How much authority do IRS Chief Counsel Advisory statements have?
Are they legally binding or close to it?
Can one rely on it?
************************The reason I ask is because I am doing a 1031 exch. The property is in CA.
Here are the sequence of events:
- I could not find what I wanted in the dollar amount so I bought a smaller property. For this I did a reverse exch for part of the expected dollar amount for the sale of the CA property.
- Then my property in CA got sold and I had left over money with the 1031 Exch company.
- Now I identified 3 properties for the forward exchange (second purchase) for the left over funds. However the Exch Company says that I should identify only 2 properties because my third property slot was used by the purchase of the property in the Reverse Mortgage.
However, at the same time, I am also told that the IRS issued a CCA in 2008 indicating that the forward exchange should be treated as a separate transaction and that someone like myself should be allowed to identify 3 properties not 2.
The above is why I am asking the questions on the authority of CCAs.
If I am audited by the IRS or CA FTB, will my leaning on the CCA statement issued on this topic hold water and get me off scott free?
I hear that the CA FTB can be very aggressive.
Thank you.