IRS Chief Counsel Advisory statements

How much authority do IRS Chief Counsel Advisory statements have?

Are they legally binding or close to it?

Can one rely on it?

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The reason I ask is because I am doing a 1031 exch. The property is in CA.

Here are the sequence of events:

  1. 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.

  1. Then my property in CA got sold and I had left over money with the 1031 Exch company.

  2. 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.

Reply to
Lisa
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The Office of the Chief Counsel of the IRS issues various memoranda to IRS attorneys and field agents. These are internal IRS documents that typically represent nothing more than legal advice to the field on how some aspect of the law should be interpreted. These documents have no precedential value and may not be cited or relied upon by taxpayers. Nevertheless, they are useful for insight into a position the IRS will take on some specific issue for which no other agency guidance is available.

Reply to
Alan

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