IRS RESPONSE TO RECOMMENDATION: Counsel agrees with this recommendation and plans to incorporate clear direction about PMTA in the CCDM.

CORRECTIVE ACTION: Counsel agrees with this recommendation and plans to incorporate clear direction about PMTA in the CCDM.

TAS RESPONSE: The National Taxpayer Advocate is pleased that the IRS has agreed to issue guidance and looks forward to working with Counsel on the CCDM. The CCDM should provide objective standards that are based on the settlement and the Freedom of Information Act (FOIA) law, rather than squishy concepts like the form of the advice, the “need of the office,” and the “issue being considered,” as the IRS’s narrative response suggests.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: ​Counsel will continue to publish PMTA and will provide clear direction in the CCDM about when advice to program managers should be issued as a formal memorandum rather than in email, but it does not plan to implement the recommendation.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The IRS’s decision to make disclosure of PMTA dependent on how the advice is transmitted to the program manager is absurd. The only way a distinction about the mode of transmission might make sense is if Counsel believes it is not required to disclose any PMTA under the settlement or the FOIA law. Under this view, it can choose which advice it discloses.

However, the National Taxpayer Advocate does not believe it is good policy to allow Counsel attorneys to choose not to disclose legal advice to program managers, particularly when the program managers are relying on it to make policy decisions. Even other attorneys within the Chief Counsel’s office generally check publicly available sources—including PMTAs that have been released—when analyzing a legal issue. If they cannot find PMTAs that they or their colleagues have issued, they risk providing inconsistent or incorrect legal advice to their colleagues, the IRS, or the public.

Moreover, the National Taxpayer Advocate cannot do her job without real-time direct access to the legal advice the program managers have received. Even if the National Taxpayer Advocate could obtain copies of advice upon request, the lack of direct access to it would mean that she would not know the advice exists or that she should request a copy.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: Counsel will continue to rely on its professional staff, including managers, to ensure that PMTA is being released. Counsel will change its process for releasing PMTAs so that they are released more contemporaneously with issuance to the program manager.

Update: The Office of Chief Counsel implemented a CCDM change consistent with the response which accomplished the more contemporaneous release by providing a cross-reference in the new PMTA portion of the CCDM on July 20, 2020. This cross-reference directs staff to 33.1.3.3, the CCA portion of the CCDM concerning the timing for releasing CCAs to the public. Under 33.1.3.3(2), nontaxpayer specific CCA is made available for public inspection within 60 days after being issued. (Most PMTA is nontaxpayer specific, but even if it is written as taxpayer specific, the notice of intent to disclose process does not apply to PTMA.)

The Manual Transmittal cover summarizing the material changes to the PMTA part of the CCDM (33.1.2.2.4) noted that this change was made:
(6) CCDM 33.1.2.2.4(8) and (9) were added to provide cross-references for the standards used to disseminate certain legal advice and for the directions for processing legal advice for release.

The new cross-reference in the PMTA part was added in 33.1.2.2.4(8) to indicate that the standards for disseminating CCA apply to PMTA as well:
(8) The standards for disseminating legal advice that has been released to the public are set out in CCDM 33.1.3.3. These standards also apply to the dissemination of legal advice issued to program managers described in this section.

The cross-reference text as 33.1.3.3(2) provides in part:
(2) Nontaxpayer specific CCA is made available for public inspection within 60 days after the CCA has been issued.

CORRECTIVE ACTION: Counsel will continue to rely on its professional staff, including managers, to ensure that PMTA is being released. Counsel will change its process for releasing PMTAs so that they are released more contemporaneously with issuance to the program manager.

TAS RESPONSE: The National Taxpayer Advocate is pleased that Counsel will change its processes so that PMTAs are released more contemporaneously with issuance to the program manager. She believes, however, that Counsel should set a goal for its attorneys to post PMTA within a specific period (e.g., a week) after it is issued to a program manager. Without specific goals or targets, it will be impossible for the National Taxpayer Advocate, IRS management, the Counsel organization, or other stakeholders to determine whether the advice is being disclosed timely. Moreover, the longer the delay between the issuance of the advice and its publication, the greater the risk that the IRS will act on Counsel’s conclusions without disclosing the underlying legal analysis, potentially prompting practitioners, TAS, or other stakeholders to doubt the legality of the IRS’s FAQs, fact sheets, publications, instructions, or  programs.

In addition, if Counsel wants to ensure PMTAs are properly disclosed, it needs a system to ensure its PMTAs are routinely identified and provided to the attorneys responsible for disclosing them. It could easily establish an internal mailbox and require its attorneys to “cc” the mailbox when they answer legal questions from program managers. Alternatively, Counsel could expand the email system that it currently uses to identify and disclose Chief Counsel Advice to field employees under IRC § 6110.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: As noted, Counsel will incorporate PMTA guidelines in the CCDM, which is available to the  public.

Update: The Office of Chief Counsel implemented a CCDM change consistent with the response which accomplished the more contemporaneous release by providing a cross-reference in the new PMTA portion of the CCDM on July 20, 2020. This cross-reference directs staff to 33.1.3.3, the CCA portion of the CCDM concerning the timing for releasing CCAs to the public. Under 33.1.3.3(2), nontaxpayer specific CCA is made available for public inspection within 60 days after being issued.  (Most PMTA is nontaxpayer specific, but even if it is written as taxpayer specific, the notice of intent to disclose process does not apply to PTMA.)

The Manual Transmittal cover summarizing the material changes to the PMTA part of the CCDM (33.1.2.2.4) noted that this change was made:
(6) CCDM 33.1.2.2.4(8) and (9) were added to provide cross-references for the standards used to disseminate certain legal advice and for the directions for processing legal advice for release.

The new cross-reference in the PMTA part was added in 33.1.2.2.4(8) to indicate that the standards for disseminating CCA apply to PMTA as well:
(8) The standards for disseminating legal advice that has been released to the public are set out in CCDM 33.1.3.3. These standards also apply to the dissemination of legal advice issued to program managers described in this section.

The cross-reference text as 33.1.3.3(2) provides in part:
(2) Nontaxpayer specific CCA is made available for public inspection within 60 days after the CCA has been issued.

CORRECTIVE ACTION: As noted, Counsel will incorporate PMTA guidelines in the CCDM, which is available to the public.

TAS RESPONSE: As noted above, the National Taxpayer Advocate is pleased that Counsel will incorporate procedures into the CCDM, which it will release to the public. It is important for taxpayers, stakeholders, and IRS employees to be able to identify advice that Counsel will and will not disclose. Accordingly, Counsel should use the same guidance in its disclosure training classes   that it has posted on its website (e.g., as CCDM or other training material). If it develops different materials for the purpose of training, then the training materials should be released to the public.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A