Annual revenue procedures for 2016

Annual revenue procedures for 2016

The IRS posted the first edition of the Internal Revenue Bulletin for 2016 (IRB 2016-1, dated January 4, 2016) providing text of the “annual revenue procedures.”

Related content

IRB 2016-1 [PDF 937 KB] provides, in 262 pages, the text of these eight revenue procedures for 2016.

  • Rev. Proc. 2016-1 - Letter rulings, information letters, and determination letters
  • Rev. Proc. 2016-2 - Technical advice
  • Rev. Proc. 2016-3 - Areas in which rulings will not be issued (domestic area)
  • Rev. Proc. 2016-4 - Rulings and information letters; issuance procedures (tax exempt and government entities (TE/GE))
  • Rev. Proc. 2016-5 - Procedures for issuance of determination letters on exempt status
  • Rev. Proc. 2016-6 - Employee plan determination letters 
  • Rev. Proc. 2016-7 - Areas in which rulings will not be issued (international area)
  • Rev. Proc. 2016-8 - User fees for employee plans and exempt organizations

Changes for 2016

The user fees set forth in Rev. Proc. 2016-1 for taxpayer requests for letter rulings, closing agreements, and determination letters from the IRS remain unchanged for 2016. 

Among the changes set forth in Rev. Proc. 2016-1 for 2016 are the following:

  • Taxpayers under examination, before IRS Appeals or before a federal court may request a letter ruling for consent to revoke an otherwise revocable election. Rev. Proc. 2016-1 also provides that the procedures applicable to Reg. section 301.9100 ruling requests (“9100 relief”) also apply to letter ruling requests for consent to revoke an election.
  • A $8,600 user fee applies for exempt organizations filing a non-automatic change in accounting method on Form 3115, Application for Change in Accounting Method, pursuant to Rev. Proc. 2016-1. Changes in accounting methods (Forms 3115) will be handled by Associate Chief Counsel.
  • There is a new address for filing a duplicate copy of Form 3115 with the IRS National Office for exempt organizations. 

Among the changes in Rev. Proc. 2016-2 are the following:

  • Procedures when an IRS field office may request a single technical advice memorandum (TAM) when the subject matter of the request involves a transaction among multiple taxpayers
  • Clarification that IRS Appeals will not settle an issue contrary to a TAM if it concerns an organization’s exempt status or private foundation classification (however, Appeals may submit a new TAM to propose disposition of the issue contrary to the original TAM)

Among other changes:

  • Rev. Proc. 2016-3, as in prior years, includes a number of changes to the list of issues for which the IRS will not (or ordinarily will not) issue letter rulings or determination letters, including areas currently under study by the IRS.
  • Additions to the areas in which rulings will not be issued include whether some, but not all, income of an entity is excluded from gross income under section 115; and whether an organization is or continues to be classified as a public charity, exempt operating foundation, private operating foundation, or is or continues to be exempt from taxation under section 501(a) as an organization described in sections 501(c) or (d)
  • Rev. Proc. 2016-8 lists changes in IRS user fees for various employee plans.

Pre-filing agreement, anticipated changes

The IRS is expected shortly to publish an update to Rev. Proc. 2009-14—i.e., the revenue procedure setting forth the procedures for obtaining a pre-filing agreement.  It is anticipated that the new revenue procedure will include a significant increase in the IRS user fee for participation in the pre-filing agreement program.

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