public inspection
(10) Signature by taxpayer or authorized representative
(11) Authorized representatives
12) Power of attorney and declaration of representative
(13) Penalties of perjury statement
(14) Number of copies of request to be submitted
(15) Sample format for a letter ruling request
(16) Checklist for letter ruling requests
.02 Additional information required in certain circumstances
(1) To request separate letter rulings for multiple issues in a single situation
(2) To designate recipient of original or copy of letter ruling or determination
letter
(3) To request a particular conclusion on a proposed transaction
(4) To request expeditious handling
(5) To receive a letter ruling or submit a request for a letter ruling by
facsimile transmission (fax)
1998–1 I.R.B.9January 5, 1998

(6) To request a conference
(7) To obtain the applicable user fee for substantially identical letter rulings
or identical accounting method changes
.03 Address to send the request
(1) Requests for letter rulings
(2) Requests for determination letters
.04 Pending letter ruling requests
.05 When to attach letter ruling to return
.06 How to check on status of request
.07 Request may be withdrawn or national office may decline to issue letter
ruling
.08 Compliance with Treasury Department Circular No. 230
SECTION 9. WHATOTHER p. 36
CHECKLISTS, GUIDELINE .01 Checklists and guideline revenue procedures and notices
REVENUE PROCEDURES,
NOTICES, SAFE HARBOR .02 Safe harbor revenue procedures
REVENUE PROCEDURES,
AND AUTOMATIC CHANGE .03 Automatic change revenue procedures
REVENUE PROCEDURES
APPLYTO CERTAIN
REQUESTS?
SECTION 10. HOWDOES p. 41
THE NATIONALOFFICE
HANDLE LETTER RULING .01 Controls request and refers it to appropriate Assistant Chief Counsel or to
REQUESTS?the Office of Associate Chief Counsel (International)
.02 Branch representative contacts taxpayer within 21 days
.03 Notifies taxpayer if any issues have been referred to another branch or office
.04 Determines if transaction can be modified to obtain favorable letter ruling
.05 Is not bound by informal opinion expressed
.06 Tells taxpayer if request lacks essential information during initial contact
.07 Requires prompt submission of additional information requested after initial
contact
.08 Near the completion of the ruling process, advises the taxpayer of conclu-
sions and, if the Service will rule adversely, offers the taxpayer the opportu-
nity to withdraw the letter ruling request
.09 May request draft of proposed letter ruling near the completion of the ruling
process
January 5, 1998101998–1 I.R.B.

.10 Issues separate letter rulings for substantially identical letter rulings and gen-
erally issues a single letter ruling for identical accounting method changes
.11 Sends copy of letter ruling to district director
SECTION 11. HOWARE p. 45
CONFERENCES
SCHEDULED?
.01 Schedules a conference if requested by taxpayer
.02 Permits taxpayer one conference of right
.03 Disallows verbatim recording of conferences
.04 Makes tentative recommendations on substantive issues
.05 May offer additional conferences
.06 Requires written confirmation of information presented at conference
.07 May schedule a pre-submission conference
.08 Under limited circumstances, may schedule a conference to be held by
telephone
SECTION 12. WHATp. 47
EFFECTWILLALETTER
RULING HAVE?.01 May be relied on subject to limitations
.02 Will not apply to another taxpayer
.03 Will be used by a district director in examining the taxpayer’s return
.04 May be revoked or modified if found to be in error
.05 Not generally revoked or modified retroactively
.06 Retroactive effect of revocation or modification applied to a particular
transaction
.07 Retroactive effect of revocation or modification applied to a continuing
action or series of actions
.08 Generally not retroactively revoked or modified if related to sale or lease
subject to excise tax
.09 May be retroactively revoked or modified when transaction is entered into
before the issuance of the letter ruling
.10 May be retroactively revoked or modified when transaction is entered into
after a change in material facts
.11 Taxpayer may request that retroactivity be limited
(1) Request for relief under § 7805(b) must be made in required format
(2) Taxpayer may request a conference on application of § 7805(b)
1998–1 I.R.B.11January 5, 1998

SECTION 13. WHATp. 50
EFFECTWILLA
DETERMINATION LETTER .01 Has same effect as a letter ruling
HAVE?
.02 Taxpayer may request that retroactive effect of revocation or modification be
limited
(1) Request for relief under § 7805(b) must be made in required format
(2) Taxpayer may request a conference on application of § 7805(b)
SECTION 14. UNDER p. 51
WHATCIRCUMSTANCES
ARE MATTERS REFERRED .01 Requests for determination letters
BETWEEN ADISTRICT
OFFICE AND THE .02No-rule areas
NATIONALOFFICE?
.03 Requests for letter rulings
SECTION 15. WHATARE p. 51
THE USER FEE
REQUIREMENTS FOR .01 Legislation authorizing user fees
REQUESTS FOR LETTER
RULINGS AND .02 Requests to which a user fee applies
DETERMINATION
LETTERS?.03 Requests to which a user fee does not apply
.04 Exemptions from the user fee requirements
.05 Fee schedule
.06 Applicable user fee for a request involving multiple offices, fee categories,
issues, transactions, or entities
.07 Applicable user fee for substantially identical letter rulings or identical
accounting method changes
.08 Method of payment
.09 Effect of nonpayment or payment of incorrect amount
.10 Refunds of user fee
.11 Request for reconsideration of user fee
SECTION 16. WHATp. 57
SIGNIFICANTCHANGES
HAVE BEEN MADE TO
REV. PROC. 97–1?
SECTION 17. WHATIS p. 58
THE EFFECTOFTHIS
REVENUE PROCEDURE ON
OTHER DOCUMENTS?
SECTION 18. WHATIS p. 58
THE EFFECTIVE DATE OF
THIS REVENUE
PROCEDURE?
January 5, 1998121998–1 I.R.B.

SECTION 19. PAPERWORK p. 58
REDUCTION ACT
DRAFTING INFORMATIONp. 59
INDEXp. 60
APPENDIX A—SCHEDULE p. 63
OFUSER FEES
APPENDIX B—SAMPLE p. 67
FORMATFOR ALETTER
RULING REQUEST
APPENDIX C—CHECKLISTp. 70
FOR ALETTER RULING
REQUEST
SECTION 1. WHATIS This revenue procedure explains how the Internal Revenue Service gives guidance to
THE PURPOSE OFTHIS taxpayers on issues under the jurisdiction of the Associate Chief Counsel (Domestic), the
REVENUE PROCEDURE?Associate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate
Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel (International).
It explains the kinds of guidance and the manner in which guidance is requested by
taxpayers and provided by the Service. Asample format of a request for a letter ruling is
provided in Appendix B.
Description of terms For purposes of this revenue procedure—
used in this revenue
procedure (1) any reference to district director or district office includes their respective offices
or, when appropriate, the Assistant Commissioner (International);
(2) the term “taxpayer” includes all persons subject to any provision of the Internal Rev-
enue Code (including issuers of § 103 obligations) and, when appropriate, their representa-
tives; and
(3) the term “national office” refers to the Office of Associate Chief Counsel (Domestic),
the Office of Associate Chief Counsel (Employee Benefits and Exempt Organizations), the
Office of Associate Chief Counsel (Enforcement Litigation), or the Office of Associate
Chief Counsel (International), as appropriate.
Updated annuallyThe revenue procedure is updated annually as the first revenue procedure of the year,
but may be modified or amplified during the year.
SECTION 2. IN WHATThe Service provides guidance in the form of letter rulings, closing agreements, deter-
FORM IS GUIDANCE mination letters, information letters, revenue rulings, and oral advice.
PROVIDED BYTHE
OFFICES OFASSOCIATE
CHIEFCOUNSEL
(DOMESTIC), ASSOCIATE
CHIEFCOUNSEL
EMPLOYEE BENEFITS
AND EXEMPT
ORGANIZATIONS),
ASSOCIATE CHIEF
COUNSEL(ENFORCEMENT
LITIGATION), AND
ASSOCIATE CHIEF
COUNSEL
(INTERNATIONAL)?
1998–1 I.R.B.13January 5, 1998

Letterruling .01A“letter ruling” is a written statement issued to a taxpayer by the national office
that interprets and applies the tax laws to the taxpayer’s specific set of facts. Aletter
ruling includes the written permission or denial of permission by the national office to a
request for a change in a taxpayer’s accounting method or accounting period. Once
issued, a letter ruling may be revoked or modified for any number of reasons, as explained
in section 12 of this revenue procedure, unless it is accompanied by a “closing
agreement.”
Closing agreement.02Aclosing agreement is a final agreement between the Service and a taxpayer on a
specific issue or liability. It is entered into under the authority in § 7121 and is final
unless fraud, malfeasance, or misrepresentation of a material fact can be shown.
Aclosing agreement may be entered into when it is advantageous to have the matter per-
manently and conclusively closed or when a taxpayer can show that there are good reasons
for an agreement and that making the agreement will not prejudice the interests of the Gov-
ernment. In appropriate cases, a taxpayer may be asked to enter into a closing agreement
as a condition to the issuance of a letter ruling.
If, in a single case, a closing agreement is requested for each person in a class of taxpay-
ers, separate agreements are entered into only if the class consists of 25 or fewer taxpayers.
However, if the issue and holding are identical for the class and there are more than 25 tax-
payers in the class, a “mass closing agreement” will be entered into with the taxpayer who
is authorized by the others to represent the class.
Determination letter.03A“determination letter” is a written statement issued by a district director that
applies the principles and precedents previously announced by the national office to a
specific set of facts. It is issued only when a determination can be made based on clearly
established rules in the statute, a tax treaty, or 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.
Adetermination letter does not include assistance provided by the U.S. competent
authority pursuant to the mutual agreement procedure in tax treaties as set forth in Rev.
Proc. 96–13, 1996–1 C.B. 616.
Information letter.04An “information letter” is a statement issued either by the national office or by a
district director. It calls attention to a well-established interpretation or principle of tax
law (including a tax treaty) without applying it to a specific set of facts. An information
letter may be issued if the taxpayer’s inquiry indicates a need for general information or if
the taxpayer’s request does not meet the requirements of this revenue procedure and the
Service thinks general information will help the taxpayer. The taxpayer should provide a
daytime telephone number with the taxpayer’s request for an information letter. An
information letter is advisory only and has no binding effect on the Service.
Revenue ruling .05A“revenue ruling” is an interpretation by the Service that has been published in the
Internal Revenue Bulletin. It is the conclusion of the Service on how the law is applied to
a specific set of facts. Revenue rulings are issued only by the national office and are
published for the information and guidance of taxpayers, Service personnel, and other
interested parties.
Because each revenue ruling represents the conclusion of the Service regarding the ap-
plication of law to the entire statement of facts involved, taxpayers, Service personnel, and
other concerned parties are cautioned against reaching the same conclusion in other cases
unless the facts and circumstances are substantially the same. They should consider the ef-
fect of subsequent legislation, regulations, court decisions, revenue rulings, notices, and
announcements. See Rev. Proc. 89–14, 1989–G1 C.B. 814, which states the objectives of,
and standards for, the publication of revenue rulings and revenue procedures in the Internal
Revenue Bulletin.
January 5, 1998141998–1 I.R.B.
Sec. 2.01

Oral guidance.06
(1) No oral rulings, and no written rulings in response to oral requests.
The Service does not orally issue letter rulings or determination letters, nor does it issue
letter rulings or determination letters in response to oral requests from taxpayers. How-
ever, Service employees ordinarily will discuss with taxpayers or their representatives in-
quiries regarding whether the Service will rule on particular issues and questions relating to
procedural matters about submitting requests for letter rulings or determination letters for a
particular case.
(2) Discussion possible on substantive issues.
At the discretion of the Service and as time permits, substantive issues also may be dis-
cussed. However, such a discussion will not be binding on the Service in general or on the
Office of Chief Counsel in particular and cannot be relied upon as a basis for obtaining
retroactive relief under the provisions of § 7805(b).
Substantive tax issues involving the taxpayer that are under examination, in appeals, or
in litigation will not be discussed by Service employees not directly involved in the exami-
nation, appeal, or litigation of the issues unless the discussion is coordinated with those
Service employees who are directly involved in the examination, appeal, or litigation of the
issues. The taxpayer or the taxpayer’s representative ordinarily will be asked whether the
oral request for guidance or information relates to a matter pending before another office of
the Service.
If a tax issue is not under examination, in appeals, or in litigation, the tax issue may be
discussed even though the issue is affected by a nontax issue pending in litigation.
Ataxpayer may seek oral technical guidance from a taxpayer service representative in a
district office or service center when preparing a return or report. Oral guidance is advi-
sory only, and the Service is not bound to recognize it, for example, in the examination of
the taxpayer’s return.
The Service does not respond to letters seeking to confirm the substance of oral discus-
sions, and the absence of a response to such a letter is not confirmation of the substance of
the letter.
SECTION 3. ON WHATTaxpayers may request letter rulings, information letters, and closing agreements under
ISSUES MAYTAXPAYERS this revenue procedure on issues within the jurisdiction of the Associate Chief Counsel
REQUESTWRITTEN (Domestic), the Associate Chief Counsel (Employee Benefits and Exempt Organizations),
GUIDANCE UNDER THIS the Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel
PROCEDURE?(International). The national office issues letter rulings to answer written inquiries of
individuals and organizations about their status for tax purposes and the tax effects of their
acts or transactions when appropriate in the interest of sound tax administration.
Taxpayers also may request determination letters within the jurisdiction of the appropri-
ate district director offices that relate to the Code sections under the jurisdiction of the
Associate Chief Counsel (Domestic), the Associate Chief Counsel (Employee Benefits and
Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), or the
Associate Chief Counsel (International).
Issues underthe .01 Issues under the jurisdiction of the Associate Chief Counsel (Domestic) include all
jurisdiction of the issues under the jurisdiction of the various Assistant Chief Counsels as explained below.
Associate Chief
Counsel (Domestic)
Issues underthe (1) Issues under the Assistant Chief Counsel (Corporate) include those that involve con-
Assistant Chiefsolidated returns, corporate acquisitions, reorganizations, liquidations, redemptions,
Counsel (Corporate)spinoffs, transfers to controlled corporations, distributions to shareholders, corporate
1998–1 I.R.B.15January 5, 1998
Sec. 3.01

bankruptcies, the effect of certain ownership changes on net operating loss carryovers and
other tax attributes, debt vs. equity determinations, allocation of income and deductions
among taxpayers, acquisitions made to evade or avoid income tax, and certain earnings
and profits questions.
Issues underthe (2) Issues under the Assistant Chief Counsel (Financial Institutions and Products) include
Assistant Chief those that involve income taxes and accounting method changes of banks, savings and
Counsel (Financial loan associations, real estate investment trusts (REITs), regulated investment companies
Institutions and (RICs), real estate mortgage investment conduits (REMICs), tax-exempt obligations,
Products)mortgage credit certificates (MCCs), insurance companies and products, and financial
products.
Issues underthe (3) Issues under the Assistant Chief Counsel (Income Tax and Accounting) include those
Assistant Chief that involve recognition and timing of income and deductions of individuals and corpora-
Counsel (Income Tax tions, sales and exchanges, capital gains and losses, installment sales, equipment leasing,
and Accounting)inventories, the alternative minimum tax, accounting method changes for these and other
miscellaneous issues, various administrative provisions, and accounting periods.
Issues underthe (4) Issues under the Assistant Chief Counsel (Passthroughs and Special Industries) include
Assistant Chief those that involve income taxes of S corporations (except accounting periods and methods)
Counsel (Passthroughs and certain noncorporate taxpayers (including partnerships, common trust funds, and trusts);
and Special entity classification; estate, gift, generation-skipping transfer, and certain excise taxes;
Industries)amortization, depreciation, depletion, and other engineering issues; accounting method
changes for depreciation and amortization; cooperative housing corporations; farmers’
cooperatives (under § 521); the low-income housing, disabled access, and qualified
electric vehicle credits; research and experimental expenditures; shipowners’protection
and indemnity associations (under § 526); and certain homeowners associations (under
§ 528).
Issues underthe .02Issues under the jurisdiction of the Associate Chief Counsel (Employee Benefits
jurisdiction of the and Exempt Organizations) include those that involve income tax and other tax aspects of
Associate Chief executive compensation and employee benefit programs (other than those within the
Counsel (Employee jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations)),
Benefits and Exempt employment taxes, and taxes on self-employment income.
Organizations)
Issues underthe .03Issues under the jurisdiction of the Associate Chief Counsel (Enforcement Litigation)
jurisdiction of theinclude issues only under the jurisdiction of the Assistant Chief Counsel (General Litigation).
Associate Chief Issues under the Assistant Chief Counsel (General Litigation) include those that involve
Counsel (Enforcement collection.
Litigation)
Issues underthe .04 Issues under the jurisdiction of the Associate Chief Counsel (International) include the
jurisdiction of thetax treatment of nonresident aliens and foreign corporations; withholding of tax on non-
Associate Chief resident aliens and foreign corporations; foreign tax credit; determination of sources of in-
Counsel come;income from sources without the United States; subpart F questions; domestic
(International)international sales corporations (DISCs); foreign sales corporations (FSCs); international
boycott determinations; treatment of certain passive foreign investment companies; and
income affected by treaty.
For the procedures to obtain advance pricing agreements under § 482, see Rev. Proc. 96–
53, 1996–2 C.B. 375.
For the procedures concerning competent authority relief arising under the application
and interpretation of tax treaties between the United States and other countries, see Rev.
Proc. 96–13. However, competent authority consideration for an advance pricing agree-
ment should be requested under Rev. Proc. 96–53.
January 5, 1998161998–1 I.R.B.
Sec. 3.01

SECTION 4. ON WHAT
ISSUES MUSTWRITTEN
GUIDANCE BE REQUESTED
UNDER DIFFERENT
PROCEDURES?
Alcohol, tobacco, and .01The procedures for obtaining letter rulings, etc., that apply to federal alcohol,
firearms taxestobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction of the
Bureau of Alcohol, Tobacco and Firearms.
Employee plans and .02The procedures for obtaining letter rulings, determination letters, etc., on employee
exempt organizationsplans and exempt organizations are under the jurisdiction of the Assistant Commissioner
(Employee Plans and Exempt Organizations). SeeRev. Proc. 98–4, this Bulletin. See also
Rev. Proc. 98-6, this Bulletin, for the procedures for issuing determination letters on the
qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock
ownership plans under §§ 401, 403(a), 409, and 4975(e)(7), and the status for exemption
of any related trusts or custodial accounts under § 501(a).
For the user fee requirements applicable to requests for letter rulings, determination let-
ters, etc., under the jurisdiction of the Assistant Commissioner (Employee Plans and
Exempt Organizations), see Rev. Proc. 98-8.
SECTION 5. UNDER WHAT
CIRCUMSTANCES DOES
THE NATIONALOFFICE
ISSUE LETTER RULINGS?
In income and gift tax .01In income and gift tax matters, the national office generally issues a letter ruling on a
mattersproposed transaction and on a completed transaction if the letter ruling request is sub-
mitted before the return is filed for the year in which the transaction that is the subject of
the request was completed.
(1) Circumstances underwhich a letterruling is not ordinarily issued. The national
office ordinarily does not issue a letter ruling if, at the time the letter ruling is requested, the
identical issue is involved in the taxpayer’s return for an earlier period and that issue—
(a) is being examined by a district director;
(b) is being considered by an appeals office;
(c) is pending in litigation in a case involving the taxpayer or a related taxpayer;
(d) has been examined by a district director or considered by an appeals office and the
statutory period of limitations has not expired for assessment or for filing a claim for re-
fund or credit of tax; or
(e) has been examined by a district director or considered by an appeals office and a
closing agreement covering the issue or liability has not been entered into by a district
director or by an appeals office.
If a return dealing with an issue for a particular year is filed while a request for a letter
ruling on that issue is pending, the national office will issue the letter ruling unless it is
notified by the taxpayer or otherwise learns that an examination of that issue or the identi-
cal issue on an earlier year’s return has been started by a district director. Seesection 8.04
of this revenue procedure. However, even if an examination has begun, the national office
ordinarily will issue the letter ruling if the district director agrees, by memorandum, to the
issuance of the letter ruling.
1998–1 I.R.B.17January 5, 1998
Sec. 5.01

(2) No letterruling on a property conversion afterreturn filed.The national office
does not issue a letter ruling on the replacement of involuntarily converted property,
whether or not the property has been replaced, if the taxpayer has already filed a return for
the taxable year in which the property was converted. However, the district director may
issue a determination letter in this case. Seesection 6.01 of this revenue procedure.
(3)Certain late S corporation elections. In lieu of requesting a letter ruling under this
revenue procedure, a taxpayer may obtain relief under § 1362(b)(5) for certain late S
corporation elections by following the procedures in Rev. Proc. 97–40, 1997–33 I.R.B. 50,
or Rev. Proc. 97–48, 1997–43 I.R.B. 19. Arequest made pursuant to Rev. Proc. 97–40 or
Rev. Proc. 97–48 does not require payment of any user fee. See section 3 of Rev. Proc.
97–40 or Rev. Proc. 97–48 and section 15.03(2) of this revenue procedure.
A§ 301.9100 request .02The national office will consider a request for an extension of time for making an
forextension of time election or other application for relief under § 301.9100–3 of the Procedure and Adminis-
formaking an tration Regulations. Even if submitted after the return covering the issue presented in the
election orforother§ 301.9100 request has been filed and even if submitted after an examination of the return
reliefhas begun or after the issues in the return are being considered by an appeals office or a
federal court, a § 301.9100 request is a letter ruling request. Therefore, the § 301.9100
request should be submitted pursuant to this revenue procedure.
However, an election made pursuant to § 301.9100–2 is not a letter ruling request and
does not require payment of any user fee. See§ 301.9100–2(d) and section 15.03(1) of this
revenue procedure. Such an election pertains to an automatic extension of time.
(1) Format of request.A§ 301.9100 request (other than an election made pursuant to
§ 301.9100–2) must be in the general form of, and meet the general requirements for, a let-
ter ruling request. These requirements are given in section 8 of this revenue procedure. In
addition, the § 301.9100 request must include the information required by
§ 301.9100–3(e).
(2) Statute of limitations.The running of any applicable period of limitations is not
suspended for the period during which a § 301.9100 request has been filed. See
§ 301.9100–3(d)(2). If the period of limitations on assessment under § 6501(a) for the tax-
able year in which an election should have been made or any taxable year that would have
been affected by the election had it been timely made will expire before receipt of a
§ 301.9100 letter ruling, the Service ordinarily will not issue a § 301.9100 ruling. See
§ 301.9100–3(c)(1)(ii). Therefore, the taxpayer must secure a consent under § 6501(c)(4)
to extend the period of limitations on assessment. Note that the filing of a claim for refund
under § 6511 does not extend the period of limitations on assessment. If § 301.9100 relief
is granted, the Service may require the taxpayer to consent to an extension of the period of
limitations on assessment. See§ 301.9100–3(d)(2).
(3) Taxpayermust notify national office if examination of return begins while re-
quest is pending. If the Service starts an examination of the taxpayer’s return for the tax-
able year in which an election should have been made or any taxable year that would have
been affected by the election had it been timely made while a § 301.9100 request is pend-
ing, the taxpayer must notify the national office. See§ 301.9100–3(e)(4)(i) and section
8.04(1)(b) of this revenue procedure.
(4) National office will notify district director, appeals officer, orgovernment coun-
sel of a § 301.9100 request if return is being examined oris being considered by an
appeals office ora federal court.If the taxpayer’s return for the taxable year in which an
election should have been made or any taxable year that would have been affected by the
election had it been timely made is being examined by a district office or considered by an
appeals office or a federal court, the national office will notify the appropriate district
director, appeals officer, or government counsel that a § 301.9100 request has been submit-
ted to the national office. The examining officer, appeals officer, or government counsel is
January 5, 1998181998–1 I.R.B.
Sec. 5.01

not authorized to deny consideration of a § 301.9100 request. The letter ruling will be
mailed to the taxpayer and a copy will be sent to the appropriate district director, appeals
officer, or government counsel.
Determinations under.03Under Rev. Proc. 77–9, 1977–1 C.B. 542, the Office of Associate Chief Counsel
§ 999(d) of the (International) issues determinations under § 999(d) that may deny certain benefits of the
Internal Revenue Codeforeign tax credit, deferral of earnings of foreign subsidiaries and domestic international
sales corporations (DISCs), and tax exemption for foreign trade income of a foreign sales
corporation or a small foreign sales corporation (FSC or small FSC) to a person, if that
person, a member of a controlled group (within the meaning of § 993(a)(3)) that includes
the person, or a foreign corporation of which a member of the controlled group is a United
States shareholder, agrees to participate in, or cooperate with, an international boycott.
Requests for determinations under Rev. Proc. 77-9 are letter ruling requests and, therefore,
should be submitted to the Associate Chief Counsel (International) pursuant to this
revenue procedure.
In matters involving .04Unless the issue is covered by section 7 of this revenue procedure, the Office of
§ 367Associate Chief Counsel (International) may issue a letter ruling under § 367 even if the
taxpayer does not request a letter ruling as to the characterization of the transaction under
the reorganization provisions of the Code. The Office of Associate Chief Counsel
(International) will determine the § 367 consequences of a transaction based on the
taxpayer’s characterization of the transaction but will indicate in the letter ruling that it
expresses no opinion as to the characterization of the transaction under the reorganization.
However, the Office of Associate Chief Counsel (International) may decline to issue a
§ 367 ruling in situations in which the taxpayer inappropriately characterizes the
transaction under the reorganization provisions.
In estate tax matters.05In general, the national office issues prospective letter rulings on transactions affect-
ing the estate tax on the prospective estate of a living person and affecting the estate tax on
the estate of a decedent before the decedent’s estate tax return is filed. The national office
will not issue letter rulings for prospective estates on computations of tax, actuarial factors,
and factual matters.
If the taxpayer is requesting a letter ruling regarding a decedent’s estate tax and the
estate tax return is due to be filed before the letter ruling is expected to be issued, the tax-
payer should obtain an extension of time for filing the return and should notify the national
office branch considering the letter ruling request that an extension has been obtained.
If the return is filed before the letter ruling is received from the national office, the tax-
payer must disclose on the return that a letter ruling has been requested, attach a copy of
the pending letter ruling request to the return, and notify the national office that the return
has been filed. Seesection 8.04 of this revenue procedure. The national office will make
every effort to issue the letter ruling within 3 months of the date the return was filed.
If the letter ruling cannot be issued within that 3-month period, the national office will
notify the district director having jurisdiction over the return, who may, by memorandum to
the national office, grant an additional period for the issuance of the letter ruling.
In matters involving .06 In matters involving additional estate tax under § 2032A(c), the national office issues
additional estate tax letter rulings on proposed transactions and on completed transactions that occurred before
under§ 2032A(c)the return is filed.
In matters involving .07In matters involving qualified domestic trusts under § 2056A, the national office
qualified domestic issues letter rulings on proposed transactions and on completed transactions that occurred
trusts under§ 2056Abefore the return is filed.
In generation-.08In general, the national office issues letter rulings on proposed transactions that
skipping transfertax affect the generation-skipping transfer tax and on completed transactions that occurred
mattersbefore the return is filed. In the case of a generation-skipping trust or trust equivalent,
letter rulings are issued either before or after the trust or trust equivalent has been
1998–1 I.R.B.19January 5, 1998
Sec. 5.08

established. The national office will issue letter rulings on the application of the effective
date rules for generation-skipping transfer tax (§ 1433 of the Tax Reform Act of 1986,
1986–3 (Vol. 1) C.B. 1, 648) to wills, trusts, and trust equivalents in existence on October
22, 1986, and to generation-skipping transfers taking place on or before October 22, 1986.
In employment and .09In employment and excise tax matters, the national office issues letter rulings on pro-
excise tax mattersposed transactions and on completed transactions either before or after the return is filed
for those transactions.
Requests regarding employment status (employer/employee relationship) from federal
agencies and instrumentalities should be submitted directly to the national office. Requests
regarding employment status from other taxpayers must first be submitted to the appropri-
ate Service office listed on the current Form SS–8 (Rev. June 1997). See section 6.04 of
this revenue procedure. Generally, the employer is the taxpayer and requests the letter rul-
ing. However, if the worker asks for the letter ruling, both the worker and the employer are
considered to be the taxpayer and both are entitled to the letter ruling.
The national office usually will not issue a letter ruling if, at the time the letter ruling is
requested, the identical issue is involved in the taxpayer’s return for an earlier period and
that issue—
(1) is being examined by a district director;
(2) is being considered by an appeals office;
(3) is pending in litigation in a case involving the taxpayer or a related taxpayer;
(4) has been examined by a district director or considered by an appeals office and the
statutory period of limitations has not expired for assessment or for filing a claim for
refund or credit of tax; or
(5) has been examined by a district director or considered by an appeals office and a
closing agreement covering the issue or liability has not been entered into by a district
director or by an appeals office.
If a return involving an issue for a particular year is filed while a request for a letter
ruling on that issue is pending, the national office will issue the letter ruling unless it is
notified by the taxpayer or otherwise learns that an examination of that issue or an exami-
nation of the identical issue on an earlier year’s return has been started by a district direc-
tor. See section 8.04 of this revenue procedure. However, even if an examination has
begun, the national office ordinarily will issue the letter ruling if the district director agrees,
by memorandum, to the issuance of the letter ruling.
In administrative .10
provisions matters
(1) In general.The national office issues letter rulings on matters arising under the
Code and related statutes and regulations that involve—
(a) the time, place, manner, and procedures for reporting and paying taxes;
(b) the assessment and collection of taxes (including interest and penalties);
(c) the abatement, credit, or refund of an overassessment or overpayment of tax; or
(d) the filing of information returns.
(2) Circumstances underwhich a letterruling is not ordinarily issued.The national
office ordinarily does not issue a letter ruling if, at the time the letter ruling is requested, the
identical issue is involved in the taxpayer’s return for an earlier period and that issue—
(a) is being examined by a district director;
January 5, 1998201998–1 I.R.B.
Sec. 5.08

(b) is being considered by an appeals office;
(c) is pending in litigation in a case involving the taxpayer or a related taxpayer;
(d) has been examined by a district director or considered by an appeals office and the
statutory period of limitations has not expired for assessment or for filing a claim for
refund or credit of tax; or
(e) has been examined by a district director or considered by an appeals office and a
closing agreement covering the issue or liability has not been entered into by a district
director or appeals office.
If a return involving an issue for a particular year is filed while a request for a letter
ruling on that issue is pending, the national office will issue the letter ruling unless it is
notified by the taxpayer or otherwise learns that an examination of that issue or an exami-
nation of the identical issue on an earlier year’s return has been started by a district direc-
tor. Seesection 8.04 of this revenue procedure. But, even if an examination has begun, the
national office ordinarily will issue the letter ruling if the district director agrees, by memo-
randum, to the issuance of the letter ruling.
Generally not to .11The national office does not issue letter rulings to business, trade, or industrial
business associations associations or to similar groups concerning the application of the tax laws to members of
orgroupsthe group. But groups and associations may submit suggestions of generic issues that
would be appropriately addressed in revenue rulings. SeeRev. Proc. 89–14, which states
the objectives of, and standards for, the publication of revenue rulings and revenue
procedures in the Internal Revenue Bulletin.
The national office, however, may issue letter rulings to groups or associations on their
own tax status or liability if the request meets the requirements of this revenue procedure.
Generally not to.12The national office does not issue letter rulings to foreign governments or their polit-
foreign governmentsical subdivisions about the U.S. tax effects of their laws. The national office also does not
issue letter rulings on the effect of a tax treaty on the tax laws of a treaty country for
purposes of determining the tax of the treaty country. Seesection 13.02 of Rev. Proc.
96–13, 1996–1 C.B. at 626. However, the national office will continue to exchange
correspondence with treaty partners pursuant to the consultation provisions in tax treaties.
In addition, the national office may issue letter rulings to foreign governments or their
political subdivisions on their own tax status or liability under U.S. law if the request
meets the requirements of this revenue procedure.
Generally not on .13 The national office does not issue letter rulings on a matter involving the federal tax
federal tax consequences of any proposed federal, state, local, municipal, or foreign legislation. The
consequences of national office, however, may provide general information in response to an inquiry.
proposed legislation
Issuance of a letter.14 Unless the issue is covered by section 7 of this revenue procedure, Rev. Proc. 98–3,
ruling before the this Bulletin, or Rev. Proc. 98–7, this Bulletin, a letter ruling may be issued before the
issuance of a issuance of a temporary or final regulation or other published guidance that interprets the
regulation orotherprovisions of any act under the following conditions:
published guidance
(1) Answeris clearoris reasonably certain. If the letter ruling request presents an
issue for which the answer seems clear by applying the statute to the facts or for which the
answer seems reasonably certain but not entirely free from doubt, a letter ruling will be
issued.
(2) Answeris not reasonably certain.The Service will consider all letter ruling
requests and use its best efforts to issue a letter ruling even if the answer does not seem
reasonably certain where the issuance of a letter ruling is in the best interests of tax
administration.
1998–1 I.R.B.21January 5, 1998
Sec. 5.14

(3) Issue cannot be readily resolved before a regulation orany otherpublished
guidance is issued.Aletter ruling will not be issued if the letter ruling request presents an
issue that cannot be readily resolved before a regulation or any other published guidance is
issued. However, when the Service has closed a regulation project or any other published
guidance project that might have answered the issue or decides not to open a regulation
project or any other published guidance project, the appropriate branch will consider all
letter ruling requests unless the issue is covered by section 7 of this revenue procedure,
Rev. Proc. 98–3, or Rev. Proc. 98–7.
SECTION 6. UNDER WHATDistrict directors issue determination letters only if the question presented is specifically
CIRCUMSTANCES DO answered by a statute, tax treaty, or regulation, or by a conclusion stated in a revenue rul-
DISTRICTDIRECTORS ing, opinion, or court decision published in the Internal Revenue Bulletin.
ISSUE DETERMINATION
LETTERS?
In income and gift .01 In income and gift tax matters, district directors issue determination letters in response
tax mattersto taxpayers’written requests on completed transactions that affect returns over which
they have examination jurisdiction. Adetermination letter usually is not issued for a
question concerning a return to be filed by the taxpayer if the same question is involved in
a return already filed.
Normally, district directors do not issue determination letters on the tax consequences of
proposed transactions. However, a district director may issue a determination letter on the
replacement, even though not yet made, of involuntarily converted property under § 1033,
if the taxpayer has filed an income tax return for the year in which the property was invol-
untarily converted.
In estate tax matters.02In estate tax matters, district directors issue determination letters in response to
written requests affecting the estate tax returns over which the district directors have
examination jurisdiction. They do not issue determination letters on matters concerning
the application of the estate tax to the prospective estate of a living person.
In generation- .03In generation-skipping transfer tax matters, district directors issue determination
skipping transfertax letters in response to written requests affecting the generation-skipping transfer tax returns
mattersover which the district directors have examination jurisdiction. They do not issue
determination letters on matters concerning the application of the generation-skipping
transfer tax before the distribution or termination takes place.
In employment and .04In employment and excise tax matters, district directors issue determination letters in
excise tax mattersresponse to written requests from taxpayers on completed transactions over which they
have examination jurisdiction.
Requests for a determination of employment status (Form SS–8) from taxpayers (other
than federal agencies and instrumentalities) must be submitted to the appropriate Service
office listed on the current Form SS–8 (Rev. June 1997) and not directly to the national
office. See alsosection 5.09 of this revenue procedure.
Circumstances under.05Adistrict director will not issue a determination letter in response to any request if—
which determination
letters are not (1) it appears that the taxpayer has directed a similar inquiry to the national office;
issued by district
director(2) the same issue involving the same taxpayer or a related taxpayer is pending in a case
in litigation or before an appeals office;
(3) the determination letter is requested by an industry, trade association, or similar
group; or
(4) the request involves an industry-wide problem.
January 5, 1998221998–1 I.R.B.
Sec. 5.14

Under no circumstances will a district 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 district director has, or will have, examination jurisdiction.
Adistrict director will not issue a determination letter on an employment tax question if
the specific question for the same taxpayer or a related taxpayer has been, or is being,
considered by the Central Office of the Social Security Administration or the Railroad
Retirement Board.
Adistrict director also will not issue a determination letter on determining constructive
sales price under § 4216(b) or § 4218(c), which deal with special provisions applicable to
the manufacturer’s excise tax. The national office, however, will issue letter rulings in this
area. See section 7.04 of this revenue procedure.
Requests concerning .06Arequest received by a district director on a question concerning an income, estate,
income, estate, oror gift tax return already filed generally will be considered in connection with the
gift tax returnsexamination of the return. If a response is made to the request before the return is
examined, it will be considered a tentative finding in any later examination of that return.
Attach a copy of .07Ataxpayer who, before filing a return, receives a determination letter about any
determination lettertransaction that has been consummated and that is relevant to the return being filed should
to taxpayer’s returnattach a copy of the determination letter to the return when it is filed.
Review of .08Determination letters issued under sections 6.01 through 6.04 of this revenue proce-
determination lettersdure are not reviewed by the national office before they are issued. If a taxpayer believes
that a determination letter of this type is in error, the taxpayer may ask the district director
to reconsider the matter or to request technical advice from the national office as
explained in Rev. Proc. 98–2, this Bulletin.
SECTION 7. UNDER WHAT
CIRCUMSTANCES DOES
THE SERVICE HAVE
DISCRETION TO ISSUE
LETTER RULINGS AND
DETERMINATION
LETTERS?
Ordinarily not in .01The Service ordinarily will not issue letter rulings or determination letters in certain
certain areas because areas because of the factual nature of the problem involved or because of other reasons.
of factual nature of Rev. Proc. 98–3 and Rev. Proc. 98–7 provide a list of these areas. This list is not all-
the probleminclusive because the Service may decline to issue a letter ruling or a determination letter
when appropriate in the interest of sound tax administration or on other grounds whenever
warranted by the facts or circumstances of a particular case.
Instead of issuing a letter ruling or determination letter, the national office or a district
director may, when it is considered appropriate and in the best interests of the Service,
issue an information letter calling attention to well-established principles of tax law.
Not on alternative .02 Aletter ruling or a determination letter will not be issued on alternative plans of pro-
plans orhypothetical posed transactions or on hypothetical situations.
situations
Ordinarily not on .03The national office ordinarily will not issue a letter ruling on only part of an
part of an integrated integrated transaction. If, however, a part of a transaction falls under a no-rule area, a
transactionletter uling on other parts of the transaction may be issued. Before preparing the letter
ruling request, a taxpayer should call the branch having jurisdiction for the matters on
which the taxpayer is seeking a letter ruling to discuss whether the national office will
issue a letter ruling on part of the transaction.
If two or more items or sub-methods of accounting are interrelated, the national office
ordinarily will not issue a letter ruling on a change in accounting method involving only
one of the items or sub-methods.
1998–1 I.R.B.23January 5, 1998
Sec. 7.03

Ordinarily not on .04Aletter ruling or determination letter ordinarily will not be issued on questions in-
questions involving volving the validity of the federal income tax and other taxes set forth in the Code, ques-
the validity of the tions on the authority or jurisdiction of the Service to enforce the Code or collect informa
federal income tax ortion, or similar matters.
siimilarmatters
On constructive sales .05 The national office will issue letter rulings in all cases on the determination of a con-
price under§ 4216(b) structive sales price under § 4216(b) or § 4218(c) and in all other cases on prospective
or§ 4218(c)transactions if the law or regulations require a determination of the effect of a proposed
transaction for tax purposes.
SECTION 8. WHATARE This section explains the general instructions for requesting letter rulings and determina-
THE GENERALtion letters on all matters. Requests for letter rulings and determination letters require the
INSTRUCTIONS FOR payment of the applicable user fee listed in Appendix Aof this revenue procedure. For
REQUESTING LETTER additional user fee requirements, see section 15 of this revenue procedure.
RULINGS AND
DETERMINATION Specific and additional instructions also apply to requests for letter rulings and determi-
LETTERS?nation letters on certain matters. Those matters are listed in section 9 of this revenue
procedure followed by a reference (usually to another revenue procedure) where more
information can be obtained.
Certain information .01
required in all requests
Facts(1) Complete statement of facts and otherinformation.Each request for a letter
ruling or a determination letter must contain a complete statement of all facts relating to
the transaction. These facts include—
(a) names, addresses, telephone numbers, and taxpayer identification numbers of all in-
terested parties. (The term “all interested parties” does not mean all shareholders of a
widely held corporation requesting a letter ruling relating to a reorganization or all employ-
ees where a large number may be involved.);
(b) the annual accounting period, and the overall method of accounting (cash or accrual)
for maintaining the accounting books and filing the federal income tax return, of all inter-
ested parties;
(c) the location of the district office that has or will have examination jurisdiction over
the return (not the service center where the return is filed);
(d) a description of the taxpayer’s business operations;
(e) a complete statement of the business reasons for the transaction; and
(f) a detailed description of the transaction.
The Service will usually not rule on only one step of a larger integrated transaction. See
section 7.03 of this revenue procedure. However, if such a letter ruling is requested, the
facts, circumstances, true copies of relevant documents, etc., relating to the entire transac-
tion must be submitted.
Documents and foreign (2) Copies of all contracts, wills, deeds, agreements, instruments, otherdocuments,
lawsand foreign laws.
(a) Documents. True copies of all contracts, wills, deeds, agreements, instruments, trust
documents, proposed disclaimers, and other documents pertinent to the transaction must be
submitted with the request.
January 5, 1998241998–1 I.R.B.
Sec. 7.04

If the request concerns a corporate distribution, reorganization, or similar transaction,
the corporate balance sheet and profit and loss statement should also be submitted. If the
request relates to a prospective transaction, the most recent balance sheet and profit and
loss statement should be submitted.
If any document, including any balance sheet and profit and loss statement, is in a lan-
guage other than English, the taxpayer must also submit a certified English translation of
the document, along with a true copy of the document. For guidelines on the acceptability
of such documents, see paragraph (c) of this section 8.01(2).
Each document, other than the request, should be labelled and attached to the request in
alphabetical sequence. Original documents, such as contracts, wills, etc., should not be
submitted because they become part of the Service’s file and will not be returned.
(b) Foreign laws. The taxpayer must also submit with the request a copy of all applica-
ble foreign laws and, if English is not the official language of the foreign country involved,
certified English translations of all applicable foreign laws. For guidelines on the accept-
ability of such documents, see paragraph (c) of this section 8.01(2).
(c) Standards foracceptability of submissions of foreign laws and documents in a
language otherthan English. The following standards govern the acceptability of sub-
missions of foreign laws and documents in a language other than English for purposes of
this section 8.01(2).
(i) Foreign laws in cases where English is the official language of the foreign country
involved.In cases involving foreign law where English is the official language of the for-
eign country involved, the document submitted must be in the English language and must
be: (A) an official publication of the foreign government involved or of its designated offi-
cial printer that contains, verbatim, the pertinent provisions of the foreign law as enacted;
(B) a copy or reproduction of this official publication, or pertinent excerpts therefrom,
properly attested to; (C) an accurate and complete reprint of the law as enacted, or pertinent
excerpts therefrom, properly attested to; (D) a copy or reproduction of the reprint, or perti-
nent excerpts therefrom, properly attested to with respect to the copy or reproduction; (E)
verbatim excerpts of the pertinent provisions of the foreign law as enacted, properly at-
tested to by an official of the department or office of the foreign government that adminis-
ters the law; (F) verbatim excerpts of the pertinent provisions of the foreign law as enacted,
properly attested to by an accredited diplomatic representative of the foreign country in-
volved; or (G) such other official documents, properly attested to, originating in the foreign
country involved and containing matters that, in the opinion of the Service, are of sufficient
scope and quality to enable it to make the determination in question.
Attestations referred to in this section 8.01(2)(c)(i) must: (H) establish that the material
offered is an exact copy of the material as it appears in the document from which it was ob-
tained; (I) contain a statement as to the period covered by the law presented; (J) contain the
name and address of the person attesting; (K) contain the official title, if any, of the person
attesting and a statement as to that person’s qualifications and knowledge regarding income
tax matters; and (L) contain a statement as to whether or not the attestant has been admitted
to practice before the Treasury Department of the United States Government.
In addition, the taxpayer or the taxpayer’s representative must represent that, to the best
of the taxpayer’s or the representative’s knowledge, the document submitted is accurate
and complete with respect to the pertinent provisions of the relevant foreign law or laws
and that the taxpayer or the taxpayer’s representative knows of no judicial interpretation of
the statutory provisions adverse to the letter ruling request.
(ii) Foreign laws in cases where English is not the official language of the foreign
country involved. In cases involving foreign law where English is not the official language
of the foreign country involved, the foreign laws submitted must be in the official language
1998–1 I.R.B.25January 5, 1998
Sec. 8.01(2)

of the country involved and must be of the same scope and quality as listed in paragraphs
(c)(i)(A) through (G) of this section 8.01(2). Attestation thereto, in the official language of
the country involved, must contain the same information listed in paragraphs (c)(i)(H)
through (L) of this section 8.01(2). All submissions of foreign laws in cases where English is
not the official language of the country involved, as well as the attestations thereto, must be
accompanied by certified English translations, as described in section 8.01(2)(c)(iii) below.
In addition, the taxpayer or the taxpayer’s representative must make the same represen-
tation stated in the last paragraph of section 8.01(2)(c)(i) of this revenue procedure.
(iii) Certified English translations.In cases involving contracts, wills, deeds, agree-
ments, instruments, trust documents, proposed disclaimers, or other documents in a lan-
guage other than English, or in cases involving foreign law where English is not the official
language of the foreign country involved, an accurate and complete translation, in the Eng-
lish language, of the document or law submitted and the attestation thereto is required.
This translation must be that of a qualified translator and must be attested to by the transla-
tor. The attestation must contain: (A) a statement that the translation submitted is a true
and accurate translation of the document or law submitted in the foreign language; (B) a
statement as to the attestant’s qualifications as a translator and as to that attestant’s qualifi-
cations and knowledge regarding income tax matters; (C) the attestant’s name and address;
and (D) a statement as to whether or not the attestant has been admitted to practice before
the Treasury Department of the United States Government.
(iv) Penalties of perjury statement is required.The taxpayer must make the same rep-
resentation regarding the accuracy and completeness of the material submitted as is re-
quired for any letter ruling request. Seesection 8.01(13) of this revenue procedure.
Analysis of material facts(3) Analysis of material facts.All material facts in documents must be included,
rather than merely incorporated by reference, 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.
Same issue in an earlierreturn(4) Statement regarding whethersame issue is in an earlierreturn. The request
must state whether, to the best of the knowledge of both the taxpayer and the taxpayer’s
representatives, the same issue is in an earlier return of the taxpayer (or in a return for any
year of a related taxpayer within the meaning of § 267 or of a member of an affiliated
group of which the taxpayer is also a member within the meaning of § 1504).
If the statement is affirmative, it must specify whether the issue—
(a) is being examined by a district director;
(b) has been examined, but the statutory period of limitations has not expired for either
assessing tax or filing a claim for refund or credit of tax;
(c) has been examined, but a closing agreement covering the issue or liability has not
been entered into by a district director;
(d) is being considered by an appeals office in connection with a return from an earlier
period;
(e) has been considered by an appeals office in connection with a return from an earlier
period, but the statutory period of limitations has not expired for either assessing tax or fil-
ing a claim for refund or credit of tax;
(f) has been considered by an appeals office in connection with a return from an earlier
period, but a closing agreement covering the issue or liability has not been entered into by
an appeals office; or
(g)is pending in litigation in a case involving the taxpayer or a related taxpayer.
January 5, 1998261998–1 I.R.B.
Sec. 8.01(2)

Same orsimilarissue (5) Statement regarding whethersame orsimilarissue was previously ruled on or
previously submitted requested, oris currently pending.The request must also state whether, to the best of the
orcurrently pendingknowledge of both the taxpayer and the taxpayer’s representatives—
(a) the Service previously ruled on the same or a similar issue for the taxpayer (or a re-
lated taxpayer within the meaning of § 267 or a member of an affiliated group of which the
taxpayer is also a member within the meaning of § 1504) or a predecessor;
(b) the taxpayer, a related taxpayer, a predecessor, or any representatives previously sub-
mitted a request (including an application for change in accounting method) involving the
same or a similar issue to the Service but withdrew the request before a letter ruling or de-
termination letter was issued;
(c) the taxpayer, a related taxpayer, or a predecessor previously submitted a request (in-
cluding an application for change in accounting method) involving the same or a similar
issue that is currently pending with the Service; or
(d) at the same time as this request, the taxpayer or a related taxpayer is presently sub-
mitting another request (including an application for change in accounting method) involv-
ing the same or a similar issue to the Service.
If the statement is affirmative for (a), (b), (c), or (d) of this section 8.01(5), the statement
must give the date the request was submitted, the date the request was withdrawn or ruled
on, if applicable, and other details of the Service’s consideration of the issue.
Statement of authorities (6) Statement of supporting authorities. If the taxpayer advocates a particular conclu-
supporting taxpayer’s viewssion, an explanation of the grounds for that conclusion and the relevant authorities to sup-
port it must be included. Even if not advocating a particular tax treatment of a proposed
transaction, the taxpayer must still furnish views on the tax results of the proposed
transaction and a statement of relevant authorities to support those views.
In all events, the request must include a statement of whether the law in connection with
the request is uncertain and whether the issue is adequately addressed by relevant authori-
ties.
Statement of authorities (7) Statement of contrary authorities.The taxpayer is also encouraged to inform the
contrary to taxpayer’s viewsService about, and discuss the implications of, any authority believed to be contrary to the
position advanced, such as legislation (or pending legislation), tax treaties, court deci-
sions, regulations, notices, revenue rulings, revenue procedures, or announcements. If the
taxpayer determines that there are no contrary authorities, a statement in the request to this
effect would be helpful. If the taxpayer does not furnish either contrary authorities or a
statement that none exists, the Service in complex cases or those presenting difficult or
novel issues may request submission of contrary authorities or a statement that none
exists. Failure to comply with this request may result in the Service’s refusal to issue a
letter ruling or determination letter.
Identifying and discussing contrary authorities will generally enable Service personnel
to understand the issue and relevant authorities more quickly. When Service personnel re-
ceive the request, they will have before them the taxpayer’s thinking on the effect and ap-
plicability of contrary authorities. This information should make research easier and lead
to earlier action by the Service. If the taxpayer does not disclose and distinguish signifi-
cant contrary authorities, the Service may need to request additional information, which
will delay action on the request.
Statement identifying (8) Statement identifying pending legislation.At the time of filing the request, the
pending legislationtaxpayer must identify any pending legislation that may affect the proposed transaction.
In addition, if legislation is introduced after the request is filed but before a letter ruling or
determination letter is issued, the taxpayer must notify the Service.
1998–1 I.R.B.27January 5, 1998
Sec. 8.01(8)

Deletions statement (9) Statement identifying information to be deleted from copy of letterruling orde-
required by § 6110termination letterforpublic inspection.The text of letter rulings and determination
letters is open to public inspection under § 6110. The Service makes deletions from the
text before it is made available for inspection. To help the Service make the deletions
required by § 6110(c), a request for a letter ruling or determination letter must be
accompanied by a statement indicating the deletions desired (“deletions statement”). If
the deletions statement is not submitted with the request, a Service representative will tell
the taxpayer that the request will be closed if the Service does not receive the deletions
statement within 21 calendar days. Seesection 10.06 of this revenue procedure.
(a) Format of deletions statement.Ataxpayer who wants only names, addresses, and
identifying numbers to be deleted should state this in the deletions statement. If the tax-
payer wants more information deleted, the deletions statement must be accompanied by a
copy of the request and supporting documents on which the taxpayer should bracket the
material to be deleted. The deletions statement must indicate the statutory basis under
§ 6110(c) for each proposed deletion.
If the taxpayer decides to ask for additional deletions before the letter ruling or determi-
nation letter is issued, additional deletions statements may be submitted.
(b) Location of deletions statement.The deletions statement must not appear in the re-
quest, but instead must be made in a separate document and placed on top of the request for
a letter ruling or determination letter.
(c) Signature.The deletions statement must be signed and dated by the taxpayer or the
taxpayer’s authorized representative. Astamped signature is not permitted.
(d) Additional information.The taxpayer should follow the same procedures above to
propose deletions from any additional information submitted after the initial request. An
additional deletions statement, however, is not required with each submission of additional
information if the taxpayer’s initial deletions statement requests that only names, ad-
dresses, and identifying numbers are to be deleted and the taxpayer wants only the same in-
formation deleted from the additional information.
(e) Taxpayermay protest deletions not made.After receiving from the Service the no-
tice under § 6110(f)(1) of intention to disclose the letter ruling or determination letter (in-
cluding a copy of the version proposed to be open to public inspection and notation of
third-party communications under § 6110(d)), the taxpayer may protest the disclosure of
certain information in the letter ruling or determination letter. The taxpayer must send a
written statement within 20 calendar days to the Service office indicated on the notice of
intention to disclose. The statement must identify those deletions that the Service has not
made and that the taxpayer believes should have been made. The taxpayer must also sub-
mit a copy of the version of the letter ruling or determination letter and bracket the dele-
tions proposed that have not been made by the Service. Generally, the Service will not
consider deleting any material that the taxpayer did not propose to be deleted before the
letter ruling or determination letter was issued.
Within 20 calendar days after the Service receives the response to the notice under §
6110(f)(1), the Service will mail to the taxpayer its final administrative conclusion regard-
ing the deletions to be made. The taxpayer does not have the right to a conference to re-
solve any disagreements concerning material to be deleted from the text of the letter ruling
or determination letter. However, these matters may be taken up at any conference that is
otherwise scheduled regarding the request.
(f) Taxpayermay request delay of public inspection.After receiving the notice under
§ 6110(f)(1) of intention to disclose, but within 60 calendar days after the date of notice,
the taxpayer may send a request for delay of public inspection under either § 6110(g)(3) or
(4). The request for delay must be sent to the Service office indicated on the notice of in-
January 5, 1998281998–1 I.R.B.
Sec. 8.01(9)

tention to disclose. Arequest for delay under § 6110(g)(3) must contain the date on which
it is expected that the underlying transaction will be completed. The request for delay
under § 6110(g)(4) must contain a statement from which the Commissioner of Internal
Revenue may determine that there are good reasons for the delay.
Signature on request (10) Signature by taxpayerorauthorized representative. The request for a letter
ruling or determination letter must be signed and dated by the taxpayer or the taxpayer’s
authorized representative. Astamped signature is not permitted.
Authorized representatives (11) Authorized representatives.To sign the request or to appear before the Service in
connection with the request, the representative must be:
Attorney(a) An attorney who is a member in good standing of the bar of the highest court of any
state, possession, territory, commonwealth, or the District of Columbia and who is not
currently under suspension or disbarment from practice before the Service. He or she
must file a written declaration with the Service showing current qualification as an
attorney and current authorization to represent the taxpayer;
Certified public accountant(b) Acertified public accountant who is duly qualified to practice in any state,
possession, territory, commonwealth, or the District of Columbia and who is not currently
under suspension or disbarment from practice before the Service. He or she must file a
written declaration with the Service showing current qualification as a certified public
accountant and current authorization to represent the taxpayer;
Enrolled agent (c) An enrolled agent who is a person, other than an attorney or certified public
accountant, that is currently enrolled to practice before the Service and is not currently
under suspension or disbarment from practice before the Service. He or she must file a
written declaration with the Service showing current enrollment and authorization to
represent the taxpayer. Either the enrollment number or the expiration date of the
enrollment card must be included in the declaration. For the rules on who may practice
before the Service, see Treasury Department Circular No. 230 (31 C.F.R. part 10 (1997));
Enrolled actuary (d) An enrolled actuary who is a person, other than an attorney or certified public
accountant, that is currently enrolled as an actuary by the Joint Board for the Enrollment
of Actuaries pursuant to 29 U.S.C. § 1242 and who is not currently under suspension or
disbarment from practice before the Service. He or she must file a written declaration
with the Service showing current qualification as an enrolled actuary and current
authorization to represent the taxpayer. Practice before the Service as an enrolled actuary
is limited to representation with respect to issues involving §§ 401, 403(a), 404, 412, 413,
414, 4971, 6057, 6058, 6059, 6652(e), 6652(f), 6692, and 7805(b); former § 405; and 29
U.S.C. § 1083; or
Aperson with a (e) Any other person, including a foreign representative, who has received a “Letter of
“Letterof Authorization”Authorization” from the Director of Practice under section 10.7(d) of Treasury
Department Circular No. 230. Aperson may make a written request for a “Letter of
Authorization” to: Office of Director of Practice, HR:DP, Internal Revenue Service, 1111
Constitution Avenue, N.W., Washington, DC 20224. Section 10.7(d) of Circular No. 230
authorizes the Commissioner to allow an individual who is not otherwise eligible to
practice before the Service to represent another person in a particular matter.
Employee, general partner, (f) The above requirements do not apply to a regular full-time employee representing his
bona fide officer, or her employer; to a general partner representing his or her partnership; to a bona fide of-
administrator, trustee, etc.ficer representing his or her corporation, association, or organized group; to a trustee,
receiver, guardian, personal representative, administrator, or executor representing a trust,
receivership, guardianship, or estate; or to an individual representing his or her immediate
family. Apreparer of a return (other than a person referred to in paragraph (a), (b), (c),
(d), or (e) of this section 8.01(11)) who is not a full-time employee, general partner, bona
fide officer, an administrator, a trustee, etc., or an individual representing his or her
immediate family may not represent a taxpayer in connection with a letter ruling or a
determination letter. Seesection 10.7(c) of Treasury Department Circular No. 230.
1998–1 I.R.B.29January 5, 1998
Sec. 8.01(11)

Foreign representative (g) Aforeign representative (other than a person referred to in paragraph (a), (b), (c),
(d), or (e) of this section 8.01(11)) is not authorized to practice before the Service and,
therefore, must withdraw from representing a taxpayer in a request for a letter ruling or a
determination letter. In this situation, the nonresident alien or foreign entity must submit
the request for a letter ruling or a determination letter on the individual’s or the entity’s
own behalf or through a person referred to in paragraph (a), (b), (c), (d), or (e) of this
section 8.01(11).
Powerof attorney and (12) Powerof attorney and declaration of representative. Any authorized repre-
declaration of representativesentative, whether or not enrolled to practice, must also comply with the conference and
practice requirements of the Statement of Procedural Rules (26 C.F.R. § 601.501–601.509
(1997)), which provide the rules for representing a taxpayer before the Service. It is
preferred that Form 2848, Power of Attorney and Declaration of Representative, be used
to provide the representative’s authorization (Part I of Form 2848, Power of Attorney) and
the representative’s qualification (Part II of Form 2848, Declaration of Representative).
The name of the person signing Part I of Form 2848 should also be typed or printed on
this form. Astamped signature is not permitted. For additional information regarding the
power of attorney form, see section 8.02(2) of this revenue procedure.
For the requirement regarding compliance with Treasury Department Circular No. 230,
see section 8.08 of this revenue procedure.
Penalties of perjury statement(13) Penalties of perjury statement.
(a) Format of penalties of perjury statement.Arequest for a letter ruling or determi-
nation letter and any change in the request submitted at a later time must be accompanied
by the following declaration: “Under penalties of perjury, I declare that I have examined
[Insert, as appropriate: this request or this modification to the request], including accompa-
nying documents, and, to the best of my knowledge and belief, [Insert, as appropriate: the
request or the modification] contains all the relevant facts relating to the request, and such
facts are true, correct, and complete.”
See section 10.07(1) of this revenue procedure for the penalties of perjury statement ap-
plicable for submissions of additional information.
(b) Signature by taxpayer. The declaration must be signed and dated by the taxpayer,
not the taxpayer’s representative. Astamped signature is not permitted.
The person who signs for a corporate taxpayer must be an officer of the corporate tax-
payer who has personal knowledge of the facts and whose duties are not limited to obtain-
ing a letter ruling or determination letter from the Service. If the corporate taxpayer is a
member of an affiliated group filing consolidated returns, a penalties of perjury statement
must also be signed and submitted by an officer of the common parent of the group.
The person signing for a trust, a state law partnership, or a limited liability company
must be, respectively, a trustee, general partner, or member-manager who has personal
knowledge of the facts.
Numberof copies of request (14) Numberof copies of request to be submitted.Generally, a taxpayer needs only to
to be submittedsubmit one copy of the request for a letter ruling or determination letter. If, however,
more than one issue is presented in the letter ruling request, the taxpayer is encouraged to
submit additional copies of the request.
Further, two copies of the request for a letter ruling or determination letter are required
if—
(a) the taxpayer is requesting separate letter rulings or determination letters on different
issues as explained later under section 8.02(1) of this revenue procedure;
(b) the taxpayer is requesting deletions other than names, addresses, and identifying
numbers, as explained in section 8.01(9)(a) of this revenue procedure. (One copy is the re-
January 5, 1998301998–1 I.R.B.
Sec. 8.01(11)

quest for the letter ruling or determination letter and the second copy is the deleted version
of such request.); or
(c) a closing agreement (as defined in section 2.02 of this revenue procedure) is being re-
quested on the issue presented.
Sample of a letter(15) Sample format fora letterruling request.To assist a taxpayer or the taxpayer’s
ruling requestrepresentative in preparing a letter ruling request, a sample format for a letter ruling
request is provided in Appendix B. This format is not required to be used by the taxpayer
or the taxpayer’s representative. If the letter ruling request is not identical or similar to the
format in Appendix B, the different format will not defer consideration of the letter ruling
request.
Checklist(16) Checklist forletterruling requests. The Service will be able to respond more
quickly to a taxpayer’s letter ruling request if the request is carefully prepared and
complete. The checklist in Appendix C of this revenue procedure is designed to assist
taxpayers in preparing a request by reminding them of the essential information and
documents to be furnished with the request. The checklist in Appendix C must be
completed to the extent required by the instructions in the checklist, signed and dated by
the taxpayer or the taxpayer’s representative, and placed on top of the letter ruling request.
If the checklist in Appendix C is not received, a branch representative will ask the
taxpayer or the taxpayer’s representative to submit the checklist, which may delay action
on the letter ruling request.
For letter ruling requests on certain matters, specific checklists supplement the checklist
in Appendix C. These checklists are listed in section 9.01 of this revenue procedure and
must also be completed and placed on top of the letter ruling request along with the check-
list in Appendix C.
Copies of the checklist in Appendix C can be obtained by calling (202) 622-7560 (not a
toll-free call). Aphotocopy of this checklist may be used.
Additional information .02
required in certain
circumstances
Multiple issues (1) To request separate letterrulings formultiple issues in a single situation.If
more than one issue is presented in a request for a letter ruling, the Service generally will
issue a single letter ruling covering all the issues. However, if the taxpayer requests
separate letter rulings on any of the issues (because, for example, one letter ruling is
needed sooner than another), the Service will usually comply with the request unless it is
not feasible or not in the best interests of the Service to do so. Ataxpayer who wants
separate letter rulings on multiple issues should make this clear in the request and submit
two copies of the request.
In issuing each letter ruling, the Service will state that it has issued separate letter rulings
or that requests for other letter rulings are pending.
Powerof attorney(2) To designate recipient of original orcopy of letterruling ordetermination
letter.Unless the power of attorney provides otherwise, the Service will send the original
of the letter ruling or determination letter to the taxpayer and a copy of the letter ruling or
determination letter to the taxpayer’s representative. In this case, the letter ruling or
determination letter is addressed to the taxpayer. It is preferred that Form 2848, Power of
Attorney and Declaration of Representative, be used to provide the representative’s
authorization. See section 8.01(12) of this revenue procedure.
Copies of letterruling (a) To have copies sent to multiple representatives.When a taxpayer has more than
ordetermination letterone representative, the Service will send the copy of the letter ruling or determination
sent to multiple letter to the first representative named on the most recent power of attorney. If the
representativestaxpayer wants an additional copy of the letter ruling or determination letter sent to the
1998–1 I.R.B.31January 5, 1998
Sec. 8.02(2)

second representative listed in the power of attorney, the taxpayer must check the
appropriate box on Form 2848. If this form is not used, the taxpayer must state in the
power of attorney that a copy of the letter ruling or determination letter is to be sent to the
second representative listed in the power of attorney. Copies of the letter ruling or
determination letter, however, will be sent to no more than two representatives.
Original of letterruling (b) To have original sent to taxpayer’s representative.Ataxpayer may request that
ordetermination letterthe original of the letter ruling or determination letter be sent to the taxpayer’s representa-
sent to taxpayer’s tive. In this case, a copy of the letter ruling or determination letter will be sent to the tax-
representativepayer. The letter ruling or determination letter is addressed to the taxpayer’s
representative to whom the original is sent.
If the taxpayer wants the original of the letter ruling or determination letter sent to the
taxpayer’s representative, the taxpayer must check the appropriate box on Form 2848. If
this form is not used, the taxpayer must state in the power of attorney that the original of
the letter ruling or determination letter is to be sent to the taxpayer’s representative. When
a taxpayer has more than one representative, the Service will send the original of the letter
ruling or determination letter to the first representative named in the most recent power of
attorney.
No copy of letterruling (c) To have no copy sent to taxpayer’s representative.If a taxpayer does not want a
ordetermination lettersent copy of the letter ruling or determination letter sent to any representative, the taxpayer
to taxpayer’s representativemust check the appropriate box on Form 2848. If this form is not used, the taxpayer must
state in the power of attorney that a copy of the letter ruling or determination letter is not
to be sent to any representative.
“Two-Part” letter(3) To request a particularconclusion on a proposed transaction.Ataxpayer who is
ruling requestsrequesting a particular conclusion on a proposed transaction may make the request for a
letter ruling in two parts. This type of request is referred to as a “two-part” letter ruling
request. The first part must include the complete statement of facts and related documents
described in section 8.01 of this revenue procedure. The second part must include a
summary statement of the facts the taxpayer believes to be controlling in reaching the
conclusion requested.
If the Service accepts the taxpayer’s statement of controlling facts, it will base its letter
ruling on these facts. Ordinarily, this statement will be incorporated into the letter ruling.
However, the Service reserves the right to rule on the basis of a more complete statement of
the facts and to seek more information in developing the facts and restating them.
Ataxpayer who chooses this two-part procedure has all the rights and responsibilities
provided in this revenue procedure.
Taxpayers may not use the two-part procedure if it is inconsistent with other procedures,
such as those dealing with requests for permission to change accounting methods or peri-
ods, applications for recognition of exempt status under § 521, or rulings on employment
tax status.
After the Service has resolved the issues presented by a letter ruling request, the Service
representative may request that the taxpayer submit a proposed draft of the letter ruling to
expedite the issuance of the ruling. Seesection 10.09 of this revenue procedure.
Expeditious handling (4) To request expeditious handling. The Service processes requests for letter rulings
and determination letters in order of the date received and as expeditiously as possible. A
taxpayer who has a compelling need to have a request processed ahead of the regular
order must request expeditious handling. This request must explain the need for
expeditious handling.
The request for expeditious handling must be made in writing, preferably in a separate
letter with, or soon after filing, the request for the letter ruling or determination letter. If
the request for expeditious handling is not made in a separate letter, then the letter in which
January 5, 1998321998–1 I.R.B.
Sec. 8.02(2)

the letter ruling or determination letter request is made should say, at the top of the first
page: “Expeditious Handling Is Requested. See page
___
of this letter.”
Arequest for expeditious handling will not be forwarded to a rulings branch for action
until the check for the user fee is received.
The Service cannot give assurance that any letter ruling or determination letter will be
processed by the time requested. For example, the scheduling of a closing date for a trans-
action or a meeting of the board of directors or shareholders of a corporation, without re-
gard for the time it may take to obtain a letter ruling or determination letter, will not be
considered a sufficient reason to process a request ahead of its regular order. Also, the pos-
sible effect of fluctuation in the market price of stocks on a transaction will not be consid-
ered a sufficient reason to process a request out of order. Accordingly, the Service urges
taxpayers to submit their requests well in advance of the contemplated transaction.
Facsimile (5) To receive a letterruling orsubmit a request fora letterruling by facsimile
transmission (fax)transmission (fax).
(a) To receive a letterruling by fax.Aletter ruling ordinarily is not sent by fax. How-
ever, if the taxpayer requests, a copy of a letter ruling may be faxed to the taxpayer or the
taxpayer’s authorized representative. Aletter ruling, however, is not issued until the ruling
is mailed. See§ 301.6110–2(h).
Arequest to fax a copy of the letter ruling to the taxpayer or the taxpayer’s authorized
representative must be made in writing, either as part of the original letter ruling request or
prior to the approval of the letter ruling. The request must contain the fax number of the
taxpayer or the taxpayer’s authorized representative to whom the letter ruling is to be
faxed.
In addition, because of the nature of a fax transmission, a statement containing a waiver
of any disclosure violations resulting from the fax transmission must accompany the re-
quest. Nevertheless, the national office will take certain precautions to protect confidential
information. For example, the national office will use a cover sheet that identifies the in-
tended recipient of the fax and the number of pages transmitted and that contains a state-
ment prohibiting unauthorized disclosure of the letter ruling if a recipient of the faxed letter
ruling is not the intended recipient of the fax. The letter ruling will be faxed by the Com-
munications Unit of the Technical Services Staff (CC:DOM:CORP:T:C).
(b) To submit a request fora letterruling by fax.Original letter ruling requests by fax
are discouraged because such requests must be treated in the same manner as requests by
letter. For example, the faxed letter ruling request will not be forwarded to the rulings
branch for action until the check for the user fee is received.
Requests for a change in accounting method or a change in accounting period must not
be submitted by fax.
Requesting a conference (6) To request a conference.Ataxpayer who wants to have a conference on the issues
involved should indicate this in writing when, or soon after, filing the request. See also
sections 11.01, 11.02, and 12.11(2) of this revenue procedure.
Substantially identical (7) To obtain the applicable userfee forsubstantially identical letterrulings or
letterrulings oridentical identical accounting method changes.Ataxpayer seeking the user fee provided in
accounting method changesparagraph (A)(5) of Appendix Aof this revenue procedure for substantially identical letter
rulings or identical accounting method changes must provide the information required in
section 15.07 of this revenue procedure.
Address to send the request.03
Requests forletterrulings(1) Requests forletterrulingsshould be sent to the Associate Chief Counsel (Domes-
tic), the Associate Chief Counsel (Employee Benefits and Exempt Organizations), the As-
1998–1 I.R.B.33January 5, 1998
Sec. 8.03(1)

sociate Chief Counsel (Enforcement Litigation), or the Associate Chief Counsel (Interna-
tional), as appropriate. The package should be marked: RULING REQUESTSUBMIS-
SION.
(a) Requests for letter rulings should be sent to the following address:
Internal Revenue Service
Attn: CC:DOM:CORP:T
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
However, if a private delivery service is used, the address is:
Internal Revenue Service
Attn: CC:DOM:CORP:T
1111 Constitution Avenue, N.W.
Washington, DC 20224
(b) Requests for letter rulings may also be hand delivered:
(i) To the drop box at the 12th Street entrance of 1111 Constitution Avenue, N.W., Wash-
ington, DC. No receipt will be given at the drop box; or
(ii) Between the hours of 8:15 a.m. and 5:00 p.m. to:
Courier’s Desk
Internal Revenue Service
Attn: CC:DOM:CORP:T
1111 Constitution Avenue, N.W.
Washington, DC
Areceipt will be given at the courier’s desk.
Requests for(2) Requests fordetermination lettersshould be sent to the district director whose of-
determination lettersfice has or will have examination jurisdiction over the taxpayer’s return. For fees required
with determination letter requests, see section 15 and Appendix Aof this revenue
procedure.
Pending letterruling requests.04
(1) Circumstances underwhich the taxpayermust notify the national office. The
taxpayer must notify the national office if, after the letter ruling request is filed but before a
letter ruling is issued, the taxpayer knows that—
(a) an examination of the issue or the identical issue on an earlier year’s return has been
started by a district director;
(b) in the case of a § 301.9100 request, an examination of the return for the taxable year
in which an election should have been made or any taxable year that would have been af-
fected by the election had it been timely made has been started by a district director. See
§ 301.9100–3(e)(4)(i) and section 5.02(3) of this revenue procedure;
(c) legislation that may affect the transaction has been introduced. Seesection 8.01(8) of
this revenue procedure; or
(d) another letter ruling request (including an application for change in accounting
method) has been submitted by the taxpayer (or a related party within the meaning of § 267
January 5, 1998341998–1 I.R.B.
Sec. 8.03(1)

or a member of an affiliated group of which the taxpayer is also a member within the mean-
ing of § 1504) involving the same or similar issue that is currently pending with the Ser-
vice.
(2) Taxpayermust notify national office if return is filed and must attach request to
return. If the taxpayer files a return before a letter ruling is received from the national of-
fice concerning the issue, the taxpayer must notify the national office that the return has
been filed. The taxpayer must also attach a copy of the letter ruling request to the return to
alert the district office and thereby avoid premature district action on the issue.
This section 8.04 also applies to pending requests for a closing agreement on a transac-
tion for which a letter ruling is not requested or issued, and for an advance pricing
agreement.
When to attach letter.05
ruling to return
Ataxpayer who receives a letter ruling before filing a return about any transaction that is
relevant to the return being filed must attach a copy of the letter ruling to the return when it
is filed.
How to check on .06
status of request
The taxpayer or the taxpayer’s authorized representative may obtain information regard-
ing the status of a request by calling the person whose name and telephone number are
shown on the acknowledgement of receipt of the request or the appropriate branch repre-
sentative who contacts the taxpayer as explained in section 10.02 of this revenue
procedure.
Request may be withdrawn .07
ornational office may
decline to issue letterruling(1) In general. Ataxpayer may withdraw a request for a letter ruling or determination
letter at any time before the letter ruling or determination letter is signed by the Service.
Correspondence and exhibits related to a request that is withdrawn or related to a letter
ruling request for which the national office declines to issue a letter ruling will not be
returned to the taxpayer. Seesection 8.01(2) of this revenue procedure. In appropriate
cases, the Service may publish its conclusions in a revenue ruling or revenue procedure.
(2) Notification of district director.
(a) Request to change an accounting method. If a taxpayer withdraws or the national
office declines to grant (for any reason) a request to change from or to adopt an improper
method of accounting, the national office will notify the appropriate district director and
the Change in Method Issue Specialist, and may give its views on the issues in the request
to the appropriate district director to consider in any later examination of the return.
(b) All otherletterruling requests.If a taxpayer withdraws a letter ruling request
(other than a request to change from or to adopt an improper method of accounting) or if
the national office declines to issue a letter ruling (other than a letter ruling pertaining to a
request to change from or to adopt an improper method of accounting), the national office
generally will notify the appropriate district director and may give its views on the issues in
the request to the appropriate district director to consider in any later examination of the re-
turn. This section 8.07(2)(b) generally does not apply if the taxpayer withdraws the letter
ruling request and submits a written statement that the transaction has been, or is being,
abandoned and if the national office has not formed an adverse opinion.
(3) Refunds of userfee.The user fee will not be returned for a letter ruling request that
is withdrawn. If the national office declines to issue a letter ruling on all of the issues in the
request, the user fee will be returned. If the national office, however, issues a letter ruling
on some, but not all, of the issues, the user fee will not be returned. Seesection 15.10 of
this revenue procedure for additional information regarding refunds of user fees.
1998–1 I.R.B.35January 5, 1998
Sec. 8.07(3)

Compliance with .08
Treasury Department
CircularNo. 230The taxpayer’s authorized representative, whether or not enrolled, must comply with
Treasury Department Circular No. 230, which provides the rules for practice before the
Service. In those situations when the national office believes that the taxpayer’s
representative is not in compliance with Circular No. 230, the national office will bring
the matter to the attention of the Director of Practice.
For the requirement regarding compliance with the conference and practice require-
ments, see section 8.01(12) of this revenue procedure.
SECTION 9. WHATOTHERSpecific revenue procedures and notices supplement the general instructions for requests
CHECKLISTS, GUIDELINE explained in section 8 of this revenue procedure and apply to requests for letter rulings or
REVENUE PROCEDURES, determination letters regarding the Code sections and matters listed in this section.
NOTICES, SAFE HARBOR
REVENUE PROCEDURES,
AND AUTOMATIC CHANGE
REVENUE PROCEDURES
APPLYTO CERTAIN
REQUESTS?
Checklists and .01For requests relating to the following Code sections and subject matters, see the fol-
guideline revenue lowing checklists and guideline revenue procedures and notices.
procedures and notices
CODE OR REGULATION SECTIONREVENUE PROCEDURE AND NOTICE
103, 141-150, 7478, and 7871Rev. Proc. 96–16, 1996–1 C.B. 630 (for a reviewable ruling under § 7478 and a nonreview
Issuance of state or local obligationsable ruling); Rev. Proc. 88–31, 1988–1 C.B. 832 (for approval of areas of chronic eco-
nomic distress); and Rev. Proc. 82–26, 1982–1 C.B. 476 (for “on behalf of” and similar is-
suers). For approval of areas of chronic economic distress, Rev. Proc. 88–31 explains how
this approval must be submitted to the Assistant Secretary for Housing/Federal Housing
Commissioner of the Department of Housing and Urban Development.
1.166–2(d)(3)Rev. Proc. 92–84, 1992–2 C.B. 489.
Uniform express determination
letter for making election
Subchapter C—Rev. Proc. 77–37, 1977–2 C.B. 568, as modified by Rev. Proc. 89-30, 1989-1 C.B. 895, and
Corporate Distributions and as amplified by Rev. Proc. 77–41, 1977–2 C.B. 574, Rev. Proc. 83–81, 1983–2 C.B. 598
Adjustments(see alsoRev. Proc. 98–3), Rev. Proc. 84–42, 1984–1 C.B. 521 (superseded as to no-rule
areas by Rev. Proc. 85–22, 1985-1 C.B. 550), Rev. Proc. 86–42, 1986–2 C.B. 722, and Rev.
Proc. 89–50, 1989–2 C.B. 631. But see Rev. Proc. 98–3, section 3.01(23) (certain combin-
ing reorganizations under § 368), section 3.01(24) (mergers or consolidations under
§ 368(a)(1)(A)), section 3.01(25) (stock acquisitions under § 368(a)(1)(B)), and section
3.01(28) (corporate changes under § 368(a)(1)(F)), which describe certain corporate reor-
ganizations where the Service will not issue advance letter rulings or determination letters.
301Rev. Proc. 87–22, 1987–1 C.B. 718.
Nonapplicability on sales of
stock of employer to defined
contribution plan
302, 311Rev. Proc. 86–18, 1986–1 C.B. 551; and Rev. Proc. 77–41, 1977–2 C.B. 574.
Checklist questionnaire
302(b)(4)Rev. Proc. 81–42, 1981–2 C.B. 611.
Checklist questionnaire
January 5, 1998361998–1 I.R.B.
Sec. 8.07(3)

331Rev. Proc. 86–16, 1986–1 C.B. 546.
Checklist questionnaire
332Rev. Proc. 90–52, 1990–2 C.B. 626.
Checklist questionnaire
351Rev. Proc. 83–59, 1983–2 C.B. 575. But see section 3.01(22) of Rev. Proc. 98–3, which
Checklist questionnairedescribes certain transfers to controlled corporations where the Service will not issue ad-
vance letter rulings or determination letters.
355Rev. Proc. 96–30, 1996–1 C.B. 696.
Checklist questionnaire
368(a)(1)(E)Rev. Proc. 81–60, 1981–2 C.B. 680. But see section 3.01(27) of Rev. Proc. 98–3, which de-
Checklist questionnairescribes circumstances under which the Service will not issue advance letter rulings or de-
termination letters as to whether a transaction constitutes a corporate recapitalization
within the meaning of § 368(a)(1)(E) (or a transaction that also qualifies under § 1036).
461(h)Rev. Proc. 92–29, 1992–1 C.B. 748.
Alternative method for the
inclusion of common improvement
costs in basis
482Rev. Proc. 96–53, 1996–2 C.B. 375
Advance pricing agreements
521Rev. Proc. 90–27, 1990–1 C.B. 514.
Appeal procedure with regard to
adverse determination letters and
revocation or modification of
exemption letter rulings and
determination letters
1.817-5(a)(2)Rev. Proc. 92–25, 1992–1 C.B. 741
Issuer of a variable contract
requesting relief
877, 2107, and 2501(a)(3)Notice 97–19, 1997–1 C.B. 394.
Individuals who lose U.S.
citizenship or cease to be taxed
as long-term U.S. residents with
a principal purpose to avoid
U.S. taxes
1362(b)(5)Rev. Proc. 97–48, 1997–43 I.R.B. 19; Rev. Proc. 97–40, 1997–33 I.R.B. 50.
Relief for late S corporation
election under certain circumstances
1.1502-13(e)(3)Rev. Proc. 97–49, 1997–43 I.R.B. 22.
Consent to treat intercompany
transactions on a separate entity
basis and revocation of this consent
1.1502-76(a)(1)Rev. Proc. 89-56, 1989-2 C.B. 643.
Consent to file a consolidated return
where member(s) of the affiliated
group use a 52-53 week taxable year
1998–1 I.R.B.37January 5, 1998
Sec. 9.01

1504(a)(3)(A) and (B)Rev. Proc. 91–71, 1991–2 C.B. 900.
Waiver of application of
§ 1504(a)(3)(A) for
certain corporations
1552Rev. Proc. 90–39, 1990–2 C.B. 365, as clarified by Rev. Proc. 90–39A, 1990–2 C.B. 367.
Consent to elect or change method
of allocating affiliated group’s
consolidated federal income
tax liability
4980BRev. Proc. 87–28, 1987–1 C.B. 770 (treating references to former § 162(k) as if they were
references to § 4980B).
SUBJECTMATTERSREVENUE PROCEDURE
Accounting methods Rev. Proc. 97–27, 1997–1 C.B. 680; and Rev. Proc. 98–1 (this revenue procedure) for
which sections 1, 2.01, 2.02, 2.06, 3.01(2), 3.01(3), 3.01(4), 5.02, 5.12, 5.14, 7.01, 7.02,
7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6), 8.01(7), 8.01(8), 8.01(11),
8.01(12), 8.01(13), 8.01(14), 8.02(2), 8.02(4), 8.02(5)(a), 8.02(6), 8.02(7), 8.03(1), 8.04,
8.05, 8.06, 8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07, 10.08, 10.10(2), 10.11, 11, 12.01,
12.02, 12.06–12.11, 15, and Appendix Aare applicable.
Accounting periods; adopt, Rev. Proc. 87–32, 1987–2 C.B. 396, as modified by T.D. 8680, 1996–2 C.B. 194; and Rev.
retain or change for partnership, Proc. 98-1 (this revenue procedure) for which sections 1, 2.01, 2.02, 2.06, 3.01(3), 5.02,
S corporation, and personal 5.12, 5.14, 7.01, 7.02, 7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6), 8.01(7),
service corporation8.01(8), 8.01(11), 8.01(12), 8.01(13), 8.01(14), 8.02(2), 8.02(4), 8.02(5)(a), 8.02(6),
8.03(1) (only for Forms 1128 filed under section 6.01 of Rev. Proc. 87-32), 8.04, 8.05,
8.06, 8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07, 10.08, 11, 12, 15, and Appendix Aare ap-
plicable.
Accounting periods; Rev. Proc. 92–13, 1992–1 C.B. 665, as modified and amplified by Rev. Proc. 92–13A,
changes in period1992–1 C.B. 668, and as modified by Rev. Proc. 94–12, 1994–1 C.B. 565; and Rev. Proc.
98–1 (this revenue procedure) for which sections 1, 2.01, 2.02, 2.06, 3.01(3), 5.02, 5.12,
5.14, 7.01, 7.02, 7.03, 8.01(1), 8.01(2), 8.01(3), 8.01(4), 8.01(5), 8.01(6), 8.01(7), 8.01(8),
8.01(11), 8.01(12), 8.01(13), 8.01(14), 8.02(2), 8.02(4), 8.02(5)(a), 8.02(6), 8.03(1), 8.04,
8.05, 8.06, 8.07, 8.08, 9, 10.01, 10.04, 10.05, 10.07, 10.08, 11, 12, 15, and Appendix Aare
applicable.
Classification of liquidating trustsRev. Proc. 82–58, 1982–2 C.B. 847, as modified and amplified by Rev. Proc. 94–45,
1994–2 C.B. 684, and as amplified by Rev. Proc. 91–15, 1991–1 C.B. 484 (checklist ques-
tionnaire), as modified and amplified by Rev. Proc. 94–45.
Earnings and profits determinationsRev. Proc. 75–17, 1975–1 C.B. 677; and Rev. Proc. 98–1 (this revenue procedure) for
which sections 2.06, 3.01(3), 8, 10.04, 10.06, and 11.05 are applicable.
Estate, gift, and generation-Rev. Proc. 91–14, 1991–1 C.B. 482 (checklist questionnaire).
skipping transfer tax issues
Deferred intercompany Rev. Proc. 82–36, 1982–1 C.B. 490.
transactions; election not to
defer gain or loss
Leveraged leasingRev. Proc. 75–21, 1975–1 C.B. 715, as modified by Rev. Proc. 76–30, 1976–2 C.B. 647,
Rev. Proc. 79–48, 1979–2 C.B. 529, and Rev. Proc. 81–71, 1981–2 C.B. 731; and Rev.
Proc. 75–28, 1975–1 C.B. 752, as modified by Rev. Proc. 79–48 and Rev. Proc. 81–71.
Rate orders; regulatory Aletter ruling request that involves a question of whether a rate order that is proposed or
agency; normalizationissued by a regulatory agency will meet the normalization requirements of § 168(f)(2) (pre-
January 5, 1998381998–1 I.R.B.
Sec. 9.01

Tax Reform Act of 1986, § 168(e)(3)) and former §§ 46(f) and 167(l) ordinarily will not be
considered unless the taxpayer states in the letter ruling request whether—
(1) the regulatory authority responsible for establishing or approving the taxpayer’s rates
has reviewed the request and believes that the request is adequate and complete; and
(2) the taxpayer will permit the regulatory authority to participate in any national office
conference concerning the request.
If the taxpayer or the regulatory authority informs a consumer advocate of the request for a
letter ruling and the advocate wishes to communicate with the Service regarding the re-
quest, any such communication should be sent to: Internal Revenue Service, Associate
Chief Counsel (Domestic), Attention CC:DOM:CORP:T, P.O. Box 7604, Ben Franklin
Station, Washington, DC 20044 (or, if a private delivery service is used: Internal Revenue
Service, Associate Chief Counsel (Domestic), Attention CC:DOM:CORP:T, 1111 Consti-
tution Avenue, N.W., Washington, DC 20224). These communications will be treated as
third party contacts for purposes of § 6110.
Unfunded deferred compensationRev. Proc. 71–19, 1971–1 C.B. 698, as amplified by Rev. Proc. 92–65, 1992–2 C.B. 428.
See Rev. Proc. 92–64, 1992–2 C.B. 422, for the model trust for use in Rabbi Trust Arrange-
ments.
Safe harborrevenue.02 For requests relating to the following Code sections and subject matters, see the
proceduresfollowing safe harbor revenue procedures.
CODE OR REGULATION SECTION REVENUE PROCEDURE
103 and 141–150Rev. Proc. 93–17, 1993–1 C.B. 507 (changes of use of proceeds); and Rev. Proc. 93–19,
Issuance of state or local obligations1993–1 C.B. 526 (management contracts).
280BRev. Proc. 95–27, 1995–1 C.B. 704.
Certain structural modifications
to a building not treated as a
demolition
355(a)(1)(B)Section 4.05(1)(b) of Rev. Proc. 96–30, 1996–1 C.B. at 705.
Transaction not violating the
device test
584(a)Rev. Proc. 92–51, 1992–1 C.B. 988.
Qualification of a proposed
common trust fund plan
642(c)(5)Rev. Proc. 88–53, 1988–2 C.B. 712.
Qualification of trusts as
pooled income funds
664(d)(1)Rev. Proc. 89–21, 1989–1 C.B. 842, as amplified by Rev. Proc. 90–32, 1990–1 C.B. 546.
Qualification of trusts as charitable
remainder annuity trusts
664(d)(2)Rev. Proc. 89–20, 1989–1 C.B. 841, as amplified by Rev. Proc. 90–30, 1990–1 C.B. 534.
Qualification of trusts as charitable
remainder unitrusts
664(d)(2) and (3)Rev. Proc. 90–31, 1990–1 C.B. 539.
Qualification of trusts as charitable
remainder unitrusts
1998–1 I.R.B.39January 5, 1998
Sec. 9.02

1286Rev. Proc. 91–50, 1991–2 C.B. 778.
Determination of reasonable
compensation under mortgage
service contracts
1362(f)Rev. Proc. 94–23, 1994–1 C.B. 609.
Automatic inadvertent
termination relief to
certain corporations
20.2056A–2(d)(1)(i) and (d)(1)(ii)Rev. Proc. 96–54, 1996–2 C.B. 386.
Sample trust language
1.7704–2(d)Rev. Proc. 92–101, 1992–2 C.B. 579.
New business activity of existing
partnership is closely related to
pre-existing business
SUBJECTMATTERSREVENUE PROCEDURE
Certain rent-to-own Rev. Proc. 95–38, 1995–2 C.B. 397.
contracts treated as leases
Automatic change .03For requests to change an accounting period or accounting method, see the following
revenue proceduresautomatic change revenue procedures published and in effect as of December 31, 1997. A
taxpayer complying timely with an automatic change revenue procedure will be deemed
to have obtained the consent of the Commissioner to change the taxpayer’s accounting
period or accounting method, as applicable.
CODE SECTIONREVENUE PROCEDURE
442The automatic change revenue procedures for obtaining a change in annual accounting
Changes in accounting periodsperiod include: Rev. Proc. 92–13, 1992–1 C.B. 665, as modified by Rev. Proc. 94–12,
1994–1 C.B. 565, and as modified and amplified by Rev. Proc. 92–13A, 1992–1 C.B. 668
(certain corporations that have not changed their accounting period within the prior 6 cal-
endar years or other specified time); Rev. Proc. 87–32, 1987–2 C.B. 396, as modified by
T.D. 8680, 1996–33 I.R.B. 5 (partnership, S corporation, or personal service corporation
seeking a natural business year or an ownership taxable year); Rev. Proc. 68–41, 1968–2
C.B. 943, as modified by Rev. Proc. 81–40, 1981–2 C.B. 605 (trusts held by certain fidu-
ciaries needing a workload spread); and Rev. Proc. 66–50, 1966–2 C.B. 1260, as modified
by Rev. Proc. 81–40 (individual seeking a calendar year).
446The automatic change revenue procedures for obtaining a change in method of accounting
Changes in accounting methodsinclude: Rev. Proc. 97–37, 1997-33 I.R.B. 18 (applies to the changes in methods of ac-
counting that are described in the Appendix of Rev. Proc. 97–37 involving §§ 162, 167,
168, 197, 263, 263A, 446, 454, 455, 461, 471, 472, 585, 1273, and 1281); Rev. Proc.
97–50, 1997–45 I.R.B. 8 (taxpayers seeking to change their method of accounting for costs
incurred to ensure that computer systems are year 2000 compliant); Rev. Proc. 97–43,
1997–39 I.R.B. 12 (certain taxpayers required to change their methods of accounting to
comply with elections out of certain exemptions from dealer status for purposes of § 475);
Rev. Proc. 97–30, 1997–1 C.B. 702 (taxpayers seeking to elect general asset accounts
under § 168(i)(4) for depreciable property placed in service after December 31, 1986, in
any taxable year ending before October 11, 1994; election available only for a taxpayer’s
taxable year ending in 1996 or 1997); Rev. Proc. 97–18, 1997–1 C.B. 642 (certain banks
seeking to change from the § 585 reserve method to the § 166 specific charge-off method
for bad debts so that they may elect S corporation status for the first taxable year beginning
after December 31, 1996); Rev. Proc. 97–10, 1997–1 C.B. 628 (taxpayers seeking to elect
15-year property treatment under § 168 for a retail motor fuels outlet placed in service be-
fore August 20, 1996; procedure available only for a taxpayer’s taxable year that includes
August 20, 1996); Rev. Proc. 95–25, 1995–1 C.B. 701 (certain taxpayers seeking to elect a
January 5, 1998401998–1 I.R.B.
Sec. 9.02

historic absorption ratio under § 263Afor their first, second, or third taxable year begin-
ning on or after January 1, 1994); Rev. Proc. 92–67, 1992–2 C.B. 429 (certain taxpayers
with one or more market discount bonds seeking to make a § 1278(b) election or a constant
interest rate election); Rev. Proc. 92–29, 1992–1 C.B. 748 (certain taxpayers seeking to use
an alternative method under § 461(h) for including common improvement costs in basis);
and Rev. Proc. 91–51, 1991–2 C.B. 779 (certain taxpayers under examination that sell
mortgages and retain rights to service the mortgages).
SECTION 10. HOWDOES The national office will issue letter rulings on the matters and under the circumstances ex-
THE NATIONALOFFICE plained in sections 3 and 5 of this revenue procedure and in the manner explained in this
HANDLE LETTER RULINGsection and section 11 of this revenue procedure.
REQUESTS?
Controls request and .01All requests for letter rulings will be controlled by the Technical Services Staff of the
refers it to appropriate Assistant Chief Counsel (Corporate) (CC:DOM:CORP:T). That office will examine the
Assistant Chief Counsel orto incoming documents for completeness, process the user fee, and forward the file to the ap-
the Office of Associate Chief propriate Assistant Chief Counsel or, for letter ruling requests under the jurisdiction of the
Counsel (International)Associate Chief Counsel (International), to the Office of Associate Chief Counsel
(International). The Assistant Chief Counsel’s office or the Office of Associate Chief
Counsel (International), as appropriate, will assign the letter ruling request to one of its
branches.
Branch representative .02 Within 21 calendar days after a letter ruling request has been received in the branch
contacts taxpayerwithin having jurisdiction, a representative of the branch will discuss the procedural issues in the
21 daysletter ruling request with the taxpayer or, if the request includes a properly executed power
of attorney, with the authorized representative unless the power of attorney provides
otherwise. If the case is complex or a number of issues are involved, it may not be
possible for the branch representative to discuss the substantive issues during this initial
contact. However, when possible, for each issue within the branch’s jurisdiction, the
branch representative will tell the taxpayer—
(1) whether the branch representative will recommend that the Service rule as the tax-
payer requested, rule adversely on the matter, or not rule;
(2) whether the taxpayer should submit additional information to enable the Service to
rule on the matter; or
(3) whether, because of the nature of the transaction or the issue presented, a tentative
conclusion on the issue cannot be reached.
Except forcases involving a request forchange in accounting method oraccounting
period, the 21 calendarday procedure applies to: all matters within the jurisdiction
of the Assistant Chief Counsel (Corporate), the Assistant Chief Counsel (Income Tax
and Accounting), the Assistant Chief Counsel (Passthroughs and Special Industries),
the Associate Chief Counsel (Employee Benefits and Exempt Organizations), the
Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel
(International); and all matters within the jurisdiction of the Assistant Chief Counsel
(Financial Institutions and Products), except cases concerning insurance issues
requiring actuarial computations.
Notifies taxpayerif any .03If the letter ruling request involves matters within the jurisdiction of more than one
issues have been referred to branch or office, a representative of the branch that received the original request will tell the
anotherbranch orofficetaxpayer within the initial 21 days—
(1) that the matters within the jurisdiction of another branch or office have been referred
to that branch or office for consideration; and
(2) that a representative of that branch or office will contact the taxpayer within 21 cal-
endar days after receiving the referral to discuss informally the procedural and, to the ex-
tent possible, the substantive issues in the request.
1998–1 I.R.B.41January 5, 1998
Sec. 10.03

Determines if transaction.04If a less than fully favorable letter ruling is indicated, the branch representative will
can be modified to obtain tell the taxpayer whether minor changes in the transaction or adherence to certain published
favorable letterrulingpositions would bring about a favorable ruling. The branch representative may also tell
the taxpayer the facts that must be furnished in a document to comply with Service
requirements. However, the branch representative will not suggest precise changes that
would materially alter the form of the proposed transaction or materially alter a taxpayer’s
proposed accounting method or accounting period.
If, at the end of this discussion, the branch representative determines that a meeting in
the national office would be more helpful to develop or exchange information, a meeting
will be offered and an early meeting date arranged. When offered, this meeting is in addi-
tion to the taxpayer’s conference of right that is described in section 11.02 of this revenue
procedure.
Is not bound by informal .05The Service will not be bound by the informal opinion expressed by the branch repre-
opinion expressedsentative or any other authorized Service representative, and such an opinion cannot be
relied upon as a basis for obtaining retroactive relief under the provisions of § 7805(b).
Tells taxpayerif request .06 If a request for a letter ruling or determination letter does not comply with all the pro-
lacks essential information visions of this revenue procedure, the branch representative will tell the taxpayer during
during initial contacttheinitial contact which requirements have not been met.
Information must be submitted (1) If the request lacks essential information, which may include additional information
within 21 calendardaysneeded to satisfy the procedural requirements of this revenue procedure, as well as
substantive changes to transactions or documents needed from the taxpayer, the branch
representative will tell the taxpayer during the initial contact that the request will be
closed if the Service does not receive the information within 21 calendar days unless an
extension of time is granted. See sections 10.07(1), (2), and (3) of this revenue procedure
for instructions on submissions of additional information.
21-day period will be (2) An extension of the 21-day period will be granted only if justified in writing by the
extended if justified and taxpayer and approved by the branch chief, senior technician reviewer (or senior technical
approvedreviewer),orassistant to the branch chief (or assistant branch chief) of the branch to
which the case is assigned. Arequest for extension should be submitted before the end of
the 21-day period. If unusual circumstances close to the end of the 21-day period make a
written request impractical, the taxpayer should notify the national office within the 21-
day period that there is a problem and that the written request for extension will be
coming soon. The taxpayer will be told promptly, and later in writing, of the approval or
denial of the requested extension. If the extension request is denied, there is no right of
appeal.
Letterruling request (3) If the taxpayer does not submit the information requested during the initial contact
closed if the taxpayerdoes within the time provided, the letter ruling request will be closed and the taxpayer will be
not submit informationnotified in writing. If the information is received afterthe request is closed, the
request will be reopened and treated as a new request as of the date the information
is received. However, the taxpayermust pay anotheruserfee before the case can be
reopened.
Letterruling request (4) Arequest for a letter ruling sent to the district director that does not comply with the
mistakenly sent to districtprovisions of this revenue procedure will be returned by the district director so that the
directortaxpayer can make corrections before sending it to the national office.
Requires prompt submission .07
of additional information
requested afterinitial contact(1) Material facts furnished to the Service by telephone or fax, or orally at a conference,
must be promptly confirmed by letter to the Service. This confirmation and any additional
information requested by the Service that is not part of the information requested during
the initial contact must be furnished within 21 calendar days to be considered part of the
request.
January 5, 1998421998–1 I.R.B.
Sec. 10.04

Additional information submitted to the Service must be accompanied by the following
declaration: “Underpenalties of perjury, I declare that I have examined this informa-
tion, including accompanying documents, and, to the best of my knowledge and be-
lief, the information contains all the relevant facts relating to the request forthe infor-
mation, and such facts are true, correct, and complete.”This declaration must be
signed in accordance with the requirements in section 8.01(13)(b) of this revenue proce-
dure. Ataxpayer who submits additional factual information on several occasions may
provide one declaration subsequent to all submissions that refers to all submissions.
To facilitate prompt action on letter ruling requests, taxpayers are encouraged to submit
additional information by fax as soon as the information is available. The Service repre-
sentative who requests additional information can provide a telephone number to which the
information can be faxed. Acopy of this information and a signed perjury statement, how-
ever, must be mailed or delivered to the Service.
Address to send (2)(a) If a private delivery service is not used, the additional information should be sent
additional informationto:
Internal Revenue Service
ADDITIONALINFORMATION
Attn: [Name, office symbols, and
room numberof the Service
representative who requested
the information]
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
However, for cases involving a request for change in accounting method or period under
the jurisdiction of the Assistant Chief Counsel (Income Tax and Accounting), and a §
301.9100 request for an extension of time on such cases, the additional information should
be sent to:
Internal Revenue Service
ADDITIONALINFORMATION
Attn: [Name, office symbols, and
room numberof the Service
representative who requested
the information]
P.O. Box 14095
Ben Franklin Station
Washington, DC 20044
(b) If a private delivery service is used, the additional information for all cases should be
sent to:
Internal Revenue Service
ADDITIONALINFORMATION
Attn: [Name, office symbols, and
room numberof the Service
representative who requested
the information]
1111 Constitution Avenue, N.W.
Washington, DC 20224
(c) For all cases, the additional information should include the name, office symbols,
and room number of the Service representative who requested the information, and the tax-
payer’s name and the case control number, which the Service representative can provide.
1998–1 I.R.B.43January 5, 1998
Sec. 10.07

Numberof copies of additional (3) Generally, a taxpayer needs only to submit one copy of the additional informa-
information to be submittedtion. However, in appropriate cases, the national office may request additional copies of
the information.
21-day period will be extended (4) An extension of the 21-day period will be granted only if justified in writing by
if justified and approvedthe taxpayer and approved by the branch chief, senior technician reviewer (or senior
technical reviewer), or assistant to the branch chief (or assistant branch chief) of the
branch to which the case is assigned. Arequest for extension should be submitted before
the end of the 21-day period. If unusual circumstances close to the end of the 21-day
period make a written request impractical, the taxpayer should notify the national office
within the 21-day period that there is a problem and that the written request for extension
will be coming soon. The taxpayer will be told promptly, and later in writing, of the
approval or denial of the requested extension. If the extension request is denied, there is
no right of appeal.
If taxpayerdoes not submit(5) If the taxpayer does not follow the instructions for submitting additional informa-
additional informationtion or requesting an extension within the time provided, a letter ruling will be issued on
the basis of the information on hand or, if appropriate, no letter ruling will be issued.
When the Service decides not to issue a letter ruling because additional information was
not timely submitted, the case will be closed and the taxpayer notified in writing. If the
Service receives the information afterthe letterruling request is closed, the request
may be reopened and treated as a new request. However, the taxpayermust pay
anotheruserfee before the case can be reopened.
Nearthe completion of the .08Generally, after the conference of right is held but before the letter ruling is issued,
ruling process, advises the the branch representative will inform the taxpayer or the taxpayer’s representative of the
taxpayerof conclusions and, Service’s conclusions. If the Service is going to rule adversely, the taxpayer will be offered
if the Service will rule the opportunity to withdraw the letter ruling request. If the taxpayer or the taxpayer’s rep-
adversely, offers the resentative does not promptly notify the branch representative of a decision to withdraw
taxpayerthe opportunity the ruling request, the adverse letter ruling will be issued. The user fee will not be re-
to withdraw the letterfunded for a letter ruling request that is withdrawn. Seesection 8.07 of this revenue
ruling requestprocedure.
May request draft of .09To accelerate issuance of letter rulings, in appropriate cases near the completion of
proposed letterruling nearthe ruling process, the Service representative may request that the taxpayer or the tax-
the completion of the payer’s representative submit a proposed draft of the letter ruling on the basis of
ruling processdiscussions of the issues. The taxpayer, however, is not required to prepare a draft letter
ruling to receive a letter ruling.
The format of the submission should be discussed with the Service representative who
requests the draft letter ruling. The representative usually can provide a sample format of a
letter ruling and will discuss the facts, analysis, and letter ruling language to be included.
Taxpayermay also submit In addition to a typed draft, taxpayers are encouraged to submit this draft on a disk in a
draft on a word processing diskword processing format. The typed draft will become part of the permanent files of the
national office, and the word processing disk will not be returned. If the Service
representative requesting the draft letter ruling cannot answer specific questions about the
format of the word processing disk, the questions can be directed to Wayne Thomas at
202-622-7560 or Roberta Hardaker at 202-622-4015 (not toll-free calls).
The proposed letter ruling (both typed draft and word processing disk) should be sent to
the same address as any additional information and contain in the transmittal the informa-
tion that should be included with any additional information (for example, a penalties of
perjury statement is required). See section 10.07 of this revenue procedure.
Issues separate letterrulings .10
forsubstantially identical letter
rulings and generally issues (1) Substantially identical letterrulings. For letter ruling requests qualifying for the
single letterruling foruser fee provided in paragraph (A)(5)(a) of Appendix Aof this revenue procedure for sub-
January 5, 1998441998–1 I.R.B.
Sec. 10.07

identical accounting stantially identical letter rulings, a separate letter ruling will be issued for each entity
method changeswith a common member or sponsor, or for each member of a common entity.
(2) Identical accounting method changes and related § 301.9100 letterrulings.For
letter ruling requests qualifying for the user fee provided in paragraphs (A)(5)(b) and (c) of
Appendix Aof this revenue procedure for identical accounting method changes and related
§ 301.9100 letter rulings, a single letter ruling generally will be issued on behalf of all
members of a consolidated group that file a Form 3115, Application for Change in Ac-
counting Method, or that file a § 301.9100 request for an extension of time to file a Form
3115. If, however, different spread periods for the § 481(a) adjustment or different terms
and conditions are required, separate letter rulings may be issued for certain members or
groups of members within a consolidated group. Each letter ruling will include an attach-
ment listing the § 481(a) adjustment for each member to which the letter ruling applies.
Sends copy of letterruling .11The national office will send a copy of the letter ruling, whether favorable or adverse,
to district directorto the district director who has examination jurisdiction of the taxpayer’s tax return.
SECTION 11. HOWARE
CONFERENCES
SCHEDULED?
Schedules a conference if .01 Ataxpayer may request a conference regarding a letter ruling request. Normally, a
requested by taxpayerconference is scheduled only when the national office considers it to be helpful in
deciding the case or when an adverse decision is indicated. If conferences are being
arranged for more than one request for a letter ruling involving the same taxpayer, they
will be scheduled so as to cause the least inconvenience to the taxpayer. As stated in
section 8.02(6) of this revenue procedure, a taxpayer who wants to have a conference on
the issue or issues involved should indicate this in writing when, or soon after, filing the
request.
If a conference has been requested, the taxpayer will be notified by telephone, if possi-
ble, of the time and place of the conference, which must then be held within 21 calendar
days after this contact. Instructions for requesting an extension of the 21-day period and
notifying the taxpayer or the taxpayer’s representative of the Service’s approval or denial
of the request for extension are the same as those explained in section 10.07(4) of this rev-
enue procedure regarding providing additional information.
Permits taxpayerone.02Ataxpayer is entitled, as a matter of right, to only one conference in the national
conference of rightoffice, except as explained under section 11.05 of this revenue procedure. This conference
normally will be held at the branch level and will be attended by a person who, at the time
of the conference, has the authority to sign the letter ruling in his or her own name or for
the branch chief.
When more than one branch has taken an adverse position on an issue in a letter ruling
request or when the position ultimately adopted by one branch will affect that adopted by
another, a representative from each branch with the authority to sign in his or her own
name or for the branch chief will attend the conference. If more than one subject is to be
discussed at the conference, the discussion will constitute a conference on each subject.
To have a thorough and informed discussion of the issues, the conference usually will be
held after the branch has had an opportunity to study the case. However, at the request of
the taxpayer, the conference of right may be held earlier.
No taxpayer has a right to appeal the action of a branch to an assistant chief counsel or to
any other official of the Service. But see section 11.05 of this revenue procedure for situa-
tions in which the Service may offer additional conferences.
In employment tax matters, only the party entitled to the letter ruling is entitled to a con-
ference. Seesection 5.09 of this revenue procedure.
1998–1 I.R.B.45January 5, 1998
Sec. 11.02

Disallows verbatim .03Because conference procedures are informal, no tape, stenographic, or other verbatim
recording of conferencesrecording of a conference may be made by any party.
Makes tentative .04The senior Service representative present at the conference ensures that the taxpayer
recommendations on has the opportunity to present views on all the issues in question. AService representative
substantive issuesexplains the Service’s tentative decision on the substantive issues and the reasons for that
decision. If the taxpayer asks the Service to limit the retroactive effect of any letter ruling
or limit the revocation or modification of a prior letter ruling, a Service representative will
discuss the recommendation concerning this issue and the reasons for the
recommendation. The Service representatives will not make a commitment regarding the
conclusion that the Service will finally adopt.
May offeradditional .05 The Service will offer the taxpayer an additional conference if, after the conference
conferencesof right, an adverse holding is proposed, but on a new issue, or on the same issue but on
different grounds from those discussed at the first conference. There is no right to another
conference when a proposed holding is reversed at a higher level with a result less
favorable to the taxpayer, if the grounds or arguments on which the reversal is based were
discussed at the conference of right.
The limit on the number of conferences to which a taxpayer is entitled does not prevent
the Service from offering additional conferences, including conferences with an official
higher than the branch level, if the Service decides they are needed. Such conferences are
not offered as a matter of course simply because the branch has reached an adverse decision.
In general, conferences with higher level officials are offered only if the Service determines
that the case presents significant issues of tax policy or tax administration and that the con-
sideration of these issues would be enhanced by additional conferences with the taxpayer.
Requires written confirmation .06The taxpayer should furnish to the national office any additional data, reasoning,
of information presented precedents, etc., that were proposed by the taxpayer and discussed at the conference but
at conferencenotpreviously or adequately presented in writing. The taxpayer must furnish the addi-
tional information within 21 calendar days from the date of the conference. See section
10.07 of this revenue procedure for instructions on submission of additional information.
If the additional information is not received within that time, a letter ruling will be issued
on the basis of the information on hand or, if appropriate, no ruling will be issued.
Procedures for requesting an extension of the 21-day period and notifying the taxpayer
or the taxpayer’s representative of the Service’s approval or denial of the requested exten-
sion are the same as those stated in section 10.07(4) of this revenue procedure regarding
submitting additional information.
May schedule a pre- .07Sometimes it will be advantageous to both the Service and the taxpayer to hold a
submission conferenceconference before the taxpayer submits the letter ruling request to discuss substantive or
procedural issues relating to a proposed transaction. Such conferences are held only if the
taxpayer actually intends to make a request, only if the request involves a matter on which
a letter ruling is ordinarily issued, and only on a time-available basis. For example, a pre-
submission conference will not be held on an income tax issue if, at the time the pre-
submission conference is requested, the identical issue is involved in the taxpayer’s return
for an earlier period and that issue is being examined by a district director. Seesection
5.01(1) of this revenue procedure.
Generally, the taxpayer will be asked to provide before the pre-submission conference a
statement of whether the issue is an issue on which a letter ruling is ordinarily issued and a
draft of the letter ruling request or other detailed written statement of the proposed transac-
tion, issue, and legal analysis. If the taxpayer’s authorized representative will attend the
pre-submission conference, a power of attorney form is required. It is preferred that Form
2848, Power of Attorney and Declaration of Representative, be used to provide the repre-
sentative’s authorization.
Any discussion of substantive issues at a pre-submission conference is advisory only, is
not binding on the Service in general or on the Office of Chief Counsel in particular, and
January 5, 1998461998–1 I.R.B.
Sec. 11.03

cannot be relied upon as a basis for obtaining retroactive relief under the provisions of
§ 7805(b). Aletter ruling request submitted following a pre-submission conference will
not necessarily be assigned to the branch that held the pre-submission conference.
Underlimited .08Infrequently, taxpayers request that their conference of right be held by telephone.
circumstances, may This request may occur, for example, when a taxpayer wants a conference of right but be-
schedule a conference lieves that the issue involved does not warrant incurring the expense of traveling to
to be held by telephoneWashington, DC. If a taxpayer makes such a request, the branch chief, senior technician
reviewer (or senior technical reviewer), or assistant to the branch chief (or assistant branch
chief) of the branch to which the case is assigned will decide if it is appropriate in the
particular case to hold the conference of right by telephone. If the request is approved, the
taxpayer will be advised when to call the Service representatives (not a toll-free call).
SECTION 12. WHAT
EFFECTWILLALETTER
RULING HAVE?
May be relied on subject.01Ataxpayer ordinarily may rely on a letter ruling received from the Service subject to
to limitationsthe conditions and limitations described in this section.
Will not apply to another.02Ataxpayer may not rely on a letter ruling issued to another taxpayer. See§ 6110(j)(3).
taxpayer
Will be used by a district .03When determining a taxpayer’s liability, the district director must ascertain whether—
directorin examining the
taxpayer’s return(1) the conclusions stated in the letter ruling are properly reflected in the return;
(2) the representations upon which the letter ruling was based reflected an accurate state-
ment of the material facts;
(3) the transaction was carried out substantially as proposed; and
(4) there has been any change in the law that applies to the period during which the
transaction or continuing series of transactions were consummated.
If, when determining the liability, the district director finds that a letter ruling should be
revoked or modified, the findings and recommendations of the district director will be for-
warded to the national office for consideration before further action is taken by the district
director. Such a referral to the national office will be treated as a request for technical ad-
vice and the provisions of Rev. Proc. 98–2 will be followed. Otherwise, the letter ruling is
to be applied by the district director in the determination of the taxpayer’s liability. Appro-
priate coordination with the national office will be undertaken if any field official having
jurisdiction over a return or other matter proposes to reach a conclusion contrary to a letter
ruling previously issued to the taxpayer.
May be revoked or.04Unless it was part of a closing agreement as described in section 2.02 of this revenue
modified if found to procedure, a letter ruling found to be in error or not in accord with the current views of the
be in errorService may be revoked or modified. If a letter ruling is revoked or modified, the
revocation or modification applies to all years open under the statute of limitations unless
the Service uses its discretionary authority under § 7805(b) to limit the retroactive effect
of the revocation or modification.
Aletter ruling may be revoked or modified due to—
(1) a notice to the taxpayer to whom the letter ruling was issued;
(2) the enactment of legislation or ratification of a tax treaty;
(3) a decision of the United States Supreme Court;
1998–1 I.R.B.47January 5, 1998
Sec. 12.04

(4) the issuance of temporary or final regulations; or
(5) the issuance of a revenue ruling, revenue procedure, notice, or other statement pub-
lished in the Internal Revenue Bulletin.
Consistent with these provisions, if a letter ruling relates to a continuing action or a
series of actions, it ordinarily will be applied until any one of the events described above
occurs or until it is specifically withdrawn.
Publication of a notice of proposed rulemaking will not affect the application of any let-
ter ruling issued under this revenue procedure.
Not generally revoked or.05 Except in rare or unusual circumstances, the revocation or modification of a letter
modified retroactivelyruling will not be applied retroactively to the taxpayer for whom the letter ruling was
issued or to a taxpayer whose tax liability was directly involved in the letter ruling
provided that—
(1) there has been no misstatement or omission of material facts;
(2) the facts at the time of the transaction are not materially different from the facts on
which the letter ruling was based;
(3) there has been no change in the applicable law;
(4) the letter ruling was originally issued for a proposed transaction; and
(5) the taxpayer directly involved in the letter ruling acted in good faith in relying on the
letter ruling, and revoking or modifying the letter ruling retroactively would be to the tax-
payer’s detriment. For example, the tax liability of each shareholder is directly involved in
a letter ruling on the reorganization of a corporation. However, the tax liability of a mem-
ber of an industry is not directly involved in a letter ruling issued to another member and,
therefore, the holding in a revocation or modification of a letter ruling to one member of an
industry may be retroactively applied to other members of the industry. By the same rea-
soning, a tax practitioner may not extend to one client the non-retroactive application of a
revocation or modification of a letter ruling previously issued to another client.
If a letter ruling is revoked or modified by letter with retroactive effect, the letter will,
except in fraud cases, state the grounds on which the letter ruling is being revoked or mod-
ified and explain the reasons why it is being revoked or modified retroactively.
Retroactive effect of .06Aletter ruling issued on a particular transaction represents a holding of the Service
revocation oron that transaction only. It will not apply to a similar transaction in the same year or any
modification applied other year. And, except in unusual circumstances, the application of that letter ruling to the
to a particulartransaction will not be affected by the later issuance of regulations (either temporary or
transactionfinal) if conditions (1) through (5) in section 12.05 of this revenue procedure are met.
However, if a letter ruling on a transaction is later found to be in error or no longer in ac-
cord with the position of the Service, it will not protect a similar transaction of the taxpayer
in the same year or later year.
Retroactive effect of.07If a letter ruling is issued covering a continuing action or series of actions and the let-
revocation orter ruling is later found to be in error or no longer in accord with the position of the Service,
modification applied to the Associate Chief Counsel (Domestic), the Associate Chief Counsel (Employee Benefits
a continuing action orand Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), or the
series of actionsAssociate Chief Counsel (International), as appropriate, ordinarily will limit the retro-
active effect of the revocation or modification to a date that is not earlier than that on
which the letter ruling is revoked or modified. For example, the retroactive effect of the
revocation or modification of a letter ruling covering a continuing action or series of
actions ordinarily would be limited in the following situations when the letter ruling is in
error or no longer in accord with the position of the Service:
January 5, 1998481998–1 I.R.B.
Sec. 12.04

(1) Ataxpayer received a letter ruling that certain payments are excludable from gross
income for federal income tax purposes. However, the taxpayer ordinarily would be pro-
tected only for the payment received after the letter ruling was issued and before the revo-
cation or modification of the letter ruling.
(2) Ataxpayer rendered a service or provided a facility that is subject to the excise tax on
services or facilities and, in relying on a letter ruling received, did not pass the tax on to the
user of the service or the facility.
(3) An employer incurred liability under the Federal Insurance Contributions Act but, in
relying on a letter ruling received, neither collected the employee tax nor paid the em-
ployee and employer taxes under the Federal Insurance Contributions Act. The retroactive
effect would be limited for both the employer and employee tax. However, the limitation
would be conditioned on the employer furnishing wage data, as may be required by
§ 31.6011(a)–1 of the Employment Tax Regulations.
Generally not retroactively.08Aletter ruling holding that the sale or lease of a particular article is subject to the
revoked ormodified if manufacturer’s excise tax or the retailer’s excise tax may not retroactively revoke or mod-
related to sale orlease ify an earlier letter ruling holding that the sale or lease of such an article was not taxable if
subject to excise taxthe taxpayer to whom the letter ruling was issued, in relying on the earlier letter ruling,
gave up possession or ownership of the article without passing the tax on to the customer.
(Section 1108(b), Revenue Act of 1926.)
May be retroactively revoked or.09Ataxpayer is not protected against retroactive revocation or modification of a letter
modified when transaction isruling involving a transaction completed before the issuance of the letter ruling or involv-
entered into before theing a continuing action or series of actions occurring before the issuance of the letter ruling
issuance of the letterrulingbecause the taxpayer did not enter into the transaction relying on a letter ruling.
May be retroactively revoked .10If a letter ruling is issued covering a particular transaction and the material facts on
ormodified when transaction which the letter ruling is based are later changed, a taxpayer is not protected against
is entered into aftera change retroactive revocation or modification of the letter ruling when the transaction is completed
in material factsafter the change in the material facts. Similarly, a taxpayer is not protected against
retroactive revocation or modification of a letter ruling involving a continuing action or a
series of actions occurring after the material facts on which the letter ruling is based have
changed.
Taxpayermay request that .11Under § 7805(b), the Service may prescribe any extent to which a revocation or
retroactivity be limitedmodification of a letter ruling or determination letter will be applied without retroactive
effect.
Ataxpayer to whom a letter ruling or determination letter has been issued may request
that the Associate Chief Counsel (Domestic), the Associate Chief Counsel (Employee Ben-
efits and Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), or
the Associate Chief Counsel (International), as appropriate, limit the retroactive effect of
any revocation or modification of the letter ruling or determination letter.
Format of request(1) Request forrelief under§ 7805(b) must be made in required format.
Arequest to limit the retroactive effect of the revocation or modification of a letter ruling
must be in the general form of, and meet the general requirements for, a letter ruling re-
quest. These requirements are given in section 8 of this revenue procedure. Specifically,
the request must also—
(a) state that it is being made under § 7805(b);
(b) state the relief sought;
(c) explain the reasons and arguments in support of the relief requested (including a dis-
cussion of the five items listed in section 12.05 of this revenue procedure and any other
factors as they relate to the taxpayer’s particular situation); and
1998–1 I.R.B.49January 5, 1998
Sec. 12.11

(d) include any documents bearing on the request.
Arequest that the Service limit the retroactive effect of a revocation or modification of a
letter ruling may be made in the form of a separate request for a letter ruling when, for ex-
ample, a revenue ruling has the effect of modifying or revoking a letter ruling previously
issued to the taxpayer, or when the Service notifies the taxpayer of a change in position that
will have the effect of revoking or modifying the letter ruling. However, when notice is
given by the district director during an examination of the taxpayer’s return or by the chief,
appeals office, during consideration of the taxpayer’s return before an appeals office, a
request to limit retroactive effect must be made in the form of a request for technical advice
as explained in section 18.03 of Rev. Proc. 98–2.
When germane to a pending letter ruling request, a request to limit the retroactive effect
of a revocation or modification of a letter ruling may be made as part of the request for the
letter ruling, either initially or at any time before the letter ruling is issued. When a letter
ruling that concerns a continuing transaction is revoked or modified by, for example, a sub-
sequent revenue ruling, a request to limit retroactive effect must be made before the exam-
ination of the return that contains the transaction that is the subject of the letter ruling
request.
Request forconference(2) Taxpayermay request a conference on application of § 7805(b).
Ataxpayer who requests the application of § 7805(b) in a separate letter ruling request
has the right to a conference in the national office as explained in sections 11.02, 11.04, and
11.05 of this revenue procedure. If the request is made initially as part of a pending letter
ruling request or is made before the conference of right is held on the substantive issues,
the § 7805(b) issue will be discussed at the taxpayer’s one conference of right as explained
in section 11.02 of this revenue procedure. If the request for the application of § 7805(b)
relief is made as part of a pending letter ruling request after a conference has been held on
the substantive issue and the Service determines that there is justification for having
delayed the request, the taxpayer is entitled to one conference of right concerning the appli-
cation of § 7805(b), with the conference limited to discussion of this issue only.
SECTION 13. WHAT
EFFECTWILLA
DETERMINATION LETTER
HAVE?
Has same effect as a .01Adetermination letter issued by a district director has the same effect as a letter rul-
letterruling ing issued to ataxpayer under section 12 of this revenue procedure.
If a district director proposes to reach a conclusion contrary to that expressed in a deter-
mination letter, he or she need not refer the matter to the national office as is required for a
letter ruling found to be in error. However, the district director must refer the matter to the
national office if the district director desires to have the revocation or modification of the
determination letter limited under § 7805(b).
Taxpayermay request .02Adistrict director does not have authority under § 7805(b) to limit the revocation or
that retroactive effect ofmodification of the determination letter. Therefore, if a district director proposes to revoke
revocation ormodificationor modify a determination letter, the taxpayer may request limitation of the retroactive
be limitedeffect of the revocation or modification by asking the district director who issued the
determination letter to seek technical advice from the national office. Seesection 18.03 of
Rev. Proc. 98–2.
Format of request(1) Request forrelief under§ 7805(b) must be made in required format.
Ataxpayer’s request to limit the retroactive effect of the revocation or modification of
the determination letter must be in the form of, and meet the general requirements for, a
technical advice request. Seesection 18.03 of Rev. Proc. 98-2. The request must also—
January 5, 1998501998–1 I.R.B.
Sec. 12.11

(a) state that it is being made under § 7805(b);
(b) state the relief sought;
(c) explain the reasons and arguments in support of the relief sought (including a discus-
sion of the five items listed in section 12.05 of this revenue procedure and any other factors
as they relate to the taxpayer’s particular situation); and
(d) include any documents bearing on the request.
Request forconference(2) Taxpayermay request a conference on application of § 7805(b).
When technical advice is requested regarding the application of § 7805(b), the taxpayer
has the right to a conference in the national office to the same extent as does any taxpayer
who is the subject of a technical advice request. Seesections 13 and 18.04 of Rev. Proc.
98–2.
SECTION 14. UNDER
WHATCIRCUMSTANCES
ARE MATTERS REFERRED
BETWEEN ADISTRICT
OFFICE AND THE
NATIONALOFFICE?
Requests for.01Requests for determination letters received by district directors that, under the pro-
determination lettersvisions of this revenue procedure, may not be issued by a district office, will be forwarded
to the national office for reply. The district office will notify the taxpayer that the matter
has been referred.
District directors will also refer to the national office any request for a determination let-
ter that in their judgment should have the attention of the national office.
No-rule areas.02If the request involves an issue on which the Service will not issue a letter ruling or
determination letter, the request will not be forwarded to the national office. The district
office will notify the taxpayer that the Service will not issue a letter ruling or a determi-
nation letter on the issue. See section 7 of this revenue procedure for a description of no-
rule areas.
Requests forletterrulings.03 Requests for letter rulings received by the national office that, under section 5 of
this revenue procedure, may not be acted upon by the national office will be forwarded to
the district office that has examination jurisdiction over the taxpayer’s return. The
taxpayer will be notified of this action. If the request is on an issue or in an area of the
type discussed in section 7 of this revenue procedure and the Service decides not to issue a
letter ruling or an information letter, the national office will notify the taxpayer and will
then forward the request to the appropriate district office for association with the related
return.
SECTION 15. WHATARE
THE USER FEE
REQUIREMENTS FOR
REQUESTS FOR LETTER
RULINGS AND
DETERMINATION
LETTERS?
Legislation .01Section 10511 of the Revenue Act of 1987, 1987–3 C.B. 1, 166, enacted December
authorizing userfees22, 1987, as amended by § 11319 of the Omnibus Budget Reconciliation Act of 1990,
1991–2 C.B. 481, 511, enacted November 5, 1990, by § 743 of the Uruguay Round
Agreements Act, 1995–1 C.B. 230, 239, enacted December 8, 1994, and by § 2 of the Tax
1998–1 I.R.B.51January 5, 1998
Sec. 15.01

Relief to Operation Joint Endeavor Participants Act, Pub. L. No. 104–117, 110 Stat. 827,
828, enacted March 20, 1996 (hereafter the four laws are referred to together as the
“Act”), provides that the Secretary of the Treasury or delegate (the “Secretary”) shall
establish a program requiring the payment of user fees for requests to the Service for letter
rulings, opinion letters, determination letters, and similar requests. The fees apply to
requests made on or after February 1, 1988, and before October 1, 2003. The fees charged
under the program are to: (1) vary according to categories or subcategories established by
the Secretary; (2) be determined after taking into account the average time for, and
difficulty of, complying with requests in each category and subcategory; and (3) be
payable in advance. The Secretary is to provide for exemptions and reduced fees under
the program as the Secretary determines to be appropriate, but the average fee applicable
to each category must not be less than the amount specified in the Act.
Requests to which a .02In general, user fees apply to all requests for—
userfee applies
(1) letter rulings, determination letters, and advance pricing agreements;
(2) closing agreements described in paragraph (A)(3)(d) of Appendix Aof this revenue
procedure;
(3) renewal of advance pricing agreements; and
(4) reconsideration of letter rulings or determination letters.
Requests to which a user fee applies must be accompanied by the appropriate fee as de-
termined from the fee schedule provided in Appendix Aof this revenue procedure. The fee
may be refunded as provided in section 15.10 of this revenue procedure.
Requests to which a user.03User fees do not apply to—
fee does not apply
(1) elections made pursuant to § 301.9100–2, pertaining to automatic extensions of time
(see section 5.02 of this revenue procedure);
(2) late S corporation elections made pursuant to Rev. Proc. 97–40 or Rev. Proc. 97–48
(seesection 5.01(3) of this revenue procedure);
(3) requests for information letters; or
(4) requests for a change in accounting period or accounting method permitted to be
made by a published automatic change revenue procedure (seesection 9.03 of this revenue
procedure).
Exemptions from the .04The user fee requirements do not apply to—
userfee requirements
(1) departments, agencies, or instrumentalities of the United States that certify that they
are seeking a letter ruling or determination letter on behalf of a program or activity funded
by federal appropriations. The fact that a user fee is not charged does not have any bearing
on whether an applicant is treated as an agency or instrumentality of the United States for
purposes of any provision of the Code; or
(2) requests as to whether a worker is an employee for federal employment taxes and in-
come tax withholding purposes (chapters 21, 22, 23, and 24 of subtitle C of the Code) sub-
mitted on Form SS–8, Information for Use in Determining Whether a Worker Is an Em-
ployee for Federal Employment Taxes and Income Tax Withholding, or its equivalent.
Fee schedule .05The schedule of user fees is provided in Appendix A. For the user fee requirements
applicable to—
January 5, 1998521998–1 I.R.B.
Sec. 15.01

(1) requests for advance pricing agreements or renewals of advance pricing agreements,
see section 5.14 of Rev. Proc. 96–53, 1996–2 C.B. at 379; or
(2) requests for letter rulings, determination letters, etc., under the jurisdiction of the
Assistant Commissioner (Employee Plans and Exempt Organizations), see Rev. Proc.
98–8.
Applicable userfee fora .06
request involving multiple
offices, fee categories, issues,(1) Requests involving several offices.If a request dealing with only one transaction in-
transactions, orentitiesvolves more than one of the offices within the Service (for example, one issue is under the
jurisdiction of the Associate Chief Counsel (Domestic) and another issue is under the
jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations)),
only one fee applies, namely the highest fee that otherwise would apply to each of the
offices involved. See Rev. Proc. 98–8 for the user fees applicable to issues under the
jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations).
(2) Requests involving several fee categories.If a request dealing with only one trans-
action involves more than one fee category, only one fee applies, namely the highest fee
that otherwise would apply to each of the categories involved.
(3) Requests involving several issues.If a request dealing with only one transaction in-
volves several issues, a request for a change in accounting method dealing with only one
item or sub-method of accounting involves several issues, or a request for a change in ac-
counting period dealing with only one item involves several issues, the request is treated as
one request. Therefore, only one fee applies, namely the fee that applies to the particular
category or subcategory involved. The addition of a new issue relating to the same trans-
action or item will not result in an additional fee, unless the issue places the transaction or
item in a higher fee category.
(4) Requests involving several unrelated transactions.If a request involves several
unrelated transactions, a request for a change in accounting method involves several unre-
lated items or sub-methods of accounting, or a request for a change in accounting period
involves several unrelated items, each transaction or item is treated as a separate request.
As a result, a separate fee will apply for each unrelated transaction or item. An additional
fee will apply if the request is changed by the addition of an unrelated transaction or item
not contained in the initial request.
(5) Requests involving several entities.Each entity involved in a transaction (for ex-
ample, a reorganization) that desires a separate letter ruling in its own name must pay a
separate fee regardless of whether the transaction or transactions may be viewed as related.
But seesection 15.07 of this revenue procedure.
Applicable userfee for.07
substantially identical
letterrulings oridentical(1) In general.The user fees provided in paragraph (A)(5) of Appendix Aof this rev-
accounting method enue procedure apply to the situations described in sections 15.07(2) and 15.07(3) of this
changesrevenue procedure. To assist in the processing of these user fee requests, all letter ruling
requests submitted under this section 15.07 should—
(a) Type or print at the top of the letter ruling request: “REQUESTFOR USER FEE
UNDER SECTION 15.07 OF REV. PROC. 98–1”;
(b) List on the first page of the submission all taxpayers and entities requesting a letter
ruling (including the taxpayer identification number, and the amount of user fee submitted,
for each taxpayer or entity); and
1998–1 I.R.B.53January 5, 1998
Sec. 15.07

(c) Submit one check to cover all user fees.
If the Service determines that the letter ruling requests do not qualify for the user fee
provided in paragraph (A)(5) of Appendix Aof this revenue procedure, the Service will re-
quest the proper fee. Seesection 15.09 of this revenue procedure.
(2) Substantially identical letterrulings. The user fee provided in paragraph (A)(5)(a)
of Appendix Aof this revenue procedure applies to a taxpayer that requests substantially
identical letter rulings (including accounting period, accounting method, and earnings and
profits requests other than those submitted on Forms 1128, 2553, 3115, and 5452) for
either multiple entities with a common member or sponsor, or multiple members of a com-
mon entity. To qualify for this user fee, all information and underlying documents must be
substantially identical and all letter ruling requests must be submitted at the same time. In
addition, the letter ruling requests must—
(a) State that the letter ruling requests, and all information and underlying documents,
are substantially identical; and
(b) Specifically identify the extent to which the letter ruling requests, information, and
underlying documents are not identical.
(3) Identical accounting method changes and related § 301.9100 letterrulings.The
user fees provided in paragraphs (A)(5)(b) and (c) of Appendix Aof this revenue procedure
apply to a parent corporation that requests either the identical accounting method change
on a single Form 3115 on behalf of more than one member of a consolidated group or an
extension of time to file Form 3115 under § 301.9100–3 for the identical accounting
method change on behalf of more than one member of a consolidated group. To qualify for
this user fee, the taxpayers in the consolidated group must be members of the same affili-
ated group under § 1504(a) that join in the filing of a consolidated tax return and must be
requesting to change from the identical present method of accounting to the identical pro-
posed method of accounting. All aspects of the requested accounting method change, in-
cluding the present and proposed methods, the underlying facts and the authority for the re-
quest, must be identical, except for the § 481(a) adjustment for the year of change and the
preceding year, and the number of years the present method has been used.
In addition, a parent corporation must file a single Form 3115. Besides including all the
information required on the Form 3115, the parent corporation must, for each member of a
consolidated group for which the accounting method change is being requested, attach to
the Form 3115 a schedule providing its name, employer identification number, § 481(a) ad-
justment for the year of change and the preceding year, and the number of years the present
method has been used. The Form 3115 must be signed by a duly authorized officer of the
parent corporation.
In the case of a § 301.9100 request for an extension of time to file Form 3115, a parent
corporation must submit the information required in the above paragraph in addition to the
information required by section 5.02 of this revenue procedure.
Method of payment.08Each request to the Service for a letter ruling, determination letter, advance pricing
agreement, closing agreement described in paragraph (A)(3)(d) of Appendix Aof this
revenue procedure, or reconsideration of a letter ruling or determination letter must be
accompanied by a check or money order, payable to the Internal Revenue Service, in the
appropriate amount. (However, the user fee check or money order should not be attached
to the Form 2553, Election by a Small Business Corporation, when it is filed at the
Service Center. If on the Form 2553 the corporation requests a ruling that it be permitted
to use a fiscal year under section 6.03 of Rev. Proc. 87–32, the Service Center will
forward the request to the national office. When the national office receives the Form
2553 from the Service Center, it will notify the taxpayer that the fee is due.) Taxpayers
should not send cash.
January 5, 1998541998–1 I.R.B.
Sec. 15.07

Effect of nonpayment .09 If a request is not accompanied by a properly completed check or money order or
orpayment of is accompanied by a check or money order for less than the correct amount, the respective
incorrect amountoffice within the Service that is responsible for issuing the letter ruling, determination
letter, advance pricing agreement, closing agreement, or reconsideration of a letter ruling
or determination letter generally will exercise discretion in deciding whether to return
immediately the request. If a request is not immediately returned, the taxpayer will be
contacted and given a reasonable amount of time to submit the proper fee. If the proper
fee is not received within a reasonable amount of time, the entire request will then be
returned. However, the Service will usually defer substantive consideration of a request
until proper payment has been received. The return of a request to the taxpayer may
adversely affect substantive rights if the request is not perfected and resubmitted to the
Service within 30 days of the date of the cover letter returning the request.
If a request is accompanied by a check or money order for more than the correct amount,
the request will be accepted and the amount of the excess payment will be returned to the
taxpayer.
Refunds of userfee.10 In general, the user fee will not be refunded unless the Service declines to rule on all
issues for which a ruling is requested.
(1) The following situations are examples of situations in which the userfee will not
be refunded:
(a) The request for a letter ruling, determination letter, etc., is withdrawn at any time
subsequent to its receipt by the Service, unless the only reason for withdrawal is that the
Service has advised the taxpayer that a higher user fee than was sent with the request is ap-
plicable and the taxpayer is unwilling to pay the higher fee.
(b) The request is procedurally deficient, although accompanied by the proper fee or an
overpayment, and is not timely perfected by the requester. When there is a failure to per-
fect timely the request, the case will be considered closed and the failure to perfect will be
treated as a withdrawal for purposes of this revenue procedure. Seesection 10.06(3) of this
revenue procedure.
(c) The Service notifies the taxpayer that the Service will not issue the letter ruling and
has closed the case as a result of the taxpayer’s failure to submit timely the additional in-
formation requested by the Service. The failure to submit the additional information will
be treated as a withdrawal for purposes of this revenue procedure. Seesection 10.07(5) of
this revenue procedure.
(d) Aletter ruling, determination letter, etc., is revoked in whole or in part at the initia-
tive of the Service. The fee paid at the time the original letter ruling, determination letter,
etc., was requested will not be refunded.
(e) The request contains several issues, and the Service rules on some, but not all, of the
issues. The highest fee applicable to the issues on which the Service rules will not be re-
funded.
(f) The taxpayer asserts that a letter ruling the taxpayer received covering a single issue
is erroneous or not responsive (other than an issue on which the Service has declined to
rule) and requests reconsideration. The Service, upon reconsideration, does not agree that
the letter ruling is erroneous or is not responsive. The fee accompanying the request for re-
consideration will not be refunded.
(g) The situation is the same as described in paragraph (e) of this section 15.10(1) except
that the letter ruling covered several unrelated transactions. The Service, upon reconsider-
ation, does not agree with the taxpayer that the letter ruling is erroneous or is not respon-
sive for all of the transactions, but does agree that it is erroneous as to one transaction. The
1998–1 I.R.B.55January 5, 1998
Sec. 15.10

fee accompanying the request for reconsideration will not be refunded except to the extent
applicable to the transaction for which the Service agrees the letter ruling was in error.
(h) The request is for a supplemental letter ruling, determination letter, etc., concerning a
change in facts (whether significant or not) relating to the transaction on which the Service
ruled.
(i) The request is for reconsideration of an adverse or partially adverse letter ruling or a
final adverse determination letter, and the taxpayer submits arguments and authorities not
submitted before the original letter ruling or determination letter was issued.
(2) The following situations are examples of situations in which the userfee will be
refunded:
(a) In a situation to which section 15.10(1)(h) of this revenue procedure does not apply,
the taxpayer asserts that a letter ruling the taxpayer received covering a single issue is erro-
neous or is not responsive (other than an issue on which the Service declined to rule) and
requests reconsideration. The Service agrees, upon reconsideration, that the letter ruling is
erroneous or is not responsive. The fee accompanying the taxpayer’s request for reconsid-
eration will be refunded.
(b) In a situation to which section 15.10(1)(h) of this revenue procedure does not apply,
the taxpayer requests a supplemental letter ruling, determination letter, etc., to correct a
mistake that the Service agrees it made in the original letter ruling, determination letter,
etc., such as a mistake in the statement of facts or in the citation of a Code section. Once
the Service agrees that it made a mistake, the fee accompanying the request for the supple-
mental letter ruling, determination letter, etc., will be refunded.
(c) The taxpayer requests and is granted relief under § 7805(b) in connection with the re-
vocation in whole or in part, of a previously issued letter ruling, determination letter, etc.
The fee accompanying the request for relief will be refunded.
(d) In a situation to which section 15.10(1)(d) of this revenue procedure applied, the tax-
payer requests reconsideration of the Service’s decision not to rule on an issue. Once the
Service agrees to rule on the issue, the fee accompanying the request for reconsideration
will be refunded.
(e) The letter ruling is not issued and taking into account all the facts and circumstances,
including the Service’s resources devoted to the request, the assistant chief counsel in his
or her sole discretion decides a refund is appropriate.
Request forreconsideration .11Ataxpayer that believes the user fee charged by the Service for its request for a letter
of userfeeruling, determination letter, advance pricing agreement, or closing agreement is either
inapplicable or incorrect and wishes to receive a refund of all or part of the amount paid
(seesection 15.10 of this revenue procedure) may request reconsideration and, if desired,
the opportunity for an oral discussion by sending a letter to the Service at the address
given in section 8.03 in this revenue procedure. Both the incoming envelope and the letter
requesting such reconsideration should be prominently marked “USER FEE
RECONSIDERATION REQUEST.” No user fee is required for these requests. The
request should be marked for the attention of:
If the matter involves primarily:Mark for the attention of:
Associate Chief Counsel Assistant Chief Counsel ( )
(Domestic) letter ruling requests(Complete by using whichever of the following designations applies.)
(Corporate)
(Financial Institutions and Products)
(Income Tax and Accounting)
(Passthroughs and Special Industries)
January 5, 1998561998–1 I.R.B.
Sec. 15.10

Associate Chief CounselAssistant Chief Counsel (Employee Benefits & Exempt Organizations)
(Employee Benefits & Exempt
Organizations) letter ruling requests
Associate Chief Counsel Assistant Chief Counsel (General Litigation)
(Enforcement Litigation)
letter ruling requests
Associate Chief Counsel Assistant Chief Counsel (International)
(International) letter ruling and
advance pricing agreement requests
Determination letterChief, Examination Division,
requests submitted pursuant ___________________
to this revenue procedureDistrict Office
(Add name of district office handling the request.)
SECTION 16. WHAT.01Sections 5.01 and 15.03 are amended to reflect the special procedures in Rev. Proc.
SIGNIFICANTCHANGES 97–40 and Rev. Proc. 97–48 for requesting relief for late S corporation elections.
HAVE BEEN MADE TO
REV. PROC. 97–1?.02Section 7.04 of Rev. Proc. 97–1 is redesignated as section 7.05 in this revenue
procedure. New section 7.04 is added to provide that a letter ruling or determination letter
ordinarily will not be issued on questions involving the validity of the federal income tax
and other taxes set forth in the Code, questions on the authority or jurisdiction of the
Service to enforce the Code or collect information, or similar matters.
.03 Section 8.01(2) is amended to require the submission of a certified English transla-
tion of any document that is in a language other than English, along with a true copy of the
document.
.04Section 8.01(2) also is expanded to include the standards in Rev. Rul. 67–308, 1967–
2 C.B. 254, governing the acceptability of submissions of foreign laws and documents in a
language other than English.
.05Section 8.01(5) is amended to clarify that a letter ruling request includes an applica-
tion for change in accounting method for purposes of the statement required regarding
whether the same or a similar issue was previously submitted or currently pending.
.06Section 8.01(11)(f) is amended to conform to section 10.7(c) of Treasury Department
Circular No. 230.
.07Section 8.01(13) is amended to clarify that a member-manager of a limited liability
company who has personal knowledge of the facts must sign the penalties of perjury state-
ment.
.08Section 8.03, section 10.07(2), and Appendix C (Checklist) are amended to reflect
the address to send letter ruling requests if a private delivery service is used.
.09Section 8.03 also is amended to reflect the national office’s existing practice of al-
lowing the hand-delivery of letter ruling requests to the courier’s desk of the Service.
.10Section 8.04 is amended to provide that the taxpayer must notify the national office
if, after the letter ruling request is filed but before a letter ruling is issued, the taxpayer
knows that the taxpayer or a related party submitted another letter ruling request (includ-
ing a request to change an accounting method) involving the same or similar issue that is
currently pending with the Service.
.11Section 8.07(2) is amended to reflect the national office’s existing practice of notify-
ing the district director and the Change in Method Issue Specialist if a taxpayer withdraws
1998–1 I.R.B.57January 5, 1998
Sec. 16.11

or the national office declines to grant (for any reason) a request to change from or to adopt
an improper accounting method.
.12Section 9 is updated to reflect the revenue procedures and notices effective as of
January 1, 1998.
.13Section 10.07(1) is amended to provide the language of the penalties of perjury
statement applicable for the submission of additional information.
.14 Sections 10.07(5) and 15.10(1) are amended to clarify that the user fee is not re-
funded if the Service notifies the taxpayer that the Service will not issue the letter ruling
and has closed the case as a result of the taxpayer’s failure to submit timely additional in-
formation requested by the Service.
.15Section 11.07 is amended to provide general procedures for requesting a pre-sub-
mission conference and to provide that a pre-submission conference will not be held on
matters on which letter rulings are not ordinarily issued.
.16Section 15.10(2) is amended to provide another situation in which the user fee may
be refunded.
.17Appendix Ais amended to clarify that the user fee of $250 for Form 2553 applies
only to an accounting period request made on Part II of Form 2553 to use a fiscal year
based on a business purpose.
SECTION 17. WHATIS .01Rev. Proc. 97–1, 1997–1 C.B. 433, is superseded.
THE EFFECTOFTHIS
REVENUE PROCEDURE ON .02Notice 97–19, 1997–1 C.B. 394, is modified by deleting all references to Rev. Proc.
OTHER DOCUMENTS?97–1 and replacing them with references to this revenue procedure.
.03Rev. Proc. 96–13, 1996–1 C.B. 616, is modified by deleting all references to Rev.
Proc. 96–1 and replacing them with references to this revenue procedure.
SECTION 18. WHATIS This revenue procedure is effective January 12, 1998.
THE EFFECTIVE DATE OF
THIS REVENUE
PROCEDURE?
SECTION 19. PAPERWORK The collections of information contained in this revenue procedure have been reviewed
REDUCTION ACTand approved by the Office of Management and Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. § 3507) under control number 1545–1522.
An agency may not conduct or sponsor, and a person is not required to respond to, a col-
lection of information unless the collection of information displays a valid control number.
The collections of information in this revenue procedure are in sections 5.05, 6.07, 8.01,
8.02, 8.03, 8.04, 8.05, 8.07, 9.01 (subject matter—rate orders; regulatory agency; normal-
ization), 10.06, 10.07, 10.09, 11.01, 11.06, 11.07, 12.11, 13.02, 15.02, 15.07, 15.08, 15.09,
and 15.11, paragraph (B)(1) of Appendix A, and Appendix C. This information is required
to evaluate and process the request for a letter ruling or determination letter. In addition,
this information will be used to help the Service delete certain information from the text of
the letter ruling or determination letter before it is made available for public inspection, as
required by § 6110. The collections of information are required to obtain a letter ruling or
determination letter. The likely respondents are business or other for-profit institutions.
The estimated total annual reporting and/or recordkeeping burden is 304,900 hours.
The estimated annual burden per respondent/recordkeeper varies from 1 to 200 hours,
depending on individual circumstances, with an estimated average burden of 80.2 hours.
The estimated number of respondents and/or recordkeepers is 3,800.
January 5, 1998581998–1 I.R.B.
Sec. 16.11

The estimated annual frequency of responses is on occasion.
Books or records relating to a collection of information must be retained as long as their
contents may become material in the administration of any internal revenue law. Gener-
ally, tax returns and tax return information are confidential, as required by § 6103.
DRAFTING INFORMATIONThe principal author of this revenue procedure is David Selig of the Office of Assistant
Chief Counsel (Passthroughs and Special Industries). For further information regarding
this revenue procedure for matters under the jurisdiction of—
(1) the Associate Chief Counsel (Domestic) or the Associate Chief Counsel (Employee
Benefits and Exempt Organizations), contact Mr. Selig on (202) 622-3040 (not a toll-free
call);
(2) the Associate Chief Counsel (International), contact Gerard Traficanti on (202) 874-
4360 (not a toll-free call); or
(3) the Associate Chief Counsel (Enforcement Litigation), contact Alan C. Levine on
(202) 622-3610 (not a toll-free call).
For further information regarding user fees, contact Wayne Thomas on (202) 622-7560
(not a toll-free call).
1998–1 I.R.B.59January 5, 1998

INDEX
References are to sections in Rev. Proc. 98–1
Additional Information
— perjury statement required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 10.07(1)
— proposed deletions under § 6110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 8.01(9)
— requested during initial contact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 10.06
failure to submit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 10.06(3)
— subsequent requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 10.07
after conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 11.06
failure to submit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 10.07(5)
— where to send . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 10.07(2)
Changes in Accounting Method orPeriod
— applicable sections of Rev. Proc. 98-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 9.01
— automatic change revenue procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 9.03
— identical accounting method changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 8.02(7), 10.10, 15.07, Appendix A
— user fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 15, Appendix A
Checklist Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 8.01(16), Appendix C
Conferences
— offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 10.04, 11.02
after conference of right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 11.05
application of § 6110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 8.01(9)
— requesting a conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 8.02(6)
— scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 11.01, 11.02
application of § 7805(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 12.11(2), 13.02(2)
pre-submission conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 11.07
telephone conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 11.08
Definitions
— closing agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 2.02
— determination letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 2.03
— information letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 2.04
— letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.01
— national office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 1
— revenue ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 2.05
— taxpayer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 1
Determinations Under§ 999(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 5.03
Discussions Not Binding on Service
— at pre-submission conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 11.07
— informal opinion expressed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 10.05
— oral advice to taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 2.06(2)
Employee Plans and Exempt Organizations
— jurisdiction of Assistant Commissioner
(Employee Plans and Exempt Organizations) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 4.02
— user fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . 4.02
Estate Tax Matters
— issuance of determination letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 6.02, 6.06
— issuance of letter rulings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 5.05
under § 2032A(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 5.06
January 5, 1998601998–1 I.R.B.

Expeditious Handling of LetterRuling and Determination LetterRequests . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 8.02(4)
Extension of Time
— to schedule conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 11.01
— to submit additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10.06(2), 10.07(4), 11.06
Fax Transmission
— to receive letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 8.02(5)
— to submit additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 10.07(1)
— to submit letter ruling request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 8.02(5)
Hand Delivery of LetterRuling Requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 8.03(1)
No-Rule Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 7
Oral Advice to Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 2.06
Penalties of Perjury Statement
— form for letter ruling request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 8.01(13)(a)
— form for submission of additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 10.07(1)
— required with draft letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 10.09
— signature requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 8.01(13)(b)
Pending LetterRuling Requests
— when to attach a copy to return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 8.04
estate tax matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 5.05
— when to notify national office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 8.04
estate tax matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 5.05
Powerof Attorney
— Form 2848 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 8.01(12) and 8.02(2)
copies sent to multiple representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 8.02(2)(a)
original sent to representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 8.02(2)(b)
no copy sent to representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 8.02(2)(c)
— signature requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 8.01(12)
Public Disclosure Under§ 6110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 8.01(9)
— signature requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 8.01(9)(c)
Representatives
— compliance with Treasury Department
Circular No. 230 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 8.08
— power of attorney required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 8.01(12)
— requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 8.01(11)
employee, general partner, administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 8.01(11)
foreign representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 8.01(11)
Retroactive Revocation orModification
— of determination letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 13
request to limit retroactive effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 13.02
— of letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 12.03-12.10
request to limit retroactive effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 12.11
Revenue Rulings
— effect on a letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 12.04
— request to limit retroactive effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 12.11
Sample of a LetterRuling Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 8.01(15), Appendix B
1998–1 I.R.B.61January 5, 1998

Section 301.9100 Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 5.02
Section 367 Rulings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 5.04
Status of LetterRuling and Determination LetterRequests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 8.06
Substantially Identical
LetterRulings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 8.02(7), 10.10, 15.07, Appendix A
UserFees
— schedule of user fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . Appendix A
— user fees requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 15
to reopen case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 10.06(3), 10.07(5)
Where to Send
— determination letter request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 8.03(2)
— letter ruling request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 8.03(1)
additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 10.07(2)
hand delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 8.03(1)
Withdrawal of LetterRuling and Determination LetterRequests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 8.07
January 5, 1998621998–1 I.R.B.

APPENDIX A
SCHEDULE OFUSER FEES
(A) FEE SCHEDULE
CATEGORYFEE
(1)Userfee fora determination letterrequest.The user fee for each determination letter request governed by
Rev. Proc. 98–1 (this revenue procedure).$275
(2)Userfee fora request foran advance pricing agreement ora renewal of an advance
pricing agreement.See Rev. Proc. 96-53
(3)Userfee fora request fora letterruling orclosing agreement.Except for the user fees for advance pricing
agreements and renewals, the reduced fees provided in paragraph (A)(4) of this appendix, the user fees
provided in paragraph (A)(5) of this appendix, and the exemptions provided in section 15.04 of Rev. Proc.
98–1 (this revenue procedure), the user fee for each request for a letter ruling or closing agreement under the
jurisdiction of the Associate Chief Counsel (Domestic), the Associate Chief Counsel (Employee Benefits and
Exempt Organizations), the Associate Chief Counsel (Enforcement Litigation), or the Associate Chief Counsel
(International) is as follows:
(a)Accounting periods
(i)Form 1128$250
(ii)Requests made on Part II of Form 2553 to use a fiscal year based on a business purpose $250
(iii)Letter ruling requests for extensions of time to file Form 1128 under § 301.9100–3$250
(b)Changes in Accounting Methods
(i)Form 3115 (except as provided in paragraph (A)(4)(a), (b), (c), or (d), or (5)(b) of this appendix)$900
(ii)Except as provided in paragraph (A)(5)(c) of this appendix, letter ruling requests for extensions of
time to file Form 3115 under § 301.9100–3$250
NOTE: Ataxpayer that receives an extension of time under § 301.9100-3 will be charged a separate user fee for the
accounting period or accounting method application. No user fee is required if the change in accounting period or
accounting method is permitted to be made pursuant to a published automatic change revenue procedure. See section
9.03 of this revenue procedure for the list of automatic change revenue procedures published and in effect as of
December 31, 1997.
(c)All other letter ruling requests (which includes accounting period and accounting method requests other
than those properly submitted on Form 1128, Part II of Form 2553, or Form 3115) (except as provided
in paragraph (A)(4)(a), (b), (c), or (d), or (5)(a) of this appendix)$3,650
(d)Requests for closing agreements on a proposed transaction or on a completed transaction before a return
for the transaction has been filed in which a letter ruling on that transaction is not requested or issued
(except as provided in paragraph (A)(4)(a), (b), (c), or (d) of this appendix)$3,650
(4)Reduced userfee fora request fora letterruling orclosing agreement.Areduced user fee is provided in the
following situations if the person provides the certification described in paragraph (B)(1) of this appendix:
(a)U.S. citizens and resident alien individuals, domestic trusts, and domestic estates with gross income
(as determined under paragraph (B)(2) and (4) of this appendix) of less than $150,000 $500
(b)Nonresident alien individuals, foreign trusts, and foreign estates with gross income (as determined
under paragraph (B)(3) and (4) of this appendix) of less than $150,000$500
1998–1 I.R.B.63January 5, 1998

(c)Domestic partnerships and corporations with gross income (as determined under paragraph (B)(5) of
this appendix) of less than $150,000$500
(d)Organizations exempt from income tax under “Subchapter F-Exempt Organizations” of the Code with
gross receipts (as determined under paragraph (B)(6) of this appendix) of less than $150,000$500
(5) Userfee forsubstantially identical letterruling requests oridentical accounting method changes.
If the requirements of section 15.07 of Rev. Proc. 98–1 (this revenue procedure) are satisfied, the user fee
for the following situations is as follows:
(a)Substantially identical letter rulings requested
Situations in which a taxpayer requests substantially identical letter rulings for multiple entities with a
common member or sponsor, or for multiple members of a common entity, for each additional letter
ruling request after the $3,650 fee or $500 reduced fee, as applicable, has been paid for the first
letter ruling request$150
(b)Identical accounting method change requested on a single Form 3115
Situations in which a parent corporation requests the identical accounting method change on a single
Form 3115 on behalf of more than one member of a consolidated group, for each additional member
of the group seeking the identical accounting method change on the same Form 3115 after the $900
fee or $500 reduced fee, as applicable, has been paid for the first member of the group$25
(c)Extension of time requested to file Form 3115 for an identical accounting method change
Situations in which a parent corporation requests an extension of time to file Form 3115 under
§ 301.9100-3 for the identical accounting method change on behalf of more than one member
of a consolidated group, for each additional member of the group seeking the identical
accounting method change on the same application after the $250 fee has been paid for
the first member of the group$25
NOTE: Aparent corporation and each member of a consolidated group that is entitled to the user fee under paragraph
(A)(5)(b) of this appendix, that receives an extension of time to file Form 3115 under § 301.9100-3 will be charged a sep-
arate user fee for the accounting method application.
(B) PROCEDURALMATTERS
(1) Required certification. Aperson seeking a reduced user fee under paragraph (A)(4) of this appendix must provide the follow-
ing certification in order to obtain the reduced user fee:
(a) If a person is seeking a reduced user fee under paragraph (A)(4)(a), (b), or (c) of this appendix, the person must certify in the
request that his, her, or its gross income, as defined under paragraph (B)(2), (3), or (5) of this appendix, as applicable, is less than
$150,000 for the last full (12 months) taxable year ending before the date the request is filed.
(b) If an organization exempt from income tax under Subchapter F of the Code is seeking a reduced user fee under paragraph
(A)(4)(d) of this appendix, the organization must certify in its request that its gross receipts are less than $150,000 for the last full
(12 months) taxable year ending before the date the request is filed.
(2)Gross income of U.S. citizens and resident alien individuals, domestic trusts, and domestic estates. For purposes of the
reduced user fee provided in paragraph (A)(4)(a) of this appendix for U.S. citizens and resident alien individuals, domestic trusts,
and domestic estates, “gross income” is equal to “total income” as reported on their last federal income tax return (as amended) filed
for a full (12 months) taxable year ending before the date the request is filed, plus any interest income not subject to tax under § 103
(interest on state and local bonds) for that period. “Total income” is a line item on federal tax returns. For example, if the 1996
Form 1040, U.S. Individual Income Tax Return, is the most recent 12-month taxable year return filed by a U.S. citizen, “total in-
come” on the Form 1040 is the amount entered on line 22.
In the case of a request for a letter ruling or closing agreement from a domestic estate or trust that, at the time the request is filed,
has not filed a federal income tax return for a full taxable year, the reduced user fee in paragraph (A)(4)(a) of this appendix will
apply if the decedent’s or (in the case of an individual grantor) the grantor’s total income as reported on the last federal income tax
return filed for a full taxable year ending before the date of death or the date of the transfer, taking into account any additions
January 5, 1998641998–1 I.R.B.

required to be made to total income described in this paragraph (B)(2), is less than $150,000. In this case, the executor or adminis-
trator of the decedent’s estate or the grantor must provide the certification required under paragraph (B)(1) of this appendix.
(3)Gross income of nonresident alien individuals, foreign trusts, and foreign estates.For purposes of the reduced user fee pro-
vided in paragraph (A)(4)(b) of this appendix for nonresident alien individuals, foreign trusts, and foreign estates, “gross income” is
equal to “total effectively connected income” as reported on their last federal income tax return (as amended) filed for a full (12
months) taxable year ending before the date the request is filed, plus any income for the period from United States or foreign sources
that is not taxable by the United States, whether by reason of § 103, an income tax treaty, § 871(h) (regarding portfolio interest), or
otherwise, plus the total amount of any fixed or determinable annual or periodical income from United States sources, the United
States tax liability for which is satisfied by withholding at the source. “Total effectively connected income” is a line item on federal
tax returns. For example, if the 1996 Form 1040NR, U.S. Nonresident Alien Income Tax Return, is the most recent 12-month tax-
able year return filed by a nonresident alien individual, “total effectively connected income” on the Form 1040NR is the amount en-
tered on line 23.
In the case of a request for a letter ruling or closing agreement from a foreign estate or trust that, at the time the request is filed, has
not filed a federal income tax return for a full taxable year, the reduced user fee in paragraph (A)(4)(b) of this appendix will apply if
the decedent’s or (in the case of an individual grantor) the grantor’s total income or total effectively connected income, as relevant,
as reported on the last federal income tax return filed for a full taxable year ending before the date of death or the date of the transfer,
taking into account any additions required to be made to total income or total effectively connected income described respectively in
paragraph (B)(2) of this appendix or in this paragraph (B)(3), is less than $150,000. In this case, the executor or administrator of the
decedent’s estate or the grantor must provide the certification required under paragraph (B)(1) of this appendix.
(4)Special rules fordetermining gross income of individuals, trusts, and estates. For purposes of paragraph (B)(2) and (3) of
this appendix, the following rules apply for determining whether gross income is less than $150,000:
(a) In the case of a request from a married individual, the gross incomes (as defined in paragraph (B)(2) or (3) of this appendix, as
applicable) of the applicant and the applicant’s spouse must be combined. This rule does not apply to an individual who is legally
separated from his or her spouse if the spouses do not file a joint income tax return with each other; and
(b) If there are two or more applicants filing the request, the gross incomes (as defined in paragraph (B)(2) or (3) of this appendix,
as applicable) of the applicants must be combined.
(5)Gross income of domestic partnerships and corporations.For purposes of the reduced user fee provided in paragraph
(A)(4)(c) of this appendix for domestic partnerships and corporations, “gross income” is equal to “total income” as reported on their
last federal income tax return (as amended) filed for a full (12 months) taxable year ending before the date the request is filed, plus
“cost of goods sold” as reported on the same federal income tax return, plus any interest income not subject to tax under § 103 (in-
terest on state and local bonds) for that period. If a domestic partnership or corporation is not subject to tax, “total income” and “cost
of goods sold” are the amounts that the domestic partnership or corporation would have reported on the federal income tax return if
the domestic partnership or corporation were subject to tax.
“Cost of goods sold” and “total income” are line items on federal tax returns. For example, if the 1996 Form 1065, U.S. Partner-
ship Return of Income, is the most recent 12-month taxable year return filed by a domestic partnership, “cost of goods sold” and
“total income” on the Form 1065 are the amounts entered on lines 2 and 8, respectively, and if the 1996 Form 1120, U.S. Corpora-
tion Income Tax Return, is the most recent 12-month taxable year return filed by a domestic corporation, “cost of goods sold” and
“total income” on the Form 1120 are the amounts entered on lines 2 and 11, respectively.
The following rules apply in determining whether gross income is less than $150,000:
(a) In the case of a request for a letter ruling or closing agreement from a domestic corporation, the gross income (as defined in
this paragraph (B)(5)) of (i) all members of the applicant’s controlled group (as defined in § 1563(a)), and (ii) any related taxpayer
that is involved in the transaction on which the letter ruling or closing agreement is requested, must be combined; and
(b) In the case of a request for a letter ruling or closing agreement from a domestic partnership, the gross income (as defined in
this paragraph (B)(5)) of (i) the partnership, and (ii) any partner who owns, directly or indirectly, 50 percent or more of the capital in-
terest or profits interest in the partnership, must be combined.
If, at the time the request is filed, a domestic partnership or corporation subject to tax has not filed a federal income tax return for
a full taxable year, the reduced user fee in paragraph (A)(4)(c) of this appendix will apply if, in the aggregate, the partners’or the
1998–1 I.R.B.65January 5, 1998

shareholders’gross income (as defined in paragraph (B)(2), (3), or (5) of this appendix, as applicable) is less than $150,000 for the
last full taxable year ending before the date the request is filed. In this case, the partners or the shareholders must provide the certi-
fication required under paragraph (B)(1) of this appendix.
(6)Gross receipts of an exempt organization.For purposes of the reduced user fee provided in paragraph (A)(4)(d) of this ap-
pendix for organizations exempt from income tax under “Subchapter F-Exempt Organizations” of the Code, “gross receipts” is the
amount of gross receipts for the last full (12 months) taxable year ending before the date the request for a letter ruling or closing
agreement is filed. If there are two or more organizations exempt from income tax under Subchapter F filing the request, the gross
receipts of the applicants must be combined in determining whether gross receipts are less than $150,000.
January 5, 1998661998–1 I.R.B.

APPENDIX B
SAMPLE FORMATFOR ALETTER RULING REQUEST
INSTRUCTIONS
To assist you in preparing a letter ruling request, the Service is providing this sample format. You are not required to use this sam-
ple format. If your request is not identical or similar to the sample format, the different format will not defer consideration of your
request.
(Insert the date of request)
Internal Revenue Service
Associate Chief Counsel (Insert one of
the following: Domestic, Employee Benefits
and Exempt Organizations, Enforcement
Litigation, or International)
Attn: CC:DOM:CORP:T
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Dear Sir or Madam:
(Insert the name of the taxpayer)requests a ruling on the proper treatment of (insert the subject matter of the letter ruling request)
under section(insert the number)of the Internal Revenue Code.
[If the taxpayer is requesting expeditious handling, a statement to that effect must be attached to, or contained in, the letter
ruling request. The statement must explain the need for expeditious handling. See section 8.02(4) of Rev. Proc. 98–1, 1998–1
I.R.B.
32
. Hereafter, all references are to Rev. Proc. 98-1 unless otherwise noted.]
A. STATEMENTOF FACTS
1.Taxpayer Information
[Provide the statements required by sections 8.01(1)(a), (b), and (c).]
2.Description of Taxpayer’s Business Operations
[Provide the statement required by section 8.01(1)(d).]
3.Facts Relating to Transaction
[The ruling request must contain a complete statement of the facts relating to the transaction that is the subject of the letter ruling re-
quest. This statement must include a detailed description of the transaction, including material facts in any accompanying docu-
ments, and the business reasons for the transaction. See sections 8.01(1)(e), 8.01(1)(f), and 8.01(2).]
B. RULING REQUESTED
[The ruling request should contain a concise statement of the ruling requested by the taxpayer. It is preferred that the language of the
requested ruling be exactly the same that the taxpayer wishes to receive.]
C. STATEMENTOF LAW
[The ruling request must contain a statement of the law in support of the taxpayer’s views or conclusion and identify any pending
legislation that may affect the proposed transaction. The taxpayer also is encouraged to identify and discuss any authorities believed
to be contrary to the position advanced in the ruling request. See sections 8.01(6), 8.01(7), and 8.01(8).]
1998–1 I.R.B.67January 5, 1998

D. ANALYSIS
[The ruling request must contain a discussion of the facts and an analysis of the law. The taxpayer also is encouraged to identify and
discuss any authorities believed to be contrary to the position advanced in the ruling request. See sections 8.01(3), 8.01(6), 8.01(7),
and 8.01(8).]
E. CONCLUSION
[The ruling request should contain a statement of the taxpayer’s conclusion on the ruling requested.]
F. PROCEDURALMATTERS
1.Revenue Procedure 98–1 Statements
a.[Provide the statement required by section 8.01(4) regarding whether the same issue in the letter ruling request is in an earlier
return of the taxpayer or in a return for any year of a related taxpayer.]
b.[Provide the statement required by section 8.01(5)(a) regarding whether the Service previously ruled on the same or similar
issue for the taxpayer, a related taxpayer, or a predecessor.]
c.[Provide the statement required by section 8.01(5)(b) regarding whether the taxpayer, a related taxpayer, a predecessor, or any
representatives previously submitted a request (including an application for change in accounting method) involving the same or
similar issue but withdrew the request before a letter ruling or determination letter was issued.]
d.[Provide the statement required by section 8.01(5)(c) regarding whether the taxpayer, a related taxpayer, or a predecessor pre-
viously submitted a request (including an application for change in accounting method) involving the same or a similar issue that is
currently pending with the Service.]
e.[Provide the statement required by section 8.01(5)(d) regarding whether, at the same time as this request, the taxpayer or a re-
lated taxpayer is presently submitting another request (including an application for change in accounting method) involving the
same or similar issue to the Service.]
f.[Provide the statement required by section 8.01(6) regarding whether the law in connection with the letter ruling request is un-
certain and whether the issue is adequately addressed by relevant authorities.]
g.[If the taxpayer determines that there are no contrary authorities, a statement to that effect would be helpful. See section
8.01(7).]
h.[If the taxpayer wants to have a conference on the issues involved in the letter ruling request, the ruling request should contain
a statement to that effect. See section 8.02(6).]
i.[If the taxpayer is requesting a copy of the letter ruling to be sent by facsimile (fax) transmission, the ruling request should con-
tain a statement to that effect. This statement must also contain a waiver of any disclosure violations resulting from the fax trans-
mission. See section 8.02(5).]
j.[If the taxpayer is requesting separate letter rulings on multiple issues, the letter ruling request should contain a statement to
that effect. See section 8.02(1).]
k.[If the taxpayer is seeking to obtain the user fee provided in paragraph (A)(5)(a) of Appendix Afor substantially identical letter
rulings, the letter ruling request must contain the statements required by section 15.07.]
2. Administrative
a.[The ruling request should state: “The deletions statement and checklist required by Rev. Proc. 98–1 are enclosed.” See sec-
tions 8.01(9) and 8.01(16).]
b.[The ruling request should state: “The required user fee of $(Insert the amount of the fee) is enclosed.” See section 15 and Ap-
pendix A.]
January 5, 1998681998–1 I.R.B.

c.[If the taxpayer’s authorized representative is to sign the letter ruling request or is to appear before the Service in connection
with the request, the ruling request should state: “APower of Attorney is enclosed.” See sections 8.01(11), 8.01(12), and 8.02(2).]
Very truly yours,
(Insert the name of the taxpayer or the taxpayer’s autho-
rized representative)
By:
SignatureDate
Typed or printed name of
person signing request
DECLARATION: [See section 8.01(13).]
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.
(Insert the name of the taxpayer)
By:
SignatureTitleDate
Typed or printed name of
person signing declaration
[If the taxpayer is a corporation that is a member of an affiliated group filing consolidated returns, the above declaration must also be
signed and dated by an officer of the common parent of the group. See section 8.01(13).]
1998–1 I.R.B.69January 5, 1998

APPENDIX C
CHECKLIST
IS YOUR LETTER RULING REQUESTCOMPLETE?
INSTRUCTIONS
The Service will be able to respond more quickly to your letter ruling request if it is carefully prepared and complete. To ensure
that your request is in order, use this checklist. Complete the five items of information requested before the checklist. Answer each
question by circling “Yes,” “No,” or “N/A.” When a question contains a place for a page number, insert the page number (or num-
bers) of the request that gives the information called for by a yes answer to a question. Sign and date the checklist (as taxpayeror
authorized representative) and place it on top of yourrequest.
If you are an authorized representative submitting a request for a taxpayer, you must include a completed checklist with the re-
quest, or the request will either be returned to you or substantive consideration of it will be deferred until a completed checklist is
submitted. If you are a taxpayerpreparing yourown request without professional assistance, an incomplete checklist will not
eithercause the return of yourrequest ordefersubstantive consideration of yourrequest. However, you should still complete
as much of the checklist as possible and submit it with your request.
TAXPAYER’S NAME
TAXPAYER’S I.D. NO.
DISTRICTHAVING AUDITJURISDICTION
ATTORNEY/P.O.A.
PRIMARYCODE SECTION
CIRCLE ONEITEM
YesNo1.Does your request involve an issue under the jurisdiction of the Associate Chief Counsel (Domestic), the As-
sociate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate Chief Counsel (Enforce-
ment Litigation), or the Associate Chief Counsel (International)? See section 3 of Rev. Proc. 98–1, 1998-1
I.R.B.
15
. For issues under the jurisdiction of other offices, see section 4 of Rev. Proc. 98–1. (Hereafter, all ref-
erences are to Rev. Proc. 98-1 unless otherwise noted.)
YesNo2.Have you read Rev. Proc. 98–3, 1998–1 I.R.B. 100, and Rev. Proc. 98–7, 1998–1 I.R.B. 222, to see if part or
all of the request involves a matter on which letter rulings are not issued or are ordinarily not issued?
YesNoN/A3.If your request involves a matter on which letter rulings are not ordinarily issued, have you given com-
pelling reasons to justify the issuance of a letter ruling? Before preparing your request, you may want to call
the branch in the Office of the Associate Chief Counsel (Domestic), the Office of the Associate Chief Counsel
(Employee Benefits and Exempt Organizations), the Office of the Associate Chief Counsel (Enforcement Liti-
gation), or the Office of the Associate Chief Counsel (International) responsible for substantive interpretations
of the principal Internal Revenue Code section on which you are seeking a letter ruling to discuss the likelihood
of an exception. For matters under the jurisdiction of—
(a) the Office of Associate Chief Counsel (Domestic) and the Office of Associate Chief Counsel (Employee
Benefits and Exempt Organizations), the appropriate branch to call may be obtained by calling (202) 622-7560
(not a toll-free call);
(b) the Office of the Associate Chief Counsel (International), the appropriate branch to call may be obtained
by calling (202) 622-3800 (not a toll-free call); or
(c) the Office of the Associate Chief Counsel (Enforcement Litigation), the appropriate branch to call may be
obtained by calling (202) 622-3600 (not a toll-free call).
January 5, 1998701998–1 I.R.B.

YesNoN/A4.If the request deals with a completed transaction, have you filed the return for the year in which the transac-
Page
—
tion was completed? See sections 5.01, 5.05, 5.06, 5.07, 5.08, and 5.09.
YesNo5.Are you requesting a letter ruling on a hypothetical situation or question? See section 7.02.
YesNo6.Are you requesting a letter ruling on alternative plans of a proposed transaction? See section 7.02.
YesNo7.Are you requesting the letter ruling for only part of an integrated transaction? See sections 7.03 and 8.01(1).
YesNo8.Are you requesting the letter ruling for a business, trade, industrial association, or similar group concerning
the application of tax law to its members? See section 5.11.
YesNo9.Are you requesting the letter ruling for a foreign government or its political subdivision? See section 5.12.
YesNo10.Have you included a complete statement of all the facts relevant to the transaction? See section 8.01(1).
Pages
—
YesNoN/A11.Have you submitted with the request true copies of all wills, deeds, and other documents relevant to the
transaction, and labelled and attached them in alphabetical sequence? See section 8.01(2).
YesNoN/A12.Have you submitted with the request a copy of all applicable foreign laws, and certified English transla-
tions of documents that are in a language other than English or of foreign laws in cases where English is not the
official language of the foreign country involved? See section 8.01(2).
YesNo13.Have you included, rather than merely incorporated by reference, all material facts from the documents in
Pages
—
the request? Are they accompanied by an analysis of their bearing on the issues that specifies the document pro-
visions that apply? See section 8.01(3).
YesNo14.Have you included the required statement regarding whether the same issue in the letter ruling request is
Page
—
in an earlier return of the taxpayer or in a return for any year of a related taxpayer? See section 8.01(4).
YesNo15.Have you included the required statement regarding whether the Service previously ruled on the same or
Page
—
similar issue for the taxpayer, a related taxpayer, or a predecessor? See section 8.01(5)(a).
YesNo16.Have you included the required statement regarding whether the taxpayer, a related taxpayer, a predeces-
Page
—
sor, or any representatives previously submitted a request (including an application for change in accounting
method) involving the same or similar issue but withdrew the request before the letter ruling or determination
letter was issued? See section 8.01(5)(b).
YesNo17.Have you included the required statement regarding whether the taxpayer, a related taxpayer, or a prede-
Page
—
cessor previously submitted a request (including an application for change in accounting method) involving the
same or similar issue that is currently pending with the Service? See section 8.01(5)(c).
YesNo18.Have you included the required statement regarding whether, at the same time as this request, the taxpayer
Page
—
or a related taxpayer is presently submitting another request (including an application for change in accounting
method) involving the same or similar issue to the Service? See section 8.01(5)(d).
YesNo19.Have you included the required statement of relevant authorities in support of your views? See section
Pages
—
8.01(6).
YesNo20.Have you included the required statement regarding whether the law in connection with the request is
Page
—
uncertain and whether the issue is adequately addressed by relevant authorities? See section 8.01(6).
YesNo21.Does your request discuss the implications of any legislation, tax treaties, court decisions, regulations,
Pages
—
notices, revenue rulings, or revenue procedures that you determined to be contrary to the position advanced?
See section 8.01(7), which states that taxpayers are encouraged to inform the Service of such authorities.
1998–1 I.R.B.71January 5, 1998

YesNoN/A22.If you determined that there are no contrary authorities, have you included a statement to this effect in your
Page
—
request? See section 8.01(7).
YesNoN/A23.Have you included in your request a statement identifying any pending legislation that may affect the
Page
—
proposed transaction? See section 8.01(8).
YesNo24.Is the request accompanied by the deletions statement required by § 6110? See section 8.01(9).
YesNo25.Have you (or your authorized representative) signed and dated the request? See section 8.01(10).
Page
—
YesNoN/A26.If the request is signed by your representative or if your representative will appear before the Service in
connection with the request, is the request accompanied by a properly prepared and signed power of attorney
with the signatory’s name typed or printed? See section 8.01(12).
YesNo27.Have you included, signed, and dated the penalties of perjury statement in the form required by section
Page
—
8.01(13)?
YesNoN/A28.Are you submitting your request in duplicate if necessary? See section 8.01(14).
YesNoN/A29.If you are requesting separate letter rulings on different issues involving one factual situation, have you
Pages
—
included a statement to that effect in each request? See section 8.02(1).
YesNoN/A30.If you want copies of the letter ruling sent to more than one representative, does the power of attorney con-
tain a statement to that effect? See section 8.02(2)(a).
YesNoN/A31.If you want the original of the letter ruling to be sent to a representative, does the power of attorney contain
a statement to that effect? See section 8.02(2)(b).
YesNoN/A32.If you do not want a copy of the letter ruling to be sent to any representative, does the power of attorney
contain a statement to that effect? See section 8.02(2)(c).
YesNoN/A33.If you are making a two-part letter ruling request, have you included a summary statement of the facts you
believe to be controlling? See section 8.02(3).
YesNoN/A34.If you want your letter ruling request to be processed ahead of the regular order or by a specific date, have
Page
—
you requested expeditious handling in the manner required by section 8.02(4) and stated a compelling need for
such action in the request?
YesNoN/A35.If you are requesting a copy of the letter ruling to be sent by facsimile (fax) transmission, have you
Page
—
included a statement containing a waiver of any disclosure violations resulting from the fax transmission? See
section 8.02(5).
YesNoN/A36.If you want to have a conference on the issues involved in the request, have you included a request for
Page
—
conference in the letter ruling request? See section 8.02(6).
YesNo37.Have you included the correct user fee with the request and made your check or money order payable to the
Internal Revenue Service? See section 15 and Appendix Ato determine the correct amount.
YesNoN/A38.If you qualify for the reduced user fee when gross income or gross receipts, as applicable, is less than
Page
—
$150,000, have you included the required certification? See paragraphs (A)(4) and (B)(1) of Appendix A.
YesNoN/A39.If you qualify for the user fee for substantially identical letter rulings, have you included the required
Page
—
information? See section 15.07(2) and paragraph (A)(5)(a) of Appendix A.
YesNoN/A40.If you qualify for the user fee for a § 301.9100 request to extend the time for filing an identical accounting
Page
—
method change on a single Form 3115, have you included the required information? See section 15.07(3) and
paragraph (A)(5)(c) of Appendix A.
January 5, 1998721998–1 I.R.B.

YesNoN/A41.If your request is covered by any of the guideline revenue procedures or notices, safe harbor revenue pro-
cedures, or other special requirements listed in section 9, have you complied with all of the requirements of the
applicable revenue procedure or notice?
Rev.Proc.List other applicable revenue procedures or notices, including checklists, used or relied upon in the preparation
of this letter ruling request (Cumulative Bulletin citation not required).
YesNoN/A42.If you are requesting relief under § 7805(b) (regarding retroactive effect), have you complied with all of the
Page
—
requirements in section 12.11?
YesNo43.Have you addressed your request to the attention of Associate Chief Counsel (Domestic), the Associate
Chief Counsel (Employee Benefits and Exempt Organizations), the Associate Chief Counsel (Enforcement Lit-
igation), or the Associate Chief Counsel (International), as appropriate? The mailing address is:
Internal Revenue Service
Attn: CC:DOM:CORP:T
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
However, if a private delivery service is used, the address is:
Internal Revenue Service
Attn: CC:DOM:CORP:T
1111 Constitution Avenue, N.W.
Washington, DC 20224
The package should be marked: RULING REQUESTSUBMISSION. Improperly addressed requests may be
delayed (sometimes for over a week) in reaching CC:DOM:CORP:Tfor initial processing.
SignatureTitle or AuthorityDate
Typed or printed name of
person signing checklist
1998–1 I.R.B.73January 5, 1998

26 CFR 601.105: Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability.
Rev. Proc. 98–2
TABLE OFCONTENTS
SECTION 1. WHATIS p. 78
THE PURPOSE OFTHIS
REVENUE PROCEDURE?
SECTION 2. WHATIS p. 78
TECHNICALADVICE?
SECTION 3. ON WHATp. 79
ISSUES MAYTECHNICAL
ADVICE BE REQUESTED .01 Issues under the jurisdiction of the Associate Chief Counsel (Domestic), the
UNDER THIS PROCEDURE?Associate Chief Counsel (Employee Benefits and Exempt Organizations),
the Associate Chief Counsel (Enforcement Litigation), or the Associate
Chief Counsel (International)
.02 Issues involving shipowners’protection and indemnity associations and cer-
tain homeowners associations
SECTION 4. ON WHATp. 79
ISSUES MUSTTECHNICAL
ADVICE BE REQUESTED .01 Alcohol, tobacco, and firearms taxes
UNDER DIFFERENT
PROCEDURES?.02 Employee plans and exempt organizations
.03 Farmers’cooperatives
SECTION 5. MAYp. 79
TECHNICALADVICE BE
REQUESTED FOR A.01 A§ 301.9100 request is a letter ruling request
§ 301.9100 REQUESTMADE
DURING THE COURSE OF.02 Statute of limitations
AN EXAMINATION?
.03 Address to send a § 301.9100 request
.04 If the return is being examined or considered by an appeals office or a fed-
eral court, the taxpayer must notify the national office and the national office
will notify the district director, appeals officer, or government counsel
SECTION 6. WHO ISp. 81
RESPONSIBLE FOR
REQUESTING TECHNICAL.01 District director or chief, appeals office, determines whether to request
ADVICE?technical advice
.02 Taxpayer may ask that issue be referred for technical advice
SECTION 7. WHEN p. 81
SHOULD TECHNICAL
ADVICE BE REQUESTED?.01 Uniformity of position lacking
.02 When technical advice can be requested
.03 At the earliest possible stage
SECTION 8. HOWp. 82
ARE PRE-SUBMISSION
CONFERENCES .01 Pre-submission conference generally is permitted when district or appeals
SCHEDULED?office likely will request technical advice and all parties agree to request the
conference
January 5, 1998741998–1 I.R.B.

.02 Purpose of a pre-submission conference
.03Request for a pre-submission conference must be submitted in writing by the
district or appeals office
.04 Branch will contact the district or appeals office to arrange the
pre-submission conference
.05 Pre-submission conference generally held in person
.06 Certain information required to be submitted to the national office prior to
the pre-submission conference
.07 Pre-submission conference may not be taped
.08 Discussion of substantive issues is not binding on the Service
SECTION 9. WHATMUSTp. 83
BE INCLUDED IN THE
REQUESTFOR TECHNICAL.01 Statement of issues, facts, law, and arguments
ADVICE?
.02 Statement identifying information to be deleted from public inspection
.03 Transmittal Form 4463, Request for Technical Advice
.04 Number of copies of request to be submitted
.05 Power of attorney
SECTION 10. HOWAREp. 85
REQUESTS HANDLED?
.01 Taxpayer notified
.02 Conference offered
.03 If the taxpayer disagrees with the Service’s statement of facts
.04 If the Service disagrees with the taxpayer’s statement of facts
.05 If the taxpayer has not submitted the required deletions statement
.06Section 6104 of the Internal Revenue Code (Applications for exemption and
letter rulings issued to certain exempt organizations open to public
inspection)
.07 Criminal or civil fraud cases
SECTION 11. HOWDOES p. 86
ATAXPAYER APPEALA
DISTRICTDIRECTOR’S .01 Taxpayer notified of decision not to seek technical advice
OR CHIEF’S, APPEALS
OFFICE, DECISION NOT.02 Taxpayer may appeal decision not to seek technical advice
TO SEEK TECHNICAL
ADVICE?.03 Chief, examination division, or chief, appeals office, determines whether
technical advice will be sought
.04 Chief’s decision may be reviewed but not appealed
1998–1 I.R.B.75January 5, 1998

SECTION 12. HOWARE p. 87
REQUESTS FOR
TECHNICALADVICE .01 Taxpayer notified
WITHDRAWN?
.02 National office may provide views
SECTION 13. HOWARE p. 88
CONFERENCES
SCHEDULED?.01 If requested, offered to the taxpayer when adverse technical advice proposed
.02 Normally held within 21 days of contact with the taxpayer
.03 21-day period will be extended if justified and approved
.04 Denial of extension cannot be appealed
.05 Entitled to one conference of right
.06 Conference may not be taped
.07 If requested and approved, conference will be delayed to address a request
for relief under § 7805(b)
.08 Service makes tentative recommendations
.09 Additional conferences may be offered
.10 Additional information submitted after the conference
.11 Under limited circumstances, may schedule a conference to be held by tele-
phone
SECTION 14. HOWISp. 90
STATUS OFREQUEST
OBTAINED?.01 Taxpayer or the taxpayer’s representative may request status from the
district or appeals office
.02 National office will give status updates to the district director or chief, ap-
peals office
SECTION 15. HOWDOES p. 91
THE NATIONALOFFICE
PREPARE THE TECHNICAL.01 Delegates authority to branch chiefs
ADVICE MEMORANDUM?
.02 Determines whether request has been properly made
.03 Contacts the district or appeals office to discuss issues
.04 Informs the district or appeals office if any matters in the request have been
referred to another branch or office
.05 Informs the district or appeals office if additional information is needed
.06 Informs the district or appeals office of the tentative conclusion
.07 If a tentative conclusion has not been reached, gives date estimated for tenta-
tive conclusion
.08 Advises the district or appeals office if tentative conclusion is changed
January 5, 1998761998–1 I.R.B.

.09 Generally does not discuss the tentative conclusion with the taxpayer
.10 Advises the district or appeals office of final conclusions
.11 If needed, requests additional information
.12 Requests taxpayer to send additional information to the national office and a
copy to the district director or chief, appeals office
.13 Informs the taxpayer when requested deletions will not be made
.14 Prepares reply in two parts
.15 Routes replies to appropriate office
SECTION 16. HOWDOES p. 94
ADISTRICTOR APPEALS
OFFICE USE THE.01 Generally applies advice in processing the taxpayer’s case
TECHNICALADVICE?
.02 Discussion with the taxpayer
.03 Gives copy to the taxpayer
.04 Taxpayer may protest deletions not made
.05 When no copy is given to the taxpayer
SECTION 17. WHATIS p. 95
THE EFFECTOF
TECHNICALADVICE?.01 Applies only to the taxpayer for whom technical advice was requested
.02 Usually applies retroactively
.03 Generally applied retroactively to modify or revoke prior technical advice
.04 Applies to continuing action or series of actions until specifically withdrawn,
modified, or revoked
.05 Applies to continuing action or series of actions until material facts change
.06 Does not apply retroactively under certain conditions
SECTION 18. HOWMAYp. 96
RETROACTIVE EFFECT
BE LIMITED?.01 Taxpayer may request that retroactivity be limited
.02 Form of request to limit retroactivity—continuing transaction before exami-
nation of return
.03 Form of request to limit retroactivity—in all other cases
.04 Taxpayer’s right to a conference
SECTION 19. WHATp. 97
SIGNIFICANTCHANGES
HAVE BEEN MADE TO
REV. PROC. 97–2?
SECTION 20. WHATIS p. 98
THE EFFECTOFTHIS
1998–1 I.R.B.77January 5, 1998

REVENUE PROCEDURE ON
OTHER DOCUMENTS?
SECTION 21. WHATIS p. 98
THE EFFECTIVE DATE OF
THIS REVENUE
PROCEDURE?
DRAFTING INFORMATIONp. 98
INDEXp. 99
SECTION 1. WHATIS This revenue procedure explains when and how the Associate Chief Counsel
THE PURPOSE OFTHIS (Domestic), the Associate Chief Counsel (Employee Benefits and Exempt Organizations),
REVENUE PROCEDURE?the Associate Chief Counsel (Enforcement Litigation), and the Associate Chief Counsel
(International) give technical advice to a district director or a chief, appeals office. It also
explains the rights a taxpayer has when a district director or a chief, appeals office,
requests technical advice regarding a tax matter.
Description of terms For purposes of this revenue procedure—
used in this revenue procedure
(1) any reference to district director or district office includes their respective offices or,
when appropriate, the Assistant Commissioner (International) or the director of an Internal
Revenue Service Center;
(2) any reference to chief, appeals office, includes, when appropriate, the assistant re-
gional director of appeals (large case);
(3) any reference to chief, examination division, includes, when appropriate, the chief,
employee plans/exempt organizations division;
(4) any reference to appeals officer includes, when appropriate, the team chief;
(5) the term “taxpayer” includes all persons subject to any provision of the Internal Rev-
enue Code (including issuers of § 103 obligations) and, when appropriate, their representa-
tives; and
(6) the term “national office” refers to the Office of Associate Chief Counsel (Domestic),
the Office of Associate Chief Counsel (Employee Benefits and Exempt Organizations), the
Office of Associate Chief Counsel (Enforcement Litigation), or the Office of Associate
Chief Counsel (International), as appropriate.
Updated annuallyThe revenue procedure is updated annually as the second revenue procedure of the year,
but may be modified or amplified during the year.
SECTION 2. WHATIS “Technical advice” means advice or guidance in the form of a memorandum furnished
TECHNICALADVICE?by the national office upon the request of a district director or a chief, appeals office,
submitted in accordance with the provisions of this revenue procedure, in response to any
technical or procedural question that develops during any proceeding on the interpretation
and proper application of tax law, tax treaties, regulations, revenue rulings, notices, or
other precedents published by the national office to a specific set of facts. Such
proceedings include: (1) the examination of a taxpayer’s return; (2) the consideration of a
taxpayer’s claim for refund or credit; (3) any matter under examination or in appeals
pertaining to tax-exempt bonds or mortgage credit certificates; and (4) any other matter
involving a specific taxpayer under the jurisdiction of the chief, examination division, or
the chief, appeals office. They also include processing and considering nondocketed cases
in an appeals office but do not include cases in which the issue in the case is in a docketed
case for any taxable year. If, however, a case is docketed for an estate tax issue of a
taxpayer while a request for technical advice on the same issue of the same taxpayer is
pending, the national office may issue the technical advice memorandum if the
January 5, 1998781998–1 I.R.B.
Sec. 1

appropriate appeals officer and government counsel agree, by memorandum, to the
issuance of the technical advice memorandum.
Technical advice helps Internal Revenue Service personnel close cases and also helps es-
tablish and maintain consistent holdings throughout the Service. Adistrict director or a
chief, appeals office, may raise an issue in any tax period, even though technical advice
may have been asked and furnished for the same or similar issue for another tax period.
Technical advice does not include legal advice furnished to the district or appeals office
in writing or orally, other than advice furnished pursuant to this revenue procedure. In ac-
cordance with section 11.01 of this revenue procedure, a taxpayer’s request for referral of
an issue to the national office for technical advice will not be denied merely because the
national office has provided legal advice, other than advice furnished pursuant to this rev-
enue procedure, to the district or appeals office on the matter.
SECTION 3. ON WHAT
ISSUES MAYTECHNICAL
ADVICE BE REQUESTED
UNDER THIS PROCEDURE?
Issues underthe jurisdiction .01The instructions of this revenue procedure apply to requests for technical advice on
of the Associate Chief Counsel any issue under the jurisdiction of the Associate Chief Counsel (Domestic), the Associate
(Domestic), the Associate Chief Chief Counsel (Employee Benefits and Exempt Organizations), or the Associate Chief
Counsel (Employee Benefits and Counsel (International), and on certain issues under the jurisdiction of the Associate Chief
Exempt Organizations), the Counsel (Enforcement Litigation). See section 3 of Rev. Proc. 98–1, this Bulletin, for a de-
Associate Chief Counsel scription of the principal subject matters of jurisdiction.
(Enforcement Litigation),
orthe Associate Chief
Counsel (International)
Issues involving shipowners’.02The jurisdiction of the Associate Chief Counsel (Domestic) extends to issuing tech-
protection and indemnitynical advice under § 526 (shipowners’protection and indemnity associations) and § 528
associations and certain (certain homeowners associations).
homeowners associations
SECTION 4. ON WHAT
ISSUES MUSTTECHNICAL
ADVICE BE REQUESTED
UNDER DIFFERENT
PROCEDURES?
Alcohol, tobacco, and.01The procedures for obtaining technical advice specifically applicable to federal
firearms taxesalcohol, tobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction
of the Bureau of Alcohol, Tobacco and Firearms.
Employee plans and .02The procedures for obtaining technical advice specifically on issues under the
exempt organizationsjurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations)
are found in Rev. Proc. 98–5, this Bulletin. However, the procedures under Rev. Proc.
98–2 (this revenue procedure) must be followed for obtaining technical advice on issues
pertaining to tax-exempt bonds and mortgage credit certificates.
Farmers’cooperatives.03Even though the Associate Chief Counsel (Domestic) has jurisdiction for issuing
technical advice under § 521, the procedures under Rev. Proc. 98–5 and Rev. Proc. 90–27,
1990–1 C.B. 514, as well as § 601.201(n) of the Statement of Procedural Rules (26 C.F.R.
§ 601.201(n) (1997)), must be followed.
SECTION 5. MAY
TECHNICALADVICE BE
REQUESTED FOR A
§ 301.9100 REQUESTMADE
DURING THE COURSE OF
1998–1 I.R.B.79January 5, 1998
Sec. 5

AN EXAMINATION?
A§ 301.9100 request .01Arequest for an extension of time for making an election or other application for
is a letterruling requestrelief under § 301.9100–3 of the Procedure and Administration Regulations is a letter
ruling request even if the request is submitted after the examination of the taxpayer’s
return has begun or after the issues in the return are being considered by an appeals office
or a federal court. Therefore, a § 301.9100 request should be submitted pursuant to Rev.
Proc. 98–1 (including the payment of the applicable user fee listed in Appendix Aof Rev.
Proc. 98–1). Seesection 5.02 of Rev. Proc. 98-1.
Statute of limitations.02The running of any applicable period of limitations is not suspended for the period
during which a § 301.9100 request has been filed. See§ 301.9100–3(d)(2). If the period
of limitations on assessment under § 6501(a) for the taxable year in which an election
should have been made or any taxable year that would have been affected by the election
had it been timely made will expire before receipt of a § 301.9100 letter ruling, the
Service ordinarily will not issue a § 301.9100 ruling. See§ 301.9100–3(c)(1)(ii). There-
fore, the taxpayer must secure a consent under § 6501(c)(4) to extend the period of
limitations on assessment. Note that the filing of a claim for refund under § 6511 does not
extend the period of limitations on assessment. If § 301.9100 relief is granted, the Service
may require the taxpayer to consent to an extension of the period of limitations on
assessment. See§ 301.9100–3(d)(2).
Address to send a .03Pursuant to section 8.03(1) of Rev. Proc. 98–1, a § 301.9100 request, together with
§ 301.9100 requesttheappropriate user fee, must be submitted by the taxpayer to the Associate Chief Counsel
(Domestic), the Associate Chief Counsel (Employee Benefits and Exempt Organizations),
the Associate Chief Counsel (Enforcement Litigation), or the Associate Chief Counsel
(International), as appropriate. The package should be marked: RULING REQUEST
SUBMISSION. See Appendix Aof Rev. Proc. 98–1 for the appropriate user fee.
(a)A§ 301.9100 request should be sent to the following address:
Internal Revenue Service
Attn: CC:DOM:CORP:T
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
However, if a private delivery service is used, the address is:
Internal Revenue Service
Attn: CC:DOM:CORP:T
1111 Constitution Avenue, N.W.
Washington, DC 20224
(b)A§ 301.9100 request may also be hand delivered:
(i)To the drop box at the 12th Street entrance of 1111 Constitution Avenue, N.W.,
Washington, DC. No receipt will be given at the drop box; or
(ii)Between the hours of 8:15 a.m. and 5:00 p.m. to:
Courier’s Desk
Internal Revenue Service
Attn: CC:DOM:CORP:T
1111 Constitution Avenue, N.W.
Washington, DC
Areceipt will be given at the courier’s desk.
January 5, 1998801998–1 I.R.B.
Sec. 5.01

If the return is being .04If the taxpayer’s return for the taxable year in which an election should have
examined orconsidered by been made or any taxable year that would have been affected by the election had it been
an appeals office ora federal timely made is being examined by a district office or considered by an appeals office or a
court, the taxpayermust notify federal court, the taxpayer must notify the national office. See§ 301.9100–3(e)(4)(i) and
the national office and the section 5.02(3) of Rev. Proc. 98–1. The national office will notify the appropriate district
national office will notify the director, appeals officer, or government counsel that a § 301.9100 request has been
district director, appeals officer, submitted to the national office. The examining officer, appeals officer, or government
orgovernment counselcounsel is not authorized to deny consideration of a § 301.9100 request. The letter ruling
will be mailed to the taxpayer and a copy will be sent to the appropriate district director,
appeals officer, or government counsel.
SECTION 6. WHO IS
RESPONSIBLE FOR
REQUESTING TECHNICAL
ADVICE?
District directororchief, .01The district director or chief, appeals office, determines whether to request technical
appeals office, determines advice on any issue being considered. Each request must be submitted through channels
whetherto request technical and signed by a person who is authorized to sign for the district director or chief, appeals
adviceoffice.
Taxpayermay ask that .02While a case is under the jurisdiction of a district director or chief, appeals office, a
issue be referred fortaxpayer may request in writing or orally to the examining officer or appeals officer that
an technical advicean issue be referred to the national office for technical advice.
SECTION 7. WHEN
SHOULD TECHNICAL
ADVICE BE REQUESTED?
Uniformity of position.01Technical advice should be requested when there is a lack of uniformity regarding
lackingthedisposition of an issue or when an issue is unusual or complex enough to warrant
consideration by the national office.
When technical advice .02The provisions of this revenue procedure apply only to a case under the jurisdiction
can be requestedof a district director or chief, appeals office. Technical advice may also be requested on
issues considered in a prior appeals disposition, not based on mutual concessions for the
same tax period of the same taxpayer, if the appeals office that had the case concurs in the
request.
Adistrict director may not request technical advice on an issue if an appeals office is
currently considering an identical issue of the same taxpayer (or of a related taxpayer
within the meaning of § 267 or a member of an affiliated group of which the taxpayer is
also a member within the meaning of § 1504) unless the appeals officer agrees, by memo-
randum, to the submission of the request for technical advice. Acase remains under the ju-
risdiction of the district director even though an appeals office has the identical issue under
consideration in the case of another taxpayer (not related within the meaning of § 267 or
§ 1504) in an entirely different transaction. With respect to the same taxpayer or the same
transaction, when the issue is under the jurisdiction of an appeals office and the applicabil-
ity of more than one kind of federal tax is dependent upon the resolution of that issue, a dis-
trict director may not request technical advice on the applicability of any of the taxes in-
volved unless the appeals officer agrees, by memorandum, to the submission of the request
for technical advice.
Adistrict director or chief, appeals office, also may not request technical advice on an
issue if the same issue of the same taxpayer (or of a related taxpayer within the meaning of
§ 267 or a member of an affiliated group of which the taxpayer is also a member within the
meaning of § 1504) is in a docketed case for the same taxpayer (or for a related taxpayer or
a member of an affiliated group of which the taxpayer is also a member) for any taxable
year. If, however, a case is docketed for an estate tax issue of a taxpayer while a request for
1998–1 I.R.B.81January 5, 1998
Sec. 7.02

technical advice on the same issue of the same taxpayer is pending, the national office may
issue the technical advice memorandum if the appropriate appeals officer and government
counsel agree, by memorandum, to the issuance of the technical advice memorandum.
At the earliest.03Once an issue is identified, all requests for technical advice should be made at
possible stagethe earliest possible stage in any proceeding. The fact that the issue is raised late in the
examination or appeals process should not influence, however, the district or appeals
office’s decision to request technical advice.
SECTION 8. HOWARE
PRE-SUBMISSION
CONFERENCES
SCHEDULED?
Pre-submission conference .01In an effort to promote expeditious processing of requests for technical advice, the
generally is permitted when national office generally will meet with the district or appeals office and the taxpayer prior
district orappeals office likely to the time a request for technical advice is submitted to the national office. In cases in-
will request technical advice volving very complex issues, the district or appeals office and the taxpayer are encouraged
and all parties agree to request to request a pre-submission conference. Arequest for a pre-submission conference
the conferenceshould be made, however, only after the district or appeals office determines that it likely
will request technical advice and only after all parties agree that a pre-submission
conference should be requested.
Purpose of a pre-.02Apre-submission conference is intended to facilitate agreement between the parties
submission conferenceas to the appropriate scope of the request for technical advice, the factual information to
be included in the request for technical advice, any collateral issues that either should or
should not be included in the request for technical advice, and any other substantive or
procedural considerations that will allow the national office to provide the parties with
technical advice as expeditiously as possible.
Apre-submission conference is not intended to create an alternative procedure for determin-
ing the merits of the substantive positions advocated by the district or appeals office or by the
taxpayer. The conference is intended only to facilitate the overall technical advice process.
Request fora pre-.03Arequest for a pre-submission conference must be submitted in writing by the
submission conference district or appeals office. The request should identify the associate or assistant chief
must be submitted in counsel office expected to have jurisdiction over the request for technical advice. The
writing by the district request should include a brief explanation of the primary issue so that an assignment to the
orappeals officeappropriate branch can be made. Coordination with district counsel is strongly en-
couraged. If the request involves a designated issue or industry under the Industry
Specialization Program, coordination with the issue or industry specialist is also strongly
encouraged.
An original and one copy of the request should be submitted to the appropriate address
listed in section 9.03 of this revenue procedure.
Branch will contact the .04Within 5 working days after it receives the request, the branch assigned responsi-
district orappeals office to bility for conducting the pre-submission conference will contact the district or appeals
arrange the pre-submission office to arrange a mutually convenient time for the parties to meet in the national office.
conferenceThe district or appeals office will be responsible for coordinating with the taxpayer as well
as with any other Service personnel whose attendance the district or appeals office
believes would be appropriate.
Pre-submission conference .05Pre-submission conferences generally will be held in person in the national office.
generally held in person However, if the district or appeals office personnel or the taxpayer is unable to attend the
conference, the conference may be conducted by telephone.
Certain information required .06At least 10 working days before the scheduled pre-submission conference, the
to be submitted to the national district or appeals office and the taxpayer should submit to the national office a statement
office priorto the pre-of the pertinent facts (including any facts in dispute), a statement of the issues that the
submission conferenceparties would like to discuss, and any legal analysis, authorities, or background documents
January 5, 1998821998–1 I.R.B.
Sec. 7.02

that the parties believe would facilitate the national office’s understanding of the issues to
be discussed at the conference. The legal analysis provided for the pre-submission
conference need not be as fully developed as the analysis that ultimately will accompany
the request for technical advice, but it should allow the national office to become
reasonably informed regarding the subject matter of the conference prior to the meeting.
The district or appeals office or the taxpayer should ensure that the national office receives
a copy of any required power of attorney, preferably on Form 2848, Power of Attorney
and Declaration of Representative.
Pre-submission conference .07Because pre-submission conference procedures are informal, no tape, stenographic,
may not be tapedor other verbatim recording of a conference may be made by any party.
Discussion of substantive .08Any discussion of substantive issues at a pre-submission conference is advisory
issues is not binding only, is not binding on the Service in general or on the Office of Chief Counsel in
on the Serviceparticular, and cannot be relied upon as a basis for obtaining retroactive relief under the
provisions of § 7805(b).
SECTION 9. WHATMUST
BE INCLUDED IN THE
REQUESTFOR TECHNICAL
ADVICE?
Statement of issues, facts, .01Whether initiated by the taxpayer or by a district or appeals office, a request for
law, and argumentstechnical advice must include the facts and the issues for which technical advice is
requested and also a written statement clearly stating the applicable law and the arguments
in support of both the Service’s and the taxpayer’s positions on the issue or issues.
(1)Taxpayermust submit statement if taxpayerinitiates request fortechnical ad-
vice. If the taxpayer initiates the request for technical advice, the taxpayer must submit to
the examining officer or appeals officer, at the time the taxpayer initiates the request, a
written statement—
(a)stating the facts and the issues;
(b)explaining the taxpayer’s position;
(c)discussing any relevant statutory provisions, tax treaties, court decisions, regula-
tions, revenue rulings, revenue procedures, notices, or any other authority supporting the
taxpayer’s position; and
(d)stating the reasons for requesting technical advice.
If the examining officer or appeals officer determines that technical advice will be re-
quested, the taxpayer’s statement will be forwarded to the national office with the request
for technical advice.
(2)Taxpayeris encouraged to submit statement if Service initiates request for
technical advice.If the request for technical advice is initiated by a district or appeals of-
fice, the taxpayer is encouraged to submit the written statement described in section
9.01(1) of this revenue procedure. If the taxpayer submits this statement, it will be for-
warded to the national office with the request for technical advice. If the taxpayer’s state-
ment is received after the request for technical advice has been forwarded to the national
office, the statement will be forwarded to the national office for association with the tech-
nical advice request.
(3)Statement of authorities contrary to taxpayer’s position. Whether the request for
technical advice is initiated by the taxpayer or by a district or appeals office, the taxpayer is
also encouraged to comment on any legislation (or pending legislation), tax treaties, regu-
lations, revenue rulings, revenue procedures, or court decisions contrary to the taxpayer’s
position. If the taxpayer determines that there are no contrary authorities, a statement to
this effect would be helpful. If the taxpayer does not furnish either contrary authorities or a
1998–1 I.R.B.83January 5, 1998
Sec. 9.01

statement that none exists, the Service, in complex cases or those presenting difficult or novel
issues, may request submission of contrary authorities or a statement that none exists.
Statement identifying .02The text of a technical advice memorandum is open to public inspection under
information to be deleted § 6110(a). The Service deletes certain information from the text before it is made avail-
from public inspectionable for inspection. To help the Service make the deletions required by § 6110(c), the
taxpayer must provide a statement indicating the deletions desired (“deletions statement”).
If the taxpayer does not submit the deletions statement, the Service will follow the
procedures in section 10.05 of this revenue procedure.
Ataxpayer who wants only names, addresses, and identifying numbers deleted should
state this in the deletions statement. If the taxpayer wants more information deleted, the
deletions statement must be accompanied by a copy of the technical advice request and
supporting documents on which the taxpayer should bracket the material to be deleted.
The deletions statement must indicate the statutory basis under § 6110(c) for each proposed
deletion.
If the taxpayer decides to ask for additional deletions before the technical advice memo-
randum is issued, additional deletions statements may be submitted.
The deletions statement must not appear in the request for technical advice but, instead,
must be made in a separate document.
The deletions statement must be signed and dated by the taxpayer or the taxpayer’s au-
thorized representative. Astamped signature is not permitted.
The taxpayer should follow these same procedures to propose deletions from any addi-
tional information submitted after the initial request for technical advice. An additional
deletions statement, however, is not required with each submission of additional informa-
tion if the taxpayer’s initial deletions statement requests that only names, addresses, and
identifying numbers are to be deleted and the taxpayer wants only the same information
deleted from the additional information.
Transmittal Form 4463, .03The district or appeals office should use Form 4463, Request for Technical Advice,
Request forTechnical Advicefor transmitting a request for technical advice to the national office using the addresses
listed below.
Address to send requests Internal Revenue Service
from district officesAttn: CC:DOM:CORP:T
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Address to send requests Internal Revenue Service
from appeals officesAttn: C:AP:FS
Box 68
901 D Street, S.W.
Washington, DC 20024
Numberof copies of .04The district or appeals office must submit: (1) two copies of the request for technical
request to be submittedadvice to the national office; and (2) one copy of the request for technical advice to the
issue or industry specialist if the request involves a designated issue or industry under the
Industry Specialization Program.
Powerof attorney.05Any authorized representative, as described in section 8.01(11) of Rev. Proc. 98–1,
whether or not enrolled to practice, must comply with Treasury Department Circular No.
230 (31 C.F.R. part 10 (1997)) and with the conference and practice requirements of the
Statement of Procedural Rules (26 C.F.R. § 601.501–601.509 (1997)). It is preferred that
Form 2848, Power of Attorney and Declaration of Representative, be used with regard to
requests for technical advice under this revenue procedure.
January 5, 1998841998–1 I.R.B.
Sec. 9.01

SECTION 10. HOWARE
REQUESTS HANDLED?
Taxpayernotified.01Regardless of whether the taxpayer or the Service initiates the request for technical
advice, the district or appeals office: (1) will notify the taxpayer that technical advice is
being requested; and (2) at or before the time the request is submitted to the national
office, will give to the taxpayer a copy of the arguments that were provided to the national
office in support of the Service’s position.
If the examining officer or appeals officer initiates the request for technical advice, he or
she will give to the taxpayer a copy of the statement of the pertinent facts and the issues
proposed for submission to the national office.
This section 10.01 does not apply to a technical advice memorandum described in sec-
tion 10.07 of this revenue procedure.
Conference offered.02When notifying the taxpayer that technical advice is being requested, the
examining officer or appeals officer will also tell the taxpayer about the right to a
conference in the national office if an adverse decision is indicated and will ask the
taxpayer whether such a conference is desired.
If the taxpayerdisagrees .03If the examining officer or appeals officer initiates the request for technical advice,
with the Service’s the taxpayer has 10 calendar days after receiving the statement of facts and specific issues
statement of factsto submit to that officer a written statement specifying any disagreement on the facts and
issues. Ataxpayer who needs more than 10 calendar days must justify in writing the
request for an extension of time. The extension is subject to the approval of the chief,
examination division, or the chief, appeals office.
After receiving the taxpayer’s statement of the areas of disagreement, every effort
should be made to reach an agreement on the facts and the specific points at issue before
the matter is referred to the national office. If an agreement cannot be reached, the district
or appeals office will notify the taxpayer in writing. Within 10 calendar days after receiv-
ing the written notice, the taxpayer may submit a statement of the taxpayer’s understanding
of the facts and the specific points at issue. Ataxpayer who needs more than 10 calendar
days to prepare the statement of understanding must justify in writing the request for an ex-
tension of time. The extension is subject to the approval of the chief, examination division,
or the chief, appeals office. Both the statements of the taxpayer and the district or appeals
office will be forwarded to the national office with the request for technical advice.
When the district director or the chief, appeals office, and the taxpayer cannot agree on
the material facts and the request for technical advice does not involve the issue of whether
a letter ruling should be modified or revoked, the national office, at its discretion, may
refuse to provide technical advice. If the national office chooses to issue technical advice,
the national office will base its advice on the facts provided by the district or appeals office.
If a request for technical advice involves the issue of whether a letter ruling should be
modified or revoked, the national office will issue technical advice.
If the Service disagrees with .04If the taxpayer initiates the request for technical advice and the taxpayer’s state-
the taxpayer’s statementment of the facts and issues is not wholly acceptable to the district or appeals office, the
of factsService will notify the taxpayer in writing of the areas of disagreement. The taxpayer has
10 calendar days after receiving the written notice to reply to it. Ataxpayer who needs
more than 10 calendar days must justify in writing the request for an extension of time.
The extension is subject to the approval of the chief, examination division, or the chief,
appeals office.
If an agreement cannot be reached, both the statements of the taxpayer and the district or
appeals office will be forwarded to the national office with the request for technical advice.
When the disagreement involves material facts essential to the preliminary assessment of
the case, the district director or the chief, appeals office, may refuse to refer a taxpayer ini-
tiated request for technical advice to the national office.
1998–1 I.R.B.85January 5, 1998
Sec. 10.04

If the district director or the chief, appeals office, submits a case involving a disagree-
ment of the material facts, the national office, at its discretion, may refuse to provide tech-
nical advice. If the national office chooses to issue technical advice, the national office
will base its advice on the facts provided by the district or appeals office.
If the taxpayerhas not .05When the district or appeals office initiates the request for technical advice, the tax-
submitted the required payer has 10 calendar days after receiving the statement of facts and issues to be sub-
deletions statementmitted to the national office to provide the deletions statement required under § 6110(c).
Seesection 9.02 of this revenue procedure. If the taxpayer does not submit the deletions
statement, the district director or the chief, appeals office, will tell the taxpayer that the
statement is required.
When the taxpayer initiates the request for technical advice and does not submit a dele-
tions statement with the request, the district director or the chief, appeals office, will ask
the taxpayer to submit the statement. If the district director or the chief, appeals office,
does not receive the deletions statement within 10 calendar days after asking the taxpayer
for it, the district director or the chief, appeals office, may decline to submit the request for
technical advice.
However, if the district director or the chief, appeals office, decides to request technical
advice, whether initiated by the district or appeals office or by the taxpayer, in a case in
which the taxpayer has not submitted the deletions statement, the national office will make
those deletions that the Commissioner of Internal Revenue determines are required by
§ 6110(c).
Section 6104 of the .06The requirements for submitting statements and other materials or proposed
Internal Revenue Code deletions in technical advice memorandums before public inspection is allowed do not to
(Applications forexemption apply torequests for any documents to the extent that § 6104 applies.
and letterrulings issued
to certain exempt
organizations open to
public inspection)
Criminal orcivil fraud cases.07The provisions of this section (about referring issues upon the taxpayer’s request,
telling the taxpayer about the referral of issues, giving the taxpayer a copy of the
arguments submitted, submitting proposed deletions, and granting conferences in the
national office) do not apply to a technical advice memorandum described in
§ 6110(g)(5)(A) that involves a matter that is the subject of or is otherwise closely related
to a criminal or civil fraud investigation, or a jeopardy or termination assessment.
In these cases, a copy of the technical advice memorandum is given to the taxpayer after
all proceedings in the investigations or assessments are complete, but before the Commis-
sioner mails the notice of intention to disclose the technical advice memorandum under
§ 6110(f)(1). The taxpayer may then provide the statement of proposed deletions to the na-
tional office.
SECTION 11. HOWDOES
ATAXPAYER APPEALA
DISTRICTDIRECTOR’S
OR CHIEF’S, APPEALS
OFFICE, DECISION NOT
TO SEEK TECHNICAL
ADVICE?
Taxpayernotified of .01If the examining officer or appeals officer concludes that a taxpayer’s request for
decision not to seek referral of an issue to the national office for technical advice does not warrant referral, the
technical adviceexamining officer or appeals officer will tell the taxpayer. Ataxpayer’s request for such a
referral will not be denied merely because the national office provided legal advice, other
than advice furnished pursuant to this revenue procedure, to the district or appeals office
on the matter.
January 5, 1998861998–1 I.R.B.
Sec. 10.04

Taxpayermay appeal decision .02The taxpayer may appeal the decision of the examining officer or appeals officer
not to seek technical advicenot to request technical advice. To do so, the taxpayer must submit to that officer, within
10 calendar days after being told of the decision, a written statement of the facts, law, and
arguments on the issue and the reasons why the taxpayer believes the matter should be
referred to the national office for technical advice. Ataxpayer who needs more than 10
calendar days must justify in writing the request for an extension of time. The extension
is subject to the approval of the chief, examination division, or the chief, appeals office.
Chief, examination division, .03The examining officer or appeals officer submits the taxpayer’s statement through
orchief, appeals office, channels to the chief, examination division, or the chief, appeals office, along with the
determines whetherexamining officer’s or appeals officer’s statement of why the issue should not be referred
technical advice will be soughtto the national office. The chief determines on the basis of the statements whether
technical advice will be requested.
If the chief determines that technical advice is not warranted and proposes to deny the
request, the taxpayer is told in writing about the determination. In the letter to the taxpayer,
the chief states the reasons for the proposed denial (except in unusual situations when
doing so would be prejudicial to the best interests of the Government). The taxpayer has
10 calendar days after receiving the letter to notify the chief of agreement or disagreement
with the proposed denial.
Chief’s decision may be .04The taxpayer may not appeal the decision of the chief, examination division, or the
reviewed but not appealedchief, appeals office, not to request technical advice from the national office. However, if
the taxpayer does not agree with the proposed denial, all data on the issue for which
technical advice has been sought, including the taxpayer’s written request and statements,
will be submitted to the Assistant Commissioner (Examination), the Assistant
Commissioner (International), or the National Director of Appeals, as appropriate.
The Assistant Commissioner (Examination), the Assistant Commissioner (International), or
the National Director of Appeals, as appropriate, will review the proposed denial solely on the
basis of the written record, and no conference will be held with the taxpayer or the taxpayer’s
representative. The Assistant Commissioner (Examination), the Assistant Commissioner (In-
ternational), or the National Director of Appeals may consult with the national office, if neces-
sary, and will notify the district office or appeals office within 45 calendar days of receiving all
the data regarding the request for technical advice whether the proposed denial is approved or
disapproved. The district office or appeals office will then notify the taxpayer.
While the matter is being reviewed, the district office or appeals office suspends action
on the issue (except when the delay would prejudice the Government’s interest).
The provisions of this revenue procedure in regard to review of the proposed denial of a
request for technical advice continue to be applicable in those situations in which the au-
thority normally exercised by the district director or chief, appeals office, has been dele-
gated to another official.
SECTION 12. HOWARE
REQUESTS FOR
TECHNICALADVICE
WITHDRAWN?
Taxpayernotified.01Once a request for technical advice has been sent to the national office, only a
district director or a chief, appeals office, may withdraw a request for technical advice.
He or she may ask to withdraw a request at any time before the responding transmittal
memorandum for the technical advice is signed.
The district director or the chief, appeals office, as appropriate, must notify the taxpayer
in writing of an intent to withdraw the request for technical advice except—
(1)when the period of limitations on assessment is about to expire and the taxpayer has
declined to sign a consent to extend the period; or
1998–1 I.R.B.87January 5, 1998
Sec. 12.01

(2)when such notification would be prejudicial to the best interests of the Government.
If the taxpayer does not agree that the request for technical advice should be withdrawn,
the procedures in section 11 of this revenue procedure must be followed.
National office may .02When a request for technical advice is withdrawn, the national office may send its
provide viewsviews to the district director or the chief, appeals office, when acknowledging the
withdrawal request. In an appeals case, acknowledgment of the withdrawal request
should be sent to the appropriate appeals office, through the National Director of Appeals,
C:AP:FS. In appropriate cases, the subject matter may be published as a revenue ruling or
as a revenue procedure.
SECTION 13. HOWARE
CONFERENCES
SCHEDULED?
If requested, offered to the .01If, after the technical advice request is analyzed, it appears that technical advice
taxpayerwhen adverse adverse to the taxpayer will be given, and if a conference has been requested, the taxpayer
technical advice proposedwill be informed, by telephone if possible, of the time and place of the conference.
Normally held within 21 days .02The conference must be held within 21 calendar days after the taxpayer is con-
of contact with the taxpayertacted. If conferences are being arranged for more than one request for technical advice
for the same taxpayer, they will be scheduled to cause the least inconvenience to the
taxpayer. The national office will notify the examining officer or appeals officer of the
scheduled conference and will offer the examining officer or appeals officer the
opportunity to attend the conference. The Assistant Commissioner (Examination), the
Assistant Commissioner (International), the National Director of Appeals, the district
director, or the chief, appeals office, may designate other Service representatives to attend
the conference in lieu of, or in addition to, the examining officer or appeals officer.
21-day period will be .03An extension of the 21-day period will be granted only if the taxpayer justifies it in
extended if justified writing and the assistant chief counsel of the office to which the case is assigned approves
and approvedthe request. No extension will be granted without the approval of the assistant chief
counsel. Except in rare and unusual circumstances, the national office will not agree to an
extension of more than 10 working days beyond the end of the 21-day period.
The taxpayer’s request for extension must be submitted before the end of the 21-day pe-
riod, and should be submitted sufficiently before the end of this period to allow the national
office to consider, and either approve or deny, the request before the end of the 21-day pe-
riod. If unusual circumstances near the end of the 21-day period make a timely written re-
quest impractical, the national office should be told orally before the end of the period
about the problem. The written request for extension must be submitted to the national of-
fice promptly after the oral request. The taxpayer will be told promptly (and later in writ-
ing) of the approval or denial of a requested extension.
Denial of extension .04There is no right to appeal the denial of a request for extension. If the national of-
cannot be appealedfice is not advised of problems with meeting the 21-day period or if the written request is
not sent promptly after the national office is notified of problems with meeting the 21-day
period, the case will be processed on the basis of the existing record.
Entitled to one.05Ataxpayer is entitled by right to only one conference in the national office unless
conference of rightone of the circumstances discussed in section 13.09 of this revenue procedure exists. This
conference is normally held at the branch level. It is attended by a person who has
authority to sign the transmittal memorandum (discussed in section 15.14 of this revenue
procedure) on behalf of the branch chief.
When more than one branch has taken an adverse position on an issue in the request or
when the position ultimately adopted by one branch will affect another branch’s determina-
tion, a representative from each branch with authority to sign for the branch chief will at-
January 5, 1998881998–1 I.R.B.
Sec. 12.01

tend the conference. If more than one subject is discussed at the conference, the discussion
constitutes a conference for each subject.
To have a thorough and informed discussion of the issues, the conference usually is held
after the branch has had an opportunity to study the case. However, the taxpayer may re-
quest that the conference of right be held earlier in the consideration of the case than the
Service would ordinarily designate.
The taxpayer has no right to appeal the action of a branch to an assistant chief counsel or
to any other Service official. But see section 13.09 of this revenue procedure for situations
in which the Service may offer additional conferences.
Conference may not be.06Because conference procedures are informal, no tape, stenographic, or other
tapedverbatim recording of a conference may be made by any party.
If requested and approved,.07In the event of a tentatively adverse determination, the taxpayer may request, in
conference will be delayed writing, a delay of the conference so that the taxpayer can prepare and submit a brief
to address a request forrequesting relief under § 7805(b) (discussed in section 18 of this revenue procedure). The
relief under§ 7805(b)assistant chief counsel of the office to which the case is assigned will determine whether
to grant or deny the request for delaying the conference. If such request is granted, the
Service will schedule a conference on the tentatively adverse decision and the § 7805(b)
relief request within 10 days of receiving the taxpayer’s § 7805(b) request. There is no
right to appeal the denial of a request for delaying the conference. See section 18.04 of
this revenue procedure for the conference procedures if the § 7805(b) request is made
after the conference on the substantive issues has been held.
Service makes tentative .08The senior Service representative at the conference ensures that the taxpayer has
recommendationsfull opportunity to present views on all the issues in question. The Service representatives
explain the tentative decision on the substantive issues and the reasons for it.
If the taxpayer requests relief under § 7805(b) (regarding limitation of retroactive ef-
fect), the Service representatives will discuss the tentative recommendation concerning the
request for relief and the reason for the tentative recommendation.
No commitment will be made as to the conclusion that the Service will finally adopt re-
garding the outcome of the § 7805(b) issue or on any other issue discussed.
Additional conferences .09The Service will offer the taxpayer an additional conference if, after the conference
may be offeredright, an adverse holding is proposed on a new issue or on the same issue but on grounds
different from those discussed at the first conference.
When a proposed holding is reversed at a higher level with a result less favorable to the
taxpayer, the taxpayer has no right to another conference if the grounds or arguments on
which the reversal is based were discussed at the conference of right.
The limitation on the number of conferences to which a taxpayer is entitled does not pre-
vent the national office from inviting a taxpayer to attend additional conferences, including
conferences with an official higher than the branch level, if national office personnel think
they are necessary. Such conferences are not offered as a matter of course simply because
the branch has reached an adverse decision. In general, conferences with higher level offi-
cials are offered only if the Service determines that the case presents significant issues of
tax policy or tax administration and that the consideration of these issues would be en-
hanced by additional conferences with the taxpayer.
In accordance with section 13.02 of this revenue procedure, the examining officer or ap-
peals officer will be offered the opportunity to participate in any additional taxpayer’s con-
ference, including a conference with an official higher than the branch level. Section 13.02
of this revenue procedure also provides that other Service representatives are allowed to
participate in the conference.
1998–1 I.R.B.89January 5, 1998
Sec. 13.09

Additional information .10Within 21 calendar days after the conference, the taxpayer must furnish to the
submitted afterthe conferencenational office any additional data, lines of reasoning, precedents, etc., that the taxpayer
proposed and discussed at the conference but did not previously or adequately present in
writing. This additional information must be submitted by letter with a penalties of
perjury statement in the form described in section 15.11(1) of this revenue procedure.
The taxpayer must also send a copy of the additional information to the district director
or the chief, appeals office, for comment. Any comments by the district director or the
chief, appeals office, must be furnished promptly to the appropriate branch in the national
office. If the district director or the chief, appeals office, does not have any comments, he
or she must notify the branch representative promptly.
If the additional information would have a significant impact on the facts in the request
for technical advice, the national office will ask the district director or the chief, appeals of-
fice, for comment on the facts contained in the additional information submitted. The dis-
trict director or the chief, appeals office, will give the additional information prompt atten-
tion.
If the additional information is not received within 21 calendar days, the technical ad-
vice memorandum will be issued on the basis of the existing record.
An extension of the 21-day period may be granted only if the taxpayer justifies it in writ-
ing and the assistant chief counsel of the office to which the case is assigned approves the
extension. Such extension will not be routinely granted. The procedures for requesting an
extension of the 21-day period and notifying the taxpayer of the Service’s decision are the
same as those in sections 13.03 and 13.04 of this revenue procedure.
Underlimited circumstances, .11Infrequently, taxpayers request that their conference of right be held by telephone.
may schedule a conferenceThis request may occur, for example, when a taxpayer wants a conference of right but
to be held by telephonebelieves that the issue involved does not warrant incurring the expense of traveling to
Washington, DC. If a taxpayer makes such a request, the branch chief, senior technician
reviewer (or senior technical reviewer), or assistant to the branch chief (or assistant branch
chief) of the branch to which the case is assigned will decide if it is appropriate in the
particular case to hold the conference of right by telephone. If the request is approved, the
taxpayer will be advised when to call the Service representatives (not a toll-free call).
In accordance with section 13.02 of this revenue procedure, the examining officer or ap-
peals officer will be offered the opportunity to participate in the telephone conference.
Section 13.02 of this revenue procedure also provides that other Service representatives are
allowed to participate in the conference.
SECTION 14. HOWIS
STATUS OFREQUEST
OBTAINED?
Taxpayerorthe taxpayer’s .01The taxpayer or the taxpayer’s representative may obtain information on the status
representative may request of the request for technical advice by contacting the district or appeals office that re-
status from the district quested the technical advice. See section 15.09 of this revenue procedure concerning the
orappeals officetime for discussing the tentative conclusion with the taxpayer or the taxpayer’s
representative. See section 16.02 of this revenue procedure regarding discussions of the
contents of the technical advice memorandum with the taxpayer or the taxpayer’s
representative.
National office will give .02The branch representative or branch chief assigned to the technical advice request
status updates to the districtwill give status updates on the request once a month to the district director or chief, ap-
directororchief, appeals officepeals office. In addition, a district director or a chief, appeals office, may get current
information on the status of the request for technical advice by calling the person whose
name and telephone number are shown on the acknowledgement of receipt of the request
for technical advice.
January 5, 1998901998–1 I.R.B.
Sec.13.10

See section 15.10 of this revenue procedure about discussing the final conclusions with
the district or appeals office. Further, the district director or the chief, appeals office, will
be notified at the time the technical advice memorandum is mailed.
SECTION 15. HOWDOES
THE NATIONALOFFICE
PREPARE THE TECHNICAL
ADVICE MEMORANDUM?
Delegates authority to .01The authority to issue technical advice on issues under the jurisdiction of the
branch chiefsAssociate Chief Counsel (Domestic) has largely been delegated to the branch chiefs in the
offices of the Assistant Chief Counsel (Corporate), the Assistant Chief Counsel (Financial
Institutions and Products), the Assistant Chief Counsel (Income Tax and Accounting), and
the Assistant Chief Counsel (Passthroughs and Special Industries).
The branch chiefs in the Office of Associate Chief Counsel (Employee Benefits and Ex-
empt Organizations) and in the Office of Associate Chief Counsel (International) have largely
been delegated the authority to issue technical advice on issues under their jurisdiction.
The authority to issue technical advice on issues under the jurisdiction of the Associate
Chief Counsel (Enforcement Litigation) has largely been delegated to the branch chiefs in
the office of the Assistant Chief Counsel (General Litigation).
Determines whetherrequest.02Arequest for technical advice generally is given priority and processed expediiously.
has been properly madeAs soon as the request for technical advice is assigned, the branch representative analyzes
the file to see whether it meets all requirements of sections 6, 7, and 9 of this revenue
procedure.
However, if the request does not comply with the requirements of section 9.02 of this
revenue procedure relating to the deletions statement, the Service will follow the procedure
in the last paragraph of section 10.05 of this revenue procedure.
Contacts the district or.03Usually, within 21 calendar days after the branch receives the request for technical
appeals office to discuss advice, a representative of the branch telephones the district or appeals office to discuss
issuesthe procedural and substantive issues in the request that come within the branch’s
jurisdiction.
Informs the district or.04If the technical advice request concerns matters within the jurisdiction of more than
appeals office if any matters one branch or office, a representative of the branch that received the original technical
in the request have been advice request informs the district or appeals office within 21 calendar days of receiving
referred to anotherthe request that—
branch oroffice
(1)the matters within the jurisdiction of another branch or office have been referred to
the other branch or office for consideration; and
(2)a representative of the other branch or office will contact the district or appeals of-
fice about the technical advice request within 21 calendar days after receiving it in accor-
dance with section 15.03 of this revenue procedure.
Informs the district orappeals .05The branch representative will inform the district or appeals office that the case is
office if additional being returned if substantial additional information is required to resolve an issue. Cases
information is neededshould be returned for additional information when significant unresolved factual
variances exist between the statement of facts submitted by the district or appeals office
and the taxpayer. Cases should also be returned if major procedural problems cannot be
resolved by telephone.
If only minor procedural deficiencies exist, the branch representative will request the ad-
ditional information in the most expeditious manner without returning the case. Within 21
calendar days after receiving the information requested, the branch representative will no-
1998–1 I.R.B.91January 5, 1998
Sec. 15.05

tify the district or appeals office of the tentative conclusion and an estimated date by which
the technical advice memorandum will be mailed, or an estimated date when a tentative
conclusion will be made.
Informs the district orappeals.06If all necessary information has been provided, the branch representative informs
office of the tentative thedistrict or appeals office of the tentative conclusion and the estimated date that the
conclusiontechnical advice memorandum will be mailed.
If a tentative conclusion .07If a tentative conclusion has not been reached because of the complexity of the
has not been reached, issue, the branch representative informs the district or appeals office of the estimated date
gives date estimated forthe tentative conclusion will be made.
tentative conclusion
Advises the district or.08Because the branch representative’s tentative conclusion may change during the
appeals office if tentativepreparation and review of the technical advice memorandum, the tentative conclusion
conclusion is changedshould not be considered final. If the tentative conclusion is changed, the branch repre-
sentative will inform the district or appeals office.
Generally does not discuss .09Neither the national office nor the district or appeals office should advise the tax-
the tentative conclusion payer or the taxpayer’s representative of the tentative conclusion during consideration of
with the taxpayerthe request for technical advice. However, in order to afford taxpayers an appropriate
opportunity to prepare and present their position, the taxpayer or the taxpayer’s
representative should be told the tentative conclusion when scheduling the adverse
conference, at the adverse conference, or in any discussion between the scheduling and
commencement of the adverse conference. See section 16.02 of this revenue procedure
regarding discussions of the contents of the technical advice memorandum with the
taxpayer or the taxpayer’s representative.
Advises the district orappeals .10In all cases, the branch representative will inform the examining officer or appeals
office of final conclusionsofficer of the national office’s final conclusions. The examining officer or appeals officer
will be offered the opportunity to discuss the issues and the national office’s final
conclusions before the technical advice memorandum is issued.
If needed, requests .11If, following the initial contact referenced in section 15.03 of this revenue proce-
additional informationdure, it is determined, after discussion with the branch chief or reviewer, that additional
information is needed, a branch representative will obtain the additional information from
the taxpayer or from the district director or the chief, appeals office, in the most
expeditious manner possible. Any additional information requested from the taxpayer by
the national office must be submitted by letter with a penalties of perjury statement within
21 calendar days after the request for information is made.
(1)Penalties of perjury statement.Additional information submitted to the national
office must be accompanied by the following declaration: “Underpenalties of perjury, I
declare that I have examined this information, including accompanying documents,
and, to the best of my knowledge and belief, the information contains all the relevant
facts relating to the request forthe information, and such facts are true, correct, and
complete.”This declaration must be signed and dated by the taxpayer, not the taxpayer’s
representative. Astamped signature is not permitted.
(2)21-day period will be extended if justified and approved. Awritten request for
an extension of time to submit additional information must be received by the national of-
fice within the 21-day period, giving compelling facts and circumstances to justify the pro-
posed extension. The assistant chief counsel of the office to which the case is assigned will
determine whether to grant or deny the request for an extension of the 21-day period. No
extension will be granted without the approval of the assistant chief counsel. Except in
rare and unusual circumstances, the national office will not agree to an extension of more
than 10 working days beyond the end of the 21-day period. There is no right to appeal the
denial of a request for extension.
January 5, 1998921998–1 I.R.B.
Sec. 15.05

(3)If the taxpayerdoes not submit additional information.If the national office
does not receive the additional information within the 21-day period, plus any extensions
granted by the assistant chief counsel, the national office will issue the technical advice
memorandum based on the existing record.
Requests taxpayerto send .12Whether or not requested by the Service, any additional information submitted by
additional information the taxpayer should be sent to the national office. Generally, the taxpayer needs only to
to the national office submit one copy of the additional information to the national office. However, in appropri-
and a copy to the district ate cases, the national office may request additional copies of the information.
directororchief,
appeals officeAlso, the taxpayer must send a copy to the district director or the chief, appeals office,
for comment. Any comments by the district director or the chief, appeals office, must be
furnished promptly to the appropriate branch in the national office. If the district director
or the chief, appeals office, does not have any comments, he or she must notify the branch
representative promptly.
Informs the taxpayer.13Generally, before replying to the request for technical advice, the national office in-
when requested deletions forms the taxpayer orally or in writing of the material likely to appear in the technical ad-
will not be madevice memorandum that the taxpayer proposed be deleted but that the Service has
determined should not be deleted.
If so informed, the taxpayer may submit within 10 calendar days any further information
or arguments supporting the taxpayer’s proposed deletions.
The Service attempts, if possible, to resolve all disagreements about proposed deletions
before the national office replies to the request for technical advice. However, the taxpayer
does not have the right to a conference to resolve any disagreements about material to be
deleted from the text of the technical advice memorandum. These matters, however, may
be considered at any conference otherwise scheduled for the request. See section 16.04 of
this revenue procedure for the procedures to protest the disclosure of information in the
technical advice memorandum.
Prepares reply in two parts.14The replies to technical advice requests are in two parts. Each part identifies the
taxpayer by name, address, identification number, and year or years involved.
The first part of the reply is a transmittal memorandum (Form M-6000). In unusual
cases, it is a way of giving the district or appeals office administrative or other information
that under the nondisclosure statutes or for other reasons may not be discussed with the
taxpayer.
The second part is the technical advice memorandum, which contains—
(1)a statement of the issues;
(2)a statement of the facts pertinent to the issues;
(3)a statement of the pertinent law, tax treaties, regulations, revenue rulings, and other
precedents published in the Internal Revenue Bulletin, and court decisions;
(4)a discussion of the rationale supporting the conclusions reached by the national of-
fice; and
(5)the conclusions of the national office. The conclusions give direct answers, when-
ever possible, to the specific issues raised by the district or appeals office. However, the na-
tional office is not bound by the precise statement of the issues as submitted by the taxpayer
or by the district or appeals office and may reframe the issues to be answered in the techni-
cal advice memorandum. The discussion of the issues will be in sufficient detail so that the
district or appeals officials will understand the reasoning underlying the conclusion.
1998–1 I.R.B.93January 5, 1998
Sec. 15.14

Accompanying the technical advice memorandum is a notice under § 6110(f)(1) of in-
tention to disclose a technical advice memorandum (including a copy of the version pro-
posed to be open to public inspection and notations of third party communications under
§ 6110(d)).
Routes replies to .15Replies to requests for technical advice are addressed to the district director or the
appropriate officechief, appeals office. Replies to requests from appeals should be routed to the appropriate
appeals office through the National Director of Appeals, C:AP:FS.
SECTION 16. HOWDOES
ADISTRICTOR APPEALS
OFFICE USE THE
TECHNICALADVICE?
Generally applies advice in.01The district director or the chief, appeals office, must process the taxpayer’s case
processing the taxpayer’s caseon the basis of the conclusions in the technical advice memorandum unless—
(1)the district director or the chief, appeals office, decides that the conclusions reached
by the national office in a technical advice memorandum should be reconsidered;
(2)in the case of technical advice unfavorable to the taxpayer, the chief, appeals office,
decides to settle the issue under existing authority; or
(3)in the case of technical advice unfavorable to a Coordinated Examination Program
taxpayer on a coordinated issue within the Industry Specialization Program or International
Field Assistance Specialization Program on which appeals has coordinated issue papers
containing settlement guidelines or positions, the examination case manager decides to
settle the issue under the settlement authority delegated in Delegation Order No. 247,
1996–1 C.B. 356.
Except as provided in paragraph (1), (2), or (3) of this section 16.01, the conclusions in a
technical advice memorandum involving a § 103 obligation and the issuer of this obliga-
tion must be treated by the district director or the chief, appeals office, as applying to the is-
suer and any holder of the obligation, unless the holder initiates a request for technical ad-
vice on the same issue addressed in the technical advice memorandum involving the issuer,
and the national office issues a technical advice memorandum involving that issue and that
holder.
Discussion with .02The national office will not discuss the contents of the technical advice
the taxpayermemorandum with the taxpayer or the taxpayer’s representative until the taxpayer has
been given a copy by the district or appeals office. See section 15.09 of this revenue
procedure concerning the time for discussing the tentative conclusion with the taxpayer or
the taxpayer’s representative.
Gives copy to the taxpayer.03The district director or the chief, appeals office, only after adopting the technical
advice, gives the taxpayer—
(1)a copy of the technical advice memorandum described in section 15.14 of this rev-
enue procedure; and
(2)the notice under § 6110(f)(1) of intention to disclose the technical advice memoran-
dum (including a copy of the version proposed to be open to public inspection and nota-
tions of third party communications under § 6110(d)).
This requirement does not apply to a technical advice memorandum involving a criminal
or civil fraud investigation, or a jeopardy or termination assessment, as described in section
10.07 of this revenue procedure.
Taxpayermay protest .04After receiving the notice under § 6110(f)(1) of intention to disclose the technical
deletions not madeadvice memorandum, the taxpayer may protest the disclosure of certain information in it.
The taxpayer must submit a written statement within 20 calendar days identifying those
January 5, 1998941998–1 I.R.B.
Sec. 15.14

deletions not made by the Service that the taxpayer believes should have been made. The
taxpayer must also submit a copy of the version of the technical advice memorandum
proposed to be open to public inspection with brackets around the deletions proposed by
the taxpayer that have not been made by the national office.
Generally, the national office considers only the deletion of material that the taxpayer has
proposed be deleted or other deletions as required under § 6110(c) before the national office
reply is sent to the district director or the chief, appeals office. Within 20 calendar days after
it receives the taxpayer’s response to the notice under § 6110(f)(1), the national office must
mail to the taxpayer its final administrative conclusion about the deletions to be made.
When no copy is given.05If the national office tells the district director or the chief, appeals office, that a
to the taxpayercopy of the technical advice memorandum should not be given to the taxpayer and the
taxpayer requests a copy, the district director or the chief, appeals office, will tell the
taxpayer that no copy will be given.
SECTION 17. WHATIS
THE EFFECTOF
TECHNICALADVICE?
Applies only to the .01Ataxpayer may not rely on a technical advice memorandum issued by the Service
taxpayerforwhom for another taxpayer. See§ 6110(j)(3).
technical advice was
requested
Usually applies retroactively.02Except in rare or unusual circumstances, a holding in a technical advice
memorandum that is favorable to the taxpayer is applied retroactively.
Moreover, because technical advice, as described in section 2 of this revenue procedure,
is issued only on closed transactions, a holding that is adverse to the taxpayer is also ap-
plied retroactively, unless the Associate Chief Counsel (Domestic), the Associate Chief
Counsel (Employee Benefits and Exempt Organizations), the Associate Chief Counsel
(Enforcement Litigation), or the Associate Chief Counsel (International), as appropriate,
exercises the discretionary authority under § 7805(b) to limit the retroactive effect of the
holding.
Generally applied .03Aholding that modifies or revokes a holding in a prior technical advice memo-
retroactively to modify randum is applied retroactively, with one exception. If the new holding is less favorable
orrevoke priortechnicalto the taxpayer than the earlier one, it generally is not applied to the period when the tax-
advicepayer relied on the prior holding in situations involving continuing transactions.
Applies to continuing .04If a technical advice memorandum relates to a continuing action or a series of ac-
action orseries of actions tions, ordinarily it is applied until specifically withdrawn or until the conclusion is modi-
until specifically withdrawn, fied or revoked by the enactment of legislation, the ratification of a tax treaty, a decision of
modified, orrevokedthe United States Supreme Court, or the issuance of regulations (temporary or final), a
revenue ruling, or other statement published in the Internal Revenue Bulletin. Publication
of a notice of proposed rulemaking does not affect the application of a technical advice
memorandum.
Applies to continuing .05Ataxpayer is not protected against retroactive modification or revocation of a tech-
action orseries of actions nical advice memorandum involving a continuing action or a series of actions occurring
until material facts changeafter the material facts on which the technical advice memorandum is based have
changed.
Does not apply retroactively.06Generally, a technical advice memorandum that modifies or revokes a letter ruling or
undercertain conditionsanother technical advice memorandum is not applied retroactively either to the taxpayer to
whom or for whom the letter ruling or technical advice memorandum was originally
issued, or to a taxpayer whose tax liability was directly involved in such letter ruling or
technical advice memorandum if—
(1)there has been no misstatement or omission of material facts;
1998–1 I.R.B.95January 5, 1998
Sec. 17.06

(2)the facts at the time of the transaction are not materially different from the facts on
which the letter ruling or technical advice memorandum was based;
(3)there has been no change in the applicable law;
(4)in the case of a letter ruling, it was originally issued on a prospective or proposed
transaction; and
(5)the taxpayer directly involved in the letter ruling or technical advice memorandum
acted in good faith in relying on the letter ruling or technical advice memorandum, and the
retroactive modification or revocation would be to the taxpayer’s detriment. For example,
the tax liability of each shareholder is directly involved in a letter ruling or technical advice
memorandum on the reorganization of a corporation. However, the tax liability of a mem-
ber of an industry is not directly involved in a letter ruling or technical advice memorandum
issued to another member and, therefore, the holding in a modification or revocation of a let-
ter ruling or technical advice memorandum to one member of an industry may be retroac-
tively applied to other members of the industry. By the same reasoning, a tax practitioner
may not obtain the nonretroactive application to one client of a modification or revocation
of a letter ruling or technical advice memorandum previously issued to another client.
When a letter ruling to a taxpayer or a technical advice memorandum involving a tax-
payer is modified or revoked with retroactive effect, the notice to the taxpayer, except in
fraud cases, sets forth the grounds on which the modification or revocation is being made
and the reason why the modification or revocation is being applied retroactively.
SECTION 18. HOWMAY
RETROACTIVE EFFECT
BE LIMITED?
Taxpayermay request that.01Under § 7805(b), the Associate Chief Counsel (Domestic), the Associate Chief
retroactivity be limitedCounsel (Employee Benefits and Exempt Organizations), the Associate Chief Counsel
(Enforcement Litigation), or the Associate Chief Counsel (International), as the
Commissioner’s delegate, may prescribe the extent, if any, to which a technical advice
memorandum will be applied without retroactive effect.
Ataxpayer for whom a technical advice memorandum was issued or for whom a techni-
cal advice request is pending may request that the Associate Chief Counsel (Domestic), the
Associate Chief Counsel (Employee Benefits and Exempt Organizations), the Associate
Chief Counsel (Enforcement Litigation), or the Associate Chief Counsel (International), as
appropriate, limit the retroactive effect of any holding in the technical advice memorandum
or of any subsequent modification or revocation of the technical advice memorandum.
When germane to a pending technical advice request, a taxpayer should request to limit
the retroactive effect of the holding of the technical advice memorandum early during the
consideration of the technical advice request by the national office. This § 7805(b) request
should be made initially as part of that pending technical advice request. The national of-
fice, however, will consider a § 7805(b) request to limit the retroactive effect of the holding
if the request is made at a later time.
Form of request to limit .02When a technical advice memorandum that concerns a continuing transaction is
retroactivity—continuing modified or revoked by, for example, issuance of a subsequent revenue ruling, or tempo-
transaction before rary or final regulation, a request to limit the retroactive effect of the modification or revo-
examination of returncation of the technical advice memorandum must be made in the form of a request for a
letter ruling if the request is submitted before an examination of the return pertaining to
the transaction that is the subject of the request for the letter ruling. The requirements for
a letter ruling request are given in sections 8 and 12.11 of Rev. Proc. 98–1.
Form of request to limit .03In all other cases during the course of an examination of a taxpayer’s return by the
retroactivity—in all district director or during consideration of the taxpayer’s return by the chief, appeals office
othercases(including when the taxpayer is informed that the district director or the chief, appeals
January 5, 1998961998–1 I.R.B.
Sec. 17.06

office, will recommend that a technical advice memorandum, letter ruling, or
determination letter previously issued to, or with regard to, the taxpayer be modified or
revoked), a taxpayer’s request to limit retroactivity must be made in the form of a request
for technical advice.
The request must meet the general requirements of a technical advice request, which are
given in sections 6, 7, and 9 of this revenue procedure. The request must also—
(1)state that it is being made under § 7805(b);
(2)state the relief sought;
(3)explain the reasons and arguments in support of the relief sought (including a dis-
cussion of the five items listed in section 17.06 of this revenue procedure and any other
factors as they relate to the taxpayer’s particular situation); and
(4)include any documents bearing on the request.
The taxpayer’s request, including the statement that the request is being made under
§ 7805(b), must be submitted to the district director or the chief, appeals office, who must
then forward the request to the national office for consideration.
Taxpayer’s right to .04When a request for technical advice concerns only the application of § 7805(b), the
a conferencetaxpayer has the right to a conference in the national office in accordance with the pro-
visions of section 13 of this revenue procedure. In accordance with section 13.02 of this
revenue procedure, the examining officer or appeals officer will be offered the opportunity
to attend the conference on the § 7805(b) issue. Section 13.02 of this revenue procedure
also provides that other Service representatives are allowed to participate in the
conference.
If the request for application of § 7805(b) is included in the request for technical advice
on the substantive issues or is made before the conference of right on the substantive is-
sues, the § 7805(b) issues will be discussed at the taxpayer’s one conference of right.
If the request for the application of § 7805(b) is made as part of a pending technical ad-
vice request after a conference has been held on the substantive issues and the Service de-
termines that there is justification for having delayed the request, then the taxpayer will
have the right to one conference of right concerning the application of § 7805(b), with the
conference limited to discussion of this issue only.
SECTION 19. WHAT.01 This revenue procedure has been expanded to include the pre-submission confer-
SIGNIFICANTCHANGES ence procedures in Rev. Proc. 97–21, 1997–1 C.B. 651. Accordingly, sections 8 through
HAVE BEEN MADE TO 20 of Rev. Proc. 97–2 are redesignated as sections 9 through 21 in this revenue procedure,
REV. PROC. 97–2?and the pre-submission conference procedures are provided in new section 8. These
procedures are the same as in Rev. Proc. 97–21, except for the provision stating that no
tape, stenographic, or other verbatim recording of the conference may be made by any
party.
.02Section 5.03 is amended to reflect the address to send a § 301.9100 letter ruling re-
quest if a private delivery service is used.
.03Section 5.03 also is amended to reflect the national office’s existing practice of al-
lowing the hand-delivery of a § 301.9100 letter ruling request to the courier’s desk of the
Service.
.04 Section 7.02 is amended to provide that if the appeals officer agrees, by memoran-
dum, to the submission of the request for technical advice, the district director may request
technical advice on the same issue of the same taxpayer (or related taxpayer) pending be-
fore the appeals office, including the applicability of any of the federal taxes involved
when more than one kind of federal tax is dependent on the resolution of that issue.
1998–1 I.R.B.97January 5, 1998
Sec. 19

.05Section 16.01 is amended to provide that the conclusions in a technical advice mem-
orandum involving a § 103 obligation and the issuer of this obligation generally must be
treated by the district director or the chief, appeals office, as applying to the issuer and any
holder of the obligation, unless the holder initiates a request for technical advice on the
same issue addressed in the technical advice memorandum involving the issuer, and the na-
tional office issues a technical advice memorandum involving that issue and that holder.
SECTION 20. WHATIS .01Rev. Proc. 97–2, 1997–1 C.B. 486, as amplified by Rev. Proc. 97–21, 1997–1 C.B.
THE EFFECTOFTHIS 651,is superseded.
REVENUE PROCEDURE
ON OTHER .02Rev. Proc. 97–21, 1997–1 C.B. 651, is modified, and, as modified, is superseded.
DOCUMENTS?
SECTION 21. WHATIS This revenue procedure is effective January 12, 1998.
THE EFFECTIVE DATE OF
THIS REVENUE
PROCEDURE?
DRAFTING INFORMATIONThe principal author of this revenue procedure is David Selig of the Office of Assistant
Chief Counsel (Passthroughs and Special Industries). For further information regarding
this revenue procedure for matters under the jurisdiction of—
(1) the Associate Chief Counsel (Domestic) or the Associate Chief Counsel (Employee
Benefits and Exempt Organizations), contact Mr. Selig at (202) 622-3040 (not a toll-free
call);
(2) the Associate Chief Counsel (International), contact Gerard Traficanti at
(202) 874-4360 (not a toll-free call);
(3) the Associate Chief Counsel (Enforcement Litigation), contact Alan C. Levine at
(202) 622-3610 (not a toll-free call);
(4) the Assistant Commissioner (Examination), contact Susan Blake at (202) 622-3664
(not a toll-free call); or
(5) the National Director of Appeals, contact Pam Robinson at (202) 401-4169 (not a
toll-free call).
January 5, 1998981998–1 I.R.B.
Sec. 19

INDEX
References are to sections in Rev. Proc. 98–2
Additional Information
— procedure for submission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 15.05, 15.11, 15.12
after conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 13.10
— proposed deletions under § 6110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 9.02
Conferences
— offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 10.02, 13.01
after conference of right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 13.09
exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 10.07, 11.04, 15.13
— pre-submission conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 8
— scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 13
request to limit retroactivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 13.07, 18.04
telephone conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 13.11
Definitions
— national office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 1
— taxpayer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 1
— technical advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2
Discussions with Taxpayers
— technical advice memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 16.02
— technical advice request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 15.09
Employee Plans and Exempt Organizations
— application of § 6104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 10.06
— jurisdiction of Assistant Commissioner (Employee Plans and Exempt Organizations) . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 4.02
Extension of Time
— to appeal decision not to request technical advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.02
— to disagree with statement of facts in technical advice request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.03, 10.04
— to schedule conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13.03, 13.04
— to submit additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 13.10, 15.11
Penalties of Perjury Statement
— form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15.11(1)
— required with additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13.10, 15.11
— signature requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15.11(1)
Powerof Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 9.05
Pre-submission Conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 8
Public Disclosure Under§ 6110
— deletion statement required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.02, 10.07
exception when § 6104 applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.06
failure to submit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.05, 15.02
signature requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.02
— notice of intention to disclose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15.14, 16.03
protesting deletions not made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15.13, 16.04
Retroactive Effect
— in general . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17.02-17.06
on letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 17.06
— request to limit retroactivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 18
format of request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 18.02, 18.03
scheduling conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 13.07, 18.04
Revenue Rulings
— effect on a continuing transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 17.04
request to limit retroactivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 18.02
Section 301.9100 Relief. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 5
Status of Technical Advice Request
— to district or appeals office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 14.02, 15.08, 15.10
— to taxpayer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 14.01, 15.09
Where to Send
— additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 13.10, 15.12
— technical advice request from appeals office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 9.03
— technical advice request from district office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 9.03
Withdrawal of Technical Advice Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 12
1998–1 I.R.B.99January 5, 1998

26 CFR 601.201: Rulings and determination
letters.
Rev. Proc. 98–3
SECTION 1. PURPOSE AND
NATURE OFCHANGES
.01 The purpose of this revenue proce-
dure is to update Rev. Proc. 97–3, 1997–1
C.B. 507, as amplified and modified by
subsequent revenue procedures, by pro-
viding a revised list of those areas of the
Internal Revenue Code under the juris-
diction of the Associate Chief Counsel
(Domestic) and the Associate Chief
Counsel (Employee Benefits and Exempt
Organizations) relating to issues on
which the Internal Revenue Service will
not issue letter rulings or determination
letters. For a list of areas under the juris-
diction of the Associate Chief Counsel
(International) relating to international is-
sues on which the Service will not issue
letter rulings or determination letters, see
Rev. Proc. 98–7, this Bulletin. For a list
of areas under the jurisdiction of the As-
sistant Commissioner (Employee Plans
and Exempt Organizations) relating to is-
sues, plans or plan amendments on which
the Service will not issue letter rulings
and determination letters, see, respec-
tively, section 8 of Rev. Proc. 98–4, this
Bulletin, and section 3.02 of Rev. Proc.
98–6, this Bulletin.
.02Changes
(1)Old section 3.01(6), dealing with
§ 121 and former § 1034, has been up-
dated to reflect changes made by the Tax-
payer Relief Act of 1997 (TRA-1997).
(2)Old section 3.01(15), dealing with
§ 274, has been updated to include a ref-
erence to Rev. Proc. 97–59, 1997–52
I.R.B. 31, and to delete references to
some prior years revenue procedures.
(3) New sections 4.01(6) and (47),
dealing with §§ 104(a)(2) and 3121, have
been added to the ordinarily no-rule area
to indicate that the Service generally will
not issue rulings as to whether an alloca-
tion is properly made when a settlement
award (including a lump sum award) is al-
located between back pay, compensatory
damages, punitive damages, etc. This no-
rule provision deals with factual questions
that fall under the existing no-rule area
under section 4.02(1) and is added to ad-
vise taxpayers of the Service’s long-
standing ruling practice with regard to
factual questions in this area.
(4) New section 4.02(8) has been added
to the ordinarily no-rule area to reflect the
Service’s unwillingness, in general, to rule
on the validity of the federal income tax or
other taxes set forth in the Code, and on
whether the Service has the authority or
jurisdiction to enforce the Code or collect
information, and similar matters.
(5) Old section 5.17, dealing with the
applicability of § 355 to situations where
negotiations, agreements, or arrange-
ments might affect the distribution of con-
trol, has been deleted. SeeRev. Proc. 97–
53, 1997–47 I.R.B. 10.
(6) Old section 6.02, dealing with
§ 446, has been updated by adding refer-
ences to Rev. Procs. 97–43, 1997–39
I.R.B. 12, 97–37, 1997–33 I.R.B. 18,
97–30, 1997–1 C.B. 702, 97–18, 1997–1
C.B. 642, and 97–10, 1997–1 C.B. 628,
and by deleting references to certain ear-
lier revenue procedures.
(7) Old section 6.04, dealing with
§ 1362, has been revised to include all sit-
uations in which a corporation qualifies
for automatic late S corporation election
relief under Rev. Proc. 97–48, 1997–43
I.R.B. 19.
SECTION 2. BACKGROUND AND
SCOPE OFAPPLICATION
.01 Background
Whenever appropriate in the interest of
sound tax administration, it is the policy
of the Service to answer inquiries of indi-
viduals and organizations regarding their
status for tax purposes and the tax effects
of their acts or transactions, prior to the
filing of returns or reports that are re-
quired by the revenue laws.
There are, however, certain areas in
which, because of the inherently factual
nature of the problems involved, or for
other reasons, the Service will not issue
January 5, 19981001998–1 I.R.B.

1998–1 I.R.B.101January 5, 1998
advance rulings or determination letters.
These areas are set forth in four sections
of this revenue procedure. Section 3 re-
flects those areas in which advance rul-
ings and determinations will not be is-
sued. Section 4 sets forth those areas in
which they will not ordinarily be issued.
“Not ordinarily” means that unique and
compelling reasons must be demon-
strated to justify the issuance of a ruling
or determination letter. Those sections
reflect a number of specific questions and
problems as well as general areas. Sec-
tion 5 lists specific areas for which the
Service is temporarily not issuing ad-
vance rulings and determinations because
those matters are under extensive study.
Finally, section 6 of this revenue proce-
dure lists specific areas where the Service
will not ordinarily issue advance rulings
because the Service has provided auto-
matic approval procedures for these
matters.
See Rev. Proc. 98–1, page 7, this Bul-
letin, particularly section 7 captioned
“Under What Circumstances Does the
Service Have Discretion to Issue Letter
Rulings and Determination Letters?” for
general instructions and other situations
in which the Service will not or ordinarily
will not issue letter rulings or determina-
tion letters.
With respect to the items listed, rev-
enue rulings or revenue procedures may
be published in the Internal Revenue Bul-
letin from time to time to provide general
guidelines regarding the position of the
Service.
Additions or deletions to this revenue
procedure as well as restatements of
items listed will be made by modification
of this revenue procedure. Changes will
be published as they occur throughout the
year and will be incorporated annually in
a new revenue procedure published as the
third revenue procedure of the year.
These lists should not be considered all-
inclusive.Decisions not to rule on indi-
vidual cases (as contrasted with those
that present significant pattern issues) are
not reported in this revenue procedure
and will not be added to subsequent revi-
sions.
.02 Scope of Application
This revenue procedure does not pre-
clude the submission of requests for tech-
nical advice to the national office from
the Office of a District Director of the In-
ternal Revenue or a Chief, Appeals Of-
fice.
SECTION 3. AREAS IN WHICH
RULINGS OR DETERMINATION
LETTERS WILLNOTBE ISSUED
.01 Specific questions and problems.
(1) Section 79.—Group-Term Life In-
surance Purchased for Employees.—
Whether a group insurance plan for 10 or
more employees qualifies as group-term
insurance, if the amount of insurance is
not computed under a formula that would
meet the requirements of § 1.79–1(c)-
(2)(ii) of the Income Tax Regulations if
the group consisted of fewer than 10 em-
ployees.
(2) Section 83.—Property Transferred
in Connection with Performance of Ser-
vices.—Whether a restriction constitutes
a substantial risk of forfeiture, if the em-
ployee is a controlling shareholder. Also,
whether a transfer has occurred, if the
amount paid for the property involves a
nonrecourse obligation.
(3) Section 105(h).—Amount Paid to
Highly Compensated Individuals Under
Discriminatory Self-Insured Medical Ex-
pense Reimbursement Plan.—Whether,
following a determination that a self-in-
sured medical expense reimbursement
plan is discriminatory, that plan had pre-
viously made reasonable efforts to com-
ply with tax anti-discrimination rules.
(4) Section 117.—Qualified Scholar-
ships.—Whether an employer-related
scholarship or fellowship grant is excludi-
ble from the employee’s gross income, if
there is no intermediary private founda-
tion distributing the grants, as there was
in Rev. Proc. 76–47, 1976–2 C.B. 670.
(5) Section 119.—Meals or Lodging
Furnished for the Convenience of the Em-
ployer.—Whether the value of meals or
lodging is excludible from gross income
by an employee who is a controlling
shareholder of the employer.
(6) Section 121 and former § 1034.—
Exclusion of Gain from Sale of Principal
Residence; Rollover of Gain on Sale of
Principal Residence.—Whether property
qualifies as the taxpayer’s principal resi-
dence.
(7) Section 125.—Cafeteria Plans.—
Whether amounts used to provide group-
term life insurance under § 79, accident
and health benefits under §§ 105 and 106,
and dependent care assistance programs
under § 129 are includible in the gross in-
come of participants and considered
“wages” for purposes of §§ 3401, 3121,
and 3306 when the benefits are offered
through a cafeteria plan.
(8) Section 162.—Trade or Business
Expenses.—Whether compensation is
reasonable in amount.
(9) Section 163.—Interest.—The in-
come tax consequences of transactions in-
volving “shared appreciation mortgage”
(SAM) loans in which a taxpayer, bor-
rowing money to purchase real property,
pays a fixed rate of interest on the mort-
gage loan below the prevailing market
rate and will also pay the lender a percent-
age of the appreciation in value of the real
property upon termination of the mort-
gage. This applies to all SAM arrange-
ments where the loan proceeds are used
for commercial or business activities, or
where used to finance a personal resi-
dence, if the facts are not similar to those
described in Rev. Rul. 83–51, 1983–1
C.B. 48. (Also §§ 61, 451, 461, 856,
1001, and 7701.)
(10) Section 170.—Charitable, Etc.,
Contributions and Gifts.—Whether a tax-
payer who advances funds to a charitable
organization and receives therefor a
promissory note may deduct as contribu-
tions, in one taxable year or in each of
several years, amounts forgiven by the
taxpayer in each of several years by en-
dorsement on the note.
(11) Section 213.—Medical, Dental,
Etc., Expenses.—Whether a capital ex-
penditure for an item that is ordinarily
used for personal, living, or family pur-
poses, such as a swimming pool, has as its
primary purpose the medical care of the
taxpayer or the taxpayer’s spouse or de-
pendent, or is related directly to such
medical care.
(12) Section 264(b).—Certain
Amounts Paid in Connection with Insur-
ance Contracts.—Whether “substantially
all” the premiums of a contract of insur-
ance are paid within a period of 4 years
from the date on which the contract is
purchased. Also, whether an amount de-
posited is in payment of a “substantial
number” of future premiums on such a
contract.
(13) Section 264(c)(1).—Certain
Amounts Paid in Connection with Insur-
ance Contracts.—Whether § 264(c)(1)
applies.

(14) Section 269.—Acquisitions Made
to Evade or Avoid Income Tax.—Whether
an acquisition is within the meaning of
§ 269.
(15) Section 274.—Disallowance of
Certain Entertainment, Etc., Expenses.—
Whether a taxpayer who is traveling away
from home on business may, in lieu of
substantiating the actual cost of meals,
deduct a fixed per-day amount for meal
expenses that differs from the amount
prescribed in the revenue procedure pro-
viding optional rules for substantiating
the amount of travel expenses for the pe-
riod in which the expense was paid or in-
curred, such as Rev. Proc. 96–64, 1996–2
C.B. 427, or its successor, Rev. Proc. 97–
59, 1997-52 I.R.B. 31.
(16) Section 302.—Distributions in Re-
demption of Stock.—Whether § 302(b)
applies when the consideration given in
redemption by a corporation consists en-
tirely or partly of its notes payable, and
the shareholder’s stock is held in escrow
or as security for payment of the notes
with the possibility that the stock may or
will be returned to the shareholder in the
future, upon the happening of specific de-
faults by the corporation.
(17) Section 302.—Distributions in Re-
demption of Stock.—Whether § 302(b)
applies when the consideration given in
redemption by a corporation in exchange
for a shareholder’s stock consists entirely
or partly of the corporation’s promise to
pay an amount based on, or contingent on,
future earnings of the corporation, when
the promise to pay is contingent on work-
ing capital being maintained at a certain
level, or any other similar contingency.
(18) Section 302.—Distributions in Re-
demption of Stock.—Whether § 302(b)
applies to a redemption of stock, if after
the redemption the distributing corpora-
tion uses property that is owned by the
shareholder from whom the stock is re-
deemed and the payments by the corpora-
tion for the use of the property are depen-
dent upon the corporation’s future
earnings or are subordinate to the claims
of the corporation’s general creditors.
Payments for the use of property will not
be considered to be dependent upon future
earnings merely because they are based on
a fixed percentage of receipts or sales.
(19) Section 302.—Distributions in Re-
demption of Stock.—Whether the acqui-
sition or disposition of stock described in
§ 302(c)(2)(B) has, or does not have, as
one of its principal purposes the avoid-
ance of federal income taxes within the
meaning of that section, unless the facts
and circumstances are materially identical
to those set forth in Rev. Rul. 85–19,
1985–1 C.B. 94, Rev. Rul. 79–67, 1979–1
C.B. 128, Rev. Rul. 77–293, 1977–2 C.B.
91, Rev. Rul. 57–387, 1957–2 C.B. 225,
Rev. Rul. 56–584, 1956–2 C.B. 179, or
Rev. Rul. 56–556, 1956–2 C.B. 177.
(20) Section 302(b)(4) and (e).—Re-
demption from Noncorporate Shareholder
in Partial Liquidation; Partial Liquidation
Defined.—The amount of working capital
attributable to a business or portion of a
business terminated that may be distrib-
uted in partial liquidation.
(21) Section 312.—Effect on Earnings
and Profits.—The determination of the
amount of earnings and profits of a corpo-
ration.
(22) Section 351.—Transfer to Corpo-
ration Controlled by Transferor.—
Whether § 351 applies to an exchange of
stock for stock in the formation of a hold-
ing company, and whether the taxpayer is
subject to the consequences of qualifica-
tion under that section (such as nonrecog-
nition and basis consequences) that are
adequately addressed by a statute, regula-
tion, decision of the Supreme Court, tax
treaty, revenue ruling, revenue procedure,
notice, or other authority published in the
Internal Revenue Bulletin. Transfers that
do not involve the formation of a holding
company are not subject to this provision.
For purposes of this provision, if such
an exchange qualifies under both § 351
and another corporate restructuring provi-
sion and the other provision is not cov-
ered by this revenue procedure, the Ser-
vice will treat any request for a
qualification ruling under the other provi-
sion as a request for a qualification ruling
under § 351. Ataxpayer or the taxpayer’s
representative (as the Service deems ap-
propriate) seeking a qualification ruling
for such an exchange under any such
other provision must, accordingly, state to
the best of knowledge and belief that the
exchange does not qualify under § 351.
The Service will not rule on the qualifi-
cation of an exchange of stock under
§ 351, even if it is an integral part of a
larger transaction that involves other is-
sues upon which the Service will rule and
it is impossible to determine the tax con-
sequences of the larger transaction with-
out making a determination with regard to
the exchange of stock. However, in such
event, the Service will rule on the tax con-
sequences of the larger transaction, pro-
vided the taxpayer or the taxpayer’s rep-
resentative (as the Service deems
appropriate) states to the best of knowl-
edge and belief that the exchange will (or
will not) qualify under § 351. If the Ser-
vice issues a ruling on the larger transac-
tion, the ruling will state that no opinion
is expressed as to whether or not the ex-
change qualifies under § 351.
SUBISSUES: Additionally, the Ser-
vice will have the discretion to rule on
significant subissues that must be re-
solved to determine whether a transaction
that is in this no-rule area qualifies under
§ 351. However, the Service will only
rule on these subissues if in the view of
the Service they are significant and not
clearly and adequately addressed by a
statute, regulation, decision of the
Supreme Court, tax treaty, revenue ruling,
revenue procedure, notice, or other au-
thority published in the Internal Revenue
Bulletin.
To obtain a ruling on a subissue, the
taxpayer must explain the significance of
the subissue, set forth the authorities most
closely related to the subissue, and ex-
plain why the subissue is not resolved by
the authorities. The Service will require
the taxpayer or the taxpayer’s representa-
tive (as the Service deems appropriate) to
state to the best of knowledge and belief
that the transaction will (or will not) qual-
ify under § 351 if the Service rules as the
taxpayer proposes on the subissue.
Ataxpayer may seek a presubmission
conference to determine whether a ruling
on the subissue can be obtained under this
section. Seesection 11.07 of Rev. Proc.
97–1. If the Service issues a ruling on a
subissue, the ruling will state that no
opinion is expressed as to whether the
transaction in question qualifies under
§ 351.
COLLATERALISSUES: Although
the Service will not rule on the conse-
quences of qualification of an exchange
of stock for stock in the formation of a
holding company under § 351 if the con-
sequences are adequately addressed by a
statute, regulation, decision of the
Supreme Court, tax treaty, revenue ruling,
revenue procedure, notice, or other au-
January 5, 19981021998–1 I.R.B.

1998–1 I.R.B.103January 5, 1998
thority published in the Internal Revenue
Bulletin, it will rule where the conse-
quences of qualification are not ade-
quately addressed by these authorities. To
obtain a ruling on a collateral issue, the
taxpayer or the taxpayer’s representative
(as the Service deems appropriate) must
state to the best of knowledge and belief
that the exchange qualifies under § 351,
set forth the authorities most closely re-
lated to the collateral issue, and explain
why the collateral issue is not resolved by
these authorities. If the Service issues a
ruling on a collateral issue, the ruling will
state that no opinion is expressed as to
whether the exchange in question quali-
fies under § 351.
The Service will also continue to rule
on issues that arise in connection with an
exchange of stock for stock in the forma-
tion of a holding company but do not de-
pend upon or affect qualification under
§ 351.
(23) Section 368.—Definitions Relat-
ing to Corporate Reorganizations.—The
tax consequences under § 368 or other
provisions of the Code with respect to a
transaction in which one corporation
owns stock in a second corporation, the
first corporation is not an “80-percent dis-
tributee” of the second corporation under
§ 337(c), and the two corporations are
combined.
(24) Section 368(a)(1)(A).—Defini-
tions Relating to Corporate Reorganiza-
tions.—Whether a transaction constitutes
a corporate reorganization within the
meaning of § 368(a)(1)(A), including a
transaction that qualifies under § 368(a)-
(1)(A) by reason of § 368(a)(2)(D) or
§ 368(a)(2)(E), and whether the taxpayer
is subject to the consequences of qualifi-
cation under that section (such as non-
recognition and basis consequences) that
are adequately addressed by a statute, reg-
ulation, decision of the Supreme Court,
tax treaty, revenue ruling, revenue proce-
dure, notice, or other authority published
in the Internal Revenue Bulletin.
For purposes of this provision, if a
transaction qualifies under both § 368(a)-
(1)(A) and another corporate restructuring
provision and the other provision is not
covered by this revenue procedure, the
Service will treat any request for a qualifi-
cation ruling under the other provision as
a request for a qualification ruling under
§ 368(a)(1)(A). Ataxpayer or the tax-
payer’s representative (as the Service
deems appropriate) seeking a qualifica-
tion ruling under any such other provision
must, accordingly, state to the best of
knowledge and belief that the transaction
does not qualify under § 368(a)(1)(A).
The Service will continue to rule on trans-
actions that qualify under § 368(a)(1)(G),
even if they are also defined in
§ 368(a)(1)(A).
The Service will not rule on the qualifi-
cation of a reorganization under § 368(a)-
(1)(A), even if it is an integral part of a
larger transaction that involves other is-
sues upon which the Service will rule and
it is impossible to determine the tax con-
sequences of the larger transaction with-
out determining the tax consequences of
the reorganization. However, in such
event, the Service will rule on the tax con-
sequences of the larger transaction, pro-
vided the taxpayer or the taxpayer’s repre-
sentative (as the Service deems
appropriate) states to the best of knowl-
edge and belief that the reorganization will
(or will not) qualify under § 368(a)1)(A).
If the Service issues a ruling on the larger
transaction, the ruling will state that no
opinion is expressed as to whether or not
the reorganization qualifies under
§ 368(a)(1)(A). For example, the Service
will not rule on whether a transaction con-
stitutes a corporate reorganization within
the meaning of § 368(a)(1)(A), even if the
larger transaction also involves the issue of
whether a prior distribution of stock in a
subsidiary containing assets unwanted by
the acquiring corporation qualifies under
§ 355. SeeRev. Rul. 78–251, 1978–1 C.B.
89. However, in such event, if the taxpayer
or the taxpayer’s representative (as the Ser-
vice deems appropriate) states to the best
of knowledge and belief that the merger
qualifies under § 368(a)(1)(A), the Service
will rule as to whether the prior stock dis-
tribution qualifies under § 355. Such rul-
ing will state that no opinion is expressed
as to whether or not the reorganization
qualifies under § 368(a)(1)(A).
SUBISSUES: Additionally, the Ser-
vice will have the discretion to rule on
significant subissues that must be re-
solved to determine whether the transac-
tion qualifies under § 368(a)(1)(A) (in-
cluding transactions qualifying by reason
of § 368(a)(2)(D) or § 368(a)(2)(E)).
However, the Service will only rule on
such subissues if in the view of the Ser-
vice they are significant and not clearly
and adequately addressed by a statute,
regulation, decision of the Supreme
Court, tax treaty, revenue ruling, revenue
procedure, notice, or other authority pub-
lished in the Internal Revenue Bulletin.
To obtain a ruling on such a subissue, the
taxpayer must explain the significance of
the subissue, set forth the authorities most
closely related to the subissue, and ex-
plain why the subissue is not resolved by
these authorities. The taxpayer or the tax-
payer’s representative (as the Service
deems appropriate) will also be required
to state to the best of knowledge and be-
lief that the transaction will (or will not)
qualify under § 368(a)(1)(A), if the Ser-
vice rules as the taxpayer proposes on the
subissue.
Ataxpayer may seek a presubmission
conference to determine whether a ruling
on the subissue can be obtained under this
section. Seesection 11.07, Rev. Proc. 97–
1. If the Service issues a ruling on a
subissue, the ruling will state that no
opinion is expressed as to whether the
transaction in question qualifies under
§ 368(a)(1)(A).
COLLATERALISSUES: Although
the Service will not rule on the conse-
quences of qualification as a reorganiza-
tion under § 368(a)(1)(A) if the conse-
quences are adequately addressed by a
statute, regulation, decision of the
Supreme Court, tax treaty, revenue ruling,
revenue procedure, notice, or other au-
thority published in the Internal Revenue
Bulletin, it will rule where the conse-
quences of qualification are not ade-
quately addressed by these authorities.
For example, the Service will issue a
§ 381(c)(4) ruling in connection with a
§ 368(a)(1)(A) reorganization. To obtain
a ruling on a collateral issue, the taxpayer
or the taxpayer’s representative (as the
Service deems appropriate) must state to
the best of knowledge and belief that the
transaction qualifies under § 368(a)-
(1)(A), set forth the authorities most
closely related to the collateral issue, and
explain why the collateral issue is not re-
solved by these authorities. If the Service
issues a ruling on a collateral issue, the
ruling will state that no opinion is ex-
pressed as to whether the transaction in
question qualifies under § 368(a)(1)(A).
The Service will also continue to rule
on issues that arise in connection with a

transaction under § 368(a)(1)(A) but do
not depend upon or affect qualification
under § 368(a)(1)(A).
(25) Section 368(a)(1)(B).—Defini-
tions Relating to Corporate Reorganiza-
tions.—Whether the acquisition of stock
in the formation of a holding company
constitutes a corporate reorganization
within the meaning of § 368(a)(1)(B), and
whether the taxpayer is subject to the con-
sequence of qualification under that sec-
tion (such as nonrecognition and basis
consequences) that are adequately ad-
dressed by a statute, regulation, decision
of the Supreme Court, tax treaty, revenue
ruling, revenue procedure, notice, or other
authority published in the Internal Rev-
enue Bulletin. Acquisitions of stock that
do not involve the formation of a holding
company are not subject to this provision.
For purposes of this provision, if such
an acquisition of stock qualifies under
both § 368(a)(1)(B) and another corporate
restructuring provision, and the other pro-
vision is not covered by this revenue pro-
cedure, the Service will treat any request
for a qualification ruling under the other
provision as a request for a qualification
ruling under § 368(a)(1)(B). Ataxpayer
or the taxpayer’s representative (as the
Service deems appropriate) seeking a
qualification ruling for such an acquisi-
tion under any such other provision must,
accordingly, state to the best of knowl-
edge and belief that the acquisition does
not qualify under § 368(a)(1)(B).
The Service will not rule on the qualifi-
cation of an acquisition of stock under
§ 368(a)(1)(B), even if it is an integral
part of a larger transaction that involves
other issues upon which the Service will
rule and it is impossible to determine the
tax consequences of the larger transaction
without determining the tax consequences
of the acquisition. However, in such
event, the Service will rule on the tax con-
sequences of the larger transaction, pro-
vided the taxpayer or the taxpayer’s rep-
resentative (as the Service deems
appropriate) states to the best of knowl-
edge and belief that the acquisition will
(or will not) qualify under § 368(a)(1)(B).
If the Service issues a ruling on the larger
transaction, the ruling will state that no
opinion is expressed as to whether or not
the acquisition qualifies under § 368(a)-
(1)(B).
SUBISSUES: Additionally, the Ser-
vice will have the discretion to rule on
significant subissues that must be re-
solved to determine whether a transaction
that is in this no-rule area qualifies under
§ 368(a)(1)(B). However, the Service
will only rule on these subissues if in the
view of the Service they are significant
and not clearly and adequately addressed
by a statute, regulation, decision of the
Supreme Court, tax treaty, revenue ruling,
revenue procedure, notice, or other au-
thority published in the Internal Revenue
Bulletin. To obtain a ruling on a subissue,
the taxpayer must explain the significance
of the subissue, set forth the authorities
most closely related to the subissue, and
explain why the subissue is not resolved
by these authorities. The Service will re-
quire the taxpayer or the taxpayer’s repre-
sentative (as the Service deems appropri-
ate) to state to the best of knowledge and
belief that the acquisition will (or will
not) qualify under § 368(a)(1)(B), if the
Service rules as the taxpayer proposes on
the subissue.
Ataxpayer may seek a presubmission
conference to determine whether a ruling
on the subissue can be obtained under this
section. Seesection 11.07, Rev. Proc. 97–
1. If the Service issues a ruling on a
subissue, the ruling will state that no
opinion is expressed on whether the ac-
quisition in question qualifies under
§ 368(a)(1)(B).
COLLATERALISSUES: Although
the Service will not rule on the conse-
quences of qualification of an acquisition
of stock in the formation of a holding
company under § 368(a)(1)(B) if the con-
sequences are adequately addressed by a
statute, regulation, decision of the
Supreme Court, tax treaty, revenue ruling,
revenue procedure, notice, or other au-
thority published in the Internal Revenue
Bulletin, it will rule where the conse-
quences of qualification are not ade-
quately addressed by these authorities. To
obtain a ruling on a collateral issue, the
taxpayer or the taxpayer’s representative
(as the Service deems appropriate) must
state to the best of knowledge and belief
that the acquisition qualifies under
§ 368(a)(1)(B), set forth the authorities
most closely related to the collateral
issue, and explain why the collateral issue
is not resolved by these authorities. If the
Service issues a ruling on a collateral
issue, the ruling will state that no opinion
is expressed as to whether the acquisition
in question qualifies under § 368(a)(1)(B).
The Service will also continue to rule
on issues that arise in connection with an
acquisition of stock in the formation of a
holding company but do not depend upon
or affect qualification under § 368(a)-
(1)(B).
(26) Section 368(a)(1)(B).—Defini-
tions Relating to Corporate Reorganiza-
tions.—The acceptability of an estimation
procedure or the acceptability of a spe-
cific sampling procedure to determine the
basis of stock acquired by an acquiring
corporation in a reorganization described
in § 368(a)(1)(B).
(27) Section 368(a)(1)(E).—Defini-
tions Relating to Corporate Reorganiza-
tions.—Whether a transaction constitutes
a corporate recapitalization within the
meaning of § 368(a)(1)(E) (or a transac-
tion that also qualifies under § 1036)
when either (i) the transaction involves a
closely held corporation or (ii) the issues
involved are substantially similar to those
described in the following revenue rul-
ings:
Rev. Rul. 82–34, 1982–1 C.B. 59 (con-
tinuity of business enterprise);
Rev. Rul. 77–479, 1977–2 C.B. 119
(continuity of shareholder interest);
Rev. Rul. 77–238, 1977–2 C.B. 115
(conversion of shares of one class of stock
into shares of another class, as permitted
by certificate of incorporation);
Rev. Rul. 74–269, 1974–1 C.B. 87
(major shareholder’s exchange of com-
mon stock for preferred stock);
Rev. Rul. 56–654, 1956–2 C.B. 216
(corporate charter amended to provide
preferred stock with increased redemption
and liquidation value, where common and
preferred stock held pro rata);
Rev. Rul. 55–112, 1955–1 C.B. 344
(common stock exchanged for preferred
stock); and
Rev. Rul. 54–482, 1954–2 C.B. 148
(old common stock exchanged for new
common stock).
The above no-ruling area does not
apply, however, to any corporate recapi-
talization that is an integral part of a
larger transaction, if it is impossible to de-
termine the tax consequences of the larger
transaction without making a determina-
tion with regard to the recapitalization.
(28) Section 368(a)(1)(F).—Defini-
tions Relating to Corporate Reorganiza-
January 5, 19981041998–1 I.R.B.

1998–1 I.R.B.105January 5, 1998
tions.—Whether a transaction constitutes
a reorganization within the meaning of
§ 368(a)(1)(F), and whether the taxpayer
is subject to the consequences of qualifi-
cation under that section (such as non-
recognition and basis consequences) that
are adequately addressed by a statute, reg-
ulation, decision of the Supreme Court,
tax treaty, revenue ruling, revenue proce-
dure, notice, or other authority published
in the Internal Revenue Bulletin.
For purposes of this provision, if a
transaction qualifies under both § 368(a)-
(1)(F) and another corporate restructuring
provision, and the other provision is not
covered by this revenue procedure, the
Service will treat any request for a qualifi-
cation ruling under the other provision as
a request for a qualification ruling under
§ 368(a)(1)(F). Ataxpayer or the tax-
payer’s representative (as the Service
deems appropriate) seeking a qualifica-
tion ruling under any such other provision
must, accordingly, state to the best of
knowledge and belief that the transaction
does not qualify under § 368(a)(1)(F).
The Service will not rule on the qualifi-
cation of a reorganization under § 368(a)-
(1)(F), even if it is an integral part of a
larger transaction that involves other is-
sues upon which the Service will rule and
it is impossible to determine the tax con-
sequences of the larger transaction with-
out determining the tax consequences of
the reorganization. However, in such
event, the Service will rule on the tax con-
sequences of the larger transaction, pro-
vided the taxpayer or the taxpayer’s rep-
resentative (as the Service deems
appropriate) states to the best of knowl-
edge and belief that the reorganization
will (or will not) qualify under § 368(a)-
(1)(F). If the Service issues a ruling on
the larger transaction, the ruling will state
that no opinion is expressed as to whether
or not the reorganization qualifies under
§ 368(a)(1)(F).
SUBISSUES: Additionally, the Ser-
vice will have the discretion to rule on
significant subissues that must be re-
solved to determine whether a transaction
that is in this no-rule area qualifies under
§ 368(a)(1)(F). However, the Service will
only rule on such subissues if in the view
of the Service they are significant and not
clearly and adequately addressed by a
statute, regulation, decision of the
Supreme Court, tax treaty, revenue ruling,
revenue procedure, notice, or other au-
thority published in the Internal Revenue
Bulletin. To obtain a ruling on such a
subissue, the taxpayer must explain the
significance of the subissue, set forth the
authorities most closely related to the
subissue, and explain why the subissue is
not resolved by these authorities. The
Service will require the taxpayer or the
taxpayer’s representative (as the Service
deems appropriate) to state to the best of
knowledge and belief that the transaction
will (or will not) qualify under § 368(a)-
(1)(F), if the Service rules as the taxpayer
proposes on the subissue.
Ataxpayer may seek a presubmission
conference to determine whether a ruling
on the subissue can be obtained under this
section. Seesection 11.07, Rev. Proc. 97–
1. If the Service issues a ruling on a subis-
sue, the ruling will state that no opinion is
expressed on whether the transaction in
question qualifies under § 368(a)(1)(F).
COLLATERALISSUES: Although
the Service will not rule on the conse-
quences of qualification as a reorganiza-
tion under § 368(a)(1)(F) if the conse-
quences are adequately addressed by a
statute, regulation, decision of the
Supreme Court, tax treaty, revenue ruling,
revenue procedure, notice, or other au-
thority published in the Internal Revenue
Bulletin, it will rule where the conse-
quences of qualification are not ade-
quately addressed by these authorities. To
obtain a ruling on a collateral issue, the
taxpayer or the taxpayer’s representative
(as the Service deems appropriate) must
state to the best of knowledge and belief
that the transaction qualifies under
§ 368(a)(1)(F), set forth the authorities
most closely related to the collateral issue
and explain why the collateral issue is not
resolved by these authorities. If the Ser-
vice issues a ruling on a collateral issue,
the ruling will state that no opinion is ex-
pressed as to whether the transaction in
question qualifies under § 368(a)(1)(F).
The Service will also continue to rule
on issues that arise in connection with a
transaction under § 368(a)(1)(F) but do
not depend upon or affect qualification
under § 368(a)(1)(F).
(29) Section 425.—Substitution or As-
sumption of Incentive Stock Options.—
Whether the substitution of a new Incen-
tive Stock Option (“ISO”) for an old ISO,
or the assumption of an old ISO, by an
employer by reason of a corporate trans-
action constitutes a modification which
results in the issuance of a new option by
reason of failing to satisfy the spread test
requirement of § 425(a)(1) or the ratio test
requirement of § 1.425–1(a)(4). The Ser-
vice will continue to rule on the issue of
whether the new ISO or the assumption of
the old ISO gives the employee additional
benefits not present under the old option
within the meaning of § 425(a)(2).
(30) Section 451.—General Rule for
Taxable Year of Inclusion.—The tax con-
sequences of a non-qualified unfunded
deferred-compensation arrangement with
respect to a controlling shareholder-
employee eligible to participate in the
arrangement.
(31) Section 451.—General Rule for
Taxable Year of Inclusion.—The tax con-
sequences of unfunded deferred-compen-
sation arrangements where the arrange-
ments fail to meet the requirements of
Rev. Proc. 92–65, 1992–2 C.B. 428, and
Rev. Proc. 71–19, 1971–1 C.B. 698.
(32) Sections 451 and 457.—General
Rule for Taxable Year of Inclusion; De-
ferred Compensation Plans of State and
Local Governments and Tax-Exempt Or-
ganizations.—The tax consequences to
unidentified independent contractors in
nonqualified unfunded deferred-compen-
sation plans. This applies to plans estab-
lished under § 451 by employers in the
private sector and to plans of state and
local governments and tax-exempt orga-
nizations under § 457. However, a ruling
with respect to a specific independent
contractor’s participation in such a plan
may be issued.
(33) Section 641.—Imposition of
Tax.—Whether the period of administra-
tion or settlement of an estate or a trust
(other than a trust described in § 664) is
reasonable or unduly prolonged.
(34) Section 642(c).—Deduction for
Amounts Paid or Permanently Set Aside
for a Charitable Purpose.—Allowance of
an unlimited deduction for amounts set
aside by a trust or estate for charitable
purposes when there is a possibility that
the corpus of the trust or estate may be in-
vaded.
(35) Section 664.—Charitable Remain-
der Trusts.—Whether the settlement of a
charitable remainder trust upon the termi-
nation of the noncharitable interest is
made within a reasonable period of time.

(36) Section 704(e).—Family Part-
nerships.—Matters relating to the valid-
ity of a family partnership when capital
is not a material income producing fac-
tor.
(37) Section 856.—Definition of Real
Estate Investment Trust.—Whether a cor-
poration whose stock is “paired” with or
“stapled” to stock of another corporation
will qualify as a real estate investment
trust under § 856, if the activities of the
corporations are integrated.
(38) Section 1034 (prior to TRA
1997).—See section 3.01(6), above.
(39) Section 1221.—Capital Asset De-
fined.—Whether specialty stock allocated
to an investment account by a registered
specialist on a national securities ex-
change is a capital asset.
(40) Section 1551.—Disallowance of
the Benefits of the Graduated Corporate
Rates and Accumulated Earnings Credit.—
Whether a transfer is within § 1551.
(41) Section 2031.—Definition of
Gross Estate.—Actuarial factors for valu-
ing interests in the prospective gross es-
tate of a living person.
(42) Section 2512.—Valuation of
Gifts.—Actuarial factors for valuing
prospective or hypothetical gifts of a
donor.
(43) Sections 3121, 3306, and 3401.—
Definitions.—For purposes of determin-
ing prospective employment status,
whether an individual will be an em-
ployee or an independent contractor. A
ruling with regard to prior employment
status may be issued.
(44) Section 4980B.—Failure to Sat-
isfy Continuation Coverage Requirements
of Group Health Plans.—Whether an ac-
tion is “gross misconduct” within the
meaning of § 4980B(f)(3)(B). (Seesec-
tion 3.05 of Rev. Proc. 87–28, 1987–1
C.B. 770, 771.)
(45) Section 7701.—Definitions.—The
classification of an instrument that has
certain voting and liquidations rights in an
issuing corporation but whose dividend
rights are determined by reference to the
earnings of a segregated portion of the is-
suing corporation’s assets, including as-
sets held by a subsidiary.
.02 General Areas.
(1) The results of transactions that lack
a bona fide business purpose or have as
their principal purpose the reduction of
federal taxes.
(2) Amatter upon which a court deci-
sion adverse to the Government has been
handed down and the question of follow-
ing the decision or litigating further has
not yet been resolved.
(3) Amatter involving alternate plans
of proposed transactions or involving hy-
pothetical situations.
(4) Amatter involving the federal tax
consequences of any proposed federal,
state, local or municipal legislation. The
Service may provide general information
in response to an inquiry.
(5) Whether under Subtitle F (Proce-
dure and Administration) reasonable
cause, due diligence, good faith, clear and
convincing evidence, or other similar
terms that require a factual determination
exist.
(6) Whether a proposed transaction
would subject the taxpayer to a criminal
penalty.
(7) Arequest that does not comply with
the provisions of Rev. Proc. 98–1.
(8) Whether, under the common law
rules applicable in determining the em-
ployer-employee relationship, a profes-
sional staffing corporation (loan-out cor-
poration) or the subscriber is the
employer of individuals, if:
(i) the loan-out corporation hires em-
ployees of the subscriber and assigns the
employees back to the subscriber, or
(ii) the loan-out corporation assigns in-
dividuals to subscribers for more than a
temporary period (1 year or longer).
SECTION 4. AREAS IN WHICH
RULINGS OR DETERMINATION
LETTERS WILLNOTORDINARILY
BE ISSUED
.01 Specific questions and problems.
(1) Sections 38, 39, 46, and 48.—
General Business Credit; Carryback and
Carryforward of Unused Credits;
Amount of Credit; Energy Credit; Re-
forestation Credit.—Application of
these sections where the formal owner-
ship of property is in a party other than
the taxpayer, except when title is held
merely as security.
(2) Section 61.—Gross Income De-
fined.—Determination as to who is the
true owner of property in cases involving
the sale of securities, or participation in-
terests therein, where the purchaser has
the contractual right to cause the securi-
ties, or participation interests therein, to
be purchased by either the seller or a third
party.
(3) Sections 61 and 163.—Gross In-
come Defined; Interest.—Determinations
as to who is the true owner of property or
the true borrower of money in cases in
which the formal ownership of the prop-
erty, or the liability for the indebtedness,
is in another party.
(4) Section 103.—Interest on State and
Local Bonds.—Whether the interest on
state or local bonds will be excludible
from gross income under § 103(a), if the
proceeds of issues of bonds (other than
advance refunding issues) are placed in
escrow or otherwise not expended for a
governmental purpose for an extended pe-
riod of time even though the proceeds are
invested at a yield that will not exceed the
yield on the state or local bonds prior to
their expenditure.
(5) Section 103.—Interest on State
and Local Bonds.—Whether a state or
local governmental obligation that does
not meet the criteria of section 5 of Rev.
Proc. 89–5, 1989–1 C.B. 774, is an “ar-
bitrage bond” within the meaning of for-
mer § 103(c)(2) solely by reason of the
investment of the bond proceeds in
acquired nonpurpose obligations at a
materially higher yield more than 3
years after issuance of the bonds or 5
years after issuance of the bonds in the
case of construction issues described in
former § 1.103–13(a)(2)(ii)(E).
(6) Sections 104(a)(2) and 3121.—
Compensation for Injuries or Sickness;
Definitions.—Whether an allocation of
the amount of a settlement award (includ-
ing a lump sum award) between back pay,
compensatory damages, punitive dam-
ages, etc. is a proper allocation for federal
tax purposes.
(7) Section 141.—Private Activity
Bond; Qualified Bond.—With respect to
requests made pursuant to Rev. Proc. 88–
33, 1988–1 C.B. 835, whether state or
local bonds will meet the “private busi-
ness use test” and the “private security or
payment test” under § 141(b)(1) and (2)
in situations in which the proceeds are
used to finance certain output facilities
and, pursuant to a contract to take, or take
or pay for, a nongovernmental person pur-
chases 30 percent or more of the actual
output of the facility but 10 percent or less
of the subparagraph (5) output of the fa-
cility as defined in § 1.103–7(b)(5)(ii)(b)
January 5, 19981061998–1 I.R.B.

1998–1 I.R.B.107January 5, 1998
(issued under former § 103(b)). In similar
situations, the Service will not ordinarily
issue rulings or determination letters con-
cerning questions arising under para-
graphs (3), (4), and (5) of § 141(b).
(8) Sections 142 and 144.—Exempt
Facility Bond; Qualified Small Issue
Bond.—Whether an issue of private ac-
tivity bonds meets the requirements of
§ 142 or § 144(a), if the sum of—
(i) the portion of the proceeds used to
finance a facility in which an owner (or
a related person) or a lessee (or a re-
lated person) is a user of the facility
both after the bonds are issued and at
any time before the bonds were issued,
and
(ii) the portion used to pay issuance
costs and non-qualified costs, equals
more than 5 percent of the net pro-
ceeds, as defined in § 150(a)(3).
(9) Section 148.—Arbitrage.—
Whether amounts received as proceeds
from the sale of municipal bond financed
property and pledged to the payment of
debt service or pledged as collateral for
the municipal bond issue are sinking
fund proceeds within the meaning of for-
mer § 1.103–13(g) (issued under former
§ 103(c)) or replaced proceeds described
in § 148(a)(2) (or former § 103(c)-
(2)(B)).
(10) Section 162.—Trade or Business
Expenses.—Whether the requisite risk
shifting and risk distribution necessary to
constitute insurance are present for pur-
poses of determining the deductibility
under § 162 of amounts paid (premiums)
by a taxpayer for insurance, unless the
facts of the transaction are within the
scope of Rev. Rul. 78–338, 1978–2 C.B.
107, or Rev. Rul. 77–316, 1977–2 C.B. 53.
(11) Sections 162 and 262.—Trade or
Business Expenses; Personal, Living, and
Family Expenses.—Whether expenses
are nondeductible commuting expenses,
except for situations governed by Rev.
Rul. 90–23, 1990–1 C.B. 28.
(12) Section 163.—See section 4.01(3),
above.
(13) Section 167.—Depreciation.
(i) Useful lives of assets.
(ii) Depreciation rates.
(iii) Salvage value of assets.
(14) Sections 167 and 168.—Deprecia-
tion; Accelerated Cost Recovery Sys-
tem.—Application of those sections
where the formal ownership of property is
in a party other than the taxpayer except
when title is held merely as security.
(15) Section 170.—Charitable, Etc.,
Contributions and Gifts.—Whether a
transfer to a pooled income fund de-
scribed in § 642(c)(5) qualifies for a char-
itable contribution deduction under §
170(f)(2)(A).
(16) Section 170(c).—Charitable, Etc.,
Contributions and Gifts.—Whether a tax-
payer who transfers property to a charita-
ble organization and thereafter leases
back all or a portion of the transferred
property may deduct the fair market value
of the property transferred and leased
back as a charitable contribution.
(17) Section 170.—Charitable, Etc.,
Contributions and Gifts.—Whether a
transfer to a charitable remainder trust de-
scribed in § 664 that provides for annuity
or unitrust payments for one or two mea-
suring lives qualifies for a charitable de-
duction under § 170(f)(2)(A).
(18) Section 216.—Deduction of
Taxes, Interest, and Business Deprecia-
tion by Cooperative Housing Corporation
Tenant-Stockholder.—If a cooperative
housing corporation (CHC), as defined in
§ 216(b)(1), transfers an interest in real
property to a corporation (not a CHC) in
exchange for stock or securities of the
transferee corporation, which engages in
commercial activity with respect to the
real property interest transferred, whether
(i) the income of the transferee corpora-
tion derived from the commercial activity,
and (ii) any cash or property (attributable
to the real property interest transferred)
distributed by the transferee corporation
to the CHC will be considered as gross in-
come of the CHC for the purpose of deter-
mining whether 80 percent or more of the
gross income of the CHC is derived from
tenant-stockholders within the meaning of
§ 216(b)(1)(D).
(19) Section 262.—See section
4.01(11), above.
(20) Section 265(a)(2).—Expenses and
Interest Relating to Tax-Exempt In-
come.—Whether indebtedness is incurred
or continued to purchase or carry obliga-
tions the interest on which is wholly ex-
empt from the taxes imposed by subtitle
A.
(21) Section 302.—Distributions in Re-
demption of Stock.—The tax effect of the
redemption of stock for notes, when the
payments on the notes are to be made
over a period in excess of 15 years from
the date of issuance of such notes.
(22) Section 302(b)(4) and (e).—Re-
demption from Noncorporate Shareholder
in Partial Liquidation; Partial Liquidation
Defined.—Whether a distribution will
qualify as a distribution in partial liquida-
tion under § 302(b)(4) and (e)(1)(A), un-
less it results in a 20 percent or greater re-
duction in (i) gross revenue, (ii) net fair
market value of assets, and (iii) employ-
ees. (Partial liquidations that qualify as §
302(e)(2) business terminations are not
subject to this provision.)
(23) Sections 302(b)(4) and (e), 331,
332, and § 346(a).—Effects on Recipients
of Distributions in Corporate Liquida-
tions.—The tax effect of the liquidation of
a corporation preceded or followed by the
reincorporation of all or a part of the busi-
ness and assets when more than a nominal
amount of the stock (that is, more than 20
percent in value) of both the liquidating
corporation and the transferee corporation
is owned by the same shareholders; or
when a liquidation is followed by the sale
of the corporate assets by the shareholders
to another corporation in which such
shareholders own more than a nominal
amount of the stock (that is, more than 20
percent in value).
(24) Section 306.—Dispositions of
Certain Stock.—Whether the distribution
or disposition or redemption of “section
306 stock” in a closely held corporation is
in pursuance of a plan having as one of its
principal purposes the avoidance of fed-
eral income taxes within the meaning of
§ 306(b)(4).
(25) Sections 331 and 332.—See sec-
tion 4.01(23), above.
(26) Sections 331 and 346(a).—Gain or
Loss to Shareholders in Corporate Liqui-
dations.—The tax effect of the liquidation
of a corporation by a series of distribu-
tions, when the distributions in liquida-
tion are to be made over a period in ex-
cess of 3 years from the adoption of the
plan of liquidation.
(27) Section 341.—Collapsible Corpo-
rations.—Whether a corporation will be
considered to be a “collapsible corpora-
tion,” that is, whether it was “formed or
availed of” with the view of certain tax
consequences. However, ruling requests
will be considered on this matter when the
enterprise (i) has been in existence for at
least 20 years or has clearly demonstrated

that it has realized two-thirds of the taxable
income to be derived from the manufactur-
ing, constructing, producing, or purchasing
of property as stated in § 341(b)(1)(A) and
as described in Rev. Rul. 72–48, 1972–1
C.B. 102; (ii) has had an aggregate change
in the shareholders’interests of not more
than 10 percent during that period (except
for transfers among family members, as
defined in § 267(c)(4), or redemptions of
stock to pay death taxes pursuant to § 303);
and (iii) has conducted substantially the
same trade or business during that period.
The period referred to in (ii) and (iii) above
is the lesser of 20 years of corporate exis-
tence or the period in which the enterprise
has realized two-thirds of the taxable in-
come from activities specified in § 341(b)-
(1)(A).
(28) Section 346(a).—See section
4.01(23), above.
(29) Section 346(a).—See section
4.01(26), above.
(30) Section 351.—Transfer to Corpo-
ration Controlled by Transferor.—The tax
effect of the transfer when part of the con-
sideration received by the transferors con-
sists of an instrument that is a bond,
debenture, or any other evidence of in-
debtedness of the transferee and a deter-
mination as to whether the “indebtedness”
is properly classified as debt or equity is
required in order to establish that the re-
quirements of § 351 are met.
(31) Section 351.—Transfer to Corpo-
ration Controlled by Transferor.—
Whether § 351 applies to the transfer of
an interest in real property by a coopera-
tive housing corporation (as described in
§ 216(b)(1)) to a corporation in exchange
for stock or securities of the transferee
corporation, if the transferee engages in
commercial activity with respect to the
real property interest transferred.
(32) Section 355.—Distribution of
Stock and Securities of a Controlled Cor-
poration.—Whether the active business
requirement of § 355(b) is met when,
within the 5-year period described in §
355(b)(2)(B), a distributing corporation
acquired control of a controlled corpora-
tion as a result of the distributing corpora-
tion transferring cash or other liquid or in-
active assets to the controlled corporation
in a transaction in which gain or loss was
not recognized as a result of the transfer
meeting the requirements of § 351(a) or
§ 368(a)(1)(D).
(33) Section 355.—Distribution of
Stock and Securities of a Controlled Cor-
poration.—Whether a distribution of
stock or securities is described in §
355(a)(1) when the gross assets of the
trades or businesses relied on to satisfy
the active trade or business requirement
of § 355(b) will have a fair market value
that is less than 5 percent of the total fair
market value of the gross assets of the
corporation directly conducting the trades
or businesses. The Service may rule that
the trades or businesses satisfy the active
trade or business requirement of § 355(b)
if it can establish that, based on all the rel-
evant facts and circumstances, the trades
or businesses are not de minimiscom-
pared with the other assets or activities of
the corporation and its subsidiaries.
(34) Section 441(i).—Taxable Year of
Personal Service Corporations.—
Whether the principal activity of the tax-
payer during the testing period for the tax-
able year is the performance of personal
services within the meaning of § 1.441-
4T(d)(1)(ii).
(35) Section 448(d)(2)(A).—Limita-
tion on Use of Cash Method of Account-
ing; Qualified Personal Service Corpora-
tion.—Whether 95 percent or more of the
time spent by employees of the corpora-
tion, serving in their capacity as such, is
devoted to the performance of services
within the meaning of § 1.448–
1T(e)(4)(i).
(36) Section 451.—General Rule for
Taxable Year of Inclusion.—The tax con-
sequences of a nonqualified deferred
compensation arrangement using a
grantor trust where the trust fails to meet
the requirements of Rev. Proc. 92–64,
1992–2 C.B. 422.
(37) Section 584.—Common Trust
Funds.—Whether a common trust fund
plan meets the requirements of § 584.
(For § 584 plan drafting guidance, see
Rev. Proc. 92–51, 1992–1 C.B. 988.)
(38) Section 642.—Special Rules for
Credits and Deductions; Pooled Income
Fund.—Whether a pooled income fund
satisfies the requirements described in
§ 642(c)(5).
(39) Section 664.—Charitable Remain-
der Trusts.—Whether a charitable re-
mainder trust that provides for annuity or
unitrust payments for one or two measur-
ing lives satisfies the requirements de-
scribed in § 664.
(40) Sections 671 to 679.—Grantors
and Others Treated as Substantial Own-
ers.—In a nonqualified, unfunded de-
ferred compensation arrangement de-
scribed in Rev. Proc. 92–64, the tax
consequences of the use of a trust, other
than the model trust described in that rev-
enue procedure.
(41) Section 816.—Life Insurance
Company Defined.—Whether the requi-
site risk shifting and risk distribution nec-
essary to constitute insurance are present
for purposes of determining if a company
is an “insurance company” under § 1.801–
3(a), unless the facts of the transaction are
within the scope of Rev. Rul. 78–338,
1978–2 C.B. 107, or Rev. Rul. 77–316,
1977–2 C.B. 53.
(42) Section 1502.—Regulations.—
Whether a parent cooperative housing cor-
poration (as defined in § 216(b)(1)) will be
permitted to file a consolidated income tax
return with its transferee subsidiary, if the
transferee engages in commercial activity
with respect to the real property interest
transferred to it by the parent.
(43) Section 2055.—Transfers for Pub-
lic, Charitable, and Religious Uses.—
Whether a transfer to a pooled income
fund described in § 642(c)(5) qualifies for
a charitable deduction under § 2055(e)-
(2)(A).
(44) Section 2055.—Transfers for Pub-
lic, Charitable, and Religious Uses.—
Whether a transfer to a charitable remain-
der trust described in § 664 that provides
for annuity or unitrust payments for one or
two measuring lives qualifies for a charita-
ble deduction under § 2055(e)(2)(A).
(45) Section 2522.—Charitable and
Similar Gifts.—Whether a transfer to a
pooled income fund described in
§ 642(c)(5) qualifies for a charitable de-
duction under § 2522(c)(2)(A).
(46) Section 2522.—Charitable and
Similar Gifts.—Whether a transfer to a
charitable remainder trust described in
§ 664 that provides for annuity or unitrust
payments for one or two measuring lives
qualifies for a charitable deduction under
§ 2522(c)(2)(A).
(47) Section 3121.—See section
4.01(6), above.
.02 General areas.
(1) Any matter in which the determina-
tion requested is primarily one of fact,
e.g., market value of property, or whether
an interest in a corporation is to be treated
as stock or indebtedness.
January 5, 19981081998–1 I.R.B.

1998–1 I.R.B.109January 5, 1998
(2) Situations where the requested rul-
ing deals with only part of an integrated
transaction. Generally, a letter ruling will
not be issued on only part of an integrated
transaction. If, however, a part of a trans-
action falls under a no-rule area, a letter
ruling on other parts of the transaction
may be issued. Before preparing the letter
ruling request, a taxpayer should call the
Branch having jurisdiction for the matters
on which the taxpayer is seeking a letter
ruling to discuss whether a letter ruling
will be issued on part of the transaction.
(3) Situations where two or more items
or sub-methods of accounting are interre-
lated. If two or more items or sub-meth-
ods of accounting are interrelated, ordi-
narily a letter ruling will not be issued on
a change in accounting method involving
only one of the items or sub-methods.
(4) The tax effect of any transaction to
be consummated at some indefinite future
time.
(5) Any matter dealing with the ques-
tion of whether property is held primarily
for sale to customers in the ordinary
course of a trade or business.
(6) The tax effect of a transaction if any
part of the transaction is involved in liti-
gation among the parties affected by the
transaction, except for transactions in-
volving bankruptcy reorganizations.
(7)(a) Situations where the taxpayer or
a related party is domiciled or organized
in a foreign jurisdiction with which the
United States does not have an effective
mechanism for obtaining tax information
with respect to civil tax examinations and
criminal tax investigations, which would
preclude the Service from obtaining infor-
mation located in such jurisdiction that is
relevant to the analysis or examination of
the tax issues involved in the ruling re-
quest.
(b) The provisions of subsection (a)
above shall not apply if the taxpayer or af-
fected related party (i) consents to the dis-
closure of all relevant information re-
quested by the Service in processing the
ruling request or in the course of an exam-
ination in order to verify the accuracy of
the representations made and to otherwise
analyze or examine the tax issues in-
volved in the ruling request, and (ii)
waives all claims to protection of bank or
commercial secrecy laws in the foreign
jurisdiction with respect to the informa-
tion requested by the Service. In the
event the taxpayer’s or related party’s
consent to disclose relevant information
or to waive protection of bank or com-
mercial secrecy is determined by the Ser-
vice to be ineffective or of no force and
effect, then the Service may retroactively
rescind any ruling rendered in reliance on
such consent.
(8) Questions involving the validity of
the federal income tax and other taxes set
forth in the Code, questions on the author-
ity or jurisdiction of the Service to en-
force the Code or collect information, or
similar matters.
SECTION 5. AREAS UNDER
EXTENSIVE STUDYIN WHICH
RULINGS OR DETERMINATION
LETTERS WILLNOTBE ISSUED
UNTILTHE SERVICE RESOLVES
THE ISSUE THROUGH
PUBLICATION OFAREVENUE
RULING, REVENUE PROCEDURE,
REGULATIONS OR OTHERWISE
.01 Section 61.—Gross Income De-
fined.—Whether amounts voluntarily de-
ferred by a taxpayer under a deferred-
compensation plan maintained by an
organization described in § 501 (other
than a plan maintained by an eligible em-
ployer pursuant to the provisions of §
457) are currently includible in the tax-
payer’s gross income.
.02 Sections 61 and 162.—Gross In-
come Defined; Trade or Business Ex-
penses.—The tax consequences with re-
spect to a salary reduction arrangement
under which an employee receives and re-
turns salary amounts to the employer.
(Also §§ 3121, 3306, and 3401.)
.03 Section 79.—Group-Term Life In-
surance Purchased for Employees.—
Whether life insurance provided for em-
ployees under a “retired lives reserve”
plan will be considered group-term insur-
ance. (Also §§ 61, 72, 83, 101, 162, 264,
and 641.)
.04 Sections 83 and 451.—Property
Transferred in Connection with Perfor-
mance of Services; General Rule for Tax-
able Year of Inclusion.—When compen-
sation is realized by a person who, in
connection with the performance of ser-
vices, is granted a nonstatutory option
without a readily ascertainable fair market
value to purchase stock at a price that is
less than the fair market value of the stock
on the date the option is granted.
.05 Sections 101, 761, and 7701.—Def-
initions.—Whether, in connection with
the transfer of a life insurance policy to an
unincorporated organization, (i) the orga-
nization will be treated as a partnership
under §§ 761 and 7701, or (ii) the transfer
of the life insurance policy to the organi-
zation will be exempt from the transfer-
for-value rules of § 101, when substan-
tially all of the organization’s assets
consists or will consist of life insurance
policies on the lives of the members.
.06 Section 101.—Certain Death Bene-
fits.—Whether there has been a transfer
for value for purposes of § 101(a) in situa-
tions involving a grantor and a trust when
(i) substantially all of the trust corpus
consists or will consist of insurance poli-
cies on the life of the grantor or the
grantor’s spouse, (ii) the trustee or any
other person has a power to apply the
trust’s income or corpus to the payment of
premiums on policies of insurance on the
life of the grantor or the grantor’s spouse,
(iii) the trustee or any other person has a
power to use the trust’s assets to make
loans to the grantor’s estate or to purchase
assets from the grantor’s estate, and (iv)
there is a right or power in any person that
would cause the grantor to be treated as
the owner of all or a portion of the trust
under §§ 673 to 677.
.07 Section 105.—Amounts Received
Under Accident and Health Plans.—
Whether a medical reimbursement plan,
funded by employer contributions, con-
taining a provision allowing unused
amounts to be carried over and accumu-
lated in an employee’s account qualifies
as an accident and health plan under
§ 105.
.08 Section 107.—Rental value of par-
sonages.—Whether amounts distributed
to a retired minister from a pension or an-
nuity plan should be excludible from the
minister’s gross income as a parsonage al-
lowance under § 107.
.09 Section 115.—Income of states,
municipalities, etc.—The results of trans-
actions pursuant to a plan or arrangement
created by state statute a primary objec-
tive of which is to enable participants to
pay for the costs of a post-secondary edu-
cation for themselves or a designated ben-
eficiary, including: (i) whether the plan or
arrangement, itself, is an entity separate
from a state and, if so, how the plan or
arrangement is treated for federal tax pur-

poses; and (ii) whether any contract under
the plan or arrangement is a debt instru-
ment and, if so, how interest or original
issue discount attributable to the contract
is treated for federal tax purposes. (Also
§§ 61, 163, 1275, 2501, and 7701.)
.10 Section 162.—See section 5.02,
above.
.11 Section 162.—Trade or Business
Expenses.—Whether payments paid or
accrued by a corporation to an exempt or-
ganization as described in § 501(c)(7) or §
501(c)(20) are deductible under § 162.
.12 Section 213.—Medical, Dental,
etc., Expenses.—Whether amounts paid
for medical insurance (or other medical
care) extending substantially beyond the
close of the taxable year may be deducted
under § 213 in the year of payment, if the
conditions of § 213(d)(7) are not satisfied.
.13 Section 302(b)(4) and (e).—Re-
demption from Noncorporate Shareholder
in Partial Liquidation; Partial Liquidation
Defined.—Whether a deemed surrender
of stock as described in Rev. Rul. 90–13,
1990–1 C.B. 65, satisfies the require-
ments for a redemption, when:
(i) The corporation has outstanding
more than one class of stock and there are
priorities as to dividend or liquidating dis-
tributions or any other differences in
stock rights, or
(ii) Either under the terms of the stock
or as established contractually, there are
outstanding any rights affecting the cor-
poration’s stock, such as, but not limited
to, warrants, options, convertible securi-
ties, shareholder agreements, or rights of
first refusal.
.14 Section 306(b)(4).—Transactions
Not in Avoidance.—Whether § 306(b)(4)
applies to the distribution and disposition
or redemption of “section 306 stock” that
is subject to mandatory redemption.
.15 Sections 331, 453, and 1239.—The
Tax Effects of Installment Sales of Prop-
erty Between Entities with Common
Ownership.—The tax effects of a transac-
tion in which there is a transfer of prop-
erty by a corporation to a partnership or
other noncorporate entity (or the transfer
of stock to such entity followed by a liqui-
dation of the corporation) when more than
a nominal amount of the stock of such
corporation and the capital or beneficial
interests in the purchasing entity (that is,
more than 20 percent in value) is owned
by the same persons, and the considera-
tion to be received by the selling corpora-
tion or the selling shareholders includes
an installment obligation of the purchas-
ing entity.
.16 Section 351.—Transfer to Corpora-
tion Controlled by Transferor.—Whether
§ 351 applies to the transfer of widely
held developed or undeveloped real prop-
erty or interests therein; widely held oil
and gas properties or interests therein; or
any similarly held properties or interests
to a corporation in exchange for shares of
stock of such corporation when (i) the
transfer is the result of solicitation by pro-
moters, brokers, or investment houses, or
(ii) the transferee corporation’s stock is is-
sued in a form designed to render it read-
ily tradable.
.17 Section 451.—See section 5.04,
above.
.18 Section 453.—See section 5.15,
above.
.19 Section 457.—Deferred Compensa-
tion Plans of State and Local Govern-
ments and Tax-Exempt Organizations.—
The tax effect of provisions under the
Small Business Job Protection Act affect-
ing plans described in § 457. Taxpayers
may, however, still receive rulings on
§ 457 plans based on the law in effect
prior to enactment of the Small Business
Jobs Protection Act.
.20 Section 671.—Trust Income, De-
ductions, and Credits Attributable to
Grantors and Others as Substantial Own-
ers.—Whether the grantor will be consid-
ered the owner of any portion of a trust
when (i) substantially all of the trust cor-
pus consists or will consist of insurance
policies on the life of the grantor or the
grantor’s spouse, (ii) the trustee or any
other person has a power to apply the
trust’s income or corpus to the payment of
premiums on policies of insurance on the
life of the grantor or the grantor’s spouse,
(iii) the trustee or any other person has a
power to use the trust’s assets to make
loans to the grantor’s estate or to purchase
assets from the grantor’s estate, and (iv)
there is a right or power in any person that
would cause the grantor to be treated as
the owner of all or a portion of the trust
under §§ 673 to 677.
.21 Section 721.—Nonrecognition of
Gain or Loss on Contribution.—Whether
§ 721 applies to the contribution of
widely held developed or undeveloped
real property or interests therein; widely
held oil and gas properties or interests
therein; or any similarly held properties or
interests to a partnership in exchange for
an interest in the partnership when (i) the
contribution is the result of solicitation by
promoters, brokers, or investment houses,
or (ii) the interest in the transferee part-
nership is issued in a form designed to
render it readily tradable.
.22 Section 761.—See section 5.05,
above.
.23 Section 1239.—See section 5.15,
above.
.24 Section 2503.—Taxable Gifts.—
Whether the transfer of property to a trust
will be a gift of a present interest in prop-
erty when (i) the trust corpus consists or
will consist substantially of insurance
policies on the life of the grantor or the
grantor’s spouse, (ii) the trustee or any
other person has a power to apply the
trust’s income or corpus to the payment of
premiums on policies of insurance on the
life of the grantor or the grantor’s spouse,
(iii) the trustee or any other person has a
power to use the trust’s assets to make
loans to the grantor’s estate or to purchase
assets from the grantor’s estate, (iv) the
trust beneficiaries have the power to with-
draw, on demand, any additional transfers
made to the trust, and (v) there is a right
or power in any person that would cause
the grantor to be treated as the owner of
all or a portion of the trust under §§ 673
to 677.
.25 Section 2514.—Powers of Appoint-
ment.—If the beneficiaries of a trust per-
mit a power of withdrawal to lapse,
whether § 2514(e) will be applicable to
each beneficiary in regard to the power
when (i) the trust corpus consists or will
consist substantially of insurance policies
on the life of the grantor or the grantor’s
spouse, (ii) the trustee or any other person
has a power to apply the trust’s income or
corpus to the payment of premiums on
policies of insurance on the life of the
grantor or the grantor’s spouse, (iii) the
trustee or any other person has a power to
use the trust’s assets to make loans to the
grantor’s estate or to purchase assets from
the grantor’s estate, (iv) the trust benefi-
ciaries have the power to withdraw, on
demand, any additional transfers made to
the trust, and (v) there is a right or power
in any person that would cause the grantor
to be treated as the owner of all or a por-
tion of the trust under §§ 673 to 677.
January 5, 19981101998–1 I.R.B.

1998–1 I.R.B.111January 5, 1998
.26 Section 2601.—Tax Imposed.—
Whether a trust that is excepted from the
application of the generation-skipping
transfer tax because it was irrevocable on
September 25, 1985, will lose its excepted
status if the situs of the trust is changed
from the United States to a situs outside
of the United States.
.27 Sections 3121, 3306, and 3401.—
Definitions; Employment Taxes.—Who is
the employer of an “employee-owner” as
defined in § 269A(b)(2).
.28 Section 7701.—See section 5.05,
above.
.29 Section 7701.—Definitions.—The
classification of separately tradable in-
struments that are issued by a corporation
as a unit, the components of which collec-
tively contain the attributes of stock.
SECTION 6. AREAS COVERED BY
AUTOMATIC APPROVAL
PROCEDURES IN WHICH
RULINGS WILLNOTORDINARILY
BE ISSUED
.01 Section 442.—Change of Annual
Accounting Period.—All situations where
the Service has provided an administra-
tive procedure for obtaining a change in
annual accounting period. SeeRev.
Procs. 92–13, 1992–1 C.B. 665 (as modi-
fied by Rev. Proc. 94–12, 1994–1 C.B.
565, and as modified and amplified by
Rev. Proc. 92–13A, 1992–1 C.B. 668)
(certain corporations that have not
changed their accounting period within
the prior 6 calendar years or other speci-
fied time); 87–32, 1987–2 C.B. 396, as
modified by § 301.9100–3T(partnership,
S corporation, or personal service corpo-
ration seeking a natural business year or
an ownership taxable year); 68–41, 1968–
2 C.B. 943 (as modified by Rev. Proc.
81–40, 1981–2 C.B. 604) (trusts held by
certain fiduciaries needing a workload
spread); and 66–50, 1966–2 C.B. 1260
(as modified by Rev. Proc. 81–40) (indi-
vidual seeking a calendar year).
.02 Section 446.—General Rule for
Methods of Accounting.—All situations
where the Service has provided an admin-
istrative procedure for obtaining a change
in method of accounting. SeeRev. Procs.
97–43, 1997–39 I.R.B. 12 (certain tax-
payers required to change their method of
accounting to comply with elections out
of certain exemptions from dealer status
for purposes of § 475); 97–37, 1997–33
I.R.B. 18 (applies to the changes in meth-
ods of accounting that are described in the
Appendix of Rev. Proc. 97–37 involving
§§ 162, 167, 168, 197, 263, 263A, 446,
454, 455, 461, 471, 472, 585, 1273, and
1281); 97–30, 1997–1 C.B. 702 (taxpay-
ers seeking to elect general asset accounts
under § 168(i)(4) for depreciable property
placed in service in prior years, election
available only for a taxpayer’s taxable
year ending in 1996 or 1997); Rev. Proc.
97–18, 1997–1 C.B. 642 (certain banks
seeking to change from the § 585 reserve
method to the § 166 specific charge off
method for bad debts so as to be able to
elect S corporation status for the first tax-
able year beginning after December 31,
1996); Rev. Proc. 97–10, 1997-1 C.B. 628
(taxpayers seeking to change the classifi-
cation under § 168 of a retail motor fuel
outlet placed in service before August 20,
1996, procedures available only for a tax-
payer’s taxable year that includes August
20, 1996; Rev. Proc. 92–67, 1992–2 C.B.
429 (certain taxpayers with one or more
market discount bonds seeking to make a
§ 1278(b) election or a constant interest
rate election).
.03 Section 461.—General Rule for
Taxable Year of Deduction.—All situa-
tions where the Service has provided an
administrative procedure for making or
revoking an election under § 461. See
Rev. Procs. 92–29, 1992–1 C.B. 748
(dealing with the use of an alternative
method for including in basis the esti-
mated cost of certain common improve-
ments in a real estate development); and
92–28, 1992–1 C.B. 745, as amplified by
Rev. Proc. 94–32, 1994–1 C.B. 627 (deal-
ing with ratable accrual of real property
taxes).
.04 Section 1362.—Election; Revoca-
tion; Termination.—All situations in
which an S corporation qualifies for auto-
matic inadvertent termination relief under
Rev. Proc. 94–23, 1994–1 C.B. 609, and
all situations in which a corporation qual-
ifies for automatic late S corporation elec-
tion relief under Rev. Proc. 97–48,
1997–43 I.R.B. 19.
.05 Sections 1502, 1504, and 1552.—
Regulations; Definitions; Earnings and
Profits.—All situations where the Service
has provided an administrative procedure
for obtaining waivers or consents on con-
solidated return issues. SeeRev. Procs.
90–53, 1990–2 C.B. 636 (certain corpora-
tions seeking reconsolidation within the
5-year period specified in § 1504(a)-
(3)(A)); 90-39, 1990-2 C.B. 365 (certain
affiliated groups of corporations seeking,
for earnings and profits determinations, to
make an election or a change in their
method of allocating the group’s consoli-
dated federal income tax liability); and
89-56, 1989-2 C.B. 643 (certain affiliated
groups of corporations seeking to file a
consolidated return where member(s) of
the group use a 52-53 week taxable year).
SECTION 7. EFFECTON OTHER
REVENUE PROCEDURES
Rev. Procs. 97–3 and 97–53 are super-
seded.
SECTION 8. PAPERWORK
REDUCTION ACT
The collections of information con-
tained in this revenue procedure have
been reviewed and approved by the Of-
fice of Management and Budget in accor-
dance with the Paperwork Reduction Act
(44 U.S.C. § 3507) under control number
1545–1522.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless the col-
lection of information displays a valid
control number.
The collections of information in this
revenue procedure are in sections
3.01(22), (24), (25), (27), and (28),
3.02(1) and (3), 4.01(27), and 4.02(1) and
(7)(b).
This information is required to evaluate
whether the request for a letter ruling or
determination letter is not covered by the
provisions of this revenue procedure. The
collections of information are required to
obtain a letter ruling or determination let-
ter. The likely respondents are business
or other for-profit institutions.
The estimated total annual reporting
and/or recording burden is 90 hours.
The estimated annual burden per re-
spondent/recordkeeper varies from 15
minutes to 3 hours, depending on individ-
ual circumstances, with an estimated av-
erage burden of 2 hours. The estimated
number of respondents and/or record-
keepers is 45.
The estimated annual frequency of re-
sponses is on occasion.
Books or records relating to a collec-
tion of information must be retained as

January 5, 19981121998–1 I.R.B.
long as their contents may become mater-
ial in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by § 6103.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Michael Danbury of the Of-
fice of Assistant Chief Counsel (Corpo-
rate). For further information about this
revenue procedure, please contact Mr.
Danbury at (202) 622-7750 (not a toll-
free call).

26 CFR 601.201: Rulings and determination letters.
Rev. Proc. 98–4
TABLE OFCONTENTS
SECTION 1. WHATp. 118
IS THE PURPOSE OF
THIS REVENUE
PROCEDURE?
SECTION 2. WHATp. 118
CHANGES HAVE BEEN
MADE TO REV.
PROC. 97–4?
SECTION 3. IN p. 118.01In general
WHATFORM IS
GUIDANCE PROVIDED .02Letter ruling
BYTHE ASSISTANT
COMMISSIONER .03Closing agreement.
(EMPLOYEE PLANS
AND EXEMPT04Determination letter
ORGANIZATIONS)?
.05Opinion letter
.06Notification letter
.07Information letter
.08Revenue ruling
.09Oral guidance
(1)No oral rulings, and no written rulings in response to oral requests
(2)Discussion possible on substantive issues
.10Nonbank trustee requests
SECTION 4. ON p. 121
WHATISSUES MAY
TAXPAYERS REQUEST
WRITTEN GUIDANCE
UNDER THIS
PROCEDURE?
SECTION 5. ON WHATp. 121.01Determination letters
ISSUES MUSTWRITTEN
GUIDANCE BE .02Master and prototype plans
REQUESTED UNDER
DIFFERENT.03Regional prototype plans
PROCEDURES?
.04Closing agreement program for defined contribution plans that purchased
GICs or GACs
.05Voluntary Compliance Resolution Program
.06Chief Counsel
1998–1 I.R.B.113January 5, 1998

.07Alcohol, tobacco, and firearms taxes
SECTION 6. UNDER WHATp. 122.01In exempt organizations matters
CIRCUMSTANCES
DOES THE NATIONAL.02In employee plans matters
OFFICE ISSUE LETTER
RULINGS?.03In qualifications matters
.04Request for extension of time for making an election or for other relief
under §301.9100–1 of the Procedure and Administration Regulations
.05Issuance of a letter ruling before the issuance of a regulation or other pub-
lished guidance
.06Issues in prior return
.07Generally not to business associations or groups
.08Generally not to foreign governments
.09Generally not on federal tax consequences of proposed legislation
SECTION 7. UNDER WHATp. 124.01Circumstances under which determination letters are issued by the key
CIRCUMSTANCES DOdistrict director
KEYDISTRICT
DIRECTORS ISSUE .02In general
DETERMINATION
LETTERS?.03In employee plans matters
.04In exempt organizations matters
.05Circumstances under which determination letters are not issued by the
key district director
.06Requests involving returns already filed
.07Attach a copy of determination letter to taxpayer’s return
.08Review of determination letters
SECTION 8. UNDER WHATp. 126.01Ordinarily not in certain areas because of factual nature of the problem
CIRCUMSTANCES DOES
THE SERVICE HAVE .02Not on alternative plans or hypothetical situations
DISCRETION TO ISSUE
LETTER RULINGS AND .03Ordinarily not on part of an integrated transaction
DETERMINATION LETTERS?
.04Not on partial terminations of employee plans
.05Law requires letter ruling
.06Issues under consideration by PBGC or DOL
.07Cafeteria plans
.08Determination letters
.09Domicile in a foreign jurisdiction
January 5, 19981141998–1 I.R.B.

SECTION 9. WHATAREp. 127.01In general
THE GENERAL
INSTRUCTIONS FOR .02Certain information required in all requests
REQUESTING LETTER
RULINGS AND (1)Complete statement of facts and other information
DETERMINATION LETTERS?
(2)Copies of all contracts, wills, deeds, agreements, instruments, plan doc-
uments, and other documents
(3)Analysis of material facts
(4)Statement regarding whether same issue is in an earlier return
(5)Statement regarding whether same or similar issue was previously
ruled on or requested, or is currently pending
(6)Statement of supporting authorities
(7)Statement of contrary authorities
(8)Statement identifying pending legislation
(9)Statement identifying information to be deleted from copy of letter rul-
ing or determination letter for public inspection
(10)Signature by taxpayer or authorized representative
(11)Authorized representatives
(12)Power of attorney and declaration of representative
(13)Penalties of perjury statement
(14)Applicable user fee
(15)Number of copies of request to be submitted
(16)Sample format for a letter ruling request
(17)Checklist for letter ruling requests
.03Additional information required in certain circumstances
(1)To request separate letter rulings for multiple issues in a single situation
(2)To designate recipient of original or copy of letter ruling or determina-
tion letter
(3)To request expeditious handling
(4)To receive a letter ruling or submit a request for a letter ruling by fac-
simile transmission (fax)
(5)To request a conference
.04Address to send the request
(1)Requests for letter rulings
1998–1 I.R.B.115January 5, 1998

(2)Requests for information letters
(3)Requests for determination letters
.05Pending letter ruling requests
.06When to attach letter ruling to return
.07How to check on status of request
.08Request may be withdrawn or national office may decline to issue letter
ruling
.09Compliance with Treasury Department Circular No. 230
SECTION 10. WHATp. 138.01In general
SPECIFIC, ADDITIONAL
PROCEDURES APPLY.02Exempt Organizations
TO CERTAIN REQUESTS?
.03Employee Plans
SECTION 11. HOWDOES p. 139.01In general
THE NATIONAL
OFFICE HANDLE .02Is not bound by informal opinion expressed
LETTER RULING
REQUESTS?.03Tells taxpayer if request lacks essential information during initial contact
.04Requires prompt submission of additional information requested after ini-
tial contact
.05Near the completion of the ruling process, advises taxpayer of conclu-
sions and, if the Service will rule adversely, offers the taxpayer the oppor-
tunity to withdraw the letter ruling request
.06May request draft of proposed letter ruling near the completion of the rul-
ing process
SECTION 12. HOWp. 140.01Schedules a conference if requested by taxpayer
ARE CONFERENCES
SCHEDULED?.02Permits taxpayer one conference of right
.03Disallows verbatim recording of conferences
.04Makes tentative recommendations on substantive issues
.05May offer additional conferences
.06Requires written confirmation of information presented at conference
.07May schedule a pre-submission conference
.08Under limited circumstances, may schedule a conference to be held by
telephone
SECTION 13. WHATp. 142.01May be relied on subject to limitations
EFFECTWILLA
LETTER RULING .02Will not apply to another taxpayer
HAVE?
.03Will be used by a key district director in examining the taxpayer’s return
January 5, 19981161998–1 I.R.B.

.04May be revoked or modified if found to be in error
.05Not generally revoked or modified retroactively
.06Retroactive effect of revocation or modification applied to a particular
transaction
.07Retroactive effect of revocation or modification applied to a continuing
action or series of actions
.08May be retroactively revoked or modified when transaction is completed
without reliance on the letter ruling
.09Taxpayer may request that retroactivity be limited
(1)Request for relief under §7805(b) must be made in required format
(2)Taxpayer may request a conference on application of §7805(b)
SECTION 14. WHATp. 145.01Has same effect as a letter ruling
EFFECTWILLA
DETERMINATION .02Taxpayer may request that retroactive effect of revocation or modification
LETTER HAVE?be limited
(1)Request for relief under §7805(b) must be made in required format
(2)Taxpayer may request a conference on application of §7805(b)
(3)Taxpayer steps in exhausting administrative remedies
SECTION 15. UNDER p. 146.01Requests for determination letters
WHATCIRCUMSTANCES
ARE MATTERS REFERRED .02No-rule areas
BETWEEN AKEY
DISTRICTOFFICE .03Requests for letter rulings
AND THE NATIONAL
OFFICE?
SECTION 16. WHATIS p. 147
THE EFFECTOFTHIS
REVENUE PROCEDURE
ON OTHER DOCUMENTS?
SECTION 17. p. 147
EFFECTIVE DATE
SECTION 18. p. 147
PAPERWORK
REDUCTION ACT
DRAFTING p. 147
INFORMATION
INDEXp. 148
APPENDIX A—p. 149
SAMPLE FORMATFOR
ALETTER RULING
REQUEST
APPENDIX B—p. 152
CHECKLISTFOR A
LETTER RULING REQUEST
1998–1 I.R.B.117January 5, 1998

SECTION 1. WHATIS This revenue procedure explains how the Internal Revenue Service gives guidance to
THE PURPOSE OFtaxpayers on issues under the jurisdiction of the Assistant Commissioner (Employee Plans
THIS REVENUE and Exempt Organizations). It explains the kinds of guidance and the manner in which
PROCEDURE?guidance is requested by taxpayers and provided by the Service. Asample format of a
request for a letter ruling is provided in Appendix A.
SECTION 2. WHAT.01 Section 7.04(8) is added to indicate that the key district directors issue determina-
CHANGES HAVE BEEN tion letters involving the advance approval of voter registration activities described in
MADE TO REV. § 4945(f) of the Internal Revenue Code.
PROC. 97–4?
.02 Section 9.02(11)(f) is amended to conform to section 10.7(c) of Treasury Depart-
ment Circular No. 230.
.03 Section 9.02(13)(b) is amended to clarify that a member-manager of a limited liabil-
ity company who has personal knowledge of the facts must sign the penalties of perjury
statement.
.04 Section 9.04(1) is amended to reflect the national office’s existing practice of allow-
ing the hand-delivery of letter ruling requests to the courier’s desk of the Service.
.05 Section 11.04 is amended to provide the language of the penalties of perjury state-
ment applicable for the submission of additional information.
.06 Section 12.07 is amended to provide general procedures for requesting a pre-sub-
mission conference and to provide that a pre-submission conference will not be held on
matters on which letter rulings are not ordinarily issued.
SECTION 3. IN WHAT
FORM IS GUIDANCE
PROVIDED BYTHE
ASSISTANT
COMMISSIONER
(EMPLOYEE PLANS
AND EXEMPT
ORGANIZATIONS)?
In general .01 The Service provides guidance in the form of letter rulings, closing agreements,
determination letters, opinion letters, notification letters, information letters, revenue
rulings, and oral advice.
Letterruling.02 A“letter ruling” is a written statement issued to a taxpayer by the Service’s
national office that interprets and applies the tax laws or any nontax laws applicable to
employee benefit plans and exempt organizations to the taxpayer’s specific set of facts.
Once issued, a letter ruling may be revoked or modified for any number of reasons, as
explained in section 13 of this revenue procedure, unless it is accompanied by a “closing
agreement.”
Closing agreement.03 Aclosing agreement is a final agreement between the Service and a taxpayer on a
specific issue or liability. It is entered into under the authority in §7121 and is final
unless fraud, malfeasance, or misrepresentation of a material fact can be shown.
Aclosing agreement prepared in an office under the responsibility of the Assistant Com-
missioner (Employee Plans and Exempt Organizations) may be based on a ruling that has
been signed by the Commissioner or the Commissioner’s delegate that says that a closing
agreement will be entered into on the basis of the ruling letter.
Aclosing agreement may be entered into when it is advantageous to have the matter per-
manently and conclusively closed, or when a taxpayer can show that there are good reasons
for an agreement and that making the agreement will not prejudice the interests of the Gov-
January 5, 19981181998–1 I.R.B.

ernment. In appropriate cases, taxpayers may be asked to enter into a closing agreement as
a condition to the issuance of a letter ruling.
If, in a single case, a closing agreement is requested for each person in a class of taxpay-
ers, separate agreements are entered into only if the class consists of 25 or fewer taxpayers.
However, if the issue and holding are identical for the class and there are more than 25 tax-
payers in the class, a “mass closing agreement” will be entered into with the taxpayer who
is authorized by the others to represent the class.
In appropriate cases, a closing agreement may be made with sponsors of national office
master and prototype plans and sponsors of regional prototype plans.
Rev. Proc. 94–16, 1994–1 C.B. 576, as modified by Rev. Proc. 96–29, 1996–1 C.B. 693,
establishes a voluntary closing agreement program for employee plans matters. The rev-
enue procedure contains a formula for determining monetary sanctions and limits the sanc-
tion for employers who voluntarily enter the program.
Key district directors have authority to enter into a closing agreement on employee plans
matters, notwithstanding the delegation of authority to the Commissioner’s delegate.
Determination letter.04 A“determination letter” is a written statement issued by a key district director that
applies the principles and precedents previously announced by the national office to a spe-
cific set of facts. It is issued only when a determination can be made based on clearly es-
tablished rules in the statute, a tax treaty, or 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.
District directors of key district offices issue determination letters involving §§401,
403(a), 409, and 4975(e)(7) as provided in Rev. Proc. 98–6, page 225, this Bulletin.
Opinion letter.05 An “opinion letter” is a written statement issued by the national office to a
sponsoring organization as to the acceptability (for purposes of §§401 and 501(a)) of the
form of a master or prototype plan and any related trust or custodial account under §§401,
403(a), and 501(a), or as to the conformance of a prototype trust, custodial account, or
individual annuity with the requirements of §408(a), (b), or (k), as applicable. SeeRev.
Proc. 89–9, 1989–1 C.B. 780, as modified by Rev. Proc. 90–21, 1990–1 C.B. 499, Rev.
Proc. 92–41, 1992–1 C.B. 870, and Rev. Proc. 93–12, 1993–1 C.B. 479. See alsoRev.
Proc. 91–44, 1991–2 C.B. 733, and Rev. Proc. 92–38, 1992–1 C.B. 859.
Notification letter.06 A“notification letter” is a written statement issued by the national office or a key
district office, upon request, as to the acceptability (for purposes of §§401 and 501(a)) of
the form of a regional prototype plan and any related trust or custodial account. SeeRev.
Proc. 89–13, 1989–1 C.B. 801, as modified by Rev. Proc. 90–21, Rev. Proc. 92–41, Rev.
Proc. 93–12, sections 12 and 13 of Rev. Proc. 93–39, and supplemented by Rev. Proc.
93–10.
Information letter.07 An “information letter” is a statement issued either by the national office or by a
key district director. It calls attention to a well-established interpretation or principle of
tax law (including a tax treaty) without applying it to a specific set of facts. To the extent
resources permit, an information letter may be issued if the taxpayer’s inquiry indicates a
need for general information or if the taxpayer’s request does not meet the requirements of
this revenue procedure and the Service thinks general information will help the taxpayer.
The taxpayer should provide a daytime telephone number with the taxpayer’s request for
an information letter. Requests for information letters should be sent to the address stated
in section 9.04(2) of this revenue procedure. The requirements of section 9.02 of this
revenue procedure are not applicable to information letters. An information letter is
advisory only and has no binding effect on the Service.
Revenue ruling.08 A“revenue ruling” is an interpretation by the Service that has been published in the
Internal Revenue Bulletin. It is the conclusion of the Service on how the law is applied to
1998–1 I.R.B.119January 5, 1998

a specific set of facts. Revenue rulings are issued only by the national office and are
published for the information and guidance of taxpayers, Service personnel, and other
interested parties.
Because each revenue ruling represents the conclusion of the Service regarding the ap-
plication of law to the entire statement of facts involved, taxpayers, Service personnel, and
other concerned parties are cautioned against reaching the same conclusion in other cases
unless the facts and circumstances are substantially the same. They should consider the ef-
fect of subsequent legislation, regulations, court decisions, revenue rulings, notices, and
announcements. SeeRev. Proc. 89–14, 1989–1 C.B. 814, which states the objectives of
and standards for the publication of revenue rulings and revenue procedures in the Internal
Revenue Bulletin.
Oral guidance.09
(1) No oral rulings, and no written rulings in response to oral requests.
The Service does not orally issue letter rulings or determination letters, nor does it issue
letter rulings or determination letters in response to oral requests from taxpayers. How-
ever, Service employees ordinarily will discuss with taxpayers or their representatives in-
quiries regarding whether the Service will rule on particular issues and questions relating to
procedural matters about submitting requests for letter rulings, determination letters, and
requests for recognition of exempt status for a particular organization.
(2) Discussion possible on substantive issues.
At the discretion of the Service, and as time permits, substantive issues may also be dis-
cussed. However, such a discussion will not be binding on the Service, and cannot be re-
lied on as a basis for obtaining retroactive relief under the provisions of §7805(b).
Substantive tax issues involving the taxpayer that are under examination, in appeals, or
in litigation will not be discussed by Service employees not directly involved in the exami-
nation, appeal, or litigation of the issues unless the discussion is coordinated with those
Service employees who are directly involved in the examination, appeal, or litigation of the
issues. The taxpayer or the taxpayer’s representative ordinarily will be asked whether the
oral request for guidance or information relates to a matter pending before another office of
the Service.
If a tax issue is not under examination, in appeals, or in litigation, the tax issue may be
discussed even though the issue is affected by a nontax issue pending in litigation.
Ataxpayer may seek oral technical guidance from a taxpayer service representative in a
key district office or service center when preparing a return or report. Oral guidance is ad-
visory only, and the Service is not bound to recognize it, for example, in the examination of
the taxpayer’s return.
The Service does not respond to letters seeking to confirm the substance of oral discus-
sions, and the absence of a response to such a letter is not confirmation of the substance of
the letter.
Nonbank trustee requests.10 In order to receive approval to act as a nonbank custodian of plans qualified under
§401(a) or accounts described in §403(b)(7), and as a nonbank trustee or nonbank
custodian for individual retirement arrangements (IRAs) established under §408(a), (b),
or (h), or for an educational IRAestablished under § 530 or a medical savings account
established under § 220, a written application must be filed that demonstrates how the
applicant complies with the requirements of §1.408–2(e)(2) through (5) of the Income
Tax Regulations.
January 5, 19981201998–1 I.R.B.

The Service must have clear and convincing proof in its files that the requirements of the
regulations are met. If there is a requirement that the applicant feels is not applicable, the
application must provide clear and convincing proof that such requirement is not germane
to the manner in which the applicant will administer any trust. See§1.408–2(e)(6).
The completed application should be sent to:
Internal Revenue Service
Assistant Commissioner (Employee Plans and Exempt Organizations)
Attention: CP:E:EP:T
P.O. Box 14073, Ben Franklin Station
Washington, DC 20044
Section 6.01(4) of Rev. Proc. 98–8, page 225, this Bulletin, imposes a user’s fee for any-
one applying for approval to become a nonbank trustee or custodian.
SECTION 4. ON WHATTaxpayers may request letter rulings, information letters and closing agreements on
ISSUES MAYissues within the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt
TAXPAYERS REQUESTOrganizations) under this revenue procedure. The national office issues letter rulings to
WRITTEN GUIDANCE answer written inquiries of individuals and organizations about their status for tax pur-
UNDER THIS poses and the tax effects of their acts or transactions when appropriate in the interest of
PROCEDURE?sound tax administration.
Taxpayers also may request determination letters within the jurisdiction of the appropriate
key district director that relate to Code sections under the jurisdiction of the Assistant
Commissioner (Employee Plans and Exempt Organizations). SeeRev. Proc. 98-6, this
Bulletin.
SECTION 5. ON WHAT
ISSUES MUSTWRITTEN
GUIDANCE BE
REQUESTED
UNDER DIFFERENT
PROCEDURES?
Determination letters.01 The procedures for obtaining determination letters involving §§401, 403(a), 409,
and 4975(e)(7), and the status for exemption of any related trusts or custodial accounts
under §501(a) are contained in Rev. Proc. 98–6, this Bulletin, Rev. Proc. 93–10 and Rev.
Proc. 93–12.
Masterand prototype plans.02 The procedures for obtaining opinion letters for master and prototype plans and any
related trusts or custodial accounts under §§401(a), 403(a) and 501(a) are contained in
Rev. Proc. 89–9, as modified by Rev. Proc. 90–21, Rev. Proc. 92–41, Rev. Proc. 93–12,
sections 12 and 13 of Rev. Proc. 93–39, and supplemented by Rev. Proc. 93–10. The
procedures for obtaining opinion letters for prototype trusts, custodial accounts or
annuities under §408(a) or (b) are contained in Rev. Proc. 87-50, as modified by Rev.
Proc. 92–38. The procedures for obtaining opinion letters for prototype trusts under
§408(k) are contained in Rev. Proc. 87-50, as modified by Rev. Proc. 91–44 (as modified
by Rev. Proc. 98–8). The procedures for obtaining opinion letters for SIMPLE IRAs under
§ 408(p) are contained in Rev. Proc. 97–29, 1997–24, I.R.B. 9.
Regional prototype plans.03 The procedures for obtaining notification letters for regional prototype plans under
§401(a) and any related trust or custodial account under §501, are contained in Rev.
Proc. 89–13, as modified by Rev. Proc. 90–21, Rev. Proc. 92–41, Rev. Proc. 93–12,
sections 12 and 13 of Rev. Proc. 93–39, and supplemented by Rev. Proc. 93–10.
Closing agreement .04 Rev. Proc. 95–52, 1995–1 C.B. 439, restates and extends the closing agreement
program fordefined program for defined contribution plans that purchased guaranteed investment contracts
contribution plans that (GICs) or group annuity contracts (GACs) from troubled life insurance companies for an
purchased GICs orGACsindefinite period.
1998–1 I.R.B.121January 5, 1998

Voluntary Compliance .05 The procedures for obtaining corrections of operational qualification plan defects
Resolution Programunder the Voluntary Compliance Resolution (VCR) Program are contained in Rev. Proc.
94–62, 1994–2 C.B. 778, as modified by Rev. Proc. 96–29.
Chief Counsel.06 The procedures for obtaining rulings, closing agreements, and information letters
on issues within the jurisdiction of the Chief Counsel are contained in Rev. Proc. 98–1,
this Bulletin, including tax issues involving interpreting or applying the federal tax laws
and income tax treaties relating to international transactions.
Alcohol, tobacco, .07 The procedures for obtaining letter rulings, etc., that apply to federal alcohol, tobacco,
and firearms taxesand firearms taxes under subtitle E of the Internal Revenue Code are under the jurisdiction
of the Bureau of Alcohol, Tobacco and Firearms.
SECTION 6. UNDER
WHATCIRCUMSTANCES
DOES THE NATIONAL
OFFICE ISSUE LETTER
RULINGS?
In exempt .01 In exempt organizations matters, the national office issues letter rulings on proposed
organizations matterstransactions and on completed transactions if the request is submitted before the return is
filed for the year in which the transaction that is the subject of the request was completed.
The national office issues letter rulings involving:
(1) Organizations exempt from tax under §501, including private foundations;
(2) Organizations described in §170(b)(1)(A) (except clause (v));
(3) Political organizations described in §527;
(4) Qualified state tuition programs described in §529;
(5) Trusts described in §4947(a);
(6) Welfare benefit plans described in §4976; and
(7) Other matters including issues under §§501 through 514, 4911, 4912, 4940 through
4948, 4955, 4958, 6033, 6104, 6113, and 6115.
In employee plans matters.02 In employee plans matters, the national office issues letter rulings on proposed
transactions and on completed transactions either before or after the return is filed. The
national office issues letter rulings involving:
(1) §§72, 101(d), 219, 381(c)(11), 402, 403(b), 404, 412, 414(d), 414(e), 419, 419A,
511 through 514, 4971, 4972, 4973, 4974, 4978, 4979, 4980, and 4980A;
(2) Waiver of the minimum funding standard (SeeRev. Proc. 94–41, 1994–1 C.B. 711),
and changes in funding methods and actuarial assumptions under §412(c)(5);
(3) Waiver of the liquidity shortfall (as that term is defined in §412(m)(5)) excise tax
under §4971(f)(4) as added by §1464 of the Small Business Job Protection Act of 1996;
(4) Whether a plan amendment is reasonable and provides for only de minimis increases
in plan liabilities in accordance with §§401(a)(33) and 412(f)(2)(A) of the Code (SeeRev.
Proc. 79–62, 1979–2 C.B. 576);
(5) Achange in the plan year of an employee retirement plan and the trust year of a tax-
exempt employees’trust (SeeRev. Proc. 87–27, 1987–1 C.B. 769);
January 5, 19981221998–1 I.R.B.

(6) The tax consequences of prohibited transactions under §§503 and 4975;
(7) Whether individual retirement accounts established by employers or associations of
employees meet the requirements of §408(c) (SeeRev. Proc. 87–50, as modified by Rev.
Proc. 91–44 (as modified by Rev. Proc. 98–8) and Rev. Proc. 92–38);
(8) With respect to employee stock ownership plans and tax credit employee stock own-
ership plans, §§409(l), 409(m), and 4975(d)(3). Other subsections of §§409 and
4975(e)(7) involve qualification issues within the jurisdiction of the key district offices.
(9) Where the Assistant Commissioner (Employee Plans and Exempt Organizations)
has authority to grant extensions of certain periods of time within which the taxpayer must
perform certain transactions (for example, the 90-day period for reinvesting in employer
securities under §1.46–8(e)(10) of the regulations), the taxpayer’s request for an extension
of such time period must be postmarked (or received, if hand delivered to the national of-
fice) no later than the expiration of the original time period. Thus, for example, a request
for an extension of the 90-day period under §1.46–8(e)(10) must be made before the expi-
ration of this period. However, see section 6.04 with respect to elections under
§301.9100–1 of the Procedure and Administration Regulations.
In qualifications matters.03 The national office ordinarily will not issue letter rulings on matters involving a
plan’s qualified status under §§401 through 420 and §4975(e)(7). These matters are
generally handled by the key district offices’determination letter program as provided in
Rev. Proc. 98–6, this Bulletin, Rev. Proc. 93–10 and Rev. Proc. 93–12. Although the
national office will not ordinarily issue rulings on matters involving plan qualification,
rulings may be issued where, (1) the taxpayer has demonstrated to the Service’s
satisfaction that the qualification issue involved is unique and requires immediate
guidance, (2) as a practical matter, it is not likely that such issue will be addressed through
the determination letter process, and (3) the Service determines that it is in the interest of
good tax administration to provide guidance to the taxpayer with respect to such
qualification issue.
Request forextension of .04 The national office will consider a request for an extension of time for making an
time formaking an election or other application for relief under §301.9100–1 of the Procedure and Admini-
election orforotherstration Regulations even if submitted after the return covering the issue presented in the
relief under§ 301.9100–1 §301.9100–1 request has been filed and even if submitted after an examination of the
of the Procedure and returnhas begun or after the issues in the return are being considered by an appeals office
Administration Regulationsor a federal court. In such a case, the national office will notify the field office that has
examination jurisdiction over the taxpayer’s return.
Except for those requests pertaining to applications for recognition of exemption,
§ 301.9100–1 requests, even those submitted after the examination of the taxpayer’s return
has begun, are letter ruling requests and therefore should be submitted pursuant to this rev-
enue procedure, and require payment of the applicable user fee, referenced in section
9.02(14) of this revenue procedure. In addition, the taxpayer must include the information
required by §301.9100–3(e).
However, an election made pursuant to §301.9100–2 is not a letter ruling and does not
require payment of any user fee. See§ 301.9100–2(d). Such an election pertains to an au-
tomatic extension of time under §301.9100–1.
Issuance of a letterruling.05 Unless the issue is covered by section 8 of this procedure, a letter ruling may be
before the issuance of a issued before the issuance of a temporary or final regulation or other published guidance
regulation orotherpublishedthat interprets the provisions of any act under the following conditions:
guidance
(1) Answeris clearoris reasonably certain.If the letter ruling request presents an
issue for which the answer seems clear by applying the statute to the facts or for which the
answer seems reasonably certain but not entirely free from doubt, a letter ruling will be is-
sued.
1998–1 I.R.B.123January 5, 1998

(2) Answeris not reasonably certain. The Service will consider all letter ruling requests
and use its best efforts to issue a letter ruling even if the answer does not seem reasonably cer-
tain where the issuance of a letter ruling is in the best interest of tax administration.
(3) Issue cannot be readily resolved before a regulation orany otherpublished guid-
ance is issued. Aletter ruling will not be issued if the letter ruling request presents an issue
that cannot be readily resolved before a regulation or any other published guidance is issued.
Issue in priorreturn.06The national office ordinarily does not issue rulings if, at the time the ruling is
requested, the identical issue is involved in the taxpayer’s return for an earlier period, and
that issue—
(1) is being examined by a key district director,
(2) is being considered by an appeals office,
(3) is pending in litigation in a case involving the taxpayer or related taxpayer, or
(4) has been examined by a key district director or considered by an appeals office, and
the statutory period of limitation has not expired for either assessment or filing a claim for
a refund or a closing agreement covering the issue of liability has not been entered into by
a key district director or by an appeals office.
If a return dealing with an issue for a particular year is filed while a request for a ruling
on that issue is pending, the national office will issue the ruling unless it is notified by the
taxpayer that an examination of that issue or the identical issue on an earlier year’s return
has been started by a key district director. Seesection 9.05. However, even if an examina-
tion has begun, the national office ordinarily will issue the letter ruling if the key district di-
rector agrees, by memorandum, to permit the ruling to be issued.
Generally not to business .07 The national office does not issue letter rulings to business, trade, or industrial asso-
associations orgroupsciations or to similar groups concerning the application of the tax laws to members of the
group. But groups and associations may submit suggestions of generic issues that would
be appropriately addressed in revenue rulings. SeeRev. Proc. 89–14, which states
objectives of, and standards for, the publication of revenue rulings and revenue procedures
in the Internal Revenue Bulletin.
The national office, however, may issue letter rulings to groups or associations on their
own tax status or liability if the request meets the requirements of this revenue procedure.
Generally not to foreign .08 The national office does not issue letter rulings to foreign governments or their
governmentspolitical subdivisions about the U.S. tax effects of their laws. However, the national office
may issue letter rulings to foreign governments or their political subdivisions on their own
tax status or liability under U.S. law if the request meets the requirements of this revenue
procedure.
Generally not on federal tax .09 The national office does not issue letter rulings on a matter involving the federal tax
consequences of proposed consequences of any proposed federal, state, local, municipal, or foreign legislation. The
legislationnational office, however, may provide general information in response to an inquiry.
SECTION 7. UNDER WHAT
CIRCUMSTANCES DO KEY
DISTRICTDIRECTORS
ISSUE DETERMINATION
LETTERS?
Circumstances underwhich .01 Key district directors issue determination letters only if the question presented is
determination letters are specifically answered by a statute, tax treaty, or regulation, or by a conclusion stated in a
issued by the key district revenue ruling, opinion, or court decision published in the Internal Revenue Bulletin.
director
January 5, 19981241998–1 I.R.B.

In general.02 In employee plans and exempt organizations matters, key district directors issue
determination letters in response to taxpayers’written requests on completed transactions
that affect returns over which they have examination jurisdiction. However, see section
13.08 of this revenue procedure. Adetermination letter usually is not issued for a question
concerning a return to be filed by the taxpayer if the same question is involved in a return
under examination.
In situations involving continuing transactions, such as whether an ongoing activity is an
unrelated trade or business, the national office would issue a ruling covering future tax pe-
riods and periods for which a return had not yet been filed.
Key district directors do not issue determination letters on the tax consequences of pro-
posed transactions, except as provided in sections 7.03 and 7.04 below.
In employee plans matters.03 In employee plans matters, key district directors issue determination letters on the
qualified status of employee plans under §§401, 403(a), 409 and 4975(e)(7), and the
exempt status of any related trust under §501. SeeRev. Proc. 98–6, this Bulletin, Rev.
Proc. 93–10 and Rev. Proc. 93–12.
In exempt organizations matters.04 In exempt organizations matters, the key district directors issue determination
letters involving:
(1) Qualification for exempt status of organizations described in §§501 and 521 to the
extent provided in Rev. Proc. 90–27, 1990–1 C.B. 514, as modified by Rev. Proc. 98–8;
(2) Classification of private foundation status as provided in Rev. Proc. 76–34, 1976–2
C.B. 656;
(3) Recognition of unusual grants to certain organizations under §§170(b)(1)(A)(vi)
and 509(a)(2);
(4) Requests for relief under §301.9100 of the Procedure and Administration Regula-
tions in connection with applications for recognition of exemption;
(5) Advance approval under §4945 of organizations’grant making procedures whose
determination letter requests or applications disclose (or who have otherwise properly dis-
closed) a grant program or plans to conduct such a program. If questions arise regarding
grant-making procedures that cannot be resolved on the basis of law, regulations, a clearly
applicable revenue ruling, or other published precedent, the key district director will for-
ward the matter to the national office for technical advice;
(6) Whether certain organizations are excepted from filing annual information returns
under §6033 as provided in Rev. Procs. 83–23, 1983–1 C.B. 687, 86–23, 1986–1 C.B. 564,
and 95–48, 1995–2 C.B. 418;
(7) Whether certain organizations qualify as exempt operating foundations described in
§4940(d); and
(8) Advance approval of voter registration activities described in § 4945(f).
Circumstances underwhich.05Akey district director will not issue a determination letter in response to any request
determination letters are if—
not issued by the key district
director(1) it appears that the taxpayer has directed a similar inquiry to the national office;
(2) the same issue involving the same taxpayer or a related taxpayer is pending in a case
in litigation or before an appeals office;
1998–1 I.R.B.125January 5, 1998

(3) the determination letter is requested by an industry, trade association, or similar
group on behalf of individual taxpayers within the group (other than subordinate organiza-
tions covered by a group exemption letter); or
(4) the request involves an industry-wide problem.
Under no circumstances will a key district director issue a determination letter unless it
is clearly shown that the request concerns a return that has been filed or is required to be
filed and over which the key district director has, or will have, examination jurisdiction.
Requests involving returns .06 Arequest received by a key district director on a question concerning a return that is
already filedunder examination, will be, in general, considered in connection with the examination of
the return. If a response is made to the request before the return is examined, it will be
considered a tentative finding in any later examination of that return.
Attach a copy of determination .07 Ataxpayer who, before filing a return, receives a determination letter about any
letterto taxpayer’s returntransaction that has been consummated and that is relevant to the return being filed should
attach a copy of the determination letter to the return when it is filed.
Review of determination letters.08 Determination letters issued under sections 7.02 through 7.04 of this revenue
procedure are not reviewed by the national office before they are issued. If a taxpayer
believes that a determination letter of this type is in error, the taxpayer may ask the key
district director to reconsider the matter or to request technical advice from the national
office as explained in Rev. Proc. 98–5, this Bulletin.
(1) In employee plans matters, the procedures for review of determination letters relat-
ing to the qualification of employee plans involving §§401 and 403(a) are provided in Rev.
Proc. 98–6, Rev. Proc. 93–10 and Rev. Proc. 93–12.
(2) In exempt organizations matters, the procedures for the review of determination let-
ters relating to the exemption from federal income tax of certain organizations under
§§501 and 521 are provided in Rev. Proc. 90–27, as modified by Rev. Proc. 98–8.
SECTION 8. UNDER WHAT
CIRCUMSTANCES DOES
THE SERVICE HAVE
DISCRETION TO ISSUE
LETTER RULINGS AND
DETERMINATION LETTERS?
Ordinarily not in certain .01 The Service ordinarily will not issue a letter ruling or determination letter in certain
areas because of factual areas because of the factual nature of the problem involved or because of other reasons.
nature of the problemThe Service may decline to issue a letter ruling or a determination letter when appropriate
in the interest of sound tax administration or on other grounds whenever warranted by the
facts or circumstances of a particular case.
Instead of issuing a letter ruling or determination letter, the national office or a key dis-
trict director may, when it is considered appropriate and in the best interests of the Service,
issue an information letter calling attention to well-established principles of tax law.
Not on alternative plans or.02 Aletter ruling or a determination letter will not be issued on alternative plans of
hypothetical situationsproposed transactions or on hypothetical situations.
Ordinarily not on part of an .03 The national office ordinarily will not issue a letter ruling on only part of an inte-
integrated transactiongrated transaction. If, however, a part of a transaction falls under a no-rule area, a letter
ruling on other parts of the transaction may be issued. Before preparing the letter ruling
request, a taxpayer should call the branch having jurisdiction for the matters on which the
taxpayer is seeking a letter ruling to discuss whether the national office will issue a letter
ruling on part of the transaction.
January 5, 19981261998–1 I.R.B.

Not on partial terminations .04 The national office will not issue a letter ruling on the partial termination of an
of employee plansemployee plan. Determinations involving the partial termination of an employee plan are
within the jurisdiction of the appropriate key district office.
Law requires ruling letter.05 The national office will issue rulings on prospective or future transactions if the law
or regulations require a determination of the effect of a proposed transaction for tax
purposes.
Issues underconsideration .06 Aletter ruling or determination letter relating to an issue that is being considered by
by PBGC orDOLthe Pension Benefit Guaranty Corporation (PBGC) or the Department of Labor (DOL),
and involves the same taxpayer, shall be issued at the discretion of the Service.
Cafeteria plans.07 The Service does not issue letter rulings or determination letters on whether a
cafeteria plan satisfies the requirements of §125. See alsoRev. Proc. 98–3, also in this
Bulletin, for areas under the jurisdiction of the Associate Chief Counsel (Domestic)
involving cafeteria plans in which advance rulings or determination letters will not be
issued.
Determination letters.08 Seesection 3.02 of Rev. Proc. 98–6 for employee plans matters on which determi-
nation letters will not be issued.
Domicile in a foreign .09
jurisdiction
(1) The Service is ordinarily unwilling to rule in situations where a taxpayer or a
related party is domiciled or organized in a foreign jurisdiction with which the United
States does not have an effective mechanism for obtaining tax information with respect to
civil tax examinations and criminal investigations, which would preclude the Service from
obtaining information located in such jurisdiction that is relevant to the analysis or
examination of the tax issues involved in the ruling request.
(2) The provisions of subsection 8.09(1) above shall not apply if the taxpayer or affected
related party (a) consents to the disclosure of all relevant information requested by the Ser-
vice in processing the ruling request or in the course of an examination to verify the accu-
racy of the representations made and to otherwise analyze or examine the tax issues in-
volved in the ruling request, and (b) waives all claims to protection of bank or commercial
secrecy laws in the foreign jurisdiction with respect to the information requested by the
Service. In the event the taxpayer’s or related party’s consent to disclose relevant informa-
tion or to waive protection of bank or commercial secrecy is determined by the Service to
be ineffective or of no force and effect, then the Service may retroactively rescind any rul-
ing rendered in reliance on such consent.
SECTION 9. WHAT
ARE THE GENERAL
INSTRUCTIONS FOR
REQUESTING LETTER
RULINGS AND
DETERMINATION
LETTERS?
In general.01 This section explains the general instructions for requesting letter rulings and
determination letters on all matters. Requests for letter rulings and determination letters
require the payment of the applicable user fee discussed in section 9.02(14) of this
revenue procedure.
Specific and additional instructions also apply to requests for letter rulings and determi-
nation letters on certain matters. Those matters are listed in section 10 of this revenue pro-
cedure followed by a reference (usually to another revenue procedure) where more infor-
mation can be obtained.
1998–1 I.R.B.127January 5, 1998

Certain information .02
required in all requests
Facts(1) Complete statement of facts and otherinformation.Each request for a letter
ruling or a determination letter must contain a complete statement of all facts relating to
the transaction. These facts include—
(a) names, addresses, telephone numbers, and taxpayer identification numbers of all in-
terested parties. (The term “all interested parties” does not mean all shareholders of a
widely held corporation requesting a letter ruling relating to a reorganization, or all em-
ployees where a large number may be involved.);
(b) the location of the key district office that has or will have examination jurisdiction
over the return (not the service center where the return is filed). For a list see Appendix A
of Rev. Proc. 98–5);
(c) a complete statement of the business reasons for the transaction; and
(d) a detailed description of the transaction.
The Service will usually not rule on only one step of a larger integrated transaction. See
section 8.03 of this revenue procedure. However, if such a letter ruling is requested, the
facts, circumstances, true copies of relevant documents, etc., relating to the entire transac-
tion must be submitted.
Documents(2) Copies of all contracts, wills, deeds, agreements, instruments, plan documents,
and otherdocuments. True copies of all contracts, wills, deeds, agreements, instruments,
plan documents, trust documents, proposed disclaimers, and other documents pertinent to
the transaction must be submitted with the request.
Each document, other than the request, should be labelled alphabetically and attached to
the request in alphabetical order. Original documents, such as contracts, wills, etc., should
not be submitted because they become part of the Service’s file and will not be returned.
Analysis of material facts(3) Analysis of material facts. All material facts in documents must be included
rather than merely incorporated by reference, 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.
Same issue in an earlierreturn(4) Statement regarding whethersame issue is in an earlierreturn. The request
must state whether, to the best of the knowledge of both the taxpayer and the taxpayer’s
representatives, the same issue is in an earlier return of the taxpayer (or in a return for any
year of a related taxpayer within the meaning of §267, or of a member of an affiliated
group of which the taxpayer is also a member within the meaning of §1504).
If the statement is affirmative, it must specify whether the issue—
(a) is being examined by a key district director;
(b) has been examined and if so, whether or not the statutory period of limitations has
expired for either assessing tax or filing a claim for refund or credit of tax;
(c) has been examined and if so, whether or not a closing agreement covering the issue
or liability has been entered into by a key district director;
(d) is being considered by an appeals office in connection with a return from an earlier
period;
January 5, 19981281998–1 I.R.B.

(e) has been considered by an appeals office in connection with a return from an earlier
period and if so, whether or not the statutory period of limitations has expired for either as-
sessing tax or filing a claim for refund or credit of tax;
(f) has been considered by an appeals office in connection with a return from an earlier
period and whether or not a closing agreement covering the issue or liability has been en-
tered into by an appeals office;
(g) is pending in litigation in a case involving the taxpayer or a related taxpayer; or
(h) in employee plans matters, is being considered by the Pension Benefit Guaranty
Corporation or the Department of Labor.
Same orsimilarissue (5) Statement regarding whethersame orsimilarissue was previously ruled on or
previously submitted orrequested, oris currently pending. The request must also state whether, to the best of
currently pendingthe knowledge of both the taxpayer and the taxpayer’s representatives—
(a) the Service previously ruled on the same or similar issue for the taxpayer (or a re-
lated taxpayer within the meaning of §267, or a member of an affiliated group of which the
taxpayer is also a member within the meaning of §1504) or a predecessor;
(b) the taxpayer, a related taxpayer, a predecessor, or any representatives previously
submitted the same or similar issue to the Service but withdrew the request before a letter
ruling or determination letter was issued;
(c) the taxpayer, a related taxpayer, or a predecessor previously submitted a request in-
volving the same or a similar issue that is currently pending with the Service; or
(d) at the same time as this request, the taxpayer or a related taxpayer is presently sub-
mitting another request involving the same or a similar issue to the Service.
If the statement is affirmative for (a), (b), (c), or (d) of this section 9.02(5), the statement
must give the date the request was submitted, the date the request was withdrawn or ruled
on, if applicable, and other details of the Service’s consideration of the issue.
Statement of authorities (6) Statement of supporting authorities.If the taxpayer advocates a particular con-
supporting taxpayer’s viewsclusion, an explanation of the grounds for that conclusion and the relevant authorities to
support it must also be included. Even if not advocating a particular tax treatment of a
proposed transaction, the taxpayer must still furnish views on the tax results of the
proposed transaction and a statement of relevant authorities to support those views.
In all events, the request must include a statement of whether the law in connection with
the request is uncertain and whether the issue is adequately addressed by relevant authori-
ties.
Statement of authorities (7) Statement of contrary authorities. The taxpayer is also encouraged to inform the
contrary to taxpayer’s viewsService about, and discuss the implications of, any authority believed to be contrary to the
position advanced, such as legislation (or pending legislation), tax treaties, court deci-
sions, regulations, notices, revenue rulings, revenue procedures or announcements. If the
taxpayer determines that there are no contrary authorities, a statement in the request to this
effect would be helpful. If the taxpayer does not furnish either contrary authorities or a
statement that none exists, the Service in complex cases or those presenting difficult or
novel issues may request submission of contrary authorities or a statement that none
exists. Failure to comply with this request may result in the Service’s refusal to issue a
letter ruling or determination letter.
Identifying and discussing contrary authorities will generally enable Service personnel
to understand the issue and relevant authorities more quickly. When Service personnel re-
ceive the request, they will have before them the taxpayer’s thinking on the effect and ap-
1998–1 I.R.B.129January 5, 1998

plicability of contrary authorities. This information should make research easier and lead
to earlier action by the Service. If the taxpayer does not disclose and distinguish signifi-
cant contrary authorities, the Service may need to request additional information, which
will delay action on the request.
Statement identifying(8) Statement identifying pending legislation.At the time of filing the request, the tax-
pending legislationpayer must identify any pending legislation that may affect the proposed transaction. In
addition, if legislation is introduced after the request is filed but before a letter ruling or
determination letter is issued, the taxpayer must notify the Service.
Deletions statement(9) Statement identifying information to be deleted from copy of letterruling or
required by §6110determination letterforpublic inspection.The text of certain letter rulings and
determination letters is open to public inspection under §6110. The Service makes
deletions from the text before it is made available for inspection. To help the Service
make the deletions required by § 6110(c), a request for a letter ruling or determination
letter must be accompanied by a statement indicating the deletions desired (“deletions
statement”). If the deletions statement is not submitted with the request, a Service
representative will tell the taxpayer that the request will be closed if the Service does not
receive the deletions statement within 30 calendar days. Seesection 11.03 of this revenue
procedure.
(a) Format of deletions statement. Ataxpayer who wants only names, addresses, and
identifying numbers to be deleted should state this in the deletions statement. If the tax-
payer wants more information deleted, the deletion’s statement must be accompanied by a
copy of the request and supporting documents on which the taxpayer should bracket the
material to be deleted. The deletions statement must indicate the statutory basis under
§6110(c) for each proposed deletion.
If the taxpayer decides to ask for additional deletions before the letter ruling or determi-
nation letter is issued, additional deletions statements may be submitted.
(b) Location of deletions statement.The deletions statement must not appear in the
request, but instead must be made in a separate document and placed on top of the request
for a letter ruling or determination letter.
(c) Signature.The deletions statement must be signed and dated by the taxpayer or the
taxpayer’s authorized representative. Astamped signature is not permitted.
(d) Additional information.The taxpayer should follow the same procedures above to
propose deletions from any additional information submitted after the initial request. An
additional deletions statement, however, is not required with each submission of additional
information if the taxpayer’s initial deletions statement requests that only names, ad-
dresses, and identifying numbers are to be deleted and the taxpayer wants only the same in-
formation deleted from the additional information.
(e) Taxpayermay protest deletions not made.After receiving from the Service the
notice under §6110(f)(1) of intention to disclose the letter ruling or determination letter
(including a copy of the version proposed to be open to public inspection and notation of
third-party communications under §6110(d)), the taxpayer may protest the disclosure of
certain information in the letter ruling or determination letter. The taxpayer must send a
written statement within 20 calendar days to the Service office indicated on the notice of
intention to disclose. The statement must identify those deletions that the Service has not
made, and that the taxpayer believes should have been made. The taxpayer must also sub-
mit a copy of the version of the letter ruling or determination letter and bracket the dele-
tions proposed that have not been made by the Service. Generally, the Service will not
consider deleting any material that the taxpayer did not propose to be deleted before the
letter ruling or determination letter was issued.
January 5, 19981301998–1 I.R.B.

Within 20 calendar days after the Service receives the response to the notice under
§6110(f)(1), the Service will mail to the taxpayer its final administrative conclusion re-
garding the deletions to be made. The taxpayer does not have the right to a conference to
resolve any disagreements concerning material to be deleted from the text of the letter rul-
ing or determination letter. However, these matters may be taken up at any conference that
is otherwise scheduled regarding the request.
(f) Taxpayermay request delay of public inspection. After receiving the notice under
§6110(f)(1) of intention to disclose, but within 60 calendar days after the date of notice,
the taxpayer may send a request for delay of public inspection under either §6110(g)(3) or
(4). The request for delay must be sent to the Service office indicated on the notice of in-
tention to disclose. Arequest for delay under §6110(g)(3) must contain the date on which
it is expected that the underlying transaction will be completed. The request for delay
under §6110(g)(4) must contain a statement from which the Commissioner of Internal
Revenue may determine that there are good reasons for the delay.
Section 6110(k)(1) states that §6110 disclosure provisions do not apply to any matter to
which §6104 applies. Therefore, letter rulings, determination letters, technical advice
memoranda, and related background file documents dealing with the following matters
(covered by §6104) are not subject to §6110 disclosure provisions—
(i) An application for exemption under §501(a) as an organization described in §501(c)
or (d), or any application filed with respect to the qualification of a pension, profit-sharing
or stock bonus plan, or an individual retirement account, whether the plan or account has
more than 25 or less than 26 participants, or any application for exemption under §501(a)
by an organization forming part of such a plan or account;
(ii) Any document issued by the Internal Revenue Service in which the qualification or
exempt status of an organization, plan, or account is granted, denied, or revoked or the por-
tion of any document in which technical advice with respect thereto is given to a key dis-
trict director;
(iii) Any application filed and any document issued by the Internal Revenue Service
with respect to the qualification or status of national office master and prototype plans and
regional prototype plans;
(iv) The portion of any document issued by the Internal Revenue Service with respect to
the qualification or exempt status of an organization, plan, or account, of a proposed trans-
action by such organizations, plan, or account; and
(v) Any document issued by the Internal Revenue Service in which is discussed the sta-
tus of an organization under §509(a) or §4942(j)(3), other than one issued to a nonexempt
charitable trust described in §4947(a)(1). This includes documents discussing the termina-
tion of private foundation status under §507.
Signature on request(10) Signature by taxpayerorauthorized representative.The request for a letter
ruling or determination letter must be signed and dated by the taxpayer or the taxpayer’s
authorized representative. Astamped signature is not permitted.
Authorized representatives(11) Authorized representatives. To sign the request or to appear before the Service
in connection with the request, the representative must be:
Attorney(a) An attorney who is a member in good standing of the bar of the highest court of any
state, possession, territory, commonwealth, or the District of Columbia and who is not
currently under suspension or disbarment from practice before the Service. He or she
must file a written declaration with the Service showing current qualification as an
attorney and current authorization to represent the taxpayer;
1998–1 I.R.B.131January 5, 1998

Certified public accountant(b) Acertified public accountant who is qualified to practice in any state, possession,
territory, commonwealth, or the District of Columbia and who is not currently under
suspension or disbarment from practice before the Service. He or she must file a written
declaration with the Service showing current qualification as a certified public accountant
and current authorization to represent the taxpayer;
Enrolled agent(c) An enrolled agent who is a person, other than an attorney or certified public
accountant, that is currently enrolled to practice before the Service and is not currently
under suspension or disbarment from practice before the Service, including a person
enrolled to practice only for employee plans matters. He or she must file a written
declaration with the Service showing current enrollment and authorization to represent the
taxpayer. Either the enrollment number or the expiration date of the enrollment card must
be included in the declaration. For the rules on who may practice before the Service, see
Treasury Department Circular No. 230 (31 C.F.R. part 10 (1997));
Enrolled actuary (d) An enrolled actuary who is a person enrolled as an actuary by the Joint Board for
the Enrollment of Actuaries pursuant to 29 U.S.C. 1242 and qualified to practice in any
state, possession, territory, commonwealth, or the District of Columbia and who is not
currently under suspension or disbarment from practice before the Service. He or she
must file a written declaration with the Service showing current qualification as an
enrolled actuary and current authorization to represent the taxpayer. Practice as an
enrolled actuary is limited to representation with respect to issues involving the following
statutory provisions: §§401, 403(a), 404, 412, 413, 414, 4971, 6057, 6058, 6059,
6652(e), 6652(f), 6692, 7805(b), and 29 U.S.C. 1083;
Aperson with a (e)Any other person, including a foreign representative who has received a “Letter of
“Letterof Authorization”Authorization” from the Director of Practice under section 10.7(d) of Treasury
Department Circular No. 230. Aperson may make a written request for a “Letter of
Authorization” to: Office of Director of Practice, HR:DP, Internal Revenue Service, 1111
Constitution Avenue, NW, Washington, DC 20224. Section 10.7(d) of Circular No. 230
authorizes the Commissioner to allow an individual who is not otherwise eligible to
practice before the Service to represent another person in a particular matter.
Employee, general partner, (f) The above requirements do not apply to a regular full-time employee representing
bona fide officer, his or her employer, to a general partner representing his or her partnership, to a bona fide
administrator, trustee, etc.officer representing his or her corporation, association, or organized group, to a trustee,
receiver, guardian, personal representative, administrator, or executor representing a trust,
receivership, guardianship, or estate, or to an individual representing his or her immediate
family. Apreparer of a return (other than a person referred to in paragraph (a), (b), (c), (d)
or (e) of this section 9.02(11)) who is not a full-time employee, general partner, a bona
fide officer, an administrator, trustee, etc., or an individual representing his or her
immediate family may not represent a taxpayer in connection with a letter ruling,
determination letter or a technical advice request. Seesection 10.7(c) of Treasury
Department Circular No. 230.
Foreign representative(g) Aforeign representative (other than a person referred to in paragraph (a), (b), (c),
(d) or (e) of this section 9.02(11)) is not authorized to practice before the Service and,
therefore, must withdraw from representing a taxpayer in a request for a letter ruling or a
determination letter. In this situation, the nonresident alien or foreign entity must submit
the request for a letter ruling or a determination letter on the individual’s or entity’s own
behalf or through a person referred to in paragraph (a), (b), (c), (d) or (e) of this section
9.02(11).
Powerof attorney and (12) Powerof attorney and declaration of representative.Any authorized repre-
declaration of representativesentative, whether or not enrolled to practice, must also comply with the conference and
practice requirements of the Statement of Procedural Rules (26 C.F.R. §601.501–601.509
(1997)), which provide the rules for representing a taxpayer before the Service.
It is preferred that Form 2848, Power of Attorney and Declaration of Representative, be
used to provide the representative’s authorization (Part I of Form 2848, Power of Attorney)
January 5, 19981321998–1 I.R.B.

1998–1 I.R.B.133January 5, 1998
and the representative’s qualification (Part II of Form 2848, Declaration of Representa-
tive). The name of the person signing Part I of Form 2848 should also be typed or printed
on this form. Astamped signature is not permitted. For additional information regarding
the power of attorney form, see section 9.03(2) of this revenue procedure.
For the requirement regarding compliance with Treasury Department Circular No. 230,
see section 9.09 of this revenue procedure.
Penalties of perjury statement(13) Penalties of perjury statement.
(a) Format of penalties of perjury statement.Arequest for a letter ruling or determi-
nation letter and any change in the ruling request submitted at a later time must be accom-
panied by the following declaration: “Underpenalties of perjury, I declare that I have
examined this request, orthis modification to the request, including accompanying
documents, and, to the best of my knowledge and belief, the request orthe modifica-
tion contains all the relevant facts relating to the request, and such facts are true, cor-
rect, and complete.” See section 11.04 of this revenue procedure for the penalties of per-
jury statement applicable for submissions of additional information.
(b) Signature by taxpayer.The declaration must be signed and dated by the taxpayer,
not the taxpayer’s representative. Astamped signature is not permitted.
The person who signs for a corporate taxpayer must be an officer of the corporate tax-
payer who has personal knowledge of the facts, and whose duties are not limited to obtain-
ing a letter ruling or determination letter from the Service. If the corporate taxpayer is a
member of an affiliated group filing consolidated returns, a penalties of perjury statement
must also be signed and submitted by an officer of the common parent of the group.
The person signing for a trust, a state law partnership, or a limited liability company
must be, respectively, a trustee, general partner, or member-manager who has personal
knowledge of the facts.
Applicable userfee(14) Applicable userfee.Section 10511 of the Revenue Act of 1987, Pub. L. No.
100– 203, 101 Stat. 1330–382, 1330–446, enacted December 22, 1987, as amended by
§11319 of the Omnibus Budget Reconciliation Act of 1990, 1991–2 C.B. 481, 511,
enacted November 5, 1990, by §743 of the Uruguay Round Agreements Act, 1995–1 C.B.
230, 239, enacted December 8, 1994, and by §2 of the Tax Relief to Operation Joint
Endeavor Participants Act, Pub. L. No. 104–117, 110 STAT. 827, 828, enacted March 20,
1996, requires taxpayers to pay user fees for requests for rulings, opinion letters,
determination letters, and similar requests. Rev. Proc. 98–8, page225, this Bulletin,
contains the schedule of fees for each type of request under the jurisdiction of the
Assistant Commissioner (Employee Plans and Exempt Organizations) and provides
guidance for administering the user fee requirements. If two or more taxpayers are parties
to a transaction and each requests a letter ruling, each taxpayer must satisfy the rules
herein and additional user fees may apply.
Numberof copies of (15) Numberof copies of request to be submitted. Generally a taxpayer needs
request to be submittedonly to submit one copy of the request for a letter ruling or determination letter. If,
however, more than one issue is presented in the letter ruling request, the taxpayer is
encouraged to submit additional copies of the request.
Further, two copies of the request for a letter ruling or determination letter are required
if—
(a) the taxpayer is requesting separate letter rulings or determination letters on different
issues as explained later under section 9.03(1) of this revenue procedure;

January 5, 19981341998–1 I.R.B.
(b) the taxpayer is requesting deletions other than names, addresses, and identifying
numbers, as explained in section 9.02(9) of this revenue procedure. (One copy is the re-
quest for the letter ruling or determination letter and the second copy is the deleted version
of such request.); or
(c) a closing agreement (as defined in section 3.03 of this revenue procedure) is being
requested on the issue presented.
Sample of a letter(16) Sample format fora letterruling request. To assist a taxpayer or the taxpayer’s
ruling requestrepresentative in preparing a letter ruling request, a sample format for a letter ruling
request is provided in Appendix A. This format is not required to be used by the taxpayer
or the taxpayer’s representative. If the letter ruling request is not identical or similar to the
format in Appendix A, the different format will neither defer consideration of the letter
ruling request nor be cause for returning the request to the taxpayer or taxpayer’s
representative.
Checklist(17) Checklist forletterruling requests.The Service will be able to respond more
quickly to a taxpayer’s letter ruling request if it is carefully prepared and complete. The
checklist in Appendix B of this revenue procedure is designed to assist taxpayers in
preparing a request by reminding them of the essential information and documents to be
furnished with the request. The checklist in Appendix B must be completed to the extent
required by the instructions in the checklist, signed and dated by the taxpayer or the
taxpayer’s representative, and placed on top of the letter ruling request. If the checklist in
Appendix B is not received, a branch representative will ask the taxpayer or the taxpayer’s
representative to submit the checklist, which may delay action on the letter ruling request.
Aphotocopy of this checklist may be used.
Additional information .03
required in certain
circumstances
Multiple issues(1) To request separate letterrulings formultiple issues in a single situation.If
more than one issue is presented in a request for a letter ruling, the Service generally will
issue a single ruling letter covering all the issues. However, if the taxpayer requests
separate letter rulings on any of the issues (because, for example, one letter ruling is
needed sooner than another), the Service will usually comply with the request unless it is
not feasible or not in the best interests of the Service to do so. Ataxpayer who wants
separate letter rulings on multiple issues should make this clear in the request and submit
two copies of the request.
In issuing each letter ruling, the Service will state that it has issued separate letter rulings
or that requests for other letter rulings are pending.
Powerof attorney(2) To designate recipient of original orcopy of letterruling ordetermination
letter. Unless the power of attorney provides otherwise, the Service will send the original
of the letter ruling or determination letter to the taxpayer and a copy of the letter ruling or
determination letter to the taxpayer’s representative. In this case, the letter ruling or
determination letter is addressed to the taxpayer. It is preferred that Form 2848, Power of
Attorney and Declaration of Representative, be used to provide the representative’s
authorization. Seesection 9.02(12) of this revenue procedure.
Copies of letterruling or(a) To have copies sent to multiple representatives.When a taxpayer has more than
determination letteronerepresentative, the Service will send the copy of the letter ruling or determination
sent to multiple letter to the first representative named on the most recent power of attorney. If the
representativestaxpayers wants an additional copy of the letter ruling or determination letter sent to the
second representative listed in the power of attorney, the taxpayer must check the
appropriate box on Form 2848. If this form is not used, the taxpayer must state in the
power of attorney that a copy of the letter ruling or determination letter is to be sent to the
second representative listed in the power of attorney. Copies of the letter ruling or
determination letter, however, will be sent to no more than two representatives.

Original of letterruling or(b) To have original sent to taxpayer’s representative.Ataxpayer may request that
determination lettersent the original of the letter ruling or determination letter be sent to the taxpayer’s
to taxpayer’s representativerepresentative. In this case, a copy of the letter ruling or determination letter will be sent
to the taxpayer. The letter ruling or determination letter is addressed to the taxpayer’s
representative to whom the original is sent.
If the taxpayer wants the original of the letter ruling or determination letter sent to the
taxpayer’s representative, the taxpayer must check the appropriate box on Form 2848. If
this form is not used, the taxpayer must state in the power of attorney that the original of
the letter ruling or determination letter is to be sent to the taxpayer’s representative. When
a taxpayer has more than one representative, the Service will send the original of the letter
ruling or determination letter to the first representative named in the most recent power of
attorney.
No copy of letterruling or(c) To have no copy sent to taxpayer’s representative.If a taxpayer does not want
determination lettersent a copy of the letter ruling or determination letter sent to any representative, the tax-
to taxpayer’s payer must check the appropriate box on Form 2848. If this form is not used, the taxpayer
representativemust state in the power of attorney that a copy of the letter ruling or determination letter is
not to be sent to any representative.
Expeditious handling(3) To request expeditious handling. The Service processes requests for letter rulings
and determination letters in order of the date received, and as expeditiously as possible. A
taxpayer who has a compelling need to have a request processed ahead of the regular
order must request expeditious handling. The request must be made in writing, preferably
in a separate letter with, or soon after filing, the request for the letter ruling or
determination letter. The request must explain the need for expeditious handling.
If the request for expeditious handling is not made in a separate letter, then the letter in
which the letter ruling or determination letter request is made should say, at the top of the
first page: “Expeditious Handling Is Requested. See page ___ of this letter.”
Arequest for expeditious handling will not be forwarded to a rulings branch for action
until the check or money order for the user fee in the correct amount is received.
The Service cannot give assurance that any letter ruling or determination letter will be
processed by the time requested. For example, the scheduling of a closing date for a trans-
action or a meeting of the board of directors or shareholders of a corporation, without re-
gard for the time it may take to obtain a letter ruling or determination letter, will not be
considered a sufficient reason to process a request ahead of its regular order. Also, the pos-
sible effect of fluctuation in the market price of stocks on a transaction will not be a suffi-
cient reason to process a request out of order. Accordingly, the Service urges taxpayers to
submit their requests well in advance of the contemplated transaction.
Facsimile transmission (fax)(4) To receive a letterruling orsubmit a request fora letterruling by facsimile
transmission (fax).
(a) To receive a letterruling by fax.Aletter ruling ordinarily is not sent by fax. How-
ever, if the taxpayer requests, a copy of a letter ruling may be faxed to the taxpayer or the
taxpayer’s authorized representative. Aletter ruling, however, is not issued until the ruling
is mailed. See§301.6110-2(h).
Arequest to fax a copy of the letter ruling to the taxpayer or the taxpayer’s authorized
representative must be made in writing, either as part of the original letter ruling request or
prior to the approval of the letter ruling. The request must contain the fax number of the
taxpayer or the taxpayer’s authorized representative to whom the letter ruling is to be
faxed.
1998–1 I.R.B.135January 5, 1998

In addition, because of the nature of a fax transmission, a statement containing a waiver
of any disclosure violations resulting from the fax transmission must accompany the re-
quest. Nevertheless, the national office will take certain precautions to protect confidential
information. For example, the national office will use a cover sheet that identifies the in-
tended recipient of the fax and the number of pages transmitted. The cover sheet, if possi-
ble, will not identify the specific taxpayer by name, and it will be the first page covering
the letter ruling being faxed.
(b) To submit a request fora letterruling by fax.Original letter ruling requests sent
by fax are discouraged because such requests must be treated in the same manner as re-
quests by letter. For example, the faxed letter ruling request will not be forwarded to the
applicable branch for action until the check for the user fee is received.
Requesting a conference(5) To request a conference.Ataxpayer who wants to have a conference on the issues
involved should indicate this in writing when, or soon after, filing the request. See also
sections 12.01, 12.02, and 13.09(2) of this revenue procedure.
Address to send the request.04
Requests forletterrulings
(1) Requests forletterrulings should be sent to the following offices (as appropriate):
Employee Plans Division
Internal Revenue Service
Assistant Commissioner (EP/EO)
Attention: CP:E:EP:T
P.O. Box 14073, Ben Franklin Station
Washington, DC 20044
Exempt Organizations Division
Internal Revenue Service
Assistant Commissioner (EP/EO)
Attention: CP:E:EO:P:2
P.O. Box 120, Ben Franklin Station
Washington, DC 20044
Requests may also be hand delivered:
(a) After working hours, to the drop box at the 12th Street entrance of 1111 Constitution
Avenue, NW, Washington, DC. No receipt will be given at the drop box; or
(b) Between the hours of 8:15 a.m. and 5:00 p.m. to:
Courier’s Desk
Internal Revenue Service
Att: CP:E:EP/EO
1111 Constitution Avenue, NW
Washington, DC
Areceipt will be given at the Courier’s desk.
The package should be marked: RULING REQUESTSUBMISSION. Requests may also
be hand delivered to Room 6052, 1111 Constitution Avenue, NW, Washington, DC be-
tween 8:30 a.m. and 4:00 p.m. on work days.
Requests for(2) Requests forinformation letterson either exempt organizations matters or em-
information lettersployee plans matters should be sent to the Employee Plans Technical Branches or the Ex-
empt Organizations Technical Branches (as appropriate):
January 5, 19981361998–1 I.R.B.

Internal Revenue Service
1111 Constitution Avenue, NW
Attention: CP:E:EO:P:2, Room 6052
Washington, DC 20224
Requests for(3) Requests fordetermination lettersshould be sent to the key district director whose
determination lettersoffice has or will have examination jurisdiction over the taxpayer’s return. For fees
required with determination letter requests, see section 6 of Rev. Proc. 98-8.
Pending letterruling requests.05
(1) Circumstances underwhich the taxpayermust notify the national office.The
taxpayer must notify the national office if, after the letter ruling request is filed but before a
letter ruling is issued, the taxpayer knows that—
(a) an examination of the issue or the identical issue on an earlier year’s return has been
started by a key district director;
(b) in employee plans matters, the issue is being considered by the Pension Benefit
Guaranty Corporation or the Department of Labor; or
(c) legislation that may affect the transaction has been introduced (see section 9.02(8) of
this revenue procedure).
(2) Taxpayermust notify national office if return is filed and must attach request to
return.If the taxpayer files a return before a letter ruling is received from the national of-
fice concerning the issue, the taxpayer must notify the national office that the return has
been filed. The taxpayer must also attach a copy of the letter ruling request to the return to
alert the key district office and thereby avoid premature key district action on the issue.
When to attach letter.06 Ataxpayer who receives a letter ruling before filing a return about any transaction
ruling to returnthat is relevant to the return being filed must attach a copy of the letter ruling to the return
when it is filed.
How to check on.07 The taxpayer or the taxpayer’s authorized representative may obtain information
status of requestregarding the status of a request by calling the person whose name and telephone number
are shown on the acknowledgement of receipt of the request.
Request may be .08
withdrawn ornational
office may decline to (1) In general.Ataxpayer may withdraw a request for a letter ruling or determination
issue letterrulingletter at any time before the letter ruling or determination letter is signed by the Service.
Correspondence and exhibits related to a request that is withdrawn or related to a letter
ruling request for which the national office declines to issue a letter ruling will not be
returned to the taxpayer. See section 9.02(2) of this revenue procedure. In appropriate
cases, the Service may publish its conclusions in a revenue ruling or revenue procedure.
Arequest for a letter ruling will not be suspended in the national office at the request of
a taxpayer.
(2) Notification of key district director.If a taxpayer withdraws a request for a letter
ruling or if the national office declines to issue a letter ruling, the national office will notify
the appropriate key district director and may give its views on the issues in the request to
the appropriate key district director to consider in any later examination of the return.
(3) Refunds of userfee.The user fee will not be returned for a letter ruling request that
is withdrawn. If the national office declines to issue a letter ruling on all of the issues in the
request, the user fee will be returned. If the national office, however, issues a letter ruling
on some, but not all, of the issues, the user fee will not be returned. Seesection 10 of Rev.
Proc. 98–8 for additional information regarding refunds of user fees.
1998–1 I.R.B.137January 5, 1998

Compliance with Treasury.09The taxpayer’s authorized representative, whether or not enrolled, must comply
Department CircularNo. 230with Treasury Department Circular No. 230, which provides the rules for practice before
the Service. In those situations when the national office believes that the taxpayer’s
representative is not in compliance with Circular No. 230, the national office will bring
the matter to the attention of the Director of Practice.
For the requirement regarding compliance with the conference and practice
requirements, see section 9.02(12) of this revenue procedure.
SECTION 10. WHAT
SPECIFIC,
ADDITIONAL
PROCEDURES APPLY
TO CERTAIN
REQUESTS?
In general.01 Specific revenue procedures supplement the general instructions for requests
explained in section 9 of this revenue procedure and apply to requests for letter rulings or
determination letters regarding the Code sections and matters listed in this section.
Exempt Organizations.02 If the request is for the qualification of an organization for exemption from federal
income tax under §501 or 521, see Rev. Proc. 72–5, 1972–1 C.B. 709, regarding religious
and apostolic organizations; Rev. Proc. 80–27, 1980–1 C.B. 677, concerning group
exemptions; and Rev. Proc. 90–27 1990–1 C.B. 514 (as modified by Rev. Proc. 98–8),
regarding applications for recognition of exemption.
Employee Plans.03
(1) For requests to obtain approval for a retroactive amendment described in §412(c)(8)
of the Code and §302(c)(8) of the Employee Retirement Income Security Act of 1974
(ERISA) that reduces accrued benefits, see Rev. Proc. 94–42, 1994–1 C.B. 717.
(2) For requests for a waiver of the minimum funding standard, see Rev. Proc. 94–41,
1994–1 C.B. 711.
(3) For requests for a waiver of the 100 percent tax imposed under §4971(b) of the
Code on a pension plan that fails to meet the minimum funding standards of §412, see
Rev. Proc. 81–44, 1981-2 C.B. 618.
(4) For requests for a determination that a plan amendment is reasonable and provides
for only de minimis increases in plan liabilities in accordance with §§401(a)(33) and
412(f)(2)(A), see Rev. Proc. 79–62, 1979–2 C.B. 576.
(5) For requests to obtain approval for an extension of an amortization period of any un-
funded liability in accordance with §412(e), see Rev. Proc. 79–61, 1979–2 C.B. 575.
(6) For requests by administrators or sponsors of a defined benefit plan to obtain ap-
proval for a change in funding method, see Rev. Proc. 78–37, 1978–2 C.B. 540.
(7) For requests for the return to the employer of certain nondeductible contributions,
see Rev. Proc. 90–49, 1990–2 C.B. 620 (as modified by Rev. Proc. 98–8).
(8) For requests for determination letters for plans under §§401, 403(a), 409, and
4975(e)(7), and for the exempt status of any related trust under §501, see Rev. Proc. 98–6,
Rev. Proc. 93–10 and Rev. Proc. 93–12.
January 5, 19981381998–1 I.R.B.

SECTION 11. HOWDOES
THE NATIONAL
OFFICE HANDLE
LETTER RULING
REQUESTS?
In general.01 The national office will issue letter rulings on the matters and under the
circumstances explained in sections 4 and 6 of this revenue procedure and in the manner
explained in this section and section 13 of this revenue procedure.
Is not bound by informal .02 The Service will not be bound by the informal opinion expressed by the branch rep-
opinion expressedresentative or any other authorized Service representative under this procedure, and such
an opinion cannot be relied upon as a basis for obtaining retroactive relief under the
provisions of §7805(b).
Tells taxpayerif request .03 If a request for a letter ruling or determination letter does not comply with all the
lacks essential information provisions of this revenue procedure, the request will be acknowledged and the Service
during initial contactrepresentative will tell the taxpayer during the initial contact which requirements have not
been met.
Information must be If the request lacks essential information, which may include additional information
submitted within needed to satisfy the procedural requirements of this revenue procedure, as well as sub-
30 calendardaysstantive changes to transactions or documents needed from the taxpayer, the branch repre-
sentative will tell the taxpayer during the initial contact that the request will be closed if
the Service does not receive the information within 30 calendar days unless an extension
of time is granted. Seesection 11.04 of this revenue procedure for information on
extension of time and instructions on submissions of additional information.
Letterruling request Arequest for a letter ruling sent to the key district director that does not comply with
mistakenly sent to key the provisions of this revenue procedure will be returned by the key district director so
district directorthat the taxpayer can make corrections before sending it to the national office.
Requires prompt submission .04 Material facts furnished to the Service by telephone or fax, or orally at a conference,
of additional information must be promptly confirmed by letter to the Service. This confirmation and any additional
requested afterinitial information requested by the Service that is not part of the information requested during
contactthe initial contact must be furnished within 21 calendar days to be considered part of the
request.
Additional information submitted to the Service must be accompanied by the following
declaration: “Underpenalties of perjury, I declare that I have examined this informa-
tion, including accompanying documents, and, to the best of my knowledge and be-
lief, the information contains all the relevant facts relating to the request forthe infor-
mation, and such facts are true, correct, and complete.”This declaration must be
signed in accordance with the requirements in section 9.02(13)(b) of this revenue proce-
dure. Ataxpayer who submits additional factual information on several occasions may pro-
vide one declaration subsequent to all submissions that refers to all submissions.
Encourage use of fax(1) To facilitate prompt action on letter ruling requests, taxpayers are encouraged to
submit additional information by fax as soon as the information is available. The Service
representative who requests additional information can provide a telephone number to
which the information can be faxed. Acopy of this information and a signed perjury
statement, however, must be mailed or delivered to the Service.
Address to send(2) Additional information should be sent to the same address as the original letter
additional informationruling request. See section 9.04. However, the additional information should include the
name, office symbols, and room number of the Service representative who requested the
information and the taxpayer’s name and the case control number (which the Service
representative can provide).
1998–1 I.R.B.139January 5, 1998

Numberof copies of (3) Generally, a taxpayer needs only to submit one copy of the additional information.
additional information However, in appropriate cases, the national office may request additional copies of the
to be submittedinformation.
30-day or21-day period (4) An extension of the 30-day period under section 11.03 or the 21-day period under
may be extended if justified section 11.04, will be granted only if justified in writing by the taxpayer and approved by
and approvedthe branch chief of the branch to which the case is assigned. Arequest for extension
should be submitted before the end of the 30-day or 21-day period. If unusual
circumstances close to the end of the 30-day or 21-day period make a written request
impractical, the taxpayer should notify the national office within the 30-day or 21-day
period that there is a problem and that the written request for extension will be coming
soon. The taxpayer will be told promptly, and later in writing, of the approval or denial of
the requested extension. If the extension request is denied, there is no right of appeal.
If taxpayerdoes not (5) If the taxpayer does not follow the instructions for submitting additional information
submit additional or requesting an extension within the time provided, a letter ruling will be issued on the
informationbasis of the information on hand, or, if appropriate, no letter ruling will be issued. When
the Service decides not to issue a letter ruling because essential information is lacking, the
case will be closed and the taxpayer notified in writing. If the Service receives the
information afterthe letterruling request is closed, the request may be reopened and
treated as a new request. However, the taxpayermust pay anotheruserfee before
the case can be reopened
Nearthe completion of the .05 Generally, after the conference of right is held but before the letter ruling is issued,
ruling process, advises the branch representative will inform the taxpayer or the taxpayer’s authorized representa-
taxpayerof conclusions tive of the Service’s final conclusions. If the Service is going to rule adversely, the tax-
and, if the Service will payer will be offered the opportunity to withdraw the letter ruling request. If the taxpayer
rule adversely, offers the or the taxpayer’s representative does not promptly notify the branch representative of a de-
taxpayerthe opportunity cision to withdraw the ruling request, the adverse letter will be issued. The user fee will
to withdraw the letternot be refunded for a letter ruling request that is withdrawn. Seesection 10 of Rev. Proc.
ruling request98–8.
May request draft of proposed .06 To accelerate issuance of letter rulings, in appropriate cases near the completion of
letterruling nearthe the ruling process, the Service representative may request that the taxpayer or the tax-
completion of the rulingpayer’s representative submit a proposed draft of the letter ruling on the basis of discus-
processsions of the issues. The taxpayer, however, is not required to prepare a draft letter ruling
in order to receive a letter ruling.
The format of the submission should be discussed with the Service representative who
requests the draft letter ruling. The representative usually can provide a sample format of a
letter ruling and will discuss the facts, analysis, and letter ruling language to be included.
Taxpayermay also submit In addition to a typed draft, taxpayers are encouraged to submit this draft on a disk in
draft on a word either Word Perfect 5.1 or ASCII. The typed draft will become part of the permanent files
processing diskof the national office, and the word processing disk will not be returned. If the Service
representative requesting the draft letter ruling cannot answer specific questions about the
format of the word processing disk, the questions can be directed to Alan Pipkin at (202)
622-8400 (Employee Plans), or Wayne Hardesty at (202) 622-7644 (Exempt
Organizations) (not toll-free calls).
The proposed letter ruling (both typed draft and word processing disk) should be sent to
the same address as any additional information and contain in the transmittal the informa-
tion that should be included with any additional information (for example, a penalties of
perjury statement is required). Seesection 11.04 of this revenue procedure.
SECTION 12. HOW
ARE CONFERENCES
SCHEDULED?
Schedules a conference .01 Ataxpayer may request a conference regarding a letter ruling request. Normally, a
if requested by taxpayerconference is scheduled only when the national office considers it to be helpful in
January 5, 19981401998–1 I.R.B.

deciding the case or when an adverse decision is indicated. If conferences are being
arranged for more than one request for a letter ruling involving the same taxpayer, they
will be scheduled so as to cause the least inconvenience to the taxpayer. As stated in
section 9.03(5) of this revenue procedure, a taxpayer who wants to have a conference on
the issue or issues involved should indicate this in writing when, or soon after, filing the
request.
If a conference has been requested, the taxpayer will be notified by telephone, if possi-
ble, of the time and place of the conference, which must then be held within 21 calendar
days after this contact. Instructions for requesting an extension of the 21-day period and
notifying the taxpayer or the taxpayer’s representative of the Service’s approval or denial
of the request for extension are the same as those explained in section 11.04 of this revenue
procedure regarding providing additional information.
Permits taxpayerone .02 Ataxpayer is entitled, as a matter of right, to only one conference in the national
conference of rightoffice, except as explained under section 12.05 of this revenue procedure. This con-
ference normally will be held at the branch level and will be attended by a person who, at
the time of the conference, has the authority to sign the ruling letter in his or her own
name or for the branch chief.
When more than one branch has taken an adverse position on an issue in a letter ruling
request, or when the position ultimately adopted by one branch will affect that adopted by
another, a representative from each branch with the authority to sign in his or her own
name or for the branch chief will attend the conference. If more than one subject is to be
discussed at the conference, the discussion will constitute a conference on each subject.
To have a thorough and informed discussion of the issues, the conference usually will be
held after the branch has had an opportunity to study the case. However, at the request of
the taxpayer, the conference of right may be held earlier.
No taxpayer has a right to appeal the action of a branch to the division director or to any
other official of the Service. But see section 12.05 of this revenue procedure for situations
in which the Service may offer additional conferences.
Disallows verbatim .03 Because conference procedures are informal, no tape, stenographic, or other
recording of conferencesverbatim recording of a conference may be made by any party.
Makes tentative .04 The senior Service representative present at the conference ensures that the taxpayer
recommendations on has the opportunity to present views on all the issues in question. AService representative
substantive issuesexplains the Service’s tentative decision on the substantive issues and the reasons for that
decision. If the taxpayer asks the Service to limit the retroactive effect of any letter ruling
or limit the revocation or modification of a prior letter ruling, a Service representative will
discuss the recommendation concerning this issue and the reasons for the recom-
mendation. The Service representatives will not make a commitment regarding the
conclusion that the Service will finally adopt.
May offeradditional .05 The Service will offer the taxpayer an additional conference if, after the conference
conferencesof right, an adverse holding is proposed, but on a new issue, or on the same issue but on
different grounds from those discussed at the first conference. There is no right to another
conference when a proposed holding is reversed at a higher level with a result less
favorable to the taxpayer, if the grounds or arguments on which the reversal is based were
discussed at the conference of right.
The limit on the number of conferences to which a taxpayer is entitled does not prevent
the Service from offering additional conferences, including conferences with an official
higher than the branch level, if the Service decides they are needed. Such conferences are
not offered as a matter of course simply because the branch has reached an adverse deci-
sion. In general, conferences with higher level officials are offered only if the Service de-
termines that the case presents significant issues of tax policy or tax administration and that
1998–1 I.R.B.141January 5, 1998

the consideration of these issues would be enhanced by additional conferences with the
taxpayer.
Requires written .06 The taxpayer should furnish to the national office any additional data, reasoning,
confirmation of precedents, etc., that were proposed by the taxpayer and discussed at the conference but not
information presentedpreviously or adequately presented in writing. The taxpayer must furnish the additional
at conferenceinformation within 21 calendar days from the date of the conference. See section 11.04 of
this revenue procedure for instructions on submission of additional information. If the
additional information is not received within that time, a ruling will be issued on the basis
of the information on hand or, if appropriate, no ruling will be issued.
Procedures for requesting an extension of the 21-day period and notifying the taxpayer
or the taxpayer’s representative of the Service’s approval or denial of the requested exten-
sion are the same as those stated in section 11.04 of this revenue procedure regarding sub-
mitting additional information.
May schedule a pre-.07 Sometimes it is advantageous to both the Service and the taxpayer to hold a con-
submission conferenceference before the taxpayer submits the letter ruling request to discuss substantive or
procedural issues relating to a proposed transaction. Such conferences are held only if the
taxpayer actually intends to make a request, only if the request involves a matter on which
a letter ruling is ordinarily issued, and only on a time-available basis. For example, a pre-
submission conference will not be held on an income tax issue if, at the time the pre-
submission conference is requested, the identical issue is involved in the taxpayer’s return
for an earlier period and that issue is being examined by a district director. See section 6
of this revenue procedure. Generally, the taxpayer will be asked to provide before the pre-
submission conference a statement of whether the issue is an issue on which a letter ruling
is ordinarily issued and a draft of the letter ruling request or other detailed written
statement of the proposed transaction, issue, and legal analysis.
Any discussion of substantive issues at a pre-submission conference is advisory only, is
not binding on the Service, and cannot be relied upon as a basis for obtaining retroactive
relief under the provisions of §7805(b). Aletter ruling request submitted following a pre-
submission conference will not necessarily be assigned to the branch that held the pre-sub-
mission conference.
Underlimited circumstances, .08 Ataxpayer may request that their conference of right be held by telephone. This
may schedule a conference request may occur, for example, when a taxpayer wants a conference of right but believes
to be held by telephonethat the issue involved does not warrant incurring the expense of traveling to Washington,
DC. If a taxpayer makes such a request, the branch chief will decide if it is appropriate in
the particular case to hold the conference of right by telephone. If the request is approved
by the branch chief, the taxpayer will be advised when to call the Service representatives
(not a toll-free call).
SECTION 13. WHAT
WILLALETTER
RULING HAVE?
May be relied on .01 Ataxpayer ordinarily may rely on a letter ruling received from the Service subject
subject to limitationsto the conditions and limitations described in this section.
Will not apply to .02 Ataxpayer may not rely on a letter ruling issued to another taxpayer. See §6110(j)(3).
anothertaxpayer
Will be used by a key .03 When determining a taxpayer’s liability, the key district director must ascertain
district directorin whether—
examining the
taxpayer’s return(1) the conclusions stated in the letter ruling are properly reflected in the return;
(2) the representations upon which the letter ruling was based reflected an accurate
statement of the material facts;
January 5, 19981421998–1 I.R.B.

(3) the transaction was carried out substantially as proposed; and
(4) there has been any change in the law that applies to the period during which the
transaction or continuing series of transactions were consummated.
If, when determining the liability, the key district director finds that a letter ruling should
be revoked or modified, unless a waiver is obtained from the national office, the findings
and recommendations of the key district director will be forwarded to the national office
for consideration before further action is taken by the key district director. Such a referral
to the national office will be treated as a request for technical advice and the procedures of
Rev. Proc. 98-5 will be followed. Otherwise, the letter ruling is to be applied by the key
district office in its determination of the taxpayer’s liability. Appropriate coordination with
the national office will be undertaken if any field official having jurisdiction over a return
or other matter proposes to reach a conclusion contrary to a letter ruling previously issued
to the taxpayer.
May be revoked or.04 Unless it was part of a closing agreement as described in section 3.03 of this revenue
modified if found to procedure, a letter ruling found to be in error or not in accord with the current views of the
be in errorService may be revoked or modified. If a letter ruling is revoked or modified, the
revocation or modification applies to all years open under the statute of limitations unless
the Service uses its discretionary authority under §7805(b) to limit the retroactive effect
of the revocation or modification.
Aletter ruling may be revoked or modified due to—
(1) a notice to the taxpayer to whom the letter ruling was issued;
(2) the enactment of legislation or ratification of a tax treaty;
(3) a decision of the United States Supreme Court;
(4) the issuance of temporary or final regulations; or
(5) the issuance of a revenue ruling, revenue procedure, notice, or other statement pub-
lished in the Internal Revenue Bulletin.
Consistent with these provisions, if a letter ruling relates to a continuing action or a se-
ries of actions, it ordinarily will be applied until any one of the events described above oc-
curs or until it is specifically withdrawn.
Publication of a notice of proposed rulemaking will not affect the application of any let-
ter ruling issued under this revenue procedure.
Not generally revoked or.05 Except in rare or unusual circumstances, the revocation or modification of a letter
modified retroactivelyruling will not be applied retroactively to the taxpayer for whom the letter ruling was
issued or to a taxpayer whose tax liability was directly involved in the letter ruling
provided that—
(1) there has been no misstatement or omission of material facts;
(2) the facts at the time of the transaction are not materially different from the facts on
which the letter ruling was based;
(3) there has been no change in the applicable law;
(4) the letter ruling was originally issued for a proposed transaction; and
(5) the taxpayer directly involved in the letter ruling acted in good faith in relying on the
letter ruling, and revoking or modifying the letter ruling retroactively would be to the tax-
1998–1 I.R.B.143January 5, 1998

payer’s detriment. For example, the tax liability of each employee covered by a ruling re-
lating to a qualified plan of an employer is directly involved in such ruling. However, the
tax liability of a member of an industry is not directly involved in a letter ruling issued to
another member and, therefore, the holding in a revocation or modification of a letter rul-
ing to one member of an industry may be retroactively applied to other members of the in-
dustry. By the same reasoning, a tax practitioner may not extend to one client the non-
retroactive application of a revocation or modification of a letter ruling previously issued to
another client.
If a letter ruling is revoked or modified by letter with retroactive effect, the letter will,
except in fraud cases, state the grounds on which the letter ruling is being revoked or mod-
ified and explain the reasons why it is being revoked or modified retroactively.
Retroactive effect of revocation .06 Aletter ruling issued on a particular transaction represents a holding of the Service
ormodification applied only on that transaction only. It will not apply to a similar transaction in the same year or any
to a particulartransactionother year. And, except in unusual circumstances, the application of that letter ruling to
the transaction will not be affected by the later issuance of regulations (either temporary or
final), if conditions (1) through (5) in section 13.05 of this revenue procedure are met.
However, if a letter ruling on a transaction is later found to be in error or no longer in ac-
cord with the position of the Service, it will not protect a similar transaction of the taxpayer
in the same year or later year.
Retroactive effect of .07 If a letter ruling is issued covering a continuing action or series of actions and the
revocation ormodification letter ruling is later found to be in error or no longer in accord with the position of the
applied to a continuing Service, the Assistant Commissioner (Employee Plans and Exempt Organizations) ordi-
action orseries of actionsnarily will limit the retroactive effect of the revocation or modification to a date that is not
earlier than that on which the letter ruling is revoked or modified.
May be retroactively revoked.08 Ataxpayer is not protected against retroactive revocation or modification of a letter
ormodified when transactionruling involving a completed transaction other than those described in section 13.07 of this
is completed withoutrevenue procedure, because the taxpayer did not enter into the transaction relying on a
reliance on the letterrulingletter ruling.
Taxpayermay request that .09 Under §7805(b), the Service may prescribe any extent to which a revocation or
retroactivity be limitedmodification of a letter ruling or determination letter will be applied without retroactive
effect.
Ataxpayer to whom a letter ruling or determination letter has been issued may request
that the Assistant Commissioner (Employee Plans and Exempt Organizations) limit the
retroactive effect of any revocation or modification of the letter ruling or determination let-
ter.
Format of request(1) Request forrelief under§7805(b) must be made in required format.
Arequest to limit the retroactive effect of the revocation or modification of a letter ruling
must be in the general form of, and meet the general requirements for, a letter ruling re-
quest. These requirements are given in section 9 of this revenue procedure. Specifically,
the request must also—
(a) state that it is being made under §7805(b);
(b) state the relief sought;
(c) explain the reasons and arguments in support of the relief requested (including a dis-
cussion of the five items listed in section 13.05 of this revenue procedure and any other
factors as they relate to the taxpayer’s particular situation); and
(d) include any documents bearing on the request.
January 5, 19981441998–1 I.R.B.

Arequest that the Service limit the retroactive effect of a revocation or modification of a
letter ruling may be made in the form of a separate request for a letter ruling when, for ex-
ample, a revenue ruling has the effect of revoking or modifying a letter ruling previously
issued to the taxpayer, or when the Service notifies the taxpayer of a change in position that
will have the effect of revoking or modifying the letter ruling. However, when notice is
given by the key district director during an examination of the taxpayer’s return or by the
chief, appeals office, during consideration of the taxpayer’s return before an appeals office,
a request to limit retroactive effect must be made in the form of a request for technical ad-
vice as explained in section 18 of Rev. Proc. 98–5.
When germane to a pending letter ruling request, a request to limit the retroactive effect
of a revocation or modification of a letter ruling may be made as part of the request for the
letter ruling, either initially or at any time before the letter ruling is issued. When a letter
ruling that concerns a continuing transaction is revoked or modified by, for example, a sub-
sequent revenue ruling, a request to limit retroactive effect must be made before the exam-
ination of the return that contains the transaction that is the subject of the letter ruling re-
quest.
Consideration of relief under §7805(b) will be included as one of the taxpayer’s steps in
exhausting administrative remedies only if the taxpayer has requested such relief in the
manner described in this revenue procedure. If the taxpayer does not complete the applica-
ble steps, the taxpayer will not have exhausted the taxpayer’s administrative remedies as
required by §7428(b)(2) and §7476(b)(3) and will, thus, be precluded from seeking a de-
claratory judgment under §7428 or §7476. Where the taxpayer has requested §7805(b)
relief, the taxpayer’s administrative remedies will not be considered exhausted until the na-
tional office has had a reasonable time to act upon the request.
Request forconference(2) Taxpayermay request a conference on application of §7805(b).
Ataxpayer who requests the application of §7805(b) in a separate letter ruling request
has the right to a conference in the national office as explained in sections 12.01, 12.02,
12.03, 12.04 and 12.05 of this revenue procedure. If the request is made initially as part of
a pending letter ruling request or is made before the conference of right is held on the sub-
stantive issues, the §7805(b) issue will be discussed at the taxpayer’s one conference of
right as explained in section 12.02 of this revenue procedure. If the request for the applica-
tion of §7805(b) relief is made as part of a pending letter ruling request after a conference
has been held on the substantive issue and the Service determines that there is justification
for having delayed the request, the taxpayer is entitled to one conference of right concern-
ing the application of §7805(b), with the conference limited to discussion of this issue
only.
SECTION 14. WHAT
EFFECTWILLA
DETERMINATION
LETTER HAVE?
Has same effect as a .01 Adetermination letter issued by a key district director has the same effect as a letter
letterrulingruling issued to a taxpayer under section 13 of this revenue procedure.
If a key district director proposes to reach a conclusion contrary to that expressed in a
determination letter, he or she need not refer the matter to the national office as is required
for a letter ruling found to be in error. However, the key district director must refer the
matter to the national office if the key district director desires to have the revocation or
modification of the determination letter limited under §7805(b).
Taxpayermay request.02 Akey district director does not have authority under §7805(b) to limit the revoca-
that retroactive effect tion or modification of the determination letter. Therefore, if a key district director pro-
of revocation orposes to revoke or modify a determination letter, the taxpayer may request limitation of
modification be limitedthe retroactive effect of the revocation or modification by asking the key district director
1998–1 I.R.B.145January 5, 1998

who issued the determination letter to seek technical advice from the national office. See
section 18 of Rev. Proc. 98–5.
Format of request(1) Request forrelief under§7805(b) must be made in required format.
Ataxpayer’s request to limit the retroactive effect of the revocation or modification of
the determination letter must be in the form of, and meet the general requirements for, a
technical advice request. Seesection 17.06 of Rev. Proc. 98–5. The request must also—
(a) state that it is being made under §7805(b);
(b) state the relief sought;
(c) explain the reasons and arguments in support of the relief sought (including a discus-
sion of the five items listed in section 13.05 of this revenue procedure and any other factors
as they relate to the taxpayer’s particular situation); and
(d) include any documents bearing on the request.
Request forconference(2) Taxpayermay request a conference on application of §7805(b).
When technical advice is requested regarding the application of §7805(b), the taxpayer
has the right to a conference in the national office to the same extent as does any taxpayer
who is the subject of a technical advice request. See section 10 of Rev. Proc. 98–5.
Exhaustion of administrative (3) Taxpayersteps in exhausting administrative remedies.
remedies
Consideration of relief under §7805(b) will be included as one of the taxpayer’s steps in
exhausting administrative remedies only if the taxpayer has requested such relief in the
manner described in this revenue procedure. If the taxpayer does not complete the applica-
ble steps, the taxpayer will not have exhausted the taxpayer’s administrative remedies as
required by §7428(b)(2) and §7476(b)(3) and will, thus, be precluded from seeking a de-
claratory judgment under §7428 or §7476. Where the taxpayer has requested §7805(b)
relief, the taxpayer’s administrative remedies will not be considered exhausted until the na-
tional office has had a reasonable time to act upon the request.
SECTION 15. UNDER WHAT
CIRCUMSTANCES ARE
MATTERS REFERRED
BETWEEN AKEY
DISTRICTOFFICE
AND THE NATIONAL
OFFICE?
Requests for.01 Requests for determination letters received by key district directors that, under the
determination lettersprovisions of this revenue procedure, may not be issued by a key district office, will be
forwarded to the national office for reply. The key district office will notify the taxpayer
that the matter has been referred.
Key district directors will also refer to the national office any request for a determination
letter that in their judgement should have the attention of the national office.
No-rule areas.02 If the request involves an issue on which the Service will not issue a letter ruling or
determination letter, the request will not be forwarded to the national office. The key
district office will notify the taxpayer that the Service will not issue a letter ruling or a
determination letter on the issue. See section 8 of this revenue procedure for a description
of no-rule areas.
January 5, 19981461998–1 I.R.B.

Requests forletterrulings.03 Requests for letter rulings received by the national office that, under section 6 of
this revenue procedure, may not be acted upon by the national office will be forwarded to
the key district office that has examination jurisdiction over the taxpayer’s return. The
taxpayer will be notified of this action. If the request is on an issue or in an area of the
type discussed in section 8 of this revenue procedure, and the Service decides not to issue
a letter ruling or an information letter, the national office will notify the taxpayer and will
then forward the request to the appropriate key district office for association with the
related return.
SECTION 16. WHATIS Rev. Proc. 97–4 is superseded.
THE EFFECTOFTHIS
REVENUE PROCEDURE
ON OTHER DOCUMENTS?
SECTION 17. This revenue procedure is effective January 5, 1998.
EFFECTIVE DATE
SECTION 18. The collections of information contained in this revenue procedure have been reviewed
PAPERWORK and approved by the Office of Management and Budget in accordance with the Paperwork
REDUCTION ACTReduction Act (44 U.S.C. §3507) under control number 1545-1520.
An agency may not conduct or sponsor, and a person is not required to respond to, a col-
lection of information unless the collection of information displays a valid control number.
The collections of information in this revenue procedure are in sections 7.07, 9.02, 9.03,
9.04, 9.05, 9.06, 10.02, 10.03, 11.03, 11.04(1)–(5), 11.06, 12.01, 12.06, 12.07, 13.09(1),
14.02(1), and in Appendix B. This information is required to evaluate and process the re-
quest for a letter ruling or determination letter. In addition, this information will be used to
help the Service delete certain information from the text of the letter ruling or determina-
tion letter before it is made available for public inspection, as required by §6110. The col-
lections of information are required to obtain a letter ruling or determination letter. The
likely respondents are business or other for-profit institutions.
The estimated total annual reporting and/or recordkeeping burden is 12,650 hours.
The estimated annual burden per respondent/recordkeeper varies from 15 minutes to 16
hours, depending on individual circumstances and the type of request involved, with an es-
timated average burden of 6.01 hours. The estimated number of respondents and/or
recordkeepers is 2,103.
The estimated annual frequency of responses is one request per applicant, except that a
taxpayer requesting a letter ruling may also request a presubmission conference.
Books or records relating to a collection of information must be retained as long as their
contents may become material in the administration of any internal revenue law. Gener-
ally, tax returns and tax return information are confidential, as required by §6103.
DRAFTING INFORMATIONThe principal authors of this revenue procedure are Luis Ortiz of the Employee Plans
Division and Dave Flavin of the Exempt Organizations Division. For further information
regarding how this revenue procedure applies to employee plan matters, contact the
Employee Plans Division telephone assistance service between the hours of 1:30 and 3:30
p.m., Eastern Time, Monday through Thursday, on (202) 622-6074/75 (not a toll-free call).
Mr. Ortiz’telephone number is (202) 622-7656 (not a toll-free call). For exempt
organization matters, please contact Mr. Flavin at (202) 622-7922 (not a toll-free call).
1998–1 I.R.B.147January 5, 1998

INDEX
additional information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.02(9), 9.03, 11.03, 11.04
closing agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 3.03, 6.06(4), 9.02(4), 9.02(15), 13.04
conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.02(9), 9.03(5), 12.01-.08, 13.09(2), 14.02(2)
disclose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.02(9)
exempt organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 6.01
expeditious handling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.03(3)
extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 6.02, 6.04, 11.04, 12.01, 12.06
fax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.03(4), 11.04
fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.02(14), 11.04(5)
hand delivered. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.04(1)
information letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 3.07, 8.01, 15.03
no rule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 8, 15.02
perjury statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.02(13), 11.04, 11.06
power of attorney. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.02(12), 9.03(2)
reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 3.09, 11.02, 12.07, 13, 14
representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 3.09, 9.02(10)-(11), 9.03(2)
retroactive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 11.02, 12.04, 12.07, 13, 14
revenue ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 3.08, 6.07, 13.04, 13.09(1)
section 6110. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.02(9), 13.02
status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.07
technical advice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 7.08, 13.03, 13.09(1), 14
telephone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.02(1), 11.04, 12.01, 12.08
where to send. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.04
withdraw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sec. 9.08
January 5, 19981481998–1 I.R.B.

APPENDIX A
SAMPLE FORMATFOR ALETTER RULING REQUEST
(Insert the date of request)
Internal Revenue Service
Assistant Commissioner (EP/EO)
Attention: CP:E:EP:T
P.O. Box 14073
Ben Franklin Station
Washington, DC 20044
Dear Sir or Madam:
(Insert the name of the taxpayer)(the “Taxpayer”) requests a ruling on the proper treatment of (insert the subject matter of the let-
ter ruling request)under §(insert the number) of the Internal Revenue Code.
[If the taxpayer is requesting expeditious handling, the letter ruling request must contain a statement to that effect. This statement
must explain the need for expeditious handling. See section 9.03(3).]
A. STATEMENTOF FACTS
1.Taxpayer Information
[Provide the statements required by sections 9.02(1)(a), (b), (c), and (d) of Rev. Proc. 98–4, 1998–1 I.R.B.113. (Hereafter, all refer-
ences are to Rev. Proc. 98–4 unless otherwise noted.)]
For example, a taxpayer that maintains a qualified employee retirement plan and files an annual Form 5500 series of returns may
include the following statement to satisfy sections 9.02(1)(a), (b), (c), and (d):
The Taxpayer is a construction company with principal offices located at 100 Whatever Drive, Wherever, Maryland 12345, and its
telephone number is (123) 456-7890. The Taxpayer’s federal employer identification number is 00-1234567. The Taxpayer uses the
Form 5500 series of returns on a calendar year basis to report its qualified employee retirement plan and trust.
The key district director of Internal Revenue for the Baltimore, Maryland district has audit jurisdiction over the Taxpayer’s Fed-
eral tax returns.
2.Detailed Description of the Transaction.
[The ruling request must contain a complete statement of the facts relating to the transaction that is the subject of the letter ruling re-
quest. This statement must include a detailed description of the transaction, including material facts in any accompanying docu-
ments, and the business reasons for the transaction. See sections 9.02(1)(c), 9.02(1)(d), and 9.02(2).]
B. RULING REQUESTED
[The ruling request should contain a concise statement of the ruling requested by the taxpayer.]
C. STATEMENTOF LAW
[The ruling request must contain a statement of the law in support of the taxpayer’s views or conclusion, including any authorities
believed to be contrary to the position advanced in the ruling request. This statement must also identify any pending legislation that
may affect the proposed transaction. See sections 9.02(6), 9.02(7), and 9.02(8).]
D. ANALYSIS
[The ruling request must contain a discussion of the facts and an analysis of the law. See sections 9.02(3), 9.02(6), 9.02(7), and
9.02(8).]
1998–1 I.R.B.149January 5, 1998

E. CONCLUSION
[The ruling request should contain a statement of the taxpayer’s conclusion on the ruling requested.]
F. PROCEDURALMATTERS
1.Rev. Proc. 98–4 Statements
a.[The statement required by section 9.02(4).]
b.[The statement required by section 9.02(5).]
c.[The statement required by section 9.02(6) regarding whether the law in connection with the letter ruling request is uncertain
and whether the issue is adequately addressed by relevant authorities.]
d.[The statement required by section 9.02(7) when the taxpayer determines that there are no contrary authorities.]
e.[If the taxpayer wants to have a conference on the issues involved in the letter ruling request, the ruling request should contain
a statement to that effect. See section 9.03(5).]
f.[If the taxpayer is requesting the letter ruling to be issued by fax, the ruling request should contain a statement to that effect.
This statement must also contain a waiver of any disclosure violations resulting from the fax transmission. See section
9.03(4).]
g.[If the taxpayer is requesting separate letter rulings on multiple issues, the letter ruling request should contain a statement to
that effect. See section 9.03(1).]
2.Administrative
a.APower of Attorney is enclosed. [See sections 9.02(12) and 9.03(2).]
b.The deletions statement and checklist required by Rev. Proc. 98–4 are enclosed. [See sections 9.02(9) and 9.02(17).]
c.The required user fee is enclosed. [See section 9.02(14).]
Very truly yours,
(Insert the name of the taxpayer or the taxpayer’s autho-
rized representative)
By:
Signature Date
Typed or printed name
of person signing request
DECLARATION: [See section 9.02(13).]
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.
(Insert the name of the taxpayer)
January 5, 19981501998–1 I.R.B.

By:
SignatureTitleDate
Typed or printed name of
person signing declaration
1998–1 I.R.B.151January 5, 1998

APPENDIX B
CHECKLIST
IS YOUR RULING REQUESTCOMPLETE?
INSTRUCTIONS
The Service will be able to respond more quickly to your letter ruling request if it is carefully prepared and complete. To ensure
that your request is in order, use this checklist. Complete the five items of information requested before the checklist. Answer each
question by circling “Yes,” “No,” or “N/A.” When a question contains a place for a page number, insert the page number (or num-
bers) of the request that gives the information called for by a yes answer to a question. Sign and date the checklist (as taxpayeror
authorized representative) and place it on top of yourrequest.
If you are an authorized representative submitting a request for a taxpayer, you must include a completed checklist with the re-
quest, or the request will either be returned to you or substantive consideration of it will be deferred until a completed checklist is
submitted. If you are a taxpayerpreparing yourown request without professional assistance, an incomplete checklist will not
be cause forreturning yourrequest ordeferring substantive consideration of the request. However, you should still complete
as much of the checklist as possible and submit it with your request.
TAXPAYER’S NAME
TAXPAYER’S I.D. No.
DISTRICTHAVING AUDITJURISDICTION
ATTORNEY/P.O.A.
PRIMARYCODE SECTION
CIRCLE ONEITEM
YesNoN/A1. Does your request involve an issue under the jurisdiction of the Assistant Commissioner (Employee Plans
and Exempt Organizations)? See section 5 of Rev. Proc. 98–4, 1998–1 I.R.B.113, for issues under the jurisdic-
tion of other offices. (Hereafter, all references are to Rev. Proc. 98-4 unless otherwise noted.)
YesNoN/A2. If your request involves a matter on which letter rulings are not ordinarily issued, have you given compelling
reasons to justify the issuance of a private letter ruling? Before preparing your request, you may want to call the
branch in the Office of the Assistant Commissioner (Employee Plans and Exempt Organizations) responsible for
substantive interpretations of the principal Internal Revenue Code section on which you are seeking a letter rul-
ing to discuss the likelihood of an exception. The appropriate branch to call for this information may be ob-
tained by calling (202) 622-8400 (Employee Plans matters), or (202) 622-8200 (Exempt Organizations matters)
(not toll-free calls).
YesNoN/A3. If the request involves an employee plans qualification matter under §401(a), §409, or §4975(e)(7), have
Page
—
you demonstrated that the request satisfies the three criteria in section 6.03 for a national office ruling?
YesNoN/A4. If the request deals with a completed transaction, have you filed the return for the year in which the
Page
—
transaction was completed? See sections 6.01 and 6.02.
YesNo5. Are you requesting a letter ruling on a hypothetical situation or question? See section 8.02.
YesNo6. Are you requesting a letter ruling on alternative plans of a proposed transaction? See section 8.02.
YesNo7. Are you requesting the letter ruling for only part of an integrated transaction? See section 8.03.
YesNo8. Have you submitted another letter ruling request for the transaction covered by this request?
January 5, 19981521998–1 I.R.B.

1998–1 I.R.B.153January 5, 1998
YesNo9. Are you requesting the letter ruling for a business, trade, industrial association, or similar group concerning
the application of tax law to its members? See section 6.07.
YesNo10. Have you included a complete statement of all the facts relevant to the transaction? See section 9.02(1).
Pages
—
YesNoN/A11. Have you submitted with the request true copies of all wills, deeds, plan documents, and other documents
relevant to the transaction, and labelled and attached them in alphabetical sequence? See section 9.02(2).
YesNo12. Have you included, rather than merely by reference, all material facts from the documents in the request?
Page
—
Are they accompanied by an analysis of their bearing on the issues that specifies the document provisions that
apply? Seesection 9.02(3).
YesNo13. Have you included the required statement regarding whether the same issue in the letter ruling request is in
Page
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an earlier return of the taxpayer or in a return for any year of a related taxpayer? See section 9.02(4).
YesNo14. Have you included the required statement regarding whether the Service previously ruled on the same or
Page
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similar issue for the taxpayer, a related taxpayer, or a predecessor? See section 9.02(5).
YesNo15. Have you included the required statement regarding whether the taxpayer, a related taxpayer, a predecessor,
Page
—
or any representatives previously submitted the same or similar issue but withdrew it before the letter ruling was
issued? See section 9.02(5).
YesNo16. Have you included the required statement regarding whether the law in connection with the
Page
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request is uncertain and whether the issue is adequately addressed by relevant authorities? See section 9.02(6).
YesNo17. Have you included the required statement of relevant authorities in support of your views? See section
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9.02(6).
YesNoN/A18. Does your request discuss the implications of any legislation, tax treaties, court decisions, regula-
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tions, notices, revenue rulings, or revenue procedures you determined to be contrary to the position advanced?
See section 9.02(7), which states that taxpayers are encouraged to inform the Service of such authorities.
YesNoN/A19. If you determined that there are no contrary authorities, have you included a statement to this effect
Page
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in your request? See section 9.02(7).
YesNoN/A20. Have you included in your request a statement identifying any pending legislation that may affect the pro-
Page
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posed transaction? See section 9.02(8).
YesNo21. Is the request accompanied by the deletions statement required by §6110? See section 9.02(9).
YesNoN/A22. Have you (or your authorized representative) signed and dated the request? See section 9.02(10).
Page
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YesNoN/A23. If the request is signed by your representative, or if your representative will appear before the Service in
connection with the request, is the request accompanied by a properly prepared and signed power of attorney
with the signatory’s name typed or printed? See section 9.02(12).
YesNoN/A24. Have you included, signed and dated, the penalties of perjury statement in the form required by section
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9.02(13)?
YesNoN/A25. Have you included the correct user fee with the request and made your check or money order payable to the
Internal Revenue Service? See section 9.02(14) and Rev. Proc. 98–8, page 225, this Bulletin, for the correct
amount and additional information on user fees.
YesNoN/A26. Are you submitting your request in duplicate if necessary? See section 9.02(15).

January 5, 19981541998–1 I.R.B.
YesNoN/A27. If you are requesting separate letter rulings on different issues involving one factual situation, have you
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included a statement to that effect in each request? See section 9.03(1).
YesNoN/A28. If you want the original of the ruling to be sent to a representative, does the power of attorney contain a
statement to that effect? See section 9.03(2).
YesNoN/A29. If you do not want a copy of the letter ruling to be sent to any representative, does the power of attorney con-
tain a statement to that effect? See section 9.03(2).
YesNoN/A30. If you have more than one representative, have you designated whether the second representative listed on
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the power of attorney is to receive a copy of the letter ruling? See section 9.03(2).
YesNoN/A31. If you want your letter ruling request to be processed ahead of the regular order or by a specific date, have
you requested expeditious handling in the form required by section 9.03(3) and stated a compelling need for
such action in the request?
YesNoN/A32. If you are requesting that a copy of the letter ruling be issued by facsimile (fax) transmission, have you
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included a statement containing a waiver of any disclosure violations resulting from the fax transmission? See
section 9.03(4).
YesNoN/A33. If you want to have a conference on the issues involved in the request, have you included a request for
Page
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conference in the ruling request? See section 9.03(5).
YesNoN/A34. If your request is covered by any of the guideline revenue procedures or other special requirements listed in
section 10 of Rev. Proc. 98–4, have you complied with all of the requirements of the applicable revenue proce-
dure?
YesNoN/A35. If you are requesting relief under §7805(b) (regarding retroactive effect), have you complied with all of the
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requirements in section 13.09?
YesNoN/A36. Have you addressed your request to the appropriate office listed in section 9.04? Improperly addressed re-
quests may be delayed (sometimes for over a week) in reaching the appropriate office for initial processing.
SignatureTitleDate
Typed or printed name of
person signing checklist

26 CFR 601.201: Rulings and determination letters.
Rev. Proc. 98–5
TABLE OFCONTENTS
SECTION 1. WHATp. 159
IS THE PURPOSE OF
HIS REVENUE
PROCEDURE?
SECTION 2. WHATp. 159
CHANGES HAVE
BEEN MADE TO
REV. PROC. 97–5?
SECTION 3. WHATp. 160
IS TECHNICALADVICE?
SECTION 4. ON WHATp. 160
ISSUES MAYOR MUST
TECHNICALADVICE BE .01Issues under the jurisdiction of the Assistant Commissioner (Employee
REQUESTED UNDER Plans and Exempt Organizations)
THIS PROCEDURE?
.02Farmers’cooperatives
.03Basis for requesting technical advice
.04Areas of mandatory technical advice
SECTION 5. ON WHATp. 161
ISSUES MUST
TECHNICALADVICE .01Matters (other than farmers’cooperatives) under the jurisdiction of the
BE REQUESTED UNDER Associate Chief Counsel (Domestic), the Associate Chief Counsel (Employee
DIFFERENTPROCEDURES?Benefits and Exempt Organizations), and the Associate Chief Counsel
(International)
.02Alcohol, tobacco, and firearms taxes
.03Excise taxes
SECTION 6. MAYp. 161
TECHNICALADVICE
BE REQUESTED FOR .01A§301.9100–1 request is a letter ruling request
A§301.9100–1 REQUEST
DURING THE COURSE .02Statute of limitations
OFAN EXAMINATION?
.03Address to send a §301.9100–1 request
.04If the return is being examined or considered by an appeals office or a
federal court, the taxpayer must notify the national office which will notify the
key district director, appeals office or government counsel
SECTION 7. WHO IS p. 163
RESPONSIBLE FOR
REQUESTING .01Key district director or chief, appeals office determines whether to re
TECHNICALADVICE?questtechnical advice
.02Taxpayer may ask that issue be referred for technical advice
1998–1 I.R.B.155January 5, 1998

SECTION 8. WHEN p. 163
SHOULD TECHNICAL
ADVICE BE REQUESTED?.01Uniformity of position lacking
.02When technical advice can be requested
.03At earliest possible stage
SECTION 9. WHATp. 164
MUSTBE INCLUDED
IN THE REQUESTFOR .01Statement of issues, facts, law, and arguments
TECHNICALADVICE?
.02Statement pertaining to statute of limitations
.03General provisions of §§6104 and 6110 of the Code
.04Application of §6104 of the Code
.05Statement identifying information to be deleted from public inspection
.06Transmittal Form 5565, Request for Technical Advice - EP/EO
.07Number of copies of request to be submitted
.08Power of attorney
.09Case files
SECTION 10. HOWARE p. 166
REQUESTS HANDLED?.01Taxpayer notified
.02Conference offered
.03If the taxpayer disagrees with the Service’s statement of facts
.04If the Service disagrees with the taxpayer’s statement of facts
.05If the taxpayer has not submitted the required deletions statement
.06Criminal or civil fraud cases
SECTION 11. HOWp. 168
DOES ATAXPAYER APPEAL
AKEYDISTRICT.01Taxpayer notified of decision not to seek technical advice
DIRECTOR’S OR
CHIEF’S, APPEALS .02Taxpayer may appeal decision not to seek technical advice
OFFICE DECISION
NOTTO SEEK .03Chief, EP/EO division, or chief, appeals office, determines whether
TECHNICALADVICE?technical advice will be sought
.04Chief’s decision may be reviewed but not appealed
SECTION 12. HOWARE p. 169
REQUESTS FOR
TECHNICALADVICE .01Taxpayer notified
WITHDRAWN?
.02National office may provide views
January 5, 19981561998–1 I.R.B.

1998–1 I.R.B.157January 5, 1998
SECTION 13. HOWp. 169
ARE CONFERENCES
SCHEDULED?.01If requested, offered to the taxpayer when adverse technical advice
proposed
.02Normally held within 21 days of contact with the taxpayer
.0321-day period may be extended if justified and approved
.04Denial of extension cannot be appealed
.05Entitled to one conference of right
.06Conference may not be taped
.07Conference may be delayed to address a request for relief under
§7805(b) of the Code
.08Service makes tentative recommendations
.09Additional conferences may be offered
.10Additional information submitted after the conference
.11Under limited circumstances, may schedule a conference to be held by
telephone
SECTION 14. HOWIS p. 172
STATUS OFREQUEST
OBTAINED? .01Taxpayer or the taxpayer’s representative may request status from the
key district or appeals office
.02National office will give status updates to the key district director or
chief, appeals office
SECTION 15. HOWDOES p. 172
THE NATIONALOFFICE
PREPARE THE .01Delegates authority to branch chiefs
TECHNICALADVICE
MEMORANDUM?.02Determines whether request has been properly made
.03Contacts the key district or appeals office to discuss issues
.04Informs the key district or appeals office if any matters in the request
have been referred to another branch or office
.05Informs the key district or appeals office if additional information is
needed
.06Informs the key district or appeals office of the tentative conclusion
.07If a tentative conclusion has not been reached, gives date estimated for
tentative conclusion
.08Advises the key district or appeals office that tentative conclusion is not
final
.09Advises the key district or appeals office of final conclusions

.10If needed, requests additional information
.11Requests taxpayer to send additional information to the national office
and a copy to the key district director or chief, appeals office
.12Informs the taxpayer when requested deletions will not be made
.13Prepares reply in two parts
.14Routes replies to appropriate office
SECTION 16. HOWp. 175
DOES AKEYDISTRICT
OR AN APPEALS .01Generally applies advice in processing the taxpayer’s case
OFFICE USE THE
TECHNICALADVICE?.02Discussion with the taxpayer
.03Gives copy to the taxpayer
.04Taxpayer may protest deletions not made
.05When no copy is given to the taxpayer
SECTION 17. WHATp. 176
IS THE EFFECTOF
TECHNICALADVICE?.01Applies only to the taxpayer for whom technical advice was requested
.02Usually applies retroactively
.03Generally applied retroactively to modify or revoke prior technical
advice
.04Applies to continuing action or series of actions until specifically
withdrawn, modified or revoked
.05Applies to continuing action or series of actions until material facts
change
.06Does not apply retroactively under certain conditions
SECTION 18. HOWp. 177
MAYRETROACTIVE
EFFECTBE LIMITED?.01Commissioner has discretionary authority under §7805(b) of the Code
.02Taxpayer may request Commissioner to exercise authority
.03Form of request to limit retroactivity—before an examination
.04Form of request to limit retroactivity—during course of examination
.05Form of request to limit retroactivity—technical advice that does not
modify or revoke prior memorandum
.06Taxpayer’s right to a conference
.07Exhaustion of administrative remedies—employee plans determination
letter requests
.08Exhaustion of administrative remedies — exempt organization matters
January 5, 19981581998–1 I.R.B.

SECTION 19. WHATIS p. 178
THE EFFECTOFTHIS
REVENUE PROCEDURE
ON OTHER
DOCUMENTS?
SECTION 20. EFFECTIVE p. 178
DATE
SECTION 21. p. 178
PAPERWORK
REDUCTION ACT
APPENDIX A— KEYp. 180
DISTRICTS WITH AUDIT
JURISDICTION
INDEXp. 181
SECTION 1. WHATIS This revenue procedure explains when and how the Assistant Commissioner (Employee
THE PURPOSE OFTHIS Plans and Exempt Organizations) gives technical advice to a key district director or a
REVENUE PROCEDURE?chief, appeals office in the employee plans areas (including actuarial matters) and exempt
organizations areas. It also explains the rights a taxpayer has when a key district director
or a chief, appeals office requests technical advice regarding a tax matter.
The term key district director means the district director of (1) the Northeast Key
District, (2) the Southeast Key District, (3) the MidStates Key District, (4) the Western
Key District, and (5) the Ohio Key District. (Alist of the key district offices that have
audit jurisdiction is contained in Appendix A.) The reference in this revenue procedure to
the chief, appeals office includes, when appropriate, the Assistant Regional Director of
Appeals (Large Case). In addition, any reference to appeals officer includes, when
appropriate, the team chief. Finally, any reference to EP/EO means Employee Plans and
Exempt Organizations.
SECTION 2. WHAT.01This revenue procedure is a general update of Rev. Proc. 97–5, 1997–1 C.B. 555,
CHANGES HAVE BEEN which contains the general procedures for technical advice requests for matters within the
MADE TO REV. PROC. 97–5?jurisdiction of the Office of the Assistant Commissioner (Employee Plans and Exempt
Organizations). Most of the changes to Rev. Proc. 97–5 involve minor revisions, such as
updating citations to other revenue procedures.
.02As a result of the centralization of the EP/EO determination letter programs, the list
of EP/EO key district offices was deleted from the EPdetermination letter and EP/EO user
fee revenue procedures. Because EP/EO technical advice requests arise in the context of
determination letter requests and examinations, the various key district offices are now set
forth in this revenue procedure.
.03Section 6.03 is amended to provide that a taxpayer may hand deliver a §301.9100
letter ruling request to the courier’s desk.
.04Section 13.03 and 13.10 are amended to provide a ten day limit for granting an
extension of the 21-day period for, respectively, holding a conference and submitting
additional information after the conference.
.05Section 14.02 is revised to reflect the manner in which status reports will now be
submitted to key district offices.
.06Section 15.10 is amended to provide a ten day limit for granting an extension of the
21-day period for submitting additional information.
1998–1 I.R.B.159January 5, 1998

SECTION 3. WHATIS “Technical advice” means advice or guidance in the form of a memorandum furnished
TECHNICALADVICE?by the Office of the Assistant Commissioner (Employee Plans and Exempt Organizations),
(hereinafter referred to as the “national office”), upon the request of a key district director
or a chief, appeals office, submitted in accordance with the provisions of this revenue
procedure in response to any technical or procedural question that develops during any
proceeding on the interpretation and proper application of tax law, tax treaties, regulations,
revenue rulings, notices or other precedents published by the national office to a specific
set of facts. Such proceedings include (1) the examination of a taxpayer’s return, (2)
consideration of a taxpayer’s claim for refund or credit, (3) a request for a determination
letter, (4) any other matter involving a specific taxpayer under the jurisdiction of the chief,
EP/EO division or chief, appeals office, or (5) processing and considering nondocketed
cases in an appeals office. However, they do not include cases in which the issue in the
case is in a docketed case for any year.
For purposes of technical advice, the term “taxpayer” includes all persons subject to
any provision of the Internal Revenue Code (including tax-exempt entities such as
governmental units which issue municipal bonds within the meaning of §103(a)), and
when appropriate, their representatives. However, the instructions and the provisions of
this revenue procedure do not apply to requests for technical advice involving any matter
pertaining to either tax-exempt bonds or mortgage credit certificates. Instead, the
procedures under Rev. Proc. 98–2, page 74,this Bulletin must be followed.
Technical advice resolves complex issues and helps establish and maintain consistent
holdings throughout the Internal Revenue Service. Akey district director or a chief,
appeals office, may raise an issue in any tax period, even though technical advice may
have been asked and furnished for the same or similar issue for another tax period.
Technical advice does not include legal advice furnished to the key district or appeals
office in writing or orally, other than advice furnished pursuant to this revenue procedure.
In accordance with section 11.01 of this revenue procedure, a taxpayer’s request for
referral of an issue for technical advice will not be denied merely because the national
office has provided legal advice, other than advice furnished pursuant to this revenue
procedure, to the key district or appeals office on the matter.
SECTION 4. ON WHAT
ISSUES MAYOR MUST
TECHNICALADVICE
BE REQUESTED UNDER
THIS PROCEDURE?
Issues underthe jurisdiction .01Generally, the instructions of this revenue procedure apply to requests for technical
of the Assistant advice on any issue under the jurisdiction of the Assistant Commissioner (Employee Plans
Commissioner(Employee and Exempt Organizations).
Plans and Exempt
Organizations)
Farmers’cooperatives.02 If a key district director, chief, appeals office, or a taxpayer requests technical
advice on a determination letter under §521 of the Code, the procedures under this
revenue procedure, Rev. Proc. 90–27, 1990–1 C.B. 514, as modified by Rev. Proc. 98–8,
page 225 of this Bulletin, as well as §601.201(n) of the Statement of Procedural Rules,
must be followed.
Basis forrequesting .03 Requests for technical advice are encouraged on any technical or procedural ques-
technical advicetions arising in connection with any case of the type described in section 3 at any stage of
the proceedings in the key district or appeals office that cannot be resolved on the basis of
law, regulations, or a clearly applicable revenue ruling or other published precedent.
Areas of mandatory .04Requests for §7805(b) relief are mandatory technical advice with respect to all
technical advice exempt organizations and employee plans matters.
January 5, 19981601998–1 I.R.B.

Except for those exemption application cases handled in the national office in
accordance with section 6.02 of Rev. Proc. 90–27, key districts and appeals offices are
required to request technical advice on their exempt organization cases concerning
qualification for exemption or foundation status for which there is no published precedent
or for which there is reason to believe that nonuniformity exists.
Regarding employee plans matters, a request for technical advice is required in cases
concerning (1) proposed adverse or proposed revocation letters on collectively-bargained
plans, (2) plans for which the Service is proposing to issue a revocation letter because of
certain fiduciary actions that violate the exclusive benefit rule of §401(a) of the Code and
are subject to Part 4 of Subtitle B of Title I of the Employee Retirement Income Security
Act of 1974, Pub. L. 93–406, 1974–3 C.B. 1, 43, (3) amendments to defined contribution
plans pursuant to Rev. Proc. 94–41, 1994–1 C.B. 711, in connection with a waiver of the
minimum funding standard and a request for a determination letter (Seesection 15 of Rev.
Proc. 98–6, page183, this Bulletin, and section 3.04 of Rev. Proc. 94–41), (4)
termination/reestablishment and spinoff-termination cases in which the key district office
proposes that the Implementation Guidelines are not applicable, or (5) a situation in which
the employer has had a prior termination/reestablishment or spinoff-termination within 15
years of the time of the transaction.
SECTION 5. ON WHAT
ISSUES MUST
TECHNICALADVICE
BE REQUESTED
UNDER DIFFERENT
PROCEDURES?
Matters (otherthan farmers’.01All procedures for obtaining technical advice on issues (other than farmers’
cooperatives) underthe cooperatives) under the jurisdiction of the Associate Chief Counsel (Domestic), the
jurisdiction of the Associate Associate Chief Counsel (Employee Benefits and Exempt Organizations), and the
Chief Counsel (Domestic), Associate Chief Counsel (International) including any matter pertaining to tax-exempt
the Associate Chief Counsel bonds or mortgage credit certificates, §526 of the Code (shipowners’protection and
(Employee Benefits and indemnity associations), §528 (certain homeowners’associations) and issues involving
Exempt Organizations), the interpretation or application of the federal income tax laws and income tax treaties
and the Associate Chief relating to international transactions are contained in Rev. Proc. 98–2.
Counsel (International)
Alcohol, tobacco, and.02Procedures for obtaining technical advice specifically applicable to federal
firearms taxesalcohol, tobacco, and firearms taxes under subtitle E of the Code are under the jurisdiction
of the Bureau of Alcohol, Tobacco and Firearms.
Excise taxes.03Technical advice procedures regarding excise taxes (other than excise taxes
imposed under Chapters 41, 42 and 43 of the Code), and employment taxes that employee
plans and exempt organizations are subject to, are set forth in Rev. Proc. 98–2.
SECTION 6. MAY
TECHNICALADVICE
BE REQUESTED FOR A
§ 301.9100–1 REQUEST
DURING THE COURSE
OFAN EXAMINATION?
A§ 301.9100 request is .01Except with regard to exemption application matters involving §§505(c) and
a letterruling request508, requests for an extension of time for making an election or other application for relief
under §301.9100 of the Procedure and Administration Regulations made after the
examination of the taxpayer’s return has begun or made after the issues in the return are
being considered by an appeals office or a federal court are letter ruling requests.
Therefore, §301.9100 requests should be submitted pursuant to Rev. Proc. 98–4, page
113, this Bulletin, and require payment of the applicable user fee listed in section 6 of
Rev. Proc. 98–8.
1998–1 I.R.B.161January 5, 1998

Statute of limitations.02The running of any applicable period of limitations is not suspended for the period
during which a § 301.9100–1 request has been filed. See §301.9100–3(d)(2). If the
period of limitations on an assessment under §6501(a) for the taxable year in which an
election should have been made, or any taxable year that would have been affected by the
election had it been timely made, will expire before receipt of a §301.9100–1 letter
ruling, the Service ordinarily will not issue a §301.9100–1 ruling. See
§301.9100–3(c)(1)(ii). Therefore, the taxpayer must secure a consent under §6501(c)(4)
to extend the period of limitations on assessment. Note that the filing of a protective
claim for refund under §6511 does not extend the period of limitations on assessment. If
§301.9100–1 relief is granted, the Service may require the taxpayer to consent to an
extension of the period of limitations for assessment. See§301.9100–3(d)(2).
Address to send a.03Requests made under §301.9100–1, pursuant to Rev. Proc. 98–4, together with the
§301.9100–1 request appropriate user fee, must be submitted to the Internal Revenue Service by the taxpayer
and addressed as follows:
Requests involving employee plans matters:
Internal Revenue Service
Assistant Commissioner (EP/EO)
Attn: CP:E:EP:T
P.O. Box 14073
Ben Franklin Station
Washington, DC 20044
Requests involving exempt organization matters:
Internal Revenue Service
Assistant Commissioner (EP/EO)
Attn: CP:E:EO
P.O. Box 120
Ben Franklin Station
Washington, DC 20044
A§301.9100 request may also be hand delivered:
(1)To the drop box at the 12th Street entrance of 1111 Constitution Ave., N.W.,
Washington, DC. No receipt will be given at the drop box; or
(2)Between the hours of 8:15 a.m. and 5:00 p.m. to:
Courier’s Desk
Internal Revenue Service
Assistant Commissioner (EP/EO)
Attn: CP:E:EP:T
or
Attn: CP:E:EO
1111 Constitution Avenue, N.W.
Washington, DC
Areceipt will be given at the courier’s desk. In each instance, the package should be
marked: RULING REQUESTSUBMISSION. See Rev. Proc. 98–8 for the appropriate
user fee.
If return is being examined .04If the taxpayer’s return for the taxable year in which an election should have been
orconsidered by an appeals made or any taxable year that would have been affected by the election had it been timely
office ora federal court,made is being examined by a key district office or the issues in the return are being
the taxpayermust notify considered by an appeals office or a federal court, the taxpayer must notify the national
January 5, 19981621998–1 I.R.B.

the national office which office. See,§301.9100-3(e)(4)(i) and section 6.04 of Rev. Proc. 98-4. The national office
will notify the key districtwill notify the appropriate key district director, chief appeals office, or government
director, chief, appealscounsel considering the return that a request for §301.9100 relief has been submitted to
office orgovernmentthe national office. The EP/EO specialist, appeals officer or government counsel is not
counselauthorized to deny consideration of a request for §301.9100 relief. The letter ruling will
be mailed to the taxpayer and a copy will be sent to the appropriate key district director,
chief, appeals office, or government counsel.
SECTION 7. WHO IS
RESPONSIBLE FOR
REQUESTING TECHNICAL
ADVICE?
Key district directororchief, .01 The key district director or chief, appeals office, determines whether to request
appeals office determines technical advice on any issue being considered. Each request must be submitted through
whetherto request technical proper channels and signed by a person who is authorized to sign for the key district
advicedirector or chief, appeals office. The mandatory technical advice described in section
4.04(3) of this revenue procedure, for cases concerning amendments to defined
contribution plans in connection with a waiver of the minimum funding standard and a
request for a determination letter, is treated as if it had been a request for technical advice
submitted by the key district director. See section 15 of Rev. Proc. 98–6 and section 3.04
of Rev. Proc. 94–41 for the procedural rules applicable to this particular mandatory
technical advice.
Taxpayermay ask that issue .02 While a case is under the jurisdiction of a key district director or chief, appeals
be referred fortechnical adviceoffice, a taxpayer may request that an issue be referred to the national office for technical
advice.
SECTION 8. WHEN
SHOULD TECHNICAL
ADVICE BE REQUESTED?
Uniformity of position lacking.01 Technical advice should be requested when there is a lack of uniformity regarding
the disposition of an issue or when an issue is unusual or complex enough to warrant
consideration by the national office.
When technical advice .02The provisions of this revenue procedure apply only to a case under the
can be requestedjurisdiction of a key district director or chief, appeals office. Technical advice may also be
requested on issues considered in a prior appeals disposition, not based on mutual
concessions for the same tax period of the same taxpayer, if the appeals office that had the
case concurs in the request.
Akey district director may not request technical advice on an issue if an appeals office
is currently considering an identical issue of the same taxpayer (or of a related taxpayer
within the meaning of §267 or a member of an affiliated group of which the taxpayer is
also a member within the meaning of §1504). Acase remains under the jurisdiction of
the key district director even though an appeals office has the identical issue under
consideration in the case of another taxpayer (not related within the meaning of §267 or
§1504) in an entirely different transaction. With respect to the same taxpayer or the same
transaction, when the issue is under the jurisdiction of an appeals office, and the
applicability of more than one kind of federal tax is dependent upon the resolution of that
issue, a key district director may not request technical advice on the applicability of any of
the taxes involved.
Akey district director or chief, appeals office, also may not request technical advice on
an issue if the same issue of the same taxpayer (or of a related taxpayer within the
meaning of §267 or a member of an affiliated group of which the taxpayer is also a
member within the meaning of §1504) is in a docketed case for the same taxpayer (or for
a related taxpayer or a member of an affiliated group of which the taxpayer is also a
member) for any taxable year.
1998–1 I.R.B.163January 5, 1998

January 5, 19981641998–1 I.R.B.
At the earliest possible stage.03Once an issue is identified, all requests for technical advice should be made at the
earliest possible stage in any proceeding. The fact that the issue is raised late in the
examination or appeals process should not influence, however, the key district or appeals
office’s decision to request technical advice.
SECTION 9. WHATMUST
BE INCLUDED IN THE
REQUESTFOR TECHNICAL
ADVICE?
Statement of issues, facts,.01 Whether initiated by the taxpayer or by a key district or appeals office, a request for
law, and argumentstechnical advice must include the facts and the issues for which technical advice is
requested, and a written statement clearly stating the applicable law and the arguments in
support of both the Service’s and the taxpayer’s positions on the issue or issues.
Taxpayermust submit (1)If the taxpayer initiates the request for technical advice, the taxpayer must submit to
statement if the taxpayerthe EP/EO specialist or appeals officer, at the time the taxpayer initiates the request, a
initiates request forwritten statement—
technical advice
(a)stating the facts and the issues;
(b)explaining the taxpayer’s position;
(c)discussing any relevant statutory provisions, tax treaties, court decisions,
regulations, revenue rulings, revenue procedures, notices, or any other authority
supporting the taxpayer’s position; and
(d)stating the reasons for requesting technical advice.
If the EP/EO specialist or appeals officer determines that technical advice will be
requested, the taxpayer’s statement will be forwarded to the national office with the
request for technical advice.
Taxpayeris encouraged to (2)If the request for technical advice is initiated by a key district or appeals office, the
submit statement if Service taxpayer is encouraged to submit the written statement described in section 9.01(1) of this
initiates request fortechnical revenue procedure. If the taxpayer’s statement is received after the request for technical
adviceadvice has been forwarded to the national office, the statement will be forwarded to the
national office for association with the technical advice request.
Statement of authorities (3)Whether the request for technical advice is initiated by the taxpayer or by a key
contrary to taxpayer’s positiondistrict or appeals office, the taxpayer is also encouraged to comment on any legislation,
tax treaties, regulations, revenue rulings, revenue procedures, or court decisions contrary
to the taxpayer’s position. If the taxpayer determines that there are no contrary
authorities, a statement to this effect would be helpful. If the taxpayer does not furnish
either contrary authorities or a statement that none exists, the Service, in complex cases or
those presenting difficult or novel issues, may request submission of contrary authorities
or a statement that none exists.
Statement pertaining to .02As part of the request, the key district or appeals office must submit a statement, in
statute of limitationsaddition to the criteria on Form 5565 referred to below, that (1) the applicable statute of
limitations has at least 180 calendar days to run before its expiration or (2) the applicable
statute of limitations will run prior to 180 calendar days from the date a request is
transferred to the national office and the case should be processed on an expedited basis.
If the key district or appeals office obtains an extension of the statute of limitations while
the request is being processed in the national office, the office obtaining the extension
must also submit a revised statement to the national office advising it of the new
expiration date.
If there are less than 61 calendar days remaining before the expiration of the statute of
limitations with respect to a case being processed on an expedited basis, the case will be

1998–1 I.R.B.165January 5, 1998
returned to the office responsible for statute control of the file unless a decision is made
pursuant to section 7(10)(14)1.5:(8) of the Internal Revenue Manual that the case can be
timely processed. The national office will telephone (or fax notice of) its decision to the
requesting key district or appeals office and will place a memorandum in the file to reflect
whatever procedural steps have been taken.
General provisions of.03Generally, §6104(a)(1)(B) provides that an application filed with respect to: (1) the
§§6104 and 6110qualification of a pension, profit-sharing, or stock bonus plan under §401(a) or §403(a)
or an individual retirement arrangement under §408(a) or §408(b) will be open to public
inspection pursuant to regulations as will (2) any application filed for an exemption from
tax under §501(a) of an organization forming part of a plan or account described above.
Generally, §6110(a) provides that except as provided otherwise, written determinations
(defined in §6110(b)(1) as rulings, determination letters, and technical advice
memorandums) and any related background file document will be open to public
inspection pursuant to regulations.
Application of §6104.04The requirements for submitting statements and other materials or proposed
deletions in technical advice memorandums before public inspection is allowed do not
apply to requests for any documents to the extent §6104 applies.
Statement identifying .05 The text of a technical advice memorandum subject to §6110 may be open to
information to be deletedavailable for inspection. To help the Service make the deletions required by §6110(c), the
from public inspectiontaxpayer must provide a statement indicating the deletions desired (“deletions statement”).
If the taxpayer does not submit the deletions statement, the Service will follow the
procedures in section 10.05 of this revenue procedure.
Ataxpayer who wants only names, addresses, and identifying numbers deleted should
state this in the deletions statement. If the taxpayer wants more information deleted, the
deletions statement must be accompanied by a copy of the technical advice request and
supporting documents on which the taxpayer should bracket the material to be deleted.
The deletions statement must indicate the statutory basis, under §6110(c) for each
proposed deletion.
If the taxpayer decides to ask for additional deletions before the technical advice
memorandum is issued, additional deletions statements may be submitted.
The deletions statement must not appear in the request for technical advice but, instead,
must be made in a separate document attached to the request.
The deletions statement must be signed and dated by the taxpayer or the taxpayer’s
authorized representative. Astamped signature is not permitted.
The taxpayer should follow these same procedures to propose deletions from any
additional information submitted after the initial request for technical advice. An
additional deletions statement, however, is not required with each submission of
additional information if the taxpayer’s initial deletions statement requests that only
names, addresses, and identifying numbers are to be deleted and the taxpayer wants the
same information deleted from the additional information.
Transmittal Form 5565, .06The key district or appeals office should use Form 5565, Request for Technical
Request forTechnical Advice - Advice—EP/EO, for transmitting a request for technical advice to the national office
EP/EOusing the addresses listed below.
Address to send requests Employee Plans
from key district officesInternal Revenue Service
Attn: CP:E:EP
1111 Constitution Ave., NW
Room 6052 CP:E:EO:P:2
Washington, DC 20224

Exempt Organizations
Internal Revenue Service
Attn: CP:E:EO
1111 Constitution Ave., NW
Room 6052 CP:E:EO:P:2
Washington, DC 20224
Address to send requests Internal Revenue Service
from appeals officesAttn: C:AP:FS
Box 68
901 D Street, SW
Washington, DC 20024
Numberof copies of .07The key district or the appeals office must submit (3) three copies of the request for
request to be submitted technical advice to the national office.
Powerof attorney.08Any authorized representative, as described in section 9.02 of Rev. Proc. 98–4,
whether or not enrolled to practice, must comply with Treasury Department Circular No.
230 (31 CFR part 10 (1997)) and with the conference and practice requirements of the
Statement of Procedural Rules (26 CFR part 601). It is preferred that Form 2848, Power
of Attorney and Declaration of Representative, be used with regard to requests for
technical advice under this revenue procedure.
Case files.09The key district or appeals office will submit copies of the original documents (the
administrative file) to the national office accompanying the applicable Form 5565. The
key district or appeals office will maintain the original documents (including any power of
attorney).
SECTION 10. HOWARE
REQUESTS HANDLED?
Taxpayernotified.01Regardless of whether the taxpayer or the Service initiates the request for technical
advice, the key district or appeals office: (1) will notify the taxpayer that technical advice
is being requested; and (2) at or before the time the request is submitted to the national
office, will give to the taxpayer a copy of the arguments that are being provided to the
national office in support of its position.
If the EP/EO specialist or appeals officer initiates the request for technical advice, he or
she will give to the taxpayer a copy of the statement of the pertinent facts and the issues
proposed for submission to the national office.
This section 10.01 does not apply to a technical advice memorandum described in
section 10.06 of this revenue procedure.
Conference offered.02When notifying the taxpayer that technical advice is being requested, the EP/EO
specialist or appeals officer will also tell the taxpayer about the right to a conference in the
national office if an adverse decision is indicated and will ask the taxpayer whether such a
conference is desired.
If the taxpayerdisagrees .03If the EP/EO specialist or appeals officer initiates the request for technical advice,
with the Service’s statementthe taxpayer has 10 calendar days after receiving the statement of facts and specific issues
of facts to submit to that specialist or officer a written statement specifying any disagreement on
the facts and issues. Ataxpayer who needs more than 10 calendar days must justify, in
writing, the request for an extension of time. The extension is subject to the approval of
the chief, EP/EO division, or the chief, appeals office.
After receiving the taxpayer’s statement of the areas of disagreement, every effort
should be made to reach agreement on the facts and the specific points at issue before the
matter is referred to the national office. If an agreement cannot be reached, the key
district or appeals office will notify the taxpayer in writing. Within 10 calendar days after
receiving the written notice, the taxpayer may submit a statement of the taxpayer’s
January 5, 19981661998–1 I.R.B.

understanding of the facts and the specific points at issue. Ataxpayer who needs more
than 10 calendar days to prepare the statement of understanding must justify, in writing,
the request for an extension of time. The extension is subject to the approval of the chief,
EP/EO division, or the chief, appeals office. Both the statements of the taxpayer and the
key district or appeals office will be forwarded to the national office with the request for
technical advice.
When the key district director or the chief, appeals office, and the taxpayer cannot agree
on the material facts and the request for technical advice does not involve the issue of
whether a letter ruling or determination letter should be modified or revoked, the national
office, at its discretion, may refuse to provide technical advice. If the national office
chooses to issue technical advice, it will base its advice on the facts provided by the key
district or appeals office.
If a request for technical advice involves the issue of whether a letter ruling or
determination letter should be modified or revoked, the national office will issue the
technical advice.
If the Service disagrees with.04If the taxpayer initiates the action to request technical advice, and the taxpayer’s
the taxpayer’s statementstatement of the facts and issues is not wholly acceptable to the key district or appeals
of factsoffice, the Service will notify the taxpayer in writing of the areas of disagreement. The
taxpayer has 10 calendar days after receiving the written notice to reply to it. Ataxpayer
who needs more than 10 calendar days must justify in writing the request for an extension
of time. The extension is subject to the approval of the chief, EP/EO division, or the
chief, appeals office.
If an agreement cannot be reached, both the statements of the taxpayer and the key
district or appeals office will be forwarded to the national office with the request for
technical advice. When the disagreement involves material facts essential to the
preliminary assessment of the case, the key district director or the chief, appeals office,
may refuse to refer a taxpayer initiated request for technical advice to the national office.
If the key district director or the chief, appeals office, submits a case involving a
disagreement of material facts, the national office, at its discretion, may refuse to provide
technical advice. If the national office chooses to issue technical advice, it will base its
advice on the facts provided by the key district or appeals office.
If the taxpayerhas not .05When the key district or appeals office initiates the request for technical advice, the
submitted the requiredtaxpayer has 10 calendar days after receiving the statement of facts and issues to be sub-
deletions statement mitted to the national office to provide the deletions statement required under §6110(c) if
public inspection is permitted pursuant to §6110 (see section 9.05 of this revenue
procedure). In such a case, if the taxpayer does not submit the deletions statement, the
key district director or the chief, appeals office, will tell the taxpayer that the statement is
required.
When the taxpayer initiates the request for technical advice and does not submit with
the request a deletions statement as required by §6110, the key district director or the
chief, appeals office, will ask the taxpayer to submit the statement. If the key district
director or the chief, appeals office, does not receive the deletions statement within 10
calendar days after asking the taxpayer for it, the key district director or the chief, appeals
office, may decline to submit the request for technical advice.
However, if the key district director or the chief, appeals office, decides to request
technical advice, whether initiated by the key district or appeals office or by the taxpayer,
in a case in which the taxpayer has not submitted the deletions statement, the national
office will make those deletions that the Commissioner of Internal Revenue determines
are required by §6110(c).
Criminal orcivil fraud cases.06The provisions of this section (about referring issues upon the taxpayer’s request,
obtaining the taxpayer’s statement of the areas of disagreement, telling the taxpayer about
1998–1 I.R.B.167January 5, 1998

the referral of issues, giving the taxpayer a copy of the arguments submitted, submitting
proposed deletions, and granting conferences in the national office) do not apply to a
technical advice memorandum described in §6110(g)(5)(A) that involves a matter that is
the subject of or is otherwise closely related to a criminal or civil fraud investigation, or a
jeopardy or termination assessment.
In these cases, a copy of the technical advice memorandum is given to the taxpayer
after all proceedings in the investigations or assessments are complete, but before the
Commissioner mails the notice of intention to disclose the technical advice memorandum
under §6110(f)(1). The taxpayer may then provide the statement of proposed deletions to
the national office.
SECTION 11. HOWDOES A
TAXPAYER APPEALAKEY
DISTRICTDIRECTOR’S OR
CHIEF’S APPEALS OFFICE
DECISION NOTTO SEEK
TECHNICALADVICE?
Taxpayernotified of.01If the EP/EO specialist or appeals officer concludes that a taxpayer’s request for
decision not to seek technical referral of an issue to the national office for technical advice does not warrant referral, the
adviceEP/EO specialist or appeals officer will tell the taxpayer. Ataxpayer’s request for such a
referral will not be denied merely because the national office provided legal advice, other
than advice furnished pursuant to this revenue procedure, to the key district or appeals
office on the matter.
Taxpayermay appeal .02The taxpayer may appeal the decision of the EP/EO specialist or the appeals officer
decision not to seek technical not to request technical advice. To do so, the taxpayer must submit to that specialist or
adviceofficer, within 10 calendar days after being told of the decision, a written statement of the
facts, law, and arguments on the issue and the reasons why the taxpayer believes the
matter should be referred to the national office for technical advice. Ataxpayer who needs
more than 10 calendar days must justify in writing the request for an extension of time.
The extension is subject to the approval of the chief, EP/EO division, or the chief, appeals
office.
Chief, EP/EO division, or.03The EP/EO specialist or the appeals officer submits the taxpayer’s statement
chief, appeals office, through proper channels to the chief, EP/EO division, or the chief, appeals office, along
determines whethertechnical with the EP/EO specialist’s or the appeals officer’s statement of why the issue should not
advice will be soughtbe referred to the national office. The chief determines, on the basis of the statements,
whether technical advice will be requested.
If the chief determines that technical advice is not warranted and proposes to deny the
request, the taxpayer is told in writing about the determination. In the letter to the
taxpayer, the chief states the reasons for the proposed denial (except in unusual situations
when doing so would be prejudicial to the best interests of the Government). The
taxpayer has 10 calendar days after receiving the letter to notify the chief of agreement or
disagreement with the proposed denial.
Chief’s decision may be .04The taxpayer may not appeal the decision of the chief, EP/EO division, or the chief,
reviewed but not appealedappeals office, not to request technical advice from the national office. However, if the
taxpayer does not agree with the proposed denial, all data on the issue for which technical
advice has been sought, including the taxpayer’s written request and statements, will be
submitted to the Assistant Commissioner (Employee Plans and Exempt Organizations) or
the National Director of Appeals as appropriate.
The Assistant Commissioner (Employee Plans and Exempt Organizations), through the
Director, Employee Plans Division, or the Director, Exempt Organizations Division or, if
appropriate, the National Director of Appeals will review the proposed denial solely on
the basis of the written record, and no conference will be held with the taxpayer or the
January 5, 19981681998–1 I.R.B.

taxpayer’s representative. The appropriate Director or his or her representative may
consult within the national office, if necessary, and will notify the key district office or
appeals office within 45 calendar days of receiving all the data regarding the request for
technical advice whether the proposed denial is approved or disapproved. The key district
office or appeals office will then notify the taxpayer.
While the matter is being reviewed, the key district office or the appeals office suspends
action on the issue (except when the delay would prejudice the Government’s interest).
The provisions of this revenue procedure regarding review of the proposed denial of a
request for technical advice continue to be applicable in those situations in which the
authority normally exercised by the key district director or chief, appeals office, has been
delegated to another official.
SECTION 12. HOWARE
REQUESTS FOR TECHNICAL
ADVICE WITHDRAWN?
Taxpayernotified.01 Once a request for technical advice has been sent to the national office, only a key
district director or a chief, appeals office, may withdraw a request for technical advice.
He or she may ask to withdraw a request at any time before the responding transmittal
memorandum transmitting the technical advice is signed.
The key district director or the chief, appeals office, as appropriate, must notify the
taxpayer in writing of an intent to withdraw the request for technical advice except (1)
when the period of limitations on assessment is about to expire and the taxpayer has
declined to sign a consent to extend the period, or (2) when such notification would be
prejudicial to the best interests of the Government.
If the taxpayer does not agree that the request for technical advice should be withdrawn,
the procedures in section 11 of this revenue procedure must be followed.
National office may.02When a request for technical advice is withdrawn, the national office may send its
provide viewsviews to the key district director or the chief, appeals office, when acknowledging the
withdrawal request. In an appeals case, acknowledgment of the withdrawal request
should be sent to the appropriate appeals office, through the National Director of Appeals,
C:AP:FS. In appropriate cases, the subject matter may be published as a revenue ruling or
as a revenue procedure.
SECTION 13. HOWARE
CONFERENCES SCHEDULED?
If requested, offered to the .01 If, after the technical advice request is analyzed, it appears that technical advice
taxpayerwhen adverseadverse to the taxpayer will be given, and if a conference has been requested, the taxpayer
technical advice proposedwill be informed, by telephone if possible, of the time and place of the conference.
Normally held within 21 days .02 The conference must be held within 21 calendar days after the taxpayer is
of contact with the taxpayercontacted. If conferences are being arranged for more than one request for technical
advice for the same taxpayer, they will be scheduled to cause the least inconvenience to
the taxpayer. If considered appropriate, the national office will notify the EP/EO
specialist or appeals officer of the scheduled conference and will offer the EP/EO
specialist or appeals officer the opportunity to attend the conference. The Assistant
Commissioner (EP/EO), the National Director of Appeals, the key district director, or the
chief, appeals office may designate other Service representatives to attend the conference
in lieu of, or in addition to, the EP/EO specialist or the appeals officer.
21-day period may be .03 An extension of the 21-day period will be granted only if the taxpayer justifies it in
extended if justified and writing, and the branch chief (or his or her delegate) of the office to which the case is
approvedassigned approves it. No extension will be granted without the approval of the branch
chief (or his or her delegate). Except in rare and unusual circumstances, the national
1998–1 I.R.B.169January 5, 1998

office will not agree to an extension of more than 10 working days beyond the end of the
21-day period.
The request for an extension must be submitted before the end of the 21-day period, and
should be submitted sufficiently before the end of this period to allow the national office
to consider, and either approve or deny, the request before the end of the 21-day period. If
unusual circumstances near the end of the period make a timely written request
impractical, the national office should be told orally before the end of the period about the
problem and about the forthcoming written request for an extension. The written request
for an extension must be submitted to the national office promptly after the oral request.
The taxpayer will be told promptly (and later in writing) of the approval or denial of the
requested extension.
Denial of extension .04 There is no right to appeal the denial of a request for an extension. If the national
cannot be appealedoffice is not advised of problems with meeting the 21-day period, or if the written request
is not sent promptly after the national office is notified of problems with meeting the 21-
day period, the case will be processed on the basis of the existing record.
Entitled to one conference.05Ataxpayer is entitled by right to only one conference in the national office unless
of rightone of the circumstances discussed in section 13.09 of this revenue procedure exists. This
conference is normally held at the branch level in the appropriate division (Employee
Plans Division or Exempt Organizations Division). It is attended by a person who has
authority to sign the transmittal memorandum discussed in section 15.13 on behalf of the
branch chief.
When more than one branch has taken an adverse position on an issue in the request, or
when the position ultimately adopted by one branch will affect another branch’s
determination, a representative from each branch with authority to sign for the branch
chief will attend the conference. If more than one subject is discussed at the conference,
the discussion constitutes the conference of right for each subject discussed.
To have a thorough and informed discussion of the issues, the conference usually is
held after the branch has had an opportunity to study the case. However, the taxpayer may
request that the conference of right be held earlier in the consideration of the case than the
Service would ordinarily designate.
The taxpayer has no right to appeal the action of a branch to a Division Director or to
any other Service official. But see section 13.09 for situations in which the Service may
offer additional conferences.
Conference may not be taped.06 Because conference procedures are informal, no tape, stenographic, or other
verbatim recording of a conference may be made by any party.
Conference may be delayed .07 In the event of a tentative adverse determination, the taxpayer may request in
to address a request forwriting a delay of the conference so that the taxpayer can prepare and submit a brief
relief under§7805(b)requesting relief under §7805(b) (discussed in section 18 of this revenue procedure). The
branch chief (or his or her delegate) of the office to which the case is assigned will
determine whether to grant or deny the request for delaying the conference. If such
request is granted, the Service will schedule a conference on the tentatively adverse
position and the §7805(b) relief request within 10 days of receiving the taxpayer’s
§7805(b) request. See section 18.06 of this revenue procedure for the conference
procedures if the §7805(b) request is made after the conference on the substantive issues
has been held.
Service makes tentative.08 The senior Service representative at the conference ensures that the taxpayer has
recommendationsfull opportunity to present views on all the issues in question. The Service representatives
explain the tentative decision on the substantive issues and the reasons for it.
If the taxpayer requests relief under §7805(b) (regarding limitation of retroactive
effect), the Service representatives will discuss the tentative recommendation concerning
the request for relief and the reason for the tentative recommendation.
January 5, 19981701998–1 I.R.B.

No commitment will be made as to the conclusion that the Service will finally adopt
regarding the outcome of the §7805(b) issue or on any other issue discussed.
Additional conferences .09 The Service will offer the taxpayer an additional conference if, after the conference
may be offeredof right, an adverse holding is proposed on a new issue or on the same issue but on
grounds different from those discussed at the first conference.
When a proposed holding is reversed at a higher level with a result less favorable to the
taxpayer, the taxpayer has no right to another conference if the grounds or arguments on
which the reversal is based were discussed at the conference of right.
The limitation on the number of conferences to which a taxpayer is entitled does not
prevent the national office from inviting a taxpayer to attend additional conferences,
including conferences with an official higher than the branch level, if national office
personnel think they are necessary. Such conferences are not offered as a matter of course
simply because the branch has reached an adverse decision. In general, conferences with
higher level officials are offered only if the Service determines that the case presents
significant issues of tax policy or tax administration and that the consideration of these
issues would be enhanced by additional conferences with the taxpayer.
In accordance with section 13.02 of this revenue procedure, the EP/EO specialist or
appeals officer may be offered the opportunity to participate in any additional taxpayer’s
conference, including a conference with an official higher than the branch level. Section
13.02 of this revenue procedure also provides that other Service representatives are
allowed to participate in the conference.
Additional information .10 Within 21 calendar days after the conference, the taxpayer must furnish to the
submitted afterthe conferencenational office any additional data, lines of reasoning, precedents, etc., that the taxpayer
proposed and discussed at the conference but did not previously or adequately present in
writing. This additional information must be submitted by letter with a penalties of
perjury statement in the form described in section 15.10 of this revenue procedure.
The taxpayer must also send a copy of the additional information to the key district
director or the chief, appeals office, for comment. Any comments must be furnished
promptly to the appropriate branch in the national office. If the key district director or the
chief, appeals office, does not have any comments, he or she must notify the branch
representative promptly.
If the additional information would have a significant impact on the facts in the request
for technical advice, the national office will ask the key district director or the chief,
appeals office, for comments on the facts contained in the additional information
submitted. The key district director or the chief, appeals office, will give the additional
information prompt attention.
If the additional information is not received from the taxpayer within 21 calendar days,
the technical advice memorandum will be issued on the basis of the existing record.
An extension of the 21-day period may be granted only if the taxpayer justifies it in
writing, and the Division Director (or his or her delegate) of the office to which the case is
assigned approves the extension. Such extension will not be routinely granted. The
procedures for requesting an extension of the 21-day period and notifying the taxpayer of
the Services’s decision are the same as those in sections 13.03 and 13.04 of this revenue
procedure.
Underlimited circumstances, .11Infrequently, taxpayers request that their conference of right be held by telephone.
may schedule a conference This request may occur, for example, when a taxpayer wants a conference of right but
to be held by telephone believes that the issue does not warrant the expense of traveling to Washington, DC. If a
taxpayer makes such a request, the branch chief, or his or her delegate of the branch to
which the case is assigned, will decide if it is appropriate in the particular case to hold the
1998–1 I.R.B.171January 5, 1998

conference of right by telephone. If the request is approved, the taxpayer will be advised
when to call the Service representatives (not a toll-free call).
In accordance with section 13.02 of this revenue procedure, the EP/EO specialist or
appeals officer will be offered the opportunity to participate in the telephone conference.
Section 13.02 of this revenue procedure also provides that other Service representatives
are allowed to participate in the conference.
SECTION 14. HOWIS
STATUS OFREQUEST
OBTAINED?
Taxpayermay request .01The taxpayer or the taxpayer’s representative may obtain information on the status
status from the key districtof the request for technical advice by contacting the key district or appeals office that
orappeals office requested the technical advice. See section 15.08 of this revenue procedure concerning
the time for discussing the tentative conclusion with the taxpayer’s representative. See
section 16.02 of this revenue procedure regarding discussions of the contents of the
technical advice memorandum with the taxpayer or the taxpayer’s representative.
National office will give .02The branch representative or the branch chief to whom the technical advice request
status updates to the key is assigned will give status updates on the request once a month to the key district director
district directororchief,or chief appeals office. In addition, a key district director or chief, appeals office, may get
appeals office current information on the status of the request for technical advice by calling the person
whose name and telephone number are shown on the acknowledgement of receipt of the
request for technical advice.
See section 15.09 of this revenue procedure about discussing the final conclusions with
the key district or appeals office. Further, the key district director or the chief, appeals
office will be notified at the time the technical advice memorandum is mailed.
SECTION 15. HOWDOES
THE NATIONALOFFICE
PREPARE THE TECHNICAL
ADVICE MEMORANDUM?
Delegates authority to .01 The authority to issue technical advice on issues under the jurisdiction of the
branch chiefsAssistant Commissioner (Employee Plans and Exempt Organizations) has largely been
delegated to the Chiefs, Employee Plans Technical Branches; Chiefs, Employee Plans
Projects Branches; Chiefs, Employee Plans Actuarial Branches; and Chiefs, Exempt
Organizations Technical Branches.
Determines whetherrequest.02 Arequest for technical advice generally is given priority and processed
has been properly madeexpeditiously. As soon as the request for technical advice is assigned, the technical
employee analyzes the file to see whether it meets all of the requirements of sections 7
through 9 of this revenue procedure.
However, if the request does not comply with the requirements of section 9.05 of this
revenue procedure relating to the deletions statement, the Service will follow the
procedure in the last paragraph of section 10.05 of this revenue procedure.
Contacts the key district or.03Usually, within 21 calendar days after the branch receives the request for technical
appeals office to discuss issuesadvice, a representative of the branch telephones the key district or appeals office to
discuss the procedural and substantive issues in the request that come within the branch’s
jurisdiction.
Informs the key district or.04 If the technical advice request concerns matters within the jurisdiction of more than
appeals office if any matters in one branch or office, a representative of the branch that received the original technical
the request have been referred advice request generally informs the key district or appeals office within 21 calendar days
to anotherbranch orofficeof receiving the request that—
January 5, 19981721998–1 I.R.B.

(1) the matters within the jurisdiction of another branch or office have been referred to
the other branch or office for consideration, and
(2) a representative of the other branch or office will contact the key district or appeals
office about the referral of the technical advice request within 21 calendar days after
receiving it in accordance with section 15.03 above.
Informs the key district or.05The branch representative will inform the key district or appeals office that the case
appeals office if additional is being returned if substantial additional information is required to resolve an issue.
information is neededCases should be returned for additional information when significant unresolved factual
variances exist between the statement of facts submitted by the key district or appeals
office and the taxpayer. They should also be returned if major procedural problems
cannot be resolved by telephone.
If only minor procedural deficiencies exist, the branch will request the additional
information in the most expeditious manner without returning the case.
Informs the key district or.06 If all necessary information has been provided, the branch representative discusses
appeals office of the tentative with the key district or appeals office his or her tentative conclusion.
conclusion
If a tentative conclusion has.07If a tentative conclusion has not been reached because of the complexity of the
not been reached, gives date issue, the branch representative informs the key district or appeals office of the estimated
estimated fortentative conclusiondate the tentative conclusion will be made.
Advises the key district or.08 Because the branch representative’s tentative conclusion may change during the
appeals office that preliminarypreparation and review of the technical advice memorandum, the tentative conclusion
conclusion not finalshould not be considered final. Therefore, neither the branch representative nor the key
district or appeals office should advise the taxpayer or the taxpayer’s representative of the
tentative conclusion before the scheduling of the adverse conference.
Advises the key district or.09In all cases, the branch representative should inform the EP/EO specialist or
appeals office of final conclusionsappeals officer of the national office’s final conclusions. The EP/EO specialist or the
appeals officer should be offered the opportunity to discuss the issues and the national
office’s final conclusions before the technical advice memorandum is issued.
If needed, requests .10If, following the initial contact referenced in section 15.03 of this revenue
additional informationprocedure, it is determined, after discussion with the appropriate branch chief or reviewer,
that additional information is needed, a branch representative will obtain the additional
information from the taxpayer, the key district director, or the chief, appeals office, in the
most expeditious manner possible. Any additional information requested from the
taxpayer by the national office must be submitted by letter with a penalties of perjury
statement within 21 calendar days after the request for information is made.
Penalties of perjury statementAdditional information submitted to the national office must be accompanied by the
following declaration: “Underpenalties of perjury, I declare that I have examined
this information, including accompanying documents, and, to the best of my
knowledge and belief, the information contains all the relevant facts relating to the
request, forthe information and such facts are true, correct, and complete.”This
declaration must be signed and dated by the taxpayer, not the taxpayer’s representative. A
stamped signature is not permitted.
Awritten request for an extension of time to submit additional information must be
received by the national office within the 21 day period, giving compelling facts and
circumstances to justify the proposed extension. The branch chief (or his or her delegate)
of the office to which the case is assigned will determine whether to grant or deny the
request for an extension of the 21-day period. No extension will be granted without the
approval of the appropriate branch chief (or his or her delegate). Except in rare and
unusual circumstances, the national office will not agree to an extension of more than 10
working days beyond the end of the 21-day period. There is no right to appeal the denial
of a request for an extension.
1998–1 I.R.B.173January 5, 1998

If the national office does not receive the additional information within 21 calendar
days, plus any extensions granted by the appropriate branch chief (or his or her delegate),
the national office will process the technical advice memorandum based on the existing
record.
Requests taxpayerto send .11Whether or not requested by the Service, any additional information submitted by
additional information to thethe taxpayer should be sent to the national office. Generally, the taxpayer needs only to
national office and a copy to submit one copy of the additional information to the national office. However, in
the key district directororappropriate cases, the national office may request additional copies of the information.
chief, appeals office
Also, the taxpayer must send a copy to either the key district director or the chief,
appeals office, for comment. Any comments must be furnished promptly to the
appropriate branch in the national office. If the key district director or the chief, appeals
office, does not have any comments, he or she must notify the branch representative
promptly.
Informs the taxpayerwhen .12 Generally, before replying to the request for technical advice, the national office
requested deletions will notinforms the taxpayer orally or in writing of the material likely to appear in the technical
be madeadvice memorandum that the taxpayer proposed be deleted but that the Service has
determined should not be deleted.
If so informed, the taxpayer may submit within 10 calendar days any further
information or other arguments supporting the taxpayer’s proposed deletions.
The Service will attempt to resolve all disagreements about proposed deletions before
the national office replies to the request for technical advice. However, the taxpayer does
not have the right to a conference to resolve any disagreements about material to be
deleted from the text of the technical advice memorandum. These matters, however, may
be considered at any conference otherwise scheduled for the request.
Prepares reply in two parts.13The national office’s reply to a technical advice request is in two parts. Each part
identifies the taxpayer by name, address, identification number, and year or years
involved.
The first part of the reply is a transmittal memorandum. In unusual cases, it is a way of
giving the key district or appeals office administrative or other information that under the
nondisclosure statutes or for other reasons may not be discussed with the taxpayer.
The second part is the technical advice memorandum, which contains—
(1) a statement of the issues;
(2) a statement of the facts pertinent to the issues;
(3) a statement of the pertinent law, tax treaties, regulations, revenue rulings, and other
precedents published in the Internal Revenue Bulletin, and court decisions;
(4) a discussion of the rationale underlying the conclusions reached by the national
office; and
(5) the conclusions of the national office.
The conclusions give direct answers, whenever possible, to the specific issues raised by
the key district or appeals office. However, the national office is not bound by the precise
statement of the issues as submitted by the taxpayer or by the key district or appeals office
and may reframe the issues to be answered in the technical advice memorandum. The
discussion of the issues will be in sufficient detail so that the key district or appeals
officials will understand the reasoning underlying the conclusion.
January 5, 19981741998–1 I.R.B.

Accompanying a technical advice memorandum subject to §6110, is a notice under
§6110(f)(1) of intention to disclose the technical advice memorandum (including a copy
of the version proposed to be open to public inspection and notations of third party
communications under §6110(d)).
Routes replies to .14Replies to requests for technical advice are addressed to the key district director or
appropriate officethe chief, appeals office. Replies to requests from appeals should be routed to the
appropriate appeals office through the National Director of Appeals, C:AP:FS.
SECTION 16. HOWDOES
AKEYDISTRICTOR AN
APPEALS OFFICE USE
THE TECHNICALADVICE?
Generally applies advice .01The key district director or the chief, appeals office, must process the taxpayer’s
in processing the taxpayer’s casecase on the basis of the conclusions in the technical advice memorandum unless—
(1) the key district director or the chief, appeals office, decides that the conclusions
reached by the national office in a technical advice memorandum should be reconsidered,
or
(2) the chief, appeals office, in the case of technical advice unfavorable to the taxpayer,
decides to settle the issue in the usual manner under existing authority.
Subject to a request for reconsideration of the conclusions in a technical advice
memorandum, the key district director must follow the conclusions in a technical advice
memorandum as to all issues and the chief, appeals office, must follow the conclusions in
a technical advice memorandum on issues of an organization’s/plan’s status or
qualification. Thus, if the technical advice memorandum received by a key district
director concerns an organization’s/plan’s status or qualification, the organization/plan has
no appeal to the appeals office on those specific issues.
Discussion with the taxpayer.02The national office will not discuss the contents of the technical advice
memorandum with the taxpayer or the taxpayer’s representative until the taxpayer has
been given a copy by the key district or appeals office.
Gives copy to the taxpayer.03The key district director or the chief, appeals office, only after adopting the
technical advice, gives the taxpayer (1) a copy of the technical advice memorandum
described in section 15.13, and (2) the notice under §6110(f)(1) of intention to disclose
the technical advice memorandum (including a copy of the version proposed to be open to
public inspection and notations of third party communications under §6110(d)).
This requirement does not apply to a technical advice memorandum involving a
criminal or civil fraud investigation, or a jeopardy or termination assessment, as described
in section 10.06 of this revenue procedure, or documents to which §6104 (document open
to public inspection) applies as described in section 9.03.
Taxpayermay protest .04 After receiving the notice under §6110(f)(1) of intention to disclose the technical
deletions not madeadvice memorandum, the taxpayer may protest the disclosure of certain information in it.
The taxpayer must submit a written statement within 20 calendar days identifying those
deletions not made by the Service that the taxpayer believes should have been made. The
taxpayer must also submit a copy of the version of the technical advice memorandum
proposed to be open to public inspection with brackets around deletions proposed by the
taxpayer that have not been made by the national office.
Generally, the national office considers only the deletion of material that the taxpayer
has proposed be deleted or other deletions as required under § 6110(c) before the national
office reply is sent to the key district director or the chief, appeals office. Within 20
calendar days after it receives the taxpayer’s response to the notice under §6110(f)(1), the
national office must mail the taxpayer its final administrative conclusion about the
deletions to be made.
1998–1 I.R.B.175January 5, 1998

When no copy is given .05If the national office tells the key district director or the chief, appeals office, that a
to the taxpayercopy of the technical advice memorandum should not be given to the taxpayer and the
taxpayer requests a copy, the key district director or the chief, appeals office, will tell the
taxpayer that no copy will be given.
SECTION 17. WHATIS
THE EFFECTOF
TECHNICALADVICE?
Applies only to the taxpayer.01 Ataxpayer may not rely on a technical advice memorandum issued by the Service
forwhom technical advicefor another taxpayer.
was requested
Usually applies retroactively.02 Except when stated otherwise, a holding in a technical advice memorandum is
applied retroactively, unless the Assistant Commissioner (Employee Plans and Exempt
Organizations) exercises discretionary authority under §7805(b) to limit the retroactive
effect of the holding. Section 17.06 below lists the criteria necessary for granting
§7805(b) relief, and section 18 of this revenue procedure describes the effect of §7805(b)
relief.
Generally applied retroactively .03Aholding that modifies or revokes a holding in a prior technical advice memo-
to modify orrevoke priorrandum is applied retroactively, with one exception. If the new holding is less favorable
technical adviceto the taxpayer than the earlier one, it generally is not applied to the period when the
taxpayer relied on the prior holding in situations involving continuing transactions.
Applies to continuing action.04If a technical advice memorandum relates to a continuing action or a series of
orseries of actions until actions, ordinarily it is applied until specifically withdrawn or until the conclusion is
specifically withdrawn,modified or revoked by enactment of legislation, ratification of a tax treaty, a decision of
modified, orrevoked the United States Supreme Court, or the issuance of regulations (temporary or final), a
revenue ruling, or other statement published in the Internal Revenue Bulletin. Publication
of a notice of proposed rulemaking does not affect the application of a technical advice
memorandum.
Applies to continuing action.05Ataxpayer is not protected against retroactive modification or revocation of a
orseries of actions until technical advice memorandum involving a continuing action or a series of actions
material facts changeoccurring after the material facts on which the technical advice memorandum is based
have changed.
Does not apply retroactively .06 Generally, a technical advice memorandum that modifies or revokes a letter ruling
undercertain conditionsor another technical advice memorandum or a determination letter is not applied
retroactively either to the taxpayer to whom or for whom the letter ruling or technical
advice memorandum or determination letter was originally issued, or to a taxpayer whose
tax liability was directly involved in such letter ruling or technical advice memorandum or
determination letter if—
(1)there has been no misstatement or omission of material facts;
(2)the facts at the time of the transaction are not materially different from the facts on
which the letter ruling or technical advice memorandum or determination letter was based;
(3) there has been no change in the applicable law;
(4) in the case of a letter ruling, it was originally issued on a prospective or proposed
transaction; and
(5) the taxpayer directly involved in the letter ruling or technical advice memorandum
or determination letter acted in good faith in relying on the letter ruling or technical advice
memorandum or determination letter, and the retroactive modification or revocation
would be to the taxpayer’s detriment. For example, the tax liability of each employee
covered by a letter ruling or technical advice memorandum or determination letter relating
January 5, 19981761998–1 I.R.B.

to a pension plan of an employer is directly involved in the letter ruling or technical
memorandum or determination letter. However, the tax liability of members of an
industry is not directly involved in a letter ruling or technical advice memorandum or
determination letter issued to one of the members, and the holding in a modification or
revocation of a letter ruling or technical advice memorandum or determination letter to
one member of an industry may be retroactively applied to other members of the industry.
By the same reasoning, a tax practitioner may not obtain the nonretroactive application to
one client of a modification or revocation of a letter ruling or technical advice
memorandum or determination letter previously issued to another client.
When a letter ruling or determination letter to a taxpayer or a technical advice
memorandum involving a taxpayer is modified or revoked with retroactive effect, the
notice to the taxpayer, except in fraud cases, sets forth the grounds on which the
modification or revocation is being made and the reason why the modification or
revocation is being applied retroactively.
In order for a technical advice memorandum that modifies or revokes a letter ruling or
another technical advice memorandum or a determination letter not to be applied
retroactively either to the taxpayer to whom or for whom the letter ruling, technical advice
memorandum or determination letter was originally issued, or to a taxpayer whose tax
liability was directly involved in such letter ruling, technical advice memorandum or
determination letter, such taxpayer generally must request relief under §7805(b) in the
manner described in section 18 below.
SECTION 18. HOWMAY
RETROACTIVE EFFECTE
LIMITED?
Commissionerhas .01 Under §7805(b) the Commissioner or the Commissioner’s delegate has the
discretionary authority discretion to prescribe the extent, if any, to which a technical advice memorandum will be
under§7805(b)applied without retroactive effect.
Taxpayermay request .02 Ataxpayer who has received a technical advice memorandum or for whom a
Commissionerto exercisetechnical advice request is pending may request that the Assistant Commissioner
authority (Employee Plans and Exempt Organizations), the Commissioner’s delegate, exercise the
discretionary authority under §7805(b) to limit the retroactive effect of any holding stated
in the technical advice memorandum or to limit the retroactive effect of any subsequent
modification or revocation of the technical advice memorandum.
Form of request to limit .03When a technical advice memorandum that concerns a continuing transaction is
retroactivity—beforemodified or revoked by, for example, a subsequent revenue ruling or final regulations, a
an examinationrequest to limit the retroactive effect of the modification or revocation of the technical
advice memorandum must be made in the form of a request for a letter ruling if submitted
before examination of the return that contains the transaction that is the subject of the
request for the letter ruling. SeeRev. Proc. 98–4.
Form of request to limit .04When, during the course of an examination of a taxpayer’s return by a key district
retroactivity—during director or consideration by the chief, appeals office, a taxpayer is informed that the key
course of an examinationdistrict director or the chief, appeals office, recommends that a technical advice
memorandum be modified or revoked, a request to limit the retroactive application of the
modification or revocation of the technical advice memorandum must itself be made in the
form of a request for technical advice. Seesections 7 through 9 of this revenue procedure
and sections 18.07 and 18.08 below.
The taxpayer must also submit a statement that the request is being made pursuant to
§7805(b). This statement must also indicate the relief requested and give the reasons and
arguments in support of the relief requested. It must also be accompanied by any
documents bearing on the request. The explanation should discuss the five items listed in
section 17.06 of this revenue procedure as they relate to the taxpayer’s situation.
1998–1 I.R.B.177January 5, 1998

The taxpayer’s request, including the statement that the request is being made pursuant
to §7805(b), must be forwarded by the key district director or the chief, appeals office, to
the national office for consideration.
Form of request to limit .05Arequest to limit the retroactive effect of a holding in a technical advice memo-
retroactivity—technical advice randum that does not modify or revoke a technical advice memorandum may be made as
that does not modify orrevokepart of that technical advice request, either initially, or at any time before the technical
priormemorandumadvice memorandum is issued by the national office. In such a case, the taxpayer must
also submit a statement in support of the application of §7805(b), as described in section
18.04 above.
Taxpayer’s right to a conference.06When a request for technical advice concerns only the application of §7805(b), the
taxpayer has the right to a conference in the national office in accordance with the
provisions of section 13 of this revenue procedure.
If the request for application of §7805(b) is included in the request for technical advice
on the substantive issues or is made before the conference of right on the substantive
issues, the §7805(b) issues will be discussed at the taxpayer’s one conference of right.
If the request for the application of §7805(b) is made as part of a pending technical
advice request after a conference has been held on the substantive issues, and the Service
determines that there is justification for having delayed the request, then the taxpayer will
have the right to one conference of right concerning the application of §7805(b), with the
conference limited to discussion of this issue.
Exhaustion of administrative .07Where the applicant has requested the key district director to seek technical advice
remedies—employee plans on the applicability of §7805(b) relief to a qualification issue under §401(a) pursuant to a
determination letterrequestsdetermination letter request, the applicant’s administrative remedies will not be considered
exhausted until the national office has a reasonable time to act on the request for technical
advice. (Seesection 20 of Rev. Proc. 98–6.)
Exhaustion of administrative .08Where technical advice has been requested pursuant to an exempt organization’s
remedies—exempt request for §7805(b) relief from the retroactive application of an adverse determination
organization matterswithin the meaning of §7428(a)(1), the exempt organization’s administrative remedies
will not be considered exhausted, within the meaning of §7428(b)(2), until the national
office has a reasonable time to act on the request for technical advice.
SECTION 19. WHATIS THE Rev. Proc. 97–5 is superseded.
EFFECTOFTHIS REVENUE
PROCEDURE ON OTHER
DOCUMENTS?
SECTION 20. This revenue procedure is effective January 5, 1998.
EFFECTIVE DATE
SECTION 21. PAPERWORK The collections of information contained in this revenue procedure have been reviewed
REDUCTION ACTand approved by the Office of Management and Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. §3507) under control number 1545–1520.
An agency may not conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection of information displays a valid control
number.
The collections of information in this revenue procedure are in sections 6.03, 9.01, 9.02,
10.03, 10.04, 10.05, 11.02, 11.03, 12.01, 13.03, 13.10, 15.10, 15.12, 16.04, 18.03, 18.04,
and 18.05. This information is required to evaluate and process the request for a
technical advice memorandum. In addition, this information will be used to help the
Service delete certain information from the text of the technical advice memorandum
before it is made available for public inspection, as required by § 6110. The collections of
information are required to obtain a technical advice memorandum. The likely
respondents are businesses or other for-profit institutions and not-for-profit institutions.
January 5, 19981781998–1 I.R.B.

The estimated total annual reporting and/or recordkeeping burden is 1,650 hours.
The estimated annual burden per respondent/recordkeeper varies from 4 hours to 40
hours, depending on individual circumstances, with an estimated average of 16.5 hours.
The estimated number of respondents and/or recordkeepers is 100.
The estimated annual frequency of responses is one request per applicant.
Books or records relating to a collection of information must be retained as long as their
contents may become material in the administration of any internal revenue law.
Generally, tax returns and tax return information are confidential, as required by §6103.
DRAFTING INFORMATIONThe principal authors of this revenue procedure are Michael Rubin of the Employee
Plans Division and David Flavin of the Exempt Organizations Division. For further
information regarding how this revenue procedure applies to employee plans matters,
please contact the Employee Plans Division’s taxpayer assistance telephone service or Mr.
Rubin between the hours of 1:30 and 3:30 p.m. Eastern time, Monday through Thursday
on (202) 622-6074/6075 or (202) 622-6214, respectively. For exempt organizations
matters, please contact Mr. Flavin at (202) 622-7922. These telephone numbers are not
toll-free.
1998–1 I.R.B.179January 5, 1998

Appendix A
If the entity is in:The key district office that has audit jurisdiction is:
Connecticut, Maine,Internal Revenue Service
Massachusetts, Michigan, Northeast Key District Office
New Hampshire, New Jersey, New York, Chief, EP/EO Division
Ohio, Pennsylvania, Rhode Island, VermontG.P.O. Box 029162
Brooklyn, NY11201
Alabama, Delaware, District of Columbia, Internal Revenue Service
Florida, Georgia, Indiana, Kentucky, Southeast Key District Office
Louisiana, Maryland, Mississippi, North Carolina, Chief, EP/EO Division
South Carolina, Tennessee, Virginia, West Virginia, P.O. Box 13163
any U.S. possession or foreign country Baltimore, MD 21203
Arkansas, Illinois, Iowa, Kansas, Minnesota, Internal Revenue Service
Missouri, Nebraska, North Dakota, Oklahoma, Midstates Key District Office
South Dakota, Texas, WisconsinChief, EP/EO Division
Mail Code 4950 DAL
1100 Commerce Street
Dallas, TX 75242
Alaska, Arizona, California, Colorado, Hawaii, Internal Revenue Service
Idaho, Montana, Nevada, New Mexico, Oregon, Western Key District Office
Utah, Washington, Wyoming Chief, EP/EO Division
P.O. Box 2350
Los Angeles, CA90053-2350
January 5, 19981801998–1 I.R.B.

INDEX
References are to sections in Rev. Proc. 98-5
Additional Information
—procedure for submission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 15.02, 15.05, 15.10
after conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 13.10
—proposed deletions under § 6110. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 9.05
Chief Counsel
—jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..section 5.01
Conferences
—offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 10.02, 13.01, 13.09
exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 10.06, 11.04, 15.12
—scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 13
request to limit retroactivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 13.07, 13.08, 18.05
telephone conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 13.11
Definition—technical advice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..section 3
Extension of Time
—to appeal decision not to request technical advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 11.02
—to disagree with statement of facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 10.03, 10.04
—to schedule conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 13.03, 13.04
—to submit additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 13.10, 15.10
Farmers’Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 4.02, 5.01
LetterRuling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 17.06
Mandatory Technical Advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..sections 4.04, 7.01
Paperwork Reduction Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 21
Perjury Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 13.10, 15.10
Powerof Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 9.08
Public Disclosure under§ 6110
—deletion statement required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 9.05
exception when § 6104 applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 9.04
failure to submit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 10.05
—notice of intention to disclose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 16.03
protesting deletions not made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 15.12, 16.04
Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 13.08, 15.10
Retroactive Effect
—in general . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 17.02—.06
on letter ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 17.06
—request to limit retroactivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 18
employee plans determination letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 18.07
1998–1 I.R.B.181January 5, 1998

exempt organization matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 18.08
format of request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 18.03, 18.04
scheduling conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 13.07, 13.09, 18.06
Revenue Rulings
—effect on continuing transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 17.04
request to limit retroactivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .sections 18.01—.03
Section 301.9100–1 Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 6
Status of Technical Advice Request
—to Key District or Appeals Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 14.02
—to taxpayer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 14.01
Where to Send
—additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 15.11
—technical advice request from Appeals Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 9.06
—technical advice from Key District Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 9.06
Withdrawal of Technical Advice Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .section 12
January 5, 19981821998–1 I.R.B.

26 CFR 601.201:Rulings and determination letters.
Rev. Proc. 98–6
TABLE OFCONTENTS
SECTION 1. WHATIS p. 188
THE PURPOSE OF
THIS REVENUE .01 Purpose of revenue procedure
PROCEDURE?
.02 Organization of revenue procedure
SECTION 2. WHATp. 189
CHANGES HAVE BEEN
MADE TO THIS .01 In general
PROCEDURE?
.02 The Taxpayer Relief Act of 1997
.03 Where to file
.04 Volume submitters
.05 Foreign situs trusts, foreign employers
PARTI. PROCEDURES
FOR DETERMINATION
LETTER REQUESTS
SECTION 3. ON WHATp. 189
ISSUES MAYTAXPAYERS
REQUESTWRITTEN .01 Types of requests
GUIDANCE UNDER THIS
PROCEDURE?.02 Areas in which determination letters will not be issued
.03 GATT, SBJPA, and TRA’97
SECTION 4. ON WHATp. 192
ISSUES MUSTWRITTEN
GUIDANCE BE REQUESTED .01 Employee Plans and Exempt Organizations
UNDER DIFFERENT
PROCEDURES?.02 Chief Counsel’s revenue procedure
SECTION 5. WHATIS THE p. 192
GENERALSCOPE OFA
DETERMINATION LETTER?.01 Scope
.02 All form and certain non-form requirements generally reviewed
.03 Nondiscrimination in amount requirement
.04 Average benefit test requirement
.05 Nondiscriminatory current availability requirement
.06 Effective availability requirement
.07 Other limits on scope of determination letter
1998–1 I.R.B.183January 5, 1998

SECTION 6. WHATIS p. 193
THE GENERAL
PROCEDURE FOR .01 Scope
REQUESTING
DETERMINATION .02 Qualified trusteed plans
LETTERS?
.03 Qualified nontrusteed annuity plans
.04 Complete information required
.05 Complete copy of plan and trust required
.06 Section 9 of Rev. Proc. 98–4 applies
.07 Separate application required for each single §414(l) plan
.08 Schedule Q
.09 Prior letters
.10 User fees
.11 Interested party notification and comment
.12 Contrary authority must be distinguished
.13 Employer/employee relationship
.14 Incomplete applications returned
.15 Effect of failure to disclose material fact
.16 Data requirements
.17 Where to file request
.18 Withdrawal of requests
SECTION 7. INITIALp.196
QUALIFICATION, ETC.
.01 Scope
.02 Forms
.03 Application for amendments must include copy of plan
.04 Restatements may be required
.05 Controlled groups, etc.
SECTION 8. MASTER & p.197
PROTOTYPE PLANS;
REGIONALPROTOTYPE .01 Scope
PLANS
.02 Determination letter may be necessary for reliance
.03 Forms
January 5, 19981841998–1 I.R.B.

.04 Required information
.05 Special rules for standardized plans
.06 Amended plan is treated as an individually designed plan
.07 Requests made prior to the issuance of opinion or notification letter
SECTION 9. VOLUME p. 199
SUBMITTER PLANS
.01 Scope
.02 Purpose of volume submitter program
.03 Description of volume submitter program
.04 Definition of volume submitter plan
.05 Other requirements
.06 User fees
.07 Advisory letter for specimen plan
.08 Determination letter for adoption of volume submitter plan
SECTION 10. MULTIPLEp. 201
EMPLOYER PLANS
.01 Scope
.02 Form 5300 and Schedule Q
.03 Multiple employer M&Pplans
.04 Where to file
.05 Preliminary approval for certain multiple employer M&Pplans
.06 Determination letter sent to each employer
.07 Addition of employers
SECTION 11. MINOR p.201
AMENDMENTOF
PREVIOUSLY.01 Scope
APPROVED PLAN
.02 Form 6406
.03 Additional information
.04 Minor amendment procedures may not be used for complex amendments
.05 Key district office has discretion to determine whether use of minor
amendment procedure is appropriate
SECTION 12. p. 202
TERMINATION OR
DISCONTINUANCE OF.01 Scope
CONTRIBUTIONS;
1998–1 I.R.B.185January 5, 1998

NOTICE OFMERGERS, .02 Forms
CONSOLIDATIONS, ETC.
.03 Required demonstration of nondiscrimination requirements
.04 Compliance with Title IVof ERISA
.05 Termination prior to time for amending for change in law
SECTION 13. GROUPp. 203
TRUSTS
.01 Scope
.02 Required information
SECTION 14. AFFILIATEDp. 203
SERVICE GROUPS;
LEASED EMPLOYEES.01 Scope
.02 Types of requests under §414(m) and §414(n)
.03 Employer must request the determination under§ 414(m) or §414(n)
.04 Forms
.05 Employer is responsible for determining status under §414(m) and
§414(n)
.06 Omission of material fact
.07 Service will indicate whether §414(m) or §414(n) was considered
.08 M&Pplans; regional prototype plans
.09 Required information for § 414(m) determination
.10 Required information for § 414(n) determination
SECTION 15. WAIVER p. 206
OFMINIMUM FUNDING
.01 Scope
.02 Applicability of Rev. Proc. 94-41
.03 Waiver and determination letter request submitted to national office
.04 Handling of the request
.05 Interested party notice and comment
.06 When waiver request should be submitted
SECTION 16. SECTIONp. 207
420 DETERMINATION
LETTERS.01 Scope
.02 Required information
January 5, 19981861998–1 I.R.B.

PARTII. INTERESTED
PARTYNOTICE AND
COMMENT
SECTION 17. WHATp. 209
RIGHTS TO NOTICE
AND COMMENTDO .01 Rights of interested parties
INTERESTED PARTIES
HAVE?.02 Comments by interested parties
.03 Requests for DOLto submit comments
.04 Right to comment if DOLdeclines to comment
.05 Confidentiality of comments
.06 Availability of comments
.07 When comments are deemed made
SECTION 18. WHATARE p. 211
THE GENERALRULES
FOR NOTICE TO .01 Notice to interested parties
INTERESTED PARTIES?
.02 Time when notice must be given
.03 Content of notice
.04 Procedures for making information available to interested parties
.05 Information to be available to interested parties
.06 Special rules if there are less than 26 participants
.07 Information described in §6104(a)(1)(D) should not be included
.08 Availability of additional information to interested parties
.09 Availability of notice to interested parties
PARTIII. PROCESSING
DETERMINATION
LETTER REQUESTS
SECTION 19. HOWDOES p. 214
THE SERVICE HANDLE
DETERMINATION .01 Oral advice
LETTER REQUESTS?
.02 Conferences
.03 Determination letter based solely on administrative record
.04 Notice of final determination
.05 Issuance of the notice of final determination
1998–1 I.R.B.187January 5, 1998

SECTION 20. EXHAUSTION p. 215
OFADMINISTRATIVE
REMEDIES.01 In general
.02 Steps for exhausting administrative remedies
.03 Applicant’s request for § 7805(b) relief
.04 Interested parties
.05 Deemed exhaustion of administrative remedies
.06 Service must act on appeal
.07 Service must act on §7805(b) request
.08 Effect of technical advice request
SECTION 21. WHATEFFECTp. 216
WILLAN EMPLOYEE
PLANS DETERMINATION .01 Scope of reliance on determination letter
LETTER HAVE?
.02 Effect of determination letter on minor plan amendment
.03 Sections 13 and 14 of Rev. Proc. 98–4 applicable
.04 Effect of subsequent publication of revenue ruling, etc.
.05 Determination letter does not apply to taxability issues
SECTION 22. EFFECTp. 217
ON OTHER REVENUE
PROCEDURES
SECTION 23. p. 217
EFFECTIVE DATE
SECTION 24. p. 217
PAPERWORK
REDUCTION ACT
DRAFTING p. 218
INFORMATION
EXHIBIT
APPENDIX §420
determination letters
SECTION 1. WHATIS
THE PURPOSE OF
THIS REVENUE
PROCEDURE?
Purpose of revenue .01 This revenue procedure sets forth the procedures of the various offices of the
procedureInternal Revenue Service for issuing determination letters on the qualified status of
pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans
(ESOPs) under §§401, 403(a), 409 and 4975(e)(7) of the Internal Revenue Code of 1986,
and the status for exemption of any related trusts or custodial accounts under §501(a).
January 5, 19981881998–1 I.R.B.

Organization of .02 Part I of this revenue procedure contains instructions for requesting determination
revenue procedureletters for various types of plans and transactions. Part II contains procedures for provid-
ing notice to interested parties and for interested parties to comment on determination let-
ter requests. Part III contains procedures concerning the processing of determination letter
requests and describes the effect of a determination letter.
SECTION 2. WHAT
CHANGES HAVE BEEN
MADE TO THIS
PROCEDURE?
In general.01 This revenue procedure is a general update of Rev. Proc. 97–6, 1997–1 C.B. 576,
which contains the Service’s general procedures for employee plans determination letter
requests. Most of the changes to Rev. Proc. 97–6 involve minor revisions, such as
updating citations to other revenue procedures.
The TaxpayerRelief .02 The Taxpayer Relief Act of 1997, Pub. L. 105–34 (TRA’97), made several
Act of 1997changes to the qualification requirements. Section 3 of this revenue procedure has been
modified to provide that, until further notice, the Service will not consider these changes
in making a determination of a plan’s qualified status, except with respect to terminating
plans. Section 3 continues to provide that, until further notice, amendments to the
qualification requirements made by the Uruguay Round Agreements Act, Pub. L. 103–465
(GATT) or the Small Business Job Protection Act of 1996, Pub. L. 104–188 (SBJPA), also
will generally not be considered.
Areas in which .03 Section 3.02 of this revenue procedure has been modified to remove from the list
determination letters of areas in which determination letters will not be issued transactions that include trans-
will not be issued fers of excess assets from ongoing defined benefit plans to defined contribution plans or
transfers in connection with the amendment of a defined benefit plan to create a floor
offset arrangement with a defined contribution plan, including transactions resulting in a
plan described in § 414(k).
Where to file .04 As a result of the centralization of the Service’s EP/EO determination letter function,
section 6.17 and other sections of this revenue procedure have been modified to provide
that all requests for determination and other letters, as well as all comments by interested
parties regarding applications for determination letters, are to be sent to the Internal
Revenue Service Center in Covington, Kentucky.
Volume submitters .05 Also as a result of centralization, minor changes have been made to the procedures
for filing requests for advisory and determination letters for volume submitter plans. In
addition, the prior restriction on the submission of volume submitter requests with respect
to cross-tested defined contribution plans has been removed.
Foreign situs trusts,.06 Finally, because of centralization, the section that contained procedures relating to
foreign employersforeign situs trusts and foreign employers is no longer necessary and has been deleted.
Determination letter applications involving foreign situs trusts or foreign employers should
now be sent to the Internal Revenue Service Center in Covington, Kentucky.
PARTI. PROCEDURES
FOR DETERMINATION
LETTER REQUESTS
SECTION 3. ON WHAT
ISSUES MAY
TAXPAYERS REQUEST
WRITTEN GUIDANCE
UNDER THIS
PROCEDURE?
Types of requests.01 Determination letters may be requested on completed and proposed transactions as
set forth in the table below:
1998–1 I.R.B.189January 5, 1998

Areas in which .02Determination letters issued in accordance with this revenue procedure do not
determination include determinations on the following issues within the jurisdiction of the Assistant
letters will not Commissioner (Employee Plans and Exempt Organizations):
be issued
(1)Issues involving §§72, 79, 105, 125, 127, 129, 402, 403 (other than 403(a)), 404,
409(l), 409(m), 412, 457, 511 through 515, and 4975 (other than 4975(e)(7)), unless these
determination letters are authorized under section 7 of Rev. Proc. 98-4, page 113, this
Bulletin.
January 5, 19981901998–1 I.R.B.
REV. PROC.
TYPE OFREQUESTFORMSSECTION
1.Initial Qualification, etc.
a. Individually Designed Plans (other than collectively 5300,7
bargained plans)Schedule Q
b. ESOPs5300, 5309,7
Schedule Q
c. Collectively Bargained Plans5303,7
Schedule Q,
d. Adoptions of Master & Prototype or Regional Prototype Plans5307,8
(including a collectively bargained plan if no noncollectivelySchedule Q
bargained employees are in the plan
e. Adoptions of Volume Submitter Plans (including a collectively5307,9
bargained plan if no noncollectively bargained employeesSchedule Q
are in the plan)
f. Multiple Employer Plans5300,10
Schedule Q
g. Group Trusts Cover letter13
h. Section 420 determination letters Cover letter,16
Checklist,
Appendix
2. MinorAmendments640611
3. Termination
a. In general5310, 6088,12
Schedule Q
b. Multiemployer plan covered by PBGC insurance 5303, 6088,12
Schedule Q
Note: Form 5310-A, Notice of Plan Merger, Consolidation, Spinoff or Transfer of Plan Assets or Liabilities—Notice of
Qualified Separate Lines of Business, generally must be filed not less than 30 days before the merger, consolidation or
transfer of assets and liabilities. The filing of Form 5310-Awill not result in the issuance of a determination letter.
4. Special Procedures
a. Affiliated Service Group Status (§ 414(m)),5300, 14
Leased Employees (§ 414(n))Schedule Q
b. Minimum Funding Waiver5300,15
Schedule Q

1998–1 I.R.B.191January 5, 1998
(2)Plans or plan amendments for which automatic approval is granted pursuant to sec-
tion 8.05 below.
(3) Plan amendments described below (these amendments will, to the extent provided,
be deemed not to alter the qualified status of a plan under §401(a)).
(a) An amendment solely to permit a trust forming part of a plan to participate in a
pooled fund arrangement described in Rev. Rul. 81–100, 1981–1 C.B. 326;
(b) An amendment that merely adjusts the maximum limitations under §415 to reflect
annual cost-of-living increases, other than an amendment that adds an automatic cost-of-
living adjustment provision to the plan; and
(c) An amendment solely to include language pursuant to §403(c)(2) of Title I of the
Employee Retirement Income Security Act of 1974 (ERISA) concerning the reversion of
employer contributions made as a result of mistake of fact.
(4) This section applies to determination letter requests with respect to plans that com-
bine an ESOP(as defined in §4975(e)(7) of the Code) with retiree medical benefit features
described in §401(h) (HSOPs).
(a) In general, determination letters will not be issued with respect to plans that combine
an ESOPwith an HSOPwith respect to:
(i) whether the requirements of §4975(e)(7) are satisfied;
(ii) whether the requirements of §401(h) are satisfied; or
(iii) whether the combination of an ESOPwith an HSOPin a plan adversely affects its
qualification under §401(a).
(b) Aplan is considered to combine an ESOPwith an HSOPif it contains ESOPprovi-
sions and §401(h) provisions.
(c) However, an arrangement will not be considered covered by section 3.02(4) of this
revenue procedure if, under the provisions of the plan, the following conditions are satis-
fied:
(i) No individual accounts are maintained in the §401(h) account (except as required by
§401(h)(6));
(ii) No employer securities are held in the §401(h) account;
(iii) The §401(h) account does not contain the proceeds (directly or otherwise) of an
exempt loan as defined in §54.4975-7(b)(1)(iii) of the Pension Excise Tax Regulations;
and
(iv) The amount of actual contributions to provide §401(h) benefits (when added to
actual contributions for life insurance protection under the plan) does not exceed 25 per-
cent of the sum of: (1) the amount of cash contributions actually allocated to participants’
accounts in the plan and (2) the amount of cash contributions used to repay principal with
respect to the exempt loan, both determined on an aggregate basis since the inception of the
§401(h) arrangement.
GATT, SBJPA, and TRA’97 .03 Until further notice is given, determination letters, other than those issued for
terminating plans, will not include consideration by the Service of any amendments to the
qualification requirements made by TRA‘97, or by GATTor SBJPA, except for § 1432
and § 1454 of SBJPA, which amended § 401(a)(26) and § 414(n) of the Code,

respectively. Until such notice is given, plans, other than terminating plans, that include
provisions that reflect the GATT, SBJPA, or TRA’97 amendments to the qualification
requirements will not be subject to adverse determination letters by reason of the inclusion
of such provisions. However, favorable letters issued for plans, other than terminating
plans, may not be relied upon with respect to whether such provisions satisfy the
qualification requirements as amended by GATT, SBJPA, or TRA’97. Also see Rev.
Proc. 97–41, 1997–33 I.R.B. 51, regarding the remedial amendment period for GATTand
SBJPAplan amendments.
SECTION 4. ON WHAT
ISSUES MUSTWRITTEN
GUIDANCE BE REQUESTED
UNDER DIFFERENT
PROCEDURES?
Employee Plans and .01Other procedures for obtaining rulings, determination letters, opinion letters, etc.,
Exempt Organizationson matters within the jurisdiction of the Assistant Commissioner (Employee Plans and
Exempt Organizations) are contained in the following revenue procedures:
(1)National office letter rulings, information letters, etc.: SeeRev. Proc. 98–4.
(2)Master and Prototype (M&P) plans: SeeRev. Proc. 89–9, 1989–1 C.B. 780, as mod-
ified by Rev. Proc. 90–21, 1990–1 C.B. 499, sections 8.03–8.08 of Rev. Proc. 91–66, Rev.
Proc. 92–41, 1992–1 C.B. 870, and Rev. Proc. 93–10, 1993–1 C.B. 476.
(3)Regional prototype plans: SeeRev. Proc. 89–13, 1989–1 C.B. 801, as modified by
Rev. Proc. 90–21, 1990–1 C.B. 499, sections 8.03–8.08 of Rev. Proc. 91–66, Rev. Proc.
92–41, Rev. Proc. 93–10, and Rev. Proc. 95–42, 1995–2 C.B. 411.
(4) Technical advice requests: SeeRev. Proc. 98–5, page 155, this Bulletin.
Chief Counsel’s revenue.02 For the procedures for obtaining letter rulings, determination letters, etc., on mat-
procedureters within the jurisdiction of the Associate Chief Counsel (Domestic), the Associate Chief
Counsel (Employee Benefits and Exempt Organizations), and the Associate Chief Counsel
(International), see Rev. Proc. 98–1, page 7, this Bulletin.
SECTION 5. WHATIS THE
GENERALSCOPE OFA
DETERMINATION LETTER?
Scope.01 This section delineates, generally, the scope of an employee plan determination let-
ter. It identifies certain qualification requirements, relating to nondiscrimination, that are
considered by the Service in its review of a plan only at the election of the applicant. This
section also identifies certain qualification requirements that are not considered by the
Service in its review of a plan and with respect to which determination letters do not pro-
vide reliance. This section applies to all determination letters other than letters issued in
response to an application filed on Form 6406, Short Form Application for Determination
for Minor Amendment of Employee Benefit Plan; letters relating to the qualified status of
group trusts; and letters relating solely to the requirements of §420, regarding the transfer
of assets in a defined benefit plan to a health benefit account described in §401(h). For
additional information pertaining to the scope of reliance on a determination letter, see sec-
tion 21 of this revenue procedure.
All form and certain non-form .02In general, employee plans are reviewed by the Service for compliance with the
requirements generally reviewedform requirements (that is, those plan provisions that are required as a condition of
qualification under §401(a)). In addition, certain non-form qualification requirements,
including, for example, the minimum participation requirements of §401(a)(26), are
considered by the Service in its review of a plan. As described below, certain other
nondiscrimination requirements are not considered unless the applicant specifically
requests that they be considered. Unless otherwise stated, a plan is reviewed on the basis
January 5, 19981921998–1 I.R.B.

of the requirements that apply to the plan as of the date the application is received, except
for terminating plans. For terminating plans, the requirements are those that apply as of
the date of termination.
Nondiscrimination in .03 Unless the applicant elects otherwise, a plan that is not intended to satisfy one of
amount requirement the design-based safe harbors described in §§1.401(a)(4)–2(b)(2), 1.401(a)(4)–3(b)(3),
1.401(a)(4)–3(b)(4)(i)(C)(1), 1.401(a)(4)–3(b)(4)(i)(C)(2), 1.401(a)(4)–3(b)(5),
1.401(a)(4)-8(b)(3), or 1.401(a)(4)–8(c)(3)(iii)(B) of the Income Tax Regulations (herein
referred to as the “design-based safe harbors”) will not be reviewed for (and a
determination letter may not be relied on with respect to) the nondiscrimination in amount
of contributions or benefits requirement of §1.401(a)(4)–1(b)(2).
Average benefit test requirement.04 Unless the applicant elects otherwise, a plan that does not satisfy the ratio
percentage test of §410(b)(1) and the regulations thereunder will not be reviewed for (and
determination letters may not be relied on with respect to) the average benefit test of
§410(b)(2) and the regulations thereunder.
Nondiscriminatory current .05 Any determination letter that expresses an opinion that the plan satisfies the
availability requirement minimum coverage requirements of §410(b) also will express an opinion that the plan
satisfies the nondiscriminatory current availability requirements of §1.401(a)(4)–4(b)
with respect to those benefits, rights, and features that are currently available (within the
meaning of §1.401(a)(4)–4(b)(2)) to all employees in the plan’s coverage group. The
plan’s coverage group consists of those employees who are treated as currently benefiting
under the plan (within the meaning of §1.410(b)–3(a)) for purposes of demonstrating that
the plan satisfies the minimum coverage requirements of §410(b). Applications will not
be reviewed for (and determination letters may not be relied on with respect to) whether
the plan satisfies the requirements of §1.401(a)(4)–4(b) with respect to any benefit, right,
or feature other than the ones described above, except those that are specified by the
applicant and for which the applicant has provided information relevant to the
determination.
Effective availability .06 In no event will any plan be reviewed to determine (and determination letters may
requirementnot be relied on with respect to) whether any benefit, right, or feature under the plan
satisfies the effective availability requirement of §1.401(a)(4)-4(c).
Otherlimits on scope of.07 Determination letters may generally be relied on with respect to whether the timing
determination letterof a plan amendment (or series of amendments) satisfies the nondiscrimination require-
ments of §1.401(a)(4)-5(a) of the regulations, unless the plan amendment is part of a
pattern of amendments that significantly discriminates in favor of highly compensated
employees. Afavorable determination letter does not provide reliance for purposes of
§404 and §412 with respect to whether an interest rate (or any other actuarial
assumption) is reasonable. Furthermore, a favorable determination letter will not
constitute a determination with respect to the use of the substantiation guidelines
contained in Rev. Proc. 93–42, 1993–2 C.B. 540; e.g., a determination letter will not
consider whether data submitted with an application is substantiation quality. Lastly, a
favorable determination letter will not constitute a determination with respect to whether
any requirements of §414(r), relating to whether an employer is operating qualified
separate lines of business, are satisfied. However, if an employer is relying on §414(r) to
satisfy the minimum coverage or minimum participation requirements, a determination
letter will take into account whether the plan satisfies the nondiscriminatory classification
test of §410(b)(5)(B), and, if the requirements of §410(b) or §401(a)(26) are to be
applied on an employer-wide basis under the special rules for employer-wide plans, a
determination letter will take into account whether the requirements of the applicable
special rule set forth in §1.414(r)–1(c)(2)(ii) or §1.414(r)–1(c)(3)(ii) are met.
SECTION 6. WHATIS THE
GENERALPROCEDURE
FOR REQUESTING
DETERMINATION
LETTERS?
1998–1 I.R.B.193January 5, 1998

Scope.01 This section contains procedures that are generally applicable to all determination
letter requests. Additional procedures for specific requests are contained in sections 7
through 16.
Qualified trusteed plans.02 Atrust created or organized in the United States and forming part of a pension,
profit-sharing, stock bonus or annuity plan of an employer for the exclusive benefit of its
employees or their beneficiaries that meets the requirements of §401 is a qualified trust
and is exempt from federal income tax under §501(a) unless the exemption is denied
under §502, relating to feeder organizations, or §503, relating to prohibited transactions,
if, in the latter case, the plan is one described in §503(a)(1)(B).
Qualified nontrusteed.03 Anontrusteed annuity plan that meets the applicable requirements of §401 and
annuity plansother additional requirements as provided under §403(a) and §404(a)(2), (relating to
deductions of employer contributions for the purchase of retirement annuities), qualifies
for the special tax treatment under §404(a)(2), and the other sections of the Code, if the
additional provisions of such other sections are also met.
Complete information .04 An applicant requesting a determination letter must file the material required by
requiredthis revenue procedure with the key district director for the Ohio Key District Office at the
address in section 6.17.The filing of the application, when accompanied by all
information and documents required by this revenue procedure, will generally serve to
provide the Service with the information required to make the requested determination.
However, in making the determination, the Service may require the submission of
additional information.Information submitted to the Service in connection with an
application for determination may be subject to public inspection to the extent provided by
§6104.
Complete copy of plan and .05 Except in the case of applications involving master and prototype plans filed on
trust instrument requiredForm 5307, or minor amendments described in section 11, a complete copy of the plan
and trust instrument is required to be included with the determination letter application.
See sections 7.03 and 7.04 for what must be included with applications involving plan
amendments that are not minor amendments.
Section 9 of Rev. Proc..06Section 9 of Rev. Proc. 98–4 is generally applicable to requests for determination
98–4 appliesletters under this revenue procedure.
Separate application for.07 Aseparate application is required for each single plan within the meaning of
each single §414(l) plan§414(l). This requirement does not pertain to applications regarding the qualified status
of group trusts.
Schedule Q.08 Schedule Q (Form 5300) must be filed with all determination letter applications,
other than applications that (1) are filed on Form 6406, (2) relate to state and local
government plans or to the qualified status of group trusts, or (3) relate solely to the
requirements of §420. The applicant must indicate on Schedule Q whether a
determination of any of the requirements referred to in sections 5.03 through 5.05 is
requested, and must include with the application form the material and demonstrations
called for in the instructions to Schedule Q.
Priorletters.09 If the plan has received a favorable determination letter in the past, the application
must include a copy of the latest determination letter, if available. If the letter is not
available, an explanation must be included with the application.
Userfees.10 The appropriate user fee must be paid according to the procedures of Rev. Proc.
98–8, page 225, this Bulletin. Form 8717, User Fee for Employee Plan Determination
Letter Request, should accompany each determination letter request.
Interested party notification.11 Before filing an application, the applicant requesting a determination letter must
and commentsatisfy the requirements of §3001(a) of ERISA, and §7476(b)(2) of the Code and the
regulations thereunder, which provide that an applicant requesting a determination letter
on the qualified status of certain retirement plans must notify interested parties of such
application.The general rules of the Service with respect to notifying interested parties of
January 5, 19981941998–1 I.R.B.

requests for determination letters relating to the qualification of plans involving §§401
and 403(a) are set out below in sections 17 and 18 of this revenue procedure.
Contrary authority must .12If the application for determination involves an issue where contrary authorities
be distinguishedexist, failure to disclose or distinguish such significant contrary authorities may result in
requests for additional information, which will delay action on the application.
Employer/employee relationship.13 The Service ordinarily does not make determinations regarding the existence of an
employer-employee relationship as part of its determination of the qualification of a plan,
but relies on the applicant’s representations or assumptions, stated or implicit, regarding
the existence of such a relationship. The key district director will, however, make a
determination regarding the existence of an employer-employee relationship when so
requested by the applicant. In such cases, the application with respect to the qualification
of the plan should be filed in accordance with the provisions of this revenue procedure,
contain the information and documents in the instructions to the application, and be
accompanied by a completed Form SS–8, Information for Use in Determining whether a
Worker is an Employee for Federal Employment Taxes and Income Tax Withholding, and
any information and copies of documents the organization deems appropriate to establish
its status. The Service may, in addition, require further information that it considers
necessary to determine the employment status of the individuals involved or the
qualification of the plan. After the employer-employee relationships have been
determined, the key district director may issue a determination letter as to the qualification
of the plan.
Incomplete applications .14If an applicant requesting a determination letter does not comply with all the
returnedrequired provisions of this revenue procedure, the key district director, in his or her
discretion, may return the application and point out to the applicant those provisions
which have not been met.The request will also be returned pursuant to Rev. Proc. 98–8 if
the correct user fee is not attached.If such a request is returned to the applicant, the 270-
day period described in §7476(b)(3) will not begin to run until such time as the provisions
of this section have been satisfied.
Effect of failure to .15 The Service may determine, based on the application form, the extent of review of
disclose material factthe plan document. Afailure to disclose a material fact or misrepresentation of a material
fact on the application may adversely affect the reliance which would otherwise be
obtained through issuance by the Service of a favorable determination letter. Similarly,
failure to accurately provide any of the information called for on any form required by this
revenue procedure may result in no reliance.
Data requirements.16 The applicant is responsible for the accuracy of any factual representations and
conclusions contained in the application. In some circumstances, applicants may not be
able to use precise data in preparing demonstrations or schedules that may be required to
be submitted with the application. Therefore, the use of estimated data in these
demonstrations and schedules is not prohibited. In addition, the data used may be for a
prior plan year, provided the following conditions are satisfied: (1) the data is the most
recent data available, (2) there is no misstatement or omission of material fact with respect
to such prior year’s data, (3) there has been no material change in the facts (including a
change in the benefits provided under the plan and employee demographics) since such
prior plan year, (4) the same data is used throughout the application, (5) the data is
relevant to the operational effect of the plan provisions that are under review, and (6) the
applicant clearly discloses that prior year’s data is being submitted with the application.
The use of estimated or prior year’s data is not a misrepresentation of material fact. A
determination letter that is based on estimated or prior year’s data, however, may not be
relied upon to the extent that such data does not satisfy the substantiation guidelines in
Rev. Proc. 93–42. Regardless of whether the data is actual or estimated, or whether it is
for the current or a prior year, data that is presented in a determination letter application
must reflect any changes in the law that are considered by the Service in its determination
of the plan’s qualified status. For example, the Service anticipates that it will announce in
the near future that determination letters issued with respect to applications filed after a
certain date will include consideration of the changes to the qualification requirements
1998–1 I.R.B.195January 5, 1998

made by SBJPA. Data presented in determination letter applications that are filed after
that date will have to reflect the changes to the qualification requirements made by
SBJPA, including, for example, the change to the definition of highly compensated
employee in § 414(q).
Where to file request.17 Requests for determination letters are to be addressed to the key district director of
the Ohio Key District Office at the following address:
Internal Revenue Service
P.O.Box 192
Covington, KY41012-0192
Requests shipped by Express Mail or a delivery service should be sent to:
Internal Revenue Service
201 West Rivercenter Blvd.
Attn: Extracting Stop 312
Covington, KY41011
Withdrawal of requests.18The applicant’s request for a determination letter may be withdrawn by a written
request at any time prior to the issuance of a final adverse determination letter. If an
appeal to a proposed adverse determination letter is filed, a request for a determination
letter may be withdrawn at any time prior to the forwarding of the proposed adverse action
to the chief, appeals office.In the case of a withdrawal, the Service will not issue a
determination of any type.Afailure to issue a determination letter as a result of a
withdrawal will not be considered a failure of the Secretary or his delegate to make a
determination within the meaning of §7476.However, the Service may consider the
information submitted in connection with the withdrawn request in a subsequent
examination. Generally, the user fee will not be refunded if the application is withdrawn.
SECTION 7. INITIAL
QUALIFICATION, ETC.
Scope.01This section contains the procedures for requesting determination letters for
individually designed defined contribution and defined benefit plans including employee
stock ownership plans and collectively bargained plans in the following circumstances:
(1) Initial qualification.
(2) Amendment (other than minor amendments described in section 11 below for
which Form 6406 is appropriate).
(3) Restatement of plan.
(4) Qualification of a plan in the event of a partial termination.
(5) Change in scope of determination letter. This means that the applicant has previ-
ously received a favorable determination letter for the plan and now wishes to modify the
scope of the letter, for example, by requesting the Service to review the plan for certain
nondiscrimination requirements that were not within the scope of the earlier letter.
(6) Other circumstances (excluding plan termination) such as a change in the demo-
graphics of the employer or a change in the method of testing the plan that was used in a
demonstration submitted in support of an earlier application.
Forms.02 Adetermination letter request for the items listed in section 7.01 is made by filing
the appropriate form according to the instructions to the form and any prevailing revenue
procedures, notices, and announcements.
(1) Form 5300, Application for Determination for Employee Benefit Plan, must be filed
to request a determination letter for plans other than collectively bargained plans.
January 5, 19981961998–1 I.R.B.

(2)Form 5303, Application for Determination for Collectively Bargained Plan, must be
filed by a sponsor of a collectively bargained plan. If there is more than one plan, a sepa-
rate Form 5303 must be filed for each plan.
(3) Form 5309, Application for Determination of Employee Stock Ownership Plan, must
be filed as an attachment with a Form 5300 or Form 5303 (if the ESOPis collectively bar-
gained), in order to request a determination whether the plan is an ESOPunder §409 or
§4975(e)(7).
(4) Schedule Q, (Form 5300) Nondiscrimination Requirements, must be filed as an
attachment with Form 5300 and Form 5303.
Application foramendments.03 Because a plan amendment, other than a minor amendment described in section 11,
must include copy of planmay affect other portions of a plan so as to cause plan disqualification, a determination
letter issued on such an amendment to a plan will express an opinion on the entire plan, as
amended. Therefore, the determination letter application must include a copy of the plan
and trust instrument plus all plan amendments made to the date of the application. The
application must also include a statement explaining how any amendments made since the
last determination letter affect the plan or any other plan maintained by the employer.
Restatements may be required.04 Arestated plan is required to be submitted if four or more amendments (excluding
amendments making only non-substantive changes) have been made since the last restated
plan was submitted. In addition, the Service may require restatement of a plan or
submission of a working copy of the plan in a restated format when considered necessary,
for example when there have been major changes in law. Arestated plan or a working
copy of the plan in a restated format must be submitted for a plan that has not previously
received a determination letter that takes into account all requirements of TRA’86.
Controlled groups, etc..05 For a controlled group of corporations as defined in §414(b), trades or businesses
under common control as defined in §414(c), an affiliated service group within the
meaning of §414(m), and entities utilizing the services of leased employees within the
meaning of §414(n), the coverage items on the application forms referred to in this
revenue procedure must be completed as though the controlled group, commonly
controlled trades or businesses, affiliated service group, etc., constitutes a single entity.
Leased employees within the meaning of §414(n) must be included as employees of the
recipient entity (except in the case of a safe-harbor plan described in §414(n)(5)).
SECTION 8. MASTER &
PROTOTYPE PLANS;
REGIONALPROTOTYPE
PLANS
Scope.01This section contains procedures for requesting determination letters relating to
M&Pplans or regional prototype plans.
Determination lettermay .02 Except as provided in section 8.05, the issuance of a favorable opinion letter or
be necessary forreliancenotification letter for an M&Pplan or regional prototype plan does not constitute a
determination that an employer adopting the sponsoring organization or sponsor’s plan
has reliance that the plan is qualified under §401(a). In order to have reliance, an
employer must obtain a favorable determination letter. In general, determination letters
are requested for the employer’s adoption of an M&Pplan or regional prototype plan, or
for a change by the employer in the choice of options offered by the sponsoring
organization of an M&Pplan or sponsor of a regional prototype plan.
Forms.03 Form 5307, Application for Determination for Adopters of Master or Prototype,
Regional Prototype, or Volume Submitter Plan, must be filed to request a determination
letter for the adoption of an M&Pplan or a regional prototype plan. Schedule Q, (Form
5300) Nondiscrimination Requirements, must be filed as an attachment to Form 5307.
Form 5307 may also be filed by adopters of pre-approved plans that are single employer
collectively bargained plans that benefit only collectively bargained employees described
1998–1 I.R.B.197January 5, 1998

in §1.410(b)–6(d)(2) and that automatically satisfy the requirements of
§1.410(b)–2(b)(7).
Required information.04The determination letter request must include the following:
(1) An adoption agreement showing which elections the employer is making with
respect to the elective provisions contained in the plan;
(2) Acopy of the plan’s most recent opinion letter or notification letter;
(3) In the case of a determination letter request for a regional prototype plan, the appli-
cation must include a certification by the sponsor that the notification letter has not been
withdrawn and is still in effect with respect to the plan being submitted; and
(4) In the case of a determination letter request for a regional prototype plan that uses a
separate trust or custodial account, a copy of the employer’s trust or custodial account doc-
ument.
Special rules for.05 The following procedures apply for an employer’s adoption of an M&Por regional
standardized plansprototype standardized form plan or paired plan.
(1) An employer adopting a standardized form or paired plan may rely on that plan’s
opinion or notification letter, except as provided in section 8.05(2) and (3) below, if the fol-
lowing conditions are satisfied:
(a) The sponsoring organization or sponsor of such plan or plans has a currently valid
favorable opinion or notification letter; and
(b) The employer has followed the terms of the plan(s), and the coverage and contribu-
tions or benefits under the plan(s) are not more favorable to highly compensated employ-
ees (as defined in §414(q)) than for other employees.
(2) Except in the case of a combination of paired plans, an employer may not rely on
opinion letters for standardized form plans without obtaining a determination letter if the
employer maintains at any time, or has maintained at any time, another plan, including a
standardized form plan, that was qualified or determined to be qualified covering some of
the same participants. For this purpose, a plan that has been properly replaced by the adop-
tion of a standardized form plan is not considered another plan. The plan that has been
replaced and the standardized form plan must be of the same type (e.g., both money pur-
chase pension plans) in order for the employer to be able to rely on the standardized form
plan’s opinion or notification letter without obtaining a determination letter.
(3) With respect to M&Pplans, a standardized plan sponsored by a trade or profession-
al organization which is adopted by an employer that is not a bona fide member of such
organization will be considered an individually designed plan unless the following condi-
tions are satisfied:
(a) The trade or professional organization is exempt from federal income taxation under
§501(c)(6);
(b) The plan is a standardized defined contribution plan;
(c) The trade or professional organization makes the plan available for adoption by non-
member employers by furnishing it to those of its members that independently qualify as
sponsoring organizations; and
(d) The requirements of section 5.01(2) through 5.01(5) of Rev. Proc. 90–21 are satisfied.
January 5, 19981981998–1 I.R.B.

Amended plan is treated .06 An employer that amends any provision of an M&Pplan or regional prototype plan
as an individually designed planor its adoption agreement (other than to choose among the options offered by the
sponsoring organization or sponsor if the plan permits or contemplates such options), or
an employer that chooses to discontinue participation in such a plan as amended by its
sponsoring organization or sponsor and does not substitute another approved plan referred
to in this section 8 is considered to have adopted an individually designed plan. The
requirements stated in this revenue procedure relating to the issuance of determination
letters for individually designed plans will then apply to such plan.
Requests made priorto the .07An application submitted by an employer with respect to an M&Pplan or regional
issuance of opinion orprototype plan will be treated as an application for an individually designed plan if it is
notification lettersubmitted prior to the time the M&Pplan or regional prototype plan is approved.
SECTION 9. VOLUME
SUBMITTER PLANS
Scope.01 This section contains procedures for requesting advisory letters and determination
letters for volume submitter plans.
Purpose of volume.02 The volume submitter program enables the Service to expedite the issuance of
submitterprogramdetermination letters in response to applications for approval of individually designed
plans.
Description of volume .03 Under the volume submitter program, a practitioner who qualifies may request the
submitterprogramService to issue an advisory letter regarding a volume submitter specimen plan. Aspeci-
men plan is a sample plan of a practitioner (rather than the actual plan of an employer) that
contains provisions that are identical or substantially similar to the provisions in plans that
such practitioner’s clients have adopted or are expected to adopt. Once the Service has
approved the specimen plan, the practitioner will be able to file determination letter
requests on behalf of employers adopting substantially similar plans.
Definition of volume .04 Avolume submitter plan is a profit-sharing plan (without a §401(k) arrangement),
submitterplan a profit-sharing plan (with a §401(k) arrangement), a money purchase pension plan, or a
defined benefit plan that is submitted under the procedures described in this section 9 for
filing requests for volume submitter advisory letters (with respect to the specimen plan)
and requests for determination letters (with respect to an employer’s adoption of a plan
that is substantially similar to an approved specimen plan). The Service will not accept
volume submitter requests with respect to ESOPs or other stock bonus plans.
Otherrequirements.05 Incorporation by reference in a volume submitter plan is subject to the limits
described in section 5.02(16) and (17) of Rev. Proc. 89–13. In addition, because the vol-
ume submitter program is intended to speed the processing of determination letter requests
for individually designed plans, volume submitter plans may not use an adoption agreement
format. Practitioners who wish to use an adoption agreement format may request plan
approval under the regional prototype plan program described in Rev. Proc. 89-13.
Userfees.06 Rev. Proc. 98–8 provides reduced user fees for requests under the volume submitter
program if certain requirements are satisfied. For adopting employers to be entitled to file
a request with the lower fees, the volume submitter practitioner must certify at the time of
filing the specimen plan that at least 30 employers are expected to adopt plans that are
substantially similar in form to the specimen plan. Also, the volume submitter practitioner
must be a representative of the employer when the employer’s determination letter
application is filed. Although the volume submitter is not required to submit a list of
adopting employers, the Service reserves the right to request such a list.
Advisory letterforspecimen plan.07 With respect to advisory letters for volume submitter specimen plans:
(1) Arequest for approval of a volume submitter specimen plan must be sent to the
Volume Submitter Coordinator in the Ohio Key District Office at the following address:
1998–1 I.R.B.199January 5, 1998

Internal Revenue Service
P.O. Box 2508
Cincinnati, OH 45201
Attn: VSC Coordinator
Room 4106
(2) The request for approval must include the following:
(a) Acopy of the specimen plan and any related specimen trust instrument;
(b) Acover letter requesting approval that includes the certification described in section
9.05 above and indicates the type of plan for which approval is being requested;
(c) The required user fee submitted with Form 8717, User Fee for Employee Plan
Determination Letter Request; and
(d) An index/table of contents listing the location of all variable sections.
(3) Apractitioner who has received approval of a volume submitter specimen plan from
a key district office other than the Ohio Key District Office need not request approval from
the Ohio Key District Office merely because of the Service’s consolidation of its determi-
nation functions. However, all subsequent requests for advisory letters with respect to the
specimen plan are to be sent to the address in this section 9.07.
Determination letterfor.08 With respect to determination letters for volume submitter plans:
adoption of volume submitterplan
(1) Arequest for a determination letter for an employer’s adoption of an approved vol-
ume submitter plan must be sent to the address provided in section 6.17.
(2) The request for a determination letter, including a request regarding a single-employ-
er collectively bargained plan that benefits only collectively bargained employees
described in §1.410(b)-6(d)(2) and that automatically satisfies the requirements of
§1.410(b)-2(b)(7), must include the following:
(a) Form 5307, Application for Determination for Adopters of Master or Prototype,
Regional Prototype, or Volume Submitter Plan;
(b) Schedule Q, (Form 5300) Nondiscrimination Requirements;
(c) Written authorization allowing the volume submitter practitioner to act as a repre-
sentative of the employer with respect to the request for a determination letter;
(d) Acopy of the advisory letter for the practitioner’s volume submitter specimen plan;
(e) Acopy of the plan and trust instrument and a written representation made by the vol-
ume submitter practitioner which states whether the plan and trust instrument are word-for-
word identical to the approved specimen plan and, if they are not, explains how the plan
and trust instrument differ from the approved specimen plan, describing the location, nature
and effect of each deviation from the language of the approved specimen plan;
(f) Acopy of the plan’s latest favorable determination letter, if applicable; and
(g) Any other information or material that may be required by the key district office.
(3) Deviations from the language of the approved specimen plan will be evaluated based
on the complexities of the changes. If the changes are determined not to be compatible
January 5, 19982001998–1 I.R.B.

with the volume submitter program, the Service may require the adopter to file Form 5300
and pay the higher user fee.
SECTION 10. MULTIPLE
EMPLOYER PLANS
Scope.01 This section contains procedures for applications filed with respect to plans
described in §413(c).
Form 5300 and Schedule Q.02 An application filed with respect to a multiple employer plan must include a
completed Form 5300 filed on behalf of one employer and a separate Form 5300
completed through line 8 for each other employer maintaining the plan. One Schedule Q,
(Form 5300) Nondiscrimination Requirements, should be filed for the plan. In accordance
with the instructions for Schedule Q, separate coverage and other information must be
submitted for each employer.
Multiple employerM&Pplans.03 Certain multiple employer plans have in the past received Service approval as
M&Pplans. In the case of such a plan that will continue to use an adoption agreement
format, the application must also include a completed adoption agreement for each
employer maintaining the plan. Regardless of whether an adoption agreement format
continues to be used for such a plan, the rules of §1.414(l)-1 will apply in determining
whether the plan is a single plan for which only one determination letter will be issued and
which requires only one user fee.
Where to file.04 The complete application, including all Forms 5300 (and, if applicable, adoption
agreements) for employers maintaining the plan as of the date of the application, must be
filed as one package submission with the key district director for the Ohio Key District
Office. The application is to be directed to the attention of the key district office volume
submitter coordinator at the address provided in section 9.07, above.
Preliminary approval for.05 Multiple employer plan applicants who previously received Service approval for a
certain multiple employerplan as an M&Pplan and who will continue to use an adoption agreement format are
M&Pplansencouraged to request preliminary approval of the provisions of the plan, including the
permitted adoption agreement elections, prior to making the submission described above.
Preliminary approval may be requested by submitting a copy of the plan and trust
instrument, including a blank adoption agreement, and a copy of the latest opinion letter to
the volume submitter coordinator for the Ohio Key District Office. The request should
not include an application form or user fee. The key district will notify the applicant in
writing if preliminary approval is granted, and the complete application may then be filed.
Adopting employers will not be entitled to rely on the preliminary approval as to the
qualified status of the plan.
Determination letter.06 The Service will mail a copy of the determination letter issued with respect to the
sent to each employerplan to each employer maintaining the plan.
Addition of employers.07 If other employers become participating employers under the plan after a favorable
determination letter has been issued, the employers may not continue to rely on such
favorable determination letter. However, an applicant may request a determination that
the addition of new participating employers to the plan does not adversely affect the plan’s
qualified status by filing a completed Form 5300 for the plan in the name of the
controlling member on the Form 5300 filed pursuant to section 10.02 above, and a
supplemental Form 5300 (and, if applicable, adoption agreement) for each new
participating employer. The Service will send copies of such a determination only to the
applicant and the new participating employers.
SECTION 11. MINOR
AMENDMENTOF
PREVIOUSLY
APPROVED PLAN
1998–1 I.R.B.201January 5, 1998

Scope.01 This section contains procedures for requesting determination letters on the effect
of a minor plan amendment.
Form 6406.02 Form 6406, Short Form Application for Determination for Minor Amendment of
Employee Benefit Plan, may be filed to request a determination letter on a minor plan
amendment. This form may be used for minor amendments of individually designed
plans (including volume submitter plans) or permitted changes to adoption agreement
elections in master or prototype or regional prototype plans, provided the changes
constitute minor amendments. The Service may also designate other specific amendments
which may be submitted using Form 6406.
Additional information.03 All applications must be accompanied by a copy of the new amendments, a
statement as to how the amendments affect or change the plan or any other plan
maintained by the employer, and a copy of the latest determination letter. In the case of a
master or prototype, regional prototype, or volume submitter plan, a copy of the opinion,
notification, or advisory letter should also be included. Acopy of the plan or trust
instrument should not be filed with the Form 6406.
Minoramendment procedures .04 Since determination letters issued on minor amendments express an opinion only as
may not be used forcomplex to whether the amendments, in and of themselves, affect the qualification of employee
amendmentsplans under §401 or 403(a), the minor amendment procedures cannot be used for complex
amendments that may affect other portions of the plan so as to cause plan disqualification.
Thus, the minor amendment procedures may not be used for an amendment to add a
§401(k) or an ESOPprovision to a plan, or to restate a plan. The minor amendment
procedures also may not be used to obtain a determination letter on plan amendments
involving plan mergers or consolidations, transfers of assets or liabilities, or plan
terminations (including partial terminations). In addition, the minor amendment
procedures may not be used for an amendment that involves a significant change to plan
benefits or coverage.
Key district office has discretion to.05 The key district office has discretion to determine whether a plan amendment may
determine whetheruse of minorbe submitted as a minor plan amendment and may request additional information, in-
amendment procedures is cluding the filing of a Form 5300 series application if it determines that the application
appropriateand the attachments filed under the minor amendment procedures do not contain sufficient
information, or that the Form 6406 is inappropriate.
SECTION 12. TERMINATION
OR DISCONTINUANCE OF
CONTRIBUTIONS; NOTICE
OFMERGERS,
CONSOLIDATIONS, ETC.
Scope.01 This section contains procedures for requesting determination letters involving plan
termination or discontinuance of contributions. This section also contains procedures
regarding required notice of merger, consolidation, or transfer of assets or liabilities.
Forms.02 Required Forms
(1) Form 5310, Application for Determination for Terminating Plan, is filed by plans
other than multiemployer plans covered by the insurance program of the Pension Benefit
Guaranty Corporation (PBGC).
(2) Form 5303, Application for Determination for Collectively Bargained Plan, is filed
in the case of a multiemployer plan covered by PBGC insurance.
(3) Schedule Q, (Form 5300) Nondiscrimination Requirements, is required to be filed
as an attachment to Form 5310 or Form 5303.
(4) Form 6088, Distributable Benefits from Employee Pension Benefit Plans, is also
required of a sponsor or plan administrator of a defined benefit plan or an underfunded
defined contribution plan who files only an application for a determination letter regarding
January 5, 19982021998–1 I.R.B.

plan termination. For collectively bargained plans, a Form 6088 is required only if the plan
benefits employees who are not collectively bargained employees within the meaning of
§1.410(b)–6(d). Aseparate Form 6088 is required for each employer employing such
employees.
(5) Form 5310–A, Notice of Plan Merger or Consolidation, Spinoff, or Transfer of Plan
Assets or Liabilities—Notice of Qualified Separate Lines of Business, if required, general-
ly must be filed not later than 30 days before merger, consolidation or transfer of assets and
liabilities. The filing of Form 5310-Awill not result in the issuance of a determination let-
ter.
Required demonstration of .03 An applicant requesting a determination letter upon termination may not decline to
nondiscrimination requirementselect that the plan be reviewed for the average benefit test (if applicable) or the non-
discrimination in amount requirement, as otherwise permitted under sections 5.03 and
5.04, unless the following conditions are satisfied:
(1) With respect to the average benefit test, the plan must have received a favorable
determination letter that stated that the plan satisfied the requirements of the test;
(2) With respect to the nondiscrimination in amount requirement, the plan must have
received a favorable determination letter that stated that the plan satisfied the requirements
of either a nondesign-based safe harbor or the general test for nondiscrimination in amount;
(3) The favorable determination letter was issued during the immediately preceding three
plan years; and
(4) There has been no material change in the facts (including benefits provided under the
plan and employee demographics) or law upon which the determination was based.
Compliance with .04In the case of plans subject to Title IVof ERISA, a favorable determination letter
Title IVof ERISAissued in connection with a plan’s termination is conditioned on approval that the
termination is a valid termination under Title IVof ERISA.Notification by PBGC that a
plan may not be terminated will be treated as a material change of fact.
Termination priorto time for.05Aplan that terminates after the effective date of a change in law, but prior to the
amending forchange in lawdate that amendments are otherwise required, must be amended to comply with the
applicable provisions of law from the date on which such provisions become effective
with respect to the plan.Because such a terminated plan would no longer be in existence
by the required amendment date and therefore could not be amended on that date, such
plan must be amended in connection with the plan termination to comply with those
provisions of law that become effective with respect to the plan on or before the date of
plan termination (such amendments include any amendments made after the date of plan
termination that were required in order to obtain a favorable determination letter).In
addition, annuity contracts distributed from such terminated plans also must meet all the
applicable provisions of any change in law. Also see section 9 of Rev. Proc. 97–41.
SECTION 13. GROUPTRUSTS
Scope
.01This section provides special procedures for requesting a determination letter on the
qualified status of a group trust under Rev. Rul. 81–100.
Required information.02Arequest for a determination letter on the status of a group trust as described in
Rev. Rul. 81–100 is made by submitting a written request demonstrating how the group
trust satisfies the five criteria listed in Rev. Rul. 81–100, together with the trust instrument
and related documents.
SECTION 14. AFFILIATED
SERVICE GROUPS;
LEASED EMPLOYEES
1998–1 I.R.B.203January 5, 1998

Scope.01This section provides procedures for determination letter requests on affiliated
service group status under §414(m), and the effect of leased employees on a plan’s
qualified status.
Types of requests under.02 In accordance with section 7.01, an employer that is subject to §414(m) or (n) may
§414(m) and §414(n)request a determination letter under the following circumstances: (1) with respect to the
initial qualification of its plan, (2) on a plan amendment, and (3) in certain circumstances,
even though the plan has not been amended (for example, where there has been a change
in membership in the affiliated service group or where the employer did not previously
have reliance).
Employermust request the .03 Generally, a determination letter will cover §414(m) or §414(n) only if the
determination underemployer requests such determination, and submits with the determination letter
§ 414(m) or§414(n)application the information specified in section 14.09 or section 14.10 below.
Forms.04 Form 5300 (with Schedule Q) is submitted for a request on affiliated service group
status or leased employee status.Form 5307 cannot be used for this purpose.
Employeris responsible for.05 An employer is responsible for determining at any particular time whether it is a
determining status undermember of an affiliated service group and, if so, whether its plan(s) continues to meet the
§414(m) and §414(n)requirements of § 401(a) after the effective date of §414(m), including §414(m)(5).An
employer or plan administrator is also responsible for taking action relative to the
employer’s qualified plan if that employer becomes, or ceases to be, a member of an
affiliated service group.An employer that is the recipient of services of leased employees
within the meaning of §414(n) is also responsible for determining at any particular time
whether a leased employee is deemed to be an employee of the recipient for qualified plan
purposes.
Omission of material fact.06Failure to properly indicate that there is or may be an affiliated service group and to
provide the information specified in section 14.09 of this revenue procedure, or failure to
properly indicate that an employer is utilizing the services of leased employees and to
provide the information specified in section 14.10, is an omission of a material fact.The
failure of the employer to follow the procedures in this section will result in the employer
being unable to rely on any favorable determination letter concerning the effect of
§414(m) or §414(n) on the qualified status of the plan.
Service will indicate whether.07 If the Service considers whether the plan of an employer satisfies the requirements
§ 414(m) or§414(n) was consideredof § 414(m) or §414(n), the determination letter issued to the employer will state that
questions arising under §414(m) or §414(n) have been considered, and that the plan
satisfies qualification requirements relating to that section.Absent such a statement
pertaining to §414(m) or §414(n), a determination letter does not apply to any
qualification issue arising by reason of such provisions.
M&Pplans; regional .08An employer that has adopted an M&Pplan or a regional prototype plan (including
prototype plansa standardized form plan within the meaning of section 3.08 of Rev. Proc. 89–9 or a
standardized regional prototype plan within the meaning of section 4.11 of Rev. Proc. 89–
13) and wants a determination as to the effect of §414(m) or §414(n) on the qualified
status of its plan must attach the information required by section 14.09 of this revenue
procedure to Form 5300 and submit the information, Form 5300, Schedule Q, and any
other materials necessary to make a determination.
Required information.09Adetermination letter issued with respect to a plan’s qualification under §401(a),
for§ 414(m) determination403(a), or 4975(e)(7) will be a determination as to the effect of §414(m) upon the plan’s
qualified status only if the application includes:
(1)Adescription of the nature of the business of the employer, specifically whether it
is a service organization or an organization whose principal business is the performance of
management functions for another organization, including the reasons therefor;
(2)The identification of other members (or possible members) of the affiliated service
group;
January 5, 19982041998–1 I.R.B.

(3)Adescription of the business of each member (or possible member) of the affiliated
service group, describing the type of organization (corporation, partnership, etc.) and indi-
cating whether the member is a service organization or an organization whose principal
business is the performance of management functions for the other group member(s);
(4)The ownership interests between the employer and the members (or possible mem-
bers) of the affiliated service group (including ownership interests as described in
§414(m)(2)(B)(ii) or §414(m)(6)(B));
(5)Adescription of services performed for the employer by the members (or possible
members) of the affiliated service group, or vice versa (including the percentage of each
member’s (or possible member’s) gross receipts and service receipts provided by such ser-
vices, if available, and data as to whether such services are a significant portion of the
member’s business) and whether, as of December 13, 1980, it was not unusual for the ser-
vices to be performed by employees of organizations in that service field in the United
States;
(6)Adescription of how the employer and the members (or possible members) of the
affiliated service group associate in performing services for other parties;
(7)In the case of a management organization under §414(m)(5):
(a) Adescription of the management functions, if any, performed by the employer for the
member(s) (or possible member(s)) of the affiliated service group, or received by the
employer from any other members (or possible members) of the group (including data
explaining whether the management functions are performed on a regular and continuous
basis) and whether or not it is unusual for such management functions to be performed by
employees of organizations in the employer’s business field in the United States;
(b) If management functions are performed by the employer for the member (or possible
members) of the affiliated service group, a description of what part of the employer’s busi-
ness constitutes the performance of management functions for the member (or possible
member) of the group (including the percentage of gross receipts derived from manage-
ment activities as compared to the gross receipts from other activities);
(8)Abrief description of any other plan(s) maintained by the members (or possible
members) of the affiliated service group, if such other plan(s) is designated as a unit for
qualification purposes with the plan for which a determination letter has been requested;
(9)Adescription of how the plan(s) satisfies the coverage requirements of §410(b) if
the members (or possible members) of the affiliated service group are considered part of an
affiliated service group with the employer;
(10)Acopy of any ruling issued by the national office on whether the employer is an
affiliated service group; a copy of any prior determination letter that considered the effect
of §414(m) on the qualified status of the employer’s plan; and, if known, a copy of any
such ruling or determination letter issued to any other member (or possible member) of the
same affiliated service group, accompanied by a statement as to whether the facts upon
which the ruling or determination letter was based have changed.
Required information for.10Unless the plan provides that all leased employees within the meaning of §414(n)(2)
§ 414(n) determinationare treated as common law employees for all purposes under the plan, a determination let-
ter issued with respect to the plan’s qualification under §401(a), 403(a), or 4975(e)(7) will
be a determination as to the effect of §414(n) upon the plan’s qualified status only if the
application includes:
(1)Adescription of the nature of the business of the recipient organization;
1998–1 I.R.B.205January 5, 1998

(2)Acopy of the relevant leasing agreement(s);
(3)Adescription of the function of all leased employees within the trade or business of
the recipient organization (including data as to whether all leased employees are perform-
ing services on a substantially full-time basis);
(4) Adescription of facts and circumstances relevant to a determination of whether such
leased employees’services are performed under primary direction or control by the recipi-
ent organization (including whether the leased employees are required to comply with
instructions of the recipient about when, where, and how to perform the services, whether
the services must be performed by particular persons, whether the leased employees are
subject to the supervision of the recipient, and whether the leased employees must perform
services in the order or sequence set by the recipient); and
(5) If the recipient organization is relying on any qualified plan(s) maintained by the
employee leasing organization for purposes of qualification of the recipient organization’s
plan, a description of such plan(s) (including a description of the contributions or benefits
provided for all leased employees which are attributable to services performed for the
recipient organization, plan eligibility, and vesting).
SECTION 15. WAIVER
OFMINIMUM FUNDING
Scope.01This section provides procedures with respect to defined contribution plans for
requesting a waiver of the minimum funding standard account and requesting a
determination letter on any plan amendment required for the waiver.
Applicability of .02The procedures of Rev. Proc. 94–41, 1994–1 C.B. 711, which supersedes Rev. Proc.
Rev. Proc. 94–4183–41, 1983–1 C.B. 775, as modified by Rev. Proc. 88–5, 1988–1 C.B. 587, and Rev.
Proc. 88–29, 1988–1 C.B. 828, apply to the request for a waiver of the minimum funding
requirement.
Waiverand determination .03Under this section, both the request for a waiver ruling and the request for a
letterrequest submitted to determination letter on the effect of any amendment necessary to satisfy section 3 of Rev.
national officeRul. 78–223, 1978–1 C.B. 125, must be submitted by the taxpayer to the national office
where it will be treated as a mandatory request for technical advice.The request that is
submitted to the national office must include the following:
(1) All the procedural requirements described in section 2 of Rev. Proc. 94-41 must be
satisfied;
(2) The submission must include a completed Form 5300 (with Schedule Q) and all
necessary documents, plan amendments, and information required by the Form 5300 and
by this revenue procedure for approval of the plan amendments;
(3) The request must indicate which key district office has audit jurisdiction over the
return (see Appendix Aof Rev. Proc. 98–5, page 155, this Bulletin); and
(4) The request and the applicable user fee (required by Rev. Proc. 98-8) for both the
waiver request and the determination letter request should be sent to:
Internal Revenue Service
Assistant Commissioner (Employee Plans and Exempt Organizations)
Attention: CP:E:EP:A:1
P.O. Box 14073
Ben Franklin Station
Washington, DC 20044
Additional information sent after the initial request should be sent to:
January 5, 19982061998–1 I.R.B.

Chief, Actuarial Branch 1
CP:E:EP:A:1
Internal Revenue Service
1111 Constitution Ave., NW
Washington, DC 20224
Handling of the request .04 The waiver request will be handled by the national office as follows:
(1) The waiver request and supporting documents will be forwarded to Actuarial
Branch, CP:E:EP:A:1, which will treat the request as a technical advice on the qualifica-
tion issue with respect to the plan provisions necessary to satisfy section 3 of Rev. Rul. 78-
223.
(2) The Ohio Key District Office will be notified of the request. In order not to delay
the processing of the request, all materials relating to the determination letter request will
be sent by the national office to the key district director for consideration while the techni-
cal advice request is completed.
(3) The national office will consider both the application for a funding waiver and the
proposed plan amendment. If a waiver is to be granted and if the national office believes
that qualification of the plan is not adversely affected by the plan amendment, the manda-
tory technical advice memorandum will be issued to the key district director. The key dis-
trict director must decide within 10 working days from the date of the technical advice
memorandum either to furnish the applicant with the technical advice memorandum and
with a favorable advance determination letter, or to ask for reconsideration of the technical
advice memorandum.This request must be in writing.An initial written notice of an intent
to make this request may be submitted within 10 working days of the date of the technical
advice memorandum and followed by a written request within 30 working days from the
date of such written notice.If the key district director does not ask for reconsideration of
the technical advice memorandum within 10 working days, the Actuarial Branch will issue
the waiver ruling.This ruling will not contain the caveat described in section 3.02 of Rev.
Proc. 94–41.
Interested party notice.05 The notice and comment requirements for interested parties provided in sections 17
and commentand 18 of this revenue procedure must be satisfied. Comments are to be forwarded to the
Ohio Key District Office that is considering the determination letter request for the plan
amendments. With respect to the waiver request the notice requirements applicable to
waiver requests found in Rev. Proc. 94-41 must be satisfied.
When waiverrequest .06 In the case of a plan other than a multiemployer plan, no waiver may be granted
should be submittedunder §412(d) with respect to any plan for any plan year unless an application therefor is
submitted to the Service not later than the 15th day of the third month beginning after the
close of such plan year. The Service may not extend this deadline. Arequest for a waiver
with respect to a multiemployer plan generally must be submitted no later than the close
of the plan year following the plan year for which the waiver is requested.
In seeking a waiver with respect to a plan year which has not yet ended, the applicant
may have difficulty in furnishing sufficient current evidence in support of the request.For
this reason it is generally advisable that such advance request be submitted no earlier than
180 days prior to the end of the plan year for which the waiver is requested.
SECTION 16. SECTION
420 DETERMINATION
LETTERS
Scope.01 This section provides procedures for requesting determination letters on plan
language that permits, pursuant to §420, the transfer of assets in a defined benefit plan to
a health benefit account described in §401(h).
1998–1 I.R.B.207January 5, 1998

Required Information .02 The key district director will consider the qualified status of plan language
designed to comply with §420 only if the plan sponsor requests such consideration in a
cover letter. The cover letter must specifically state (i) whether consideration is being
requested only with regard to §420, or (ii) whether consideration is being requested with
regard to §420 in addition to other matters under §401(a). The cover letter must
specifically state the location of a plan provision that satisfies each of the following
requirements. The checklist in the Appendix of this revenue procedure may be used to
identify the location of relevant plan provisions.
(1) The plan must include a health benefits account as described in §401(h).
(2) The plan must provide that transfers shall be limited to transfers of “excess assets”
as defined in §420(e)(2).
(3) The plan must provide that only one transfer may be made in a taxable year.
However, for purposes of determining whether the rule in the preceding sentence is met, a
plan may provide that a transfer will not be taken into account if it is a transfer that:
(a) Is made after the close of the taxable year preceding the employer’s first taxable year
beginning after December 31, 1990, and before the earlier of (i) the due date (including
extensions) for the filing of the return of tax for such preceding year, or (ii) the date such
return is filed; and
(b) Does not exceed the expenditures of the employer for qualified current retiree health
liabilities for such preceding taxable year.
(4) The plan must provide that the amount transferred shall not exceed the amount which
is reasonably estimated to be the amount the employer will pay out (whether directly or
through reimbursement) of the health benefit account during the taxable year of the trans-
fer for “qualified current retiree health liabilities,” as defined in §420(e)(1).
(5) The plan must provide that no transfer will be made in any taxable year beginning
after December 31, 2000.
(6) The plan must provide that any assets transferred, and any income allocable to such
assets, shall be used only to pay qualified current retiree health liabilities for the taxable
year of transfer.
(7) The plan must provide that any amounts transferred to a health benefits account (and
income attributable to such amounts) which are not used to pay qualified current retiree
health liabilities shall be transferred back to the defined benefit portion of the plan.
(8) The plan must provide that the amounts paid out of a health benefits account will be
treated as paid first out of transferred assets and income attributable to those assets.
(9) The plan must provide that the accrued pension benefits for participants and benefi-
ciaries must become nonforfeitable as if the plan had terminated immediately prior to the
transfer (or in the case of a participant who separated during the 1-year period ending on
the date of transfer immediately before such separation). In the case of a transfer described
in §420(b)(4) that relates to a prior year, the plan must provide that the accrued benefit of
a participant who separated from service during the taxable year to which such transfer
relates will be recomputed and treated as nonforfeitable immediately before such separa-
tion.
(10) The plan must provide that a transfer will be permitted only if each group health
plan or arrangement under which health benefits are provided contains provisions satisfy-
ing §420(c)(3). The plan must define “applicable employer cost,” “cost maintenance peri-
od,” and “benefit maintenance period,” as applicable, consistent with §420(c)(3). The plan
January 5, 19982081998–1 I.R.B.

may provide that §420(c)(3) is satisfied separately with respect to individuals eligible for
benefits under Title XVIII of the Social Security Act at any time during the taxable year
and with respect to individuals not so eligible.
(11) The plan must provide that transferred assets cannot be used for key employees (as
defined in §416(i)(1)).
PARTII. INTERESTED
PARTYNOTICE AND
COMMENT
SECTION 17. WHAT
RIGHTS TO NOTICE AND
COMMENTDO INTERESTED
PARTIES HAVE?
Rights of interested parties.01Persons who qualify as interested parties under §1.7476-1(b), have the following
rights:
(1)To receive notice, in accordance with section 18 below, that an application for an
advance determination will be filed regarding the qualification of plans described in
§§401, 403(a), 409 and/or 4975(e)(7);
(2) To submit written comments with respect to the qualification of such plans to the
Service;
(3) To request the Department of Labor to submit a comment to the Service on behalf
of the interested parties; and
(4) To submit written comments to the Service on matters with respect to which the
Department of Labor was requested to comment but declined.
Comments by interested parties.02Comments submitted by interested parties must be received by the key district
director for the Ohio Key District Office by the 45th day after the day on which the
application for determination is received by the key district director. (However, see
sections 17.03 and 17.04 for filing deadlines where the Department of Labor has been
requested to comment). Such comments must be in writing, signed by the interested
parties or by an authorized representative of such parties (as provided in section 9.02(11)
of Rev. Proc. 98–4), addressed to the key district director for the Ohio Key District at the
address in section 6.17, and contain the following information:
(1) The names of the interested parties making the comments;
(2) The name and taxpayer identification number of the applicant for a determination;
(3) The name of the plan, the plan identification number, and the name of the plan
administrator;
(4) Whether the parties submitting the comment are:
(a)Employees eligible to participate under the plan,
(b)Employees with accrued benefits under the plan, or former employees with vested
benefits under the plan,
(c) Beneficiaries of deceased former employees who are eligible to receive or are cur-
rently receiving benefits under the plan,
(d) Employees not eligible to participate under the plan.
1998–1 I.R.B.209January 5, 1998

(5) The specific matters raised by the interested parties on the question of whether the
plan meets the requirements for qualification involving §§401 and 403(a), and how such
matters relate to the interests of the parties making the comment; and
(6) The address of the interested party submitting the comment (or if a comment is sub-
mitted jointly by more than one party, the name and address of a designated representative)
to which all correspondence, including a notice of the Service’s final determination with
respect to qualification, should be sent.(The address designated for notice by the Service
will also be used by the Department of Labor in communicating with the parties submitting
a request for comment.)The designated representative may be one of the interested parties
submitting the comment or an authorized representative. If two or more interested parties
submit a single comment and one person is not designated in the comment as the repre-
sentative for receipt of correspondence, a notice of determination mailed to any interested
party who submitted the comment shall be notice to all the interested parties who submit-
ted the comment for purposes of §7476(b)(5) of the Code.
Requests forDOLto .03Arequest to the Department of Labor to submit to the key district director a com-
submit commentsment pursuant to §3001(b)(2) of ERISAmust be made in accordance with the following
procedures.
(1) The request must be received by the Department of Labor by the 25th day after the
day the application for determination is received by the key district director.However, if
the parties requesting the Department to submit a comment wish to preserve the right to
comment to the key district director in the event the Department declines to comment, the
request must be received by the Department by the 15th day after the day the application
for determination is received by the key district director.
(2) The request to the Department of Labor to submit a comment to the key district
director must:
(a)Be in writing;
(b)Be signed as provided in section 17.02 above;
(c)Contain the names of the interested parties requesting the Department to comment
and the address of the interested party or designated representative to whom all corre-
spondence with respect to the request should be sent. See also section 17.02(6) above;
(d)Contain the information prescribed in section 17.02(2), (3), (4), (5) and (6) above;
(e)Indicate that the application was or will be submitted to the key district director for
the Ohio Key District Office at the address in section 6.17;
(f)Contain a statement of the specific matters upon which the Department’s comment
is sought, as well as how such matters relate to the interested parties making the request;
and
(g)Be addressed as follows:
Deputy Assistant Secretary
Pension and Welfare Benefits Administration
U.S. Department of Labor,
200 Constitution Avenue, NW,
Washington, DC20210
Attention: 3001 Comment Request
Right to comment if.04If a request described in 17.03 is made and the Department of Labor notifies the
DOLdeclines to commentinterested parties making the request that it declines to comment on a matter concerning
January 5, 19982101998–1 I.R.B.

qualification of the plan which was raised in the request, the parties submitting the request
may still submit a comment to the key district director on such matter. The comment must
be received by the later of the 45th day after the day the application for determination is
received by the key district director or the 15th day after the day on which notification is
given by the Department that it declines to submit a comment on such matter.(See
section 17.07 for the date of notification.) In no event may the comment be received later
than the 60th day after the day the application for determination was received. Such a
comment must comply with the requirements of section 17.02 and include a statement that
the comment is being submitted on matters raised in a request to the Department upon
which the Department declined to comment.
Confidentiality of comments.05For rules regarding the confidentiality of contents of written comments submitted
by interested parties to the Service pursuant to section 17.02 or 17.04, see § 601.201(o)(5)
of the Statement of Procedural Rules.
Availability of comments.06For rules regarding the availability to the applicant of copies of all comments on
the application submitted pursuant to section 17.01(1), (2), (3) and (4) of this revenue
procedure, see § 601.201(o)(5) of the Statement of Procedural Rules.
When comments are .07An application for an advance determination, a comment to the key district director,
deemed madeor a request to the Department of Labor shall be deemed made when it is received by the
key district director, or the Department.Notification by the Department that it declines to
comment shall be deemed given when it is received by the interested party or designated
representative. The notice described in section 18.01 below shall be deemed given when
it is given in person, posted as prescribed in the regulations under §7476, or received
through the mail or a private delivery service that has been designated under § 7502(f). In
the case of an application, comment, request, notification, or notice that is sent by mail or
designated private delivery service, the date as of which it shall be deemed received will
be determined under § 7502. However, if such an application, comment, request,
notification, or notice is not received within a reasonable period from the date determined
under § 7502, the immediately preceding sentence shall not apply.
SECTION 18.WHATARE
THE GENERALRULES
FOR NOTICE TO
INTERESTED PARTIES?
Notice to interested parties.01Notice that an application for an advance determination regarding the qualification
of a plan described in §§401, 403(a), 409 and 4975(e)(7) is to be made must be given to
all interested parties in the manner set forth in §1.7476-2(c) and in accordance with the
requirements of this section.
Time when notice must be given.02When the notice referred to in section 18.01 is given by posting or in person, such
notice must be given not less than 7 days nor more than 21 days prior to the day the
application for a determination is made. When the notice is given by mailing or
designated private delivery service, it should be given not less than 10 days nor more than
24 days prior to the day the application for a determination is made.If, however, an
application is returned to the applicant for failure to adequately satisfy the notification
requirements with respect to a particular group or class of interested parties, the applicant
need not cause notice to be given to those groups or classes of interested parties with
respect to which the notice requirement was already satisfied merely because, as a result
of the resubmission of the application, the time limitations of this subsection would not be
met.
Content of notice.03The notice referred to in section 18.01 shall be in writing and shall contain the
following information:
(1) Abrief description identifying the class or classes of interested parties to whom the
notice is addressed (e.g., all present employees of the employer, all present employees
eligible to participate);
1998–1 I.R.B.211January 5, 1998

(2) The name of the plan, the plan identification number, and the name of the plan
administrator;
(3) The name and taxpayer identification number of the applicant for a determination;
(4) That an application for a determination as to the qualified status of the plan is to be
made to the Service at the address in section 6.17, and stating whether the application
relates to an initial qualification, a plan amendment, termination, or a partial termination;
(5) Adescription of the class of employees eligible to participate under the plan;
(6) Whether or not the Service has issued a previous determination as to the qualified
status of the plan;
(7) Astatement that any person to whom the notice is addressed is entitled to submit, or
request the Department of Labor to submit, to the key district director for the Ohio Key
District Office, a comment on the question of whether the plan meets the requirements of
§401 or 403(a); that two or more such persons may join in a single comment or request;
and that if such persons request the Department of Labor to submit a comment and the De-
partment of Labor declines to do so with respect to one or more matters raised in the re-
quest, the persons may still submit a comment to the key district director with respect to the
matters on which the Department declines to comment. The Pension Benefit Guaranty
Corporation (PBGC) may also submit comments. In every instance where there is either a
final adverse termination or a distress termination, the Service formally notifies the PBGC
for comments;
(8) The specific dates by which a comment to the key district director or a request to the
Department of Labor must be received in order to preserve the right of comment (see sec-
tion 17 above);
(9) The number of interested parties needed in order for the Department of Labor to
comment; and
(10) Except to the extent that the additional informational material required to be made
available by sections 18.05 through 18.09 are included in the notice, a description of a rea-
sonable procedure whereby such additional informational material will be available to in-
terested parties (see section 18.04). (Examples of notices setting forth the above informa-
tion, in a case in which the additional information required by sections 18.05 through 18.09
will be made available at places accessible to the interested parties, are set forth in the Ex-
hibit attached to this revenue procedure.)
Procedures formaking .04The procedure referred to in section 18.03(10), whereby the additional informa-
information available totional material required by sections 18.05 through 18.09 will (to the extent not included in
interested partiesthe notice) be made available to interested parties, may consist of making such material
available for inspection and copying by interested parties at a place or places reasonably
accessible to such parties, or supplying such material in person or by mail, or by a
combination of the foregoing, provided such procedure is immediately available to all
interested parties, is designed to supply them with such additional informational material
in time for them to pursue their rights within the time period prescribed, and is available
until the earlier of: 1) the filing of a pleading commencing a declaratory judgment action
under §7476 with respect to the qualification of the plan; or 2) the 92nd day after the day
the notice of final determination is mailed to the applicant.Reasonable charges to
interested parties for copying and/or mailing such additional informational material are
permissible.
Information to be available.05Unless provided in the notice, or unless section 18.06 applies, there shall be made
to interested partiesavailable to interested parties under a procedure described in section 18.04:
January 5, 19982121998–1 I.R.B.

(1) An updated copy of the plan and the related trust agreement (if any); and
(2) The application for determination.
Special rules if there .06If there would be less than 26 participants in the plan, as described in the appli-
are less than 26 participantscation (including, as participants, former employees with vested benefits under the plan,
beneficiaries of deceased former employees currently receiving benefits under the plan,
and employees who would be eligible to participate upon making mandatory employee
contributions, if any), then in lieu of making the materials described in section 18.05
available to interested parties who are not participants (as described above), there may be
made available to such interested parties a document containing the following
information:
(1) Adescription of the plan’s requirements respecting eligibility for participation and
benefits and the plan’s benefit formula;
(2) Adescription of the provisions providing for nonforfeitable benefits;
(3) Adescription of the circumstances which may result in ineligibility, or denial or loss
of benefits;
(4) Adescription of the source of financing of the plan and the identity of any organiza-
tion through which benefits are provided;
(5) Adescription of any optional forms of benefits described in §411(d)(6) which have
been reduced or eliminated by plan amendment; and
(6) Whether the applicant is claiming in the application that the plan meets the require-
ments of §410(b)(1)(A), and, if not, the coverage schedule required by the application in
the case of plans not meeting the requirements of such section.
However, once an interested party or designated representative receives a notice of final
determination, the applicant must, upon request, make available to such interested party
(whether or not the plan has less than 26 participants) an updated copy of the plan and re-
lated trust agreement (if any) and the application for determination.
Information described in .07Information of the type described in §6104(a)(1)(D) should not be included in the
§6104(a)(1)(D) should not beapplication, plan, or related trust agreement submitted to the Service. Accordingly, such
included information should not be included in any of the material required by section 18.05 or
18.06 to be available to interested parties.
Availability of additional .08Unless provided in the notice, there shall be made available to interested parties
information to interested partiesunder a procedure described in section 18.04, any additional document dealing with the
application which is submitted by or for the applicant to the Service, or furnished by the
Service to the applicant; provided, however, if there would be less than 26 participants in
the plan as described in the application (including, as participants, former employees with
vested benefits under the plan, beneficiaries of deceased former employees currently
receiving benefits under the plan, and employees who would be eligible to participate
upon making mandatory employee contributions, if any), such additional documents need
not be made available to interested parties who are not participants (as described above)
until they, or their designated representative, receive a notice of final determination. The
applicant may also withhold from such inspection and copying information described in
§6104(a)(1)(C) and (D) which may be contained in such additional documents.
Availability of notice to .09Unless provided in the notice, there shall be made available to all interested parties
interested partiesunder a procedure described in section 18.04 the material described in sections 17.02
through 17.07 above.
1998–1 I.R.B.213January 5, 1998

PARTIII. PROCESSING
DETERMINATION
LETTER REQUESTS
SECTION 19. HOWDOES
THE SERVICE HANDLE
DETERMINATION LETTER
REQUESTS?
Oral advice.01 Oral advice.
(1) The Service does not issue determination letters on oral requests. However, person-
nel in the key district office ordinarily will discuss with taxpayers or their representatives
inquiries regarding: substantive tax issues; whether the Service will issue a determination
letter on particular issues; and questions relating to procedural matters about submitting de-
termination letter requests. Any discussion of substantive issues will be at the discretion of
the Service on a time available basis, will not be binding on the Service, and cannot be re-
lied upon as a basis of obtaining retroactive relief under the provisions of §7805(b). Atax-
payer may seek oral technical assistance from a taxpayer service representative in a district
office or Service Center when preparing a return or report, under established procedures.
Oral advice is advisory only, and the Service is not bound to recognize it in the examina-
tion of the taxpayer’s return.
(2) The advice or assistance furnished, whether requested by personal appearance, tele-
phone, or correspondence will be limited to general procedures, or will direct the inquirer
to source material, such as pertinent Code provisions, regulations, revenue procedures, and
revenue rulings that may aid the inquirer in resolving the question or problem.
Conferences.02The key district director may grant a conference upon written request from a
taxpayer or his representative, provided the request shows that a substantive plan,
amendment, etc., has been developed for submission to the Service, but that special
problems or issues are involved, and the key district director concludes that a conference
would be warranted in the interest of facilitating review and determination when the plan,
etc., is formally submitted.
Determination letterbased .03Administrative Record
solely on administrative record
(1) In the case of a request for a determination letter, the determination of the key dis-
trict director or the appeals office on the qualification or non-qualification of the retirement
plan shall be based solely upon the facts contained in the administrative record. The admin-
istrative record shall consist of the following:
(a) The request for determination, the retirement plan and any related trust instruments,
and any written modifications or amendments made by the applicant during the proceed-
ings within the Service;
(b) All other documents submitted to the Service by, or on behalf of, the applicant with
respect to the request for determination;
(c) All written correspondence between the Service and the applicant with respect to the
request for determination and any other documents issued to the applicant from the Ser-
vice;
(d) All written comments submitted to the Service pursuant to sections 17.01(2), (3),
and (4) above, and all correspondence relating to comments submitted between the Service
and persons (including PBGC and the Department of Labor) submitting comments pur-
suant to sections 17.01(2), (3), and (4) above; and
(e) In any case in which the Service makes an investigation regarding the facts as repre-
sented or alleged by the applicant in the request for determination or in comments submit-
January 5, 19982141998–1 I.R.B.

ted pursuant to sections 17.01(2), (3), and (4) above, a copy of the official report of such in-
vestigation.
(2) The administrative record shall be closed upon the earlier of the following events:
(a) The date of mailing of a notice of final determination by the Service with respect to
the application for determination; or
(b) The filing of a petition with the United States Tax Court seeking a declaratory judg-
ment with respect to the retirement plan.
(3) Any oral representation or modification of the facts as represented or alleged in the
application for determination or in a comment filed by an interested party, which is not re-
duced to writing shall not become a part of the administrative record and shall not be taken
into account in the determination of the qualified status of the retirement plan by the key
district director, or the appeals office.
Notice of final determination.04 In the case of final determination, the notice of final determination:
(1) Shall be the letter issued by the key district director, or the appeals office which
states that the applicant’s plan satisfies the qualification requirements of the Code. The fa-
vorable determination letter will be sent by certified or registered mail where either an in-
terested party, the Department of Labor, or the PBGC has commented on the application
for determination.
(2) Shall be the letter issued, by certified or registered mail, by the key district director,
or the appeals office subsequent to a letter of proposed determination, stating that the appli-
cant’s plan fails to satisfy the qualification requirements of the Code.
Issuance of the notice of.05 The key district director, or the appeals office will send the notice of final determi-
final determinationnation to the applicant, to the interested parties who have previously submitted comments
on the application to the Service (or to the persons designated by them to receive such
notice), to the Department of Labor in the case of a comment submitted by the
Department, and to PBGC if it has filed a comment.
SECTION 20. EXHAUSTION
OFADMINISTRATIVE
REMEDIES
In general.01 For purposes of §7476(b)(3), a petitioner shall be deemed to have exhausted the
administrative remedies available within the Service upon the completion of the steps
described in sections 20.02, 20.03, 20.04, or 20.05 subject, however, to sections 20.06 and
20.07. If applicants, interested parties, or the PBGC do not complete the applicable steps
described below, they will not have exhausted their respective available administrative
remedies as required by §7476(b)(3) and will, thus, be precluded from seeking
declaratory judgment under §7476 except to the extent that section 20.05 or 20.08
applies.
Steps forexhausting .02In the case of an applicant, with respect to any matter relating to the qualification of
administrative remediesa plan, the steps referred to in section 20.01 are:
(1) Filing a completed application with the Ohio Key District Director pursuant to this
revenue procedure;
(2) Complying with the requirements pertaining to notice to interested parties as set
forth in this revenue procedure and § 1.7476–2 of the regulations; and,
(3) Appealing to the Appeals Office pursuant to paragraph 601.201(o)(6) of the State-
ment of Procedural Rules, in the event a notice of proposed adverse determination is issued
by the key district director.
1998–1 I.R.B.215January 5, 1998

Applicant’s request for.03 Consideration of relief under §7805(b) will be included as one of the applicant’s
7805(b) reliefsteps in exhausting administrative remedies only if the applicant requests the key district
director to seek technical advice from the national office on the applicability of such
relief. The applicant’s request must be made in writing according to the procedures for
requesting technical advice (see section 18 of Rev. Proc. 98-5).
Interested parties.04In the case of an interested party or the PBGC, the steps referred to in section 20.01
are, with respect to any matter relating to the qualification of the plan, submitting to the
key district director a comment raising such matter in accordance with section 17.01(2)
above, or requesting the Department of Labor to submit to the key district director a
comment with respect to such matter in accordance with section 17.01(3) and, if the
Department of Labor declines to comment, submitting the comment in accordance with
section 17.01(4) above, so that it may be considered by the Service through the
administrative process.
Deemed exhaustion of .05An applicant, an interested party, or the PBGC shall in no event be deemed to have
administrative remediesexhausted administrative remedies prior to the earlier of:
(1) The completion of those steps applicable to each as set forth in sections 20.01,
20.02, 20.03 or 20.04, which constitute their administrative remedies; or,
(2) The expiration of the 270-day period described in §7476(b)(3), which period shall
be extended in a case where there has not been a completion of all the steps referred to in
section 20.02 and the Service has proceeded with due diligence in processing the applica-
tion for determination.
Service must act on appeal.06The step described in section 20.02(3) will not be considered completed until the
Service has had a reasonable time to act upon the appeal.
Service must act on.07 Where the applicant has requested the key district director to seek technical advice
§ 7805(b) requeston the applicability of §7805(b) relief, the applicant’s administrative remedies will not be
considered exhausted until the national office has had a reasonable time to act upon the
request for technical advice.
Effect of technical advice request.08The step described in section 20.02(3) will not be available or necessary with
respect to any issue on which technical advice has been obtained from the national office.
SECTION 21. WHATEFFECT
WILLAN EMPLOYEE PLAN
DETERMINATION LETTER
HAVE?
Scope of reliance on .01Adetermination letter issued pursuant to this revenue procedure contains only the
determination letteropinion of the Service as to the qualification of the particular plan involving the
provisions of §§401 and 403(a) and the status of a related trust, if any, under §501(a).
Such a determination letter is based on the facts and demonstrations presented to the
Service in connection with the application for the determination letter and may not be
relied upon after a change in material fact or the effective date of a change in law, except
as provided. For example, a determination letter issued pursuant to this revenue procedure
may not be relied upon after a significant change in plan coverage resulting from the
operation of the plan. The Service may determine, based on the application form, the
extent of review of the plan document. Failure to disclose a material fact or
misrepresentation of a material fact may adversely affect the reliance which would
otherwise be obtained through the issuance by the Service of a favorable determination
letter. Similarly, failure to accurately provide any of the information called for on any
form required by this revenue procedure may result in no reliance. Applicants are advised
to retain copies of all demonstrations and supporting data submitted with their
applications. Failure to do so may limit the scope of reliance.
January 5, 19982161998–1 I.R.B.

Effect of determination letter.02Determination letters issued on minor amendments to plans and trusts under this
on minorplan amendmentrevenue procedure will merely express an opinion whether the amendment, in and of
itself, affects the existing status of the plan’s qualification and the exempt status of the
related trust. In no event should such a determination letter be construed as an opinion on
the qualification of the plan as a whole and the exempt status of the related trust as a
whole.
Sections 13 and 14 of Rev. .03Except as otherwise provided in this section, determination letters referred to in
Proc. 98-4 applicablesections 21.01 and 21.02 are governed, generally, by the provisions of sections 13 and 14
of Rev. Proc. 98–4.
Effect of subsequent .04The prior qualification of a plan as adopted by an employer will not be considered
publication of revenue ruling, etc.to be adversely affected by the publication of a revenue ruling, a revenue procedure, or an
administrative pronouncement within the meaning of §1.6661–3(b)(2) of the regulations
where:
(1) The plan was the subject of a favorable determination letter and the request for that
letter contained no misstatement or omission of material facts;
(2) The facts subsequently developed are not materially different from the facts on
which the determination letter was based;
(3) There has been no change in the applicable law; and
(4) The employer that established the plan acted in good faith in reliance on the deter-
mination letter.
However, all such plans must be amended to comply with the published revenue ruling for
subsequent years.Unless specifically stated otherwise in the revenue ruling or in other
published guidance of general applicability, the conforming amendment to an individually
designed plan must be adopted before the end of the first plan year that begins after the rev-
enue ruling, revenue procedure, or administrative pronouncement is published in the Inter-
nal Revenue Bulletin and must be effective, for all purposes, not later than the first day of
the first plan year beginning after the revenue ruling is published.For the rule as to the
conforming amendment to an M&Pplan and a regional prototype plan, see section 14 of
Rev. Proc. 89–9 and Rev. Proc. 89–13, as modified by Rev. Proc. 90–21, sections
8.03–8.08 of Rev. Proc. 91–66, and Rev. Proc. 92–41.
Determination letterdoes .05While a favorable determination letter may serve as a basis for determining
not apply to taxability issuesdeductions for employer contributions thereunder, it is not to be taken as an indication that
contributions are necessarily deductible as made.This latter determination can be made
only upon an examination of the employer’s tax return, in accordance with the limitations,
and subject to the conditions of, §404.
SECTION 22. EFFECTON Rev. Proc. 97–6 is superseded.
OTHER REVENUE
PROCEDURES
SECTION 23. This revenue procedure is effective January 5, 1998.
EFFECTIVE DATE
SECTION 24.The collections of information contained in this revenue procedure have been reviewed
PAPERWORK and approved by the Office of Management and Budget in accordance with the Paperwork
REDUCTION ACTReduction Act (44 U.S.C. 3507) under control number 1545–1520.
An agency may not conduct or sponsor, and a person is not required to respond to, a col-
lection of information unless the collection of information displays a valid control number.
1998–1 I.R.B.217January 5, 1998

The collections of information in this revenue procedure are in sections 6.16, 6.18, 7.04,
9.08, 10.05, 13, 14, 15, 16, 19.02, and 21.04. This information is required to determine
plan qualification. This information will be used to determine whether a plan is entitled to
favorable tax treatment. The collections of information are mandatory. The likely respon-
dents are business or other for-profit institutions.
The estimated total annual reporting and/or recordkeeping burden is 163,086 hours.
The estimated annual burden per respondent/recordkeeper varies from 1 hour to 40
hours, depending on individual circumstances, with an estimated average of 2.02 hours.
The estimated number of respondents and/or recordkeepers is 80,763.
The estimated annual frequency of responses (used for reporting requirements only) is
once every three years.
Books or records relating to a collection of information must be retained as long as their
contents may become material in the administration of any internal revenue law. Generally
tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
DRAFTING The principal author of this revenue procedure is James Flannery of the Employee Plans
INFORMATIONDivision. For further information regarding this revenue procedure, contact the Employee
Plans Division’s telephone assistance service between the hours of 1:30 and 3:30 p.m.
Eastern time, Monday through Thursday, on (202) 622-6074 (not a toll-free call). Mr.
Flannery can be contacted by calling (202) 622-6214 (also not a toll-free call).
EXHIBIT: SAMPLE The Exhibit set forth below, may be used to satisfy the requirements of section 18 of
NOTICES TO this revenue procedure.
INTERESTED PARTIES
January 5, 19982181998–1 I.R.B.

Exhibit: Sample Notice to Interested Parties
1.Notice To:______________________________[describe class or classes of interested parties]
An application is to be made to the Internal Revenue Service for an advance determination on the qualification of the follow-
ing employee pension benefit plan:
2.
(name of plan)
3.(plan number)
4.
(name and address of applicant)
5.
(applicant EIN)
6.
(name and address of plan administrator)
7.The application will be filed on ________________ for an advance determination as to whether the plan meets the qualifica-
tion requirements of §401 or 403(a) of the Internal Revenue Code of 1986, with respect to the plan’s
_________________________ [initial qualification, amendment, termination, or partial termination]. The application will be
filed with:
Key District Director
Internal Revenue Service
Ohio Key District Office
P.O. Box 192
Covington, KY41012-0192
8.The employees eligible to participate under the plan are: __________________________________
9.The Internal Revenue Service _______________ [has/has not] previously issued a determination letter with respect to the qual-
ification of this plan.
RIGHTS OF INTERESTED PARTIES
10.You have the right to submit to the Key District Director, at the above address, either individually or jointly with other interested
parties, your comments as to whether this plan meets the qualification requirements of the Internal Revenue Code.
You may instead, individually or jointly with other interested parties, request the Department of Labor to submit, on your behalf,
comments to the Key District Director regarding qualification of the plan.If the Department declines to comment on all or
some of the matters you raise, you may, individually, or jointly if your request was made to the Department jointly, submit your
comments on these matters directly to the Key District Director.
REQUESTS FOR COMMENTS BYTHE DEPARTMENTOF LABOR
11.The Department of Labor may not comment on behalf of interested parties unless requested to do so by the lesser of 10 employ-
ees or 10 percent of the employees who qualify as interested parties. The number of persons needed for the Department to comment
with respect to this plan is _____________________.If you request the Department to comment, your request must be in writing
and must specify the matters upon which comments are requested, and must also include:
(1)the information contained in items 2 through 5 of this Notice; and
(2)the number of persons needed for the Department to comment.
Arequest to the Department to comment should be addressed as follows:
1998–1 I.R.B.219January 5, 1998

Deputy Assistant Secretary
Pension and Welfare Benefits Administration
ATTN: 3001 Comment Request
U.S. Department of Labor,
200 Constitution Avenue, NW
Washington, DC 20210
COMMENTS TO THE INTERNALREVENUE SERVICE
12.Comments submitted by you to the Key District Director must be in writing and received by him by
________________________.However, if there are matters that you request the Department of Labor to comment upon on your
behalf, and the Department declines, you may submit comments on these matters to the Key District Director to be received by him
within 15 days from the time the Department notifies you that it will not comment on a particular matter, or by _______________,
whichever is later, but not after ______________.Arequest to the Department to comment on your behalf must be received by it by
_________________ if you wish to preserve your right to comment on a matter upon which the Department declines to comment, or
by ________________ if you wish to waive that right.
ADDITIONALINFORMATION
13.Detailed instructions regarding the requirements for notification of interested parties may be found in sections 17 and 18 of Rev.
Proc. 98-6.Additional information concerning this application (including, where applicable, an updated copy of the plan and related
trust; the application for determination; any additional documents dealing with the application that have been submitted to the Ser-
vice; and copies of section 17 of Rev. Proc. 98–6 are available at _________________ during the hours of _________________ for
inspection and copying.(There is a nominal charge for copying and/or mailing.)
January 5, 19982201998–1 I.R.B.

APPENDIX
Checklist As part of a §420 determination letter request described in section 16 of this revenue procedure the following
checklist may be completed and attached to the determination letter request:
ITEMCIRCLE SECTION
1.Does the Plan contain a medical benefits account within the meaning of §401(h) of the Code? If the
medical benefits account is a new provision, items “a” through “h” should be completed.
a.Does the medical benefits account specify the medical benefits that will be available and contain
provisions for determining the amount which will be paid?
b.Does the medical benefits account specify who will benefit?
c.Does the medical benefits account indicate that such benefits, when added to any life insurance pro-
tection in the Plan, will be subordinate to retirement benefits?
d.Does the medical benefits account maintain separate accounts with respect to contributions to key
employees (as defined in §416(i)(1) of the Code) to fund such benefits?
e.Does the medical benefits account state that amounts contributed must be reasonable and ascertain-
able?
f.Does the medical benefits account provide for the impossibility of diversion prior to satisfaction of
liabilities (other than item “7” below)?
g.Does the medical benefits account provide for reversion upon satisfaction of all liabilities (other
than item “7” below)?
h.Does the medical benefits account provide that forfeitures must be applied as soon as possible to re-
duce employer contributions to fund the medical benefits?
2.Does the Plan limit transfers to “Excess Assets” as defined in §420(e)(2) of the Code?
3.Does the Plan provide that only one transfer may be made in a taxable year (except with regard to trans-
fers relating to prior years pursuant to §420(b)(4) of the Code)?
4.Does the Plan provide that the amount transferred shall not exceed the amount reasonably estimated to be
paid for qualified current retiree health liabilities?
5.Does the Plan provide that no transfer will be made in any taxable year beginning after December 31,
2000?
6.Does the Plan provide that transferred assets and income attributable to such assets shall be used only to
pay qualified current retiree health liabilities for the taxable year of transfer?
7.Does the Plan provide that any amounts transferred (plus income) that are not used to pay qualified cur-
rent retiree health liabilities shall be transferred back to the defined benefit portion of the Plan?
8.Does the Plan provide that amounts paid out of a health benefits account will be treated as paid first out
of transferred assets and income attributable to those assets?
9.Does the Plan provide that participants’accrued benefits become nonforfeitable on a termination basis (i)
immediately prior to transfer, or (ii) in the case of a participant who separated within 1 year before the
transfer, immediately before such separation?
1998–1 I.R.B.221January 5, 1998
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______
Yes No_______

26 CFR 601.201: Rulings and determination l
etters.
Rev. Proc. 98–7
SECTION 1. PURPOSE AND NATURE
OF CHANGES
.01 Purpose
This revenue procedure updates Rev.
Proc. 97–7, 1997–1 C.B. *, by providing
a current list of areas of the Internal Rev-
enue Code under the jurisdiction of the
Associate Chief Counsel (International)
on which advance letter rulings or deter-
mination letters will not be issued. For a
list of areas under the jurisdiction of the
Associate Chief Counsel (Domestic) and
the Associate Chief Counsel (Employee
Benefits and Exempt Organization) on
which advance letter rulings or determi-
nation letters will not be issued, see Rev.
Proc. 98–3, this Bulletin.
.02 Changes
(1) New section 4.01(15), dealing with
the issue of whether an entity is treated as
fiscally transparent by a foreign jurisdic-
tion for purposes of section 894, has been
added to reflect the fact that the Service is
studying the issue and plans to publish ad-
ditional guidance in this area.
(2) New section 4.02(2), dealing with
any transaction or series of transactions
that is designed to achieve inconsistent
tax consequences or classifications under
the tax laws of the U.S. and the tax laws
of a treaty partner, has been added to re-
flect the Service’s view that transactions
of this type require a determination of
whether or not the transaction is treated
appropriately under the laws of the United
States in light of its treatment under the
laws of the treaty partner and whether or
not the transaction is structured for a
meaningful non-tax business purpose.
Thus, such transactions require complex
factual determinations that are not the
proper subject of advance letter rulings or
determination letters.
(3) New section 4.02(3) has been
added to provide that questions involving
the validity of the federal income tax and
other taxes set forth in the Code, ques-
tions on the authority or jurisdiction of the
Service to enforce the Code or collection
information, or similar matters.
SECTION 2. BACKGROUND AND
SCOPE OF APPLICATION
. 01 Background
Whenever appropriate to sound tax ad-
ministration, the Service answers in-
quiries from individuals and organiza-
tions about their status for tax purposes
and the tax effects of their acts or transac-
tions, before the filing of returns or re-
ports that are required by the Internal
Revenue Code. There are, however, areas
where the Service will not issue advance
letter rulings or determination letters, ei-
ther because the issues are inherently fac-
tual or for other reasons. This revenue
procedure lists those areas.
Section 3 gives areas in which advance
letter rulings and determinations will not
be issued under any circumstances. Sec-
tion 4 gives areas in which they will not
ordinarily be issued; in these areas,
unique and compelling reasons may jus-
tify issuing a letter ruling or determina-
tion letter. Ataxpayer who plans to re-
quest a letter ruling or determination letter
in an area described in Section 4 should
contact (by telephone or in writing) the
Office of Associate Chief Counsel (Inter-
national) (hereinafter “the Office”) prior
to making such request and discuss with
the Office the unique and compelling rea-
sons that the taxpayer believes justify is-
suing such letter ruling or determination
letter. While not required, a written sub-
mission is encouraged since it will enable
Office personnel to arrive more quickly at
an understanding of the unique facts of
each case. Ataxpayer who contacts the
Office by telephone may be requested to
provide a written submission. The Ser-
vice may provide a general information
letter in response to inquiries in areas on
either list.
These lists are not all-inclusive. Future
revenue procedures may add or delete
items. The Service may also decline to
rule on an individual case for reasons pe-
culiar to that case; such decisions will not
be announced in the Internal Revenue
Bulletin.
.02 Scope of Application
This revenue procedure does not pre-
clude District Directors, the Assistant
Commissioner (International), or Chiefs,
Appeals Offices from submitting requests
for technical advice in the areas listed to
the Office.
SECTION 3. AREAS IN WHICH LET-
TER RULINGS OR DETERMINATION
LETTERS WILLNOTBE ISSUED
.01 Specific Questions and Problems
(1) Section 871(g).—Special Rules for
Original Issue Discount.—Whether a debt
instrument having original issue discount
within the meaning of § 1273 of the Inter-
nal Revenue Code is not an original issue
discount obligation within the meaning of
§ 871(g)(1)(B)(i) when the instrument is
payable 183 days or less from the date of
January 5, 19982221998–1 I.R.B.
ITEMCIRCLE SECTION
10.In the case of transfers described in §420(b)(4) of the Code relating to 1990, does the Plan provide that
benefits will be recomputed and become nonforfeitable for participants who separated from service in
such prior year as described in §420(c)(2)?
11.Does the Plan provide that transfers will be permitted only if each group health plan or arrangement
contains provisions satisfying §420(c)(3) of the Code?
12.Does the Plan define “applicable employer cost,” “cost maintenance period” and “benefit maintenance
period,” as needed, consistently with §420(c)(3) of the Code?
13.Does the Plan provide that transferred assets cannot be used for key employees?
Yes No_______
Yes No_______
Yes No_______
Yes No_______

original issue (without regard to the pe-
riod held by the taxpayer).
(2) Section 894.—Income Affected by
Treaty.—Whether a person that is a resi-
dent of a foreign country and derives in-
come from the United States is entitled to
benefits under the United States income
tax treaty with that foreign country pur-
suant to the limitation on benefits article.
However, the Service may rule regarding
the legal interpretation of a particular pro-
vision within the relevant limitation on
benefits article.
(3) Section 954.—Foreign Base Com-
pany Income.—The effective rate of tax
that a foreign country will impose on in-
come.
(4) Section 1503(d).—Dual Consoli-
dated Loss.—Whether the conditions
under the regulations for excepting a net
operating loss of a dual resident corpora-
tion from the definition of a dual consoli-
dated loss, or for rebutting the presump-
tion that an event constitutes a triggering
event for purposes of § 1.1503–2(g)-
(2)(iii)(B), are satisfied.
.02 General Areas.
(1) The prospective application of the
estate tax to the property or the estate of a
living person, except that letter rulings
may be issued on any international issues
in a ruling request accepted pursuant to
Rev. Proc. 88–50, 1988–2 C.B. 711, and
section 5.05 of Rev. Proc. 98–1.
(2) The federal tax consequences of
proposed federal, state, local, municipal,
or foreign legislation.
(3) Whether reasonable cause exists
under Subtitle F (Procedure and Adminis-
tration) of the Code.
(4) Whether a proposed transaction
would subject a taxpayer to criminal
penalties.
(5) Any area where the letter ruling re-
quest does not comply with the require-
ments of Rev. Proc. 98–1.
(6) Any area where the same issue is
the subject of the taxpayer’s pending re-
quest for competent authority assistance
under a United States tax treaty.
(7) A“comfort” ruling will not be is-
sued with respect to an issue that is clearly
and adequately addressed by statute, regu-
lations, decisions of a court, tax treaties,
revenue rulings, or revenue procedures ab-
sent extraordinary circumstances (e.g., a
request for a letter ruling required by a
governmental regulatory authority in order
to effectuate the transaction.)
SECTION 4. AREAS IN WHICH
LETTER RULINGS OR
DETERMINATION LETTERS WILL
NOTORDINARILYBE ISSUED
.01 Specific Questions and Problems
(1) Section 367(a).—Transfers of
Property from the United States.—
Whether an oil or gas working interest is
transferred from the United States for use
in the active conduct of a trade or busi-
ness for purposes of § 367(a)(3); and
whether any other property is so trans-
ferred, where the determination requires
extensive factual inquiry.
(2) Section 367(b).—Other Transfers. -
Whether a foreign corporation is consid-
ered a corporation for purposes of any
nonrecognition provision listed in
§ 367(b), and related issues, unless the
letter ruling presents a significant legal
issue or subchapter C rulings are re-
quested in the context of reorganizations
or liquidations involving foreign corpora-
tions. (These matters are dealt with in de-
tail in § 7.367(b) of the Temporary In-
come Tax Regulations.)
(3) Section 864.—Definitions and Spe-
cial Rules.—Whether a taxpayer is en-
gaged in a trade or business within the
United States, and whether income is ef-
fectively connected with the conduct of a
trade or business within the United States;
whether an instrument is a security as de-
fined in § 1.864-2(c)(2); whether a tax-
payer effects transactions in the United
States in stocks or securities under
§ 1.864-2(c)(2); whether an instrument or
item is a commodity as defined in
§ 1.864-2(d)(3); and for purposes of
§ 1.864-2(d)(1) and (2), whether a com-
modity is of a kind customarily dealt in on
an organized commodity exchange, and
whether a transaction is of a kind custom-
arily consummated at such place.
(4) Section 871.—Tax on Nonresident
Alien Individuals.—Whether the income
earned on contracts that do not qualify as
annuities or life insurance contracts be-
cause of the limitations imposed by
§ 72(s) and § 7702(a) is portfolio interest
as defined in § 871(h).
(5) Section 881.—Tax on Income of
Foreign Corporations Not Connected with
United States Business.—Whether the in-
come earned on contracts that do not
qualify as annuities or life insurance con-
tracts because of the limitations imposed
by § 72(s) and § 7702(a) is portfolio inter-
est as defined in § 881(c).
(6) Section 892.—Income of Foreign
Governments and of International Organi-
zations.—Whether income received by
local governmental authorities of the
United Kingdom from certain United
States investments of money allocable to
their superannuation funds is exempt
from federal income taxation.
(7) Section 892.—Income of Foreign
Governments and of International Organi-
zations.—Whether a foreign government
is engaged in commercial activities for
purposes of § 892, and whether income
received by a foreign government is de-
rived from the conduct of such commer-
cial activities.
(8) Section 893.—Compensation of
Employees of Foreign Governments and
International Organizations.—Whether a
foreign government is engaged in com-
mercial activities for purposes of § 893,
and whether the services of an employee
of a foreign government are primarily in
connection with such commercial activi-
ties.
(9) Section 894.—Income Affected by
Treaty.—Whether a taxpayer has a per-
manent establishment in the United States
for purposes of any United States income
tax treaty and whether income is attribut-
able to a permanent establishment in the
United States.
(10) Section 894.—Income Affected
by Treaty.—Whether the income received
by a nonresident alien student for services
performed for a university or other educa-
tional institution is exempt from federal
income tax or withholding under United
States income tax treaties with Belgium,
China, Cyprus, Egypt, Finland, France,
Iceland, Japan, Korea, Morocco, the
Netherlands, Norway, Pakistan, the
Philippines, Poland, Romania, and
Trinidad and Tobago. Rev. Proc. 87–8,
1987–1 C.B. 366, as modified by Rev.
Proc. 93–22, 1993–1 C.B. 535, and as
modified by Rev. Proc. 93–22A, 1993–2
C.B. 343.
(11) Section 894.—Income Affected
by Treaty.—Whether the income received
by a nonresident alien performing re-
search or teaching at a university is ex-
empt from federal income tax or with-
holding under United States income tax
treaties with Belgium, China, Egypt, Fin-
land, France, Hungary, Iceland, Italy, Ja-
maica, Japan, Korea, Luxembourg, the
Netherlands, Norway, the Philippines,
1998–1 I.R.B.223January 5, 1998

Poland, Romania, Sweden, Trinidad and
Tobago, the former Union of the Soviet
Socialist Republics, and the United King-
dom. Rev. Proc. 87–9, 1987–1 C.B. 368,
as modified by Rev. Proc. 93–22, 1993–1
C.B. 535, and as modified by Rev. Proc.
93–22A, 1993–2 C.B. 343.
(12) Section 894.—Income Affected
by Treaty.—Whether the income received
by a nonresident alien teaching at a uni-
versity is exempt from federal income tax
or withholding under United States in-
come tax treaties with Austria, Denmark,
the Federal Republic of Germany, Greece,
Ireland, Pakistan, and Switzerland. Rev.
Proc. 87–9, 1987–1 C.B. 368, as modified
by Rev. Proc. 93–22, 1993–1 C.B. 535,
and as modified by Rev. Proc. 93–22A,
1993–2 C.B. 343.
(13) Section 894.—Income Affected
by Treaty.—Whether a foreign recipient
of payments made by a United States per-
son is ineligible to receive the benefits of
a United States tax treaty under the princi-
ples of Rev. Rul. 84–152, 1984–2 C.B.
381, as modified by Rev. Rul. 85–163,
1985–2 C.B. 249, and modified and clari-
fied by Rev. Rul. 89–110, 1989–2 C.B.
275; and Rev. Rul. 84–153, 1984–2 C.B.
383, as modified by Rev. Rul. 85–163,
1985–2 C.B. 249, and modified and clari-
fied by Rev. Rul. 89–110, 1989–2 C.B.
275.
(14) Section 894.—Income Affected
by Treaty.—Whether a recipient of pay-
ments is or has been a resident of a coun-
try for purposes of any United States tax
treaty. Pursuant to § 1.884–5(f), however,
the Service may rule whether a corpora-
tion representing that it is a resident of a
country is a qualified resident thereof for
purposes of § 884.
(15) Section 894.—Income Affected
by Treaty.—Whether an entity is treated
as fiscally transparent by a foreign juris-
diction for purposes of §894(c) and the
regulations thereunder.
(16) Section 901.—Taxes of Foreign
Countries and of Possessions of the
United States.—Whether a person claim-
ing a credit has established, based on all
of the relevant facts and circumstances,
the amount (if any) paid by a dual capac-
ity taxpayer under a qualifying levy that is
not paid in exchange for a specific eco-
nomic benefit. See § 1.901–2A(c)(2).
(17) Sections 927, 936, 954, 993.—
Manufactured Product.—Whether a prod-
uct is manufactured or produced for pur-
poses of § 927(a), § 936(h)(5), § 954(d),
and § 993(c).
(18) Section 936.—Puerto Rico and
Possession Tax Credit.—What constitutes
a substantial line of business.
(19) Section 956.—Investment of
Earnings in United States Property.—
Whether a pledge of the stock of a con-
trolled foreign corporation is an indirect
pledge of the assets of that corporation.
See § 1.956–2(c)(2).
(20) Section 985.—Functional Cur-
rency.—Whether a currency is the func-
tional currency of a qualified business unit.
(21) Section 989(a).—Qualified Busi-
ness Unit.—Whether a unit of the tax-
payer’s trade or business is a qualified
business unit.
(22) Section 1058.—Transfers of Se-
curities under Certain Agreements.—
Whether the amount of any payment de-
scribed in § 1058(b)(2) or the amount of
any other payment made in connection
with a transfer of securities described in
§ 1058 is from sources within or without
the United States; the character of such
amounts; and whether the amounts consti-
tute a particular kind of income for pur-
poses of any United States income tax
treaty.
(23) Section 1503(d).—Dual Consoli-
dated Loss.—Whether an event presump-
tively constitutes a triggering event for
purposes of § 1.1503–2(g)(2)(iii)(A)(1)-
(7), apart from possible rebuttal of the
presumption under § 1.1503–2(g)(2)-
(iii)(B). See section 3.01(4), Rev. Proc.
98–7.
(24) Section 2501.—Imposition of
Tax.—Whether a partnership interest is
intangible property for purposes of
§ 2501(a)(2) (dealing with transfers of in-
tangible property by a nonresident not a
citizen of the United States).
(25) Section 7701.—Tax on Nonresi-
dent Alien Individuals.—Whether an
alien individual is either a resident or a
nonresident of the United States, in situa-
tions where the determination depends on
facts that cannot be confirmed until the
close of the taxable year (including, for
example, the length of the alien’s stay or
the nature of the alien’s activities).
(26) Section 7701.—Definitions.—
Whether an estate or trust is a foreign es-
tate or trust for federal income tax pur-
poses.
(27) Section 7701.—Definitions.—
Whether an intermediate entity is a con-
duit entity under section §1.881–3(a)(4);
whether a transaction is a financing trans-
action under section §1.881–3(a)(ii);
whether the participation of an intermedi-
ate entity in a financing arrangement is
pursuant to a tax avoidance plan under
section §1.881–3(b); whether an interme-
diate entity performs significant financing
activities under section §1.881–3(b)-
(3)(ii); whether an unrelated intermediate
entity would not have participated in a fi-
nancing arrangement on substantially the
same terms under section §1.881–3(c).
.02 General Areas
(1) Whether a taxpayer has a business
purpose for a transaction or arrangement.
(2) Any transaction or series of trans-
actions that is designed to achieve incon-
sistent tax consequences or classifications
under the tax laws of the U.S. and the tax
laws of a treaty partner.
(3) Questions involving the validity of
the federal income tax and other taxes set
forth in the Code, questions on the author-
ity or jurisdiction of the Service to en-
force the Code or collect information, or
similar matters.
(4) (a) Situations where a taxpayer or a
related party is domiciled or organized in
a foreign jurisdiction with which the
United States does not have an effective
mechanism for obtaining tax information
with respect to civil tax examinations and
criminal tax investigations, which would
preclude the Service from obtaining infor-
mation located in such jurisdiction that is
relevant to the analysis or examination of
the tax issues involved in the ruling re-
quest.
(b) The provisions of subsection
4.02(4)(a) above shall not apply if the tax-
payer or affected related party (i) consents
to the disclosure of all relevant informa-
tion requested by the Service in process-
ing the ruling request or in the course of
an examination to verify the accuracy of
the representations made and to otherwise
analyze or examine the tax issues in-
volved in the ruling request, and (ii)
waives all claims to protection of bank or
commercial secrecy laws in the foreign
jurisdiction with respect to the informa-
tion requested by the Service. In the
event the taxpayer’s or related party’s
consent to disclose relevant information
or to waive protection of bank or com-
January 5, 19982241998–1 I.R.B.

mercial secrecy is determined by the Ser-
vice to be ineffective or of no force and
effect, then the Service may retroactively
rescind any ruling rendered in reliance on
such consent.
SECTION 5. EFFECTON OTHER
REVENUE PROCEDURES
Rev. Proc. 97–7 is superseded.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Gerard Traficanti of the Of-
fice of Associate Chief Counsel (Interna-
tional). For further information about this
revenue procedure, please contact Mr.
Traficanti at (202) 874-5740 (not a toll-
free number).
26 CFR 601.201: Rulings and determination letters.
Rev. Proc. 98–8
TABLE OFCONTENTS
SECTION 1. PURPOSE
SECTION 2. CHANGES
.01 Fee schedule
.02 New categories
.03 Deletion of material no longer applic-
able
SECTION 3. BACKGROUND
.01 Legislation authorizing user fees
.02 Related revenue procedures
SECTION 4. SCOPE
.01 Requests to which user fees apply
.02 Requests and other actions that do
not require the payment of a user fee
.03 Exemptions from the user fee re-
quirements
SECTION 5. DEFINITIONS
SECTION 6.FEE SCHEDULE
EMPLOYEE PLANS USER FEES
.01 Letter ruling requests.
.02 Requests for certain administrative
exemptions
.03 Administrative scrutiny determina-
tions with respect to separate lines of
business
.04 Opinion letters and advisory letters
on master and prototype plans
.05 Notification letters issued by the Na-
tional Office on mass submitter re-
gional prototype plans
.06 Opinion letters on prototype individ-
ual retirement accounts and/or annu-
ities, simplified employee pensions,
SIMPLE IRAs and SIMPLE IRA
Plans
.07 Determination letters
.08 Advisory letters on volume submitter
plans
.09 Notification letters issued by key dis-
trict offices with respect to regional
prototype plans
COMPLIANCE FEES AND
CORRECTION FEES
.10 Compliance statements under the
Voluntary Compliance Resolution
(VCR) program
.11 Correction statements under the Tax-
Sheltered Annuity Voluntary Correc-
tion (TVC) program
EXEMPTORGANIZATIONS USER
FEES
.12 Letter rulings
.13 Determination letters and requests for
group exemption letters
SECTION 7. MAILING ADDRESS
FOR REQUESTING LETTER
RULINGS, DETERMINATION
LETTERS, ETC.
.01 Matters handled by the National Of-
fice.
.02Matters handled by the Ohio Key
District Office.
SECTION 8. REQUESTS
INVOLVING MULTIPLE OFFICES,
FEE CATEGORIES, ISSUES,
TRANSACTIONS, OR ENTITIES
.01 Requests involving several offices
.02 Requests involving several fee cate-
gories
.03 Requests involving several issues
.04 Requests involving several unrelated
transactions
.05 Requests for separate letter rulings
for several entities
SECTION 9. PAYMENTOFFEE
.01 Method of payment
.02 Transmittal forms
.03 Effect of nonpayment or payment of
incorrect amount
SECTION 10. REFUNDS
.01 General rule
.02 Examples
SECTION 11. REQUESTFOR
RECONSIDERATION OFUSER FEE
SECTION 12.EFFECTON OTHER
DOCUMENTS
SECTION 13. EFFECTIVE DATE
SECTION 14. PAPERWORK
REDUCTION ACT
APPENDIX
SECTION 1. PURPOSE
This revenue procedure provides guid-
ance for complying with the user fee pro-
gram of the Internal Revenue Service as it
pertains to requests for letter rulings, de-
termination letters, etc. on matters under
the jurisdiction of the Assistant Commis-
sioner (Employee Plans and Exempt Or-
ganizations); requests for compliance
statements under the Voluntary Compli-
ance Resolution (VCR) program and the
Standardized VCR Procedure (SVP) de-
scribed in Rev. Proc. 94–62, 1994–2 C.B.
778, as modified by Rev. Proc. 96–29,
1996–1 C.B. 693; requests for correction
statements under the Tax Sheltered Annu-
ity Voluntary Correction Program (TVC
program) described in Rev. Proc. 95–24,
1995–1 C.B. 694, as modified by Rev.
Proc. 96–50, 1996–2 C.B. 370; and re-
quests for administrative scrutiny deter-
minations under Rev. Proc. 93–41, 1993–
2 C.B. 536.
SECTION 2. CHANGES
.01 Fee schedule.Adjustments have
been made in several of the fees. With re-
spect to employee plans categories,
changes have been made with respect to
requests relating to: (1) computation of
the exclusion for an annuitant under §72
of the Code (increased from $75 to $80);
(2) change in plan year (increased from
$100 to $120); (3) change in funding
method (increased from $400 to $450);
(4) waiver of the minimum funding stan-
dard, where the waiver is for $1,000,000
or more (increased from $3,750 to
$4,425); (5) waiver of the minimum fund-
ing standard, where the waiver is for less
1998–1 I.R.B.225January 5, 1998

than $1,000,000 (increased from $1,625
to $1,900); (6)waiver of the excise tax
under § 4971(f), on failure to pay a liquid-
ity shortfall, where the waiver is for
$1,000,000 or more (increased from
$3,750 to $4,425); (7) waiver of the ex-
cise tax under § 4971(f), on failure to pay
a liquidity shortfall, where the waiver is
for less than $1,000,000 (increased from
$1,625 to $1,900); (8) letter ruling under
Rev. Proc. 90-49 (increased from $250 to
$275); (9) administrative scrutiny deter-
mination with respect to separate lines of
business, for the first separate line of
business (increased from $3,450 to
$4,000); (10) administrative scrutiny de-
termination with respect to separate lines
of business, for each additional separate
line of business for which a determination
is requested (increased from $1,100 to
$1,300); (11) mass submitter M & Pplan,
per basic plan document with one adop-
tion agreement (decreased from $3,600 to
$3,000); (12) each adoption agreement re-
lating to an M & Pplan of a mass submit-
ter (decreased from $700 to $400); (13)
minor modification of a mass submitter’s
M & Pplan document, per adoption
agreement (increased from $200 to $225);
(14) M & Pplan nonmass submission, per
adoption agreement (decreased from
$2,000 to $1,800); (15) addition of op-
tional provisions following the issuance
of a favorable opinion letter, per basic
plan document (increased from $400 to
$480); (16) addition of new adoption
agreements relating to a mass submitter’s
M & Pplan after the basic plan document
and associated adoption agreements have
been approved, per adoption agreement
(decreased from $700 to $400); (17)as-
sumption of sponsorship of an approved
M & Pplan, without any amendment to
the plan document, by a new entity, as ev-
idenced by a change of employer identifi-
cation number (increased from $200 to
$240); (18) mass submitter regional pro-
totype plan, per basic plan document with
one adoption agreement (decreased from
$3,600 to $3,000); (19)each adoption
agreement relating to a regional prototype
plan of a mass submitter (decreased from
$700 to $400); (20)addition of new adop-
tion agreements relating to a mass submit-
ter’s regional prototype plan after the
basic plan document and associated adop-
tion agreements have been approved, per
adoption agreement (decreased from $700
to $400); (21) mass submitter’s prototype
IRA, SEP, SIMPLE IRA, or SIMPLE
IRAPlan, per plan document (increased
from $1,000 to $1,050); (22) minor modi-
fication of a mass submitter’s prototype
IRA, SEP, SIMPLE IRA, or SIMPLE
IRAPlan, per plan document (increased
from $200 to $275); and (23) nonmass
submission of prototype IRA, SEP, SIM-
PLE IRA, or SIMPLE IRAPlan, per plan
document (decreased from $500 to $400).
With respect to exempt organization cate-
gories, changes have been made with re-
spect to requests relating to: (1) change in
accounting period (increased from $100
to $130); and (2) change in accounting
method (increased from $100 to $130).
.02 New categories.The provisions of
Rev. Proc. 97–29, 1997–1 C.B. 698, sec-
tions 3.03(6) and 6.02, relating to the user
fee applicable to the establishment of a
prototype SIMPLE IRAand the user fees
applicable to prototype SIMPLE IRA
Plans have been incorporated herein. A
new category, relating to the approval of
an organization’s exempt status under
§501(c)(25) has been added, with a user
fee of $500.
.03 Deletion of material no longer ap-
plicable.References to Rev. Proc. 93–12,
1993–1 C.B. 479; Rev. Proc. 94–13,
1994–1 C.B. 566; and Rev. Proc. 95–34,
1995–2 C.B. 385, and to user fees related
to these revenue procedures, have been
deleted.
SECTION 3. BACKGROUND
.01 Legislation authorizing user fees.
Section 10511 of the Revenue Act of
1987, Pub. L. 100–203, 101 Stat. 1330-
382, 1330–446, enacted December 22,
1987, directed the Secretary of the Trea-
sury or delegate (the “Secretary”) to es-
tablish a program requiring the payment
of user fees for requests to the Service for
letter rulings, opinion letters, determina-
tion letters, and similar requests. The fees
charged under the program (1) were to
vary according to categories or subcate-
gories established by the Secretary; (2)
were to be determined after taking into
account the average time for, and diffi-
culty of, complying with requests in each
category and subcategory; and (3) were to
be payable in advance. The Secretary was
to provide for exemptions and reduced
fees under the program as the Secretary
determined to be appropriate, but the av-
erage fee applicable to each category
must not be less than the amount specified
in the statute. The fees were to apply to
requests made on or after February 1,
1988, and before September30, 1990.
Section 11319 of the Omnibus Budget
Reconciliation Act of 1990, Pub. L. 101-
508, 1991-2 C.B. 481, 511, extended the
time during which the user fees would be
applicable through September 30, 1995.
Section 743 of the Uruguay Round Agree-
ments Act, Pub. L. 103–465, 1995–1 C.B.
230, 239, extended the time during which
the user fees will be applicable through
September 30, 2000. Section 2 of Pub. L.
104–117, Tax Relief to Operation Joint
Endeavor Participants Act, 1996–34
I.R.B. 19, extended the time during which
the user fees will be applicable through
September 30, 2003.
.02 Related revenue procedures. The
various revenue procedures that require
payment of a user fee, a voluntary com-
pliance fee under the VCR program or the
SVP, a voluntary correction fee under the
TVC program, or an administrative
scrutiny determination user fee are de-
scribed in the appendix to this revenue
procedure.
SECTION 4. SCOPE
.01 Requests to which user fees apply.
In general, user fees apply to all requests
for letter rulings, opinion letters, notifica-
tion letters, determination letters, and ad-
visory letters submitted by or on behalf of
taxpayers, sponsoring organizations or
other entities as described in this revenue
procedure. Further, voluntary compliance
fees applicable to requests under the VCR
program or the SVP, voluntary correction
fees applicable to requests under the TVC
program, and administrative scrutiny de-
termination user fees described in Rev.
Proc. 93–41, are collected through the
user fee program described in this rev-
enue procedure. Requests to which a user
fee, a voluntary compliance fee, a volun-
tary correction fee, or an administrative
scrutiny determination user fee is applica-
ble must be accompanied by the appropri-
ate fee as determined from the fee sched-
ule set forth in section 6 of this revenue
procedure. The fee may be refunded in
limited circumstances as set forth in sec-
tion 10.
.02 Requests and other actions that do
not require the payment of a user fee.Ac-
January 5, 19982261998–1 I.R.B.

tions which do not require the payment of
a user fee include the following:
(1) Requests for information letters as
defined in Rev. Proc. 98–4.
(2) Elections pertaining to automatic
extensions of time under §301.9100–1 of
the Procedure and Administration regula-
tions.
(3) Use of forms which are not to be
filed with the Service. For example, no
user fee is required in connection with the
use of Form 5305, Individual Retirement
Trust Account, or Form 5305–A, Individ-
ual Retirement Custodial Account, in
order to adopt an individual retirement ac-
count under §408(a). This form should
not be filed with the Service.
(4) In general, plan amendments
whereby sponsors amend their plans by
adopting, word-for-word, the model lan-
guage contained in a revenue procedure
which states that the amendment should
not be submitted to the Service and that
the Service will not issue new opinion,
notification, advisory, ruling or determi-
nation letters for plans that are amended
solely to add the model language.
(5) Change in accounting period or ac-
counting method permitted to be made by
a published automatic change revenue
procedure.
.03 Exemptions from the user fee re-
quirements. The following exemptions
apply to the user fee requirements. These
are the only exemptions that apply:
(1) Departments, agencies, or instru-
mentalities of the United States that cer-
tify that they are seeking a letter ruling,
determination letter, opinion letter or sim-
ilar letter on behalf of a program or activ-
ity funded by federal appropriations. The
fact that a user fee is not charged has no
bearing on whether an applicant is treated
as an agency or instrumentality of the
United States for purposes of any provi-
sion of the Code.
(2) Requests as to whether a worker is
an employee for federal employment
taxes and federal income tax withholding
purposes (chapters 21, 22, 23, and 24 of
subtitle C of the Code) submitted on Form
SS–8, Information for Use in Determin-
ing Whether a Worker is an Employee for
Federal Employment Taxes and Income
Tax Withholding, or its equivalent. Such
a request may be submitted in connection
with an application for a determination on
the qualification of a plan when it is nec-
essary to determine whether an employer-
employee relationship exists. See section
6.13 of Rev. Proc. 98–6, page 183, this
bulletin. In that case, although no user fee
applies to the request submitted on Form
SS–8, the applicable user fee must be paid
in connection with the application for de-
termination on the plan’s qualification.
SECTION 5. DEFINITIONS
The following terms used in this rev-
enue procedure are defined in the perti-
nent revenue procedures referred to
below, which are described in the appen-
dix:
1998–1 I.R.B.227January 5, 1998
Administrative scrutiny determinationRev. Proc. 93–41
Adoption agreementRev. Procs. 89–9, 89–13
Advisory letter Rev. Procs. 89–9, 98–6
Basic plan documentRev. Procs. 89–9, 89–13
Compliance statementRev. Proc. 94–62
Correction statementRev. Proc. 95–24
Determination letterRev. Procs. 90–27, 98–6
Group exemption letterRev. Proc. 80–27
Information letterRev. Proc. 98–4
Letter rulingRev. Proc. 98–4
Mass submitter Rev. Procs. 89–9, 89–13, 87–50
Mass submitter plan Rev. Proc. 89–9
Mass submitter regional prototype planRev. Proc. 89–13
Master plan Rev. Proc. 89–9
Minor modificationRev. Procs. 89–9, 87–50
Notification letterRev. Procs. 89–13, 98–4
Opinion letterRev. Procs. 89–9, 98–4
Prototype planRev. Proc. 89–9
Regional prototype planRev. Proc. 89–13
SIMPLE IRARev. Proc. 97–29
SIMPLE IRAPlanRev. Proc. 97–29
Plan SponsorRev. Proc. 89–13
Sponsoring organizationRev. Procs. 87–50, 89–9, 90–21
Standardized VCR Program (SVP)Rev. Proc. 94–62
Tax-Sheltered Annuity Voluntary Correction (TVC) programRev. Proc. 95–24
Volume submitter planRev. Proc. 98–6
Volume submitter specimen planRev. Proc. 98–6
Voluntary Compliance Resolution (VCR) programRev. Proc. 94–62
Word-for-word identical adoption Rev. Procs. 89–9, 89–13, 87–50

SECTION 6.FEE SCHEDULE
The amount of the user fee, compliance fee or correction fee payable with respect to each category or subcategory of submission
is as set forth in the following schedule.
CATEGORYFEE
EMPLOYEE PLANS USER FEES
.01 Letter ruling requests.
(1)Computation of exclusion for annuitant under §72
(2)Change in plan year (Form 5308)
Note:No user fee is required if the requested change is permitted to be made pursuant to the procedure for automatic
approval set forth in Rev. Proc. 87–27, 1987–1 C.B. 769. In such a case, Form 5308 should not be submitted to the Ser-
vice.
(3)Change in funding method
(4)Approval to become a nonbank trustee (see §1.408-2(e) of the Income Tax Regulations)
(5)Waiver of minimum funding standard, under §412(d):
(a)Waiver of $1,000,000 or more
(b)Waiver of less than $1,000,000
(6)Waiver of the excise tax, under §4971(f), on failure to pay a liquidity shortfall:
(a)Waiver of $1,000,000 or more
(b)Waiver of less than $1,000,000
(7)Letter ruling under Rev. Proc. 90–49, 1990–2 C.B. 620
(8)Letter ruling involving the determination of the account limit under §419A(c)
(9)Individually designed simplified employee pension (SEP)
(10)All other letter rulings
Reduced fees, or augmented fee, applicable to all other letter rulings:
(a)Letter ruling requests by or on behalf of eligible retirement plans (within the meaning of §402(c)(8)(B))
with assets of less than $150,000
(b)Letter ruling requests from U.S. citizens and resident alien individuals, domestic trusts, and domestic
estates whose “total income” as reported on their federal income tax return (as amended) filed for a full
(12 months) taxable year ending before the date the request is filed, plus any interest income not subject
to tax under §103 (interest on state and local bonds) for that period, is less than $150,000
Note: The reduced fee applies to a married individual if the combined gross income of the applicant and the applicant’s
spouse is less than $150,000. The gross incomes of the applicant and the applicant’s spouse are not combined, however,
if the applicant is legally separated from his or her spouse and the spouses do not file a joint income tax return with each
other. In the case of a letter ruling request from a domestic estate or trust that, at the time the request is filed, has not
filed an income tax return for a full taxable year, the reduced fee will be applicable if the decedent’s or (in the case of an
individual grantor) the grantor’s total income as reported on the last return filed for a full taxable year ending before the
date of death or the date of the transfer, taking into account any additions required to be made to total income described
in this subparagraph, is less than $150,000.
(c)Letter ruling requests from organizations exempt from income tax under “Subchapter F-Exempt Organi-
zations” with gross receipts of less than $150,000
Note:An organization exempt from income tax under Subchapter F must certify in its request for a letter ruling that its
gross receipts for the last full taxable year before the request was filed were less than $150,000.
(d)In situations in which a taxpayer requests substantially identical letter rulings for multiple entities with a
common member or sponsor, or for multiple members of a common entity, each additional letter ruling
request after the $2,100 fee or the $600 reduced fee, as applicable, has been paid for the first letter rul-
ing request
(e)In situations in which a taxpayer requests a single letter ruling involving substantially identical issues of
fact and law with respect to multiple members of a common entity, for each additional entity after the
$2,100 fee or $600 reduced fee, as applicable, has been paid for the first entity
.02 Requests for certain administrative exemptions.
Requests for administrative exemptions for participant-directed transactions that are in compliance with the regula-
tions under §404(c) of the Employee Retirement Income Security Act of 1974 (ERISA) but may result in prohibited
transactions under §4975
Note:The provisions of Rev. Proc. 75–26, 1975–1 C.B. 722, are applicable to such requests.
January 5, 19982281998–1 I.R.B.
$80
$120
$450
$3,000
$4,425
$1,900
$4,425
$1,900
$275
$2,100
$2,100
$2,100
$600
$600
$600
$200
$200
$2,100

CATEGORYFEE
.03 Administrative scrutiny determinations with respect to separate lines of business.
(1)For the first separate line of business for which a determination is requested
(2)For each additional separate line of business for which a determination is requested
.04 Opinion letters and advisory letters on master and prototype plans.
(1) Mass submitter M & Pplan, per basic plan document, new or amended, with one adoption agreement
(2) Mass submitter M & Pplan, per each additional adoption agreement
(3) Sponsoring organization’s word-for-word identical adoption of M & Pmass submitter’s basic plan document
(or an amendment thereof), per adoption agreement
Note 1: Mass submitters that are sponsoring organizations in their own right are liable for this fee.
Note 2: If a mass submitter submits, in any 12-month period ending January 31, more than 300 applications on behalf
of word-for-word adopters with respect to a particular adoption agreement, only the first 300 such applications will be
subject to the fee; no fee will apply to those in excess of the first 300 such applications submitted within the 12-month
period.
(4)Sponsoring organization’s minor modification of M & Pmass submitter’s plan document, per adoption agree-
ment
(5)Nonmass submission (new or amended) by M & Psponsoring organization, per adoption agreement
(6)M & Pmass submitter’s request for an advisory letter with respect to the addition of optional provisions fol-
lowing issuance of a favorable opinion letter (see section 18.031(c) of Rev. Proc. 89–9), per basic plan docu-
ment (regardless of the number of adoption agreements)
(7)M & Pmass submitter’s addition of new adoption agreements after the basic plan document and associated
adoption agreements have been approved, per adoption agreement
(8)Assumption of sponsorship of an approved M & Pplan, without any amendment to the plan document, by a
new entity, as evidenced by a change of employer identification number
.05 Notification letters issued by the National Office on mass submitter regional prototype plans.
(1)Mass submitter regional prototype plan, per basic plan document, new or amended, with one adoption agree-
ment
(2)Mass submitter regional prototype plan, per each additional adoption agreement
Note: Separate notification letters are required for sponsors utilizing mass submitter regional prototype plans. Such no-
tification letters are issued by the Ohio Key District Office. The applicable user fee is set forth in section 6.09(1) of this
revenue procedure.
(3)Regional prototype plan mass submitter’s addition of new adoption agreements after the basic plan document
and associated adoption agreements have been approved, per adoption agreement
.06 Opinion letters on prototype individual retirement accounts and/or annuities, simplified employee pensions,
SIMPLE IRAs and SIMPLE IRAPlans.
(1)Mass submission of a prototype IRA, SEP, SIMPLE IRA, or SIMPLE IRAPlan, per plan document, new or
amended
(2)Sponsoring organization’s word-for-word identical adoption of mass submitter’s prototype IRA, SEP,
SIMPLE IRA, or SIMPLE IRAPlan, per plan document or an amendment thereof
Note: If a mass submitter submits, in any 12-month period ending January 31, more than 300 applications on behalf of
word-for-word adopters of prototype IRAs with respect to a particular adoption agreement, only the first 300 such appli-
cations will be subject to the fee; no fee will apply to those in excess of the first 300 such applications submitted within
the 12-month period.
(3)Sponsoring organization’s minor modification of mass submitter’s prototype IRA, SEP, SIMPLE IRA, or
SIMPLE IRAPlan, per plan document
(4)Sponsoring organization’s nonmass submission of prototype IRA, SEP, SIMPLE IRA, or SIMPLE IRAPlan,
per plan document (Form 5306 or Form 5306-SEP)
(5)Establishment of prototype SIMPLE IRApursuant to section 3 of Rev. Proc. 97–29, 1997–1 C.B. 698.
.07 Determination letters
(1)If the plan is intended to satisfy a design-based or nondesign-based safe harbor, or if the applicant is not elect-
ing to receive a determination with respect to any of the general tests, and the applicant is not electing to re-
ceive a determination with respect to the average benefit test:
(a) Form 5300
(b) Form 5303
(c) Form 5310
(d) Form 5307
1998–1 I.R.B.229January 5, 1998
$4,000
$1,300
$3,000
$400
$100
$225
$1,800
$480
$400
$240
$3,000
$400
$400
$1,050
$100
$275
$400
$50
$700
$700
$225
$125

CATEGORYFEE
(e) Form 6406
(f) Multiple employer plan:
(i) 2 to 10 employers
(ii) 11 to 99 employers
(iii) 100 to 499 employers
(iv) Over 499 employers
Note: In the case of a multiple employer plan that is adopted by other employers after the initial submission, the fee
would be the same as in paragraph (1) above. If only one employer adopts the plan in any subsequent year, the fee
would be $700.
(2)If the applicant is electing to receive a determination with respect to the average benefit test and/or any of the
general tests:
(a) Form 5300 or Form 5303
(b) Form 5307
(c) Form 5310
(d) Multiple employer plan:
(i) 2 to 10 employers
(ii) 11 to 99 employers
(iii) 100 to 499 employers
(iv) Over 499 employers
Note:In the case of a multiple employer plan that is adopted by other employers after the initial submission, the fee
would be the same as in paragraph (2) above. If only one employer adopts the plan in any subsequent year, the fee
would be $1,250.
(3) Group trusts contemplated by Rev. Rul. 81–100, 1981–1 C.B. 326
.08 Advisory letters on volume submitter plans.
Volume submitter specimen plans
.09 Notification letters issued by key district offices with respect to regional prototype plans.
(1)Sponsor’s identical adoption of mass submitter’s regional prototype plan basic plan document, per adoption
agreement (Form 4461–B)
Note: Mass submitters that are sponsors in their own right are liable for this fee.
(2) Sponsor’s nonmass submission of regional prototype plan, per adoption agreement (Form 4461 or 4461–A)
COMPLIANCE FEES AND CORRECTION FEES
.10 Compliance statements under the Voluntary Compliance Resolution (VCR) program.
(1) Request for a compliance statement under the VCR program:
(a)For a plan with assets of less than $500,000, and no more than 1,000 plan participants
(b)For a plan with assets of at least $500,000, and no more than 1,000 plan participants
(c)For a plan with more than 1,000 plan participants but less than 10,000 plan participants
(d)For a plan with 10,000 or more plan participants
Note:In establishing the number of plan participants, the plan sponsor will use the numbers from the most recently
filed Form 5500 series.
(2) Request for a compliance statement under the Standardized VCR Program (SVP)
.11 Correction statements under the Tax-Sheltered Annuity Voluntary Correction (TVC) program.
(1) Request for a correction statement under the TVC program:
(a)For an employer with fewer than 25 employees
(b)For an employer with at least 25 and no more than 1,000 employees
(c)For an employer with more than 1,000 employees but less than 10,000 employees
(d)For an employer with 10,000 or more employees
EXEMPTORGANIZATIONS USER FEES
.12 Letter rulings.
(1) Applications with respect to change in accounting period (Form 1128)
Note:No user fee is charged if the procedure described in Rev. Proc. 85–58, 1985–2 C.B. 740, is used by timely filing
the appropriate information return, or if the procedure described in Rev. Proc. 76–10, 1976–1 C.B. 548, for organiza-
tions with group exemptions is followed.
(2) Applications with respect to change in accounting method (Form 3115)
January 5, 19982301998–1 I.R.B.
$125
$125
$700
$1,400
$2,800
$5,600
$1,250
$1,000
$375
$1,250
$2,000
$3,500
$6,500
$750
$1,500
$100
$1,500
$500
$1,250
$5,000
$10,000
$350
$500
$1,250
$5,000
$10,000
$130
$130

CATEGORYFEE
Note:No user fee is charged if the method described in Rev. Proc. 92–74, 1992–2 C.B. 442, or that described in Rev.
Proc. 92–75, 1992–2 C.B. 448, is used. Taxpayers complying timely with whichever of those revenue procedures is ap-
plicable will be deemed to have obtained the consent of the Commissioner of Internal Revenue to change their method
of accounting.
(3)Advance approval of scholarship grant-making procedures of a private foundation that has an agreement for
the administration of the scholarship program with the National Merit Scholarship Corp., or similar organiza-
tion administering a scholarship program shown to meet Service requirements
(4)Request for a letter ruling as to whether an organization exempt from federal income tax is required to file an
annual return under §6033
Note 1: See Rev. Proc. 95–48, 1995–2 C.B. 418, which specifies that governmental units and affiliates of governmental
units that are exempt from federal income tax under §501(a) are not required to file annual information returns on Form
990, Return of Organization Exempt from Income Tax.
Note 2:There is no additional charge for a determination of the §6033 filing requirement from an organization seeking
recognition of exempt status under §501 if the organization submits the information required by line 9 of Part I of Form
1023, Application for Recognition of Exemption under Section 501(c)(3) of the Code, or submits a separate written re-
quest with its application for recognition of exemption. Only the user fee for the initial application for recognition of ex-
emption applies.
(5) Request for approval of an organization’s exempt status under § 501(c)(25)
(6) All other letter rulings
Reduced fees applicable to all other letter rulings:
(a)Organizations with gross receipts less than $150,000
Note:An exempt organization seeking a reduced fee must certify in the letter ruling request that its gross receipts for
the last taxable year before the request is filed were less than $150,000.
(b)Letter ruling requests from U.S. citizens and resident alien individuals, domestic trusts, and domestic es-
tates whose “total income” as reported on their federal income tax return (as amended) filed for a full (12
months) taxable year ending before the date the request is filed, plus any interest income not subject to
tax under §103 (interest on state and local bonds) for that period, is less than $150,000
Note:The reduced fee applies to a married individual if the combined gross income of the applicant and the applicant’s
spouse is less than $150,000. The gross incomes of the applicant and the applicant’s spouse are not combined, however,
if the applicant is legally separated from his or her spouse and the spouses do not file a joint income tax return with each
other. In the case of a letter ruling request from a domestic estate or trust that, at the time the request is filed, has not
filed an income tax return for a full taxable year, the reduced fee will be applicable if the decedent’s or (in the case of an
individual grantor) the grantor’s total income as reported on the last return filed for a full taxable year ending before the
date of death or the date of the transfer, taking into account any additions required to be made to total income described
in this subparagraph, is less than $150,000.
(c)Letter ruling requests in which a taxpayer requests substantially identical letter rulings for multiple enti-
ties with a common member or activity, or multiple members of a common entity, each additional letter
ruling request after the $2,100 fee or the $600 reduced fee, as applicable, has been paid for the first letter
ruling request
.13 Determination letters and requests for group exemption letters.
(1)Initial application for exemption under §501 or §521 from organizations (other than pension, profit-sharing,
and stock bonus plans described in §401) that have had annual gross receipts averaging not more than
$10,000 during the preceding four years, or new organizations that anticipate gross receipts averaging not
more than $10,000 during their first four years
Note: Organizations seeking this reduced fee must sign a certification with their application that the receipts are or will
be not more than the indicated amounts.
(2)Initial application for exempt status from organizations otherwise described in paragraph (1) of this section
6.13 whose actual or anticipated gross receipts exceed the $10,000 average annually
Note:If an organization that is already recognized as exempt under §501(c) seeks reclassification under another sub-
paragraph of §501(c), a new user fee will be charged whether or not a new application is required. An additional fee ap-
plies to organizations that seek recognition of exemption under §501(c)(4) (unless requested at the time of the
§501(c)(3) application) for a period for which they do not qualify for exemption under §501(c)(3) because their appli-
cation was filed late and they do not qualify for relief under §301.9100–1.
(3)Group exemption letters
1998–1 I.R.B.231January 5, 1998
$200
$200
$500
$2,100
$600
$600
$200
$150
$500
$500

SECTION 7. MAILING ADDRESS
FOR REQUESTING LETTER
RULINGS, DETERMINATION
LETTERS, ETC.
.01 Matters handled by the National
Office.Requests should either be mailed
to the appropriate address set forth in this
section 7.01, or hand delivered to the drop
box at the 12th Street entrance of 1111
Constitution Avenue, NW, Washington,
DC. No dated receipt will be given at the
drop box.
(1) Employee plans letter rulings under
Rev. Proc. 78–37, 79–61, 79–62, 87–50,
90–49, 94–41, 94–42 or 98–4:
Employee Plans Division
Internal Revenue Service
Assistant Commissioner(EP/EO)
Attention: CP:E:EP:T
P.O. Box 14073, Ben Franklin
Station
Washington, DC 20044
(2)Employee plans opinion letters,
advisory letters, or notification letters
(that is, notification letters with respect to
mass submitters’regional prototype
plans) under Rev. Proc. 89–9, 89–13 or
98–4:
Internal Revenue Service
Attention: CP:E:EP
P.O. Box 14073
Ben Franklin Station
Washington, DC 20044
(3) Employee plans compliance state-
ments under Rev. Proc. 94–62:
Internal Revenue Service
Attention: CP:E:EP:VCR
P.O. Box 14073
Ben Franklin Station
Washington, DC 20044
(4) Employee plans correction state-
ments under Rev. Proc. 95–24:
Internal Revenue Service
Attention: CP:E:EP:TVC
P.O. Box 14073
Ben Franklin Station
Washington, DC 20044
(5) Employee plans administrative
scrutiny determinations under Rev. Proc.
93–41:
Internal Revenue Service
Attention: CP:E:EP
ADMINISTRATIVE SCRUTINY
P.O. Box 14073
Ben Franklin Station
Washington, DC 20044
(6) Exempt organizations letter rulings:
Exempt Organizations Division
Internal Revenue Service
Assistant Commissioner(EP/EO)
Attention: CP:E:EO:P:2
P.O. Box 120, Ben Franklin
Station
Washington, DC 20044
.02Matters handled by the Ohio Key
District Office.The following types of
requests and applications are handled by
the Ohio Key District Office and should
be sent to the Internal Revenue Service
Center in Covington, Kentucky, at the ad-
dress shown below: requests for determi-
nation letters, regional prototype notifica-
tion letters and volume submitter advisory
letters on the qualified status of employee
plans under §§401, 403(a), and 409, and
the exempt status of any related trust
under §501; applications for recognition
of tax exemption on Form 1023, Form
1024 and Form 1028; and other applica-
tions for recognition of qualification or
exemption. The address is:
Internal Revenue Service
P.O. Box 192
Covington, KY41012-0192
Applications shipped by Express Mail
or a delivery service should be sent to:
Internal Revenue Service
201 West RivercenterBlvd.
Attn: Extracting Stop 312
Covington, KY41011
SECTION 8. REQUESTS
INVOLVING MULTIPLE OFFICES,
FEE CATEGORIES, ISSUES,
TRANSACTIONS, OR ENTITIES
.01 Requests involving several offices.
If a request dealing with only one transac-
tion involves more than one of the offices
within the National Office (for example,
one issue is under the jurisdiction of the
Associate Chief Counsel (Domestic) and
another issue is under the jurisdiction of
the Assistant Commissioner (Employee
Plans and Exempt Organizations)), only
one fee applies, namely the highest fee
that otherwise would apply to each of the
offices involved. See Rev. Proc. 98–1,
this bulletin, for the user fees applicable
to issues under the jurisdiction of the As-
sociate Chief Counsel (Domestic), the As-
sociate Chief Counsel (Employee Bene-
fits and Exempt Organizations), the
Associate Chief Counsel (Enforcement
Litigation), or the Associate Chief Coun-
sel (International).
.02 Requests involving several fee cat-
egories. If a request dealing with only
one transaction involves more than one
fee category, only one fee applies, namely
the highest fee that otherwise would apply
to each of the categories involved.
.03 Requests involving several issues.
If a request dealing with only one transac-
tion involves several issues, or a request
for a change in accounting method deal-
ing with only one item or sub-method of
accounting involves several issues, or a
request for a change in accounting period
dealing with only one item involves sev-
eral issues, the request is treated as one
request. Therefore, only one fee applies,
namely the fee that applies to the particu-
lar category or subcategory involved. The
addition of a new issue relating to the
same transaction will not result in an ad-
ditional fee, unless the issue places the
transaction in a higher fee category.
.04 Requests involving several unre-
lated transactions. If a request involves
several unrelated transactions, or a re-
quest for a change in accounting method
involves several unrelated items or sub-
methods of accounting, or a request for a
change in accounting period involves sev-
eral unrelated items, each transaction or
item is treated as a separate request. As a
result, a separate fee will apply for each
unrelated transaction or item. An addi-
tional fee will apply if the request is
changed by the addition of an unrelated
transaction or item not contained in the
initial submission.
.05 Requests for separate letter rulings
for several entities. Each entity involved
in a transaction (for example, an exempt
hospital reorganization) that desires a sep-
arate letter ruling in its own name must
pay a separate fee regardless of whether
the transaction or transactions may be
viewed as related. In certain situations,
however, a reduced fee may be charged.
See sections 6.01(10)(d) and (e) and
6.12(6)(c) of this revenue procedure.
SECTION 9. PAYMENTOFFEE
.01 Method of payment.Each request
to the Service for a letter ruling, determi-
nation letter, opinion letter, etc. must be
accompanied by a check or money order,
payable to the Internal Revenue Service,
in the appropriate amount. Taxpayers
should not send cash.
January 5, 19982321998–1 I.R.B.

.02 Transmittal forms.Form 8717,
User Fee for Employee Plan Determina-
tion Letter Request, and Form 8718, User
Fee for Exempt Organization Determina-
tion Letter Request, are intended to be
used as attachments to determination let-
ter applications. Space is reserved for the
attachment of the applicable user fee
check or money order. No similar form
has been designed to be used in connec-
tion with requests for letter rulings, opin-
ion letters, notification letters, advisory
letters, compliance statements, correction
statements or administrative scrutiny de-
terminations.
.03 Effect of nonpayment or payment
of incorrect amount. It will be the general
practice of the Service that:
(1) The respective offices within the
Service that are responsible for issuing let-
ter rulings, determination letters, etc. will
exercise discretion in deciding whether to
immediately return submissions that are
not accompanied by a properly completed
check or money order or that are accom-
panied by a check or money order for less
than the correct amount.In those in-
stances where the submission is not imme-
diately returned, the requester will be con-
tacted and given a reasonable amount of
time to submit the proper fee. If the
proper fee is not received within a reason-
able amount of time, the entire submission
will then be returned. However, the re-
spective offices of the Service, in their dis-
cretion, may defer substantive considera-
tion of a submission until proper payment
has been received.
(2) An application for a determination
letter will not be returned merely because
Form 8717 or Form 8718 was not at-
tached.
(3) The return of a submission to the re-
quester may adversely affect substantive
rights if the submission is not perfected
and resubmitted to the Service within 30
days of the date of the cover letter return-
ing the submission. Examples of this are:
(a) where an application for a determina-
tion letter is submitted prior to the expira-
tion of the remedial amendment period
under § 401(b) and is returned because no
user fee was attached, the submission will
be timely if it is resubmitted by the expi-
ration of the remedial amendment period
or, if later, within 30 days after the appli-
cation was returned; and (b) where an ap-
plication for exemption under §501(c)(3)
is submitted before expiration of the pe-
riod provided by §1.508–1(a)(2) and is
returned because no user fee was at-
tached, the submission will be timely if it
is resubmitted before expiration of the pe-
riod provided by §1.508–1(a)(2) or
within 30 days, whichever is later.
(4) If a check or money order is for
more than the correct amount, the submis-
sion will be accepted and the amount of
the excess payment will be returned to the
requester.
SECTION 10. REFUNDS
.01 General rule.In general, the fee
will not be refunded unless the Service
declines to rule on all issues for which a
ruling is requested. In the case of a re-
quest for a letter ruling, if the case has
been closed by the Service because essen-
tial information has not been submitted
timely, the request may be reopened and
treated as a new request, but the taxpayer
must pay another user fee before the case
can be reopened. See section 11.04(5) of
Rev. Proc. 98-4, page 113, this bulletin.
.02 Examples.
(1) The following are examples of sit-
uations in which the fee will not be re-
funded:
(a)The request for a letter ruling, de-
termination letter, etc. is withdrawn at any
time subsequent to its receipt by the Ser-
vice, unless the only reason for with-
drawal is that the Service has advised the
requester that a higher user fee than was
sent with the request is applicable and the
requester is unwilling to pay the higher
fee.
(b)The request is procedurally defi-
cient, although accompanied by the
proper fee and is not timely perfected by
the requester.When there is a failure to
timely perfect the request, the case will be
considered closed and the failure to per-
fect will be treated as a withdrawal for
purposes of this revenue procedure.
(c)Aletter ruling, determination letter,
etc. is revoked in whole or in part at the
initiative of the Service.The fee paid at
the time the original letter ruling, determi-
nation letter, etc. was requested will not
be refunded.
(d)The request contains several issues
and the Service rules on some, but not all,
of the issues.The highest fee applicable
to the issues on which the Service rules
will not be refunded.
(e)The taxpayer asserts that a letter
ruling the taxpayer received covering a
single issue is erroneous or not responsive
(other than an issue on which the Service
has declined to rule) and requests recon-
sideration. The Service, upon reconsider-
ation, does not agree that the letter ruling
is erroneous or is not responsive. The fee
accompanying the request for reconsider-
ation will not be refunded.
(f)The situation is the same as de-
scribed in subparagraph (e) of this section
10.02(1) except that the letter ruling cov-
ered several unrelated transactions. The
Service, upon reconsideration, does not
agree with the taxpayer that the letter rul-
ing is erroneous or is not responsive for
all of the transactions, but does agree that
it is erroneous as to one transaction. The
fee accompanying the request for recon-
sideration will not be refunded except to
the extent applicable to the transaction for
which the Service agrees the letter ruling
was in error.
(g)The request is for a supplemental
letter ruling, determination letter, etc.
concerning a change in facts (whether sig-
nificant or not) relating to the transaction
ruled on.
(h)The request is for reconsideration
of an adverse or partially adverse letter
ruling or a final adverse determination let-
ter, and the taxpayer submits arguments
and authorities not submitted before the
original letter ruling or determination let-
ter was issued.
(2) The following are examples of sit-
uations in which the fee will be re-
funded:
(a)In a situation to which section
10.02(1)(h) of this revenue procedure
does not apply, the taxpayer asserts that a
letter ruling the taxpayer received cover-
ing a single issue is erroneous or is not re-
sponsive (other than an issue on which the
Service declined to rule) and requests re-
consideration. The Service agrees, upon
reconsideration, that the letter ruling is er-
roneous or is not responsive. The fee ac-
companying the taxpayer’s request for re-
consideration will be refunded.
(b)In a situation to which section
10.02(1)(h) of this revenue procedure
does not apply, the requester requests a
supplemental letter ruling, determination
letter, etc. to correct a mistake that the
Service agrees it made in the original let-
ter ruling, determination letter, etc., such
1998–1 I.R.B.233January 5, 1998

SECTION 12.EFFECTON OTHER
DOCUMENTS
.01 Rev. Proc. 97–8, 1997–1 C.B. 610,
is superseded.
SECTION 13. EFFECTIVE DATE
This revenue procedure is effective
January 5, 1998.
SECTION 14. PAPERWORK
REDUCTION ACT
The collections of information con-
tained in this revenue procedure have
been reviewed and approved by the Of-
fice of Management and Budget in accor-
dance with the Paperwork Reduction Act
(44 U.S.C. 3507) under control number
1545–1520.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless the col-
lection of information displays a valid
control number.
The collections of information in this
revenue procedure are in sections
6.01(10)(c), 6.12(6)(a), 6.13(1) and 11.
This information is required to substanti-
ate that a taxpayer or an exempt organiza-
tion seeking to pay a reduced user fee with
respect to a request for a letter ruling is en-
titled to pay the reduced fee; to identify
the user fee category and corresponding
fee required to be paid with respect to de-
termination letter requests; to request re-
consideration of the user fee charged by
the Service and, in connection with such a
request, to indicate whether an oral discus-
sion is desired. This information will be
used to enable the Service to determine
whether the taxpayer or exempt organiza-
tion is entitled to pay a reduced user fee, to
ascertain whether reconsideration of the
user fee is being requested and, if it is
being requested, whether an oral discus-
sion is requested. The collections of infor-
mation are voluntary, to obtain a benefit.
The likely respondents are individuals,
business or other for-profit institutions,
nonprofit institutions, and small busi-
nesses or organizations.
The estimated total annual reporting
and/or recordkeeping burden is 300 hours.
The estimated annual burden per re-
spondent/recordkeeper varies from one
hour to ten hours, depending on individ-
ual circumstances, with an estimated av-
erage of three hours. The estimated num-
ber of respondents and/or recordkeepers
is 90 (requests for reduced fees) and 10
(requests for reconsideration of fee).
The estimated annual frequency of re-
sponses is on occasion.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mater-
ial in the administration of any internal
revenue law. Generally tax returns and
tax return information are confidential, as
required by 26 U.S.C. 6103.
DRAFTING INFORMATION
The principal author of this revenue
procedure is John H. Turner of the Em-
ployee Plans Division. For further infor-
mation regarding this revenue procedure,
contact Mr. Turner at (202) 622-6214 (not
a toll-free number).
APPENDIX
Following is a list of revenue proce-
dures requiring payment of a user fee, an
administrative scrutiny determination
user fee, a voluntary compliance fee, or a
voluntary correction fee.
A. Procedures applicable to both Em-
ployee Plans and Exempt Organizations
Rev. Proc. 98–4, this bulletin, provides
procedures for issuing letter rulings, in-
formation letters, etc. on matters relating
to matters under the jurisdiction of the As-
as a mistake in the statement of facts or in
the citation of a Code section. Once the
Service agrees that it made a mistake, the
fee accompanying the request for the sup-
plemental letter ruling, determination let-
ter, etc. will be refunded.
(c)The taxpayer requests and is
granted relief under §7805(b) in connec-
tion with the revocation in whole or in
part, of a previously issued letter ruling,
determination letter, etc. The fee accom-
panying the request for relief will be re-
funded.
(d)In a situation to which section
10.02(1)(d) of this revenue procedure ap-
plied, the taxpayer requests reconsidera-
tion of the Service’s decision not to rule
on an issue. Once the Service agrees to
rule on the issue, the fee accompanying
the request for reconsideration will be re-
funded.
SECTION 11. REQUESTFOR
RECONSIDERATION OFUSER FEE
Ataxpayer that believes the user fee
charged by the Service for its request for a
letter ruling, determination letter, etc. is
either not applicable or incorrect and
wishes to receive a refund of all or part of
the amount paid (see section 10 of this
revenue procedure) may request reconsid-
eration and, if desired, the opportunity for
an oral discussion by sending a letter to
the Internal Revenue Service at the ap-
plicable Post Office Box or other address
given in this section 11. Both the incom-
ing envelope and the letter requesting
such reconsideration should be promi-
nently marked “USER FEE RECONSID-
ERATION REQUEST.” No user fee is
required for these requests. The request
should be marked for the attention of:
January 5, 19982341998–1 I.R.B.
If the matter involves primarily:Mark for the attention of:
Employee plans letterruling requests and all otheremployee Director, Employee Plans Division, CP:E:EP
plans matters handled by the National Office
Exempt organizations letterruling requestsDirector, Exempt Organizations Division, CP:E:EO
Employee plans and/orexempt organizations Chief, Technical/Review Staff
determination letterrequestsOhio Key District Office

sistant Commissioner (Employee Plans
and Exempt Organizations).
B. Procedures Applicable to Employee
Plans Matters other than Actuarial Mat-
ters
Rev. Proc. 75–26, 1975–1 C.B. 722,
sets forth the general procedures of the In-
ternal Revenue Service for the processing
of applications for exemption under
§4975(c)(2) of the Code.
Rev. Proc. 87–50, 1987–2 C.B. 647, as
modified by Rev. Proc. 91–44 and Rev.
Proc. 92–38, sets forth the procedures of
the Service relating to the issuance of rul-
ings and opinion letters with respect to the
establishment of individual retirement ac-
counts and annuities (IRAs) under §408,
the entitlement to exemption of related
trusts or custodial accounts under
§408(e), and the acceptability of the form
of prototype simplified employee pension
(SEP) agreements under §§408(k) and
415.
Rev. Proc. 89–9, 1989–1 C.B. 780, as
modified by Rev. Proc. 90–21; Rev. Proc.
92–41, 1992–1 C.B. 870; Rev. Proc.
93–9, 1993-1 C.B. 474; and as supple-
mented by Rev. Proc. 93–10, 1993–1
C.B. 476, sets forth the procedures of the
Service pertaining to the issuance of
opinion letters relating to master or pro-
totype pension, profit-sharing and annu-
ity plans involving §§401 and 403(a), as
amended by the Tax Reform Act of 1986
(TRA‘86), the Omnibus Budget Recon-
ciliation Act of 1986 (OBRA‘86), the
Omnibus Budget Reconciliation Act of
1987 (OBRA‘87), the Technical and
Miscellaneous Revenue Act of 1988
(TAMRA), and the Omnibus Budget
Reconciliation Act of 1993 (OBRA‘93),
and the status for exemption of related
trusts or custodial accounts under
§501(a).
Rev. Proc. 89–13, 1989–1 C.B. 801, as
modified by Rev. Proc. 90–21, Rev. Proc.
92–41, Rev. Proc. 93–9 and Rev. Proc.
93–12, and as supplemented by Rev.
Proc. 93–10, sets forth the procedures of
the Service for issuing notification letters
relating to the qualification, as to form, of
certain regional prototype defined contri-
bution plans and defined benefit plans,
and provides guidance with respect to the
issuance of determination letters to em-
ployers adopting such plans as to whether
the plans as adopted qualify under §§401
and 403(a) and as to whether any related
trusts or custodial accounts are exempt
under §501(a).
Rev. Proc. 90–21, 1990–1 C.B. 499,
modified Rev. Procs. 89-9 and 89-13 re-
garding certain requirements for approval
by the Service of master and prototype (M
& P) pension, profit-sharing and annuity
plans and regional prototype plans.
Rev. Proc. 92–24, 1992–1 C.B. 739,
provides procedures for requesting deter-
mination letters on the effect on a plan’s
qualified status under §401(a) of the
Code of plan language that permits, pur-
suant to §420, the transfer of assets in a
defined benefit plan to a health benefits
account described in §401(h).
Rev. Proc. 92–38, 1992–1 C.B. 859,
provides notice that individual retirement
arrangement trusts, custodial account
agreements, and annuity contracts must
be amended to provide for the required
distribution rules in §408(a)(6) or (b)(3).
In addition, Rev. Proc. 92–38 modifies
the guidance in Rev. Proc. 87–50 with re-
gard to opinion letters issued to sponsor-
ing organizations, including mass submit-
ters and sponsors of prototype IRAs.
Rev. Proc. 93–41, 1993–2 C.B. 536,
sets forth the procedures of the Service re-
lating to the issuance of an administrative
scrutiny determination as to whether a
separate line of business satisfies the re-
quirement of administrative scrutiny
within the meaning of §1.414(r)-6.
Rev. Proc. 94–-62, 1994–2 C.B. 778, as
modified by Rev. Proc. 96–29, 1996–1
C.B. 693, describes the Voluntary Com-
pliance Resolution (VCR) program and
the Standardized VCR Procedure (SVP).
The VCR program permits plan sponsors
(including employers, plan administrators
and trustees) to correct operational plan
defects that they have identified. Certain
other operational defects may be cor-
rected under the SVP, pursuant to rules set
forth in the applicable sections of Rev.
Proc. 94–62.
Rev. Proc. 95–24, 1995–1 C.B. 694, as
modified by Rev. Proc. 96–50, 1996-2
C.B. 370, establishes the Tax Sheltered
Annuity Voluntary Correction Program
(TVC program). The TVC program per-
mits an employer that offers a tax shel-
tered annuity plan under §403(b) of the
Code to voluntarily identify and correct
defects in the plan. Employers that re-
quest consideration under the TVC pro-
gram, agree to correct the identified de-
fects, and pay the negotiated sanction,
will receive written assurance that the
corrections are acceptable and that the
Service will not pursue revocation of the
income tax exclusion with respect to the
violations identified and corrected.
Rev. Proc. 97–29, 1997–1 C.B. 698,
describes model amendments for SIM-
PLE IRAs; guidance to drafters of proto-
type SIMPLE IRAs on obtaining opinion
letters; permissive amendments to spon-
sors of nonSIMPLE IRAs; the opening of
a prototype program for SIMPLE IRA
Plans; and transitional relief for users of
SIMPLE IRAs and SIMPLE IRAPlans
that have not been approved by the Ser-
vice.
Rev. Proc. 98–6, this bulletin, provides
procedures for issuing determination let-
ters on the qualified status of employee
plans under §§401(a), 403(a), 409, and
4975(e)(7).
C. Employee Plans Actuarial Matters
Rev. Proc. 78–37, 1978–2 C.B. 540,
sets forth the procedure by which a plan
administrator or plan sponsor may obtain
approval of the Secretary of the Treasury
for a change in funding method as pro-
vided by §412(c)(5) of the Code and
§302(c)(5) of ERISA.
Rev. Proc. 79–61, 1979–2 C.B. 575,
outlines the procedure by which a plan
administrator or plan sponsor may request
and obtain approval for an extension of an
amortization period in accordance with
§412(e) of the Code and §304(a) of
ERISA.
Rev. Proc. 79–62, 1979–2 C.B. 576,
outlines the procedure by which a plan
sponsor or administrator may request a
determination that a plan amendment is
reasonable and provides for only de min-
imisincreases in plan liabilities in accor-
dance with §412(f)(2)(A) of the Code
and §304(b)(2)(A) of ERISA.
Rev. Proc. 90–49, 1990–2 C.B. 620,
modifies and replaces Rev. Proc. 89–35,
1989–1 C.B. 917, in order to extend the
effective date to contributions made for
plan years beginning after December 31,
1989, to change the deadline for request-
ing rulings under the revenue procedure,
to revise the information requirements for
a ruling request made under the revenue
procedure, to furnish a worksheet for ac-
tuarial computations, and to provide a
special rule under which certain de min-
imis nondeductible employer contribu-
1998–1 I.R.B.235January 5, 1998

tions to a qualified defined benefit plan
may be returned to the taxpayer without a
formal ruling or disallowance from the
Service.
Rev. Proc. 94–41, 1994–1 C.B. 711,
sets forth procedures for requesting
waivers of the minimum funding standard
described in §412(d) and the issuance of
such waivers by the Assistant Commis-
sioner (Employee Plans and Exempt Or-
ganizations).
Rev. Proc. 94–42, 1994–1 C.B. 717, su-
persedes Rev. Proc. 79–18, 1979–1 C.B.
525, and Rev. Rul. 79–215, 1979–2 C.B.
190, and sets forth a procedure for obtain-
ing approval of an amendment to a quali-
fied plan that, under § 412(c)(8), reduces
the accrued benefits of plan participants.
D. Procedures Applicable to Exempt
Organizations Matters Only
Rev. Proc. 80–27, 1980–1 C.B. 677,
provides procedures under which recogni-
tion of exemption from federal income
tax under §501(c) may be obtained on a
group basis for subordinate organizations
affiliated with and under the general su-
pervision or control of a central organiza-
tion. This procedure relieves each of the
subordinates covered by a group exemp-
tion letter from filing its own application
for recognition of exemption.
Rev. Proc. 90–27, 1990–1 C.B. 514,
sets forth revised procedures with regard
to applications for recognition of exemp-
tion from federal income tax under §§501
and 521.
January 5, 19982361998–1 I.R.B.

1998–1 I.R.B.237January 5, 1998
The following is a cumulative listing
of names of organizations that are
presently challenging, under section 7428
of the Internal Revenue Code, the revoca-
tion of their status as organizations enti-
tled to receive deductible contributions in
declaratory judgment suits in the Tax
Court, the United States District Court
for the District of Columbia, or the
United States Court of Federal Claims.
The purpose of this announcement is to
inform potential donors to these organi-
zations of the protection under 7428(c)
for certain contributions made during the
litigation period.
Protection under section 7428(c) of the
Code begins on the date that the notice of
revocation is published in the Internal
Revenue Bulletin and ends on the date on
which a court first determines that an or-
ganization is not described in section
170(c)(2), as more particularly set forth in
section 7428(c)(1). In the case of individ-
ual contributors, the maximum amount of
contributions protected during this period
is limited to $1,000.00, with a husband
and wife being treated as one contributor.
This protection is not extended to any in-
dividual who was responsible, in whole or
in part, for the acts or omissions of the or-
ganization that were the basis for the re-
vocation. This protection also applies
(but without limitation as to amount) to
organizations described in section
170(c)(2) which are exempt from tax
under section 501(a). If the organization
ultimately prevails in its declaratory judg-
ment suit, deductibility of contributions
would be subject to the normal limitations
set forth under section 170.
I. The organizations listed below con-
tinue to be involved in pending declara-
tory judgment suits under section 7428 of
the Code, challenging revocation of their
status as eligible donees under section
170(c)(2). Protection under section
7428(c) begins on the date indicated.
Anclote Psychiatric Center, Inc.
Tarpon Springs, FL
(January 27, 1992)
At Cost Services, Inc.
New York, NY
(January 5, 1998)
Branch Ministries, Inc. d/b/a The Church
at Pierce Creek
Vestal, NY
(April 10, 1995)
Shirley Caesar Outreach Ministries, Inc.
Durham, NC
(October 16, 1995)
Eastern Orthodox Christian Church in
America
New Albany, OH
(November 20, 1995)
LAC Facilities, Inc. f/k/a Modern Health
Care Services, Inc.
North Miami Beach, FL
(August 29, 1994)
Music Square Church
Van Buren, AR
(August 5, 1996)
Saint Ignatius Orthodox Church
Albany, OH
(November 20, 1995)
Saint Nicholas Orthodox Church
Albany, OH
(November 20, 1995)
United Cancer Council, Inc.
Indianapolis, IN
(March 25, 1991)
II. The Organizations listed below
have timely filed declaratory judgment
suits under section 7428 of the Code dur-
ing 1997. Protection under section
7428(c) begins on the date indicated.
The Children’s Learning Center, Inc.
Rockville, MD
(December 8, 1997)
Oriana House, Inc.
Akron, OH
(October 14, 1997)
Society of Separationists, Inc.
Austin, TX
(December 16, 1996)
Spartanburg Gospel Workshop, Inc.
Spartanburg, SC
(April 4, 1997)
Charles E. Stevens American Atheist
Library and Archives
Austin, TX
(March 3, 1997)
Don Stewart Association
Phoenix, AZ
(July 21, 1997)
Student Ministries, Inc.
Milwaukee, OR
(November 10, 1997)
III. This Announcement serves notice
to potential donors that a court has deter-
mined that the organization listed below
continues to be described in section
170(c)(2) of the Internal Revenue Code.
Jack Rehburg Ministries a/k/a Total
Christian Television
Snow Camp, NC
Part IV. Items of General Interest
Cumulative List of Announcements Relating to Section 7428(c) Validation of Certain
Contributions Made During Pendency of Declaratory Judgment Proceedings from
January 1, 1997 through December 31, 1997

January 5, 19982381998–1 I.R.B.
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
with modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously
published ruling and points out an essen-
tial difference between them.
Modified is used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to Abut not
to B, and the new ruling holds that it ap-
plies to both Aand B, the prior ruling is
modified because it corrects a published
position. (Compare with amplified and
clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used
in a ruling that lists previously published
rulings that are obsoleted because of
changes in law or regulations. Aruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.
Revoked describes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the
new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example, modified
and superseded describes a situation
where the substance of a previously pub-
lished ruling is being changed in part and
is continued without change in part and it
is desired to restate the valid portion of
the previously published ruling in a new
ruling that is self contained. In this case
the previously published ruling is first
modified and then, as modified, is super-
seded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and
that list is expanded by adding further
names in subsequent rulings. After the
original ruling has been supplemented
several times, a new ruling may be pub-
lished that includes the list in the original
ruling and the additions, and supersedes
all prior rulings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current use and for-
merly used will appear in material published in the
Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C.—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contribution Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Proc..—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedral Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Definition of Terms

1998–1 I.R.B.239January 5, 1998
1
Acumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 1997–1 through 1997–26
will be found in Internal Revenue Bulletin 1997–27,
dated July 7, 1997.
Numerical Finding List
1
Bulletins 1997–27 through 1997–52
Announcements:
97–61, 1997–29 I.R.B. 13
97–67, 1997–27 I.R.B. 37
97–68, 1997–28 I.R.B. 13
97–69, 1997–28 I.R.B. 13
97–70, 1997–29 I.R.B. 14
97–71, 1997–29 I.R.B. 15
97–72, 1997–29 I.R.B. 15
97–73, 1997–30 I.R.B. 86
97–74, 1997–31 I.R.B.16
97–75, 1997–32 I.R.B. 28
97–76, 1997–32 I.R.B. 28
97–77, 1997–33 I.R.B. 58
97–78, 1997–34 I.R.B. 11
97–79, 1997–35 I.R.B. 8
97–80, 1997–34 I.R.B. 12
97–81, 1997–34 I.R.B. 12
97–82, 1997–34 I.R.B. 12
97–83, 1997–34 I.R.B. 13
97–84, 1997–34 I.R.B. 13
97–85, 1997–35 I.R.B. 8
97–86, 1997–35 I.R.B. 9
97–87, 1997–35 I.R.B. 9
97–88, 1997–35 I.R.B. 9
97–89, 1997–36 I.R.B. 10
97–90, 1997–36 I.R.B. 10
97–91, 1997–37 I.R.B. 25
97–92, 1997–37 I.R.B. 26
97–93, 1997–36 I.R.B. 11
97–94, 1997–36 I.R.B. 12
97–95, 1997–36 I.R.B. 12
97–96, 1997–39 I.R.B.15
97–97, 1997–38 I.R.B. 22
97–98, 1997–39 I.R.B. 15
97–99, 1997–40 I.R.B. 7
97–100, 1997–40 I.R.B. 8
97–101, 1997–41 I.R.B. 13
97–102, 1997–41 I.R.B. 15
97–103, 1997–41 I.R.B. 16
97–104, 1997–42 I.R.B. 39
97–105, 1997–42 I.R.B. 40
97–106, 1997–45 I.R.B. 11
97–107, 1997–43 I.R.B. 25
97–108, 1997–43 I.R.B. 25
97–109, 1997–45 I.R.B. 12
97–110, 1997–45 I.R.B. 14
97–111, 1997–47 I.R.B. 15
97–112, 1997–46 I.R.B. 20
97–113, 1997–46 I.R.B.21
97–114, 1997–46 I.R.B. 21
97–115, 1997–47 I.R.B. 17
97–116, 1997–48 I.R.B. 25
97–117, 1997–49 I.R.B. 12
97–118, 1997–49 I.R.B. 13
97–119, 1997–50 I.R.B.61
97–120, 1997–50 I.R.B. 61
97–121, 1997–50 I.R.B. 62
97–122, 1997–50 I.R.B. 63
97–123, 1997–51 I.R.B. 28
97–124, 1997–52 I.R.B. 61
97–125, 1997–52 I.R.B. 61
97–126, 1997–52 I.R.B. 62
Court Decisions:
2061, 1997–31 I.R.B. 5
2062, 1997–32 I.R.B. 8
Delegation Orders
97 (Rev. 34), 1997–41 I.R.B. 14
172 (Rev. 5), 1997–28 I.R.B. 6
Notices:
97–37, 1997–27 I.R.B. 4
97–38, 1997–27 I.R.B. 8
97–39, 1997–27 I.R.B. 8
97–40, 1997–28 I.R.B. 6
97–41, 1997–28 I.R.B. 6
97–42, 1997–29 I.R.B. 12
97–43, 1997–30 I.R.B. 9
97–44, 1997–31 I.R.B. 15
97–45, 1997–33 I.R.B. 7
97–46, 1997–34 I.R.B. 10
97–47, 1997–35 I.R.B. 5
97–48, 1997–35 I.R.B. 5
97–49, 1997–36 I.R.B. 8
97–50, 1997–37 I.R.B. 21
97–51, 1997–38 I.R.B. 20
97–52, 1997–38 I.R.B. 20
97–53, 1997–40 I.R.B. 6
97–54, 1997–41 I.R.B. 7
97–55, 1997–40 I.R.B. 6
97–56, 1997–43 I.R.B. 19
97–57, 1997–43 I.R.B. 19
97–58, 1997–45 I.R.B. 7
97–59, 1997–45 I.R.B. 7
97–60, 1997–46 I.R.B.8
97–61, 1997–48 I.R.B.8
97–62, 1997–49 I.R.B.8
97–63, 1997–47 I.R.B. 6
97–64, 1997–47 I.R.B. 7
97–65, 1997–51 I.R.B. 14
97–66, 1997–48 I.R.B.8
97–67, 1997–48 I.R.B.10
97–68, 1997–48 I.R.B. 11
97–69, 1997–48 I.R.B. 12
97–70, 1997–49 I.R.B.9
97–71, 1997–49 I.R.B.9
97–72, 1997–50 I.R.B.7
97–73, 1997–51 I.R.B. 16
97–74, 1997–51 I.R.B. 18
97–75, 1997–51 I.R.B. 18
97–76, void
97–77, 1997–52 I.R.B. 18
Railroad Retirement Quarterly Rate:
1997–28 I.R.B. 5
1997–52 I.R.B. 12
Public Laws
105–35, 1997–43 I.R.B. 13
Proposed Regulations:
REG–103330–97, 1997–51 I.R.B. 24
REG–104893–97, 1997–29 I.R.B. 13
REG–105160–97, 1997–37 I.R.B. 22
REG–105162–97, 1997–48 I.R.B. 13
REG–106043–97, 1997–37 I.R.B. 24
REG–107644–97, 1997–32 I.R.B. 24
REG–107872–97, 1997–47 I.R.B. 11
REG–114000–97, 1997–47 I.R.B. 13
REG–208151–91, 1997–38 I.R.B. 21
REG–243025–96, 1997–51 I.R.B. 25
REG–246250–96, 1997–42 I.R.B. 30
REG–251985–96, 1997–48 I.R.B. 18
REG–252936–96, 1997–51 I.R.B. 27
Revenue Procedures:
97–32, 1997–27 I.R.B. 9
97–32A, 1997–34 I.R.B. 10
97–33, 1997–30 I.R.B. 10\
97–34, 1997–30 I.R.B.14
97–35, 1997–33 I.R.B. 11
97–36, 1997–33 I.R.B. 14
97–37, 1997–33 I.R.B. 18
97–38, 1997–33 I.R.B. 43
97–39, 1997–33 I.R.B. 48
97–40, 1997–33 I.R.B. 50
97–41, 1997–33 I.R.B. 5
97–42, 1997–33 I.R.B. 57
97–43, 1997–39 I.R.B. 12
97–44, 1997–41 I.R.B. 8
97–45, 1997–41 I.R.B. 10
97–46, 1997–42 I.R.B. 10
97–47, 1997–42 I.R.B. 19
97–48, 1997–43 I.R.B. 19
97–49, 1997–43 I.R.B. 22
97–50, 1997–45 I.R.B. 8
97–51, 1997–45 I.R.B. 9
97–52, 1997–46 I.R.B.17
97–53, 1997–47 I.R.B.10
97–54, 1997–50 I.R.B.8
97–55, 1997–51 I.R.B.23
97–56, 1997–52 I.R.B. 18
97–57, 1997–52 I.R.B.20
97–58, 1997–52 I.R.B. 24
97–59, 1997–52 I.R.B. 31
97–60, 1997–52 I.R.B. 39
97–61, 1997–52 I.R.B. 51
Revenue Rulings:
97–27, 1997–27 I.R.B. 4
97–28, 1997–28 I.R.B. 4
97–29, 1997–28 I.R.B. 4
97–30, 1997–31 I.R.B.12
97–31, 1997–32 I.R.B.4
97–32, 1997–33 I.R.B. 4
97–33, 1997–34 I.R.B. 4
97–34, 1997–34 I.R.B. 14
97–35, 1997–35 I.R.B. 4
97–36, 1997–36 I.R.B. 5
97–37, 1997–37 I.R.B.15
97–38, 1997–38 I.R.B.14
97–39, 1997–39 I.R.B. 4
97–40, 1997–39 I.R.B. 8
97–41, 1997–40 I.R.B. 4
97–42, 1997–41 I.R.B. 4
97–43, 1997–42 I.R.B. 8
97–44, 1997–45 I.R.B. 5
97–45, 1997–46 I.R.B.4
97–46, 1997–46 I.R.B.7
97–47, 1997–47 I.R.B.4
97–48, 1997–49 I.R.B.5
97–49, 1997–48 I.R.B. 4
97–50, 1997–49 I.R.B.5
97–51, 1997–49 I.R.B. 4
97–52, 1997–50 I.R.B.4
97–53, 1997–52 I.R.B.13
97–54, 1997–52 I.R.B.9
97–55, 1997–52 I.R.B.7
97–56, 1997–52 I.R.B.11
97–57, 1997–52 I.R.B.16
Social Security Domestic Coverage Threshold:
1997–52 I.R.B. 59

Numerical Finding List
—
Continued
Bulletins 1997–27 through 1997–52
Announcements:
Treasury Decisions:
8722, 1997–29 I.R.B. 4
8723, 1997–30 I.R.B. 4
8724, 1997–36 I.R.B. 4
8725, 1997–37 I.R.B. 16
8726, 1997–34 I.R.B. 7
8727, 1997–34 I.R.B. 5
8728, 1997–37 I.R.B. 4
8729, 1997–38 I.R.B. 4
8730, 1997–38 I.R.B. 16
8731, 1997–42 I.R.B. 6
8732, 1997–42 I.R.B. 4
8733, 1997–43 I.R.B. 8
8734, 1997–44 I.R.B. 5
8735, 1997–43 I.R.B. 4
8736, 1997–50 I.R.B.5
8737, 1997–51 I.R.B. 11
8738, 1997–51 I.R.B. 4
8739, 1997–51 I.R.B.8
January 5, 19982401998–1 I.R.B.

1998–1 I.R.B.241January 5, 1998
Finding List of Current Action on
Previously Published Items
1
Bulletins 1997–27 through 1997–52
*Denotes entry since last publication
Notices:
97–9
Modified by
97–70, 1997–49 I.R.B. 9
Revenue Procedures:
82–36
Modified and superseded by
97–49, 1997–43 I.R.B. 22
96–36
Superseded by
97–34, 1997–30 I.R.B. 14
96–42
Superseded by
97–27, 1997–27 I.R.B. 9
96–48
Superseded by
97–54, 1997–50 I.R.B.8
96–63
Superseded by
97–58, 1997–52 I.R.B. 24
96–64
Superseded by
97–59, 1997–52 I.R.B. 31
97–32
Modified and amplified by
97–32A, 1997–34 I.R.B. 10
Revenue Rulings:
73–67
Revoked by
97–46, 1997–46 I.R.B. 7
75–7
Revoked by
97–48, 1997–49 I.R.B. 5
89–42
Supplemented by
97–31, 1997–32 I.R.B. 4
93–76
Clarified, modified, partially
obsoleted, and superceded by
97–39, 1997–39 I.R.B 4
94–7
Clarified, modified, partially
obsoleted, and superceded by
97–39, 1997–39 I.R.B 4
96–63
Suppplemented and superseded by
97–56, 1997–52 I.R.B. 11
96–64
Supplemented and superseded by
97–57, 1997–52 I.R.B. 16
1
Acumulative finding list for previously published
items mentioned in Internal Revenue Bulletins
1997–1 through 1997–26 will be found in Internal
Revenue Bulletin 1997–27, dated July 7, 1997.

Index
Internal Revenue Bulletins
1997–27 Through 1997–52
For the index of items published during
the first six months of 1997, see I.R.B.
1997–27, dated July 7, 1997.
The abbreviation and number in paren-
thesis following the index entry refer to
the specific item; numbers in roman and
italic type following the parenthesis refer
to the Internal Revenue Bulletin in which
the item may be found and the page
number on which it appears.
Key to Abbreviations:
RRRevenue Ruling
RPRevenue Procedure
TDTreasury Decision
CDCourt Decision
PLPublic Law
EOExecutive Order
DODelegation Order
TDOTreasury Department Order
TCTax Convention
SPRStatement of Procedural
Rules
PTEProhibited Transaction
Exemption
EMPLOYMENT TAX
Penalty:
Guidance regarding waiver of failure to
deposit penalty for certain taxpayers
required to begin using electronic
funds transfer on or after July 1,
1997 (Notice 43) 30, 86
Railroad retirement:
Rate determination; quarterly (July 1,
1997) 28, 5
Social security contribution and benefit
base, 52, 59
Regulations:
26 CFR 31.0–1(a), 31.0–3(f), amended;
31.6302–1(h), added; 31.6302–1(i),
redesignated; 31.6302–1T, removed;
31.6302(c)–3, amended; 31.6302–3T,
removed; federal tax deposits by elec-
tronic funds transfer (TD 8723) 30, 4
26 CFR 31.3401(a)(6)–1, 31.3406–0,
31.3406(d)–3, 31.3406(h)–2, 31.6413-
(a)–3, amended; 31.3406(g)–1(e),
added; 31.9999–0, added effective
10/14/97; 31.9999–0, removed effec-
tive 1/1/99; 35a.9999–0T, removed
effective 10/14/97; 35a.9999–0,
EMPLOYMENT TAX—
Continued
added effective 10/14/97; 35a.9999–0,
–1, –2, –3, –3A, –4T, –5, removed ef-
fective 1/1/99; withholding of tax on
certain U.S. source income paid to
foreign persons (TD 8734) 44,5
26 CFR 301.6634–1, 301.6601–1,
301.6651–1, 1.6013–2(b)(1),
amended; 301.6656–3, added;
301.7122–1(e), revised; 301.7430–0,
–1, –2, –4, –5, amended; 301.7430–6,
revised; miscellaneous sections af-
fected by TBOR 2 and PRWORA
1996 (TD 8725) 37, 16
Railroad retirement; rate determination;
quarterly (October 1997 and January
1998) 52, 12
ESTATE TAX
Marital or charitable bequests (CtD 2062)
32, 8
26 CFR 301.6634–1, 301.6601–1,
301.6651–1, 1.6013–2(b)(1), amended;
301.6656–3, added; 301.7122–1(e), re-
vised; 301.7430–0, –1, –2, –4, –5,
amended; 301.7420–6, revised; miscel-
laneous sections affected by TBOR 2
and PRWORA1996 (TD 8725) 37, 16
EXCISE TAX
Group health plans; access, portability,
and renewability requirements; correc-
tion (Notice 41) 28, 6
Regulations:
26 CFR 40.6302(c)–1, amended;
40.6302(c)–1T, removed; federal tax
deposits by electronic funds transfer
(TD 8723) 30, 4
26 CFR 301.6634–1, 301.6601–1,
301.6651–1, 1.6013–2(b)(1), amended;
301.6656–3, added; 301.7122–1(e), re-
vised; 301.7430–0, –1, –2, –4, –5,
amended; 301.7420– 6, revised; mis-
cellaneous sections affected by TBOR
2 and PRWORA1996 (TD 8725)
37, 16
Rural airport list (RP46) 42, 10
GIFTTAX
Regulations:
26 CFR 301.6634–1, 301.6601–1,
GIFTTAX—Continued
301.6651–1, 1.6013–2(b)(1), amended;
301.6656–3, added; 301.7122–1(e), re-
vised; 301.7430–0, –1, –2, –4, –5,
amended; 301.7420–6, revised; miscel-
laneous sections affected by TBOR 2
and PRWORA1996 (TD 8725) 37, 16
INCOMETAX
Accounting method requests for grace pe-
riod interest (Notice 67) 48, 10
Accuracy-related penalty, TD 8656 cor-
rection (Notice 55) 40,
6
Adoption assistance (Notice 70) 49, 9
Advance rulings on production payments
(RP55) 51, 22
Allocation of interest expense among tax-
payer’s expenditures (Notice 46) 34, 10
Automatic relief for S elections (RP48)
43, 19
Base period T-bill rate, 1997 (RR 49) 48, 4
Calculation of partner’s limited deficit
restoration obligation (RR 38) 38, 14
Capital gain dividends by RICs or REITs;
designation of classes (Notice 64) 47, 7
Capital gains and losses; rates (Notice 59)
45, 7
Changes to RP96–11 (Notice 48) 37, 5
Charitable contributions; business ex-
penses (RP52) 46, 17
Charitable remainder trusts payments
(Notice 68) 48, 11
Community development corporation;
general business credit (RR 51) 49, 4
Consent to change accounting method to
comply with section 475 mark-to-mar-
ket rules (RP43) 39, 12
Cost-of-living adjustments for 1998 (RP
57) 52, 20
Cost-sharing payments (RR 55) 52, 5
CPI adjustment for below-market loans,
1998 (RR 57) 52, 16
Depreciation:
Retail motor fuels outlet (RR29) 28, 4
Elections into mark-to-market account-
ing (Notice 37) 27, 8
Earned income credit; due diligence; paid
preparers (Notice 65) 51, 14
Education incentives; credits; interest de-
duction; individual retirement accounts
(Notice 60) 46, 8
Electing Small Business Trust (ESBT)
qualification (Notice 49) 36, 8
Electronic filing of Form 941, Employer’s
Quarterly Federal Tax Return (RP47)
January 5, 19982421998–1 I.R.B.

1998–1 I.R.B.243January 5, 1998
42, 19; Form 1040 (RP60) 52, 39
Electronic or magnetic media filing:
Specifications for 1997 Forms 1098,
1099, 5498, and W–2G (RP34) 30,
14
Employee plans:
Cost-of-living adjustments, 1998 (No-
tice 58) 45, 7
Covered compensation tables; 1998
(RR 45) 46, 4
Delegation of authority (DO 97 (Rev.
34)) 41, 14
Funding:
Full funding limitations, weighted av-
erage interest rate, July 1997 (Notice
44) 31, 15; August 1997 (Notice 47)
35, 5; September 1997 (Notice 51) 38,
20; October 1997 (Notice 56) 43, 19;
November 1997 (Notice 69) 48; 12;
December 1997 (Notice 74) 51, 18
Highly compensated employee, definition
(Notice 45) 33, 7
Individual retirement plans, definition
of academic period (Notice 53) 40, 6
Minimum distributions; age 70
1
⁄
2
(No-
tice 75) 51, 18
Organizations, functions, and authority
delegations; director, Employee Plans
Division (DO 172(Rev. 5)) 28, 6
Remedial amendment period extension
(RP41) 33, 51
Enhanced oil recovery credit for 1997
(Notice 39) 27, 8
Extension of time to file, Form 926 (No-
tice 42) 29, 12
Foreign base company income (RR 48)
49, 5
Forms 1096, 1098, 1099 series, 5498,
W–2G:
Reproduction of forms; RP97–32,
modified and amplified (RP97–32A)
34, 10;Requirements for reproduc-
ing paper substitutes (RP27) 27, 9
Fringe benefits aircraft valuation formula
(RR 33) 34, 4
Hope Scholarship Credit; Lifetime Learn-
ing Credit; information reporting (No-
tice 73) 51, 16
Inflation-adjusted numbers for 1998, sec-
tion 1274A(RR 56) 52, 11
Insurance companies; segregated asset ac-
counts (RR 46) 46, 7
Intercompany transactions on separate en-
tity basis (RP49) 43, 22
Interest:
Investment:
Federal short-term, mid-term, and
long-term rates for July 1997 (RR
27) 27, 4; August 1997 (RR 30) 31,
12; September 1997 (RR 36) 36, 5;
October 1997 (RR 41) 40,4; No-
vember 1997 (RR 44) 45, 5; De-
cember 1997 (RR 50) 49,5
Rates:
Underpayments and overpayments for
calendar quarter beginning October
1, 1997 (RR 40) 39, 8; beginning
January 1, 1998 (RR53) 52, 13
International operation of ships and air-
craft; income exempt from tax (RR 31)
32, 4
Inventories:
LIFO:
Automobile dealers (RR 42) 41, 4;
(RP44) 41, 8
Price indexes, department stores,
May 1997 (RR 28) 28, 4; June
1997 (RR 32) 33, 4; July 1997
(RR 37) 37, 15; August 1997 (RR
43) 42,8; September 1997 (RR
47) 47, 4; October 1997 (RR 52)
50, 4
Late S corporation elections (RP40) 33, 50
Leased property, substantial modification
(Notice 72) 50, 7
Line pack gas; cushion gas (RR 54) 52, 9
Low-income housing:
Bond factor amounts, July–September
1997 (RR 34) 34, 4
Tax credit (RP42) 33, 57
Magnetic media filing; partnership (No-
tice 77) 52, 18
Marginal production rates for 1997 (No-
tice 38) 27, 8
Mark-to-market accounting method for
dealers in securities (RR 39) 39, 4
Material limitation on surviving spouse’s
right to income (Notice 63) 47, 6
Methods of accounting:
Automatic consent to change (RP37)
33, 18
Last-in, first-out inventory method (RP
36) 33, 14
Original issue discount (RP39) 33, 48
Package design costs (RP35) 33, 11
Warranty contracts (RP38) 33, 43
Mutual life insurance companies; differ-
ential earnings rate (RR 35) 35, 4
Notice of levy used to collect delinquent
tax in 1998 (Notice 71) 49, 9
On-line filing program; Form 1040 (RP
61) 52, 51
Optional rules for substantiating certain
travel etc., expenses (RP45) 41, 10
Optional standard mileage rates, 1998
(RP58) 52, 24
Penalties; substantial understatement (RP
56) 52, 18
Per diem allowances, 1998 (RP59) 52, 31
Presidentially declared disasters in North
Dakota and Minnesota (Notice 62) 49, 8
Private delivery services; timely filing or
payment (Notice 50) 37, 21
Proposed regulations:
26 CFR 1.125–1, –2, amended; tax treat-
ment of cafeteria plans (REG–243025–
96) 51, 25
26 CFR 1.263A–0, amended; rules for
property produced in a farming busi-
ness (REG–208151–91) 38, 21
26 CFR 1.401(b)–1; remedial amend-
ment period (REG–106043–97) 37, 24
26 CFR 1.411(d)–4, amended; permitted
elimination of preretirement optional
forms benefit (REG–107644–97)
32, 24
26 CFR 1.465–27, added; qualified
nonrecourse financing under section
465(b)(6) (REG–105160–97) 37, 22
26 CFR 1.743–2, added; 301.6109–1,
amended; 301.7701–2, –3, amended;
elective entity classification (REG–
105162–97) 48, 13
26 CFR 1.863–3, amended; 1.936–6,
added; source of income from sales
of inventory partly from sources
within a possession of the U.S.
(REG–251985–96) 48, 18
26 CFR 1.894–1(d), added; guidance re-
garding claims for certain income tax
convention (REG–104893–97) 29, 13
26 CFR 1.1441–1 (e)(4)(iv), revised;
Form W–8, electronic filing
(REG–107872–97) 47, 11
26 CFR 1.1441–3(b), revised; sales of
obligations between interest pay-
ment dates; Withholding on interest
(REG–114000–97) 47, 13
26 CFR 301.6104(e)–0, –1, –2, –3,
added; tax-exempt organizations,
public disclosure requirements,
guidance availability and hearing
(REG–246250–96) 42, 30
26 CFR 301.6109–1, amended;
301.6109–3, added; adoption tax-
payer identification numbers
(REG–103330–97) 51, 24
26 CFR 301.7623–1, revised; viola-
tions of Internal Revenue laws, re-
wards (REG–252936–96) 51, 27
INCOMETAX—ContinuedINCOMETAX—ContinuedINCOMETAX—Continued

Punitive damages for personal injuries
(CtD 2061) 31, 5
Qualified state tuition programs (Notice
52) 38, 20
Regulations:
26 CFR 1.42–15, added; low-income
housing tax credit, available unit rule
(TD 8732) 42, 4
26 CFR 1.42–16, added; 1.42–16T, re-
moved; low-income housing tax
credit, federal grants (TD 8731) 42, 6
26 CFR 1.61–4, 1.162–12(a), 1.263A–
1, 1.471–6, amended; 1.263A–4T, re-
vised; rules for property produced in
a farming business (TD 8729) 38, 4
26 CFR 1.125–4T, added; tax treatment
of cafeteria plans (TD 8738) 51, 4
26 CFR 1.163–5(c)(2)(i)(B)(5),
1.165–12, 1.817–7, 1.1441–8, 1.1445–5,
1.6041–1, –2, –3, 1.6041–7, 1.6042–2,
–4, 1.6043–2, 1.6044–2, 1.6045–1, –2,
1.6049–4, –5, –6, –7, –8(a), 1.6050A,
1.6050H–1, 1.6050N–1, 1.6071–1,
301.6109–1, 301.6114–1,301.6402–3,
301.6721–0, 1.1441–3, 1.871–14,
1.1441–0, –9, 1.1442–3, 1.6041–8,
1.6041A–1, added; 1.871–6,1.1441–1,
–2, –5, –6,1.1442–1, –2, 1.1443–1,
1.1461–1, –2, 1.1462–1, 1.1463–1,
1.6041–4, 1.6044–3, –5, 1.6091–1-
(b)(15),revised; 1.1441–4T, 1.1461–3,
–4, 1.6045–1T, –2T, removed;
1.1441–8T,redesignated; withhold-
ing of tax on certain U.S. source in-
come paid to foreign persons and re-
lated collection, refunds, and credits
(TD 8734) 44, 5
26 CFR 1.263A–0, –1, –15, amended;
1.263A, added; 1.263A–7T, re-
moved; procedure for changing a
method of accounting under section
263A(TD 8728) 37, 4
26 CFR 1.302–2, amended; 1.1059-
(e)(1), added; extraordinary divi-
dends (TD 8724) 36, 4
26 CFR 1.401(b)–1, amended; 1.401-
(b)–1T, added; remedial amendment
period (TD 8727) 34, 5
26 CFR 1.501(c)(5)–1, amended; tax-
exempt organizations, requirements
(TD 8726) 34, 7
26 CFR 1.704–3, 1.1245–1, amended;
allocations of depreciation recapture
among partners in a partnership (TD
8730) 38, 16
26 CFR 1.861–2, 1.864–5, 1.871–7,
1.881–2, 1.884–1, 1.7701(1)–1; se-
curities lending transactions, certain
payments made (TD 8735) 43, 4
26 CFR 1.894–1T(a) through (c),
added; guidance regarding claims for
certain income tax convention (TD
8722) 29, 4
26 CFR 1.6038–2, 1.6046–1(g),
301.6114–1, 301.7701(b)–0, –3, –7,
–8; treaty-based return positions (TD
8733) 43, 8
26 CFR 1.6302–1, –2, amended;
1.6302–1T, –2T, –3T, –4T, removed;
1.6302–3(c), revised; 1.6302–4,
added; federal tax deposits by elec-
tronic funds transfer (TD 8723) 30, 4
26 CFR 53.6071–1T(f), –1(f), amended;
time for filing Form 4720 return (TD
8736) 50, 5
26 CFR 301.6109–1, amended;
301.6109–1T, –3T, added; adoption
taxpayer identification numbers (TD
8739) 51, 8
26 CFR 301.6334–1, 301.6601–1,
301.6651–1, 1.6013–2(b)(1), amended;
301.6656–3, added; 301.7122–1(e), re-
vised; 301.7430–0, –1, –2, –4, –5,
amended; 301.7430–6, revised; miscel-
laneous sections affected by TBOR 2
and PRWORA1996 (TD 8725) 37, 16
26 CFR 301.7623–1, amended;
301.7623–1T, added; violations of In-
ternal Revenue laws, rewards (TD
8737) 51, 11
Securities lending transaction notice (Notice
66) 48, 8
Section 911(d)(4) waiver (RP51) 45, 9
Substitute printed, computer-prepared,
and computer-generated tax forms
and schedules for 1997 (RP54) 50, 8
Tax forms and instructions:
Electronic Federal Tax Payment Sys-
tem (EFTPS); electronic remittance
system for federal tax deposits and
payments (RP33) 30, 10
Taxpayer Browsing Protection Act (PL
105–35) 43, 13
Treatment of Hong Kong and China (No-
tice 40) 28, 6
Work Opportunity and Welfare-to-Work
tax credits (Notice 54) 41, 7
Year 2000 costs; computer software (RP
50) 45, 8
Year 2000 date standard policy (Notice
61) 48, 8
January 5, 19982441998–1 I.R.B.
INCOMETAX—ContinuedINCOMETAX—ContinuedINCOMETAX—Continued

Notes
1998–1 I.R.B.245January 5, 1998

Notes
January 5, 19982461998–1 I.R.B.

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