us-irs-notices-irb-2001-47-pdf•Internal Revenue Bulletin 2001-47 (PDF rendition): IRS Notices
Internal Revenue Bulletin 2001-47 (PDF rendition): IRS Notices
us-irs-notices-irb-2001-47-pdfInternal Revenue Bulletin 2001-47 (PDF rendition): IRS NoticesGuidance
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# Internal Revenue bulletin <!-- PageHeader="Bulletin No. 2001-47 November 19, 2001" --> ## HIGHLIGHTS OF THIS ISSUE These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretation. ## INCOME TAX Rev. Rul. 2001-56, page 500. 2001 base period T-bill rate. The "base period T-bill rate" for the period ending September 30, 2001, is published as required by section 995(f) of the Code. ## EMPLOYEE PLANS Rev. Rul. 2001-55, page 497. Covered compensation tables; 2002. Covered compen- sation tables under section 401 of the Code for the year 2002 are provided for use in determining contributions to defined benefit plans and permitted disparity. ## ADMINISTRATIVE Notice 2001-68, page 504. This notice supplements the tax relief granted in Notice 2001- 61 (2001-40 I.R.B. 305) for taxpayers affected by the Septem- ber 11, 2001, terrorist attacks by clarifying and expanding the definition of affected taxpayer, listing additional acts for which a postponement is granted, and providing other relief. ### Rev. Proc. 2001-53, page 506. This procedure provides a list of time-sensitive acts, the performance of which may be postponed under sections 7508 and 7508A of the Code by reason of service in a combat zone or a Presidentially declared disaster. The list of acts in this procedure supplements the list of postponed acts in section 7508(a)(1) of the Code and section 301.7508A-1(b) of the regulations. Announcement 2001-114, page 528. The Service announces the availability of new Form 1042-T, Annual Summary and Transmittal of Forms 1042-S. This form is used by filers of paper Forms 1042-S. Finding Lists begin on page ii. Department of the Treasury Internal Revenue Service <!-- PageBreak --> # The IRS Mission Provide America's taxpayers top quality service by help- ing them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. # Introduction The Internal Revenue Bulletin is the authoritative instru- ment of the Commissioner of Internal Revenue for an- nouncing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation, court decisions, and other items of general interest. It is published weekly and may be obtained from the Superin- tendent of Documents on a subscription basis. Bulletin contents are consolidated semiannually into Cumulative Bulletins, which are sold on a single-copy basis. It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless otherwise indicated. Proce- dures relating solely to matters of internal management are not published; however, statements internal prac- tices and procedures that affect the rights and duties of taxpayers are published. Revenue rulings represent the conclusions of the Ser- vice on the application of the law to the pivotal facts stated in the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted to prevent unwar- ranted invasions of privacy and to comply with statutory requirements. Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regu- lations, but they may be used as precedents. Unpub- lished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases. In applying published rulings and proce- dures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be con- sidered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. The Bulletin is divided into four parts as follows: ## Part I .- 1986 Code. This part includes rulings and decisions based on provi- sions of the Internal Revenue Code of 1986. ## Part II .- Treaties and Tax Legislation. This part is divided into two subparts as follows: Sub- part A, Tax Conventions, and Other Related Items, and Subpart B, Legislation and Related Committee Reports. Part III .- Administrative, Procedural, and Miscellaneous. To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Adminis- trative Rulings are issued by the Department of the Treasury's Office of the Assistant Secretary (Enforce- ment). ## Part IV .- Items of General Interest. This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements. The first Bulletin for each month includes a cumulative index for the matters published during the preceding months. These monthly indexes are cumulated on a semiannual basis, and are published in the first Bulletin of the succeeding semiannual period, respectively. The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate. For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> # Part I. Rulings and Decisions Under the Internal Revenue Code of 1986 ## Section 401. - Qualified Pension, Profit-Sharing, and Stock Bonus Plans 26 CFR 1.401(1)-1: Permitted disparity in employer-provided contributions or benefits. Covered compensation tables; 2002. The covered compensation tables for the year 2002 under section 401 of the Code are provided for use in determin- ing contributions to defined benefit plans and permitted disparity. ### Rev. Rul. 2001-55 This revenue ruling provides tables of covered compensation under § 401(I)(5)(E) of the Internal Revenue Code (the "Code") and the Income Tax Regulations, thereunder, for the 2002 plan year. Section 401(I)(5)(E)(i) defines cov- ered compensation with respect to an employee, as the average of the contri- bution and benefit bases in effect under section 230 of the Social Security Act (the "Act") for each year in the 35-year period ending with the year in which the employee attains social security retire- ment age. Section 401(I)(5)(E)(ii) of the Code states that the determination for any year preceding the year in which the employee attains social security retire- ment age shall be made by assuming that there is no increase in covered compensation after the determination year and before the employee attains social security retirement age. Section 1.401(I)-1(c)(34) of the regulations defines the taxable wage base as the contribution and benefit base under section 230 of the Act. Section 1.401(I)-1(c)(7)(i) defines covered compensation for an employee as the average (without indexing) of the taxable wage bases in effect for each calendar year during the 35-year period ending with the last day of the calendar year in which the employee attains (or will attain) social security retirement age. A 35-year period is used for all individuals regardless of the year of birth of the individual. In deter- mining an employee's covered compensation for a plan year, the taxable wage base for all calendar years beginning after the first day of the plan year is assumed to be the same as the taxable wage base in effect as of the beginning of the plan year. An employee's cov- ered compensation for a plan year beginning after the 35-year period applicable under § 1.401(I)-1(c)(7)(i) is the employee's covered compensation for a plan year during which the 35- year period ends. An employee's cov- ered compensation for a plan year beginning before the 35-year period applicable under § 1.401(I)-1(c)(7)(i) is the taxable wage base in effect as of the beginning of the plan year. Section 1.401(I)-1(c)(7)(ii) provides that, for purposes of determining the amount of an employee's covered compensation under § 1.401(I)- 1(c)(7)(i), a plan may use tables, pro- vided by the Commissioner, that are developed by rounding the actual amounts of covered compensation for different years of birth. For purposes of determining covered compensation for the 2002 year the taxable wage base is $84,900. The following tables provide covered compensation for 2002: 2002 COVERED COMPENSATION TABLE CALENDAR YEAR OF BIRTH CALENDAR YEAR OF SOCIAL SECURITY RETIREMENT AGE 2002 COVERED COMPENSATION TABLE 1907 1972 $4,488 1908 1973 4,704 1909 1974 5,004 1910 1975 5,316 1911 1976 5,664 1912 1977 6,060 1913 1978 6,480 1914 1979 7,044 1915 1980 7,692 1916 1981 8,460 1917 1982 9,300 1918 1983 10,236 1919 1984 11,232 <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## 2002 COVERED COMPENSATION TABLE CALENDAR YEAR OF BIRTH CALENDAR YEAR OF SOCIAL SECURITY RETIREMENT AGE 2002 COVERED COMPENSATION TABLE 1920 1985 12,276 1921 1986 13,368 1922 1987 14,520 1923 1988 15,708 1924 1989 16,968 1925 1990 18,312 1926 1991 19,728 1927 1992 21,192 1928 1993 22,716 1929 1994 24,312 1930 1995 25,920 1931 1996 27,576 1932 1997 29,304 1933 1998 31,128 1934 1999 33,060 1935 2000 35,100 1936 2001 37,212 1937 2002 39,444 1938 2004 43,848 1939 2005 46,056 1940 2006 48,252 1941 2007 50,424 1942 2008 52,548 1943 2009 54,588 1944 2010 56,616 1945 2011 58,608 1946 2012 60,552 1947 2013 62,472 1948 2014 64,248 1949 2015 65,940 1950 2016 67,512 1951 2017 69,012 1952 2018 70,416 1953 2019 71,760 1954 2020 73,056 1955 2022 75,456 1956 2023 76,596 1957 2024 77,652 1958 2025 78,612 1959 2026 79,512 1960 2027 80,352 1961 2028 81,132 1962 2029 81,828 <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> 2002 COVERED COMPENSATION TABLE CALENDAR YEAR OF BIRTH CALENDAR YEAR OF SOCIAL SECURITY RETIREMENT AGE 2002 COVERED COMPENSATION TABLE 1963 2030 82,500 1964 2031 83,136 1965 2032 83,700 1966 2033 84,168 1967 2034 84,516 1968 2035 84,768 1969 or later 2036 84,900 2002 ROUNDED COVERED COMPENSATION TABLE YEAR OF BIRTH COVERED COMPENSATION 1935-1936 $36,000 1937 39,000 1938 - 1939 45,000 1940 48,000 1941 51,000 1942 - 1943 54,000 1944 57,000 1945 - 1946 60,000 1947 - 1948 63,000 1949 66,000 1950 - 1952 69,000 1953 - 1954 72,000 1955 75,000 1956 - 1958 78,000 1959 - 1962 81,000 1963 - 1966 84,000 1967 and later 84,900 <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## DRAFTING INFORMATION The principal author of this revenue ruling is Todd Newman of Employee Plans Actuarial Group 1 of the Tax Exempt and Government Entities Divi- sion. For further information regarding this revenue ruling, please contact the Employee Plans' taxpayer assistance telephone service at 1-877-829-5500, between the hours of 8:00 a.m. and 9:30 p.m. Eastern time, Monday through Friday (a toll-free number). Mr. New- man's number is (202) 283-9888 (not a toll free number). ## Section 995 .- Taxation of DISC Income to Share- holders 2001 base period T-bill rate. The "base period T-bill rate" for the period ending September 30, 2001, is pub- lished as required by section 995(f) of the Code. ## Rev. Rul. 2001-56 Section 995(f)(1) of the Internal Revenue Code provides that a share- holder of a DISC shall pay interest each taxable year in an amount equal to the product of the shareholder's DISC- related deferred tax liability for the year and the "base period T-bill rate." Under section 995(f)(4), the base period T-bill rate is the annual rate of interest deter- mined by the Secretary to be equivalent to the average of the 1-year constant maturity Treasury yields, as published by the Board of Governors of the Fed- eral Reserve System, for the 1-year period ending on September 30 of the calendar year ending with (or of the most recent calendar year ending be- fore) the close of the taxable year of the shareholder. The base period T-bill rate for the period ending September 30, 2001, is 4.41 percent. Pursuant to section 6222 of the Code, interest must be compounded daily. The table below provides factors for com- pounding the base period T-bill rate daily for any number of days in the shareholder's taxable year (including a 52-53 week accounting period) for the 2001 base period T-bill rate. To com- pute the amount of the interest charge for the shareholder's taxable year, multiply the amount of the share- holder's DISC-related deferred tax liability (as defined in section 995(f)(2)) for that year by the base period T-bill rate factor corresponding to the number of days in the shareholder's taxable year for which the interest charge is being computed. Generally, one would use the factor for 365 days. One would use a different factor only if the shareholder's taxable year for which the interest charge being determined is a short taxable year, if the shareholder uses the 52-53 week taxable year, or if the shareholder's taxable year is a leap year. For the base period T-bill rates for the periods ending in prior years, see Rev. Rul. 2000-52 (2000-48 I.R.B. 516). ## DRAFTING INFORMATION The principal author of this revenue ruling is David Bergkuist of the Office of the Associate Chief Counsel (Interna- tional). For further information about this revenue ruling, contact Mr. Bergkuist at (202) 622-3850 (not a toll- free call). ## 2001 ANNUAL RATE COMPOUNDED DAILY 4.410 PERCENT DAYS FACTOR 1 .000120822 2 .000241658 3 .000362510 4 .000483375 5 .000604256 6 .000725151 7 .000846060 8 .000966984 9 .001087923 10 .001208876 11 .001329844 12 .001450827 13 .001571824 14 .001692836 15 .001813862 4.410 PERCENT DAYS FACTOR 16 .001934903 17 .002055959 18 .002177029 19 .002298114 20 .002419214 21 .002540328 22 .002661457 23 .002782601 24 .002903759 25 .003024931 26 .003146119 27 .003267321 28 .003388538 29 .003509769 30 .003631015 31 .003752275 32 .003873551 33 .003994841 34 .004116145 35 .004237464 36 .004358798 37 .004480147 38 .004601510 39 .004722888 40 .004844281 41 .004965688 42 .005087110 43 .005208546 44 .005329997 45 .005451463 46 .005572944 47 .005694439 48 .005815949 49 .005937474 50 .006059013 51 .006180567 52 .006302136 53 .006423719 54 .006545317 55 .006666930 56 .006788557 57 .006910199 58 .007031856 59 .007153528 60 .007275214 <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> # 2001 ANNUAL RATE COMPOUNDED DAILY-CONTINUED 4.410 PERCENT 4.410 PERCENT 4.410 PERCENT DAYS FACTOR DAYS FACTOR DAYS FACTOR 61 .007396915 101 .012277028 141 .017180782 62 .007518630 102 .012399333 142 .017303680 63 .007640361 103 .012521653 143 .017426592 64 .007762106 104 .012643988 144 .017549520 65 .007883866 105 .012766338 145 .017672462 66 .008005640 106 .012888702 146 .017795419 67 .008127429 107 .013011081 147 .017918391 68 .008249233 108 .013133475 148 .018041378 69 .008371052 109 .013255884 149 .018164380 70 .008492885 110 .013378307 150 .018287396 71 .008614733 111 .013500746 151 .018410428 72 .008736596 112 .013623199 152 .018533474 73 .008858473 113 .013745667 153 .018656535 74 .008980366 114 .013868149 154 .018779611 75 .009102272 115 .013990647 155 .018902702 76 .009224194 116 .014113159 156 .019025808 77 .009346131 117 .014235686 157 .019148929 78 .009468082 118 .014358228 158 .019272064 79 .009590048 119 .014480785 159 .019395215 80 .009712028 120 .014603356 160 .019518380 81 .009834023 121 .014725943 161 .019641560 82 .009956034 122 .014848544 162 .019764755 83 .010078058 123 .014971160 163 .019887965 84 .010200098 124 .015093791 164 .020011190 85 .010322152 125 .015216436 165 .020134429 86 .010444221 126 .015339097 166 .020257684 87 .010566305 127 .015461772 167 .020380954 88 .010688404 128 .015584462 168 .020504238 89 .010810517 129 .015707167 169 .020627537 90 .010932645 130 .015829886 170 .020750851 91 .011054788 131 .015952621 171 .020874180 92 .011176945 132 .016075370 172 .020997524 93 .011299118 133 .016198134 173 .021120883 94 .011421305 134 .016320913 174 .021244257 95 .011543507 135 .016443707 175 .021367646 96 .011665723 136 .016566516 176 .021491049 97 .011787955 137 .016689340 177 .021614468 98 .011910201 138 .016812178 178 .021737901 99 .012032462 139 .016935031 179 .021861350 100 .012154738 140 .017057899 180 .021984813 <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## 2001 ANNUAL RATE COMPOUNDED DAILY-CONTINUED 4.410 PERCENT 4.410 PERCENT 4.410 PERCENT DAYS FACTOR DAYS FACTOR DAYS FACTOR 181 .022108291 221 .027059670 261 .032035036 182 .022231784 222 .027183762 262 .032159728 183 .022355292 223 .027307868 263 .032284436 184 .022478815 224 .027431989 264 .032409158 185 .022602353 225 .027556126 265 .032533896 186 .022725906 226 .027680277 266 .032658648 187 .022849473 227 .027804443 267 .032783416 188 .022973056 228 .027928625 268 .032908199 189 .023096654 229 .028052821 269 .033032997 190 .023220266 230 .028177032 270 .033157810 191 .023343894 231 .028301258 271 .033282638 192 .023467536 232 .028425500 272 .033407481 193 .023591193 233 .028549756 273 .033532340 194 .023714865 234 .028674027 274 .033657213 195 .023838553 235 .028798314 275 .033782102 196 .023962255 236 .028922615 276 .033907005 197 .024085972 237 .029046932 277 .034031924 198 .024209704 238 .029171263 278 .034156857 199 .024333451 239 .029295610 279 .034281806 200 .024457213 240 .029419971 280 .034406770 201 .024580990 241 .029544347 281 .034531749 202 .024704782 242 .029668739 282 .034656743 203 .024828588 243 .029793146 283 .034781752 204 .024952410 244 .029917567 284 .034906777 205 .025076247 245 .030042004 285 .035031816 206 .025200099 246 .030166455 286 .035156871 207 .025323965 247 .030290922 287 .035281940 208 .025447847 248 .030415404 288 .035407025 209 .025571743 249 .030539901 289 .035532125 210 .025695655 250 .030664412 290 .035657240 211 .025819581 251 .030788939 291 .035782370 212 .025943523 252 .030913481 292 .035907515 213 .026067479 253 .031038038 293 .036032676 214 .026191451 254 .031162610 294 .036157851 215 .026315437 255 .031287197 295 .036283042 216 .026439439 256 .031411799 296 .036408247 217 .026563455 257 .031536416 297 .036533468 218 .026687486 258 .031661049 298 .036658704 219 .026811533 259 .031785696 299 .036783955 220 .026935594 260 .031910358 300 .036909221 <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ## 2001 ANNUAL RATE COMPOUNDED DAILY-CONTINUED 4.410 PERCENT DAYS FACTOR 4.410 PERCENT 4.410 PERCENT DAYS FACTOR DAYS FACTOR 301 .037034503 326 .040171461 351 .043317908 302 .037159799 327 .040297137 352 .043443964 303 .037285111 328 .040422827 353 .043570035 304 .037410438 329 .040548533 354 .043696121 305 .037535780 330 .040674254 355 .043822222 306 .037661137 331 .040799990 356 .043948339 307 037786509 332 .040925742 357 .044074471 308 .037911896 333 .041051509 358 .044200618 309 .038037299 334 .041177290 359 .044326780 310 .038162716 335 .041303087 360 .044452958 311 .038288149 336 .041428900 361 .044579151 312 .038413597 337 .041554727 362 .044705359 313 .038539060 338 .041680570 363 .044831582 314 .038664539 339 .041806428 364 .044957821 315 .038790032 340 .041932301 365 .045084074 316 .038915541 341 .042058189 366 .045210343 317 .039041064 342 .042184092 367 .045336628 318 .039166603 343 .042310011 368 .045462927 319 .039292157 344 .042435945 369 .045589242 320 .039417727 345 .042561894 370 .045715572 321 .039543311 346 .042687858 371 .045841918 322 039668911 347 .042813838 323 039794526 348 .042939833 324 .039920156 349 .043065843 325 .040045801 350 .043191868 <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> # Part III - Administrative, Procedural, and Miscellaneous Disaster Relief for Taxpay- ers Affected by the Sep- tember 11, 2001 Terrorist Attack Notice 2001-68 PURPOSE This notice supplements the tax relief granted in Notice 2001-61, 2001-40 I.R.B. 305 (October 1, 2001), for tax- payers affected by the September 11, 2001 Terrorist Attack (the "Terrorist Attack") by clarifying and expanding the definition of affected taxpayer, listing additional acts for which a post- ponement is granted, and providing other relief. The relief provided to taxpayers in this notice will apply retroactively to September 11, 2001. This notice also postpones the dead- lines for certain acts performed by the Internal Revenue Service (IRS). The postponement of these deadlines is not retroactive to September 11, 2001. Thus, the IRS deadlines are postponed only if the last day for performing the act (e.g., making a tax assessment) would otherwise be on or after Novem- ber 2, 2001. Taxpayers who believe they are entitled to relief under this notice should mark "September 11, 2001 Terrorist Attack" in red ink on the top of their returns and other documents submitted to the IRS and petitions submitted to the United States Tax Court. Taxpayers should not put this notation on enve- lopes. Doing so may result in a delay in the delivery or processing of the return or document. Taxpayers that do not qualify for relief under Notice 2001-61 or this notice may still qualify for extensions and relief from penalties for reasonable cause. Reasonable cause relief may also be available to taxpayers who did re- ceive relief under Notice 2001-61 or this notice but who nevertheless could not meet their tax obligations within the relief period. A request for relief from penalties for reasonable cause should beattached to the return with an expla- nation of the reasons supporting relief. If penalties are assessed, Form 843, Claim for Refund and Request for Abatement, may be completed as a request for reasonable cause relief from penalties. ## A. MISSING TAXPAYERS Individuals missing as a result of the Terrorist Attack are affected taxpayers as defined in Notice 2001-61 under the term "victims of the crash." Thus, the relief granted by Notice 2001-61 and this notice applies to individuals miss- ing as a result of the Terrorist Attack. ## B. POSTPONEMENT OF DEAD- LINES FOR SECTION 1031 EX- CHANGES As explained below, a 120-day postponement of time is granted to affected taxpayers for the acts listed in Rev. Proc. 2001-53, 2001-47 I.R.B 506 (November 19, 2001), if the last day to perform the act would otherwise fall within the period beginning on Septem- ber 11, 2001, and ending on November 30, 2001. One of the acts listed in Rev. Proc. 2001-53 is an exchange of prop- erty under section 1031. This notice provides three types of postponements relating to section 1031 exchanges. (1) If the taxpayer (transferor) is an affected taxpayer under Notice 2001- 61, then the last day of the identification period or the exchange period set forth in section 1.1031(k)-1(b)(2) of the regulations, relating to deferred like- kind exchanges, or the last day of any period set forth in section 4.02(3) through (6) of Rev. Proc. 2000-37, 2000-40 I.R.B. 308 (October 2, 2000), relating to a qualified ex- change accommodation arrangement, is postponed by 120 days if the follow- ing requirements are met: (a) The relinquished property was transferred on or before September 11, 2001, or, in a transaction governed by Rev. Proc. 2000-37, property was transferred to the exchange accommo- dation titleholder on or before Septem- ber 11, 2001; and (b) Absent application of this notice, the identification period or the exchange period, or any time period set forth in section 4.02(3) through (6) of Rev. Proc. 2000-37, would end on or after September 11, 2001, and on or before November 30, 2001. (2) If a taxpayer (transferor) is not an affected taxpayer under Notice 2001- 61, then the last day of the identification period or the exchange period set forth in section 1.1031(k)-1(b)(2), or the last day of any period set forth in section 4.02(3) through (6) of Rev. Proc. 2000- 37, is postponed by 120 days if the following requirements are met: (a) The relinquished property was transferred on or before September 11, 2001, or, in a transaction governed by Rev. Proc. 2000-37, property was transferred to the exchange accommo- dation titleholder on or before Septem- ber 11, 2001; and (b) Absent application of this notice, the identification period or the exchange period, or any time period set forth in section 4.02(3) through (6) of Rev. Proc. 2000-37, would end on or after September 11, 2001, and on or before November 30, 2001, and (c) It is difficult to meet a deadline set forth in section 1.1031(k)-1(b), or a deadline in section 4.02(3) through (6) of Rev. Proc. 2000-37, due to the Ter- rorist Attack for the following or similar reasons: (I) The relinquished property or the replacement property is or was located in a covered disaster area (as defined in Notice 2001-61); or (II) The principal place of business of any party to the transaction other than the transferor (e.g., a qualified interme- diary, exchange accommodation title- holder, transferee, settlement attorney, lender, financial institution or a title insurance company) is located in a covered disaster area (as defined in Notice 2001-61); or <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> (III) Any party to the transaction other than the transferor (or an em- ployee of such a party who is or was involved in the section 1031 transac- tion) was killed, injured, or is missing as a result of the Terrorist Attack; or (IV) A document prepared in connec- tion with the exchange (e.g., the agree- ment between the transferor and the qualified intermediary or the deed to the relinquished property or replacement property) or land records were de- stroyed, damaged, or lost as a result of the Terrorist Attack; or (V) A lender decided not to fund a real estate closing due to the Terrorist Attack or refused to fund a loan to the taxpayer because terrorism insurance was not available; or (VI) A title insurance company was not able to provide the required title insurance policy necessary to settle or close a real estate transaction due to the Terrorist Attack. (3) If a postponement is not otherwise granted under paragraphs (1) and (2), a postponement to September 24, 2001, similar to the postponement provided in Notice 2001-63, 2001-40 I.R.B. 308 (October 1, 2001), is granted if the following requirements are met: (a) The relinquished property was transferred on or before September 11, 2001, or, in a transaction governed by Rev. Proc. 2000-37, property was transferred to the exchange accommo- dation titleholder on or before Septem- ber 11, 2001; and (b) Absent application of this notice, the identification period or the exchange period, or any time period set forth in section 4.02(3) through (6) of Rev. Proc. 2000-37, would end on or after September 11, 2001, and on or before September 17, 2001. C. ADDITIONAL GRANT OF RE- LIEF (1) This notice expands the relief provided by paragraph (2) of the Grant of Relief section of Notice 2001-61. The additional relief is for tax returns on an extension (not on a postponement under section 7508A) that expires on or after December 1, 2001, and on or before January 31, 2002. For these returns, the last date for filing the return is postponed until February 15, 2002, under section 7508A. This additional relief is available only to taxpayers that have difficulty in meeting their federal tax obligations because their records, computers, or other essential supporting services were lost or damaged, or essen- tial personnel were injured or killed, or are missing as a result of the Terrorist Attack. (2) Under paragraph (4) of the Grant of Relief section of Notice 2001-61, the IRS granted to all affected taxpay- ers a 120-day postponement of time to perform the acts described in section 301.7508A-1(c)(1), if the last day to perform the act fell within the period beginning on September 11, 2001, and ending on November 30, 2001. One of these acts is the filing of any Tax Court petition. Under this notice, the relief provided by paragraph (4) is expanded as follows. If the last date for filing any Tax Court petition would other- wise be on or after December 1, 2001, and on or before December 31, 2001, the last date for filing the petition is postponed by 60 days under section 7508A. (3) In addition to the acts specifically identified in section 301.7508A-1(c)(1), a 120-day postponement is granted for each act listed in Rev. Proc. 2001-53, for affected taxpayers if the last day to perform the act would otherwise fall within the period beginning on Septem- ber 11, 2001, and ending on November 30, 2001. This postponement does not, however, apply to the acts required by section 148(f)(3) and section 1.148- 3(g), section 1.148-5(c), section 148(f)(4)(C)(xvi) and section 1.148- 7(k)(1), or section 149(e). Postpone- ments of these acts for issuers of tax exempt bonds were provided in An- nouncement 2001-101, 2001-43 I.R.B. 374 (October 22, 2001). For purposes of tax-exempt bonds, the term "affected taxpayer" shall include any affected issuer as described in Announcement 2001-101. This postponement also does not apply to the deadline for Form 5500 and Form 5500-EZ filings. The De- partment of Labor's Pension and Wel- fare Benefits Administration Press Release No. 01-36 (released September 14, 2001) grants relief extending the deadline for filing Form 5500 and Form 5500-EZ. ## D. PARTNERS, S CORPORATION SHAREHOLDERS, AND BENEFICI- ARIES OF TRUSTS AND ESTATES Partners, S corporation shareholders, and beneficiaries of trusts and estates use the information reported to them on Schedule K-1 by their partnerships, corporations, trusts, or estates to prepare their own income tax returns. If the income tax return of the partnership, S corporation, trust or estate was post- poned or extended under this notice or Notice 2001-61, the partner, S corpora- tion shareholder, or beneficiary of a trust or estate may not receive the Schedule K-1 prior to the due date or extended due date of the partner's, shareholder's, or beneficiary's income tax return. The income tax return of the partner, shareholder, or beneficiary is not postponed or extended by Notice 2001-61 or this notice solely because the entity (the partnership, S corpora- tion, trust, or estate) is an affected taxpayer. Partners, shareholders, and benefici- aries of trusts and estates may request extensions of time to file their income tax returns. See I.R.C. § 6081. If the Schedule K-1 is not received by the extended due date, the partner, share- holder, or beneficiary should prepare and file the income tax return on a timely basis by making a reasonable estimate in good faith of items of in- come, gain, loss, deduction, and credit attributable to the taxpayer's interest in the entity. Later, when the Schedule K-1 is received, the taxpayer should prepare an amended return reflecting the items reported on the Schedule K-1. If the taxpayer's original return under- estimated items of income or gain, or overstated items of deduction, loss, or credit, and a late payment penalty at- tributable to these items is assessed, the taxpayer should request an abatement of the penalty for reasonable cause. If the original return was prepared in good faith based on reasonable estimates of the tax items attributable to the entity, the IRS will waive or abate penalties for late payment. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## E. RELIEF FROM PENALTY FOR FAILING TO FILE PARTNERSHIP RETURN BY MAGNETIC MEDIA Any partnership that is an affected taxpayer, as defined in Notice 2001-61 and this notice, and that is required to file a partnership return by magnetic media (electronically) under section 6011(e) will not be assessed a penalty under section 6721 for failing to file the partnership return electronically if the partnership elects to file a paper return. This relief is for partnership returns that have an original due date or extended due date (not a postponed due date under section 7508A) on or after Sep- tember 11, 2001, and on or before November 30, 2001. Taxpayers who qualify should write "September 11, 2001 Terrorist Attack" in red ink on the top of their paper Form 1065. The IRS will abate any penalty that is improperly assessed. ## F. ACTS PERFORMED BY THE GOVERNMENT (1) If the last date otherwise pre- scribed by law for making a tax assess- ment is on or after November 2, 2001, and the taxpayer received a 120-day postponement of time to file a Tax Court petition under paragraph (4) of the Grant of Relief section of Notice 2001-61, then the last date otherwise prescribed by law for making an as- sessment is correspondingly postponed by 120 days. This additional time for making an assessment is needed for the following reason. Under section 6503, the period of limitations on assessment is suspended when a statutory notice of deficiency is mailed. The section 6503 suspension period (generally 150 days) includes the period (generally 90 days) after the issuance of a statutory notice of deficiency during which the taxpayer is permitted to file a Tax Court petition and the IRS is prohibited from making an assessment. See I.R.C. §§ 6213(a) and 6213(c). Under Notice 2001-61, affected taxpayers are entitled to an additional 120 days to file a Tax Court petition in response to the notice of deficiency. In some cases, the period of limitations on assessment could expire prior to the expiration of the expanded period during which an affected tax- payer may file a Tax Court petition. (2) Similar to paragraph (1), if the last date otherwise prescribed by law for making a tax assessment is on or after November 2, 2001, and the taxpayer receives a 60-day postponement of time to file a Tax Court petition under para- graph (2) of the Additional Grant of Relief section of this notice, the last date otherwise prescribed by law for making a tax assessment is correspond- ingly postponed by 60 days. (3) Documents maintained by the IRS (including the Office of Chief Counsel) in New York City were destroyed or lost in the Terrorist Attack, or remain in buildings that are inaccessible. The destruction or loss of these documents (or the IRS's lack of access to them) will materially interfere with the IRS's ability to timely administer the Internal Revenue Code with respect to certain taxpayers. The taxpayers to whom these records relate are "affected tax- payers" for the limited purpose of this paragraph. In these cases, a 120-day postponement is granted for the follow- ing government acts if the last date for performance of the act is on or after November 2, 2001, and on or before November 30, 2001: making an as- sessment of any tax; issuing a statutory notice of deficiency; allowing a credit or refund of any tax; collecting by the Secretary, by levy or otherwise, the amount of any liability in respect of any tax; bringing suit by the United States, or any office on its behalf, in respect of any tax liability; returning property under section 6343; and the discharge of an executor from personal liability for a decedent's taxes under section 6905. The IRS will notify, as soon as practicable, any affected taxpayers, as defined under this paragraph, of the government act or acts that will be postponed. ## G. TAXPAYER INQUIRIES If you wish to recommend that other acts qualify for postponement under this notice, Notice 2001-61, or Rev. Proc. 2001-53, please write to the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provi- sions and Judicial Practice Division), CC:PA:APJP:Br2, 1111 Constitution Avenue, NW, Washington, DC 20224, or send an e-mail message to No- tice.Comments@irscounsel.treas.gov. Please write "7508A List" on the enve- lope or in the subject matter area of the e-mail. ## H. DRAFTING INFORMATION This notice was drafted by the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Divi- sion). For further information regarding this notice you may call the toll-free disaster hotline at (866) 562-5227 or (202) 622-4940 (not a toll-free call). 26 CFR 301.7508-1: Time for performing certain acts postponed by reason of service in a combat zone or a Presidentially declared disaster. (Also Part I, 7508A; 301.7508A-1.) # Rev. Proc. 2001-53 ## SECTION 1. PURPOSE .01 This revenue procedure provides a list of time-sensitive acts, the per- formance of which may be postponed under sections 7508 and 7508A of the Internal Revenue Code (Code). Section 7508 of the Code postpones specified acts for individuals serving in the Armed Forces of the United States or serving in support of such Armed Forces in a combat zone. Section 7508A of the Code permits a post- ponement of specified acts for tax- payers affected by a Presidentially declared disaster. The list of acts in this revenue procedure supplements the list of postponed acts in section 7508(a)(1) of the Code and § 301.7508A-1(b) of the Regulations on Procedure and Administration. .02 This revenue procedure does not, by itself, provide any postponements under sections 7508 or 7508A. In order for taxpayers to be entitled to a post- ponement of any act listed in this reve- <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> nue procedure, the IRS generally will publish a Notice or other guidance providing relief with respect to a spe- cific combat zone or Presidentially declared disaster. .03 This revenue procedure will be updated as needed when the IRS deter- mines that additional acts should be included in the list of postponed acts or that certain acts should be removed from the list. Also, taxpayers may recommend that additional acts be considered for postponement under sections 7508 and 7508A. See section 17 of this revenue procedure. ## SECTION 2. BACKGROUND .01 Section 7508(a)(1) of the Internal Revenue Code permits a postponement of certain time-sensitive acts for indi- viduals serving in the Armed Forces or in support of such Armed Forces in an area designated by the President as a combat zone under section 112. Among these acts are the filing of returns, the payment of tax, the filing of a Tax Court petition, and the filing of a refund claim. In the event of service in a combat zone, the acts specified in section 7508(a)(1) of the Code are automatically postponed. In addition, if the Service publishes a Notice or other guidance providing additional relief under section 7508, some or all of the acts listed in this revenue procedure may be postponed. Likewise, acts not listed in this revenue procedure may be included in published guidance. .02 Section 7508A of the Code pro- vides that certain acts performed by taxpayers and the government may be postponed if the taxpayer is affected by a Presidentially declared disaster. A "Presidentially declared disaster" is defined in section 1033(h)(3) of the Code. Section 301.7508A-1(d)(1) of the Regulations on Procedure and Administration defines seven types of affected taxpayers, including any indi- vidual whose principal residence (for purposes of 1033(h)(4)) is located in a "covered disaster area" and any busi- ness entity or sole proprietor whose principal place of business is located in a "covered disaster area." Postpone- ments under section 7508A are not available simply because a disaster has occurred. Generally, the IRS will publish a Notice or other guidance authorizing the postponement. Such guidance will describe the acts post- poned, the duration of the postpone- ment, and the location of the covered disaster area. See, for example, Notice 2001-30, 2001-14 I.R.B. 989 and Notice 97-62, 1997-2 C.B. 320, 1997- 49 I.R.B. 8. When a notice or other guidance for a particular disaster is published, the guidance generally will refer to this revenue procedure and may provide for a postponement of all the acts listed in the regulations and this revenue procedure. Alternatively, the guidance may provide that only certain acts listed in this revenue procedure are postponed based on the time when the disaster occurred, its severity, and other factors. ## SECTION 3. SCOPE This revenue procedure applies to individuals serving in the Armed Forces in a combat zone, or in support of such Armed Forces, and to affected taxpay- ers within the meaning of § 301.7508A- 1(d)(1) of the Regulations on Procedure and Administration. # SECTION 4. APPLICATION .01 The tables below list sections of the Internal Revenue Code and Treas- ury Regulations requiring the timely performance of specified acts that may be postponed under sections 7508 and 7508A. .02 In order to avoid unnecessary duplication, the following tables do not include acts specified in sections 7508 or 7508A or the regulations thereunder. Thus, for example, no mention is made in the following tables of the filing of tax returns or the payment of taxes (or an installment thereof) because these acts are already covered by sections 7508 and 7508A and the regulations thereunder. Also, the following tables do not refer to the making of accounting method elections or any other elections required to be made on tax returns or attachments thereto. Reference to these elections is not necessary because postponement of the filing of a tax return automatically postpones the making of any election required to be made on the return or an attachment thereto. .03 The following tables refer only to postponement of acts performed by taxpayers. Additional guidance will be published in the Internal Revenue Bulletin if a decision is made that acts performed by the government may be postponed under section 7508 or section 7508A. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## SECTION 5. ACCOUNTING METHODS AND PERIODS Statute or Regulation Act Postponed 1. Chapter 1, Subchapter E of the Code Any act relating to the adoption, election, retention, or change of any accounting method or accounting period, or to the use of an accounting method or accounting period, that is required to be performed on or before the due date of a tax return (including extensions). Examples of such acts are (a) the requirement in Rev. Proc. 2000-11, section 6.02, that Form 1128 must be filed with the Director, Internal Revenue Service Center, on or before the due date of the tax return for the short period required to effect the change in account- ing period; and (b) the requirement in Rev. Proc. 99-49, section 6.02, that a copy of Form 3115 must be filed with the national office no later than when the original Form 3115 is filed with the timely filed tax return for the year of the accounting method change. 2. Treas. Reg. § 1.381(c)(4)-1 (d)(2) If the acquiring corporation is not permitted to use the method of accounting used by the acquiring corporation, the method of accounting used by the distributor/transferor corpora- tion, or the principal method of accounting; or if the corporation wishes to use a new method of accounting, then the acquiring corporation must apply to the Commissioner to use another method. Treas. Reg. § 1.381(c)(4)-1(d)(2) requires applications to be filed not later than 90 days after the date of distribution or transfer. Rev. Proc. 83-77, 1983-2 C.B. 594, provides an automatic 90-day extension. 3. Treas. Reg. § 1.381(c)(5)-1 (d)(2) If the acquiring corporation is not permitted to use the inventory method used by the ac- quiring corporation, the inventory method used by the distributor/transferor corporation, or the principal method of accounting, or wishes to use a new method of accounting, then the acquiring corporation must apply to the Commissioner to use another method. Treas. Reg. § 1.381(c)(5)-1(d)(2) requires applications to be filed not later than 90 days after the date of distribution or transfer. Rev. Proc. 83-77 provides an automatic 90-day extension. 4. Treas. Reg. § 1.442- 1(b)(1) In order to secure prior approval of an adoption, change or retention of a taxpayer's annual accounting period, the taxpayer generally must file an application on Form 1128, Applica- tion to Adopt, Change, or Retain a Tax Year, with the Commissioner. The application must be filed on or before the 15th day of the second calendar month following the close of the short period. (But see Rev. Proc. 2001-11, 2000-3 I.R.B. 309, for automatic changes in annual accounting period that can be made with the return.) 5. Treas. Reg. § 1.444- 3T(b)(1) A section 444 election must be made by filing Form 8716, Election to Have a Tax Year Other Than a Required Tax Year, with the Service Center. Generally, Form 8716 must be filed by the earlier of (a) the 15th day of the fifth month following the month that includes the first day of the taxable year for which the election will first be effective, or (b) the due date (without regard to extensions) of the income tax return resulting from the section 444 election. 6. Treas. Reg. § 1.446- 1(e)(3)(i) To secure the Commissioner's consent to a change in method of accounting, the taxpayer must file an application on Form 3115, Application for Change in Accounting Method, with the Commissioner during the taxable year in which the taxpayer desires to make the change in method of accounting (i.e., must be filed by the last day of such taxable year). This filing requirement is also in Rev. Proc. 97-27, 1997-1 C.B. 680. (But see Rev. Proc. 99-49, 1999-2 C.B. 725, for automatic changes in method of accounting that can be made with the return.) <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ### SECTION 5. ACCOUNTING METHODS AND PERIODS-CONTINUED Statute or Regulation Act Postponed 7. Treas. Reg. § 1.461- 1(c)(3)(ii) A taxpayer may elect, with the consent of the Commissioner, to accrue real property taxes ratably in accordance with section 461(c). A written request for permission to make such an election must be submitted within 90 days after the beginning of the taxable year to which the election is first applicable. Rev. Proc. 83-77 provides an automatic 90-day extension. 8. Sec. 461(h)(3) A taxpayer may elect the recurring item exception method of accounting under which certain items that are recurring in nature (for example, rebates, prizes, and provision of services under warranty contracts) are treated as incurred during a taxable year if, (among other requirements) for each such item, economic performance occurs within 81/2-months after the close of the taxable year. 9. Treas. Reg. § 1.7519- 2T(a)(2),(3) and (4) A partnership or S corporation must file the Form 8752, Required Payment or Refund Under Section 7519, if the taxpayer has made an election under section 444 to use a taxable year other than its required taxable year and the election is still in effect. The Form 8752 must be filed and any required payment must be made by the date stated in the instructions to Form 8752. 10. Rev. Proc. 87-32, 1987-2 C.B. 396 Certain partnerships, S corporations, corporations electing to be S corporations, or personal service corporations that desire to change or retain a tax year that is its natural business year, as defined in section 4.01(1) of Rev. Proc. 87-32, and S corporations or corporations electing to be S corporations that desire to change to a tax year that meets the "ownership tax year test" set forth in section 4.02, must file Form 1128, Application to Adopt, Change, or Retain a Tax Year, with the Service Center on or before the 15th day of the second calendar month following the close of the short period for which a return is required. If a partnership, S corporation or a personal service corporation desires to retain a tax year not described in Rev. Proc. 87-32, then the taxpayer should request permission to retain its tax year by filing Form 1128 on or before the 75th day of the tax year for which the reten- tion is to apply. An electing S corporation that desires to adopt, change to, or retain a tax year not described in Rev. Proc. 87-32 must request permission by filing Form 2553, Election by a Small Business Corporation, when the election to be an S corporation is filed. 11. Rev. Proc. 92-29, section 6.02 A developer of real estate requesting the Commissioner's consent to use the alternative cost method must file a private letter ruling request within 30 days after the close of the taxable year in which the first benefitted property in the project is sold. The request must include a consent extending the period of limitation on the assessment of income tax with respect to the use of the alternative cost method. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ### SECTION 6. BUSINESS AND INDIVIDUAL TAX ISSUES Statute or Regulation Act Postponed 1. Treas. Reg. § 1.71-1T(b), Q&A-7 A payer spouse may send cash to a third party on behalf of a spouse that qualifies for ali- mony or separate maintenance payments if the payments are made to the third party at the written request or consent of the payee spouse. The request or consent must state that the parties intend the payment to be treated as an alimony payment to the payee spouse subject to the rules of section 71. The payer spouse must receive the request or consent prior to the date of filing of the payer spouse's first return of tax for the taxable year in which the payment was made. 2. Treas. Reg. § 1.77-1 A taxpayer who receives a loan from the Commodity Credit Corporation may elect to include the amount of the loan in his gross income for the taxable year in which the loan is received. The taxpayer in subsequent taxable years must include in his gross income all amounts received during those years as loans from the Commodity Credit Corporation, unless he secures the permission of the Commissioner to change to a different method of accounting. Treas. Reg. § 1.77-1 requires such requests to be filed within 90 days after the beginning of the taxable year of change. Rev. Proc. 83-77 provides an automatic 90-day extension. 3. Treas. Reg. § 1.110- 1(b)(4)(ii)(A) The lessee must expend its construction allowance on the qualified long-term real property within eight and one-half months after the close of the taxable year in which the construc- tion allowance was received. 4. Sec. 118(c)(2) A contribution in aid of construction received by a regulated public utility that provides water or sewerage disposal services must be expended by the utility on qualifying property before the end of the second taxable year after the year in which it was received by the utility. 5. Treas. Reg. § 1.170A- 5(a)(2) A contribution of an undivided present interest in tangible personal property shall be treated as made upon receipt by the donee of a formally executed and acknowledged deed of gift. However, the period of initial possession by the donee may not be deferred for more than one year. 6. Sec. 468A(g) A taxpayer that makes payments to a nuclear decommissioning fund with respect to a taxable year must make the payments within 21/2 months after the close of such taxable year (the deemed payment date). 7. Sec. 530(h) A trustee of a Coverdell education savings account must provide certain information con- cerning the account to the beneficiary by January 31 following the calendar year to which the information relates. In addition, Form 5498 must be filed with the IRS by May 31 following the calendar year to which the information relates. 8. Sec. 563(a) In the determination of the dividends paid deduction for purposes of the accumulated earn- ings tax imposed by section 531, a dividend paid after the close of any taxable year and on or before the 15th day of the third month following the close of such taxable year shall be considered as paid during such taxable year. The close of the taxable year is not affected by this revenue procedure; the 31/2-month period within which the dividend is paid is the period extended. 9. Sec. 563(b) In the determination of the dividends paid deduction for purposes of the personal holding company tax imposed by section 541, a dividend paid after the close of any taxable year and on or before the 15th day of the third month following the close of such taxable year shall, to the extent the taxpayer elects on its return for the taxable year, be considered as paid during such taxable year. The close of the taxable year is not affected by this revenue procedure; the 31/2 -month period within which the dividend is paid is the period extended. 10. Sec. 563(c) In the determination of the dividends paid deduction for purposes of part III, a dividend paid after the close of any taxable year and on or before the 15th day of the third month following the close of such taxable year shall, to the extent the company designates such dividend as being taken into account, be considered as paid during such taxable year. The close of the taxable year is not affected by this revenue procedure; the 31/2-month period within which the dividend is paid is the period extended. <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ### SECTION 6. BUSINESS AND INDIVIDUAL TAX ISSUES-CONTINUED Statute or Regulation Act Postponed 11. Treas. Reg. § 1.468A- 3(h)(1)(v) A taxpayer must file a request for a schedule of ruling amounts for a nuclear decommis- sioning fund by the deemed payment date (21/2-months after the close of the taxable year for which the schedule of ruling amounts is sought). 12. Treas. Reg. § 1.468A- 3(h)(1)(vii) A taxpayer has 30 days to provide additional requested information with respect to a re- quest for a schedule of ruling amounts. If the information is not provided within the 30 days, the request will not be considered filed until the date the information is provided. 13. Sec. 529 (c)(3)(C)(i) A rollover contribution to another qualified tuition program must be made no later than the 60th day after the date of a distribution from a qualified tuition program. 14. Sec. 530(d)(4)(C) (i) Excess contributions to a Coverdell education savings account must be distributed before a specified time in the taxable year following the taxable year in which the contribution is made. 15. Sec. 530(d)(5) A rollover contribution to another Coverdell education savings account must be made no later than the 60th day after the date of a payment or distribution from a Coverdell educa- tion savings account. 16. Sec. 563(d) For the purpose of applying section 562(a), with respect to distributions under subsection (a), (b), or (c) of section 562, a distribution made after the close of the taxable year and on or before the 15th day of the third month following the close of the taxable year shall be considered as made on the last day of such taxable year. The close of the taxable year is not affected by this revenue procedure; the 31/2-month period within which the dividend is paid is the period extended. 17. Sec. 1031(a) Any property received by the taxpayer shall be treated as property which is not like-kind property if - (A) such property is not identified as property to be received in the exchange on or before the day which is 45 days after the date on which the taxpayer transfers the property relinquished in the exchange, or (B) such property is received after the earlier of (i) the day which is 180 days after the date on which the taxpayer transfers the property relinquished in the exchange, or (ii) the due date (determined with regard to extension) for the transferor's return of the tax imposed by this chapter for the taxable year in which the transfer of the relinquished property occurs. 18. Sec. 1043(a) If an eligible person (as defined under section 1043(b)) sells any property pursuant to a certificate of divestiture, then at the election of the taxpayer, gain from such sale shall be recognized only to the extent that the amount realized on such sale exceeds the cost of any permitted property purchased by the taxpayer during the 60-day period beginning on the date of such sale. 19. Sec. 1045(a) A taxpayer other than a corporation may elect to roll over gain from the sale of qualified small business stock held for more than six months if other qualified small business stock is purchased by the taxpayer during the 60-day period beginning on the date of sale. 20. Sec. 1382(d) An organization, to which section 1382(d) applies, is required to pay a patronage dividend within 81/2 months after the close of the year. 21. Sec. 1388(j)(3)(A) Any cooperative organization that exercises its option to net patronage gains and losses, is required to give notice to its patrons of the netting by the 15th day of the 9th month follow- ing the close of the taxable year. 22. Treas. Reg. § 301.7701- 3(c) The effective date of an entity classification election (Form 8832) cannot be more than 75 days prior to the date on which the election is filed. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ### SECTION 6. BUSINESS AND INDIVIDUAL TAX ISSUES-CONTINUED Statute or Regulation Act Postponed 23. Treas. Reg. §§ 301.9100- 2(b)-(d) An automatic extension of 6 months from the due date of a return, excluding extensions, is granted to make the regulatory of statutory elections whose due dates are the due date of the return or the due date of the return including extensions (for example, an application to change a method of accounting under Rev. Proc. 99-49), provided the taxpayer (a) timely filed its return for the year of election, (b) within that 6-month extension period, takes the required corrective action to file the election in accordance with the statute, regulations, revenue procedure, revenue ruling, notice or announcement permitting the election, and (c) writes at the top of the return, statement of election or other form "FILED PURSUANT TO § 301.9100-2." 24. Treas. Reg. § 301.9100- 2(a)(1) An automatic extension of 12 months from the due date for making a regulatory election is granted to make certain elections, including the election to use other than the required taxable year under section 444, and the election to use LIFO under section 472. ### SECTION 7. CORPORATE ISSUES Statute or Regulation Act Postponed 1. Sec. 302(e)(1) A corporation must complete a distribution in pursuance of a plan of partial liquidation of a corporation within the specified period. 2. Sec. 303 and Treas. Reg. § 1.303-2 A corporation must complete the distribution of property to a shareholder in redemption of all or part of the stock of the corporation which (for Federal estate tax purposes) is included in determining the estate of a decedent. Section 303 and Treas. Reg. § 1.303-2 require, among other things, that the distribution occur within the specified period. 3. Sec. 304(b)(3)(C) If certain requirements are met, section 304(a) does not apply to a transaction involving the formation of a bank holding company. One requirement is that within a specified period (generally 2 years) after control of a bank is acquired, stock constituting control of the bank is transferred to a bank holding company in connection with the bank holding company's formation. 4. Sec. 332(b) and Treas. Reg. §§ 1.332- 3 and 1.332-4 A corporation must completely liquidate a corporate subsidiary within the specified period. 5. Sec. 338(d)(3) and (h), and Treas. Reg. § 1.338-2 An acquiring corporation must complete a "qualified stock purchase" of a target corpora- tion's stock within the specified acquisition period. 6. Sec. 338(g) and Treas. Reg. § 1.338-2 An acquiring corporation may elect to treat certain stock purchases as asset acquisitions. The election must be made within the specified period. 7. Sec. 338(h)(10) and Treas. Reg. § 338(h)(10)- 1(c) An acquiring corporation and selling group of corporations may elect to treat certain stock purchases as asset purchases, and to avoid gain or loss upon the stock sale. The election must be made within the specified period. 8. Sec. 341 and Treas. Reg. § 1.341-7 A shareholder of a collapsible corporation must sell its stock in the corporation within the specified period. <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ### SECTION 7. CORPORATE ISSUES-CONTINUED Statute or Regulation Act Postponed 9. Treas. Reg. § 1.381(c)(17)- 1(c) An acquiring corporation files a Form 976, Claim for Deficiency Dividends Deduction by a Personal Holding Company, Regulated Investment Company, or Real Estate Investment Trust, within 120 days after the date of the determination under section 547(c) to claim a deduction of a deficiency dividend. 10. Sec. 562(b)(1)(B) In the case of a complete liquidation (except in the case of a complete liquidation of a personal holding company or foreign personal holding company) occurring within 24 months after the adoption of a plan of liquidation, any distribution within such period pursuant to such plan shall, to the extent of the earnings and profits (computed without regard to capital losses) of the corporation for the taxable year in which such distribution is made, be treated as a dividend for purposes of computing the dividends paid deduction. 11. Sec. 562(b)(2) In the case of a complete liquidation of a personal holding company occurring within 24 months after the adoption of a plan of liquidation, the amount of any distribution within such period pursuant to such plan shall be treated as a dividend for purposes of computing the dividends paid deduction to the extent that such is distributed to corporate distributees and represents such corporate distributees' allocable share of the undistributed personal holding company income for the taxable year of such distribution. 12. Sec. 1502 and Treas. Reg. § 1.1502- 75(c)(1)(i) A common parent must apply for permission to discontinue filing consolidated returns within a specified period after the date of enactment of a law affecting the computation of tax liability. 13. Sec. 6425 and Treas. Reg. § 1.6425-1 Corporations applying for an adjustment of an overpayment of estimated income tax must file Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax, on or before the 15th day of the third month after the taxable year, or before the date the corporation first files its income tax return for such year, whichever is earlier. ### SECTION 8. EMPLOYEE BENEFIT ISSUES Statute or Regulation Act Postponed 1. Sec. 72(p)(2)(B) and (C), and Treas. Reg. § 1.72(p)-1, Q&A-10 A loan from a qualified employer plan to a participant in, or a beneficiary of, such plan must be repaid according to certain time schedules specified in section 72(p)(2)(B) and (C) (including, if applicable, any grace period granted pursuant to Treas. Reg. § 1.72(p)-1, Q&A-10). 2. Sec. 72(t)(2)(A)(iv) Under section 72(t)(2)(A)(iv), to avoid the imposition of a 10-percent additional tax on a distribution from a qualified retirement plan, the distribution must be part of a series of substantially equal periodic payments, made at least annually. 3. Sec. 72(t)(2)(F) To avoid the imposition of a 10-percent additional tax on a distribution from an individual retirement arrangement (IRA) for a first-time home purchase, such distribution must be used within 120 days of the distribution to pay qualified acquisition costs or rolled into an IRA. 4. Sec. 83(b) and Treas. Reg. § 1.83-2(a) Any person who performs services in connection with which property is transferred to any person may elect not later than 30 days after the date of the transfer of the property to include in his gross income, for the taxable year in which such property is transferred, the excess of the fair market value of the property over the amount (if any) paid for the prop- erty. 5. Proposed Treas. Reg. § 1.125-1, Q&A-15 Cafeteria plan participants will avoid constructive receipt of the taxable amounts if they elect the benefits they will receive before the beginning of the period during which the benefits will be provided. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ### SECTION 8. EMPLOYEE BENEFIT ISSUES-CONTINUED Statute or Regulation Act Postponed 6. Proposed Treas. Reg. § 1.125-1, Q&A-14 and Proposed Treas. Reg. § 1.125-2, Q&A-7 Cafeteria plan participants will not be in constructive receipt if, at the end of the plan year, they forfeit amounts elected but not used during the plan year. 7. Proposed Treas. Reg. § 1.125-2, Q&A-5 Cafeteria plan participants may receive in cash the value of unused vacation days on or before the earlier of the last day of the cafeteria plan year or the last day of the employee's taxable year to which the unused days relate. 8. Treas. Reg. § 1.162- 27(e)(2) A performance goal is considered pre-established if it is established in writing by the cor- poration's compensation committee not later than 90 days after the commencement of the period of service to which the performance goal relates if the outcome is substantially uncertain at the time the compensation committee actually establishes the goal. In no event, however, will the performance goal be considered pre-established if it is established after 25 percent of the period of service has elapsed. 9. Sec. 220(f)(5) A rollover contribution to an Archer MSA must be made no later than the 60th day after the day on which the holder receives a payment or distribution from an Archer MSA. 10. Sec. 220(h) A trustee or custodian of an MSA (Archer MSA or Medicare+Choice MSA) must provide certain information concerning the MSA to the account holder by January 31 following the calendar year to which the information relates. In addition, MSA contribution information must be furnished to the account holder, and Form 5498, IRA Contribution Information, filed with the IRS, by May 31 following the calendar year to which the information relates. 11. Secs. 401(a)(9), 403(a)(1), 403(b)(10), 408(a)(6), 408(b)(3)and 457(d)(2) The first required minimum distribution from plans subject to the rules in section 401(a)(9) must be made no later than the required beginning date. Subsequent required minimum distributions must be made by the end of each distribution calendar year. 12. Sec. 401(a)(28)(B) (i) A qualified participant in an ESOP (as defined in section 401(a)(28)(B)(iii)) may elect within 90 days after the close of each plan year in the qualified election period (as defined in section 401(a)(28)(B)(iv)) to direct the plan as to the investment of at least 25 percent of the participant's account in the plan (50 percent in the case of the last election). 13. Sec. 401(a)(28)(B) (ii) A plan must distribute the portion of the participant's account covered by an election under section 401(a)(28)(B)(i) within 90 days after the period during which an election can be made; or the plan must offer at least 3 investment options (not inconsistent with regulations prescribed by the Secretary) to each participant making the election under section 401(a)(28)(B)(i) and within 90 days after the period during which the election may be made, the plan must invest the portion of the participant's account in accordance with the participant's election. 14. Sec. 401(a)(30) and Treas. Reg. § 1.401(a)-30 and § 1.402(g)-1 Excess deferrals for a calendar year, plus income attributable to the excess, must be distrib- uted no later than the first April 15 following the calendar year. <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ### SECTION 8. EMPLOYEE BENEFIT ISSUES-CONTINUED Statute or Regulation Act Postponed 15. Sec. 401(b) and Treas. Reg. § 1.401(b)-1 A retirement plan that fails to satisfy the requirements of section 401(a) or section 403(a) on any day because of a disqualifying provision will be treated as satisfying such require- ments on such day if, prior to the expiration of the applicable remedial amendment period, all plan provisions necessary to satisfy the requirements of section 401(a) or 403(a) are in effect and have been made effective for the whole of such period. 16. Sec. 401(k)(8) A cash or deferred arrangement must distribute excess contributions for a plan year, plus income attributable to the excess, pursuant to the terms of the arrangement no later than the close of the following plan year. 17. Sec. 401(m)(6) A plan subject to section 401(m) must distribute excess aggregate contributions for a plan year, plus income attributable to the excess, pursuant to the terms of the plan no later than the close of the following plan year. 18. Sec. 402(g)(2)(A) and Treas. Reg. § 1.402(g)-1 An individual with excess deferrals for a taxable year must notify a plan, not later than a specified date following the taxable year, that excess deferrals have been contributed to that plan for the taxable year. A distribution of excess deferrals identified by the individual, plus income attributable to the excess, must be accomplished no later than the first April 15 following the taxable year of the excess. 19. Sec. 404(k)(2)(A) (ii) An ESOP receiving dividends on stock of the C corporation maintaining the plan must distribute the dividend in cash to participants or beneficiaries not later than 90 days after the close of the plan year in which the dividend was paid. 20. Secs. 408(i) and 6047(c) A trustee or issuer of an individual retirement arrangement (IRA) must provide certain information concerning the IRA to the IRA owner by January 31 following the calendar year to which the information relates. In addition, IRA contribution information must be furnished to the owner, and Form 5498, Individual Retirement Arrangement Information, filed with the IRS, by May 31 following the calendar year to which the information relates. 21. Sec. 409(h)(4) An employer required to repurchase employer securities under section 409(h)(1)(B) must provide a put option for a period of at least 60 days following the date of distribution of employer securities to a participant, and if the put option is not exercised, for an additional 60-day period in the following plan year. A participant who receives a distribution of employer securities under section 409(h)(1)(B) must exercise the put option provided by that section within a period of at least 60 days following the date of distribution, or if the put option is not exercised within that period, for an additional 60-day period in the follow- ing plan year. 22. Sec. 409(h)(5) An employer required to repurchase employer securities distributed as part of a total distri- bution must pay for the securities in substantially equal periodic payments (at least annu- ally) over a period beginning not later than 30 days after the exercise of the put option and not exceeding 5 years. 23. Sec. 409(h)(6) An employer required to repurchase employer securities distributed as part of an install- ment distribution must pay for the securities not later than 30 days after the exercise of the put option under section 409(h)(4). 24. Sec. 409(o) An ESOP must commence the distribution of a participant's account balance, if the partici- pant elects, not later than 1 year after the close of the plan year - i) in which the partici- pant separates from service by reason of attaining normal retirement age under the plan, death or disability; or ii) which is the 5th plan year following the plan year in which the participant otherwise separates from service (except if the participant is reemployed before distribution is required to begin). 25. Sec. 1042(a)(2) A taxpayer must purchase qualified replacement property (defined in section 1042(c)(4)) within the replacement period, defined in section 1042(c)(3) as the period which begins 3 months before the date of the sale of qualified securities to an ESOP and ends 12 months after the date of such sale. 26. Treas. Reg. § 1.1042-1T, Q&A-3 A taxpayer must notarize any statement of purchase with respect to qualified replacement property required under Treas. Reg. § 1.1042-1T, Q&A-3 no later than 30 days after a purchase of qualified replacement property. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ### SECTION 8. EMPLOYEE BENEFIT ISSUES-CONTINUED Statute or Regulation Act Postponed 27. Sec. 4972(c)(3) Nondeductible plan contributions must be distributed prior to a certain date to avoid a 10 percent tax. 28. Sec. 4979 and Treas. Reg. § 54.4979-1 A 10 percent tax on the amount of excess contributions and excess aggregate contributions under a plan for a plan year will be imposed unless the excess, plus income attributable to the excess is distributed (or, if forfeitable, forfeited) no later than 21/2-months after the close of the plan year. In the case of an employer maintaining a SARSEP, employees must be notified of the excess by the employer within the 21/2-month period to avoid the tax. 29. Secs. 6033, 6039D, 6047, 6057, 6058, and 6059 Form 5500 and Form 5500-EZ, which are used to report annual information concerning employee benefit plans and fringe benefit plans, must be filed by a specified time. General Advice Affected filers are advised to follow the instructions accompanying the Form 5500 series (or other guidance published on the postponement) regarding how to file the forms when postponements are granted pursuant to section 7508 or section 7508A. Combat Zone Postponements under Section 7508 In the case of taxpayers who are individuals, the IRS may permit a postponement of the filing of the Form 5500 or Form 5500-EZ under section 7508. Whatever postponement of the Form 5500 series filing due date is permitted by the IRS under section 7508 will also be permitted by the Department of Labor and the Pension Benefit Guaranty Corporation (PBGC) for similarly situated individuals who are plan administrators. Postponements for Presidentially Declared Disasters under Section 7508A In the case of "affected taxpayers," as defined in Treas. Reg. § 301.7508A-1(d), the IRS may permit a postponement of the filing of the Form 5500 or Form 5500-EZ. Taxpayers who are unable to obtain on a timely basis information necessary for completing the forms from a bank, insurance company, or any other service provider because such service providers' operations are located in a covered disaster area will be treated as "affected taxpayers." Whatever postponement of the Form 5500 series filing due date is permitted by the IRS under section 7508A will also be permitted by the Department of Labor and PBGC for similarly situated plan administrators and direct filing entities. 30. Rev. Proc. 2001-17, Sections 9.02(1), (2) and (3) The correction period for self-correction of operational failures is the last day of the second plan year following the plan year for which the failure occurred. The correction period for self-correction of operational failures for transferred assets does not end until the last day of the first plan year that begins after the corporate merger, acquisition, or other similar employer transaction. 31. Rev. Proc. 2001-17, Section 12.08 If the submission involves a plan with transferred assets and the IRS determines that none of the failures in the submission occurred after the end of the second plan year that begins after the corporate merger, acquisition or other similar employer transaction, the plan sponsor may calculate the amount of plan assets and number of plan participants based on the Form 5500 information that would have been filed by the plan sponsor for the plan year that includes the employer transaction if the transferred assets were maintained as a sepa- rate plan. 32. Rev. Proc. 2001-17, Section 14.03 If an examination involves a plan with transferred assets and the IRS determines that the failures did not occur after the end of the second plan year that begins after the corporate merger, acquisition, or other similar employer transaction occurred, the sanction under Audit CAP will not exceed the sanction that would apply if the transferred assets were maintained as a separate plan. <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ### SECTION 9. ESTATE, GIFT AND TRUST ISSUES Statute or Regulation Act Postponed 1. Sec. 643(g) The trustee may elect to treat certain payments of estimated tax as paid by the beneficiary. The election shall be made on or before the 65th day after the close of the taxable year of the trust. 2. Sec. 2011(c) The executor of a decedent's estate must file a claim for a credit for state estate, inheri- tance, legacy or succession taxes by filing a claim within 4 years of filing Form 706, United States Estate (and Generation Skipping Transfer) Tax Return. 3. Sec. 2014(e) The executor of a decedent's estate must file a claim for foreign death taxes within 4 years of filing Form 706, United States Estate (and Generation Skipping Transfer) Tax Return. 4. Sec. 2016 and Treas. Reg. § 20.2016-1 If an executor of a decedent's estate (or any other person) receives a refund of any state or foreign death taxes claimed as a credit on Form 706, the IRS must be notified within 30 days of receipt. 5. Sec. 2031(c) If an executor of a decedent's estate elects on Form 706 to exclude a portion of the value of land that is subject to a qualified conservation easement, agreements relating to develop- ment rights must be implemented within 2 years after the date of the decedent's death. 6. Sec. 2032(d) The executor of a decedent's estate may elect an alternate valuation on a late filed Form 706 if the Form 706 is not filed later than 1 year after the due date. 7. Sec. 2032A(c)(7) A qualified heir, with respect to specially valued property, is provided a two-year grace period immediately following the date of the decedent's death in which the failure by the qualified heir to begin using the property in a qualified use will not be considered a cessa- tion of qualified use and therefore will not trigger additional estate tax. 8. Sec. 2032A(d)(3) The executor of a decedent's estate has 90 days after notification of incomplete informa- tion/signatures to provide the information/signatures to the IRS regarding an election on Form 706 with respect to specially valued property. 9. Sec. 2046 A taxpayer may make a qualified disclaimer no later than 9 months after the date on which the transfer creating the interest is made, or the date the person attains age 21. 10. Sec. 2053(d) and Treas. Reg. §§ 20.2053- 9(c) and 10(c) If the executor of a decedent's estate elects to take a deduction for state and foreign death tax imposed upon a transfer for charitable or other uses, the executor must file a written notification to that effect with the IRS before expiration of the period of limitations on assessments (generally 3 years). 11. Sec. 2055(e)(3) A party in interest must commence a judicial proceeding to change an interest into a quali- fied interest no later than the 90th day after the estate tax return (Form 706) is required to be filed or, if no return is required, the last date for filing the income tax return for the first taxable year of the trust. 12. Sec. 2056(d) A qualified domestic trust (QDOT) election must be made on Form 706, Schedule M, and the property must be transferred to the trust before the date on which the return is made. Any reformation to determine if a trust is a QDOT requires that the judicial proceeding be commenced on or before the due date for filing the return. 13. Sec. 2056A(b)(2) The trustee of a QDOT must file a claim for refund of excess tax no later than 1 year after the date of final determination of the decedent's estate tax liability. 14. Sec. 2057(i)(3)(G) A qualified heir, with respect to qualified family owned business, has a two-year grace period immediately following the date of the decedent's death in which the failure by the qualified heir to begin using the property in a qualified use will not be considered a cessa- tion of qualified use and therefore will not trigger additional estate tax. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## SECTION 9. ESTATE, GIFT AND TRUST ISSUES-CONTINUED Statute or Regulation Act Postponed 15. Sec. 2057(i)(3)(H) The executor of a decedent's estate has 90 days after notification of incomplete informa- tion/signatures to provide the information/signatures to the IRS regarding an election on Form 706 with respect to specially valued property. 16. Sec. 2516 The IRS will treat certain transfers as made for full and adequate consideration in money or money's worth where husband and wife enter into a written agreement relative to their marital and property rights and divorce actually occurs within the 3-year period beginning on the date 1 year before such agreement is entered into. 17. Sec. 2518(b) A taxpayer may make a qualified disclaimer no later than 9 months after the date on which the transfer creating the interest is made, or the date the person attains age 21. 18. Sec. 26.2654- 1(b) The IRS recognizes the division of a trust for generation-skipping transfer tax purposes if the severance occurs (or a reformation proceeding, if required, is commenced) prior to the date prescribed for filing the estate tax return, Form 706. ## SECTION 10. EXEMPT ORGANIZATION ISSUES Statute or Regulation Act Postponed 1. Sec. 505(c)(1) An organization must give notice by filing Form 1024, Application for Recognition of Exemption Under Section 501(a), to be recognized as an organization exempt under section 501(c)(9) or section 501(c)(17). Generally, if the exemption is to apply for any period before the giving of the notice, Treas. Reg. § 505(c)-1T, Q&A-6, of the regulations re- quires that Form 1024 be filed within 15 months from the end of the month in which the organization was organized. 2. Sec. 508 and Treas. Reg. § 1.508-1 A purported section 501(c)(3) organization must generally file Form 1023, Application for Recognition of Exemption, to qualify for exemption. Generally, if the exemption is to apply for any period before the giving of the notice, the Form 1023 must be filed within 15 months from the end of the month in which the organization was organized. 3. Sec. 6072(e) and Treas. Reg. § 1. 6033-2(e) Annual returns of organizations exempt under section 501(a) must be filed on or before the 15th day of the 5th month following the close of the taxable year. ### SECTION 11. EXCISE TAX ISSUES Statute or Regulation Act Postponed 1. Treas. Reg. § 48.4101- 1(h)(v) A registrant must notify the IRS of any change in the information a registrant has submitted within 10 days. 2. Sec. 4221(b) and Treas. Reg. § 48.4221- 2(c) A manufacturer is allowed to make a tax-free sale of articles for resale to a second pur- chaser for use in further manufacture. This rule ceases to apply six months after the earlier of the sale or shipment date unless the manufacturer receives certain proof. 3. Sec. 4221(b) and Treas. Reg. § 48.4221- 3(c) A manufacturer is allowed to make a tax-free sale of articles for export. This rule ceases to apply six months after the earlier of the sale or shipment date unless the manufacturer receives certain proof. <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ## SECTION 11. EXCISE TAX ISSUES-CONTINUED Statute or Regulation Act Postponed 4. Sec. 4221(e)(2)(A) and Treas. Reg. § 48.4221- 7(c) A manufacturer is allowed to make a tax-free sale of tires for use by the purchaser in con- nection with the sale of another article manufactured or produced by the purchaser. This rule ceases to apply six months after the earlier of the sale or shipment date unless the manufacturer receives certain proof. ## SECTION 12. INTERNATIONAL ISSUES Statute or Regulation Act Postponed 1. Sec. 482 and Treas. Reg. § 1.482- 1(g)(4)(ii)(C) A claim for a setoff of a section 482 allocation by the IRS must be filed within 30 days of either the date of the IRS's letter transmitting an examination report with notice of the proposed adjustment or the date of a notice of deficiency. 2. Sec. 482 and Treas. Reg. § 1.482-1(j)(2) A claim for retroactive application of the final section 482 regulations, otherwise effective only for taxable years beginning after October 6, 1994, must be filed prior to the expiration of the statute of limitations for the year for which retroactive application is sought. 3. Sec. 482 and Treas. Reg. § 1.482-7(j)(2) A participant in a cost-sharing arrangement must provide documentation regarding the arrangement, as well as documentation specified in Treas. Reg. §§ 1.482-7(b)(4) and 1.482-7(c)(1), within 30 days of a request by the IRS. 4. Treas. Reg. § 1.882- 5(d)(2)(ii)(A) (2) Liabilities of a foreign corporation that is not a bank must be entered on a set of books at a time reasonably contemporaneous with the time the liabilities are incurred. 5. Treas. Reg. § 1.882- 5(d)(2)(iii)(A) (1) Liabilities of foreign corporations that are engaged in a banking business must be entered on a set of books relating to an activity that produces ECI before the close of the day on which the liability is incurred. 6. Treas. Reg. § 1.884- 2T(b)(3)(i) Requirement that marketable securities be identified on the books of a U.S. trade or busi- ness within 30 days of the date an equivalent amount of U.S. assets ceases to be U.S. as- sets. This requirement applies when a taxpayer has elected to be treated as remaining engaged in a U.S. trade or business for branch profits tax purposes. 7. Treas. Reg. § 1.884- 4(b)(3)(ii)(B) Requirement that a foreign corporation which identifies liabilities as giving rise to U.S. branch interest, send a statement to the recipients of such interest within two months of the end of the calendar year in which the interest was paid, stating that such interest was U.S. source income (if the corporation did not make a return pursuant to section 6049 with respect to the interest payment). 8. Sec. 922(a)(1)(E) and Treas. Reg. § 1.922- 1(j) (Q&A-19) The FSC must appoint a new non-U.S. resident director within 30 days of the date of death, resignation, or removal of the former director, in the event that the sole non-U.S. resident director of a FSC dies, resigns, or is removed. 9. Sec. 924(b)(2)(B) and Treas. Reg. § 1.924(a)- 1T(j)(2)(i) A taxpayer must execute an agreement regarding unequal apportionment at a time when at least 12 months remain in the period of limitations (including extensions) for assessment of tax with respect to each shareholder of the small FSC in order to apportion unequally among shareholders of a small FSC the $5 million foreign trading gross receipts used to determine exempt foreign trade income. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## SECTION 12. INTERNATIONAL ISSUES-CONTINUED Statute or Regulation Act Postponed 10. Sec. 924(c)(2) and Treas. Reg. § 1.924(c)- 1(c)(4) The FSC must open a new qualifying foreign bank account within 30 days of the date of termination of the original bank account, if a FSC's qualifying foreign bank account termi- nates during the taxable year due to circumstances beyond the control of the FSC. 11. Sec. 924(c)(3) and Treas. Reg. § 1.924(c)- 1(d)(1) The FSC must transfer funds from its foreign bank account to its U.S. bank account, equal to the dividends, salaries or fees disbursed, and such transfer must take place within 12 months of the date of the original disbursement from the U.S. bank account, if dividends, salaries, or fees are disbursed from a FSC's U.S. bank account. 12. Sec. 924(c)(3) and Treas. Reg. § 1.924(c)- 1(d)(2) The FSC must reimburse from its own bank account any dividends or other expenses that are paid by a related person, on or before the due date (including extensions) of the FSC's tax return for the taxable year to which the reimbursement relates. 13. Sec. 924(c)(3) and Treas. Reg. § 1.924(c)- 1(d)(3) If the Commissioner determines that the taxpayer acted in good faith, the taxpayer may comply with the reimbursement requirement by reimbursing the funds within 90 days of the date of the Commissioner's determination, notwithstanding a taxpayer's failure to meet the return-filing-date reimbursement deadline in Treas. Reg. § 1.924(c)-1(d)(2). 14. Sec. 924(e)(4) and Treas. Reg. § 1.924(e)- 1(d)(2)(iii) If a payment with respect to a transaction is made directly to the FSC or the related supplier in the United States, the funds must be transferred to and received by the FSC bank account outside the United States no later than 35 days after the receipt of good funds (i.e., date of check clearance) on the transaction. 15. Temp. Treas. Reg. § 1.925(a)- 1T(e)(4) A FSC and its related supplier may redetermine a transfer pricing method, the amount of foreign trading gross receipts, and costs and expenses, provided such redetermination occurs before the expiration of the statute of limitations for claims for refund for both the FSC and related supplier, and provided such redetermination shall affect both the FSC and the related supplier. See Treas. Reg. § 1.925(a)-1(c)(8)(i) for time limitations with respect to FSC administrative pricing grouping redeterminations and for a cross-reference to Temp. Treas. Reg. § 1.925(a)-1T(e)(4). 16. Sec. 927(f)(3)(A) and Treas. Reg. § 1.927(f)- 1(b) (Q&A-12) A corporation may terminate its election to be treated as a FSC or a small FSC by revoking the election during the first 90 days of the FSC taxable year (other than the first year in which the election is effective) in which the election was to take effect. 17. Sec. 927 and Temp. Treas. Reg. § 1.927(a)-1T (d)(2)(i)(B) A taxpayer may satisfy the destination test with respect to property sold or leased by a seller or lessor if such property is delivered by the seller or lessor (or an agent of the seller or lessor) within the United States to a purchaser or lessee, if the property is ultimately delivered outside the United States (including delivery to a carrier or freight forwarder for delivery outside the United States) by the purchaser or lessee (or a subsequent purchaser or sublessee) within one year after the sale or lease. 18. Sec. 927 and Temp. Treas. Reg. § 1.927(b)- 1T(e)(2)(i) A taxpayer that claims FSC commission deductions must designate the sales, leases, or rentals subject to the FSC commission agreement no later than the due date (as extended) of the tax return of the FSC for the taxable year in which the transaction(s) occurred. <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ### SECTION 12. INTERNATIONAL ISSUES-CONTINUED Statute or Regulation Act Postponed 19. Sec. 927 and Treas. Reg. § 1.927(f)- 1(a) (Q&A 4) A transferee or other recipient of shares in the corporation (other than a shareholder that previously consented to the election) must consent to be bound by the prior election within 90 days of the first day of the FSC's taxable year to preserve the status of a corporation that previously qualified as a FSC or as a small FSC. 20. Sec. 936 and Treas. Reg. § 1.936-10(c) If a "qualified investment" in a Caribbean Basin country ceases to meet the qualification requirements, the taxpayer may correct any disqualifying events within a reasonable period of time, which is defined as not more than 60 days from the date that such events came to the attention of the taxpayer (or should have come to its attention by the exercise of reason- able diligence). 21. Sec. 936 and Treas. Reg. § 1.936-11 A taxpayer that elects retroactive application of the temporary regulation regarding sepa- rate lines of business for taxable years beginning after December 31, 1995, must elect to do so prior to the expiration of the statute of limitations for the year in question. 22. Treas. Reg. §§ 1.964 - 1(c)(3)(ii) and -1T(g)(2). An election of, or an adoption of or change in a method of accounting of a CFC (controlled foreign corporation) requires the filing of a written statement jointly executed by the con- trolling U.S. shareholders of the CFC within 180 days after the close of the taxable year of the CFC. 23. Sec. 982(c)(2)(A) Any person to whom a formal document request is mailed shall have the right to bring a proceeding to quash such request not later than the 90th day after the day such request was mailed. 24. Treas. Reg. § 1.988- 1(a)(7)(ii). An election to have Treas. Reg. § 1.988-1(a)(2)(iii) apply to regulated futures contracts and nonequity options must be made on or before the first day of the taxable year, or if later, on or before the first day during such taxable year on which the taxpayer holds a contract described in section 988(c)(1)(D)(ii) and Treas. Reg. § 1.988-1(a)(7)(ii). A late election may be made within 30 days after the time prescribed for the election. 25. Sec. 988(c)(1)(E) (iii)(V) (qualified fund) and Treas. Reg. § 1.988- 1(a)(8)(i)(E). A qualified fund election must be made on or before the first day of the taxable year, or if later, on or before the first day during such taxable year on which the partnership holds an instrument described in section 988(c)(1)(E)(i). 26. Treas. Reg. § 1.988-3(b) An election to treat (under certain circumstances) any gain or loss recognized on a contract described in Treas. Reg. § 1.988-2(d)(1) as capital gain or loss must be made by clearly identifying such transaction on taxpayer's books and records on the date the transaction is entered into. 27. Treas. Reg. § 1.988- 5(a)(8)(i) Taxpayer must establish a record, and before the close of the date the hedge is entered into, the taxpayer must enter into the record for each qualified hedging transaction the informa- tion contained in Treas. Reg. §§ 1.988-5(a)(8)(i)(A) through (E). 28. Treas. Reg. § 1.988- 5(b)(3)(i) Taxpayer must establish a record and before the close of the date the hedge is entered into, the taxpayer must enter into the record a clear description of the executory contract and the hedge. 29. Treas. Reg. § 1.988- 5(c)(2) Taxpayer must identify a hedge and underlying stock or security under the rules of Treas. Reg. § 1.988-5(b)(3). 30. Sec. 991 A corporation that elects IC-DISC treatment (other than in the corporation's first taxable year) must file Form 4876-A, Election To Be Treated as an Interest Charge DISC, with the regional service center during the 90-day period prior to the beginning of the tax year in which the election is to take effect. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ### SECTION 12. INTERNATIONAL ISSUES-CONTINUED Statute or Regulation Act Postponed 31. Sec. 991 and Treas. Reg. § 1.991- 1(g)(2) A corporation that filed a tax return as a DISC, but subsequently determines that it does not wish to be treated as a DISC, must notify the [district director] more than 30 days before the expiration of period of limitations on assessment applicable to the tax year. 32. Sec. 992 and Treas. Reg. § 1.992- 2(a)(1)(i) A qualifying corporation must file Form 4876-A, or attachments thereto, containing the consent of every shareholder of the corporation to be treated as a DISC as of the beginning of the corporation's first taxable year. 33. Sec. 992 and Treas. Reg. § 1.992- 2(b)(2) A qualifying corporation must file consents of the shareholders of the corporation to be treated as a DISC with the service center with which the DISC election was first filed, within 90 days after the first day of the taxable year, or within the time granted for an extension to file such consents. 34. Sec. 992 and Treas. Reg. § 1.992- 2(e)(2)(ii) A corporation seeking to revoke a prior election to be treated as a DISC, must file a state- ment within the first 90 days of the taxable year in which the election is to take effect with the service center with which it filed the election or, if the corporation filed an annual information return, by filing the statement at the service center with which it filed its most recent annual information return. 35. Sec. 992 and Treas. Reg. § 1.992- 3(c)(3) A DISC that receives notification that it failed to satisfy the 95 percent of gross receipts test or the 95 percent assets test, or both tests, for a particular taxable year, must make a correc- tive deficiency distribution within 90 days of the date of the first written notification from the IRS. 36. Sec. 993 and Treas. Reg. § 1.993- 3(d)(2)(i)(b) A taxpayer must deliver export property outside the U.S. within one year of the date of sale or lease in order to generate DISC benefits from a qualifying export transaction. 37. Sec. 1445 Treas. Reg. § 1.1445-1 Form 8288, U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests, must be filed by a buyer or other transferee of a U.S. real property inter- est, and a corporation, partnership, or fiduciary that is required to withhold tax. The amount withheld is to be transmitted with Form 8288, which is generally to be filed by the 20th day after the date of transfer. 38. Sec. 1446 All partnerships with effectively connected gross income allocable to a foreign partner in any tax year must file forms 8804, Annual Return for Partnership Withholding Tax, and 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, on or before the 15th day of the 4th month following the close of the partnership's taxable year. 39. Sec. 1446 Form 8813, Partnership Withholding Tax Payment Voucher, is used to pay the withhold- ing tax under section 1446 for all partnerships with effectively connected gross income allocable to a foreign partner in any tax year. Form 8813 must accompany each payment of section 1446 tax made during the partnership's taxable year. Form 8813 is to be filed on or before the 15th day of the 4th, 6th, 9th, and 12th months of the partnership's taxable year for U.S. income tax purposes. 40. Sec. 6038A(d)(2) and Treas. Reg. § 1.6038A- 4(d)(1) A reporting corporation must cure any failure to furnish information or failure to maintain records within 90 days after the IRS gives notice of the failure to avoid the continuation penalty. <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ### SECTION 12. INTERNATIONAL ISSUES-CONTINUED Statute or Regulation Act Postponed 41. Sec. 6038A(d)(2) and Treas. Reg. § 1.6038A- 4(d)(1) A reporting corporation must cure any failure to furnish information or failure to maintain records before the beginning of each 30-day period after expiration of the initial 90-day period to avoid additional continuation penalties. 42. Sec. 6038A(e)(1) and Treas. Reg. § 1.6038A- 5(b) A reporting corporation must furnish an authorization of agent within 30 days of a request by the IRS to avoid a penalty. 43. Sec. 6038A(e)(4) (A) A reporting corporation must commence any proceeding to quash a summons filed by the IRS in connection with an information request within 90 days of the date the summons is issued. 44. Sec. 6038A(e) (4)(B) A reporting corporation must commence any proceeding to review the IRS's determination of noncompliance with a summons within 90 days of the IRS's notice of noncompliance. 45. Sec. 6038A and Treas. Reg. § 1.6038A- 3(b)(3) A reporting corporation must supply an English translation of records provided pursuant to a request for production within 30 days of a request by the IRS for a translation to avoid a penalty. 46. Sec. 6038A and Treas. Reg. § 1.6038A- 3(f)(2) A reporting corporation must, within 60 days of a request by the IRS for records main- tained outside the United States, either provide the records to the IRS, or move them to the United States and provide the IRS with an index to the records to avoid a penalty. 47. Sec. 6038A and Treas. Reg. § 1.6038A- 3(f)(2)(i) A reporting corporation must supply English translations of documents maintained outside the United States within 30 days of a request by the IRS for translation to avoid a penalty. 48. Sec. 6038A and Treas. Reg. § 1.6038A- 3(f)(4) A reporting corporation must request an extension of time to produce or translate docu- ments maintained outside the United States beyond the period specified in the regulations within 30 days of a request by the IRS to avoid a penalty. 49. Sec. 6662(e) and Treas. Reg. § 1.6662- 6(d)(2)(iii)(A) A taxpayer must provide, within 30 days of a request by the IRS, specified "principal documents" regarding the taxpayer's selection and application of transfer pricing method to avoid potential penalties in the event of a final transfer pricing adjustment by the IRS. See also Treas. Reg. § 1.6666-6(d)(2)(iii)(C) (similar requirement re: background documents). 50. Secs. 6038, 6038B, and 6046A The filing of Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partner- ships, for those taxpayers who do not have to file an income tax return. The form is due at the time that an income tax return would have been due had the taxpayer been required to file an income tax return. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## SECTION 13. PARTNERSHIP AND S CORPORATION ISSUES Statute or Regulation Act Postponed 1. Treas. Reg. § 1.706- 1(b)(4)(i) A partnership may apply for approval to change a partnership taxable year by filing Form 1128, Application to Adopt, Change, or Retain a Tax Year, on or before the 15th day of the second calendar month following the close of the short period involved. 2. Treas. Reg. § 1.706- 1(b)(4)(ii) A partnership may apply for approval to adopt a partnership taxable year by filing Form 1128, Application to Adopt, Change, or Retain a Tax Year, on or before the last day of the month following the close of the taxable year to be adopted. 3. Treas. Reg. § 1.743- 1(k)(2) A transferee that acquires, by sale or exchange, an interest in a partnership with an election under section 754 in effect for the taxable year of the transfer, must notify the partnership, in writing, within 30 days of the sale or exchange. A transferee that acquires, on the death of a partner, an interest in a partnership with an election under section 754 in effect for the taxable year of the transfer, must notify the partnership, in writing, within one year of the death of the deceased partner. 4. Treas. Reg. § 1.754- 1(c)(1) Generally, a partnership may revoke a section 754 election by filing the revocation no later than 30 days after the close of the partnership taxable year with respect to which the revo- cation is intended to take effect. 5. Treas. Reg. § 1.761- 2(b)(3) A partnership may generally elect to be excluded from subchapter K. The election will be effective unless within 90 days after the formation of the organization any member of the organization notifies the Commissioner that the member desires subchapter K to apply to such organization and also advises the Commissioner that he has so notified all other mem- bers of the organization. In addition, an application to revoke an election to be excluded from subchapter K must be submitted no later than 30 days after the beginning of the first taxable year to which the revocation is to apply. 6. Treas. Reg. § 1.761-2(c) A partnership requesting permission to be excluded from certain provisions of subchapter K must submit the request to the Commissioner no later than 90 days after the beginning of the first taxable year for which partial exclusion is desired. 7. Sec. 1361(e) In general, the trustee of the electing small business trust (ESBT) must file the ESBT elec- tion within the 2-month and 16-day period beginning on the day the stock is transferred to the trust. See Notice 97-12, 1997-1 C.B. 385. 8. Treas. Reg. § 1.1361- 1(j)(6) The current income beneficiary of a qualified subchapter S trust (QSST) must make a QSST election within the 2-month and 16-day period from one of the dates prescribed in Treas. Reg. § 1.1361-1(j)(6)(iii). 9. Treas. Reg. § 1.1361- 1(j)(10) The successive income beneficiary of a QSST may affirmatively refuse to consent to the QSST election. The beneficiary must sign the statement and file the statement with the IRS within 15 days and 2 months after the date on which the successive income beneficiary becomes the income beneficiary. 10. Treas. Reg. § 1.1361- 3(a)(4) If an S corporation elects to treat an eligible subsidiary as a qualified subchapter S subsidi- ary (QSUB), the election cannot be effective more than 2 months and 15 days prior to the date of filing the election. 11. Treas. Reg. § 1.1361- 3(b)(2) An S corporation may revoke a QSUB election by filing a statement with the service cen- ter. The effective date of a revocation of a QSUB election cannot be more than 2 months and 15 days prior to the filing date of the revocation. 12. Treas. Reg. § 1.1362- 2(a)(2), (4) If a corporation revokes its subchapter S election after the first 21/2-months of its taxable year, the revocation will not be effective until the following taxable year. An S corporation may rescind a revocation of an S election at any time before the revocation becomes effec- tive. 13. Sec. 1362(b)(3) If a corporation files a subchapter S election after the first 21/2-months of a corporation's taxable year, that corporation will not be treated as an S corporation until the taxable year after the year in which the S election is made. <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> # SECTION 14. PROCEDURE & ADMINISTRATION ISSUES ## .01 Bankruptcy and Collection Statute or Regulation Act Postponed 1. Sec. 6320(a)(3)(B), 6230(c) and Treas. Reg. §§ 301.6320- 1T(b), (c) and (f) A taxpayer has 30 days after receiving a notice of a lien to request a Collection Due Proc- ess (CDP) administrative hearing. After a determination at the CDP hearing, the taxpayer may appeal this determination within 30 days to the United States Tax Court or a United States district court. 2. Sec. 6330(a)(3)(B) and (d)(1) and Treas. Reg. §§ 301.6330- 1T(b), (c) and (f) The taxpayer must request a Collections Due Process (CDP) administrative hearing within 30 days after the IRS sends notice of a proposed levy. After a determination at the CDP hearing, the taxpayer may appeal this determination within 30 days to the United States Tax Court or a United States district court. 3. Treas. Reg. §§ 301.6036- 1(a)(2) and (3) A court-appointed receiver or fiduciary in a non-bankruptcy receivership, a fiduciary in aid of foreclosure who takes possession of substantially all of the debtor's assets, or an as- signee for benefit of creditors, must give written notice within ten days of his appointment to the IRS as to where the debtor will file his tax return. ## .02 Information Returns Statute or Regulation Act Postponed 1. Sec. 6050I Any person engaged in a trade or business receiving more than $10,000 cash in one trans- action (or 2 or more related transactions) must file an information return, Form 8300, Report of Cash Payments over $10,000 Received in a Trade or Business, by the 15th day after the date the cash was received. Additionally, a statement must be provided to the person with respect to whom the information is required to be furnished by Jan. 31st of the year following. 2. Sec. 6050L Returns relating to certain dispositions of donated property, Forms 8282, Donee Informa- tion Return, must be filed within 125 days of the disposition. ## .03 Miscellaneous Statute or Regulation Act Postponed 1. Sec. 1314(b) A taxpayer may file a claim for refund or credit of tax based upon the mitigation provisions of sections 1311 through 1314 if, as of the date a determination (as defined in section 1313(a)) is made, one year remains on the period for filing a claim for refund. 2. Sec. 6015 A requesting spouse must request relief under section 6015 within 2 years of the first col- lection activity against the requesting spouse. 3. Sec. 6411 Taxpayers applying for a tentative carry back adjustment of the tax for the prior taxable year must file Form 1139 (for corporations) or Form 1045 (for entities other than corpora- tions) within 12 months after the end of such taxable year that generates such net operating loss, net capital loss, or unused business credit from which the carryback results 4. Sec. 6656(e)(2) A taxpayer who is required to deposit taxes and fails to do so is subject to a penalty under section 6656. Under section 6656(e)(2), the taxpayer may, within 90 days of the date of the penalty notice, designate to which deposit period within a specified tax period the deposits should be applied. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## SECTION 15. TAX CREDIT ISSUES Statute or Regulation Act Postponed 1. Treas. Reg. § 1.42- 8(a)(3)(v) The taxpayer and an Agency may elect to use an appropriate percentage under section 42(b)(2)(A)(ii)(I) by notarizing a binding agreement by the 5th day following the end of the month in which the binding agreement was made. 2. Treas. Reg. § 1.42-8(b) (1)(vii) The taxpayer and an Agency may elect an appropriate percentage under section 42(b)(2)(A)(ii)(II) by notarizing a binding agreement by the 5th day following the end of the month in which the tax-exempt bonds are issued. 3. Sec. 42(d)(2)(D) (ii)(IV) In order to claim section 42 credits on an existing building, section 42(d)(2)(B)(ii)(I) re- quires that the building must have been placed in service at least ten years before the date the building was acquired by the taxpayer. A building is not considered placed in service for purposes of section 42(d)(2)(B)(ii) if the building is resold within a 12-month period after acquisition by foreclosure of any purchase-money security interest. 4. Sec. 42(g)(3)(A) A building shall be treated as a qualified low-income building only if the project meets the minimum set aside requirement by the close of the first year of the credit period of the building. 5. Sec. 42(h)(6)(J) A low-income housing agreement commitment must be in effect as of the beginning of the year for a building to receive credit. If such a commitment was not in effect, the taxpayer has a one-year period for correcting the failure. 6. Sec. 42(h)(1)(E) and (F) The taxpayer's basis in the building project, as of the later of the date which is 6 months after the date the allocation was made or the close of the calendar year in which the alloca- tion is made, must be more than 10 percent of the taxpayer's reasonably expected basis in the project. 7. Sec. 47(c)(1)(C) and Treas. Reg. § 1.48- 12(b)(2) A taxpayer has a 24- or 60-month measuring period in which the requisite amount of reha- bilitation expenditures have to be incurred in order to satisfy the "substantial rehabilitation" test. 8. Treas. Reg. § 1.48-12(d)(7) In the historic rehabilitation context, if the taxpayer fails to receive final certification of completed work prior to the date that is 30 months after the date that the taxpayer filed the return on which the credit is claimed, the taxpayer must, prior to the last day of the 30th month, consent to extending the statute of limitations by submitting a written statement to the District Director. 9. Sec. 51(d)(12)(A) (ii)(II) and 51A(d)(1) An employer seeking the Work Opportunity Credit or the Welfare-to-Work Credit with respect to an individual must submit Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits, to the State Employment Security Agency not later than the 21st day after the individual begins work for the em- ployer. ## SECTION 16. TAX-EXEMPT BOND ISSUES Statute or Regulation Act Postponed 1. Treas. Reg. §§ 1.141- 12(d)(3) and 1.142-2(c)(2) An issuer must provide notice to the Commissioner of the establishment of a defeasance escrow within 90 days of the date such defeasance escrow is established in accordance with Treas. Reg. § 1.141-12(d)(1) or 1.142-2(c)(1). 2. Sec. 142(d)(7) An operator of a multi-family housing project for which an election was made under sec- tion 142(d) must submit to the Secretary an annual certification as to whether such project continues to meet the requirements of section 142(d). <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> ## SECTION 16. TAX-EXEMPT BOND ISSUES-CONTINUED Statute or Regulation Act Postponed 3. Sec. 142(f)(4) and Treas. Reg. § 1.142(f) (4)-1 A person engaged in the local furnishing of electric energy or gas (a local furnisher) that uses facilities financed with exempt facility bonds under section 142(a)(8) and expands its service area in a manner inconsistent with the requirements of sections 142(a)(8) and 142(f), may make an election to ensure that those bonds will continue to be treated as exempt facility bonds. The election must be filed with the IRS on or before 90 days after the date of the service area expansion that causes the bonds to cease to meet the applicable requirements. 4. Sec. 146(f) and Notice 89-12 If an issuing authority's volume cap for any calendar year exceeds the aggregate amount of tax-exempt private activity bonds issued during such calendar year by such authority, such authority may elect to treat all (or any portion) of such excess as a carryforward for 1 or more carryforward purposes. Such election must be filed by the earlier of (1) February 15 of the calendar year following the year in which the excess amount arises, or (2) the date of issue of bonds issued pursuant to the carryforward election. 5. Sec. 148(f)(3) and Treas. Reg. § 1.148-3(g) An issuer of a tax-exempt municipal obligation must make any required rebate payment no later than 60 days after the computation date to which the payment relates. A rebate pay- ment is paid when it is filed with the IRS at the place or places designated by the Commis- sioner. A payment must be accompanied by the form provided by the Commissioner for this purpose. 6. Treas. Reg. § 1.148-5(c) An issuer of a tax-exempt municipal obligation must make a yield reduction payment on or before the date of required rebate installment payments as described in Treas. Reg. § 1.148- 3(f), (g) and (h). 7. Sec. 148(f)(4)(C) (xvi) and Treas. Reg. § 1.148- 7(k)(1) As issuer of a tax-exempt municipal obligation that elects to pay certain penalties in lieu of rebate must make any required penalty payments not later than 90 days after the period to which the penalty relates. 8. Sec. 149(e) An issuer of a tax-exempt municipal obligation must submit to the Secretary a statement providing certain information regarding the municipal obligation not later than the 15th day of the 2nd calendar month after the close of the calendar quarter in which the municipal obligation is issued. ## SECTION 17. INQUIRIES If you wish to recommend that other acts qualify for postponement, please write to the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Division), CC:PA:APJP:B2, 1111 Constitution Avenue, NW, Wash- ington, DC 20224. Please mark "7508A List" on the envelope. In the alternative, e-mail your comments to: Notice.Comments@m1.irscounsel.treas.gov. ## SECTION 18. EFFECTIVE DATE This revenue procedure is effective for acts which may be performed on or after September 11, 2001. SECTION 19. DRAFTING INFOR- MATION The principal author of this revenue procedure is Marcy W. Mendelsohn of the Office of Associate Chief Counsel, Procedure and Administration (Admin- istrative Provisions and Judicial Practice Division). For further information regarding this revenue procedure, con- tact Ms. Mendelsohn at (202) 622-4940 (not a toll free call). <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> # Part IV. Items of General Interest New Form 1042-T, Annual Summary and Transmittal of Forms 1042-S Announcement 2001-114 New Form 1042-T is now available at the IRS Web Site for immediate use. The new form is to be used to transmit paper Forms 1042-S, Foreign Person's U.S. Source Income Subject to With- holding, to the Internal Revenue Ser- vice. You can obtain Form 1042-T by visiting the IRS Web Site at www.irs.gov. The printed version of Form 1042-T will be available soon. You will be able to order it by phone at 1-800-TAX-FORM (1-800-829- 3676). <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> # Definition of Terms Revenue rulings and revenue procedures (hereinafter referred to as "rulings") that have an effect on previous rulings use the following defined terms to describe the effect: Amplified describes a situation where no change is being made in a prior published position, but the prior position is being extended to apply to a variation of the fact situation set forth therein. Thus, if an earlier ruling held that a principle applied to A, and the new ruling holds that the same principle also applies to B, the earlier ruling is amplified. (Compare with modified, below). Clarified is used in those instances where the language in a prior ruling is being made clear because the language has caused, or may cause, some confusion. It is not used where a position in a prior ruling is being changed. Distinguished describes a situation where a ruling mentions a previously published ruling and points out an essential difference between them. Modified is used where the substance of a previously published position is being changed. Thus, if a prior ruling held that a principle applied to A but not to B, and the new ruling holds that it applies to both A and B, the prior ruling is modified because it corrects a published position. (Compare with amplified and clarified, above). Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions. This term is most commonly used in a ruling that lists previously published rulings that are obsoleted because of changes in law or regulations. A ruling may also be obsoleted because the substance has been included in regulations subsequently adopted. Revoked describes situations where the position in the previously published ruling is not correct and the correct position is being stated in the new ruling. Superseded describes a situation where the new ruling does nothing more than restate the substance and situation of a previously published ruling (or rulings). Thus, the term is used to republish under the 1986 Code and regulations the same position published under the 1939 Code and regulations. The term is also used when it is desired to republish in a single ruling a series of situations, names, etc., that were previously published over a period of time in separate rulings. If the new ruling does more than restate the substance of a prior ruling, a combination of terms is used. For example, modified and superseded describes a situation where the substance of a previously published ruling is being changed in part and is continued without change in part and it is desired to restate the valid portion of the previously published ruling in a new ruling that is self contained. In this case the previously published ruling is first modified and then, as modified, is superseded. Supplemented is used in situations in which a list, such as a list of the names of countries, is published in a ruling and that list is expanded by adding further names in subsequent rulings. After the original ruling has been supplemented several times, a new ruling may be published that includes the list in the original ruling and the additions, and supersedes all prior rulings in the series. Suspended is used in rare situations to show that the previously published rulings will not be applied pending some future action such as the issuance of new or amended regulations, the outcome of cases in litigation, or the outcome of a Service study. # Abbreviations The following abbreviations in current use and formerly used will appear in material published in the Bulletin. A-Individual. Acq .- Acquiescence. B-Individual. FICA-Federal Insurance Contributions Act. FISC-Foreign International Sales Company. Rev. Proc .- Revenue Procedure. BK-Bank. FPH-Foreign Personal Holding Company. Rev. Rul ..- Revenue Ruling. B .. T.A .- Board of Tax Appeals. F.R .- Federal Register. S Subsidiary. C-Individual. FUTA-Federal Unemployment Tax Act. S.P.R .- Statements of Procedural Rules. C.B .- Cumulative Bulletin. FX-Foreign Corporation. Stat .- Statutes at Large. CFR-Code of Federal Regulations. G.C.M .- Chief Counsel's Memorandum. T-Target Corporation. CI-City. GE-Grantee. T.C .- Tax Court. COOP-Cooperative. GP-General Partner. T.D .- Treasury Decision. Ct.D .- Court Decision. GR-Grantor. TFE-Transferee. CY-County. IC-Insurance Company. TFR-Transferor. D Decedent. I.R.B .- Intemal Revenue Bulletin. T.I.R .- Technical Infomiation Release. DC-Dummy Corporation. LE-Lessee. TP-Taxpayer. DE-Donee. LP-Limited Partner. TR-Trust. Del. Order-Delegation Order. LR-Lessor. TT-Trustee. DISC-Domestic International Sales Corporation. M-Minor. U.S.C. United States Code. DR-Donor. Nonacq .- Nonacquiescence. X-Corporation. E-Estate. O Organization. Y-Corporation. EE-Employee. E.O .- Executive Order. ER-Employer. ERISA-Employee Retirement Income Security Act. EX- Executor. PRS-Partnership. F-Fiduciary. PTE-Prohibited Transaction Exemption. FC-Foreign Country. Pub. L .- Public Law. REIT-Real Estate Investment Trust. BE-Beneficiary. PHC-Personal Holding Company. PO-Possession of the U.S. PR-Partner. Z-Corporation. P-Parent Corporation. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" --> <!-- PageBreak --> ## Numerical Finding List1 Bulletins 2001-27 through 2001-46 Announcements: 2001-69, 2001-27 I.R.B. 23 2001-70, 2001-27 I.R.B. 23 2001-71, 2001-27 I.R.B. 26 2001-72, 2001-28 I.R.B. 39 2001-73, 2001-28 I.R.B. 40 2001-74, 2001-28 I.R.B. 40 2001-75, 2001-28 I.R.B. 42 2001-76, 2001-29 I.R.B. 67 2001-77, 2001-30 I.R.B. 83 2001-78, 2001-30 I.R.B. 87 2001-79, 2001-31 I.R.B. 97 2001-80, 2001-31 I.R.B. 98 2001-81, 2001-33 I.R.B. 175 2001-82, 2001-32 I.R.B. 123 2001-83, 2001-35 I.R.B. 205 2001-84, 2001-35 I.R.B. 206 2001-85, 2001-36 I.R.B. 219 2001-86, 2001-35 I.R.B. 207 2001-87, 2001-35 I.R.B. 208 2001-88, 2001-36 I.R.B. 220 2001-89, 2001-38 I.R.B. 291 2001-90, 2001-35 I.R.B. 208 2001-91, 2001-36 I.R.B. 221 2001-92, 2001-39 I.R.B. 301 2001-93, 2001-44 I.R.B. 416 2001-94, 2001-39 I.R.B. 303 2001-95, 2001-39 I.R.B. 303 2001-96, 2001-41 I.R.B. 317 2001-97, 2001-40 I.R.B. 310 2001-98 2001-41 I.R.B. 317 2001-99 2001-42 I.R.B. 340 2001-100, 2001-41 I.R.B. 317 2001-101, 2001-43 I.R.B. 374 2001-102, 2001-42 I.R.B. 340 2001-103, 2001-43 I.R.B. 375 2001-104, 2001-43 I.R.B. 376 2001-105, 2001-43 I.R.B. 376 2001-106, 2001-44 I.R.B. 416 2001-107, 2001-44 I.R.B. 419 2001-108, 2001-44 I.R.B. 419 2001-109, 2001-45 I.R.B. 485 2001-110, 2001-45 I.R.B. 486 2001-111, 2001-45 I.R.B. 486 2001-112, 2001-46 I.R.B. 494 2001-113, 2001-46 I.R.B. 494 ### Court Decisions: 2070, 2001-31 I.R.B. 90 2071, 2001-44 I.R.B. 385 2072, 2001-44 I.R.B. 379 1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletin 2001-1 through 2001-26 is in Internal Revenue Bulletin 2001-27, dated July 2, 2001. Notices: 2001-39, 2001-27 I.R.B. 3 2001-41, 2001-27 I.R.B. 2 2001-42, 2001-30 I.R.B. 70 2001-43, 2001-30 I.R.B. 72 2001-44, 2001-30 I.R.B. 77 2001-45, 2001-33 I.R.B. 129 2001-46, 2001-32 I.R.B. 122 2001-47, 2001-36 I.R.B. 212 2001-48, 2001-33 I.R.B. 130 2001-49, 2001-34 I.R.B. 188 2001-50, 2001-3 4 I.R.B. 189 2001-51, 2001-34 I.R.B. 190 2001-52, 2001-35 I.R.B. 203 2001-53, 2001-37 I.R.B. 225 2001-54, 2001-37 I.R.B. 225 2001-55, 2001-39 I.R.B. 299 2001-56, 2001-38 I.R.B. 277 2001-57, 2001-38 I.R.B. 279 2001-58, 2001-39 I.R.B. 299 2001-59, 2001-41 I.R.B. 315 2001-60, 2001-40 I.R.B. 304 2001-61, 2001-40 I.R.B. 305 2001-62, 2001-40 I.R.B. 307 2001-63, 2001-40 I.R.B. 308 2001-64, 2001-41 I.R.B. 316 2001-65, 2001-43 I.R.B. 369 2001-66, 2001-44 I.R.B. 396 2001-69, 2001-46 I.R.B. 491 2001-70, 2001-45 I.R.B. 437 ### Proposed Regulations: REG-110311-98, 2001-35 I.R.B. 204 REG-106917-99, 2001-27 I.R.B. 4 REG-103735-00, 2001-35 I.R.B. 204 REG-103736-00, 2001-35 I.R.B. 204 REG-107151-00, 2001-43 I.R.B. 370 REG-100548-01, 2001-29 I.R.B. 67 REG-106431-01, 2001-37 I.R.B. 272 REG-142499-01, 2001-45 I.R.B. 476 ### Railroad Retirement Quarterly Rates: 2001-27, I.R.B. 1 2001-41, I.R.B. 314 Revenue Procedures: 2001-39, 2001-28 I.R.B. 38 2001-40, 2001-33 I.R.B. 130 2001-41, 2001-33 I.R.B. 173 2001-42, 2001-36 I.R.B. 212 2001-43, 2001-34 I.R.B. 191 2001-44, 2001-35 I.R.B. 203 2001-45, 2001-37 I.R.B. 227 2001-46, 2001-37 I.R.B. 263 ### Revenue Procedures-Continued 2001-47, 2001-42 I.R.B. 332 2001-48, 2001-40 I.R.B. 308 2001-49, 2001-39 I.R.B. 300 2001-50, 2001-43 I.R.B. 437 2001-51, 2001-43 I.R.B. 369 2001-52, 2001-46 I.R.B. 491 ### Revenue Rulings: 2001-30, 2001-29 I.R.B. 46 2001-33, 2001-32 I.R.B. 118 2001-34, 2001-28 I.R.B. 31 2001-35, 2001-29 I.R.B. 59 2001-36, 2001-32 I.R.B. 119 2001-37, 2001-32 I.R.B. 100 2001-38, 2001-33 I.R.B. 124 2001-39, 2001-33 I.R.B. 125 2001-40, 2001-38 I.R.B. 276 2001-41, 2001-35 I.R.B. 193 2001-42, 2001-37 I.R.B. 223 2001-43, 2001-36 I.R.B. 209 2001-44, 2001-37 I.R.B. 223 2001-45, 2001-42 I.R.B. 323 2001-46, 2001-42 I.R.B. 321 2001-47, 2001-39 I.R.B. 293 2001-48, 2001-42 I.R.B. 324 2001-49, 2001-41 I.R.B. 312 2001-50, 2001-43 I.R.B. 343 2001-51, 2001-45 I.R.B. 427 2001-52, 2001-45 I.R.B. 434 2001-53, 2001-46 I.R.B. 489 2001-54, 2001-46 I.R.B. 490 2001-57, 2001-46 I.R.B. 488 ### Treasury Decisions: 8947, 2001-28 I.R.B. 36 8948, 2001-28 I.R.B. 27 8949, 2001-28 I.R.B. 33 8950, 2001-28 I.R.B. 34 8951, 2001-29 I.R.B. 63 8952, 2001-29 I.R.B. 60 8953, 2001-29 I.R.B. 44 8954, 2001-29 I.R.B. 47 8955, 2001-32 I.R.B. 101 8956, 2001-32 I.R.B. 112 8957, 2001-33 I.R.B. 125 8958, 2001-34 I.R.B. 183 8959, 2001-34 I.R.B. 185 8960, 2001-34 I.R.B. 176 8961, 2001-35 I.R.B. 194 8962, 2001-35 I.R.B. 201 8963, 2001-35 I.R.B. 197 8964, 2001-42 I.R.B. 320 8965, 2001-43 I.R.B. 344 8966, 2001-45 I.R.B. 422 <!-- PageFooter="November 19, 2001" --> <!-- PageFooter="2001-47 I.R.B." --> <!-- PageBreak --> Finding List of Current Actions on Previously Published Items 1 Proposed Regulations-Continued REG-130477-00 Supplemented by Revenue Rulings: 57-589 Obsoleted by Bulletins 2000-27 through 2000-46 Ann. 2001-82, 2001-32 I.R.B. 123 REG-106917-99, 2001-27 I.R.B. 4 REG-130481-00 65-316 Announcements: 2000-48 Supplemented by Ann. 2001-82, 2001-32 I.R.B. 123 Obsoleted by REG-106917-99, 2001-27 I.R.B. 4 Modified by Revenue Procedures: 67-274 Notice 2001-43, 2001-30 I.R.B. 72 83-74 Amplified by Rev. Rul. 2001-46, 2001-42 I.R.B. 321 Notices: Revoked by 68-125 Rev. Proc. 2001-49, 2001-39 I.R.B. 300 Obsoleted by 98-52 REG-106917-99, 2001-27 I.R.B. 4 Modified by 84-84 Notice 2001-56, 2001-38 I.R.B. 277 Revoked by 69-563 Rev. Proc. 2001-49, 2001-39 I.R.B. 300 Obsoleted by 99-41 REG-106917-99, 2001-27 I.R.B. 4 Modified and superseded by 93-27 Notice 2001-62, 2001-40 I.R.B. 307 Clarified by 70-379 Rev. Proc. 2001-43, 2001-34 I.R.B. 191 Obsoleted by 2001-4 Rev. Rul. 2001-39, 2001-33 I.R.B. 125 Modified by 97-13 Notice 2001-43, 2001-30 I.R.B. 72 Modified by 74-326 Rev. Proc. 2001-39, 2001-28 I.R.B. 38 Obsoleted by 2001-9 REG-106917-99, 2001-27 I.R.B. 4 Modified by 97-19 Notice 2001-46, 2001-32 I.R.B. 122 Modified by 78-127 2001-15 Notice 2001-62, 2001-40 I.R.B. 307 Modified by Rev. Rul. 2001-40, 2001-38 I.R.B. 276 Supplemented by 98-44 Notice 2001-51, 2001-34 I.R.B. 190 Superseded by 78-179 2001-42 Rev. Proc. 2001-40, 2001-33 I.R.B. 130 Obsoleted by REG-106917-99, 2001-27 I.R.B. 4 Modified by 99-27 Notice 2001-57, 2001-38 I.R.B. 279 Superseded by 89-42 Rev. Proc. 2001-42, 2001-36 I.R.B. 212 Modified and superseded by Rev. Rul. 2001-48, 2001-42 I.R.B. 324 Proposed Regulations: 99-49 LR-97-79 Modified and amplified by 90-95 Distinguished by Withdrawn by REG-100548-01, 2001-29 I.R.B. 67 Rev. Proc. 2001-46, 2001-37 I.R.B. 263 Rev. Rul. 2001-42, 2001-42 I.R.B. 321 2000-20 92-19 LR-107-84 Modified by Supplemented by Withdrawn by Notice 2001-42, 2001-30 I.R.B. 70 Rev. Rul. 2001-38, 2001-33 I.R.B. 124 REG-100548-01, 2001-29 I.R.B. 67 2000-28 97-31 REG-110311-98 Superseded by Modified and superseded by Supplemented by Rev. Proc. 2001-50, 2001-45 I.R.B. 437 Rev. Rul. 2001-48, 2001-42 I.R.B. 324 T.D. 8961, 2001-35 I.R.B. 194 2000-39 98-1 REG-106917-99 Corrected by Modified by Corrected by Ann. 2001-73, 2001-28 I.R.B. 40 Rev. Rul. 2001-51, 2001-45 I.R.B. 427 Ann. 2001-86, 2001-35 I.R.B. 207 Superseded by Rev. Proc. 2001-47, 2001-42 I.R.B. 332 Treasury Decisions: REG-103735-00 Supplemented by 2001-2 8948 T.D. 8961, 2001-35 I.R.B. 194 REG-103736-00 Modified by Corrected by Rev. Proc. 2001-41, 2001-33 I.R.B. 173 Ann. 2001-90, 2001-35 I.R.B. 208 Supplemented by 2001-3 T.D. 8961, 2001-35 I.R.B. 194 Modified by REG-107186-00 Rev. Proc. 2001-51, 2001-43 I.R.B. 369 Corrected by 2001-6 Ann. 2001-71, 2001-27 I.R.B. 26 Modified by Notice 2001-42, 2001-30 I.R.B. 70 1 A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2001-1 through 2001-26 is in Internal Revenue Bulletin 2001-27, dated July 2, 2001. <!-- PageFooter="2001-47 I.R.B." --> <!-- PageFooter="November 19, 2001" -->
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