TEI files comments on IRS Chief Counsel notice on case specific legal advice: letter submitted on August 28, 2006, by TEI President David L. Bernard to Donald L. Korb, Chief Counsel of the Internal Revenue Service.

On behalf of Tax Executives Institute, II am pleased to provide comments on IRS Chief Counsel Notice CC-2006-013 on Incorporating Into Procedures Recommendations of Case Specific Advice Task Force, With Task Force Report. The May 5, 2006, notice provides recommendations of the Case Specific Task Force on improving the manner in which the Office of Chief Counsel provides legal advice to IRS personnel through the Technical Advice Memorandum (TAM) process.

Tax Executives Institute is the preeminent association of business tax executives in North America. Our more than 6,000 members represent 2,800 of the leading corporations in the United States, Canada, Europe, and Asia. TEI represents a cross-section of the business community, and is dedicated to developing and effectively implementing sound tax policy, to promoting the uniform and equitable enforcement of the tax laws, and to reducing the cost and burden of administration and compliance to the benefit of taxpayers and government alike. As a professional association, TEI is firmly committed to maintaining a tax system that works--one that is administrable and with which taxpayers can comply in a cost-efficient manner.

Members of TEI are responsible for managing the tax affairs of their companies and must contend daily with the provisions of the tax law relating to the operation of business enterprises. We believe that the diversity and professional training of our members enable us to bring a balanced and practical perspective to the issues raised by the Chief Counsel notice.

Background

The Chief Counsel task force was formed to study the IRS's Technical Advice Memorandum program and to make recommendations in respect of the process used by the Office of Chief Counsel, both in the field and in the national office, to provide technical legal advice to IRS personnel and taxpayers during the course of tax examinations (so-called case specific advice). A primary reason for doing this was that the IRS (and, in particular, the Large and Mid-Size Business Division) had changed its examination practices to accelerate the time in which examinations are conducted and there was concern that, if Chief Counsel did not adapt to these changed practices, it would be unable to provide appropriate and timely legal advice.

As a preliminary matter, the task force confirmed that the TAM process has evolved and is now being used more as a vehicle for obtaining generic legal advice rather than as a means to render taxpayer-specific guidance. In addition, the task force states that the currency initiative, particularly in respect of cases reviewed by LMSB, has placed a premium on receiving accurate technical guidance as expeditiously as possible.

To address these issues, the task force recommended three new technical advice processes: (i) a streamlined general advice process, (ii) a case-specific process for providing advice to the field, and (iii) a new category of generic, industry-specific legal advice. The Office of Chief Counsel requested comments on the new procedures by taxpayers and practitioners, and accordingly stated that the procedures will not become effective until the annual revenue procedure dealing with such guidance is revised and issued at the end of 2006.

General Comments

TEI commends the Office of Chief Counsel for its efforts to streamline the technical advice process and provide alternatives to obtain timely, issue-specific...