Internal Revenue Bulletin 1996-33 (PDF rendition): IRS Revenue Rulings

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. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

SPECIAL ANNOUNCEMENT
Announcement 96–71, page 16.
The Ninth Annual Institute on Current Issues in Interna-
tional Taxation, co-sponsored with The George Washing-
ton University, will be held December 12 and 13, 1996,
at the J.W. Marriott Hotel in Washington, DC.
INCOME TAX
Rev. Rul. 96–38, page 4.
Pooled income fund; community trust; maintenance
requirement.This ruling provides guidance on when a
fund maintained by a community trust satisfies the
maintenance requirement for a pooled income fund
under section 642(c)(5)(E) of the Code.
T.D. 8680, page 5.
IA–29–96, page 14.
Temporary and proposed regulations relate to exten-
sions of time for making certain elections under the
Code. A public hearing on the proposed regulations will
be held on October 30, 1996. Rev. Procs. 87–32 and
92–20 modified.
PS–22–96, page 15.
Proposed regulations relate to the final generation-
skipping transfer (GST) tax regulations under chapter 13
of the Code.
GL–7–96, page 13.
Proposed regulations under section 6335 of the Code
relate to the sale of seized property.
EXEMPT ORGANIZATIONS
Announcement 96–73, page 18.
A list is given of organizations now classified as private
foundations.
Announcement 96–74, page 19.
A list is provided of organizations that no longer qualify
as organizations to which contributions are deductible
under section 170 of the Code.
ADMINISTRATIVE
Notice 96–40, page 11.
Accounting methods.Comments are invited on pos-
sible changes to Rev. Proc. 92–20, 1992–1 C.B. 685,
which provides the general procedures for a taxpayer to
change a method of accounting.
Rev. Proc. 96–39, page 11.
Section 355 No Rule.This procedure amplifies the ‘‘No
Rule’’ Rev. Proc. 96–3, 1996–1 I.R.B. 82, to include
certain transactions under section 355 of the Code.
Announcement 96–72, page 16.
T.D. 8644, 1996–7 I.R.B. 16, relating to generation-
skipping transfer tax, is corrected.
Finding Lists begin on page 21.
Bulletin No. 1996–33
August 12, 1996
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 interpretations.

Mission of the Service
The purpose of the Internal Revenue Service is to
collect the proper amount of tax revenue at the least
cost; serve the public by continually improving the
quality of our products and services; and perform in a
manner warranting the highest degree of public
confidence in our integrity, efficiency and fairness.
Statement of Principles
of Internal Revenue
Tax Administration
The function of the Internal Revenue Service is to
administer the Internal Revenue Code. Tax policy
for raising revenue is determined by Congress.
With this in mind, it is the duty of the Service to
carry out that policy by correctly applying the laws
enacted by Congress; to determine the reasonable
meaning of various Code provisions in light of the
Congressional purpose in enacting them; and to
perform this work in a fair and impartial manner,
with neither a government nor a taxpayer point of view.
At the heart of administration is interpretation of the
Code. It is the responsibility of each person in the
Service, charged with the duty of interpreting the
law, to try to find the true meaning of the statutory
provision and not to adopt a strained construction in
the belief that he or she is ‘‘protecting the revenue.’’
The revenue is properly protected only when we as-
certain and apply the true meaning of the statute.
The Service also has the responsibility of applying
and administering the law in a reasonable,
practical manner. Issues should only be raised by
examining officers when they have merit, never
arbitrarily or for trading purposes. At the same
time, the examining officer should never hesitate
to raise a meritorious issue. It is also important
that care be exercised not to raise an issue or to
ask a court to adopt a position inconsistent with
an established Service position.
Administration should be both reasonable and
vigorous. It should be conducted with as little
delay as possible and with great courtesy and
considerateness. It should never try to overreach,
and should be reasonable within the bounds of law
and sound administration. It should, however, be
vigorous in requiring compliance with law and it
should be relentless in its attack on unreal tax
devices and fraud.
2

Introduction
The Internal Revenue Bulletin is the authoritative instru-
ment of the Commissioner of Internal Revenue for
announcing official rulings and procedures of the Inter-
nal Revenue Service and for publishing Treasury Deci-
sions, 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 of a permanent nature are consolidated semi-
annually 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 of internal
practices 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
Regulations, but they may be used as precedents.
Unpublished 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 consid-
ered, 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
provisions of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows:
Subpart A, Tax Conventions, 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 Administra-
tive Rulings are issued by the Department of the
Treasury’s Office of the Assistant Secretary (Enforce-
ment).
Part IV.—Items of General Interest.
With the exception of the Notice of Proposed Rulemak-
ing and the disbarment and suspension list included in
this part, none of these announcements are consoli-
dated in the Cumulative Bulletins.
The first Bulletin for each month includes an index for
the matters published during the preceding month.
These monthly indexes are cumulated on a quarterly and
semiannual basis, and are published in the first Bulletin
of the succeeding quarterly and semi-annual 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, D.C. 20402.
3

Part I. Rulings and Decision Under the Internal Revenue Code of 1986
Section 170.—Charitable
Contributions
26 CFR 1.170A–9: Definition of section
170(b)(1)(A) organization.
Does a fund satisfy the pooled income fund
requirements of § 642(c)(5)(E) of the Internal
Revenue Code if the fund is maintained by a
community trust and in the instrument of transfer
either (1) the donor gives the community trust
complete discretion to determine how the remain-
der interest will be used to further charitable
purposes, or (2) the donor requests or requires that
the community trust place the proceeds from the
remainder interest in one of its component funds
that is designated to benefit a specific charitable
organization? See Rev. Rul. 96–38, on this page.
Section 355.—Distribution of Stock
and Securities of a Controlled
Corporation
26 CFR 1.355–2: Limitations.
The revenue procedure amplifies the ‘‘No Rule’’
revenue procedure, Rev. Proc. 96–3, 1996–1 I.R.B.
82, to include certain transactions under § 355 of
the Code. See Rev. Proc. 96–39, page 11.
Section 642.—Special Rules for
Credits and Deductions
26 CFR 1.642(c)–5: Definition of pooled income
fund.
(Also § 170; 1.170A–9.)
Pooled income fund; community
trust; maintenance requirement.This
ruling provides guidance on when a
fund maintained by a community trust
satisfies the maintenance requirement
for a pooled income fund under section
642(c)(5)(E) of the Code.
Rev. Rul. 96–38
ISSUE
Does a fund satisfy the pooled in-
come fund requirements of § 642(c)(5)-
(E) of the Internal Revenue Code if the
fund is maintained by a community trust
and in the instrument of transfer either
(1) the donor gives the community trust
complete discretion to determine how
the remainder interest will be used to
further charitable purposes, or (2) the
donor requests or requires that the com-
munity trust place the proceeds from the
remainder interest in one of its compo-
nent funds that is designated to benefit a
specific charitable organization?
FACTS
BothAandBare organizations
described in § 170(b)(1)(A)(vi) and
are community trusts described in
§ 1.170A–9(e)(10) of the Income Tax
Regulations. Each pooled income fund’s
declaration of trust and instruments of
transfer (collectively referred to as the
‘‘governing instrument’’) satisfy the re-
quirements of § 642(c)(5)(A)–(D) and
(F); therefore, each proposed fund will
qualify as a pooled income fund if the
provisions of § 642(c)(5)(E) are satis-
fied.
Situation 1. Aproposes to establish a
pooled income fund thatAwill main-
tain. Under the terms of the governing
instrument, a donor contributes toAan
irrevocable remainder interest in the
property that the donor transfers to the
pooled income fund, andAhas full
discretion to determine how to use the
remainder interest to furtherA’s chari-
table purposes.
Situation 2. Bproposes to establish a
pooled income fund thatBwill main-
tain. Under the terms of the governing
instrument, a donor contributes toBan
irrevocable remainder interest in the
property that the donor has transferred
to the pooled income fund. In the instru-
ment of transfer, however, the donor
may either request or require that after
the death of the donor’s designated
income beneficiaries,Bplace the pro-
ceeds of the remainder interest in one of
B’s component funds that satisfies the
requirements of § 1.170A–9(e)(11)(ii)
and is designated to benefit a specific
charitable organization. Under the terms
ofB’s donor-designated component
funds,Bmakes current distributions of
the income of the component fund to
the designated charitable organization.B
may also distribute principal to the
designated charitable organization to fi-
nance special projects or in extraordi-
nary circumstances. As required in
§ 1.170A–9(e)(11)(v)(B)(1),B’s govern-
ing body has the power to modify any
restriction on the distributions from its
component funds if, in the sole judg-
ment of the governing body, the restric-
tion becomes unnecessary, incapable of
fulfillment, or inconsistent with the
charitable needs of the community or
area served.
LAW AND ANALYSIS
A pooled income fund is a trust that
satisfies the requirements listed in
§ 642(c)(5). Section 642(c)(5)(A) and
§ 1.642(c)–5(b)(1) provide that each do-
nor who transfers property to the trust
must contribute an irrevocable remain-
der interest in the property to or for the
use of an organization described in
§ 170(b)(1)(A), except certain private
foundations described in clauses (vii)
and (viii) of § 170(b)(1)(A).
Section 642(c)(5)(E) provides that the
trust must be maintained by the organi-
zation to which the remainder interest is
contributed and of which no donor or
beneficiary of an income interest is a
trustee. Section 1.642(c)–5(b)(5) pro-
vides that the maintenance requirement
of § 642(c)(5)(E) is satisfied only if the
public charity exercises control directly
or indirectly over the fund.
The maintenance requirement is de-
signed to ensure that the fund’s assets
will not be manipulated for the benefit
of noncharitable interests and that the
amount received by the charitable orga-
nization will reflect the amount of any
charitable contribution deduction the do-
nor may have taken for contributing the
remainder interest. H.R. Rep. No. 413
(Part 1), 91st Cong., 1st Sess. 58 (1969),
1969–3 C.B. 200, 237; and S. Rep. No.
552, 91st Cong., 1st Sess. 87 (1969),
1969–3 C.B. 423, 479. For an organiza-
tion to satisfy the maintenance require-
ment of § 642(c)(5)(E), it may not be
serving merely as a conduit for a gift to
another beneficiary, but instead must be
receiving a contribution itself that it will
use to achieve its charitable purposes.
Under § 1.170A–9(e)(11), a group of
funds is treated as a single community
trust if the funds operate under a com-
mon name, have a common governing
instrument, prepare common reports,
and are under the direction of a com-
mon governing board that has the power
to modify any restriction on distribu-
tions from any of the funds, if in the
sole judgment of the governing body,
the restriction becomes unnecessary, in-
capable of fulfillment, or inconsistent
with the charitable needs of the commu-
nity or area served. Under § 1.170A–
9(e)(11)(ii), a fund created by gift, be-
quest, or other transfer that is not
subject to any material restriction or
condition (within the meaning of
§ 1.507–2(a)(8)) can be treated as a
component part of the single entity. A
fund held by a community trust and
designated by the donor to pay its
income annually to a specific public
charity is not subject to a material
restriction and therefore may qualify as
a component part of the community
trust (component fund). § 1.507–
2(a)(8)(v),Example (3).
4

InSituation 1, the governing instru-
ment provides that the donor contributes
an irrevocable remainder interest in the
contributed property toA, andAhas
discretion over how to use the remain-
der interest to further charitable pur-
poses. AlthoughAmay elect to use
some or all of the remainder interest for
the benefit of other charitable organiza-
tions,Ais given full dominion and
control over the remainder interest.
Therefore, for § 642(c)(5), a donor in
Situation 1will be treated as contribut-
ing the remainder interest toA. Because
Awill maintain the fund, the fund will
satisfy the requirements of § 642(c)(5)-
(E) and will qualify as a pooled income
fund under § 642(c)(5).
InSituation 2, the governing instru-
ment allows a donor in the instrument
of transfer either to request or to require
thatBplace the proceeds from the
remainder interest in one of its desig-
nated funds that is a component part of
Bunder § 1.170A–9(e)(11)(ii). Under
§ 1.170A–9(e)(11),B’s component
funds, including its donor-designated
funds, are treated as a single entity,
rather than separate entities. Thus, even
though the donor inSituation 2will
either request or require thatBplace the
proceeds of the remainder interest into
one of its donor-designated funds, the
donor will be treated under § 642(c)(5)
as contributing the remainder interest to
B. BecauseBwill maintain the fund, the
fund will satisfy the requirements of
§ 642(c)(5)(E) and will qualify as a
pooled income fund under § 642(c)(5).
HOLDINGS
(1) A fund maintained by a commu-
nity trust satisfies the maintenance re-
quirement of § 642(c)(5)(E) if, in the
instrument of transfer, the donor gives
the remainder interest to the community
trust with full discretion to choose how
the remainder interest will be used to
further charitable purposes.
(2) A fund maintained by a commu-
nity trust satisfies the maintenance re-
quirement of § 642(c)(5)(E) if, in the
instrument of transfer, the donor either
requests or requires that the community
trust place the proceeds of the remainder
interest in a fund that has been desig-
nated to be used for the benefit of
specific charitable organizations pro-
vided the fund is a component part that
satisfies the requirements of § 1.170A–
9(e)(11)(ii).
DRAFTING INFORMATION
The principal author of this revenue
ruling is Jeffrey A. Erickson of the
Office of Assistant Chief Counsel
(Passthroughs and Special Industries).
For further information regarding this
revenue ruling, contact Mr. Erickson at
(202) 622–3070 (not a toll-free call).
Section 7805.—Rules and
Regulations
26 CFR 301.9100–1T: Extensions of time to make
elections (temporary).
T.D. 8680
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 301 and 602
Extensions of Time to Make
Elections
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Temporary regulations.
SUMMARY: This document contains
temporary regulations concerning exten-
sions of time for making certain elec-
tions under the Internal Revenue Code
(Code). The regulations provide the
standards that the Commissioner will
use to grant taxpayers extensions of
time for making these elections. The
text of these temporary regulations also
serves as the text of the proposed regu-
lations set forth in IA–29–96 on page 14
in this issue of the Bulletin.
DATES: These regulations are effective
June 27, 1996.
For dates of applicability, see
§ 301.9100–1T(h) of these regulations.
FOR FURTHER INFORMATION
CONTACT: Robert A. Testoff at (202)
622– 4960 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
These regulations are being issued
without prior notice and public proce-
dure pursuant to the Administrative Pro-
cedure Act (5 U.S.C. 553). For this
reason, the collection of information
contained in these regulations has been
reviewed and, pending receipt and
evaluation of public comments, ap-
proved by the Office of Management
and Budget under control number 1545–
1488. Responses to this collection of
information are required to obtain an
extension of time for making an elec-
tion.
An agency may not conduct or spon-
sor, and a person is not required to
respond to, a collection of information
unless the collection of information dis-
plays a valid control number.
For further information concerning
this collection of information, where to
submit comments on the collection of
information and the accuracy of the
estimated burden, and suggestions for
reducing this burden, please refer to the
preamble to IA–29–96 on page 14 in
this issue of the Bulletin.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become ma-
terial in the administration of any inter-
nal revenue law. Generally, tax returns
and tax return information are confiden-
tial, as required by 26 U.S.C. 6103.
Background
This document contains temporary
regulations amending the Regulations on
Procedure and Administration (26 CFR
part 301) concerning extensions of time
for making certain elections. The regula-
tions provide the standards that the
Commissioner will use to grant taxpay-
ers extensions of time for making these
elections. These standards provide relief
to taxpayers who reasonably and in
good faith fail to make a timely election
when granting relief will not prejudice
the interests of the government. The
regulations provide a means by which
taxpayers can be in the same position
they would have been in had they made
their elections in a timely fashion.
Explanation of Provisions
These temporary regulations provide
the standards the Commissioner will use
to determine whether to grant an exten-
sion of time to make an election when
the deadline for making the election is
prescribed by regulation, revenue ruling,
revenue procedure, notice, or announce-
ment published in the Federal Register
or the Internal Revenue Bulletin (regula-
tory election). Under section 6081(a),
these regulations also provide an auto-
matic extension of time to make an
election when the deadline for making
the election is prescribed by statute
(statutory election) and the deadline for
making the election is the due date of
the return or the due date of the return
including extensions. These regulations
5

adopt and revise the standards for relief
provided in Rev. Proc. 92–85, 1992–2
C.B. 490.
Automatic Extensions
Rev. Proc. 92–85 provides an auto-
matic 12-month extension for certain
regulatory elections listed in Appendix A
of that revenue procedure. The tempo-
rary regulations continue the automatic
12-month extension and update the list
of eligible regulatory elections.
Rev. Proc. 92–85 also provides an
automatic 6-month extension for statu-
tory elections when the deadline for
making the election is prescribed as the
due date of the return or the due date of
the return including extensions. The
temporary regulations expand the auto-
matic 6-month extension to include
regulatory elections.
Other Extensions
Rev. Proc. 92–85 provides relief for
certain regulatory elections that do not
qualify for relief under the automatic
extensions. Rev. Proc. 92–85 requires a
taxpayer to demonstrate that (1) it acted
reasonably and in good faith and (2)
granting relief will not prejudice the
interests of the government. The tempo-
rary regulations continue to provide ex-
tensions for such regulatory elections
upon a showing of reasonable action
and good faith and no prejudice to the
interests of the government.
The temporary regulations adopt the
standards for reasonable action and good
faith in Rev. Proc. 92–85. The regula-
tions provide that a taxpayer is deemed
to have acted reasonably and in good
faith if: (1) the taxpayer applies for
relief before the failure to make the
regulatory election is discovered by the
IRS; (2) the taxpayer inadvertently
failed to make the election because of
intervening events beyond its control;
(3) the taxpayer failed to make the
election because after exercising reason-
able diligence the taxpayer was unaware
of the necessity for the election; (4) the
taxpayer reasonably relied on written
advice of the IRS; or (5) the taxpayer
relied on a qualified tax professional,
including a professional employed by
the taxpayer, and the professional failed
to make or advise the taxpayer to make
the election. However, a taxpayer is
deemed to have not acted reasonably
and in good faith if: (1) the taxpayer is
requesting relief for an election to alter
a return position for which an accuracy-
related penalty could have been imposed
under section 6662; (2) the taxpayer was
fully informed of the required election
and related tax consequences and chose
not to file the election; or (3) the
taxpayer uses hindsight in requesting
relief.
The temporary regulations adopt the
standards for prejudice to the interests
of the government in Rev. Proc. 92–85.
The regulations provide that the interests
of the government are deemed to be
prejudiced if granting relief would result
in a taxpayer having a lower tax liability
than the taxpayer would have had if the
regulatory election had been timely
made. In addition, the interests of the
government are ordinarily deemed to be
prejudiced if the tax year in which the
election should have been made or any
affected tax years are closed by the
statute of limitations.
Accounting Method and Period Elec-
tions
Rev. Proc. 92–85 provides limited
relief (ordinarily not to exceed 90 days
from the deadline for filing Form 3115,
Application for Change in Accounting
Method) for requests to change an ac-
counting method subject to the proce-
dure described in § 1.446–1(e)(3)(i) (re-
quiring the advance written consent of
the Commissioner). The temporary regu-
lations continue this limited relief. Rev.
Proc. 92–85 provides an automatic 12-
month extension for the election to use
the last-in, first-out (LIFO) inventory
method under section 472 and also
provides relief for the section 472 elec-
tion beyond the automatic 12-month
extension. Rev. Proc. 92–85 is otherwise
inapplicable to accounting method regu-
latory elections, except for three specific
elections listed in Appendix B of that
revenue procedure.
The temporary regulations provide re-
lief for all accounting method regulatory
elections. For example, relief will now
be available for elections under sections
197 (amortization of goodwill and cer-
tain other intangibles) and 468A (special
rules for nuclear decommissioning
costs).
The temporary regulations provide ad-
ditional rules regarding what constitutes
prejudice to the interests of the govern-
ment for accounting method regulatory
elections. The temporary regulations
provide that the interests of the govern-
ment are deemed to be prejudiced ex-
cept in unusual and compelling circum-
stances if: (1) the election requires an
adjustment under section 481(a); (2) the
taxpayer is under examination, requests
relief to change from an impermissible
method of accounting, and granting re-
lief will provide the taxpayer a more
favorable method of accounting or more
favorable terms and conditions than the
taxpayer would receive if the change is
made as part of the examination; or (3)
the election provides a more favorable
method of accounting or more favorable
terms and conditions if the election is
made by a certain date or taxable year.
Rev. Proc. 92–85 provides an auto-
matic 12-month extension for elections
to use other than the required taxable
year under section 444. Rev. Proc.
92–85 also provides limited relief (ordi-
narily not to exceed 90 days from the
deadline for filing Form 1128, Applica-
tion to Adopt, Change, or Retain a Tax
Year) for accounting period regulatory
elections subject to Rev. Proc. 87–32,
1987–2 C.B. 396. Rev. Proc. 92–85 is
otherwise inapplicable to accounting pe-
riod regulatory elections. The temporary
regulations extend the limited relief for
elections subject to Rev. Proc. 87–32 to
all other accounting period regulatory
elections except for the section 444
election, and provide relief for the sec-
tion 444 election beyond the automatic
12-month extension.
Effect on other documents
Rev. Proc. 92–85, 1992–2 C.B. 490,
as modified and clarified by Rev. Proc.
93–28, 1993–2 C.B. 344, is obsolete as
of June 27, 1996.
Rev. Proc. 92–20, 1992–1 C.B. 685,
is modified as of June 27, 1996, to the
extent that the provisions of this regula-
tion apply to applications for relief with
respect to requests to change an ac-
counting method subject to the proce-
dures of Rev. Proc. 92–20.
Rev. Proc. 87–32, 1987–2 C.B. 396,
is modified as of June 27, 1996, to the
extent that the provisions of this regula-
tion apply to applications for relief with
respect to requests to change an ac-
counting period subject to the proce-
dures of Rev. Proc. 87–32.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in EO 12866.
Therefore, a regulatory assessment is not
required. It has also been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) and
the Regulatory Flexibility Act (5 U.S.C.
chapter 6) do not apply to these regula-
6

tions, and, therefore, a Regulatory Flex-
ibility Analysis is not required. Pursuant
to section 7805(f) of the Internal Rev-
enue Code, these temporary regulations
will be submitted to the Chief Counsel
for Advocacy of the Small Business
Administration for comment on their
impact on small businesses.
Drafting Information
The principal author of these regula-
tions is Robert A. Testoff of the Office
of Assistant Chief Counsel (Income Tax
and Accounting). However, other per-
sonnel from the IRS and Treasury De-
partment participated in their develop-
ment.
* * * * *
Adoption of Amendments to the Regula-
tions
Accordingly, 26 CFR parts 301 and
602 are amended as follows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 is amended by adding entries
in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 301.9100–1T also issued under
26 U.S.C. 6081;
Section 301.9100–2T also issued under
26 U.S.C. 6081;
Section 301.9100–3T also issued under
26 U.S.C. 6081; * * *
Par. 2. Sections 301.9100–1T through
301.9100–3T are added to read as fol-
lows:
§ 301.9100–1T Extensions of time to
make elections (temporary).
(a) - (c) [Reserved].
(d)Introduction.The regulations un-
der this section and §§ 301.9100–2T
through 301.9100–3T provide the stan-
dards the Commissioner will use to
determine whether to grant an extension
of time to make a regulatory election.
The regulations under this section and
§§ 301.9100–2T through 301.9100–3T
also provide an automatic extension of
time to make certain statutory elections.
An extension of time is available for
elections that a taxpayer is otherwise
eligible to make and the granting of an
extension of time is not a determination
that the taxpayer is otherwise eligible to
make the election. Section 301.9100–2T
provides automatic extensions of time
for making regulatory and statutory
elections when the deadline for making
the election is the due date of the return
or the due date of the return including
extensions. Section 301.9100–3T pro-
vides extensions of time for making
regulatory elections that do not meet the
requirements of § 301.9100–2T.
(e)Terms.The following terms have
the meanings provided below:
Electionincludes an application for
relief in respect of tax; a request to
adopt, change, or retain an accounting
method or accounting period; but does
not include an application for an exten-
sion of time for filing a return under
section 6081.
Regulatoryelection means an election
whose deadline is prescribed by a regu-
lation published in the Federal Register,
or a revenue ruling, revenue procedure,
notice, or announcement published in
the Internal Revenue Bulletin.
Statutory electionmeans an election
whose deadline is prescribed by statute.
Taxpayermeans any person within the
meaning of section 7701(a)(1).
(f)General standards for relief.The
Commissioner in the Commissioner’s
discretion may grant a reasonable exten-
sion of time to make a regulatory elec-
tion, or a statutory election (but no more
than 6 months except in the case of a
taxpayer who is abroad), under all sub-
titles of the Internal Revenue Code
except subtitles E, G, H, and I, provided
the taxpayer demonstrates to the satis-
faction of the Commissioner that—
(1) The taxpayer acted reasonably
and in good faith; and
(2) Granting relief will not prejudice
the interests of the government.
(g)Exceptions.Notwithstanding the
provisions of paragraph (f) of this sec-
tion, an extension of time will not be
granted—
(1) For elections under section
4980A(f)(5);
(2) For elections required to be made
prior to November 20, 1970, in the case
of an election—
(i) Required to be made in or with
the taxpayer’s original income tax re-
turn;
(ii) Required to be exercised by filing
a claim for credit or refund, unless the
election is required to be exercised on
or before a date that precedes the date
of expiration of the period of limitations
provided in section 6511;
(iii) Required to be filed in a petition
to the Tax Court;
(iv) To change a previous election;
(v) To change an accounting method
as described in §§ 1.77–1 of this chap-
ter and 1.446–1 of this chapter;
(vi) To change an accounting period
as described in § 1.442–1 of this chap-
ter; or
(vii) To change the method of treat-
ing bad debts as described in § 1.166–1
of this chapter; or
(3) For elections that are expressly
excepted from relief or where alternative
relief is provided by a statute, a regula-
tion published in the Federal Register,
or a revenue ruling, revenue procedure,
notice, or announcement published in
the Internal Revenue Bulletin.
(h)Effective dates.In general, this
section and §§ 301.9100–2T through
301.9100–3T are effective for all re-
quests for relief being considered by the
IRS on June 27, 1996, and for all
requests for relief submitted on or after
June 27, 1996. However, the automatic
12-month extension and the automatic
6-month extension provided in
§ 301.9100–2T are effective for elec-
tions whose due dates are on or after
June 27, 1996.
§ 301.9100–2T Automatic extensions
(temporary).
(a)Automatic 12-month extension—
(1)In general.An automatic extension
of 12 months from the original deadline
for making a regulatory election is
granted to make elections described in
paragraph (a)(2) of this section provided
the taxpayer takes corrective action as
defined in paragraph (c) of this section
within that 12-month extension period.
(2)Elections eligible for automatic
12-month extension.The following regu-
latory elections are eligible for the auto-
matic 12-month extension described in
paragraph (a)(1) of this section—
(i) The election to use other than the
required taxable year under section 444;
(ii) The election to use the last-in,
first-out (LIFO) inventory method under
section 472;
(iii) The 15-month rule for filing an
exemption application for a section
501(c)(9), 501(c)(17), or 501(c)(20) or-
ganization under section 505;
(iv) The 15-month rule for filing an
exemption application for a section
501(c)(3) organization under section
508;
(v) The election to be treated as a
homeowners association under section
528;
(vi) The election to adjust basis on
partnership transfers and distributions
under section 754;
(vii) The estate tax election to spe-
cially value qualified real property
7

(where the IRS has not yet begun an
examination of the filed return) under
section 2032A(d)(1);
(viii) The chapter 14 gift tax election
to treat a qualified payment right as
other than a qualified payment under
section 2701(c)(3)(C)(i); and
(ix) The chapter 14 gift tax election
to treat any distribution right as a quali-
fied payment under section 2701(c)(3)-
(C)(ii).
(b)Automatic 6-month extension.An
automatic extension of 6 months from
the due date of a return excluding
extensions is granted to make regulatory
or statutory elections whose deadlines
are prescribed as the due date of the
return or the due date of the return
including extensions in the case of a
taxpayer that timely filed its return for
the year the election should have been
made, provided the taxpayer takes cor-
rective action as defined in paragraph
(c) of this section within that 6-month
extension period. This extension does
not apply, however, to regulatory or
statutory elections that must be made by
the due date of the return excluding
extensions.
(c)Corrective action.For purposes of
this section,corrective actionmeans
filing an original or an amended return
for the year the regulatory or statutory
election should have been made and
attaching the appropriate form or state-
ment for making the election. For those
elections not required to be filed with a
return, corrective action means taking
the steps required to file the election in
accordance with the statute, the regula-
tion published in the Federal Register,
or the revenue ruling, revenue proce-
dure, notice, or announcement published
in the Internal Revenue Bulletin. Tax-
payers who make an election under an
automatic extension (and all taxpayers
whose tax liability would be affected by
the election) must report their income in
a manner that is consistent with the
election and comply with all other re-
quirements for making the election for
the year the election should have been
made and for all affected years; other-
wise, the Service may invalidate the
election.
(d)Procedural requirements.Any re-
turn, statement of election, or other form
of filing that must be made to obtain an
automatic extension must provide the
following statement at the top of the
document: ‘‘FILED PURSUANT TO
§ 301.9100–2T’’. Any filing made to
obtain an automatic extension must be
sent to the same address that the filing
to make the election would have been
sent had the filing been timely made.
No request for a letter ruling is required
to obtain an automatic extension. Ac-
cordingly, user fees do not apply to
taxpayers taking corrective action to
obtain an automatic extension.
(e) The following example illustrates
the rules of this section:
Example.Taxpayer A fails to make a certain
election when filing A’s 1996 income tax return on
March 17, 1997, the due date of the return. This
election does not affect the tax liability of any
other taxpayer. The applicable regulation requires
that the election be made by attaching the appro-
priate form to a timely filed return including
extensions. In accordance with paragraphs (b) and
(c) of this section, A may make the regulatory
election by filing an amended return with the
appropriate form by September 15, 1997 (6
months from the March 17, 1997, due date).
§ 301.9100–3T Other extensions (tem-
porary).
(a)In general.Requests for exten-
sions of time for regulatory elections
that do not meet the requirements of
§ 301.9100–2T must be made under the
rules of this section. Requests for relief
subject to this section will be granted
when the taxpayer provides the evidence
(including affidavits described in para-
graph (e) of this section) to establish
that the taxpayer acted reasonably and
in good faith, and granting relief will
not prejudice the interests of the govern-
ment.
(b)Reasonable action and good
faith—(1)In general.Except as pro-
vided in paragraphs (b)(3)(i) through
(iii) of this section, a taxpayer is
deemed to have acted reasonably and in
good faith if the taxpayer—
(i) Requests relief under this section
before the failure to make the regulatory
election is discovered by the IRS;
(ii) Inadvertently failed to make the
election because of intervening events
beyond the taxpayer’s control;
(iii) Failed to make the election be-
cause, after exercising reasonable dili-
gence (taking into account the taxpay-
er’s experience and the complexity of
the return or issue), the taxpayer was
unaware of the necessity for the elec-
tion;
(iv) Reasonably relied on the written
advice of the IRS; or
(v) Reasonably relied on a qualified
tax professional, including a tax profes-
sional employed by the taxpayer, and
the tax professional failed to make, or
advise the taxpayer to make, the elec-
tion.
(2)Reasonable reliance on a quali-
fied tax professional.For purposes of
this paragraph (b), a taxpayer will not
be considered to have reasonably relied
on a qualified tax professional if the
taxpayer knew or should have known
that the professional was not—
(i) Competent to render advice on the
regulatory election; or
(ii) Aware of all relevant facts.
(3)Taxpayer deemed to have not
acted reasonably or in good faith.For
purposes of this paragraph (b), a tax-
payer is deemed to have not acted
reasonably and in good faith if the
taxpayer—
(i) Seeks to alter a return position for
which an accuracy-related penalty has
been or could be imposed under section
6662 at the time the taxpayer requests
relief (taking into account any qualified
amended return filed within the meaning
of § 1.6664–2(c)(3)) of this chapter and
the new position requires or permits a
regulatory election for which relief is
requested;
(ii) Was fully informed of the re-
quired election and related tax conse-
quences, but chose not to file the elec-
tion; or
(iii) Uses hindsight in requesting re-
lief. If specific facts have changed since
the original deadline for making the
election that make the election advanta-
geous to a taxpayer, the IRS will not
ordinarily grant relief. In such a case,
the IRS will grant relief only when the
taxpayer provides strong proof that the
taxpayer’s decision to seek relief did not
involve hindsight.
(c)Prejudice to the interests of the
government—(1)In general—(i)Lower
tax liability.The interests of the govern-
ment are prejudiced if granting relief
would result in a taxpayer having a
lower tax liability in the aggregate for
all years to which the regulatory elec-
tion applies than the taxpayer would
have had if the election had been timely
made (taking into account the time
value of money). Similarly, if the tax
consequences of more than one taxpayer
are affected by the election, the govern-
ment’s interests are prejudiced if extend-
ing the time for making the election
may result in the affected taxpayers, in
the aggregate, having a lower tax liabil-
ity than if the election had been timely
made.
(ii)Closed years.The interests of the
government are ordinarily prejudiced if
the tax year in which the regulatory
election should have been made or any
tax years that would have been affected
by the election had it been timely made
are closed by the period of limitations
8

on assessment under section 6501(a)
before the taxpayer’s receipt of a ruling
granting relief under this section. The
IRS may condition a grant of relief on
the taxpayer providing the IRS with a
statement from an independent auditor
(other than an auditor providing an
affidavit pursuant to paragraph (e)(3) of
this section) certifying that the require-
ments of paragraph (c)(1)(i) of this
section are satisfied.
(2)Special rules for accounting
method regulatory elections.The inter-
ests of the government are deemed to be
prejudiced except in unusual and com-
pelling circumstances if the accounting
method regulatory election is—
(i) Subject to the procedure described
in § 1.446–1(e)(3)(i) of this chapter (re-
quiring the advance written consent of
the Commissioner), and the request for
relief under this section is filed more
than 90 days after the deadline for filing
the Form 3115, Application for Change
in Accounting Method;
(ii) Not an election described in para-
graph (c)(2)(i) of this section and re-
quires an adjustment under section
481(a) (or would require an adjustment
under section 481(a) if the taxpayer
changed to the method of accounting for
which relief is requested in a taxable
year subsequent to the taxable year the
election should have been made);
(iii) Not an election described in
paragraph (c)(2)(i) of this section, the
taxpayer is under examination and re-
quests relief under this section to change
from an impermissible method of ac-
counting, and granting relief will pro-
vide the taxpayer a more favorable
method of accounting or more favorable
terms and conditions than the taxpayer
would receive if the change from the
impermissible method is made as part of
the examination; or
(iv) Not an election described in
paragraph (c)(2)(i) of this section and
the election provides a more favorable
method of accounting or more favorable
terms and conditions if the election is
made by a certain date or taxable year.
(3)Special rules for accounting pe-
riod regulatory elections.The interests
of the government are deemed to be
prejudiced except in unusual and com-
pelling circumstances if an election is an
accounting period regulatory election
(other than the election to use other than
the required taxable year under section
444) and the request for relief is filed
more than 90 days after the deadline for
filing the Form 1128, Application to
Adopt, Change, or Retain a Tax Year (or
other required statement).
(d)Effect of amended returns—(1)
Second examination under section
7605(b).Taxpayers requesting and re-
ceiving an extension of time under this
section waive any objections to a second
examination under section 7605(b) for
the issue(s) that is the subject of the
relief request and any correlative adjust-
ments.
(2)Suspension of the period of limi-
tations under section 6501(a).A request
for relief under this section does not
suspend the period of limitations on
assessment under section 6501(a). Thus,
for relief to be granted, the IRS may
require the taxpayer to consent under
section 6501(c)(4) to an extension of the
period of limitations on assessment for
the tax year in which the regulatory
election should have been made and any
tax years that would have been affected
by the election had it been timely made.
(e)Procedural requirements—(1)In
general.Requests for relief under this
section must provide evidence that satis-
fies the requirements in paragraphs (b)
and (c) of this section, and must provide
additional information as required by
this paragraph (e).
(2)Affidavit and declaration from
taxpayer.The taxpayer, or the individual
who acts on behalf of the taxpayer with
respect to tax matters, must submit a
detailed affidavit describing the events
that led to the failure to make a valid
regulatory election and to the discovery
of the failure. When the taxpayer relied
on a qualified tax professional for ad-
vice, the taxpayer’s affidavit must de-
scribe the engagement and responsibili-
ties of the professional as well as the
extent to which the taxpayer relied on
the professional. The affidavit must be
accompanied by a dated declaration,
signed by the taxpayer, which states:
‘‘Under penalties of perjury, I declare
that, to the best of my knowledge and
belief, the facts presented herein are
true, correct, and complete.’’ The indi-
vidual who signs for an entity must
have personal knowledge of the facts
and circumstances at issue.
(3)Affidavits and declarations from
other parties.The taxpayer must submit
detailed affidavits from the individuals
having knowledge or information about
the events that led to the failure to make
a valid regulatory election and to the
discovery of the failure. These individu-
als must include the taxpayer’s income
tax return preparer, any individual (in-
cluding an employee of the taxpayer)
who made a substantial contribution to
the preparation of the return, and any
accountant or attorney, knowledgeable in
tax matters, who advised the taxpayer
with regard to the election. An affidavit
must describe the engagement and re-
sponsibilities of the individual as well as
the advice that the individual provided
to the taxpayer. Each affidavit must
include the name, current address, and
taxpayer identification number of the
individual, and be accompanied by a
dated declaration, signed by the indi-
vidual, which states: ‘‘Under penalties
of perjury, I declare that, to the best of
my knowledge and belief, the facts
presented herein are true, correct, and
complete.’’
(4)Other Information.The request
for relief filed under this section must
also contain the following information—
(i) The taxpayer must state whether
the taxpayer’s return(s) for the tax year
in which the regulatory election should
have been made or any tax years that
would have been affected by the elec-
tion had it been timely made is being
examined by a district director, or is
being considered by an appeals office or
a federal court. The taxpayer must no-
tify the IRS office considering the re-
quest for relief if the IRS starts an
examination of any such return while
the taxpayer’s request for relief is pend-
ing;
(ii) The taxpayer must state when the
applicable return, form, or statement
used to make the election was required
to be filed and when it was actually
filed;
(iii) The taxpayer must submit a copy
of any documents that refer to the
election;
(iv) When requested, the taxpayer
must submit a copy of the taxpayer’s
income tax return for any taxable year
for which the taxpayer requests an ex-
tension and any return affected by the
election; and
(v) When applicable, the taxpayer
must submit a copy of the income tax
returns of other taxpayers affected by
the election.
(5)Filing instructions.A request for
relief under this section is a request for
a letter ruling. Requests for relief should
be submitted in accordance with the
applicable procedures for requests for a
letter ruling and must be accompanied
by the applicable user fee.
(f)Examples.The following ex-
amples illustrate the provisions of this
section:
9

Example 1. Taxpayer discovers own error.Tax-
payer A prepares A’s 1996 income tax return. A is
unaware that a particular regulatory election is
available to report a transaction in a particular
manner. A files the 1996 return without making
the election and reporting the transaction in a
different manner. In 1998, A hires a qualified tax
professional to prepare A’s 1998 return. The
professional discovers that A did not make the
election. A promptly files for relief in accordance
with this section. Assuming paragraphs (b)(3)(i)
through (iii) of this section do not apply, A is
deemed to have acted reasonably and in good
faith.
Example 2. Reliance on qualified tax profes-
sional.Taxpayer B hires a qualified tax profes-
sional to advise B on preparing B’s 1996 income
tax return and provides the professional with all
the information requested. The professional fails to
advise B that a regulatory election is necessary in
order for B to report income on B’s 1996 return in
a particular manner. Nevertheless, B reports this
income in a manner that is consistent with having
made the election. In 1999, during the examination
of the 1996 return by the IRS, the examining
agent discovers that the election has not been
filed. B promptly files for relief in accordance
with this section, including attaching an affidavit
from B’s professional stating that the professional
failed to advise B that the election was necessary.
Assuming paragraphs (b)(3)(i) through (iii) of this
section do not apply, B is deemed to have acted
reasonably and in good faith.
Example 3. Accuracy-related penalty.Taxpayer
C reports income on its 1996 income tax return in
a manner that contravenes a statutory provision. C
was aware of the statutory provision that prohib-
ited the manner in which C reported this income,
but did not provide adequate disclosure of the
return position within the meaning of § 1.6662–
3(c) of this chapter. In 1999, during the examina-
tion of the 1996 return, the IRS raises an issue
regarding the reporting of this income on C’s
return. C requests relief under this section to elect
an alternative method of reporting the income.
Under paragraph (b)(3)(i) of this section, C is
deemed to have not acted reasonably and in good
faith because C seeks to alter a return position for
which an accuracy-related penalty could be im-
posed under section 6662.
Example 4. Election not requiring adjustment
under section 481(a).Taxpayer D prepares D’s
1996 income tax return. D is unaware that a
particular accounting method regulatory election is
available. D files the 1996 return using another
method of accounting. In 1998, D hires a qualified
tax professional to prepare D’s 1998 return. The
professional discovers that D did not make the
election. D promptly files for relief in accordance
with this section. Assume the applicable regulation
provides that the election does not require an
adjustment under section 481(a) and the election is
not subject to the procedure described in § 1.446–
1(e)(3)(i) of this chapter. Further assume that if D
were granted an extension of time to make the
election, D would pay no less tax than if the
election had been timely made. Under paragraph
(c) of this section, the interests of the government
are not deemed to be prejudiced.
Example 5. Election requiring adjustment under
section 481(a).The facts are the same as in
Example 4of this paragraph (f) except that the
applicable regulation provides that the election
requires an adjustment under section 481(a). Un-
der paragraph (c)(2)(ii) of this section, the inter-
ests of the government are deemed to be preju-
diced except in unusual or compelling
circumstances.
Example 6. Under examination.A regulation
permits an automatic change from an impermis-
sible method of accounting on a cut-off basis. Any
change to this method made as part of an
examination is made with a section 481(a) adjust-
ment. Taxpayer E reports income on E’s 1996
income tax return using the impermissible method
of accounting. In 1999, during the examination of
the 1996 return by the IRS, the examining agent
questions the propriety of E’s method of account-
ing. E requests relief under this section to make
the change pursuant to the regulation for 1996. E
will receive less favorable terms and conditions if
the change in method of accounting is made with
a section 481(a) adjustment by the examining
agent than if the change is made on a cut-off basis
pursuant to the regulation. Under paragraph
(c)(2)(iii) of this section, the interests of the
government are deemed to be prejudiced except in
unusual and compelling circumstances.
PART 602—OMB CONTROL
NUMBERS UNDER THE
PAPERWORK REDUCTION ACT
Par. 3. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805
Par. 4. Section 602.101(c) is amended
by adding the following entries in nu-
merical order to the table:
§ 602.101 OMB Control numbers
* * * * *
(c) * * *
CFR part or section whereCurrent OMB
identified and describedcontrol No.
* * * * *
§ 301.9100–2T. . . . . . . . . . . . . 1545–1488
§ 301.9100–3T. . . . . . . . . . . . . 1545–1488
* * * * *
Margaret Milner Richardson,
Commissioner of Internal Revenue.
Donald C. Lubick,
Assistant Secretary of the Treasury.
(Filed by the Office of the Federal Register on
June 26, 1996, 8:45 a.m., and published in the
issue of the Federal Register for June 27, 1996, 61
F.R. 33365)
10

Part III. Administrative, Procedural, and Miscellaneous
Request for Comments on
Procedures Relating to Voluntary
and Involuntary Changes in Method
of Accounting
Notice 96–40
This notice invites public comment on
possible changes to Rev. Proc. 92–20,
1992–1 C.B. 685, which provides the
general procedures for a taxpayer to
change a method of accounting. These
changes may include (1) adding proce-
dures for changes in method of account-
ing made by the district director as part
of an examination and by an appeals
officer as part of a settlement, and (2)
revising some of the existing procedures
to better achieve prompt voluntary com-
pliance with proper tax accounting prin-
ciples.
BACKGROUND
Section 446(e) of the Internal Rev-
enue Code and § 1.446–1(e) of the
Income Tax Regulations state that, ex-
cept as otherwise provided, a taxpayer
must secure the consent of the Commis-
sioner before changing a method of
accounting for federal income tax pur-
poses.
Section 1.446–1(e)(3)(ii) authorizes
the Commissioner to prescribe adminis-
trative procedures setting forth the terms
and conditions under which taxpayers
will be permitted to change a method of
accounting. The terms and conditions
the Commissioner may prescribe include
the taxable year for which the change in
method of accounting is effective and
the taxable year or years in which a
§ 481(a) adjustment is taken into ac-
count.
Rev. Proc. 92–20 sets forth the gen-
eral procedures under § 1.446–1(e) for
obtaining the consent of the Commis-
sioner to change a method of account-
ing. Rev. Proc. 92–20 uses a gradation
of incentives to encourage prompt vol-
untary compliance. Under this approach,
taxpayers that voluntarily file a request
to change prior to being contacted for
an examination of their income tax
returns receive the most favorable terms
and conditions. Once contacted for an
examination, taxpayers are generally
precluded from requesting a change
without the consent of the district direc-
tor. However, some taxpayers that have
been contacted for examination may
request a change during certain ‘‘win-
dow periods.’’ For example, certain tax-
payers may request a change during the
first 90 days after contact for examina-
tion, but will then receive terms and
conditions less favorable than those
available if they had requested a change
prior to such contact. Other taxpayers
requesting a change during certain other
available window periods receive terms
and conditions no less favorable than
those available if they had requested the
change prior to contact for examination.
Taxpayers that are required by the dis-
trict director to change their method of
accounting as part of an examination
receive the least favorable terms and
conditions.
In addition, Rev. Proc. 92–20 gener-
ally provides less favorable terms and
conditions for changes from a ‘‘Cat-
egory A method’’ of accounting than
from a ‘‘Category B method.’’ A Cat-
egory A method is any method that is
specifically not permitted by the Code,
regulations, or a decision of the Su-
preme Court or any method that differs
from a method that is specifically re-
quired by any of these authorities. A
Category B method is any method that
is not a Category A method.
The Service also has provided a num-
ber of procedures for taxpayers to obtain
automatic consent to change certain
methods of accounting. Taxpayers com-
plying with these procedures are deemed
to have obtained the consent of the
Commissioner to change their method of
accounting.
REQUEST FOR PUBLIC COMMENT
Rev. Proc. 92–20 provides no guid-
ance on changes in method of account-
ing made by the district director on
examination or by an appeals officer in
a settlement. In addition, the Service
and Treasury are evaluating whether
using window periods and characterizing
a method of accounting as a Category A
or B method are effective in encourag-
ing prompt voluntary compliance. Ac-
cordingly, the Service and Treasury re-
quest comments on possible changes to
Rev. Proc. 92–20 including, but not
limited to, the following:
(1) What are the consequences to the
Service and the taxpayer when the dis-
trict director, as part of an examination,
or an appeals officer, as part of a
settlement, makes an adjustment that
involves a method of accounting? For
example, under what circumstances does
such an adjustment constitute a change
in method of accounting imposed by the
Service (e.g., only if the adjustment
includes a § 481(a) adjustment)? When
does such a change become final (e.g.,
when the taxpayer agrees to assessment
of the tax, when the period of limita-
tions for filing a claim for refund ex-
pires, or at some other point)? What are
the effects of such a change on taxable
years for which a return has been filed
and taxable years for which a return has
not yet been filed?
(2) Are the various window periods of
Rev. Proc. 92–20 effective in encourag-
ing prompt voluntary compliance with
proper tax accounting principles? If not,
what alternatives should the Service
consider?
(3) Should the distinction between
Category A and Category B methods of
accounting be modified or eliminated? If
so, what alternatives should the Service
consider?
(4) Should the Service provide auto-
matic consent procedures for more ac-
counting method changes? If so, for
what changes?
Taxpayers may submit comments in
writing to:
Internal Revenue Service
Attn: CC:DOM:CORP:R (IA-Branch
7, Room 5228).
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044.
Alternatively, taxpayers may submit
comments electronically via the IRS
Internet site at:
http://www.irs.ustreas.gov/prod/
tax_regs/comments.html.
All comments should be received by
September 30, 1996. The comments
submitted will be available for public
inspection and copying.
DRAFTING INFORMATION
The principal author of this notice is
Robert Testoff of the Office of Assistant
Chief Counsel (Income Tax & Account-
ing). For further information regarding
this notice, contact Mr. Testoff on (202)
622–4960 (not a toll-free call).
26 CFR 601.201: Rulings and determination let-
ters.
(Also §§ 355; 1.355–2.)
Rev. Proc. 96–39
SECTION 1. PURPOSE
This revenue procedure amplifies Rev.
Proc. 96–3, 1996–1 I.R.B. 82,
11

which sets forth the areas of the Internal
Revenue Code under the jurisdiction of
the Associate Chief Counsel (Domestic)
and the Associate Chief Counsel (Em-
ployee Benefits and Exempt Organiza-
tions) relating to issues on which the
Internal Revenue Service will not issue
advance rulings or determination letters.
SECTION 2. BACKGROUND
Section 5 of Rev. Proc. 96–3 sets
forth those areas under extensive study
in which rulings or determination letters
will not be issued until the Service
resolves the issue through publication of
a revenue ruling, revenue procedure,
regulations or otherwise. Section 355(a)
of the Internal Revenue Code applies to
distributions to a shareholder with re-
spect to stock, or to a security holder in
exchange for securities, of stock or
securities of a corporation controlled by
the distributing corporation immediately
before the distribution. In cases in which
there have been negotiations, agreements
or arrangements with respect to transac-
tions or events which, if consummated
before the distribution, would result in
the distribution of stock or securities of
a corporation which is not controlled by
the distributing corporation, the Service
intends to study further the proper
evaluation of the facts and circum-
stances to determine whether the re-
quirements of § 355 are satisfied.
SECTION 3. PROCEDURE
Rev. Proc. 96–3 is amplified by add-
ing to Section 5 the following:
Section 355.—Distribution of Stock
or Securities of a Controlled Corpora-
tion.—Whether a distribution of stock or
securities is described in § 355(a)(1) if
there have been negotiations, agreements
or arrangements with respect to transac-
tions or events which, if treated as
consummated before the distribution,
would result in the distribution of stock
or securities of a corporation which is
not controlled by the distributing corpo-
ration (or, if stock is retained by the
distributing corporation, in a distribution
of an amount of stock not constituting
control).
SECTION 4. EFFECTIVE DATE
This revenue procedure will apply to
all ruling requests postmarked or, if not
mailed, received on or after July 23,
1996.
FURTHER INFORMATION
For further information regarding this
Revenue Procedure contact Bonnie
O’Brien of the Office of Assistant Chief
Counsel (Corporate) at (202) 622–7790
(not a toll-free call).
12

Part IV. Items of General Interest
Notice of Proposed Rulemaking
Sale of Seized Property
GL-7-96
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing.
SUMMARY: This document contains
proposed regulations relating to the sale
of seized property. The proposed regula-
tions reflect changes concerning the set-
ting of a minimum price for seized
property by the Tax Reform Act of
1986. The proposed regulations affect
all sales of seized property.
DATES: Written comments and requests
for a public hearing must be received by
September 11, 1996.
ADDRESSES: Send submissions to:
CC:DOM:CORP:R (GL-007-96), room
5228, Internal Revenue Service, POB
7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submis-
sions may be hand delivered to:
CC:DOM:CORP:R (GL-007-96), room
5228, Internal Revenue Service, 1111
Constitution Avenue NW., Washington,
DC.
FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
Kevin B. Connelly, (202) 622-3640 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed
amendments to the Procedure and Ad-
ministration Regulations (26 CFR part
301) relating to the sale of seized prop-
erty under section 6335 of the Internal
Revenue Code (Code). The Tax Reform
Act of 1986 amended section 6335(e),
relating to the manner and conditions of
sale, to authorize the Secretary to deter-
mine whether it would be in the best
interest of the United States to buy
seized property at the minimum price
set by the Secretary. These proposed
regulations reflect this change.
Explanation of provisions
Section 1570 of the Tax Reform Act
of 1986 amended section 6335(e) of the
Code to require the Secretary to deter-
mine before the sale of seized property
whether it would be in the best interest
of the United States to purchase such
property at the minimum price set by
the Secretary. The best interest determi-
nation is to be based on criteria pre-
scribed by the Secretary. If, at the sale,
one or more persons offer at least the
minimum price, the property shall be
sold to the highest bidder. If no one
offers at least the minimum price and
the Secretary has determined that it
would be in the best interest of the
United States to purchase the property
for the minimum price, the property will
be declared sold to the United States for
the minimum price. If no one offers the
minimum price and the Secretary has
not determined that it would be in the
best interest of the United States to
purchase the property for the minimum
price, the property shall be released to
the owner of the property and the
expense of the levy and sale shall be
added to the amount of tax for the
collection of which the United States
made the levy. Any property released
shall remain subject to any lien imposed
by subchapter C of chapter 64 of sub-
title F of the Code.
The proposed regulations reflect the
changes made by the Tax Reform Act of
1986. The regulations propose to autho-
rize district directors to make the re-
quired determination whether it would
be in the best interest of the United
States to purchase seized property for
the minimum price. In addition, the
regulations propose to set forth factors
the district director may consider when
determining the best interest of the
United States. The district director may
consider all relevant facts and circum-
stances including for example: (1) mar-
ketability of the property; (2) cost of
maintaining the property; (3) cost of
repairing or restoring the property; (4)
cost of transporting the property; (5)
cost of safeguarding the property; (6)
cost of potential toxic waste cleanup;
and (7) other factors pertinent to the
type of property.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in EO
12866. Therefore, a regulatory assess-
ment is not required. It also has been
determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flexibility
Act (5 U.S.C. chapter 6) do not apply to
these regulations, and, therefore, a
Regulatory Flexibility Analysis is not
required. Pursuant to section 7805(f) of
the Internal Revenue Code, this notice
of proposed rulemaking will be submit-
ted to the Chief Counsel for Advocacy
of the Small Business Administration for
comment on its impact on small busi-
ness.
Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, consider-
ation will be given to any written com-
ments that are submitted timely (prefer-
ably a signed original and eight (8)
copies) to the IRS. All comments will
be available for public inspection and
copying. A public hearing may be
scheduled if requested in writing by a
person that timely submits written com-
ments. If a public hearing is scheduled,
notice of the date, time, and place for
the hearing will be published in the
Federal Register.
Drafting Information
The principal author of these regula-
tions is Kevin B. Connelly, Office of
Assistant Chief Counsel (General Litiga-
tion) CC:EL:GL, IRS. However, other
personnel from the IRS and Treasury
Department participated in their devel-
opment.
* * * * *
Proposed Amendments to the Regula-
tions
Accordingly, 26 CFR part 301 is
proposed to be amended as follows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.6335-1 is amended
as follows:
1. Paragraph (c)(3) is revised.
2. Paragraphs (c)(4) through (c)(9)
are redesignated as paragraphs (c)(5)
through (c)(10).
3. New paragraph (c)(4) is added.
The additions and revision read as
follows:
13

301.6335-1 Sale of seized property.
* * * * *
(c) * * *
(3)Determinations relating to mini-
mum price—(i)Minimum price.Before
the sale of property seized by levy, the
district director shall determine a mini-
mum price, taking into account the
expenses of levy and sale, for which the
property shall be sold. The internal
revenue officer conducting the sale may
either announce the minimum price be-
fore the sale begins, or defer announce-
ment of the minimum price until after
the receipt of the highest bid, in which
case, if the highest bid is greater than
the minimum price, no announcement of
the minimum price shall be made.
(ii)Purchase by the United States.
Before the sale of property seized by
levy, the district director shall determine
whether the purchase of property by the
United States at the minimum price
would be in the best interest of the
United States. In determining whether
the purchase of property would be in the
best interest of the United States, the
district director may consider all rel-
evant facts and circumstances including
for example—
(a) Marketability of the property;
(b) Cost of maintaining the property;
(c) Cost of repairing or restoring the
property;
(d) Cost of transporting the property;
(e) Cost of safeguarding the property;
(f) Cost of potential toxic waste
cleanup; and
(g) Other factors pertinent to the type
of property.
(iii)Effective date.This paragraph
(c)(3) applies to determinations relating
to minimum price made on or after
[date final regualtions are published in
theFederal Register].
(4)Disposition of property at sale—
(i)Sale to highest bidder at or above
minimum price.If one or more persons
offer to buy the property for at least the
amount of the minimum price, the prop-
erty shall be sold to the highest bidder.
(ii)Property deemed sold to United
States at minimum price.If no one
offers at least the amount of the mini-
mum price for the property and the
Secretary has determined that it would
be in the best interest of the United
States to purchase the property for the
minimum price, the property shall be
declared to be sold to the United States
for the minimum price.
(iii)Release to owner.If the property
is not declared to be sold under para-
graph (c)(4)(i) or (ii) of this section, the
property shall be released to the owner
of the property and the expense of the
levy and sale shall be added to the
amount of tax for the collection of
which the United States made the levy.
Any property released under this para-
graph (c)(4)(iii) shall remain subject to
any lien imposed by subchapter C of
chapter 64 of subtitle F of the Internal
Revenue Code.
(iv)Effective date.This paragraph
(c)(4) applies to dispositions of property
at sale made on or after [date final
regulations are published in theFederal
Register].
* * * * *
Margaret Milner Richardson,
Commissioner of Internal Revenue.
(Filed by the Office of the Federal Register on
June 12, 1996, 8:45 a.m., and published in the
issue of the Federal Register for June 13, 1996, 61
F.R. 30012)
Notice of Proposed Rulemaking
and Notice of Public Hearing
Extensions of Time to Make
Elections
IA–29–96
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing by cross-reference to temporary
regulations and notice of public hearing.
SUMMARY: In TD 8680, on page 5 of
this issue of the Bulletin, the IRS is
issuing temporary regulations relating to
extensions of time for making certain
elections under the Internal Revenue
Code (Code). The regulations provide
the standards that the Commissioner will
use to grant taxpayers extensions of
time for making these elections. The
text of those temporary regulations also
serves as the text of these proposed
regulations. This document also provides
notice of a public hearing on these
proposed regulations.
DATES: Written comments must be re-
ceived by September 25, 1996. Outlines
of oral comments to be presented at the
public hearing scheduled for Wednesday,
October 30, 1996, at 10 a.m. must be
received by October 9, 1996.
ADDRESSES: Send submissions to:
CC:DOM:CORP:R (IA–29–96), room
5226, Internal Revenue Service, POB
7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submis-
sions may be delivered between the
hours of 8 a.m. and 5 p.m. to:
CC:DOM:CORP:R (IA–29–96), Couri-
er’s Desk, Internal Revenue Service,
1111 Constitution Avenue NW, Washing-
ton, DC. The public hearing will be held
in the IRS Classroom (room 2617),
Internal Revenue Building, 1111 Consti-
tution Avenue NW, Washington, DC.
FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
Robert A. Testoff of the Office of
Assistant Chief Counsel (Income Tax &
Accounting) at (202) 622–4960; con-
cerning submissions and the hearing,
Christina Vasquez of the Regulations
Unit, (202) 622–7190 (not toll-free num-
bers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information con-
tained in this notice of proposed
rulemaking has been submitted to the
Office of Management and Budget
(OMB) for review in accordance with
the Paperwork Reduction Act of 1995
(44 U.S.C. 3507).
Comments on the collection of infor-
mation should be sent to the Office of
Management and Budget, Attn: Desk
Officer for the Department of the Trea-
sury, Office of Information and Regula-
tory Affairs, Washington, DC 20503,
with copies to the Internal Revenue
Service, Attn: IRS Reports Clearance
Officer, T:FP, Washington, DC 20224.
Comments on the collection of informa-
tion should be received by August 26,
1996.
An agency may not conduct or spon-
sor, and a person is not required to
respond to, a collection of information
unless the collection of information dis-
plays a valid control number.
The collection of information is in
§§ 301.9100–2T and 301.9100–3T. This
information is required for a taxpayer to
obtain an extension of time to make an
election. This information will be used
by the IRS to determine whether to
grant an extension of time to make an
election. The likely respondents are
businesses or other for-profit institu-
tions, small businesses or organizations,
nonprofit institutions, individuals or
households, and farms.
Books or records relating to the col-
lection of information must be retained
as long as their contents may become
material in the administration of any
14

internal revenue law. Generally, tax re-
turns and tax return information are
confidential, as required by 26 U.S.C.
6103.
Estimated total annual reporting
burden:5,000 hours
Estimated annual burden per
respondent:10 hours.
Estimated number of respondents: 500
Estimated annual frequency
of responses:Occasional
Background
Temporary regulations in TD 8680,
on page 5 of this issue of the Bulletin
amend 26 CFR part 301. The temporary
regulations contain rules relating to ex-
tensions of time for making certain
elections.
The text of those temporary regula-
tions also serves as the text of these
proposed regulations. The preamble to
the temporary regulations explains the
temporary regulations.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in EO
12866. Therefore, a regulatory assess-
ment is not required. It has also been
determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flexibility
Act (5 U.S.C. chapter 6) do not apply to
these regulations, and, therefore, a
Regulatory Flexibility Analysis is not
required. Pursuant to section 7805(f) of
the Internal Revenue Code, this notice
of proposed rulemaking will be submit-
ted to the Chief Counsel for Advocacy
of the Small Business Administration for
comment on its impact on small busi-
nesses.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consider-
ation will be given to any written com-
ments (a signed original and eight (8)
copies) that are submitted timely to the
IRS. All comments will be available for
public inspection and copying.
A public hearing has been scheduled
for Wednesday, October 30, 1996, at 10
a.m. in the IRS Classroom (room 2617),
Internal Revenue Building, 1111 Consti-
tution Avenue NW, Washington, DC.
Because of access restrictions, visitors
will not be admitted beyond the building
lobby more than 15 minutes before the
hearing starts.
The rules of § 601.601(a)(3) apply to
the hearing.
Persons that have submitted written
comments by September 25, 1996, and
want to present oral comments at the
hearing must submit, by October 9,
1996, an outline of the topics to be
discussed and the time to be devoted to
each topic (signed original and eight (8)
copies). A period of 10 minutes will be
allotted to each person for making com-
ments.
An agenda showing the scheduling of
the speakers will be prepared after the
deadline for receiving outlines has
passed. Copies of the agenda will be
available free of charge at the hearing.
Drafting Information
The principal author of the temporary
regulations is Robert A. Testoff of the
Office of Assistant Chief Counsel (In-
come Tax and Accounting). However,
other personnel from the IRS and Trea-
sury Department participated in their
development.
* * * * *
Proposed Amendments to the Regula-
tions
Accordingly, 26 CFR part 301 is
proposed to be amended as follows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation
for part 301 is amended by removing
the entries for §§ 301.9100–1T through
301.9100–3T and adding entries in nu-
merical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 301.9100–1 also issued under 26
U.S.C. 6081;
Section 301.9100–2 also issued under 26
U.S.C. 6081;
Section 301.9100–3 also issued under 26
U.S.C. 6081; * * *
Par. 2. Sections 301.9100–1 and
301.9100–1T through 301.9100–3T are
removed.
Par. 3. Sections 301.9100–1 through
301.9100–3 are added to read as fol-
lows:
§ 301.9100–1 Extensions of time to
make elections.
§ 301.9100–2 Automatic extensions.
§ 301.9100–3 Other extensions.
[The text of these above proposed
sections are the same as the text of
§§ 301.9100-1T through 301.9100–3T
published in TD 8680, on page 5 in this
issue of the Bulletin.]
Margaret Milner Richardson,
Commissioner of Internal Revenue.
(Filed by the Office of the Federal Register on
June 26, 1996, 8:45 a.m., and published in the
issue of the Federal Register for June 27, 1996, 61
F.R. 33408)
Notice of Proposed Rulemaking
Generation-Skipping Transfer Tax
PS–22–96
AGENCY: Internal Revenue Service
(IRS), Treasury
ACTION: Notice of proposed rulemak-
ing.
SUMMARY: This document contains
proposed regulations relating to the final
generation-skipping transfer (GST) tax
regulations under chapter 13 of the
Internal Revenue Code (Code). This
document proposes a change to the final
regulations and is necessary to provide
guidance to taxpayers so that they may
comply with chapter 13 of the Code.
DATES: Written comments and requests
for a public hearing must be received by
September 10, 1996.
ADDRESSES: Send submissions to:
CC:DOM:CORP:R (PS–22–96), room
5228, Internal Revenue Service, POB
7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submis-
sions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to:
CC:DOM:CORP:R (PS–22–96), Couri-
er’s Desk, Internal Revenue Service,
1111 Constitution NW., Washington,
DC. 20224.
FOR FURTHER INFORMATION CON-
TACT: Concerning the proposed regula-
tion, James F. Hogan, (202) 622–3090
(not a toll-free number); concerning sub-
missions, Christina Vasquez, (202) 622–
7180, (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
On December 24, 1992, the IRS pub-
lished a notice of proposed rulemaking
in theFederal Register(57 FR 61356)
containing proposed regulations under
sections 2611, 2612, 2613, 2632, 2641,
2642, 2652, 2653, 2654, and 2663. On
December 27, 1995, the IRS published
final regulations in theFederal Register
15

(60 FR 66898) under sections 2611,
2612, 2613, 2632, 2641, 2642, 2652,
2653, 2654, and 2663. This proposed
regulation will delete § 26.2652–
1(a)(4) and two related examples.
Explanation of Provision
Section 2652(a)(1) provides generally,
that the termtransferormeans—(A) in
the case of any property subject to the
tax imposed by chapter 11, the decedent,
and (B) in the case of any property
subject to the tax imposed by chapter
12, the donor. An individual is treated as
transferring any property with respect to
which the individual is the transferor.
Under § 26.2652–1(a)(2), a transfer is
subject to Federal gift tax if a gift tax is
imposed under section 2501(a) and is
subject to Federal estate tax if the value
of the property is includible in the
decedent’s gross estate determined under
section 2031 or section 2103. Under
§ 26.2652–1(a)(4), the exercise of a
power of appointment that is not a
general power of appointment is also
treated as a transfer subject to Federal
estate or gift tax by the holder of the
power if the power is exercised in a
manner that may postpone or suspend
the vesting, absolute ownership, or
power of alienation of an interest in
property for a period, measured from the
date of the creation of the trust, extend-
ing beyond any specified life in being at
the date of creation of the trust plus a
period of 21 years plus, if necessary, a
reasonable period of gestation.
The purpose of the rule in
§ 26.2652–1(a)(4) was to apply the
GST tax when it may not otherwise
have applied. It was never intended to
(nor could it) prevent the application of
the tax pursuant to the statutory provi-
sions that apply based on the original
taxable transfer. To eliminate any uncer-
tainty concerning the proper application
of the GST tax, the regulations under
section 2652(a) will be clarified by
eliminating § 26.2652– 1(a)(4) andEx-
ample 9andExample 10in § 26.2652–
1(a)(6) from the final regulations.
Proposed Effective Date
These amendments apply to transfers
to trusts on or after June 12, 1996.
Special Analysis
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in EO
12866. Therefore, a regulatory assess-
ment is not required. It has also been
determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flexibility
Act (5 U.S.C. chapter 6) do not apply to
these regulations, and therefore, a Regu-
latory Flexibility Analysis is not re-
quired. Pursuant to section 7805(f) of
the Internal Revenue Code, the notice of
proposed rulemaking preceding these
regulations was submitted to the Small
Business Administration for comment on
its impact on small business.
Comments and Requests for a Public
Hearing
Before this proposed regulation is
adopted as a final regulation, consider-
ation will be given to any written com-
ments (a signed original and eight (8)
copies) that are submitted timely to the
IRS. All comments will be available for
public inspection and copying. A public
hearing may be scheduled if requested
in writing by a person that timely
submits written comments. If a public
hearing is scheduled, notice of the date,
time, and place for the hearing will be
published in theFederal Register.
Drafting Information
The principal author of this proposed
regulation is James F. Hogan, Office of
the Chief Counsel, IRS. Other personnel
from the IRS and Treasury Department
participated in its development.
* * * * *
Proposed Amendments to the Regula-
tions
Accordingly, 26 CFR part 26 is pro-
posed to be amended as follows:
PART 26—GENERATION-SKIPPING
TRANSFER TAX REGULATIONS UN-
DER THE TAX REFORM ACT OF
1986
Paragraph 1. The authority citation for
part 26 continues to read, in part, as
follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2 Section 26.2652–1 is amended
as follows:
1. Paragraph (a)(4) is removed and
paragraphs (a)(5) and (a)(6) are redesig-
nated as paragraphs (a)(4) and (a)(5),
respectively.
2. In newly designated paragraph
(a)(5),Examples 9and10are removed
andExample 11is redesignated asEx-
ample 9.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
(Filed by the Office of the Federal Register on
June 11, 1996, 8:45 a.m., and published in the
issue of the Federal Register for June 12, 1996, 61
F.R. 29714)
Announcement 96–71
Assistant Commissioner (Interna-
tional) John T. Lyons has announced the
Ninth Annual Institute on Current Issues
in International Taxation, co-sponsored
with The George Washington University,
to be held December 12 and 13 at the
J.W. Marriott Hotel in Washington, DC.
Designed for professionals in interna-
tional tax law, the Institute will cover on
the first day sessions with the U.S.,
Mexican, and Canadian Competent Au-
thorities, treaty issues, collateral conse-
quences of check-the-box, and a U.S.
multinational update. The second day
will include an ‘‘Ask the IRS’’ session,
and sessions on regulatory guidance,
intellectual property, and withholding
regulations. IRS Commissioner Margaret
Milner Richardson will be a featured
luncheon speaker.
Those interested in attending may
obtain more information from The
George Washington University, Office of
Conferences and Institutes, by calling
(202) 973–1110.
Generation-Skipping Transfer Tax;
Correction
Announcement 96–72
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regula-
tions.
SUMMARY: This document contains
corrections to final regulations (TD
8644 [1996–7 I.R.B. 16]) which were
published in theFederal Registerfor
Wednesday, December 27, 1995 (60 FR
66898). The final regulations relate to
generation-skipping transfer tax.
EFFECTIVE DATE: December 27,
1995.
FOR FURTHER INFORMATION
CONTACT: Jim Hogan (202) 622–3090
(not a toll-free number).
16

SUPPLEMENTARY INFORMATION:
Background
The final regulations that are subject
to these corrections are under chapter 13
of the Internal Revenue Code.
Need for Correction
As published, the final regulations
[TD 8644] contain errors that are in
need of clarification.
Correction of Publication
Accordingly, the publication of final
regulations which are the subject of FR
Doc. 95–30873 is corrected as follows:
1. On page 66899, column 1, in the
preamble under the paragraph heading
‘‘Uniform Statutory Rule Against Perpe-
tuities’’, line 13, the language ‘‘alien-
ation of a interest in property for a’’ is
corrected to read ‘‘alienation of an inter-
est in property for a’’.
2. On page 66902, column 1, in the
preamble under the paragraph heading
‘‘Division of a Single Trust Into Sepa-
rate Trusts’’, paragraph 3, line 3 from
the bottom, the language ‘‘for under the
original trusts. Thus, a’’ is corrected to
read ‘‘for under the original trust. Thus,
a’’.
§ 26.2601–1 [Corrected]
2a. On page 66907, column 2,
§ 26.2601–1, paragraph (b)(1)(v)(D),
Example 2, eighth line from the bottom
of the paragraph, the language, ‘‘of the
first addition), $200,000 (.2÷’’ is cor-
rected to read ‘‘of the first addition),
$200,000 (.2x’’.
3. On page 66907, column 2,
§ 26.2601–1, paragraph (b)(1)(v)(D),
Example 4, eighth line from the bottom
of the column, the language ‘‘GGC, for
life. Upon GGC’s death the’’ is cor-
rected to read ‘‘GGC, for life. Upon
GGC’s death, the’’.
4. On page 66907, column 3,
§ 26.2601–1, paragraph (b)(1)(v)(D),
Example 5, line 3, the language ‘‘As-
sume the same facts as inExample 3,’’
is corrected to read ‘‘Assume the same
facts as inExample 4,’’.
5. On page 66909, column 2,
§ 26.2601–1, paragraphs (b)(3)(iii) in-
troductory text, (b)(3)(iii)(A), (b)(3)(iii)-
(A)(1), (b)(3)(iii)(A)(2), (b)(3)(iii)(B),
(b)(3)(iii)(C) are correctly designated
(b)(3)(iii)(A) introductory text, (b)(3)-
(iii)(A)(1), (b)(3)(iii)(A)(1)(i), (b)(3)(iii)-
(A)(1)(ii), (b)(3)(iii)(A)(2), and (b)(3)-
(iii)(A)(3), respectively.
6. On page 66909, column 2,
§ 26.2601–1, newly designated para-
graph (b)(3)(iii)(A)(3) is corrected and
paragraph (b)(3)(iii)(B) is added to read
as follows:
§ 26.2601–1 Effective dates.
* * * * *
(b) * * *
(3) * * *
(iii) * * *
(A) * * *
(3) Any judgement or decree relating
to the decedent’s incompetency that was
made after October 22, 1986.
(B) Such items in paragraphs
(b)(3)(iii)(A), (B), and (C) of this sec-
tion will be considered relevant, but not
determinative, in establishing the dece-
dent’s state of competency.
7. On page 66909, column 3,
§ 26.2601–1, paragraph (b)(4)(i), line 5,
the language ‘‘rules in paragraph (b)(2)
or (3) of this’’ is corrected to read
‘‘rules in paragraph (b)(1), (2) or (3) of
this’’.
8. On page 66910, column 2,
§ 26.2601–1, paragraph (c), line 5 from
the top of the column, the language ‘‘on
or after [December 27, 1995].’’ is cor-
rected to read ‘‘on or after December
27, 1995.’’.
§ 26.2612–1 [Corrected]
9. On page 66910, column 3,
§ 26.2612–1, paragraph (a)(2)(ii), lines
5 and 6, the language ‘‘the transferor
would be assigned to a lower generation
by reason of that’’ is corrected to read
‘‘the lineal descendant would be as-
signed to a higher generation by reason
of that’’.
10. On page 66910, column 3,
§ 26.2612–1, paragraph (b)(1)(i), last 3
lines are corrected by removing the
language ‘‘(i.e., a new transferor is
determined with respect to the prop-
erty)’’.
§ 26.2632–1 [Corrected]
11. On page 66914, column 3,
§ 26.2632–1, paragraph (d)(1), line 3
from the top of the column, the lan-
guage ‘‘706 or Form 706NA and is
effective as’’ is corrected to read ‘‘706,
Form 706NA or Form 709 (filed on or
before the due date of the transferor’s
estate tax return) and is effective as’’.
§ 26.2642–2 [Corrected]
12. On page 66916, column 2,
§ 26.2642–2, paragraph (b)(3)(ii)(B),
line 6, the language ‘‘date of death and
the date of’’ is corrected to read ‘‘valua-
tion date and the date of’’.
§ 26.2642–4 [Corrected]
13. On page 66917, column 3,
§ 26.2642–4, paragraph (a)(3), lines 5
through 9 from the top of the column,
the language ‘‘not allocated to the trust,
the applicable fraction immediately be-
fore death is not changed, if the trust
was not subject to an ETIP at the time
GST exemption was allocated to the
trust. The denominator’’ is corrected to
read ‘‘not allocated to the trust, then,
except as provided in this paragraph
(a)(3), the applicable fraction immedi-
ately before death is not changed, if the
trust was not subject to an ETIP at the
time GST exemption was allocated to
the trust. In any event, the denomina-
tor’’.
14. On page 66918, column 2,
§ 26.2642–4, paragraph (b), paragraph
(i) ofExample 5, the last line,
the language ‘‘is .50 (12($100,000/
$200,000 = .50)’’ is corrected to read
‘‘is .50 (12($100,000/$200,000))’’.
§ 26.2652–1 [Corrected]
15. On page 66918, column 3,
§ 26.2652–1, paragraph (a)(2), line 2,
the language ‘‘or gift tax. For purposes
of this section,’’ is corrected to read ‘‘or
gift tax. For purposes of this chapter,’’.
16. On page 66919, column 1,
§ 26.2652–1, paragraph (a)(2), line 3
from the top of the column, the lan-
guage ‘‘2501(a). A transfer is subject to
Federal’’ is corrected to read ‘‘2501(a)
(without regard to exemptions, exclu-
sions, deductions, and credits). A trans-
fer is subject to Federal’’.
17. On page 66919, columns 1 and 2,
§ 26.2652–1, paragraph (a)(6)Example
1, last two lines in column 1 and first
line in column 2, the language ‘‘benefit
of T’s grandchild. The transfer is a
completed gift under § 25.2511–2 of
this chapter. Thus, for purposes of chap-
ter 13, T’’ is corrected to read ‘‘benefit
of T’s grandchild. The transfer is subject
to Federal gift tax because a gift tax is
imposed under section 2501(a) (without
regard to exemptions, exclusions, deduc-
tions, and credits). Thus, for purposes of
chapter 13, T’’.
18. On page 66919, column 2,
§ 26.2652–1, paragraph (a)(6),Example
5, lines 13 and 14, the language ‘‘trans-
fer by T is a completed transfer within
the meaning of § 25.2511–2 of this
chapter’’ is corrected to read ‘‘transfer
17

by T is subject to Federal gift tax
because a gift tax is imposed under
section 2501(a) (without regard to ex-
emptions, exclusions, deductions, and
credits)’’.
§ 26.2654–1 [Corrected]
19. On page 66921, column 2,
§ 26.2654–1, paragraph (a)(1)(ii)(A),
last line, the language ‘‘person; or’’ is
corrected to read ‘‘person; and’’.
20. On page 66922, column 2,
§ 26.2654–1, paragraph (a)(5),Example
6, line 10 from the top of the column,
the language ‘‘contribution is 3/4 ((2/3 x
$180,000) +’’ is corrected to read ‘‘con-
tribution is 3/4 (((2/3 x $180,000) +’’.
21. On page 66922, column 2,
§ 26.2654–1, paragraph (a)(5),Example
8, line 4 from the bottom of the para-
graph, the language ‘‘same if, the trust
instrument provided that’’ is corrected to
read ‘‘same if the trust instrument pro-
vided that’’.
22. On page 66922, column 2,
§ 26.2654–1, paragraph (b)(1)(ii)(A),
lines 1 and 2, the language ‘‘(A) The
terms of each of the new trusts provide
for the same succession of’’ is corrected
to read ‘‘(A) The terms of the new trusts
provide in the aggregate for the same
succession of’’.
23. On page 66922, column 3,
§ 26.2654–1, paragraph (b)(1)(ii)(C)(1),
line 2 from the bottom of the paragraph,
the language ‘‘measured from the date
of death to the’’ is corrected to read
‘‘measured from the valuation date to
the’’.
§ 26.2662–1 [Corrected]
24. On page 66923, column 3,
§ 26.2662–1, paragraph (c)(2)(vi),Ex-
ample 1, line 6, the language ‘‘T’s
grandchild GC, was named the sole’’ is
corrected to read ‘‘T’s grandchild, GC,
was named the sole’’.
§ 26.2663–2 [Corrected]
25. On page 66925, column 1,
§ 26.2663–2, paragraph (c)(2), the last
line, the language ‘‘the trust).’’ is cor-
rected to read ‘‘the trust)).’’.
26. On page 66925, column 2,
§ 26.2663–2, paragraph (d),Example 3,
line 8 from the bottom of the paragraph,
the language ‘‘Generation-Skipping
Transfer) Tax return’’ is corrected to
read ‘‘Generation-Skipping Transfer)
Tax Return’’.
27. On page 66925, column 3,
§ 26.2663–2, paragraph (e), line 11, the
language ‘‘prescribed in section 2632(c).
Thus, an’’ is corrected to read ‘‘pre-
scribed in section 2632(c). Thus, a’’.
Cynthia E. Grigsby
Chief, Regulations Unit
Assistant Chief Counsel (Corporate)
(Filed by the Office of the Federal Register on
June 11, 1996, 8:45 a.m., and published in the
issue of the Federal Register for June 12, 1996, 61
F.R. 29653)
Foundations Status of Certain
Organizations
Announcement 96–73
The following organizations have
failed to establish or have been unable
to maintain their status as public chari-
ties or as operating foundations. Accord-
ingly, grantors and contributors may not,
after this date, rely on previous rulings
or designations in the Cumulative List
of Organizations (Publication 78), or on
the presumption arising from the filing
of notices under section 508(b) of the
Code. This listing doesnotindicate that
the organizations have lost their status
as organizations described in section
501(c)(3), eligible to receive deductible
contributions.
Former Public Charities. The follow-
ing organizations (which have been
treated as organizations that are not
private foundations described in section
509(a) of the Code) are now classified
as private foundations:
American Research Center Inc.,
Aberdeen, MD
Arundel Singers Inc., Baltimore, MD
Assisting Dads & Moms Inc., West
Long Branch, NJ
Association for a Better Environment,
McMurray, PA
Association for Innovative Education
Inc., Philadelphia, PA
Association for Puerto Ricans in Science
and Engineering, Washington, DC
Association of Pharmaceutical
Technologists Incorporated, Union, NJ
Atlantic City Urban Beautification
Committee Inc., Atlantic City, NJ
Autumn Place Inc., Frederick, MD
Aware Safety Group Inc., Richmond,
VA
Bangladesh Society of NJ Inc.,
Lawrenceville, NJ
Bergmans Butterflies Parents
Association, Mays Landing, NJ
Bernardino Coutinho Foundation Inc.,
Newark, NJ
Bill Gold Drive for Life Inc.,
Ridgewood, NJ
Biosphere Resources Group Inc.,
Takoma Park, MD
Birmingham Football Foundation, Inc.,
Birmingham, AL
Black College AIDS Awareness
Foundation, Washington, DC
Blacks Networking for Progress Inc.,
Philadelphia, PA
Black Teenage World Educational Fund
Inc., Washington, DC
Blue Mountain Community Library Inc.,
Pen Argyl, PA
Bon Aqua Volunteer Fire Dept, Bon
Aqua Volunteer, TN
Bulgarian-American Charitable &
Educational Center, Potomac, MD
Caesar Rodney High School Cheerleader
Booster Club, Dover, DE
Cambodia Development International,
Washington, DC
Capella Productions Inc., Merion, PA
Capital Hill Tollgate Association,
Washington, DC
Captain Thomas Clifford Bland Jr
Memorial & Scholarship Fund,
Gaithersburg, MD
Care Group Inc., Calhoun, GA
Cecil Soccer League Inc., Elkton, MD
Central and Southern Africa Legal
Assistance Foundation, Harrisburg,
PA
Christians United in Business—CUBE,
Detroit, MI
C Incorporated Support for Visions in
Action, Hopewell, NJ
Ellis Swim Team, Philadelphia, PA
Goldstone-Trust Press and Educational
Division, Great Barrington, MA
Harold E. Byrd Educational Foundation,
Inc., East Bradenton, FL
Isadora Duncan International, New York,
NY
KOP Art, Inc., Brooklyn, NY
Lebanon Opera House Improvement
Corporation, Lebanon, NY
Manhattan International Cultural
Studios, Inc., New York, NY
Massachusetts Association of Women
Lawyers Scholarship Trust, Boston,
MA
Massachusetts Vigil Society
Corporation, Ipswich, MA
Mayors Youth Leadership Corps, Inc.,
Boston, MA
Medius Corporation, New York, NY
Melrose Launch, Inc., Melrose, MA
Merrimack County Mental Health
Consumers Association, Concord, NH
Minnesota Decoy Foundation, St. Paul,
MN
18

Monadnock Area Foster Parent Support
Group, Keene, NH
Music Mobile International, Inc., New
York, NY
Nash County Foundation to Reduce the
Use of Drugs, Nashville, TN
National Cancer Research Center, Inc.,
Aberdeen, MD
Northwest Community and Business
Council, Inc., Lake Wales, FL
Paralysis Research Organization,
Littleton, MA
Parents Teachers Advisory Group,
Fitchburg, MA
Pasos Bailandos Therapeutic Riding
Center, Bridgeton, ME
Planet Well Incorporated, Tallahassee,
FL
Precious Jewels Day Care Center, Inc.,
Buffalo, NY
P.S. 234 Parents and Teachers
Association, Inc., New York, NY
Quidditas, Inc., Salem, NY
Recreational Association for Deaf Youth,
Inc., Avon, MA
Relapse Preventions Therapy and
Preventive Measure, Inc., Providence,
RI
Serving Our Selves, Inc., Bronx, NY
Shaw Memorial Ame Zion Church
Gathering, Providence, RI
Shelter Works, Inc., Bloomfield, CT
Spiritual Vision, Inc., Tallahassee, FL
Sugarloaf Foundation, Gray, ME
Take-One Theatre Arts, Inc., St. James,
NY
Tilton-Northfield Baseball Organization,
Tilton, NH
Turnpike Camerata, Inc., New York, NY
Valley Grove School District
Scholarship Fund, Franklin, PA
Whitfield Education Foundation, Inc.,
Dalton, GA
Youth Hi Tech ZK Inc., Silver Spring,
MD
If an organization listed above sub-
mits information that warrants the re-
newal of its classification as a public
charity or as a private operating founda-
tion, the Internal Revenue Service will
issue a ruling or determination letter
with the revised classification as to
foundation status. Grantors and contribu-
tors may thereafter rely upon such rul-
ing or determination letter as provided
in section 1.509(a)–7 of the Income Tax
Regulations. It is not the practice of the
Service to announce such revised classi-
fication of foundation status in the Inter-
nal Revenue Bulletin.
Deletions from Cumulative List of
Organizations Contributions to
Which Are Deductible Under
Section 170 of the Code
Announcement 96–74
The names of organizations that no
longer qualify as organizations described
in section 170(c)(2) of the Internal Rev-
enue Code of 1986 are listed below.
Generally, the Service will not disal-
low deductions for contributions made
to a listed organization on or before the
date of announcement in the Internal
Revenue Bulletin that an organization
no longer qualifies. However, the Ser-
vice is not precluded from disallowing a
deduction for any contributions made
after an organization ceases to qualify
under section 170(c)(2) if the organiza-
tion has not timely filed a suit for
declaratory judgment under section 7428
and if the contributor (1) had knowledge
of the revocation of the ruling or deter-
mination letter, (2) was aware that such
revocation was imminent, or (3) was in
part responsible for or was aware of the
activities or omissions of the organiza-
tion that brought about this revocation.
If on the other hand a suit for de-
claratory judgment has been timely
filed, contributions from individuals and
organizations described in section
170(c)(2) that are otherwise allowable
will continue to be deductible. Protec-
tion under section 7428(c) would begin
on August 12, 1996, and would end on
the date the court first determines that
the organization is not described in
section 170(c)(2) as more particularly
set forth in section 7428(c)(1). For indi-
vidual contributors, the maximum de-
duction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any
individual who was responsible, in
whole or in part, for the acts or omis-
sions of the organization that were the
basis for revocation.
Fellowship Outreach Ministries, Inc.
Jacksonville, FL
Fund for the Duluth Clinic
Duluth, MN
19

Numerical Finding List
1
Bulletins 1996–27 through 1996–32
Announcements:
96–61, 1996–27 I.R.B.72
96–62, 1996–28 I.R.B.55
96–63, 1996–29 I.R.B.18
96–64, 1996–29 I.R.B.18
96–65, 1996–29 I.R.B.18
96–66, 1996–29 I.R.B.19
96–67, 1996–30 I.R.B.27
96–68, 1996–31 I.R.B.45
96–69, 1996–32 I.R.B.38
96–70, 1996–32 I.R.B.40
Notices:
96–36, 1996–27 I.R.B.11
96–37, 1996–31 I.R.B.29
96–38, 1996–31 I.R.B.29
96–39, 1996–32 I.R.B.8
Proposed Regulations:
CO–24–96, 1996–30 I.R.B.22
CO–25–96, 1996–31 I.R.B.30
CO–26–96, 1996–31 I.R.B.31
FI–28–96, 1996–31, I.R.B.33
FI–48–95, 1996–31 I.R.B.36
FI–59–94, 1996–30 I.R.B.23
IA–26–94, 1996–30 I.R.B.24
IA-292-84, 1996–28 I.R.B.38
Railroad Retirement Quarterly Rate
1996–29 I.R.B.14
Revenue Procedures:
96–36, 1996–27 I.R.B.11
96–37, 1996–29 I.R.B.16
96–40, 1996–32 I.R.B.8
96–41, 1996–32 I.R.B.9
96–42, 1996–32 I.R.B.14
Revenue Rulings:
96–33, 1996–27 I.R.B.4
96–34, 1996–28 I.R.B.4
96–35, 1996–31 I.R.B.4
96–36, 1996–30 I.R.B.6
96–37, 1996–32 I.R.B.4
Tax Conventions:
1996–28 I.R.B. 36
Treasury Decisions:
8673, 1996–27 I.R.B.4
8674, 1996–28 I.R.B.7
8675, 1996–29 I.R.B.5
8676, 1996–30 I.R.B.4
8677, 1996–30 I.R.B.7
8678, 1996–31 I.R.B.11
8679, 1996–31 I.R.B.4
1
A cumulative list of all Revenue Rulings, Rev-
enue Procedures, Treasury Decisions, etc., pub-
lished in Internal Revenue Bulletins 1996–1
through 1996–26 will be found in Internal Rev-
enue Bulletin 1996–27, dated July 1, 1996.
21

Finding List of Current Action on
Previously Published Items
1
Bulletins 1996–27 through 1996–32
*Denotes entry since last publication
Revenue Procedures:
80–27
Modified by
96–40, 1996–32 I.R.B.8
95–29
Superseded by
96–36, 1996–27 I.R.B.11
95–29A
Superseded by
96–36, 1996–27 I.R.B.11
95–30
Superseded by
96–42, 1996–32 I.R.B.4
1
A cumulative finding list for previously published
items mentioned in Internal Revenue Bulletins
1996–1 through 1996–26 will be found in Internal
Revenue Bulletin 1996–27, dated July 1, 1996.
22

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 de-
scribe the effect:
Amplifieddescribes 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 ampli-
fied. (Compare withmodified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously
published ruling and points out an es-
sential difference between them.
Modifiedis 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 pub-
lished position. (Compare withamplified
andclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered de-
terminative with respect to future trans-
actions. This term is most commonly
used in a ruling that lists previously
published rulings that are obsoleted be-
cause of changes in law or regulations.
A ruling may also be obsoleted because
the substance has been included in regu-
lations subsequently adopted.
Revokeddescribes situations where
the position in the previously published
ruling is not correct and the correct
position is being stated in the new
ruling.
Supersededdescribes 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 previ-
ously 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,modifiedandsuper-
sededdescribes a situation where the
substance of a previously published rul-
ing 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 su-
perseded.
Supplementedis 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.
Suspendedis used in rare situations to
show that the previous 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.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C.—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contribution Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
20