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geographically closer to several wholesalers. Transportation costs for its product delivered to these wholesalers will be substantially lower than the costs of transportation from the current source factory. A has announced that it will increase its price f.o.b. the factory to these wholesalers so as to offset the amount by which the transportation costs have been reduced, although the total cost to the wholesaler will in no case be higher than that which he was paying previously.

Issue. Is A's pricing from his new factory allowable under the Economic Stabilization Regulations?

Ruling. A's pricing from his new factory is in violation of the Economic Stabilization Regulations to the extent that the increase in the f.o.b. factory price it will charge is not justified by increased costs or to the extent that it will increase A's profit margin over that which prevailed during the base period. Economic Stabilization Regulations 6 CFR 300.12, 36 F.R. 23974 (Dec. 16, 1971).

This ruling has been approved by the General Counsel of the Price Commission.

[37 F.R. 3998, Feb. 25, 1972]

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(a) It is the purpose of this part to prescribe and explain the procedures used by the Internal Revenue Service, including the Office of the Chief Counsel, in administering the President's Economic Stabilization Program, with respect to acts and transactions occurring after November 13, 1971.

(b) These regulations shall be construed to effectuate the purpose of the Act and the economic stabilization regulations and guidelines and to provide for the just and prompt disposition of all proceedings.

§ 401.2 Definitions and terms.

As used in this part, except where the context indicates otherwise, the term:

"Act" means the Economic Stabilization Act of 1970 (Public Law 91-379, 84 Stat. 799), as amended.

"Act or transaction" shall include a series or combination of such acts or transactions.

"Adverse action” means an interpretation or ruling, issued by the Internal Revenue Service or the Office of the Chief Counsel, which declares an administrative determination contrary to the position asserted by the applicant.

"Attorney" means any person who is a member in good standing of the bar of the highest court of any State, possession, territory, Commonwealth, or the District of Columbia.

"Certified public accountant" means any person who is duly qualified to practice as a certified public accountant in any State, possession, territory, Commonwealth, or the District of Columbia. "Complaint" means an allegation of a violation of the President's Economic Stabilization Program.

"Cost of Living Council" means the body established pursuant to the provisions of Executive Order 11627 (3 CFR, 1971 Comp., 36 F.R. 20139), as amended.

"Cost of Living Council Ruling" means an official determination by the Office of the Chief Counsel for the Internal Revenue Service, with the advice and concurrence of the General Counsel of the Cost of Living Council and the General

Counsel of the Treasury Department, which has been promulgated in the name of the Cost of Living Council and published in the FEDERAL REGISTER. Cost of Living Council Rulings are issued only by the Office of the Chief Counsel and are published for the information and guidance of citizens, Internal Revenue Service officials, and others concerned.

"District conferee" means a person designated by Internal Revenue Service to process and decide any appeal referred to in § 401.601.

"District director" means a district director of the Internal Revenue Service, or his delegate.

"District office" means a district director's office and such local offices within his district as a director may designate.

"Economic stabilization regulations and guidelines" means the regulations and guidelines promulgated by the Cost of Living Council, Pay Board, and Price Commission in this title.

"Exception" means a waiver in a particular case of the requirements of any rule, regulation, or order, issued pursuant to the Act.

"Exemption" means a general waiver from the President's Economic Stabilization Program granted by the Cost of Living Council with respect to a class of property, services, or economic transactions.

"Information letter" means a statement issued by a district director which calls attention to a well-established interpretation or principle of the regulations or guidelines of the Cost of Living Council, Pay Board, or Price Commission, without applying it to a specific set of facts. An information letter may be issued when the nature of the request from the individual or the organization suggests that it is seeking general information or where the request does not meet all the requirements of § 401.101, and it is believed that such general information will assist the individual or organization. "Interpretation" means a written statement issued by a district director in response to an inquiry by an individual or an organization, which applies to the particular facts involved the principles and precedents previously announced by the Office of the Chief Counsel and the Cost of Living Council, Pay Board, or Price Commission, as appropriate. Interpretations are issued only where a determination can be made on the basis of established rules as set forth in the regulations and guidelines of the Cost of Liv

ing Council, Pay Board, and Price Commission, or by rulings or court decisions. "Notice of violation" means a written statement issued to a person by the Internal Revenue Service setting forth one or more charges of alleged violation of the President's Economic Stabilization Program.

"Pay adjustment" means a change in wages and salaries.

"Pay Board" means the body established pursuant to Executive Order 11627, 36 F.R. 20139 (1971), as amended.

"Pay Board Ruling" means an official interpretation by the Office of the Chief Counsel for the Internal Revenue Service, with the advice and concurrence of the General Counsel of the Pay Board and the General Counsel of the Treasury Department, which has been promulgated in the name of the Pay Board and published in the FEDERAL REGISTER. Pay Board Rulings are issued only by the Office of the Chief Counsel and are published for the information and guidance of citizens, Internal Revenue Service officials, and others concerned.

"Pay Challenge" means an objection to a pay adjustment as defined in § 201.14 of this title, filed by—

(1) A party at interest as defined in § 201.3 of this title; or,

(2) Five or more members of the Pay Board.

"Person" means any individual, estate, trust, sole proprietorship, partnership, association, company, joint-venture, corporation, bargaining representative, governmental unit or instrumentality thereof, or a charitable, educational or other such institution; however, the term does not include a foreign government or instrumentality thereof or international organizations established by treaty or by agreement among participating governments.

"Person aggrieved" means:

(1) A person with a substantial pecuniary interest in the denial of a requested action,

(2) An employee whose wage or salary is subject to a pay adjustment, or his representative, or

(3) A person whose competitive position in a labor market or with respect to the sale of property or services may be altered by the pay adjustment or price adjustment, or his representative.

"Person with a substantial pecuniary interest" means a person who increased or seeks to increase a price or rent, a per

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son who is required to pay an increase in rent, or a person who put into effect or proposed a pay adjustment.

"Practice before the Internal Revenue Service" comprehends all matters connected with presentation to the Internal Revenue Service or any of its officers or employees relating to a client's rights, privileges, or liabilities under laws or regulations administered by the Internal Revenue Service relating to economic stabilization matters. Such presentations include the preparation and filing of necessary documents, correspondence with and communications to the Internal Revenue Service, and the representation of a client at conferences, hearings, and meetings. Neither the appearance of an individual as a witness, nor the furnishing of information at the request of the Internal Revenue Service or any of its officers or employees is considered practice before the Revenue Service.

"President's Economic Stabilization Program" means the program established and constituted pursuant to Executive Order 11627, 36 F.R. 20139 (1971), and the regulations and guidelines promulgated in this title, to effectuate the purposes of the Act.

"Price adjustment" means a change in the unit price or a decrease in the quality without a change in the unit price of substantially the same property or services.

"Price Commission" means the body established pursuant to Executive Order 11627, 36 F.R. 20139 (1971), as amended.

"Price Commission Ruling" means an official interpretation by the Office of the Chief Counsel for the Internal Revenue Service, with the advice and concurrence of the General Counsel of the Price Commission and the General Counsel of the Treasury Department, which has been promulgated in the name of the Price Commission and published in the FEDERAL REGISTER. Price Commission Rulings are issued only by the Office of the Chief Counsel and are published for the information and guidance of citizens, Internal Revenue Service officials, and others concerned.

"Request for a determination” means a written inquiry by a person as to the application to him of the regulations and guidelines promulgated by the Cost of Living Council, Pay Board, and Price Commission in respect of a completed or proposed act or transaction. Thus, such a request may be a request for an infor

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