Industry Issue Resolution
(IIR)
Cheryl P Claybough
Director PFTG
May 2012
IIR Program - Rev Proc 2003-36
The program goals are to:
 Address frequently disputed or burdensome business
tax issues that affect a significant number of
taxpayers.
 Provide clear guidance to reduce the time and
resources associated with resolving issues during tax
examinations.
The IIR process includes the following:
 Issue Submission and Selection,
 Planning, Analysis and Development, and
 Resolution and Guidance.
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IIR Submission
Taxpayers, associations, and others can submit an issue
anytime:
 Not required to be in a particular format.
 Should include:
- Issue statement and description of why the issue is
appropriate for the Program,
- Explanation of the need for guidance and estimated
number of taxpayers affected, and
- Name and telephone number of a person to contact
if additional information is needed.
 May include a recommendation as to how the issue
could be resolved.
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Issues Appropriate for IIR
Issue should have two or more of the following
attributes:
 Uncertain tax treatment of common factual situation,
 Uncertainty results in frequent, repetitive exam of the
same issue,
 Uncertainty results in taxpayer burden,
 Significant and impacts a large number of taxpayers, or
 Extensive factual development, understanding of
industry practices and views would assist the Service
in determining the proper tax treatment.
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Issues Not Appropriate for IIR
Generally, issues not appropriate for the IIR program
include:
 Issues unique to one or a small number of taxpayers.
 Issues primarily under the jurisdiction of the Operating
Divisions of the Service other than the LB&I and
SB/SE Divisions.
 Issues that involve transactions that lack a bona fide
business purpose, or transactions with a significant
purpose of improperly reducing or avoiding federal
taxes.
 Issues involving transfer pricing or international tax
treaties.
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Recently Completed IIRs
IIRs recently submitted and completed include:
 Telecom Class Life for Wireless Assets- submitted
Aug 2009 for clarification of class life for wireless
telecom assets resulted in issuance of Rev. Proc.
2011-22 and Rev. Proc. 2011-28.
 Telecom Network Assets- submitted Feb 2010 for
clarification of telecom network assets to be
capitalized vs. expensed resulted in issuance of Rev.
Proc. 2011-27.
 Unit of Property – Utility Transmission &
Distribution- submitted Apr 2010 for clarification of
utility transmission and distribution assets to be
capitalized vs. expensed resulted in issuance of Rev.
Proc. 2011-42 and Rev. Proc. 2011-43.
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IIRs in Process
 Unit of Property – Electric Power Generation
Determination of power generation assets to be
capitalized under section 263 vs. expensed under
section 162.
 Unit of Property – Cable Determination of cable
industry network assets to be capitalized under section
263 vs. expensed under section 162.
 The Life Insurance Variable Rate Annuities
Hedging Application of regulation 1.446-4 to hedging
of guarantees under variable products.
 Conclusive Presumption of Worthlessness
Whether Reg. 1.166-2(d) applies to insurance
companies as “other regulated corporations”.
 Unit of Property – Natural Gas Determination of
distribution pipeline assets to be capitalized under
section 263 vs. expensed under section 162.
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IIR Questions?
 All guidance is posted on IRS.gov
 Refer to Rev. Proc. 2003-36 for IIR application
process
 Refer to IIR page on IRS.gov
 Melanie Perrin, Senior Program Analyst
(202-283-8408)
 Maria Dolan, Program Manager
(813-367-8475)
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