Tax Exempt and Government Entities Division Realignment
Announcement 2014-34 issued on December 11, 2014, introduced a plan to realign resources within its Tax-Exempt and Government Entities Division (“TE/GE”). Announcement 2014-34, Realignment of Technical Work between the Tax Exempt and Government Entities Division and Office of Associate Chief Counsel (Tax Exempt and Government Entities), addresses the final guidance regarding the “transfer of certain technical responsibility for issues involving exempt organizations, qualified retirement plans, and individual retirement annuities and accounts to the Office of Chief Counsel that will occur with the realignment of the TE/GE”.
Purpose of Realignment & Expected Changes
Announcement 2014-34 states that, beginning on January 2, 2015, the technical responsibility for preparing revenue rulings, revenue procedures, issuing technical guidance and certain letter rulings and preparing certain other forms of published guidance would be assumed by the Office of Associate Chief Counsel (“TE/GE Counsel”). Pursuant to the issuance of this Announcement, the responsibility for issues involving tax-exempt organizations, qualified retirement plans and individual retirement annuities will be transferred TE/GE Counsel. The issuance of letter rulings, with certain exceptions listed in the Announcement, will also now become the responsibility of TE/GE Counsel. It is anticipated that certain technical law specialists and support staff who are responsible for these types of published guidance would be transferred to TE/GE Counsel.
The IRS has previously stated that TE/GE is one of the few areas within the IRS where guidance and rulings are worked on outside of TE/GE Counsel. This repositioning is an attempt to bring TE/GE into alignment with the other three IRS business operating divisions (Wage and Investment, Large Business and International and Small Business/Self-Employed). As a result, all of the above mentioned business operating divisions will use TE/GE Counsel for guidance and legal work.
Areas of Guidance that Will Remain the Same
While most of the responsibility is shifting from TE/GE to TE/GE Counsel, there are certain areas of authority which will remain the responsibility of TE/GE.
The Exempt Organization office of TE/GE will continue to issue determination letters, which includes those on the exempt status of organizations under Internal Revenue Code (“IRC”) §501(c) and §521. TE/GE will also retain the authority to issue determination letters on matters such as a change in supporting organization, or IRC §509(a)(3), public charity status, reclassification of foundation status and exemption from the filing of Form 990, Return of Organization Exempt from Income Tax. A list of additional miscellaneous determinations over which TE/GE will retain authority is outlined in the Announcement.
Additionally, The Employee Plans office of TE/GE will continue to issue determination letters and, after January 2nd, 2015, will also retain the authority to issue letter rulings on various IRC Sections. A list of these IRC Sections can also be found in the Announcement.
Lastly, all proposed and final rulings will continue to be drafted by TE/GE Counsel.
Conclusion
Announcement 2014-34 provides additional uniformity in its organization and, accordingly, the IRS is hopeful that this realignment will ensure increased consistency and efficiency within TE/GE Counsel. As the impact on practitioners and organizations that interacted with the former TE/GE Division is anticipated to be minimal, the IRS believes that this organizational shift will provide potential benefits to both the IRS and taxpayers.
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The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your individual facts and circumstances.
