Unless a particular item or application of a method has been identified by the examining agents in an audit plan, information document request, or a notice of proposed adjustment
, a taxpayer should be permitted to apply for a change under the specific consent procedure.
If approved, the District will complete Form 5701, Notice of Proposed Adjustment
All Forms 5701, Notice of Proposed Adjustment
, are being reviewed and approved by the Case Manager and any Specialty Manager involved in the issue.
We continue to believe that the taxpayer is not fully apprised of the existence of an issue in respect of its accounting methods -- and hence should be able to initiate a requested change -- until a revenue agent issues a notice of proposed adjustment
or a report of examination changes specifically citing the accounting method as improper Notwithstanding our disagreement in respect of the proper time for determining when an accounting method is an "issue is under consideration," we do believe that the addition (in section 3.
It's on a Form 5701, Notice of Proposed Adjustment
Review of the Notice of Proposed Adjustment
To avoid disputes over when an issue is raised, thereby precluding use of the 30-day window, the revenue procedure should be revised to provide that the notice requirement will not be satisfied until a Form 5701, Notice of Proposed Adjustment
, is issued identifying the method change issue.
Adding further insult to injury, an agent's information document request or notice of proposed adjustment
often invites the taxpayer to provide information to establish a useful life over which to amortize these newly contrived assets.
Consider establishing procedures for issuance of a preliminary or hypothetical notice of proposed adjustment
to encourage discussion and refinement of identified issues.
To avoid disputes over when an issue is raised, thereby precluding use of the 30-day window, TEI believes that, at a minimum, a notice of proposed adjustment
on Form 5701 should be required to provide adequate notice that an issue has been raised.
Further, we recommend that Congress also repeal the ill-conceived "hot interest" provision of section 6621(c), which provides a further two-percent increase in the interest rate on large corporate underpayments (an underpayment of more than $100,000) 30 days following the issuance of a notice of proposed adjustment
(a "30-day letter") or a notice of deficiency (a "90-day letter").
10) Such items are adjusted through partnership-level procedures, which typically involve the issuance of a notice of proposed adjustment
with respect to the partnership's items, followed later by a notice of final partnership administrative adjustment.