CCA 201005037: Revenue Procedure 94-69 does not apply to an IC taxpayer

Plain-English summary

This internal IRS Chief Counsel advice considers whether Rev. Proc. 94-69 applies to a taxpayer classified by Exam as an IC taxpayer. It says no. The procedure provides special methods for taxpayers subject to the Coordinated Examination Program, now the Coordinated Industry Case Program, to report additional tax or make adequate disclosure and avoid the substantial understatement penalty under former IRC § 6661 and the accuracy-related penalty under IRC § 6662(b)(1) and (b)(2). The advice also cites IRM Exhibit 4.46.2-3, dated December 29, 2009.

Ruling snapshot

• Question: Does Rev. Proc. 94-69 apply to a taxpayer classified as an IC taxpayer by Exam?
• Outcome: Advice given.
• Key authorities: Rev. Proc. 94-69, § 1.02; former IRC § 6661; IRC § 6662(b)(1) and (b)(2); IRM Exhibit 4.46.2-3.

Full text (IRS public release)

ID: CCA_2010010613392615 Number: 201005037
Release Date: 2/5/2010
Office: --------------
UILC: 6661.02-02 R 1989, 6662.00-00, 6664.01-00

From: ---------------
Sent: Wednesday, January 06, 2010 1:39:32 PM
To: ------------
Cc: -----------------------------------
Subject: RE: Rev. Proc. 94-69

You asked whether Rev. Proc. 94-69 applies to a taxpayer classified as an IC taxpayer by Exam. No, as stated in section 1.02 of Rev. Proc. 94-69, the revenue procedure provides special procedures for taxpayers subject to the Coordinated Examination Program (now known as the Coordinated Industry Case Program) to show additional tax due or make adequate disclosure with respect to an item or position to avoid imposition of the substantial understatement penalty imposed under former IRC Section 6661 and the accuracy-related penalty described in IRC Sections 6662(b)(1) and 6662(b)(2). See also IRM Exhibit 4.46.2-3 (12-29-2009).

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