Rev. Proc. 62-29

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to prescribe the general procedures of the Internal Revenue Service in furnishing technical advice to District Director of Internal Revenue. It is also intended to inform taxpayers of their rights when a District Director requests such advice from the National Office. For purposes of this Revenue Procedure any reference to district director or district office, also includes the office of the Director, Office of International Operations, where appropriate.

SEC. 2. DEFINITION AND NATURE OF TECHNICAL ADVICE.

.01 "Technical advice," as used herein, means advice or guidance as to the interpretation and proper application of internal revenue laws, related statutes, and regulations, to a specific set of facts, furnished by the National Office upon request of a district office in connection with the examination or consideration of a taxpayer's return or claim for refund or credit. It is furnished as a means of assisting Service personnel in closing cases and establishing and maintaining consistent positions in the several districts. It does not include memorandums on matters of general technical application furnished to district offices where the issues are not raised in connection with the examination of the return of a specific taxpayer.

.02 The consideration or examination of the facts relating to a request for a determination letter is considered to be in connection with the examination or consideration of a return of the taxpayer. Thus, a District Director may, in his discretion, request technical advice with respect to the consideration of a request for a determination letter.

.03 If a District Director is of the opinion that a ruling letter previously issued to a taxpayer should be modified or revoked, and he requests the National Office to reconsider the ruling, the reference of the matter to the National Office is treated as a request for technical advice and the procedures set out herein will be followed. (For procedures relating to a request for a ruling see Revenue Procedure 62-28, page 496, this Bulletin.)

.04 The provisions of this Revenue Procedure apply only to a case under the jurisdiction of a District Director. They do not apply to a case under the jurisdiction of the Alcohol and Tobacco Tax Division or of the Appellate Division.

.05 The Assistant Commissioner (Technical), acting under a delegation of authority from the Commissioner of Internal Revenue, is exclusively responsible for providing technical advice in any issue involving the establishment of basic principles or policies for the uniform interpretation and application of substantive tax laws other than those which are under the jurisdiction of the Alcohol and Tobacco Tax Division. This authority has been largely redelegated to subordinate officials.

SEC. 3. AREAS IN WHICH TECHNICAL ADVICE MAY BE REQUESTED.

.01 District Director may request technical advice or assistance on any technical or procedural question which develops during the audit or examination of a return, or claim for refund or credit, of a taxpayer. These procedures are applicable as provided in section 2.

.02 District Director are encouraged to request technical advice on any technical or procedural question arising in connection with any case of the type described in section 2, at any state of the proceedings in the district office, which cannot be resolved on the basis of law, regulations, or a clearly applicable Revenue Ruling or other precedent issued by the National Office.

SEC. 4. REQUESTING TECHNICAL ADVICE.

.01 It is the responsibility of the district office to determine whether technical advice is to be requested on any issue before that office. However, during the course of an examination or an informal conference in a district office, a taxpayer or his representative 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. If, in the opinion of the examining officer or conferee, the circumstances do not warrant such referral, he will so advise the taxpayer.

.02 The taxpayer may appeal from the decision of the examining officer or conferee not to request technical advice by submitting to that official, within 10 days (or such longer period as may be agreed upon), a statement of the facts, law, and arguments with respect to the issue, and the reasons why he believes the matter should be referred to the National Office for advice.

.03 The examining officer or conferee will submit the statement of the taxpayer through channels to the Chief, Audit Division, accompanied by a statement of his reasons why the issue should not be referred to the National Office. The Chief, Audit Division, will determine, on the basis of the statements submitted, whether technical advice will be requested. If he determines that technical advice is not warranted, he will so inform the taxpayer in writing. The taxpayer may not appeal the decision of the Chief, Audit Division, not to request technical advice from the National Office. The Service has other established procedures for reviewing the decisions of this official which are designed to insure that he has properly used this authority.

.04 When technical advice is to be requested, whether or not upon the request of the taxpayer, the taxpayer will be so advised, except as noted in section 4.09. If the examining officer or the conferee 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 submitted by the District Director should be so worded as to avoid possible misunderstanding, in the National Office, of the facts or of the specific point or points at issue.

.05 The taxpayer will be given 10 days (or such longer period as may be agreed upon) in which to indicate in writing the extent, if any, to which he may not be in complete agreement with the statement of facts and specific questions presented to him by the district office. Every effort should be made to reach agreement as to the facts and the specific point at issue. If agreement cannot be reached, the taxpayer may submit a statement of his understanding as to the specific point or points at issue which will be forwarded to the National Office with the request for advice.

.06 If the taxpayer initiates the action to request advice, he may be requested to prepare a statement of facts and a statement as to the specific point or points at issue. If the statement of facts or the questions are not wholly acceptable to the district officials, the taxpayer will be advised in writing as to the areas of disagreement. If agreement cannot be reached, both the statement of the taxpayer and the statement of the district official will be forwarded to the National Office.

.07 The taxpayer may also submit a statement explaining his position on the issues, citing precedents which he believes will bear on the case. If this statement has been received, it should be forwarded to the National Office with the request for advice. If it is received at a later date, it should be forwarded for association with the case file.

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

.09 The provisions of this section, relating to the referral of issues upon request of taxpayer, advising taxpayers of the referral of issues, and the granting of conferences in the National Office, are not applicable to matters primarily of internal concern or in instances where it would be prejudicial to the interests of the Internal Revenue Service (as for example in cases involving fraud or jeopardy assessments).

SEC. 5. PREPARATION OF TECHNICAL ADVICE MEMORANDUM BY THE NATIONAL OFFICE.

.01 Immediately upon receipt in the National Office, the technical assistant to whom the case is assigned will analyze the file to ascertain whether it meets all requirements of section 4. If the case is not complete, appropriate steps will be taken to complete the file.

.02 If the taxpayer has requested a conference in the National Office, the procedures in section 7 will be followed.

.03 Replies to requests for technical advice will be addressed to the District Director 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 (hereafter called the "Technical Memorandum") will contain (1) a recitation of the pertinent facts having a bearing on the issue; (2) a discussion of the facts, precedents, and reasoning of the National Office; and (3) the conclusions of the National Office. The conclusions will give direct answers, whenever possible, to the specific questions of the district office. The discussion of the issues will be in such detail that the district officials are apprised of the reasoning underlying the conclusion.

.04 The second part of the reply will consist of a transmittal memorandum. In unusual cases it will serve as a vehicle for providing the district office administrative information or other information which, under the nondisclosure statutes, or for other reasons, may not be discussed with the taxpayer.

.05 It is the general practice of the Service to furnish a copy of the technical memorandum to the taxpayer, upon his request, after it has been adopted by the District Director. See section 5.03. However, where no definitive answer is given to the specific question presented, where the factual submission is such as to indicate that the issue should be decided by the district office, or where it would not be in the interest of a wise administration of the tax laws, a copy of the technical memorandum will not be furnished the taxpayer. The National Office will specifically advise the District Director in those cases where it is determined that a copy of the technical memorandum is not to be made available to the taxpayer.

SEC. 6. ACTION ON TECHNICAL ADVICE IN DISTRICT OFFICES.

.01 Upon adoption of the technical advice by a District Director, the district office will proceed to process the taxpayer's case on the basis of the conclusions expressed in the technical advice memorandum. Except as provided in section 6.02, a copy of the technical memorandum will be furnished to the taxpayer, upon his request, for his information as to the position of the Service on the issue.

.02 In those cases in which the National Office advises the District Director that he should not furnish a copy of the technical memorandum to the taxpayer, the District Director will so inform the taxpayer, if he requests such a copy.

SEC. 7. CONFERENCE IN THE NATIONAL OFFICE.

.01 If, after a comprehensive study of the case file, it appears that advice which is adverse to the taxpayer should be given and a conference has been requested, the taxpayer will be notified of the time and place of the conference. If conferences are being arranged with respect to more than one request for advice involving the same taxpayer, they will be so scheduled as to cause the least inconvenience to the taxpayer.

.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 will usually be held at the branch level in the Tax Ruling Division and will usually be attended by a person who has authority to act for the branch chief. If more than one subject is discussed at the conference, the discussion constitutes a conference with respect to each subject. At the request of the taxpayer or his representative, the conference may be held at an earlier stage in the consideration of the case than the Service would ordinarily designate. A taxpayer has no "right" of appeal from an action of a branch to the director of a division or to any other National Office official.

.03 In the process of consideration, in the National Office, of a position proposed by a branch, it may appear that the position of the Service will involve a reversal of the position proposed by the branch with a result that will be less favorable to the taxpayer or it may appear that an adverse position proposed by a branch will be sustained and become the position of the Service, but on a new or different issue or on substantially different grounds than those on which the branch turned the case. Under either of these circumstances, the taxpayer or his representative will be invited to another conference. 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 responsible National Office personnel, such need arises. All additional conferences of the type discussed in this paragraph are held only at the invitation of the Service.

.04 It is the responsibility of the taxpayer to furnish to the National Office, for addition to the case file, a written record of any additional data, lines of reasoning, precedents, etc., which are proposed by the taxpayer and discussed at the conference but which were not previously or adequately presented in writing. This additional record should be addressed to the National Office, but it should be sent to the appropriate District Director who will forward it for association with the case file. The District Director may verify the additional facts and data presented and comment upon it, to the extent he deems it appropriate, when he forwards it to the National Office.

.05 A taxpayer or his representative desiring to obtain information as to the status of his case may do so by contacting the Office of the Director, Tax Rulings Division, Washington 25, D.C. (Telephone number 964-4504 or 964-4505.)

SEC. 8. EFFECT OF TECHNICAL ADVICE.

.01 A technical advice memorandum represents an expression of the views of the Service as to the application of law, regulations, and precedents to the facts of a specific case, and is issued primarily as a means of assisting district officials in the examination and closing of the case involved.

.02 A technical memorandum given a taxpayer will, in general, be afforded the same effect as a ruling to the taxpayer on a closed and completed transaction. In this connection see section 13 of Revenue Procedure 62-28, supra. Since technical advice, in connection with cases of the type described in section 2.01 of this Revenue Procedure will always be issued with respect to a closed transaction, the taxpayer may not expect a modification or revocation of the position stated in the technical memorandum to be applied nonretroactively, except under circumstances of the type described in sections 13.07 and 13.08 of Revenue Procedure 62-28, relating to continuing transactions.

.03 A District Director may raise an issue in any taxable period, even though he may have asked for and been furnished, technical advice with regard to the same or a similar issue in any other taxable period.

SEC. 9. EFFECT ON OTHER DOCUMENTS.

Mimeograph 6293, C.B. 1948-2, 59, and Revenue Procedure 58-14, C.B. 1958-2, 1125, are superseded by this Revenue Procedure. However, cases forwarded to the National Office before the effective date of this Revenue Procedure will not be returned to a field office for compliance with the provisions of section 4 if the requirements of prior procedures were met, unless so requested by the district office.

SEC. 10. EFFECTIVE DATE.

This Revenue Procedure is effective November 19, 1962, the date of its publication in the Internal Revenue Bulletin.