rp-16-50.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

26 CFR 601.201: Rulings and determination letters
Also: (Part 1, §851)

Rev. Proc. 2016-50

# SECTION 1. PURPOSE

This revenue procedure supplements Rev. Proc. 2016-3, 2016-1 I.R.B. 126, which
sets forth areas of the Internal Revenue Code (Code) on which the Internal Revenue
Service (Service) will not issue letter rulings or determination letters (no-rule areas).
SECTION 2. BACKGROUND

In the interest of sound tax administration, the Service answers inquiries from
individuals and organizations regarding their status for tax purposes and the tax effects
of their acts or transactions before the filing of returns or reports that are required by the
Code. See Rev. Proc. 2016-1, 2016-1 I.R.B. 1. There are, however, areas in which the
Service will not issue letter rulings or determination letters because the issues are
inherently factual or for other reasons. The Service publishes guidance setting forth
these no-rule areas throughout the year and incorporates them annually into the third
revenue procedure of the year, currently Rev. Proc. 2016-3.

Section 4 of Rev. Proc. 2016-3 sets forth areas in which the Service ordinarily will
not issue letter rulings or determination letters. "Not ordinarily" means that unique and

<!-- PageBreak -->

compelling reasons must be demonstrated to justify the issuance of a letter ruling or
determination letter. Section 2.01 of Rev. Proc. 2016-3.

## SECTION 3. PROCEDURE

Rev. Proc. 2016-3 is supplemented by adding a new paragraph (63) to section 4.01
to read as follows:

(63) Section 851 .- Definition of Regulated Investment Company .- Any issue
relating to the treatment of a corporation as a regulated investment company under
section 851 and related provisions that requires a determination whether a financial
instrument or position is a security as defined in the Investment Company Act of 1940.
SECTION 4. EFFECTIVE DATE

This revenue procedure applies to all requests for letter rulings, including any
requests pending in the national office and any requests submitted on or after
September 27, 2016.

SECTION 5. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2016-3 is supplemented.

# SECTION 6. DRAFTING INFORMATION

The principal author of this revenue procedure is Matthew P. Howard of the Office of
Associate Chief Counsel (Financial Institutions & Products). For further information
regarding this revenue procedure contact Mr. Howard at (202) 317-7053 (not a toll-free
call).