Rev. Proc. 79-46

Section 1. Purpose

The purpose of this Revenue Procedure is to supersede Rev. Proc. 73-8, 1973-1 C.B. 754, by providing revised procedures for furnishing technical advice to District Directors and Chiefs, Appeals Offices, by the Assistant Commissioner (Technical). It is also intended to inform taxpayers of their rights when a District Director or a Chief, Appeals Office, requests such advice.

Sec. 2. Scope

.01 The Assistant Commissioner (Technical) acts as the principal assistant to the Commissioner in providing basic principles and rules for the uniform interpretation and application of the Federal tax laws under the jurisdiction of the Assistant Commissioner (Technical). The procedures for obtaining technical advice specifically applicable to Federal firearms taxes under Subtitle E of the Internal Revenue Code of 1954 are under the jurisdiction of the Bureau of Alcohol, Tobacco and Firearms. The procedures for obtaining technical advice specifically applicable to employee plans and exempt organizations are under the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations). In addition, the procedures applicable to obtaining technical advice for employee plans and exempt organizations are followed in obtaining technical advice relating to exemption of farmers' cooperatives from tax under section 521, even though the Assistant Commissioner (Technical) has jurisdiction for issuing technical advice under this section of the Code. Further, the Assistant Commissioner (Technical) has jurisdiction for issuing technical advice under section 526, relating to shipowners' protection and indemnity associations; section 527(a), (b), (c), (d), (e), and (g), relating to political organizations, and section 528, relating to certain homeowners associations, pursuant to this Revenue Procedure.

.02 In the Office of the Assistant Commissioner (Technical) the authority to issue technical advice has been largely redelegated to the Branch Chiefs in the Individual Tax Division and the Corporation Tax Division, within their respective areas of jurisdiction.

Sec. 3. Changes

.01 Section 2.01 revises section 2.04 of Rev. Proc. 73-8 to reflect the areas under the jurisdiction of the Assistant Commissioner (Technical).

.02 Sections 4.01 and 4.02 were added to define taxpayer and National Office, respectively, for purposes of this Revenue Procedure.

.03 Section 4.04 revises section 2.01 of Rev. Proc. 73-8 to redefine those areas in which technical advice may be requested.

.04 Section 4.05 revises section 2.02 of Rev. Proc. 73-8 to provide a reference to section 601.201(n) of the Statement of Procedural Rules which provides the procedures to be followed in requesting determination of an organization's exempt status under section 521 of the Code.

.05 Section 4.07 revises section 2.05 of Rev. Proc. 73-8 to redefine those cases under the jurisdiction of an Appeals office. Also, this section was revised to include in the definition of "same taxpayer", a member of an affiliated group within the meaning of section 1504 of the Code.

.06 Section 5.05 expands section 4.05 of Rev. Proc. 73-8 to request taxpayers to comment on any legislation, tax treaties, regulations, revenue rulings, revenue procedures or court decisions contrary to the taxpayer's position.

.07 Sections 5.07, 5.08, and 5.09 were added and section 5.10 revises section 4.07 of Rev. Proc. 73-8 to provide the procedures for taxpayers submitting statements of proposed deletions in accordance with section 6110 of the Code.

.08 Section 7 was added to provide procedures for withdrawing requests for technical advice.

.09 Section 8.03, a new section, provides that no tape, stenographic, or other verbatim recording of a conference will be made. Section 8.05 limits an invitation to an additional conference subsequent to the conference of right to when an adverse holding is proposed but on a new issue or on the same issue but different grounds than those discussed at the first conference. Sections 8.07 and 8.08 revise section 6.05 of Rev. Proc. 73-8 to require the taxpayer to contact the district or Appeals office to obtain information as to the status of a request for technical advice.

.10 Section 9 revises section 7 of Rev. Proc. 73-8 to implement new procedures designed to expedite the handling of technical advice requests in the National Office and to include the procedures that a taxpayer must use to protest the disclosure of certain information in the technical advice memorandum under section 6110 of the Code.

.11 Section 11 expands section 9 of Rev. Proc. 73-8 to provide circumstances under which a technical advice memorandum that revokes a previously issued technical advice memorandum or letter ruling will not be applied retroactively.

Sec. 4. Definition and Nature of Technical Advice

.01 For purposes of this Revenue Procedure the term "taxpayer" includes all persons subject to any provision of the Internal Revenue Code and their representative(s) and issuers of section 103 obligations.

.02 Any reference to National Office in this Revenue Procedure means only the Office of the Assistant Commissioner (Technical).

.03 For purposes of this Revenue Procedure any reference to District Director or district office, also includes the office of the Director of International Operations, where appropriate. Any reference to Chief, Appeals Office also includes Associate Chief, Appeals Office.

.04 "Technical advice", as used herein, means advice or guidance furnished by the National Office upon request of a district or an Appeals office in response to any technical or procedural question that develops during any stage of any proceedings as to the interpretation and proper application of tax law, tax treaties, regulations, revenue rulings or other precedents published by the National Office to a specific set of facts. Such proceedings include the examination of a taxpayer's return, consideration of a taxpayer's claim for refund or credit, or any other matter involving a specific taxpayer under the jurisdiction of the Chief, Examination Division, such as the consideration of a taxpayer's application to enter into an agreement as to useful life, method and rate of depreciation of business property provided by section 167(d) of the Code. Such proceedings include an examination to determine whether obligations issued are described in section 103(a) of the Code. Such proceedings also include the processing and consideration of nondocketed cases in an Appeals office. Technical advice is furnished as a means of assisting Service personnel in closing cases and establishing and maintaining consistent holdings throughout the Internal Revenue Service. A District Director or an Appeals office may raise an issue in any taxable period, even though technical advice may have been asked for and furnished with regard to the same or a similar issue for another taxable period. Technical advice does not include memoranda on matters of general technical application furnished to district or Appeals offices where the issues are not raised in connection with a proceeding involving a specific taxpayer.

.05 If a District Director, Chief, Appeals Office or a taxpayer requests technical advice with respect to a determination letter under section 521 of the Code, the procedures pursuant to section 601.201(n) of the Statement of Procedural Rules are to be followed.

.06 Only the National Office can revoke a ruling letter. Therefore, if a District Director or a Chief, Appeals Office, is of the opinion that a ruling letter previously issued to a taxpayer should be modified or revoked the procedures set forth in section 5 of this Revenue Procedure are to be followed.

.07 The provisions of this Revenue Procedure apply only to a case under the jurisdiction of a District Director or a Chief, Appeals Office. Technical advice may be requested on issues previously considered in a prior Appeals disposition, not based on mutual concessions for the same taxable periods of the same taxpayer, if the Appeals office that had the case concurs in the request. Technical advice may not be requested by a District Director on an issue if an identical issue involving the same taxpayer (or a related taxpayer within the meaning of section 267 of the Code or a member of an affiliated group of which the taxpayer is also a member within the meaning of section 1504) is currently under consideration by an Appeals office. A case remains under the jurisdiction 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 sections 267 and 1504, respectively) 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 tax is dependent upon the resolution of that issue, technical advice may not be requested by a District Director concerning the applicability of any of the taxes involved.

Sec. 5. Requesting Technical Advice

.01 It is the responsibility of the district or Appeals office to determine whether technical advice is to be requested on any issue being considered. However, while the case is under the jurisdiction of the District Director or the Chief, Appeals Office, a taxpayer may request that an issue be referred to the National Office for technical advice on the grounds that a lack of uniformity exists as to the disposition of the issue, or that the issue is so unusual or complex as to warrant consideration by the National Office. While taxpayers are encouraged to make written requests setting forth the facts, law, and argument with respect to the issue, and reasons for requesting National Office technical advice, a taxpayer may make the request orally. If, after considering the taxpayer's request, the examining officer or Appeals Officer is of the opinion that the circumstances do not warrant referral of the case to the National Office, the examining officer or Appeals Officer will so advise the taxpayer. (See section 6 for taxpayer's appeal rights when an examining officer or an Appeals Officer declines to request technical advice.)

.02 When technical advice is to be requested, whether or not upon the request of the taxpayer, the taxpayer will be advised, except as noted in section 5.10. If the examining officer or the Appeals Officer initiates the action, the taxpayer will be furnished a copy of the statement of the pertinent facts and the question or questions proposed for submission to the National Office. The request for advice should be worded so as to avoid possible misunderstanding, in the National Office, of the facts or of the specific point or points at issue.

.03 If the Service initiates the request for technical advice, the taxpayer will be given 10 calendar days, after receipt of the statement of facts and specific questions from the district office or the Appeals office, to indicate in writing the extent, if any, to which the taxpayer may not be in complete agreement. An extension of time beyond the 10 calendar days must be justified by the taxpayer in writing and approved by the Chief, Examination Division or the Chief, Appeals Office. Every effort should be made to reach agreement as to the facts and the specific point(s) at issue. If agreement cannot be reached, the taxpayer may submit, within 10 calendar days after receipt of notice from the Service, a statement of the taxpayer's understanding as to the specific point or points at issue that will be forwarded to the National Office with the request for technical advice. An extension of time beyond the 10 calendar days must be justified by the taxpayer in writing and approved by the Chief, Examination Division or the Chief, Appeals Office.

.04 If the taxpayer initiates the action to request technical advice, and the taxpayer's statement of the facts and point or points at issue are not wholly acceptable to the district or Appeals office, the taxpayer will be advised in writing as to the areas of disagreement. The taxpayer will be given 10 calendar days after receipt of the written notice to reply to the notice. An extension of time beyond the 10 calendar days must be justified by the taxpayer in writing and approved by the Chief, Examination Division or the Chief, Appeals Office. If agreement cannot be reached, both the statements of the taxpayer and the district or Appeals office must be forwarded to the National Office with the request for technical advice.

.05 If the taxpayer has not already done so, the taxpayer may submit a statement explaining the taxpayer's position on the issues and citing precedents that the taxpayer believes will bear on the case. This statement will be forwarded to the National Office with the request for technical advice. If the taxpayer's statement is received after the request for technical advice has been forwarded to the National Office, it will be forwarded to the National Office for association with the request for technical advice. If the taxpayer is aware of any legislation, tax treaties, regulations, revenue rulings, revenue procedures, or court decisions contrary to the taxpayer's position, they should be commented upon.

.06 At the time the taxpayer is informed that the matter is being referred to the National Office the taxpayer will also be informed of the right to a conference in the National Office in the event an adverse decision is indicated, and will be asked to indicate whether such a conference is desired.

.07 In connection with requests for technical advice, the taxpayer must also submit, within the 10-day period referred to in sections 5.03 and 5.04, whichever is applicable (relating to agreement by the taxpayer with the statement of facts submitted in connection with the request for technical advice), the statement described in section 5.09, of proposed deletions pursuant to section 6110(c) of the Code. If the statement is not submitted, the taxpayer will be informed by the District Director or the Chief, Appeals Office, that such a statement is required. If the District Director or the Chief, Appeals Office, does not receive the statement within 10 days after the taxpayer has been informed of the need for such statement, the District Director or the Chief, Appeals Office, may decline to submit the request for technical advice. If the District Director or the Chief, Appeals Office, decides to request technical advice in a case in which the taxpayer has not submitted the statement of proposed deletions, the National Office will make those deletions that in the judgment of the Commissioner are required by section 6110(c).

.08 The requirements with respect to submissions of statements and other material with respect to proposed deletions to be made from technical advice memoranda before public inspection is permitted to take place do not apply to requests made by a District Director before November 1, 1976, or requests for any document to which section 6104 of the Code applies.

.09 In order to assist the National Office in making the deletions, required by section 6110(c) of the Code, from the text of technical advice memoranda that are open to public inspection pursuant to section 6110(a), there must accompany requests for such technical advice either a statement of the deletions proposed by the taxpayer and the statutory basis for each proposed deletion, or a statement that no information other than names, addresses, and taxpayer identifying numbers need be deleted. Such statements shall be made in a separate document. The statement of proposed deletions shall be accompanied by a copy of all statements of facts and supporting documents that are submitted to the National Office pursuant to sections 5.03 and 5.04, on which shall be indicated, by the use of brackets, the material that the taxpayer indicates should be deleted pursuant to section 6110(c). The statement of proposed deletions shall indicate the statutory basis, under section 6110(c), for each proposed deletion. The statement of proposed deletions shall not appear or be referred to anywhere in the request for technical advice. If the taxpayer decides to request additional deletions pursuant to section 6110(c) prior to the time the National Office replies to the request for technical advice, additional statements may be submitted.

.10 The provisions of this section, relating to the referral of issues upon request of the taxpayer, advising the taxpayer of the referral of issues, the submission of proposed deletions, and the granting of conferences in the National Office, are not applicable to technical advice memoranda described in section 6110(g)(5)(A) of the Code, relating to cases involving criminal or civil fraud investigations and jeopardy or termination assessments. However, in such cases the taxpayer shall be allowed to provide the statement of proposed deletions to the National Office upon the completion of all proceedings with respect to the investigations or assessments, but prior to the date on which the Commissioner mails the notice pursuant to section 6110(f)(1) of intention to disclose the technical advice memorandum.

.11 Form 4463, Request for Technical Advice, should be used for transmitting requests for technical advice to the National Office.

Sec. 6. Appeal by Taxpayers of District or Appeals Office Determination Not To Seek Technical Advice

.01 If the taxpayer has requested referral of an issue before a district or Appeals office to the National Office for technical advice, and after consideration of the request the examining officer or the Appeals Officer is of the opinion that the circumstances do not warrant such referral, the examining officer or the Appeals Officer will so advise the taxpayer.

.02 The taxpayer may appeal the decision of the examining officer or the Appeals Officer not to request technical advice by submitting to that official within 10 calendar days after being advised of the decision, a statement of the facts, law, and arguments with respect to the issue, and the reasons why the taxpayer believes the matter should be referred to the National Office for technical advice. An extension of time beyond the 10 calendar days must be justified by the taxpayer in writing and approved by the Chief, Examination Division or the Chief, Appeals Office.

.03 The examining officer or the Appeals Officer will submit the taxpayer's statement through channels to the Chief, Examination Division or the Chief, Appeals Office, accompanied by the examining officer's or the Appeals Officer's statement indicating why the issue should not be referred to the National Office. The Chief will determine, on the basis of the statement submitted, whether technical advice will be requested. If the Chief determines that technical advice is not warranted and proposes to deny the request, the taxpayer will be informed in writing of such determination. In the letter to the taxpayer the Chief will (except in unusual situations where such action would be prejudicial to the best interests of the Government) state specifically the reasons for the proposed denial. The taxpayer will be given 10 calendar days after receipt of the letter in which to notify the Chief of agreement or disagreement with the proposed denial. The taxpayer may not appeal the decision of the Chief, Examination Division or the Chief, Appeals Office, not to request technical advice from the National Office. However, if the taxpayer does not agree with the proposed denial, all data relating to the issue for which technical advice has been sought, including the taxpayer's written request and statements, will be submitted to the Director, Examination Division or the Director, Appeals Division, for review. After such review the district office or the Appeals office will be notified whether the proposed denial is approved or disapproved.

.04 While the matter is being reviewed the district office or the Appeals office will suspend action on the issue (except where the delay would prejudice the Government's interests) until notified whether the proposed denial is approved or disapproved. This notification will be made within 30 calendar days after receipt of the data. The review will be solely on the basis of the written record and no conference will be held on the matter.

Sec. 7. Withdrawal of Requests

.01 A request for technical advice may be withdrawn by the District Director or Chief, Appeals Office, at any time prior to the signing of the responding transmittal memorandum. The District Director or Chief, Appeals Office, must notify the taxpayer in writing of intent to withdraw the request for technical advice except when the period of limitation on assessment is about to expire and the taxpayer has declined to sign a consent to extend the period, or 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 set forth in section 6 of this Revenue Procedure are to be followed.

.02 When a request for technical advice is withdrawn, the National Office, when acknowledging the withdrawal request, may furnish its views to the District Director or the Chief, Appeals Office. In appropriate cases, the subject matter may be published as a revenue ruling or revenue procedure.

Sec. 8. Conference in the National Office

.01 If, after analysis of the technical advice request, it appears that advice adverse to the taxpayer will be given and a conference has been requested, the taxpayer will be notified by telephone, if possible, of the time and place of the conference. If conferences are being arranged with respect to more than one request for technical advice involving the same taxpayer, they will be so scheduled as to cause the least inconvenience to the taxpayer. The conference must be held within 21 calendar days after contact has been made. An extension of the 21-day period will be granted only if justified in writing by the taxpayer and approved by the Chief or Assistant Chief of the technical branch to which the case is assigned. Generally, the taxpayer will be notified whether the extension has been granted within one workday after receipt of the request. The taxpayer has no right to appeal a denial of the extension.

.02 A taxpayer is entitled, as a matter of right, to only one conference in the National Office unless one of the circumstances discussed in this section exists. This conference normally will be held at the branch level in the appropriate division (Individual Tax Division or Corporation Tax Division) in the office of the Assistant Commissioner (Technical), and will be attended by a person who has authority to sign the transmittal memorandum discussed in section 9.07 on behalf of the branch chief. In appropriate cases, the examining officer or the Appeals Officer may also attend the conference to clarify the facts in the case. If more than one subject is discussed at the conference, the discussion constitutes a conference with respect to each subject. In order to promote a free and open 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 at an earlier stage 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 official of the Service, nor is a taxpayer entitled, as a matter of right, to a separate conference in the Chief Counsel's office on a technical advice request.

.03 Since conference procedures are informal, no tape, stenographic, or other verbatim recording of a conference will be made.

.04 The senior Service representative present at the conference ensures that the taxpayer has full opportunity to present views on all of the issues that are in question. The Service representatives explain the Service's tentative holding on the substantive issues and the reasons for such holding. If prospective application under section 7805(b) of the Code is advanced by the taxpayer, the Service representative will discuss the tentative recommendation with respect to such relief and the reasons for such tentative recommendation. No commitment will be made as to the holding that the Service will finally adopt.

.05 An invitation to an additional conference will be extended if, after the conference of right, an adverse holding is proposed but on a new issue or on the same issue but on different grounds than 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 provisions of this Revenue Procedure limiting the number of conferences to which a taxpayer is entitled will not foreclose inviting a taxpayer to attend further conferences when, in the opinion of National Office personnel, such further conferences are necessary. All additional conferences of the type discussed in this paragraph are held only at the invitation of the National Office.

.06 It is the responsibility of the taxpayer to furnish in writing to the National Office within 21 calendar days after the conference any additional data, line of reasoning, precedents, etc., that were proposed by the taxpayer and discussed at the conference but were not previously or adequately presented in writing. An extension of the 21-day period may be granted only if justified in writing by the taxpayer and approved by the Chief or the Assistant Chief of the Technical branch to which the case is assigned. Generally, the taxpayer will be notified whether the extension has been granted within one workday after receipt of the request. The taxpayer has no right to appeal a denial of the extension. Any additional material should be submitted in duplicate to the National Office. If the additional information would have a significant impact on the facts involved in the request for technical advice, a copy will be furnished by the National Office to the District Director or the Chief, Appeals Office, for comment on the facts contained in the additional information submitted. The District Director or the Chief, Appeals Office, will give the matter prompt attention.

.07 A taxpayer may obtain information as to the status of the request for technical advice by contacting the district or Appeals office that requested the technical advice.

.08 A District Director or the Chief, Appeals Office, may obtain current information as to the status of the request for technical advice by calling the person whose name and telephone number is shown on the acknowledgement of receipt of the request for technical advice.

Sec. 9. Preparation of Technical Advice Memorandum by the National Office

.01 As soon as the request for technical advice is assigned, the technical employee will analyze the file to ascertain whether it meets all requirements of section 5. If any request for technical advice does not comply with the requirements of section 5.09 relating to the statement of proposed deletions, the National Office will make those deletions from the technical advice memorandum that in the judgment of the Commissioner are required by section 6110(c) of the Code.

.02 Usually, within 15 work days after the request for technical advice has been received in the Branch office, a representative of the Branch will telephone the district or Appeals office to discuss the procedural and substantive issues involved in the request that come within the jurisdiction of the Branch. The Branch representative will inform the district or Appeals office either:

(a) that the case is being returned because substantial additional information is required to resolve an issue, significant unresolved factual variances exist between the statements of facts submitted by the district or Appeals office and taxpayer, or major procedural problems cannot be resolved by phone;

(b) that the case is not being returned, but additional information is needed or procedural deficiencies exist which are considered minor;

(c) what the Branch representative's tentative conclusion is and the estimated date that the technical advice memorandum will be mailed; or

(d) that a tentative conclusion has not been reached because of the complexity of the issue and the estimated date that the tentative conclusion will be made.

.03 Upon receipt of the additional information requested in section 9.02(b), the Branch representative will telephone the district or Appeals office within 15 work days to discuss the procedural and substantive issues involved in the request that come within the jurisdiction of the Branch and indicate the Branch representative's tentative conclusion and the estimated date that the technical advice memorandum will be mailed, or that a tentative conclusion has not been reached because of the complexity of the issue and the estimated date that the tentative conclusion will be made.

.04 Because the Branch representative's tentative conclusion may change during the preparation and review of the technical advice memorandum, it will not, under any circumstances, be considered final and it should not be made known to the taxpayer by the district or Appeals office.

.05 When the technical advice request involves matters within the jurisdiction of more than one Branch and/or within the jurisdiction of more than one office within the same Branch, a representative of the Branch that received the original technical advice request will inform the district or Appeals office within the initial 15 work day period, that the matters within the jurisdiction of another Branch and/or within the jurisdiction of another office within the same Branch have been referred to that Branch or office for consideration and that a representative of that Branch or office will contact the district or Appeals within 15 work days of the receipt by that Branch or office of the referral of the technical advice request in accordance with section 9.02.

.06 Generally, prior to replying to the request for technical advice, the National Office shall inform the taxpayer orally or in writing of the material likely to appear in the technical advice memorandum that the taxpayer proposed to deleted, but which the Service determined should not be deleted. If so informed, the taxpayer may submit within 10 days any further information, arguments, or other material in support of the position that such material be deleted. The Service will attempt, if feasible, to resolve all disagreements with respect to proposed deletions prior to the time the National Office replies to the request for technical advice. However, in no event shall the taxpayer have the right to a conference with respect to resolution of any disagreements concerning material to be deleted from the text of the technical advice memorandum, but such matters may be considered at any conference otherwise scheduled with respect to the request.

.07 Replies to requests for technical advice will be addressed to the District Director or the Chief, Appeals Office, and will be drafted in two parts. Each part will identify the taxpayer by name, address, identification number, and year or years involved. The first part of the reply will consist of a transmittal memorandum. In unusual cases it will serve as a vehicle for providing the district or Appeals office with administrative information or with other information which, under the nondisclosure statutes, or for other reasons, may not be discussed with the taxpayer. The second part (hereafter called the "Technical Advice Memorandum") will contain (1) a recitation of the issue(s); (2) a recitation of the pertinent facts having a bearing on the issue(s); (3) a statement of the pertinent law, tax treaties, regulations, revenue rulings and other precedents published in the Bulletin, and court decisions; (4) a discussion of the rationale developed by the National Office; and (5) the conclusion of the National Office. The conclusions will give direct answers, whenever possible, to the specific questions of the district or Appeals office. The discussion of the issues will be in such detail that the district or Appeals officials are apprised of the reasoning underlying the conclusion. There shall accompany the technical advice memorandum a notice pursuant to section 6110(f)(1) of the Code 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 pursuant to section 6110(d)) which the District Director or the Chief, Appeals Office, shall forward to the taxpayer at such time that the District Director or the Chief, Appeals Office, furnishes a copy of the technical advice memorandum to the taxpayer pursuant to section 9.08.

.08 It is the general practice of the Service to furnish a copy of the technical advice memorandum to the taxpayer after it has been adopted by the District Director or the Chief. Appeals Office. However, in the case of technical advice memoranda described in section 6110(g)(5)(A) of the Code, relating to cases involving criminal or civil fraud investigations and jeopardy or termination assessments, a copy of the technical advice memorandum shall not be furnished the taxpayer until all proceedings with respect to the investigations or assessments are completed.

.09 If after receiving the notice pursuant to section 6110(f)(1) of the Code of intention to disclose the technical advice memorandum, the taxpayer desires to protest the disclosure of certain information in the technical advice memorandum, the taxpayer must within 20 days submit a written statement identifying those deletions not made by the Service that the taxpayer believes should have been made. The taxpayer shall also submit a copy of the version of the technical advice memorandum proposed to be open to public inspection on which the taxpayer indicates, by the use of brackets, the deletions proposed by the taxpayer but which have not been made by the National Office. Generally, the National Office will not consider the deletion under this subparagraph of any material that the taxpayer did not, prior to the time when the National Office sent its reply to the request for technical advice to District Director or the Chief, Appeals Office, propose be deleted. The National Office shall, within 20 days after receipt of the response by the taxpayer to the notice pursuant to section 6110(f)(1), mail to the taxpayer its final administrative conclusion with respect to the deletions to be made.

Sec. 10. Action on Technical Advice in District and Appeals Offices

.01 Unless the District Director or the Chief, Appeals Office, feels that the conclusions reached by the National Office in a technical advice memorandum should be reconsidered, or unless 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, the District Director or the Chief, Appeals Office, will proceed to process the taxpayer's case on the basis of the conclusions expressed in the technical advice memorandum.

.02 The District Director or the Chief, Appeals Office, will furnish to the taxpayer a copy of the technical advice memorandum described in section 9.07, and the notice pursuant to section 6110(f)(1) of the Code 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 pursuant to section 6110(d)). The preceding sentence shall not apply to technical advice memoranda involving civil fraud or criminal investigations, or jeopardy or termination assessments, as described in section 5.10, or to documents to which section 6104 applies.

.03 In those cases in which the National Office advises the District Director or the Chief, Appeals Office, that a copy of the technical advice memorandum should not be furnished to the taxpayer, the District Director or the Chief, Appeals Office, will so inform the taxpayer if the taxpayer requests a copy.

Sec. 11. Effect of Technical Advice

.01 Except in rare or unusual circumstances, a holding in a technical advice memorandum that is favorable to the taxpayer is applied retroactively. Moreover, since technical advice, as described in section 4.04 of this Revenue Procedure, is issued only on closed transactions, a holding in a technical advice memorandum that is adverse to the taxpayer is also applied retroactively unless the Assistant Commissioner (Technical) exercises the discretionary authority under section 7805(b) of the Code to limit the retroactive effect of the holding.

.02 A holding in a technical advice memorandum that modifies or revokes a holding in a prior technical advice memorandum will be applied retroactively, with one exception. If the new holding is less favorable to the taxpayer, it will generally not be applied to the period in which the taxpayer relied on the prior holding in situations involving continuing transactions.

.03 If a technical advice memorandum relates to a continuing action or a series of actions, the technical advice memorandum ordinarily will be applied until the date of issuance of applicable regulations or the publication of a revenue ruling holding otherwise, or until specifically withdrawn. Publication of a notice of proposed rulemaking will not affect the application of a technical advice memorandum.

.04 Generally, a technical advice memorandum that revokes or modifies a letter ruling or a technical advice memorandum will not be applied retroactively with respect to the taxpayer to whom, or with respect to whom, the ruling or memorandum was originally issued or to a taxpayer whose tax liability was directly involved in such ruling or memorandum if (1) there has been no misstatement or omission of material facts, (2) the facts subsequently developed are not materially different from the facts on which the ruling or memorandum was based, (3) there has been no change in the applicable law, (4) the ruling was originally issued with respect to a prospective or proposed transaction, and (5) the taxpayer directly involved in the ruling or memorandum acted in good faith in reliance upon the ruling or memorandum and the retroactive revocation would be to the taxpayer's detriment. The tax liabilities of members of an industry are not directly involved in a ruling or in a memorandum issued to, or in connection with, one of the members, and the holding in a revocation or modification of a ruling or a memorandum to, or in connection with, one member of an industry may be retroactively applied to other members of that industry. By the same reasoning, a tax practitioner may not obtain the nonretroactive application to one client of a modification or revocation of a ruling or a memorandum previously issued to, or in connection with, another client. When a ruling to a taxpayer or a memorandum involving a taxpayer is revoked with retroactive effect, the notice to such taxpayer will, except in fraud cases, set forth the grounds upon which the revocation is being made and the reasons why the revocation is being applied retroactively.

Sec. 12. Effect on Other Documents

Rev. Proc. 73-8 is superseded.