Internal Revenue Bulletin 1999-13 (PDF rendition): IRS Revenue Rulings

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INCOME TAX
Rev. Rul. 99–14, page 3.
Business expenses; interest; lease-in /lease-out trans-
actions.A taxpayer may not deduct, under sections 162
and 163 of the Code, rent and interest paid or incurred in
connection with a lease-in /lease-out (LILO) transaction that
lacks economic substance.
Rev. Rul. 99–16, page 5.
Interest rates; underpayments and overpayments.The
rate of interest determined under section 6621 of the Code
for the calendar quarter beginning April 1, 1999, will be 8
percent for overpayments (7 percent in the case of a corpo-
ration), 8 percent for underpayments, and 10 percent for
large corporate underpayments. The rate of interest paid on
the portion of a corporate overpayment exceeding $10,000
is 5.5 percent.
EMPLOYMENT TAX
Notice 99–16, page 10.
Deferred compensation; methods of accounting.This
notice provides procedures for implementing a change in
method of accounting to comply with section 404(a)(11) of
the Code, regarding the payment of deferred compensation.
EMPLOYEE PLANS
REG–118662–98, page 13.
Proposed regulations under section 411 of the Code provide
applicable standards for transmitting certain notices and
consent through electronic media, and modify the timing re-
quirements for providing certain distribution-related notices.
A public hearing is scheduled for April 15, 1999.
Announcement 99–18, page 21.
This announcement clarifies the reporting of conversions to
Roth IRAs on Form 8606, Nondeductible IRAs. It clarifies the
note in Part III of the form relating to the 10% additional tax.
In addition, it corrects the computation of modified AGI for
Roth IRAs and the Ed IRA contribution worksheet in the in-
structions to the form.
EXEMPT ORGANIZATIONS
Announcement 99–27, page 22.
A list is given of organizations now classified as private foun-
dations.
ADMINISTRATIVE
Rev. Proc. 99–19, page 10.
Interest netting for interest accruing before October
1, 1998.This procedure provides guidance on how to apply
the net interest rate of zero in section 6621(d) of the Code
to interest accruing before October 1, 1998, with respect to
overlapping tax underpayments and tax overpayments. Pub-
lic comments are requested regarding the application of
section 6621 to these payments.
Announcement 99–28, page 25.
This document contains a correction to the notice of pro-
posed rulemaking, REG–106177–98 (1999–12 I.R.B. 25),
published in the Federal Register on December 22, 1998
(63 F.R. 70701).
Announcement 99–29, page 25.
This document contains a correction to final regulations,
T.D. 8804 (1999–12 I.R.B. 5), under section 1441 of the
Code, relating to the withholding of income tax on certain
U.S. source income payments to foreign persons.
Announcement 99–30, page 26.
This document contains a correction to REG–104072–97
(1999–11 I.R.B. 12) relating to financing arrangements in-
volving fast-pay stock.
Announcement 99–31, page 26.
This document contains corrections to T.D. 8795 (1999–7
I.R.B. 8), under section 411 of the Code, relating to defined
benefit plans and to individual account plans that are subject
to the funding standards of section 302 of the Employment
Retirement Income Security Act of 1974.
Internal Revenue
bbuulllleettiinn
Bulletin No. 1999–13
March 29, 1999
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.
Department of the Treasury
Internal Revenue Service
Finding Lists begin on page 32.
Announcement of Disbarments and Suspensions begins on page 27.

The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly and may be obtained
from the Superintendent of Documents on a subscription
basis. Bulletin contents are consolidated semiannually into
Cumulative Bulletins, which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive 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 other-
wise indicated. Procedures relating solely to matters of in-
ternal 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 Service 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 unwarranted 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 pub-
lished rulings and procedures, the effect of subsequent leg-
islation, regulations, court decisions, rulings, and proce-
dures must be considered, and Service personnel and oth-
ers concerned are cautioned against reaching the same con-
clusions 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 Sub-
parts. Also included in this part are Bank Secrecy Act Admin-
istrative Rulings. Bank Secrecy Act Administrative Rulings
are issued by the Department of the Treasury’s Office of the
Assistant Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The first Bulletin for each month includes a cumulative index
for the matters published during the preceding months.
These monthly indexes are cumulated on a semiannual basis,
and are published in the first Bulletin of the succeeding semi-
annual period, respectively.
Mission of the Service
Provide America’s taxpayers top quality service by help-
ing them understand and meet their tax responsibilities
and by applying the tax law with integrity and fairness to
all.
2
Introduction
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

Section 162.–Trade or Business
Expenses
26 CFR 1.162–11: Rentals.
(Also section 163; 1.163–1.)
Business expenses; interest; lease-
in /lease-out transactions.A taxpayer
may not deduct, under sections 162 and
163 of the Code, rent and interest paid or
incurred in connection with a lease-
in /lease-out (LILO) transaction that lacks
economic substance.
Rev. Rul. 99–14
ISSUE
May a taxpayer deduct, under §§ 162
and 163 of the Internal Revenue Code,
rent and interest paid or incurred in con-
nection with a “lease-in/lease-out”
(“LILO”) transaction?
FACTS
Xis a U.S. corporation. FMis a foreign
municipality that has historically owned
and used certain property having a remain-
ing useful life of 50 years and a fair market
value of $100 million. BK1and BK2are
banks. None of the parties is related.
On January 1, 1997, Xand FMentered
into a LILO transaction under which FM
leased the property to Xunder a
“Headlease,” and Ximmediately leased
the property back to FMunder a “Sub-
lease.” The term of the Headlease is 34
years. The “primary” term of the Sub-
lease is 20 years. Moreover, as described
below, the Sublease may also have a “put
renewal” term of 10 years.
The Headlease requires Xto make two
rental payments to FMduring its 34-year
term: (1) an $89 million “prepayment” at
the beginning of year 1; and (2) a “post-
payment” at the end of year 34 that has a
discounted present value of $8 million.
For federal income tax purposes, Xand
FMallocate the prepayment ratably to the
first 6 years of the Headlease and the fu-
ture value of the postpayment ratably to
the remaining 28 years of the Headlease.
The Sublease requires FMto make
fixed, annual rental payments over both
the primary term and, if exercised, the put
renewal term. The fixed, annual pay-
ments during the put renewal term are
substantially higher than those for the pri-
mary term. Nevertheless, the fixed, an-
nual payments during the put renewal
term are projected (as of January 1, 1997)
to equal only 90 percent of the fair market
value rental amounts for that term.
At the end of the Sublease primary
term, FMhas a “fixed- payment option”
to purchase from Xthe Headlease residual
(the right to use the property beyond the
Sublease primary term subject to the
obligation to make the rent postpayment)
for a fixed amount that is projected (as of
January 1, 1997) to be equal to the fair
market value of the Headlease residual. If
FMexercises the option, the transaction is
terminated at that point and Xis not re-
quired to make any portion of the post-
payment due under the Headlease. If FM
does not exercise the option, Xmay elect
to (1) use the property itself for the re-
maining term of the Headlease, (2) lease
the property to another person for the re-
maining term of the Headlease, or (3)
compel FMto lease the property for the
10-year put renewal term of the Sublease.
If FMdoes not exercise the fixed-pay-
ment option and Xexercises its put re-
newal option, Xcan require FMto pur-
chase a letter of credit guaranteeing the
put renewal rents. If FMdoes not obtain
the letter of credit, FMmust exercise the
fixed-payment option.
To partially fund the $89 million
Headlease prepayment, Xborrows $54
million from BK1and $6 million from
BK2. Both loans are nonrecourse, have
fixed interest rates, and provide for an-
nual debt service payments that fully
amortize the loans over the 20-year pri-
mary term of the Sublease. The amount
and timing of the debt service payments
mirror the amount and timing of the Sub-
lease payments due during the primary
term of the Sublease.
Upon receiving the $89 million Head-
lease prepayment, FMdeposits $54 mil-
lion into a deposit account with an affili-
ate of BK1and $6 million into a deposit
account with an affiliate of BK2.The de-
posits with the affiliates of BK1and BK2
earn interest at the same rates as the loans
from BK1and BK2. FM directs the affili-
ate of BK1to pay BK1annual amounts
equal to 90 percent of FM’s annual rent
obligation under the Sublease (that is,
amounts sufficient to satisfy X’s debt ser-
vice obligation to BK1). The parties treat
these amounts as having been paid from
the affiliate to FM, then from FMto Xas
rental payments, and finally from Xto
BK1as debt service payments. In addi-
tion, FMpledges the deposit account to X
as security for FM’s obligations under the
Sublease, while X, in turn, pledges its in-
terest in FM’s pledge to BK1as security
for X’s obligations under the loan from
BK1. Similarly, FMdirects the affiliate of
BK2to pay BK2annual amounts equal to
10 percent of FM’s annual rent obligation
under the Sublease (that is, amounts suffi-
cient to satisfy X’s debt service obligation
to BK2). The parties treat these amounts
as having been paid from the affiliate to
FM, then from FMto Xas rental pay-
ments, and finally from Xto BK2as debt
service payments. Although this deposit
account is not pledged, the parties under-
stand that FMwill use the account to pay
the remaining 10 percent of FM’s annual
rent obligation under the Sublease.
Xrequires FMto invest $15 million of
the Headlease prepayment in highly-rated
debt securities that will mature in an
amount sufficient to fund the fixed
amount due under the fixed-payment op-
tion, and to pledge these debt securities to
X. Having economically defeased both its
rental obligations under the Sublease and
its fixed payment under the fixed-pay-
ment option, FMkeeps the remaining
portion of the Headlease prepayment as
its return on the transaction.
For tax purposes, Xclaims deductions
for interest on the loans and for the allo-
cated rents on the Headlease. Xincludes
in gross income the rents received on the
Sublease and, if and when exercised, the
payment received on the fixed payment
option. By accounting for each element
of the transaction separately, Xpurports to
generate a stream of substantial net de-
ductions in the early years of the transac-
tion followed by net income inclusions on
or after the conclusion of the Sublease
primary term. As a result, Xanticipates a
substantial net after-tax return from the
transaction. Xalso anticipates a positive
pre- tax economic return from the transac-
tion. However, this pre-tax return is in-
significant in relation to the net after-tax
return.
1999–13 I.R.B.3March 29, 1999
Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

LAW AND ANALYSIS
In general, a transaction will be re-
spected for tax purposes if it has “eco-
nomic substance which is compelled or
encouraged by business or regulatory re-
alities, is imbued with tax-independent
considerations, and is not shaped solely
by tax-avoidance features that have mean-
ingless labels attached.” Frank Lyon Co.
v. United States,435 U.S. 561, 583–84
(1978); James v. Commissioner,899 F.2d
905, 908–09 (10th Cir. 1990). In assess-
ing the economic substance of a transac-
tion, a key factor is whether the transac-
tion has any practical economic effect
other than the creation of tax losses.
Courts have refused to recognize the tax
consequences of a transaction that does
not appreciably affect the taxpayer’s ben-
eficial interest except to reduce tax. The
presence of an insignificant pre-tax profit
is not enough to provide a transaction
with sufficient economic substance to be
respected for tax purposes. Knetsch v.
United States,364 U.S. 361, 366 (1960);
ACM Partnership v. Commissioner,157
F.3d 231, 248 (3d Cir. 1998); Sheldon v.
Commissioner,94 T.C. 738, 768 (1990).
In determining whether a transaction
has sufficient economic substance to be
respected for tax purposes, courts have
recognized that offsetting legal obliga-
tions, or circular cash flows, may effec-
tively eliminate any real economic signif-
icance of the transaction. For example, in
Knetsch, the taxpayer purchased an annu-
ity bond using nonrecourse financing.
However, the taxpayer repeatedly bor-
rowed against increases in the cash value
of the bond. Thus, the bond and the tax-
payer’s borrowings constituted offsetting
obligations. As a result, the taxpayer
could never derive any significant benefit
from the bond. The Supreme Court found
the transaction to be a sham, as it pro-
duced no significant economic effect and
had been structured only to provide the
taxpayer with interest deductions.
In Sheldon,the Tax Court denied the
taxpayer the purported tax benefits of a
series of Treasury bill sale-repurchase
transactions because they lacked eco-
nomic substance. In the transactions, the
taxpayer bought Treasury bills that ma-
tured shortly after the end of the tax year
and funded the purchase by borrowing
against the Treasury bills. The taxpayer
accrued the majority of its interest deduc-
tion on the borrowings in the first year
while deferring the inclusion of its eco-
nomically offsetting interest income from
the Treasury bills until the second year.
The transactions lacked economic sub-
stance because the economic conse-
quences of holding the Treasury bills
were largely offset by the economic cost
of the borrowings. The taxpayer was de-
nied the tax benefit of the transactions be-
cause the real economic impact of the
transactions was “infinitesimally nominal
and vastly insignificant when considered
in comparison with the claimed deduc-
tions.” Sheldonat 769.
In ACM Partnership, the taxpayer en-
tered into a near-simultaneous purchase
and sale of debt instruments. Taken to-
gether, the purchase and sale “had only
nominal, incidental effects on [the tax-
payer’s] net economic position.” ACM
Partnershipat 250. The taxpayer claimed
that, despite the minimal net economic ef-
fect, the transaction had a large tax effect
resulting from the application of the in-
stallment sale rules to the sale. The court
held that transactions that do not “appre-
ciably” affect a taxpayer’s beneficial in-
terest, except to reduce tax, are devoid of
substance and are not respected for tax
purposes. ACM Partnershipat 248. The
court denied the taxpayer the purported
tax benefits of the transaction because the
transaction lacked any significant eco-
nomic consequences other than the cre-
ation of tax benefits.
Viewed as a whole, the objective facts
of the LILO transaction indicate that the
transaction lacks the potential for any sig-
nificant economic consequences other
than the creation of tax benefits. During
the 20-year primary term of the Sublease,
X’s obligation to make the property avail-
able under the Sublease is completely off-
set by X’s right to use the property under
the Headlease. X’s obligation to make
debt service payments on the loans from
BK1and BK2is completely offset by X’s
right to receive Sublease rentals from FM.
Moreover, X’s exposure to the risk that
FMwill not make the rent payments is
further limited by the arrangements with
the affiliates of BK1and BK2. In the case
of the loan from BK1, X’s economic risk
is completely eliminated through the de-
feasance arrangement. In the case of the
smaller loan from BK2, X’s economic
risk, although not completely eliminated,
is substantially reduced through the de-
posit arrangement. As a result, neither
bank requires an independent source of
funds to make the loans, or bears signifi-
cant risk of nonpayment. In short, during
the Sublease primary term, the offsetting
and circular nature of the obligations
eliminate any significant economic conse-
quences of the transaction.
At the end of the 20-year Sublease pri-
mary term, Xwill have either the pro-
ceeds of the fixed-payment option or a
Headlease residual that has a fair market
value approximately equal to the proceeds
of the fixed payment option. If, at the end
of the 20-year Sublease primary term, the
Headlease residual is worth more than the
payment required on the fixed-payment
option, FMwill capture this excess value
by exercising the fixed payment option,
leaving Xwith only the proceeds of the
option. Conversely, if, at the end of the
20-year Sublease primary term, the
Headlease residual is worth significantly
less than the payment required on the
fixed-payment option, Xwill put the
property back to FMunder the put re-
newal option at rents, that while initially
projected to be at only 90 percent of esti-
mated fair market value, are (because of
the decline in the value of the property)
greater than fair market value. Thus, the
fixed payment option and put renewal op-
tion operate to “collar” the value of the
Headlease residual during the primary
term, limiting much of the economic con-
sequence of the Headlease residual.
In addition, facts indicate that there is
little economic consequence from X’s
nominal exposure to FM’s credit under
the fixed-payment option and, if exer-
cised, the put renewal term. At the incep-
tion of the transaction, FMwas required
to use a portion of the Headlease prepay-
ment to purchase highly-rated debt securi-
ties that were pledged to X, ensuring FM’s
ability to make the payment under the
fixed-payment option. If FMdoes not ex-
ercise the fixed-payment option and Xex-
ercises the put renewal option, Xcan re-
quire FMto purchase a letter of credit
guaranteeing FM’s obligation to make the
put renewal rent payments. If FMdoes
not obtain the letter of credit, FMmust
exercise the fixed-payment option. Thus,
March 29, 199941999–13 I.R.B.

as a practical matter, the transaction is
structured so that Xis never subject to
FM’s credit.
The conclusion that Xis insulated from
any significant economic consequence of
the Headlease residual is further supported
by several factors indicating that the par-
ties expect FMto exercise the fixed-pay-
ment option. First, FMhas historically
used the property. Second, because the
fixed payment obligation is fully defeased,
FMneed not draw on other sources of
capital to exercise the option. However, if
FMdoes not exercise the fixed payment
option and Xexercises the put renewal op-
tion, FMwould be required to draw on
other sources of capital to satisfy its put
renewal rental obligations.
In sum, the LILO transaction lacks the
potential for significant economic conse-
quences other than the creation of tax
benefits. During the primary term of the
Sublease, X’s obligations to provide prop-
erty are completely offset by its right to
use property. X’s obligations to make
debt service payments on the loans are
completely offset by X’s right to receive
rent on the Sublease. These cash flows
are further assured by the deposit arrange-
ments with the affiliates of BK1and BK2.
Finally, X’s economic exposure to the
Headlease residual is rendered insignifi-
cant by the option structure and the
pledge of the securities that defeases
FM’s option payment. Thus, the only real
economic consequence of the LILO trans-
action during the 20-year primary term of
the Sublease is X’s pre-tax return. This
pre-tax return is too insignificant, when
compared to X’s after-tax yield, to support
a finding that the transaction has signifi-
cant economic consequences other than
the creation of tax benefits.
Some of the features of the LILO trans-
action discussed above are present in
transactions that the Service will respect
for federal income tax purposes. For ex-
ample, an arrangement for “in-substance
defeasance” of an outstanding debt was
respected in Rev. Rul. 85–42, 1985–1
C.B. 36. By contrast, in the LILO trans-
action, the deposit arrangement exists
from the inception of the transaction,
eliminating any need by BK1and BK2for
an independent source of funds. Simi-
larly, other features of the LILO transac-
tion, such as nonrecourse financing and
fixed-payment options, are respected in
other contexts. However, when these and
other features are viewed as a whole in
the context of the LILO transaction, these
features indicate the transaction should
not be respected for tax purposes.
As a result of the transaction lacking
economic substance, Xmay not deduct in-
terest or rent paid or incurred in connec-
tion with the transaction.
The Service will scrutinize LILO trans-
actions for lack of economic substance
and/or, in appropriate cases, recharacter-
ize transactions for federal income tax
purposes based on their substance. See,
e.g., Gregory v. Helvering293 U.S. 495
(1935), Bussing v. Commissioner,88 T.C.
449 (1987), Supplemental Opinion, 89
T.C. 1050 (1987). Use of terms such as
“loan,” “lease,” “Headlease,” and “Sub-
lease” in this revenue ruling should not be
interpreted to indicate the Service’s ac-
ceptance of X’s characterization of the
LILO transaction described above.
HOLDING
A taxpayer may not deduct, under
§§ 162 and 163, rent and interest paid or
incurred in connection with a LILO trans-
action that lacks economic substance.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 85–42 is distinguished.
DRAFTING INFORMATION
The principal author of this revenue
ruling is John Aramburu of the Office of
Assistant Chief Counsel (Income Tax and
Accounting). For further information re-
garding this revenue ruling contact Mr.
Aramburu on (202) 622-4960 (not a toll-
free call).
Section 163.—Interest
26 CFR 1.163–1: Interest deduction in general.
May a taxpayer deduct interest paid or incurred
in connection with a lease-in /lease-out (LILO)
transaction that lacks economic substance? See Rev.
Rul. 99–14, page 3.
Section 6601.—Interest on
Underpayment, Nonpayment, or
Extensions of Time for Payment,
of Tax
26 CFR 301.6601–1: Interest on underpayments.
How is the net interest rate of zero in section
6621(d) of the Code to be applied to interest accru-
ing before October 1, 1998, with respect to overlap-
ping tax underpayments and tax overpayments? See
Rev. Proc. 99–19, page 10.
Section 6611.—Interest on
Overpayments
26 CFR 301.6611–1: Interest on overpayments.
How is the net interest rate of zero in section
6621(d) of the Code to be applied to interest accru-
ing before October 1, 1998, with respect to overlap-
ping tax underpayments and tax overpayments? See
Rev. Proc. 99–19, page 10.
Section 6621.—Determination
of Rate of Interest
26 CFR 301.6621–1: Interest rate.
How is the net interest rate of zero in section
6621(d) of the Code to be applied to interest accru-
ing before October 1, 1998, with respect to overlap-
ping tax underpayments and tax overpayments? See
Rev. Proc. 99–19, page 10.
26 CFR 301.6621–1: Interest rate.
Interest rates; underpayments and
overpayments.The rate of interest deter-
mined under section 6621 of the Code for
the calendar quarter beginning April 1,
1999, will be 8 percent for overpayments
(7 percent in the case of a corporation), 8
percent for underpayments, and 10 per-
cent for large corporate underpayments.
The rate of interest paid on the portion of
a corporate overpayment exceeding
$10,000 is 5.5 percent.
Rev. Rul. 99–16
Section 6621 of the Internal Revenue
Code establishes the rates for interest on
tax overpayments and tax underpayments.
Under § 6621(a)(1), the overpayment rate
beginning April 1, 1999, is the sum of the
1999–13 I.R.B.5March 29, 1999

federal short-term rate plus 3 percentage
points (2 percentage points in the case of
a corporation), except the rate for the por-
tion of a corporate overpayment of tax ex-
ceeding $10,000 for a taxable period is
the sum of the federal short-term rate plus
0.5 of a percentage point for interest com-
putations made after December 31, 1994.
Under § 6621(a)(2), the underpayment
rate is the sum of the federal short-term
rate plus 3 percentage points.
Section 6621(c) provides that for pur-
poses of interest payable under § 6601 on
any large corporate underpayment, the
underpayment rate under § 6621(a)(2) is
determined by substituting “5 percentage
points” for “3 percentage points.” See
§ 6621(c) and § 301.6621–3 of the Regu-
lations on Procedure and Administration
for the definition of a large corporate un-
derpayment and for the rules for deter-
mining the applicable date. Section
6621(c) and § 301.6621–3 are generally
effective for periods after December 31,
1990.
Section 6621(b)(1) provides that the
Secretary will determine the federal short-
term rate for the first month in each calen-
dar quarter.
Section 6621(b)(2)(A) provides that the
federal short-term rate determined under
§ 6621(b)(1) for any month applies during
the first calendar quarter beginning after
such month.
Section 6621(b)(2)(B) provides that in
determining the addition to tax under
§ 6654 for failure to pay estimated tax for
any taxable year, the federal short-term
rate that applies during the third month
following such taxable year also applies
during the first 15 days of the fourth
month following such taxable year.
Section 6621(b)(3) provides that the
federal short-term rate for any month is
the federal short-term rate determined
during such month by the Secretary in ac-
cordance with § 1274(d), rounded to the
nearest full percent (or, if a multiple of
1/2 of 1 percent, the rate is increased to
the next highest full percent).
Notice 88–59, 1988–1 C.B. 546, an-
nounced that, in determining the quarterly
interest rates to be used for overpayments
and underpayments of tax under § 6621,
the Internal Revenue Service will use the
federal short-term rate based on daily
compounding because that rate is most
consistent with § 6621 which, pursuant to
§ 6622, is subject to daily compounding.
Rounded to the nearest full percent, the
federal short- term rate based on daily
compounding determined during the
month of January 1999 is 5 percent. Ac-
cordingly, an overpayment rate of 8 per-
cent (7 percent in the case of a corpora-
tion) and an underpayment rate of 8
percent are established for the calendar
quarter beginning April 1, 1999. The
overpayment rate for the portion of a cor-
porate overpayment exceeding $10,000
for the calendar quarter beginning April 1,
1999, is 5.5 percent. The underpayment
rate for large corporate underpayments
for the calendar quarter beginning April 1,
1999, is 10 percent. These rates apply to
amounts bearing interest during that cal-
endar quarter.
Under § 6621(b)(2)(B), the 7 percent
rate that applies to estimated tax underpay-
ments for the first calendar quarter in 1999,
as provided in Rev. Rul. 98–61, 1998–51
I.R.B. 8, also applies to such underpay-
ments for the first 15 days in April 1999.
Interest factors for daily compound in-
terest for annual rates of 5.5 percent, 7
percent, 8 percent, and 10 percent are
published in Tables 16, 19, 21, and 25 of
Rev. Proc. 95–17, 1995–1 C.B. 556, 570,
573, 575, and 579.
Annual interest rates to be compounded
daily pursuant to § 6622 that apply for
prior periods are set forth in the tables ac-
companying this revenue ruling.
INFORMATION
The principal author of this revenue
ruling is Raymond Bailey of the Office of
Assistant Chief Counsel (Income Tax and
Accounting). For further information re-
garding this revenue ruling, contact Mr.
Bailey on (202) 622-6226 (not a toll-free
call).
March 29, 199961999–13 I.R.B.
TABLE OF INTEREST RATES
PERIODS BEFORE JUL. 1, 1975 – PERIODS ENDING DEC. 31, 1986
OVERPAYMENTS AND UNDERPAYMENTS
In 1995–1 C.B
PERIODRATEDAILY RATE TABLE
Before Jul. 1, 19756%Table 2, pg. 557
Jul. 1, 1975—Jan. 31, 19769%Table 4, pg. 559
Feb. 1, 1976—Jan. 31, 19787%Table 3, pg. 558
Feb. 1, 1978—Jan. 31, 19806%Table 2, pg. 557
Feb. 1, 1980—Jan. 31, 198212%Table 5, pg. 560
Feb. 1, 1982—Dec. 31, 198220%Table 6, pg. 560
Jan. 1, 1983—Jun. 30, 198316%Table 37, pg. 591
Jul. 1, 1983—Dec. 31, 198311%Table 27, pg. 581
Jan. 1, 1984—Jun. 30, 198411%Table 75, pg. 629
Jul. 1, 1984—Dec. 31, 198411%Table 75, pg. 629
Jan. 1, 1985—Jun. 30, 198513%Table 31, pg. 585
Jul. 1, 1985—Dec. 31, 198511%Table 27, pg. 581
Jan. 1, 1986—Jun. 30, 198610%Table 25 pg. 579
Jul. 1, 1986—Dec. 31, 19869%Table 23, pg. 577

TABLE OF INTEREST RATES
FROM JAN. 1, 1987 – Dec. 31, 1998
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATETABLEPGRATETABLEPG
Jan. 1, 1987—Mar. 31, 19878%215759%23577
Apr. 1, 1987—Jun. 30, 19878%215759%23577
Jul. 1, 1987—Sep. 30, 19878%215759% 23577
Oct. 1, 1987—Dec. 31, 19879%2357710% 25579
Jan. 1, 1988—Mar. 31, 198810%7362711% 75629
Apr. 1, 1988—Jun. 30, 19889%7162510%73627
Jul. 1, 1988—Sep. 30, 19889%7162510%73627
Oct. 1, 1988—Dec. 31, 198810%7362711%75629
Jan. 1, 1989—Mar. 31, 198910%2557911%27581
Apr. 1, 1989—Jun. 30, 198911%2758112%29583
Jul. 1, 1989—Sep. 30, 198911%2758112%29583
Oct. 1, 1989—Dec. 31, 198910%2557911%27581
Jan. 1, 1990—Mar. 31, 199010%2557911%27581
Apr. 1, 1990—Jun. 30, 199010%2557911%27581
Jul. 1, 1990—Sep. 30, 199010%2557911%27581
Oct. 1, 1990—Dec. 31, 199010%2557911%27581
Jan. 1, 1991—Mar. 31, 199110%2557911%27581
Apr. 1, 1991—Jun. 30, 19919%2357710%25579
Jul. 1, 1991—Sep. 30, 19919%2357710%25579
Oct. 1, 1991—Dec. 31, 19919%2357710% 25579
Jan. 1, 1992—Mar. 31, 19928%696239% 71625
Apr. 1, 1992—Jun. 30, 19927%676218% 69623
Jul. 1, 1992—Sep. 30, 19927%676218% 69623
Oct. 1, 1992—Dec. 31, 19926%656197% 67621
Jan. 1, 1993—Mar. 31, 19936%175717% 19573
Apr. 1, 1993—Jun. 30, 19936%175717% 19573
Jul. 1, 1993—Sep. 30, 19936%175717% 19573
Oct. 1, 1993—Dec. 31, 19936%175717% 19573
Jan. 1, 1994—Mar. 31, 19946%175717% 19573
Apr. 1, 1994—Jun. 30, 19946%175717% 19573
Jul. 1, 1994—Sep. 30, 19947%195738% 21575
Oct. 1, 1994—Dec. 31, 19948%215759% 23577
Jan. 1, 1995—Mar. 31, 19958%215759% 23577
Apr. 1, 1995—Jun. 30, 19959%2357710% 25579
Jul. 1, 1995—Sep. 30, 19958%215759% 23577
Oct. 1, 1995—Dec. 31, 19958%215759% 23577
Jan. 1, 1996—Mar. 31, 19968%696239% 71625
Apr. 1, 1996—Jun. 30, 19967%676218% 69623
Jul. 1, 1996—Sep. 30, 19968%696239% 71625
Oct. 1, 1996—Dec. 31, 19968%696239% 71625
Jan. 1, 1997—Mar. 31, 19978%215759% 23577
Apr. 1, 1997—Jun. 30, 19978%215759% 23577
Jul. 1, 1997—Sep. 30, 19978%215759% 23577
Oct. 1, 1997—Dec. 31, 19978%215759% 23577
Jan. 1, 1998—Mar. 31, 19988%215759% 23577
Apr. 1, 1998—Jun. 30, 19987%195738% 21575
Jul. 1, 1998—Sep. 30, 19987%195738% 21575
Oct. 1, 1998—Dec. 31, 19987%195738% 21575
1999–13 I.R.B.7March 29, 1999

TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 – PRESENT
1995–1 C.B.
RATETABLEPG
Jan. 1, 1991—Mar. 31, 199113%31585
Apr. 1, 1991—Jun. 30, 199112%29583
Jul. 1, 1991—Sep. 30, 199112%29583
Oct. 1, 1991—Dec. 31, 199112%29583
Jan. 1, 1992—Mar. 31, 199211%75629
Apr. 1, 1992—Jun. 30, 199210%73627
Jul. 1, 1992—Sep. 30, 199210%73627
Oct. 1, 1992—Dec. 31, 19929%71625
Jan. 1, 1993—Mar. 31, 19939%23577
Apr. 1, 1993—Jun. 30, 19939%23577
Jul. 1, 1993—Sep. 30, 19939%23577
Oct. 1, 1993—Dec. 31, 19939%23577
Jan. 1, 1994—Mar. 31, 19949%23577
Apr. 1, 1994—Jun. 30, 19949%23577
Jul. 1, 1994—Sep. 30, 199410%25579
Oct. 1, 1994—Dec. 31, 199411%27581
Jan. 1, 1995—Mar. 31, 199511%27581
Apr. 1, 1995—Jun. 30, 199512%29583
Jul. 1, 1995—Sep. 30, 199511%27581
Oct. 1, 1995—Dec. 31, 199511%27581
Jan. 1, 1996—Mar. 31, 199611%75629
Apr. 1, 1996—Jun. 30, 199610%73627
Jul. 1, 1996—Sep. 30, 199611%75629
TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 – PRESENT
NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
1995–1 C.B.
RATETABLEPAGE
Jan. 1, 1999—Mar. 31, 19997%19573
Apr. 1, 1999—Jun. 30, 19998%21575
March 29, 199981999–13 I.R.B.
TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 – PRESENT
CORPORATE OVERPAYMENTS AND UNDERPAYMENTS
OVERPAYMENTS UNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATETABLEPGRATETABLEPG
Jan. 1, 1999—Mar. 31, 19996%175717%19573
Apr. 1, 1999—Jun. 30, 19997%195738%21 575

1999–13 I.R.B.9March 29, 1999
TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 – PRESENT (Continued)
1995–1 C.B.
RATETABLEPG
Oct. 1, 1996—Dec. 31, 199611%75629
Jan. 1, 1997—Mar. 31, 199711%27581
Apr. 1, 1997—Jun. 30, 199711%27581
Jul. 1, 1997—Sep. 30, 199711%27581
Oct. 1, 1997—Dec. 31, 199711%27581
Jan. 1, 1998—Mar. 31, 199811%27581
Apr. 1, 1998—Jun. 30, 199810%25579
Jul. 1, 1998—Sep. 30, 199810%25579
Oct. 1, 1998—Dec. 31, 199810%25579
Jan. 1, 1999—Mar. 31, 19999%23577
Apr. 1, 1999—Jun. 30, 199910%25579
TABLE OF INTEREST RATES FOR CORPORATE
OVERPAYMENTS EXCEEDING $10,000
FROM JANUARY 1, 1995 – PRESENT
1995–1 C.B.
RATETABLEPG
Jan. 1, 1995—Mar. 31, 19956.5% 18572
Apr. 1, 1995—Jun. 30, 19957.5%20574
Jul. 1, 1995—Sep. 30, 19956.5%18572
Oct. 1, 1995—Dec. 31, 19956.5%18572
Jan. 1, 1996—Mar. 31, 19966.5%66620
Apr. 1, 1996—Jun. 30, 19965.5%64618
Jul. 1, 1996—Sep. 30, 19966.5%66620
Oct. 1, 1996—Dec. 31, 19966.5%66620
Jan. 1, 1997—Mar. 31, 19976.5%18572
Apr. 1, 1997—Jun. 30, 19976.5%18572
Jul. 1, 1997—Sep. 30, 19976.5%18572
Oct. 1, 1997—Dec. 31, 19976.5%18572
Jan. 1, 1998—Mar. 31, 1998 6.5%18572
Apr. 1, 1998—Jun. 30, 19985.5%16570
Jul. 1. 1998—Sep. 30, 19985.5%16570
Oct. 1, 1998—Dec. 31, 19985.5%16570
Jan. 1, 1999—Mar. 31, 1999 4.5%14568
Apr. 1, 1999—Jun. 30, 1999 5.5%16570

March 29, 1999101999–13 I.R.B.
Change in Accounting Method
for Deferred Compensation
Notice 99–16
This notice provides procedures for im-
plementing a change in method of ac-
counting to comply with § 404(a)(11) of
the Internal Revenue Code, regarding the
payment of deferred compensation.
Section 404(a)(11) was added to the
Code by § 7001 of the Internal Revenue
Service Restructuring and Reform Act of
1998 (RRA), Pub. L. No. 105-206, 112
Stat. 685, 827 (July 22, 1998), effective
for taxable years ending after July 22,
1998. Section 404(a)(11) provides that,
for purposes of determining under § 404
whether compensation of an employee is
deferred compensation and when deferred
compensation is paid, no amount is
treated as received by the employee, or
paid, until it is actually received by the
employee. Section 404(a)(11) overturns
the decision in Schmidt Baking Co. v.
Commissioner,107 T.C. 271 (1996), in
which the court held that a § 83(a) income
inclusion event upon securitization of va-
cation and severance pay benefits with a
letter of credit constitutes receipt of those
benefits by employees for purposes of de-
termining whether an employer’s deduc-
tion for the benefits is subject to § 404.
Section 7001(b) of the RRA provides
that a taxpayer changing its method of ac-
counting to comply with § 404(a)(11) for
its first taxable year ending after July 22,
1998, will be treated as making a change
initiated by the taxpayer with the consent
of the Commissioner. It further provides
that the change will be made with a § 481
adjustment that will be taken into account
ratably over a 3-taxable-year period be-
ginning with the first taxable year ending
after July 22, 1998.
A taxpayer changing its method of ac-
counting for its first taxable year ending
after July 22, 1998, to comply with
§ 404(a)(11) must follow the automatic
change in accounting method provisions
of Rev. Proc. 98–60, 1998–51 I.R.B. 16,
with the following modifications:
(1) The scope limitations in section
4.02 of Rev. Proc. 98–60 do not apply.
However, if the taxpayer is under exami-
nation, before an appeals office, or before
a federal court with respect to any income
tax issue, the taxpayer must provide a
copy of the Form 3115, Application for
Change in Accounting Method, to the ex-
amining agent(s), appeals officer, or
counsel for the government, as appropri-
ate, at the same time that it files the copy
of the Form 3115 with the national office.
The Form 3115 must contain the name(s)
and telephone number(s) of the examin-
ing agent(s), appeals officer, or counsel
for the government, as appropriate.
(2) The § 481(a) adjustment period
generally is three taxable years (as op-
posed to four taxable years as specified in
section 5.04(1) of Rev. Proc. 98–60).
(3) A taxpayer that, on or before May
28, 1999, files its original federal income
tax return for its first taxable year ending
after July 22, 1998, may comply with the
filing requirement in section 6.02(2)(a) of
Rev. Proc. 98–60 or with the following
filing requirement. The taxpayer must
complete and file a Form 3115 in dupli-
cate. The original must be attached to the
taxpayer’s amended federal income tax
return for the taxpayer’s first taxable year
ending after July 22, 1998. This amended
return must be filed no later than July 27,
1999. A copy of the Form 3115 must be
filed with the national office (at the ad-
dress specified in section 6.02(6) of Rev.
Proc. 98–60) no later than when the tax-
payer’s amended return is filed.
(4) Section 7 of Rev. Proc. 98–60 does
not apply; a taxpayer does not receive
audit protection in connection with this
change.
EFFECT ON OTHER DOCUMENTS
Rev. Proc. 98–60 is modified and am-
plified to include this automatic account-
ing method change in the Appendix.
DRAFTING INFORMATION
The principal author of this notice is
Robert Testoff of the Office of the Assis-
tant Chief Counsel (Income Tax and Ac-
counting). For further information re-
garding this notice, contact Mr. Testoff at
(202) 622-4800 (not a toll-free call).
26 CFR 601.105: Examination of returns and
claims for refund, credit, or abatement;
determination of correct tax liability.
(Also Part I, sections 6601, 6611, 6621;
301.6601–1, 301.6611–1, 301.6621–1.)
Rev. Proc. 99–19
SECTION 1. PURPOSE
With respect to interest accruing before
October 1, 1998, this revenue procedure
provides guidance, and requests public
comment, regarding the application of
§ 6621(d) of the Internal Revenue Code.
Section 6621(d) was enacted by § 3301 of
the Internal Revenue Service Restructur-
ing and Reform Act of 1998 (RRA), Pub.
L. No. 105–206, 112 Stat. 741, and was
amended by § 4002(d) of the Tax and
Trade Relief Extension Act of 1998, Pub.
L. No. 105–277, 112 Stat. 2681. Section
6621(d) provides for a net interest rate of
zero to the extent of overlapping tax un-
derpayments and tax overpayments, and
generally applies to interest for periods be-
ginning after July 22, 1998 (i.e.,interest
accruing on or after October 1, 1998).
However, the net interest rate of zero in
§ 6621(d) also applies to interest for peri-
ods beginning before July 22, 1998 (i.e.,
interest accruing before October 1, 1998),
provided certain conditions are met. This
revenue procedure provides guidance on,
and how to comply with, those conditions.
SECTION 2. BACKGROUND
.01 Interest computations in general.
(1) Section 6601(a) provides, in gen-
eral, that if any amount of tax imposed by
the Code is not paid on or before the last
date prescribed for payment, interest on
such amount must be paid for the period
from such last date to the date paid at the
underpayment rate established under
§ 6621.
(2) Section 6611(a) provides that inter-
est must be allowed and paid on any over-
payment in respect of any internal revenue
tax at the overpayment rate established
under § 6621. Section 6611(b)(1) pro-
vides that, in the case of a credit, interest
must be allowed and paid from the date of
the overpayment to the due date of the
amount against which the credit is taken.
Part III. Administrative, Procedural, and Miscellaneous

Section 6611(b)(2) provides that, in the
case of a refund, interest must be allowed
and paid from the date of the overpay-
ment to a date preceding the date of the
refund check by not more than 30 days.
.02 Interest rates in general.
(1) For interest accruing before January
1, 1999, § 6621(a)(1) provides that the
overpayment rate is the federal short-term
rate (determined under § 6621(b)) plus 2
percentage points. To the extent that an
overpayment of tax by a corporation ex-
ceeds $10,000, the overpayment rate is the
federal short-term rate plus 0.5 percent.
(2) Section 6621(a)(2) provides that the
underpayment rate is the federal short-
term rate (determined under § 6621(b))
plus 3 percentage points. Special rules in
§ 6621(c) increase the underpayment rate
on large corporate underpayments.
.03 Interest for overlapping periods.
(1) Section 6621(d), as enacted by the
RRA on July 22, 1998, provides that, to
the extent that for any period interest is
payable under subchapter A (§§ 6601 and
6602) and allowable under subchapter B
(§ 6611) on equivalent underpayments
and overpayments by the same taxpayer
of tax imposed by the Code, the net rate
of interest under § 6621 on such amounts
is zero for such period.
(2) The Conference Report, H. R.
Conf. Rep. No. 599, 105th Cong., 2d
Sess. 257 (1998), accompanying the RRA
provides that the net interest rate of zero
is applied without regard to whether the
overpayment or underpayment is cur-
rently outstanding. However, each over-
payment or underpayment is considered
only once in determining whether equiva-
lent amounts of overpayment and under-
payment overlap for a particular period.
That report also provides that the net in-
terest rate of zero applies even when spe-
cial rules increase the rate of interest for
large corporate underpayments under
§ 6621(c), or decrease the rate of interest
for large corporate overpayments under
§ 6621(a).
(3) Section 6621(d) generally applies to
interest for periods (calendar quarters) be-
ginning after July 22, 1998 (i.e.,interest
accruing on or after October 1, 1998).
SeeH. R. Rep. No. 364 (Part 1), 105th
Cong., 1st Sess. 64 (1998); S. Rep. No.
174, 105th Cong., 2d Sess. 62 (1998); H.
R. Conf. Rep. No. 599, 105th Cong., 2d
Sess. 257 (1998). However, § 3301(c)(2)
of the RRA provides that § 6621(d) ap-
plies to interest for periods beginning be-
fore July 22, 1998 (i.e.,interest accruing
before October 1, 1998), provided certain
conditions are met. First, both periods of
limitation applicable to the tax underpay-
ment and to the tax overpayment (as de-
scribed in section 2.04 of this revenue
procedure) must have been open on July
22, 1998. Second, the taxpayer must:
(a) reasonably identify and establish
periods of tax overpayments and under-
payments for which the net interest rate of
zero applies, and
(b) not later than December 31,
1999, request the Secretary of the Trea-
sury to apply § 6621(d) to such periods.
.04 Applicable periods of limitation.The
applicable periods of limitation are as fol-
lows:
(1) Underpayment interest.A claim for
credit or refund of interest paid on an un-
derpayment pursuant to § 6601 or 6602
generally must be filed within 3 years
from the time the tax return was filed or 2
years from the time the interest was paid,
whichever period expires later, pursuant
to § 6511.
(2) Overpayment interest.A claim for
payment of additional interest allowable
on an overpayment pursuant to § 6611
must be filed within the 6-year period in
which a suit must be filed pursuant to 28
U.S.C. §§ 2401 and 2501. See Rev. Rul.
56–506, 1956–2 C.B. 959.
SECTION 3. SCOPE
.01 Applicability.This revenue proce-
dure applies to a taxpayer that requests the
application of the net interest rate of zero
in § 6621(d) to interest for periods begin-
ning before July 22, 1998 (i.e.,interest ac-
cruing before October 1, 1998), provided:
(1) both applicable periods of limita-
tion described in section 2.04 of this rev-
enue procedure were open on July 22,
1998;
(2) the periods of tax overpayments
and underpayments for which the net in-
terest rate of zero applies are reasonably
identified and established (as described in
section 4 of this revenue procedure); and
(3) the request is made not later than
December 31, 1999.
.02 Inapplicability.This revenue proce-
dure does not apply to:
(1) the application of the net interest
rate of zero in § 6621(d) to interest for pe-
riods beginning after July 22, 1998 (i.e.,
interest accruing on or after October 1,
1998). The Service intends to provide
further guidance for those periods;
(2) an overpayment or underpayment
for any period during which interest on
the overpayment or underpayment was
not allowable or payable by law (e.g.,the
45-day interest disallowance rule under
§ 6611(e)); or
(3) an offset made pursuant to
§§ 6402(a) and 6601(f), regarding the
crediting of an outstanding overpayment
against an outstanding underpayment.
SECTION 4. APPLICATION
PROCEDURES
.01 Form to file.Except as provided in
section 4.06 of this revenue procedure, re-
quests for the application of the net inter-
est rate of zero in § 6621(d) to interest ac-
cruing before October 1, 1998, should be
made on Form 843, Claim for Refund and
Request for Abatement.
.02 Where to file.Form 843 should be
filed with the Internal Revenue Service
Center where the taxpayer filed its most
recent federal income tax return.
.03 Label.The taxpayer should label
the top of the Form 843: “Request for Net
Interest Rate of Zero Under Rev. Proc.
99–19.”
.04 Filing requirements for Form 843.
(1) Line 1 should be left blank.
(2) The taxpayer may, but is not re-
quired to, place a dollar amount on Line
2.
(3) Line 3 should indicate the type of
tax and type of return covered by the re-
quest. More than one box may be
checked if more than one type of tax or
return is covered by the request. In addi-
tion, any taxes imposed by the Code (or
returns for those taxes) for which there is
no box on Line 3 should be written in on
that line.
(4) Line 4 should be left blank.
(5) Line 5 should:
(a) identify the taxable periods for
which the taxpayer overpaid and under-
paid its tax liability. A separate Form 843
is not required for each separate taxable
period involved in the request;
1999–13 I.R.B.11March 29, 1999

(b) state when the taxpayer paid the
tax if the underpayment is no longer out-
standing;
(c) state when the taxpayer received
a refund of tax if the overpayment is no
longer outstanding;
(d) identify and establish the pe-
riod(s) for which the taxpayer’s overpay-
ment and underpayment overlapped. For
this purpose, the taxpayer should provide
any background material (such as copies
of examination reports, notices, or prior
interest computations provided by the
Service) relating to the overpayments and
underpayments. The background material
is needed to assist the Service in deter-
mining the period(s) for which the over-
payment and underpayment overlap, and
the amount of such overlap;
(e) state that, to the extent of equiva-
lent amounts of underpayment and over-
payment for the period(s) identified and
established under section 4.04(5)(d) of
this revenue procedure, the period(s) has
(have) been used only once in a request to
obtain the net interest rate of zero under
§ 6621(d); and
(f) provide a computation, to the ex-
tent possible, of the amount of interest to
be credited, refunded, or abated to provide
a net interest rate of zero for the period(s)
of overlap. This computation should be
made by applying § 6621(d) to an under-
payment year to reduce the taxpayer’s lia-
bility for underpayment interest.
.05 Verification. The amounts used in a
computation provided under section
4.04(5)(f) of this revenue procedure are
subject to verification by the Service and
may be subject to adjustment for purposes
of computing the net interest rate of zero
pursuant to § 6621(d).
.06 Special procedure.No Form 843 is
required when a computation of interest
using the net interest rate of zero under
§ 6621(d) for interest accruing before Oc-
tober 1, 1998, is requested by a taxpayer
in connection with a return (or returns) of
the taxpayer under consideration by any
office of the Service. The taxpayer must
furnish a letter or written statement to
such office that:
(1) states that the taxpayer is request-
ing the net interest rate of zero under
§ 6621(d);
(2) indicates the type of tax and type
of return that affects the interest computa-
tion for the taxable period under consider-
ation;
(3) states when and for what pe-
riod(s) the refund or payment (that affects
the interest computation for the taxable
period under consideration) was made;
and
(4) states that, to the extent of equiv-
alent amounts of overpayment or under-
payment, the period(s) set forth under
section 4.06(3) of this revenue procedure
has (have) not previously been applied to
obtain a net interest rate of zero under
§ 6621(d).
.07 Special procedure verification.The
refund or payment provided under section
4.06(3) of this revenue procedure is sub-
ject to verification by the Service and may
be subject to adjustment for purposes of
computing the net interest rate of zero
pursuant to § 6621(d).
SECTION 5. EXAMPLES
.01 Example 1. Xis a calendar year corporation.
The Service examined X’s Form 1120, Corporation
Income Tax Return, for the 1992 and 1994 taxable
years. For the 1994 taxable year, the Service deter-
mined that Xwas entitled to a refund of $30,000.
This Service-initiated refund was made on September
21, 1997, with interest computed from March 15,
1995, to July 29, 1997. For the 1992 taxable year, the
Service determined that Xunderpaid its income tax by
$80,000. The Service sent Xa notice and demand for
payment dated May 3, 1998, which Xpaid on May
12, 1998, with interest computed from March 15,
1993, to May 3, 1998. On April 27, 1999, Xfiled a
Form 843 requesting the application of § 6621(d) for
the overlap period from March 15, 1995, to July 29,
1997. On July 22, 1998, both the 6-year period of
limitation for claiming additional overpayment inter-
est on X’s 1997 refund and the 2-year period of limita-
tion for claiming a refund of underpayment interest
paid in 1998 were open. Xwill be refunded the differ-
ence between the underpayment interest paid on
$30,000 for the period from March 15, 1995, to July
29, 1997, and the overpayment interest computed and
paid on $30,000 for that period.
.02 Example 2.The facts are the same as in Ex-
ample 1,except that the Service sent Xa notice and
demand for payment dated May 3, 1996, which X
paid on May 12, 1996, with interest computed from
March 15, 1993, to May 3, 1996. On April 27, 1999,
Xfiled a Form 843 requesting the application of
§ 6621(d) for the overlap period from March 15,
1995, to May 3, 1996. On July 22, 1998, the 6-year
period of limitation for claiming additional overpay-
ment interest on X’s 1997 refund was open, but the
2-year period of limitation for claiming a refund of
underpayment interest paid in 1996 was not open.
Therefore, the net interest rate of zero under
§ 6621(d) does not apply to the overlap period and
no adjustment will be made.
SECTION 6. REQUEST FOR
COMMENTS
.01 For the application of the net inter-
est rate of zero in computing interest ac-
cruing before October 1, 1998, taxpayers
must reasonably identify and establish pe-
riods of overlapping overpayments and
underpayments for which the net interest
rate of zero applies, and not later than De-
cember 31, 1999, request that § 6621(d)
be applied. The Treasury Department and
the Service recognize that by December
31, 1999, some taxpayers may not be able
to provide a final computation of how the
net interest rate of zero applies to interest
accruing before October 1, 1998. For ex-
ample, a taxpayer may not be able to pro-
vide this final computation by December
31, 1999, because the Service’s examina-
tion of the taxable years involved has not
been completed or commenced.
.02 Written comments are requested re-
garding the level of specificity necessary
to reasonably identify and establish on or
before December 31, 1999, the period(s)
for which an equivalent amount of over-
payment and underpayment of tax overlap
when the taxpayer cannot provide by De-
cember 31, 1999, a final computation of
how the net interest rate of zero applies to
interest accruing before October 1, 1998.
Comments should be submitted by May
14, 1999, either to:
Internal Revenue Service
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Attn: CC:DOM:CORP:R (IT&A,
Branch 1) Room 5228
or electronically via:
http://www.irs.ustreas.gov/prod/tax_regs/
comments.html
(the Service’s internet site).
SECTION 7. EFFECTIVE DATE
This revenue procedure is effective for
taxpayer requests made not later than De-
cember 31, 1999, for the application of
the net interest rate of zero in § 6621(d) to
interest accruing before October 1, 1998.
DRAFTING INFORMATION
The principal author of this revenue
procedure is John J. McGreevy of the Of-
fice of Assistant Chief Counsel (Income
Tax and Accounting). For further infor-
mation regarding this revenue procedure,
contact Mr. McGreevy on (202) 622-4910
(not a toll- free call).
March 29, 1999121999–13 I.R.B.

1999–13 I.R.B.13March 29, 1999
Part IV. Items of General Interest
Notice of Proposed Rulemaking
and Notice of Public Hearing
New Technologies in Retirement
Plans
REG–118662–98
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing and notice of public hearing.
SUMMARY: This document contains
proposed amendments to the regulations
governing certain notices and consent re-
quired in connection with distributions
from retirement plans. Specifically, these
proposed regulations set forth applicable
standards for the transmission of those
notices and consent through electronic
media and modify the timing require-
ments for providing certain distribution-
related notices. The proposed regulations
provide guidance to plan sponsors and ad-
ministrators by interpreting the notice and
consent requirements in the context of the
electronic administration of retirement
plans. The proposed regulations affect re-
tirement plan sponsors, administrators,
and participants. This document also pro-
vides notice of a public hearing on these
proposed regulations.
DATES: Written comments must be re-
ceived by March 18, 1999. Outlines of
topics to be discussed at the public hear-
ing scheduled for April 15, 1999, at 10
a.m. must be received by March 25, 1999.
ADDRESSES: Send submissions to:
CC:DOM:CORP:R (REG–118662–98),
Room 5226, Internal Revenue Service,
POB 7604, Ben Franklin Station, Wash-
ington, DC 20044. Submissions may be
hand delivered Monday through Friday
between the hours of 8 a.m. and 5 p.m. to:
CC:DOM:CORP:R (REG–118662–98),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW,
Washington, DC. Alternatively, taxpayers
may submit comments electronically via
the Internet by selecting the “Tax Regs”
option on the IRS Home Page, or by sub-
mitting comments directly to the IRS In-
ternet site at http://www.irs.ustreas.gov/
prod/tax_regs/commments.html. The
public hearing will be held in room 2615,
Internal Revenue Service Building, 1111
Constitution Avenue, NW, Washington,
DC.
FOR FURTHER INFORMATION CON-
TACT: Concerning the proposed regula-
tions, Catherine Livingston Fernandez
(202) 622-6030; concerning submissions
of comments and the hearing, and/or to be
placed on the building access list to attend
the hearing Michael L. Slaughter (202)
622-7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information con-
tained in this notice of proposed rulemak-
ing have been submitted to the Office of
Management and Budget for review in ac-
cordance with the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507(d)). Com-
ments on the collection of information
should be sent to the Office of Manage-
ment and Budget,Attn: Desk Officer for
the Department of the Treasury, Office of
Information and Regulatory Affairs,
Washington, DC 20503, with copies to
the Internal Revenue Service,Attn: IRS
Reports Clearance Officer, OP:FS:FP,
Washington, DC 20224. Comments on
the collection of information should be re-
ceived by February 16, 1999. Comments
are specifically requested concerning:
Whether the proposed collections of in-
formation are necessary for the proper
performance of the functions of the Inter-
nal Revenue Service, including whether
the information will have practical utility;
The accuracy of the estimated burden as-
sociated with the proposed collection of
information (see below);
How the quality, utility, and clarity of the
information to be collected may be en-
hanced;
How the burden of complying with the
proposed collections of information may
be minimized, including through the ap-
plication of automated collection tech-
niques or other forms of information tech-
nology; and
Estimates of capital or start-up costs and
costs of operation, maintenance, and pur-
chase of service to provide information.
The collections of information in this
proposed regulation are in 26 CFR
§§1.402(f)–1, 1.411(a)–11, and 35.3405–
1. This information is required for no-
tices to recipients of distributions from re-
tirement plans, individual retirement ac-
counts, and annuities. This information
will be used to help recipients make in-
formed decisions regarding these distribu-
tions. The collections of information are
mandatory. The likely respondents are in-
dividuals, business or other for-profit in-
stitutions, and nonprofit institutions.
Estimated total annual reporting and/or
recordkeeping burden: 477,563 hours.
Estimated average annual burden hours
per respondent and/or recordkeeper: 76
minutes.
Estimated number of respondents and/or
recordkeepers: 375,000.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless it dis-
plays a valid control number assigned by
the Office of Management and Budget.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mater-
ial in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by 26 U.S.C. 6103.
Background
Section 411(a)(11) of the Internal Rev-
enue Code generally provides that if the
value of a participant’s accrued benefit
exceeds $5,000, the benefit may not be
immediately distributed without the par-
ticipant’s consent. Section 1.411(a)–11(c)
of the Income Tax Regulations states that
this requirement applies until the later of
normal retirement age or age 62 and re-
quires that the consent be in writing. Sec-
tion 1.411(a)–11(c)(2) of the regulations
provides that the participant’s consent is
not valid unless, prior to the distribution,
the participant is given an explanation of
the plan distribution options (e.g., lump
sum, annual installments, annuity, etc.)
and is advised of the right to defer the dis-
tribution in a manner that would satisfy
the notice requirement of section
417(a)(3).

March 29, 1999141999–13 I.R.B.
Section 402(f) requires that the plan ad-
ministrator of a qualified retirement plan
provide the recipient of an eligible roll-
over distribution with a written explana-
tion of the direct rollover, mandatory 20-
percent income tax withholding, and
other relevant tax information. Section
1.402(f)–1 Q&A-2 requires that notices
under section 402(f) be provided no less
than 30 and no more than 90 days before
the date of a distribution, although a par-
ticipant may waive the 30-day period.
Section 3405(e)(10)(B) of the Code re-
quires the payor of any designated distrib-
ution (other than an eligible rollover dis-
tribution) to transmit to the payee a notice
of the right not to have income tax with-
held from the payment.
Section 1510 of the Taxpayer Relief
Act of 1997 provides for the Secretary of
the Treasury to issue guidance designed to
interpret the notice, election, consent, dis-
closure, time, and related recordkeeping
requirements under the Code and the Em-
ployee Retirement Income Security Act of
1974 (ERISA) regarding the use of new
technologies by sponsors and administra-
tors of retirement plans and to clarify the
extent to which writing requirements
under the Code relating to retirement
plans permit “paperless” transactions.
Section 1510 provides that the guidance
must protect participant and beneficiary
rights. Any final regulations applicable to
this guidance may not be effective until
the first plan year beginning at least six
months after issuance as final regulations.
The IRS and Treasury issued An-
nouncement 98–62, 1998–29 I.R.B.13, to
request comments from interested mem-
bers of the public concerning the develop-
ment of the guidance described in section
1510. Announcement 98–62 solicited in-
formation on the kinds of electronic or
“paperless” technologies used by spon-
sors and administrators in plan adminis-
tration, identified a number of specific
legal and practical issues for comment,
and requested that commentators identify
the issues most in need of administrative
guidance. Commentators generally en-
couraged the IRS and Treasury to issue
guidance facilitating the use of new tech-
nologies in plan administration, particu-
larly the use of electronic technologies for
transmission of the notices and consent
required for plan distributions. These
proposed regulations respond to the com-
ments by providing the guidance most
frequently requested by commentators.
Additionally, in response to many of
the comments submitted under An-
nouncement 98–62, the IRS and Treasury
are issuing a notice concerning the use of
electronic media for general plan transac-
tions. The notice confirms that the “pa-
perless” administration of participant en-
rollments, contribution elections,
investment elections, beneficiary designa-
tions (other than designations requiring
spousal consent), direct rollover elections,
and certain other transactions will not
cause a qualified plan to fail to satisfy the
requirements of section 401(a) (or the re-
quirements for a qualified cash or de-
ferred arrangement under section 401(k)).
The notice is intended to apply to a broad
range of general plan transactions and
electronic media, but it does not apply to
transactions for which the Code, the regu-
lations, or other guidance of general ap-
plicability prescribes requirements for the
media through which such transactions
may be conducted (for example, it does
not apply to providing the section 402(f)
notice). Additionally, the notice does not
address the application of Title I of
ERISA to the use of electronic media for
any plan transactions.
Explanation of Provisions
General
These proposed regulations permit the
use of electronic media for the transmis-
sion of certain notices and consent re-
quired for distributions from qualified
plans. Using flexible standards — rather
than detailed requirements — the pro-
posed regulations:
• Permit electronic delivery of the no-
tice of distribution options and the
right to defer under section 411(a)-
(11), the rollover notice under section
402(f), and the voluntary tax with-
holding notice under section 3405(e)-
(10)(B);
• Permit participant consent to a distri-
bution under section 411(a)(11) to be
given electronically; and
• Permit a plan to provide the section
411(a)(11) and section 402(f) notices
more than 90 days before a distribu-
tion, if the plan provides a summary
of the notices within 90 days before
the distribution.
Notices under sections 402(f), 411(a)(11),
and 3405(e)(10)(B)
1. Use of electronic media for delivery of
notices
The proposed regulations provide that,
in general, a plan may provide a notice re-
quired under section 402(f), 411(a)(11),
or 3405(e)(10)(B) either on a written
paper document or through an electronic
medium reasonably accessible to the par-
ticipant to whom the notice is given. The
proposed regulations generally do not cat-
egorize particular electronic media as ei-
ther permissible or impermissible for this
purpose and do not prescribe detailed,
media-specific rules. Instead, the pro-
posed regulations set forth generally ap-
plicable standards that are intended to
parallel the key attributes of notices pro-
vided on written paper documents without
imposing more stringent requirements on
electronic notices. The use of generally
applicable standards rather than detailed
rules is consistent with the comments re-
ceived under Announcement 98–62.
Under the proposed regulations, an
electronic notice must be provided under
a system reasonably designed to give the
notice in a manner no less understandable
to the participant than a written paper
document. The no-less-understandable
requirement is to be applied taking into
account the method of delivery and the
format and content of the electronic no-
tice; however, the standard is not intended
to require that the electronic notice be
identical in form or content to a corre-
sponding notice provided on a written
paper document (although an electronic
notice must contain all the information
that would be required if the notice were
provided on a written paper document).
The IRS and Treasury would expect
that provision of notices through e-mail or
a plan web site would in most cases sat-
isfy the no-less-understandable require-
ment under well designed systems. How-
ever, the IRS and Treasury expect that the
amount and nature of the information that
must be provided in the section 402(f) no-
tice would preclude oral delivery of the
full section 402(f) notice through a tele-
phone system. By contrast, the amount
and nature of the information required in
the notice under section 3405(e)(10)(B) is
such that the no-less-understandable stan-

1999–13 I.R.B.15March 29, 1999
dard may be met by a notice provided
through a telephone system.
1
Whether a
section 411(a)(11) notice may be pro-
vided through a telephone system will de-
pend on the complexity of the plan distri-
bution options. A plan with a few simple
distribution options could provide,
through a well designed telephone sys-
tem, a section 411(a)(11) notice that is
just as understandable as a notice pro-
vided on a written paper document; a plan
with more numerous or more complex
distribution options may not be able to
satisfy the no-less-understandable stan-
dard in that manner.
The IRS and Treasury believe that par-
ticipants should be able to receive a writ-
ten paper notice from the plan on request
and that the right to receive a written
paper notice is an important safeguard for
participants. Many of the comments sub-
mitted under Announcement 98-62
strongly supported this proposition. Cer-
tain participants may be unable to use
paperless technologies in an effective
manner, particularly as these new tech-
nologies emerge and change rapidly. In
such cases, the right to receive a notice on
a written paper document may be neces-
sary to ensure that the participant has an
adequate opportunity to deliberate about
his or her rights and options (and to seek
advice from third parties, if desired). In
accordance with these considerations, the
proposed regulations provide that a par-
ticipant who is given a legally required
notice through an electronic medium be
advised at the time the notice is given that
he or she may request and receive the no-
tice on a written paper document at no
charge.
Because of its potential significance to
individuals, this written paper notice must
be a copy that participants can retain for
their own records (thus, a posted copy is
not adequate). Merely making paper no-
tices available through the electronic
medium used to deliver the notice or an-
other electronic medium (for example, by
including a “print” option on an e-mail
system or a web site) is not adequate be-
cause of the uncertainty in determining
whether a participant will in fact be able to
generate the paper version of the notice. A
written paper notice furnished on request
need not contain precisely the same infor-
mation or be presented in the same format
as the notice delivered through an elec-
tronic medium. Rather, the written paper
notice (like the electronic notice) need
only satisfy the applicable legal require-
ments regarding that notice.
These generally applicable standards
for electronic notices are illustrated by
several examples. The examples illustrate
whether certain uses of electronic tech-
nologies satisfy the proposed regulations,
but they are not intended to constitute an
exhaustive list of permissible uses, sys-
tems, or media. Other uses, systems, or
media (whether extant, such as CD-ROM
or touch-screen kiosk, or not yet devel-
oped) that satisfy the applicable standards
would be permitted.
To conform the rules for providing the
section 411(a)(11) notice to the standards
described above, the proposed regulations
remove from the existing regulations the
requirement that the section 411(a)(11)
notice be received “in a manner that
would satisfy the notice requirements of
section 417(a)(3).” Also, while they do
not remove references in the existing regu-
lations to the “written” section 402(f) no-
tice (because the statutory provisions of
section 402(f) specifically refer to a “writ-
ten” notice), the proposed regulations pro-
vide for the electronic transmission of the
section 402(f) notice and modify the tim-
ing requirement for providing that notice.
2. Flexibility for timing requirement in
providing notices
The proposed regulations modify the
timing requirement for providing the sec-
tion 402(f) and section 411(a)(11) notices.
Under existing regulations, those notices
must be provided no less than 30 days and
no more than 90 days before the date of a
distribution, although a participant is per-
mitted to waive the 30-day period.
2
As
discussed above, the proposed regulations
permit plans with comparatively few and
simple distribution options to provide the
section 411(a)(11) notice through a vari-
ety of electronic media, including (in
many cases) automated telephone sys-
tems. This will make it easier for those
plans to provide the notice within the
90/30-day period (for example, by pro-
viding the notice when a participant re-
quests a distribution through the auto-
mated telephone system). Similarly,
plans with more numerous or more com-
plex distribution options that use an
e-mail system or a web site may provide
the notice when a participant requests a
distribution through the e-mail system or
the web site.
The proposed regulations also provide
flexibility with respect to the 90-day pe-
riod by providing an alternative timing
rule under sections 402(f) and 411(a)(11).
Under this alternative timing rule, a plan
may give the full section 402(f) and sec-
tion 411(a)(11) notices more than 90 days
before the distribution and provide the
participant a summary of the notice dur-
ing the 90/30-day period. The full notice
is not required to be provided on a regular
periodic basis and could be provided in
connection with other materials (for ex-
ample, in the summary plan description or
in a brochure describing plan distribution
features), but it must be updated (and pro-
vided to the participant) as necessary to
ensure accuracy as of the time the sum-
mary is provided.
The summary of the notice must set
forth the material provisions of the notice,
must refer the participant to the most re-
cent occasion on which the full notice was
provided (and, in the case of a notice pro-
vided in a document — such as the sum-
mary plan description — that contains
other information, must identify that doc-
ument and must indicate where the notice
may be found in that document), and must
advise the participant of the right to re-
quest and receive a full notice without
charge. The plan could make this full no-
tice available through an electronic
medium under a system that satisfies the
standards discussed above if it also offers
the participant the option to request the
full notice on a written paper document.
Whether written or electronic, the full no-
tice, if requested, must be provided with-
out charge no fewer than 30 days prior to
the date of the distribution (although the
1
The permissibility under the proposed regula-
tions of providing the section 3405 notice through
an electronic medium is not limited to qualified
plans described in section 401(a); rather, it applies
with respect to any payor under section 3405.
2
The timing requirements and waiver provisions
for purposes of the section 411(a)(11) notice are pro-
vided in Treasury Regulations §§1.411(a)–11(c)-
(2)(ii) and (iii), which are part of final regulations
published in T.D. 8796, 1999–4 I.R.B. 16.

March 29, 1999161999–13 I.R.B.
participant may waive this 30-day pe-
riod).
In the case of the section 411(a)(11) no-
tice, the summary will consist of a state-
ment that the participant has a right to
defer receipt of the distribution (if applic-
able) and a summary of the plan distribu-
tion options. In the case of the section
402(f) notice, the summary must summa-
rize the principal provisions of the section
402(f) notice. The use of electronic
media to provide these summaries is sub-
ject to the same generally applicable stan-
dards that apply to the electronic trans-
mission of the full section 411(a)(11) and
section 402(f) notices, as described
above. In contrast to the full section
402(f) notice, however, the IRS and Trea-
sury believe that the summary of the sec-
tion 402(f) notice can be provided orally
through a well designed telephone system
in a manner no less understandable than a
written paper summary. The following
summary, based on the summary set forth
in Notice 92–48, 1992–2 C.B. 377, is an
example of a section 402(f) summary that
may be provided through an automated
telephone system:
Summary of Notice Regarding
Important Tax Information
The following is a brief explanation of an important
decision you must make about any distribution you
request from the Plan. Please listen to it carefully.
You can find a more complete written explanation of
these rules in the Summary Plan Description for the
Plan, beginning on page x. You can obtain a free
copy of the complete explanation from the Person-
nel Office, or you will have an opportunity at the
end of this message to request to have a copy mailed
to you.
A payment from the Plan may be eligible for
“rollover” treatment. A payment that is eligible for
“rollover” can be taken in two ways. You can have
ALL OR ANY PORTION of your payment either (1)
PAID IN A “DIRECT ROLLOVER” or (2) PAID
TO YOU.
A rollover is a payment of your Plan benefits to your
individual retirement arrangement (IRA) or to an-
other employer plan. This choice will affect the tax
you owe.
If you choose a DIRECT ROLLOVER
1. Your payment will not be taxed in the current
year and no income tax will be withheld.
2. Your payment will be made directly to your
IRA or, if you choose, to another employer
plan that accepts your rollover.
3. Your payment will be taxed later when you
take it out of the IRA or the employer plan.
If you choose to have your Plan benefits PAID TO
YOU
1. You will receive only 80% of the payment, be-
cause the plan administrator is required to
withhold 20% of the payment and send it to
the IRS as income tax withholding to be cred-
ited against your taxes.
2. Your payment will be taxed in the current year
unless you roll it over. You may be able to use
special tax rules that could reduce the tax you
owe. However, if you receive the payment
before age 59-1/2, you also may have to pay
an additional 10% tax.
3. You can roll over the payment by paying it to
your IRA or to another employer plan that ac-
cepts your rollover within 60 days of receiv-
ing the payment. The amount rolled over will
not be taxed until you take it out of the IRA or
employer plan.
4. If you choose to have your Plan benefits paid
to you and you want to roll over 100% of the
payment to an IRA or an employer plan, YOU
MUST FIND OTHER MONEY TO RE-
PLACE THE 20% THAT WAS WITHHELD.
If you roll over only the 80% that you re-
ceived, you will be taxed on the 20% that was
withheld and that is not rolled over.
You can find a complete explanation of these rules,
as well as additional rules that may apply in special
circumstances, beginning on page x of your Sum-
mary Plan Description. You can also obtain a free
copy of the complete explanation from the Person-
nel Office.
If you wish to have a free copy of the complete ex-
planation mailed to you, press 1.
If you wish to hear this explanation again, press 2.
If you wish to end this transaction now, without re-
questing any distribution, press 3.
If you wish to continue with this transaction, press 4.
Consent under section 411(a)(11)
The proposed regulations provide that,
in general, a plan may receive a partici-
pant’s consent either on a written paper
document or through an electronic
medium reasonably accessible to the par-
ticipant. As in the case of participant no-
tices, the proposed regulations generally
do not categorize particular electronic
media as either permissible or impermis-
sible for this purpose and do not prescribe
detailed, media-specific rules. Instead,
the proposed regulations set forth gener-
ally applicable standards for transmitting
consent through electronic media. The
standards are intended to parallel the key
attributes of participant consent provided
on written paper documents without im-
posing more stringent requirements on
electronic consents. To conform the ex-
isting regulations to this change, the pro-
posed regulations remove the requirement
that a participant’s consent be “written.”
The proposed regulations provide that
participant consent transmitted through an
electronic medium must be given under a
system that is reasonably designed to pre-
clude an individual other than the partici-
pant from giving the consent and that pro-
vides the participant a reasonable
opportunity to review and to confirm,
modify, or rescind the terms of the distrib-
ution before the consent to the distribu-
tion becomes effective. The proposed
regulations do not set out specific rules
regarding adequate identification or au-
thentication of participants; the IRS and
Treasury note, however, that many com-
ments submitted under Announcement
98–62 confirmed that “paperless” systems
ordinarily use passwords and personal
identification numbers to ensure partici-
pant identity in plan transactions.
The requirement that a participant be
given a reasonable opportunity to review
and to confirm, modify, or rescind the
terms of a distribution before his or her
consent becomes effective is not intended
to require a mandatory rescission period
after a transaction has been completed; it
is sufficient for the plan to provide this
opportunity immediately before the par-
ticipant completes the session in which
the consent is given (for example, before
exiting the plan web site or at the end of
an automated telephone transaction). The
opportunity to review and to confirm,
modify, or rescind the terms of the distrib-
ution may be compared to a participant’s
opportunity to review the terms of a dis-
tribution on a written paper distribution
election form prior to submitting that
written paper form to the plan.
Many comments submitted under An-
nouncement 98–62 indicated that it is a
very common practice in electronic plan
administration to provide participants
with confirmations (usually written con-
firmations) of plan transactions. The re-
ceipt of a confirmation is, for the partici-
pant, analogous to the opportunity to
retain a photocopy of a written paper dis-
tribution election form. Consistent with
these comments, the proposed regula-
tions provide for the plan to give the par-
ticipant a confirmation of the terms of the
distribution within a reasonable time
after the participant has given consent
through an electronic medium. However,
the confirmation of the participant’s con-
sent to the distribution generally need not

1999–13 I.R.B.17March 29, 1999
be given through a written paper docu-
ment; it may be given through any elec-
tronic medium that would satisfy the pro-
visions of the proposed regulations for
delivery of the section 411(a)(11) notice.
(Thus, if the confirmation is given
through an electronic medium, the partic-
ipant must be given the right to request
and to receive the confirmation on a writ-
ten paper document.) Additionally, the
confirmation need not be given as a sepa-
rate transaction. For example, the confir-
mation could be given immediately be-
fore completion of a session conducted
on a plan web site. Alternatively, a plan
could provide the confirmation by re-
flecting the transaction in a participant’s
periodic account statement (provided that
the confirmation is given within a reason-
able time after the consent).
3
As with notices, the general standards
for the section 411(a)(11) consent are il-
lustrated by several examples intended to
describe in broad terms certain uses of
electronic technologies that would satisfy
the proposed regulations. The examples
illustrate consent given through e-mail,
web sites (Internet or intranet), and auto-
mated telephone systems and clarify that
a participant may consent to a distribution
orally through an automated telephone
system. The examples are not intended to
constitute an exhaustive list of permissi-
ble uses, systems, or electronic media or
to imply that other uses, systems, or elec-
tronic media (whether extant or not yet
developed) would fail to satisfy the pro-
posed regulations.
Other transactions and recordkeeping
A few comments submitted under An-
nouncement 98–62 requested guidance on
the use of electronic media for waivers of
the qualified joint and survivor annuity
and the qualified preretirement survivor
annuity, spousal consent, and related ex-
planations under section 417. Guidance
on those issues has not been issued at this
time because any use of electronic media
for those purposes — as well as for the no-
tice requirements of sections 401(k)(12)
and 401(m)(11) (pertaining to the safe har-
bor methods of satisfying the nondiscrimi-
nation requirements of sections 401(k)
and (m)) and the notice requirements of
section 204(h) of ERISA — would raise
substantial issues distinct from those
raised by the use of electronic media for
the notice and consent requirements of
sections 402(f), 411(a)(11), and 3405(e)-
(10)(B). The IRS and Treasury will be re-
viewing those issues and will consider
whether guidance should be issued in the
future.
Several comments also requested guid-
ance regarding the use of electronic media
for withholding elections under section
3405. The IRS and Treasury are issuing
guidance permitting payors to establish
systems to receive Form W-4P (Withhold-
ing Certificate for Pension or Annuity
Payments) electronically. Interested par-
ties are invited to submit comments con-
cerning what, if any, additional guidance
is needed concerning the use of electronic
media for withholding elections under
section 3405.
Several comments submitted under An-
nouncement 98–62 addressed recordkeep-
ing under section 6001 for electronic plan
administration. Revenue Procedure 98–
25, 1998–11 I.R.B. 7, specifies the basic
requirements that the IRS considers to be
essential in cases where a taxpayer’s
records are maintained within an Auto-
matic Data Processing system. Under
section 3.01 of Revenue Procedure 98–
25, these requirements apply to employee
plans. Additionally, Revenue Procedure
97–22, 1997–1 C.B. 652, provides guid-
ance to taxpayers maintaining books and
records by using an electronic storage
system that either images their hardcopy
(paper) books and records, or transfers
their computerized books and records, to
an electronic storage medium, such as an
optical disk. Under section 3.02 of Rev-
enue Procedure 97–22, the requirements
of that revenue procedure apply employee
plans. The IRS and Treasury invite inter-
ested parties to submit comments on what
specific guidance is needed concerning
recordkeeping requirements for electronic
plan administration in addition to that
provided in Revenue Procedures 98–25
and 97–22.
Reliance
Plan sponsors and administrators may
rely on these proposed regulations for
guidance pending the issuance of final
regulations. If, and to the extent, future
guidance is more restrictive than the guid-
ance in these proposed regulations, the fu-
ture guidance will be applied without
retroactive effect.
Proposed Effective Date
These regulations are proposed to be
effective the first day of the first plan year
beginning on or after the date that is six
months after they are published in the
Federal Registeras final 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 is hereby certified
that these regulations will not have a sig-
nificant economic impact on a substantial
number of small entities. This certifica-
tion is based on the fact that the regula-
tions provide paperless alternatives to no-
tices that otherwise must be sent as
written paper documents. It is anticipated
that most small businesses affected by
these regulations will be sponsors of re-
tirement plans. Since these notices are
provided only upon distributions and
since, in the case of a small plan, there
will be relatively few distributions per
year, small plans that implement a paper-
less system for delivering these notices
will likely contract for them as part of a
paperless system for distributions offered
by outside vendors. The paperless deliv-
ery of the notices will only add a minor
increment to the cost of these paperless
distribution systems or the plan sponsor
will continue to use a paper-based system.
Accordingly, a Regulatory Flexibility
Analysis is not required. Pursuant to sec-
tion 7805(f) of the Code, this notice of
proposed rulemaking will be submitted to
the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, considera-
3
Several commentators requested that guidance
on electronic plan administration clarify that partici-
pants need not receive written paper confirmation of
every plan transaction conducted through an elec-
tronic medium (such as an inquiry regarding a par-
ticipant’s account value). The IRS and Treasury
note that (apart from the provision of the proposed
regulations described above) neither the Code nor
the regulations impose a requirement to provide
confirmation (written or otherwise) of plan transac-
tions conducted through an electronic medium.

March 29, 1999181999–13 I.R.B.
tion will be given to any electronic and
written comments (a signed original and
eight (8) copies) that are submitted timely
to the IRS. The IRS and Treasury specifi-
cally request comments on the clarity of
the proposed regulations and how it may
be made easier to understand. All com-
ments will be available for public inspec-
tion and copying.
A public hearing has been scheduled
for April 15, 1999, at 10 a.m. in room
2615, Internal Revenue Service Building,
1111 Constitution Avenue, NW, Washing-
ton, DC. Due to security procedures, visi-
tors must enter at the 10th Street entrance,
located between Constitution and Penn-
sylvania Avenues, NW. In addition, all
visitors must present a photo identifica-
tion to enter the building. Because of ac-
cess restrictions, visitors will not be ad-
mitted beyond the immediate entrance
area more than 15 minutes before the
hearing starts. For information about
having your name placed on the building
access list, see the “FOR FURTHER IN-
FORMATION CONTACT” section of
this preamble.
The rules of 26 CFR 601.601(a)(3)
apply to the hearing.
Persons that wish to present oral com-
ments at the hearing must submit written
comments and an outline of topics to be
discussed and the time to be devoted to
each topic (signed original and eight (8)
copies) by March 25, 1999.
A period of 10 minutes will be allotted
to each person for making comments.
An agenda showing the scheduling of
speakers will be prepared after the dead-
line for receiving outlines has passed.
Copies of the agenda will be available
free of charge at the hearing.
Drafting Information
The principal author of these regula-
tions is Catherine Livingston Fernandez,
Office of the Associate Chief Counsel
(Employee Benefits and Exempt Organi-
zations), Internal Revenue Service. How-
ever, personnel from other offices of the
IRS and Treasury Department partici-
pated in their development.
*****
Proposed Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 35 are
proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read, in part, as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.402(f)–1 is amended
by:
1. Revising Q&A-2.
2. Adding Q&A-5 and Q&A-6.
The revision and additions read as fol-
lows:
§1.402(f)–1 Required explanation of
eligible rollover distributions; questions
and answers.
* * * * *
Q-2: When must the plan administrator
provide the section 402(f) notice to a dis-
tributee?
A-2: The plan administrator must pro-
vide the section 402(f) notice to a distrib-
utee at a time that satisfies either para-
graph (a) or (b) of this Q&A-2.
(a) Paragraph (a) of this Q&A-2 is sat-
isfied if the plan administrator provides a
distributee with the section 402(f) notice
no less than 30 days and no more than 90
days before the date of a distribution.
However, if the distributee, after having
received the section 402(f) notice, affir-
matively elects a distribution, a plan will
not fail to satisfy section 402(f) merely
because the distribution is made less than
30 days after the section 402(f) notice was
provided to the distributee, provided the
plan administrator clearly indicates to the
distributee that the distributee has a right
to consider the decision of whether or not
to elect a direct rollover for at least 30
days after the notice is provided. The
plan administrator may use any method to
inform the distributee of the relevant time
period, provided that the method is rea-
sonably designed to attract the attention
of the distributee. For example, this in-
formation could be either provided in the
section 402(f) notice or stated in a sepa-
rate document (e.g., attached to the elec-
tion form) that is provided at the same
time as the notice. For purposes of satis-
fying the requirement in the first sentence
of paragraph (a) of this Q&A-2, the plan
administrator may substitute the annuity
starting date, within the meaning of
§1.401(a)–20, Q&A-10, for the date of
the distribution.
(b) This paragraph (b) is satisfied if the
plan administrator—
(1) Provides a distributee with the
section 402(f) notice;
(2) Provides the distributee with a
summary of the section 402(f) notice
within the time period described in para-
graph (a) of this Q&A-2; and
(3) If the distributee so requests after
receiving the summary described in para-
graph (b)(2) of this Q&A-2, provides the
section 402(f) notice to the distributee
without charge and within the period
specified in paragraph (a) of this Q&A-2
(disregarding the 90-day period described
in paragraph (a) of this Q&A-2). The
summary described in paragraph (b)(2) of
this Q&A-2 must set forth a summary of
the principal provisions of the section
402(f) notice, must refer the distributee to
the most recent occasion on which the
section 402(f) notice was provided (and,
in the case of a notice provided in any
document containing information in addi-
tion to the notice, must identify that docu-
ment and must indicate where the notice
may be found in that document), and must
advise the distributee that, upon request, a
copy of the section 402(f) notice will be
provided without charge.
* * * * *
Q-5: Will the requirements of section
402(f) be satisfied if a plan administrator
provides a distributee with the section
402(f) notice or the summary of the notice
described in paragraph (b)(2) of Q&A-2
of this section other than through a writ-
ten paper document?
A-5: A plan administrator may provide
a distributee with the section 402(f) notice
or the summary of that notice described in
paragraph (b)(2) of Q&A-2 of this section
either on a written paper document or
through an electronic medium reasonably
accessible to the distributee. A notice or
summary provided through an electronic
medium must be provided under a system
that satisfies the following requirements:
(a) The system must be reasonably de-
signed to provide the notice or summary
in a manner no less understandable to the
distributee than a written paper document.
(b) At the time the notice or summary is
provided, the distributee must be advised
that the distributee may request and re-
ceive the notice on a written paper docu-
ment, and, upon request, that document

1999–13 I.R.B.19March 29, 1999
must be provided to the distributee at no
charge.
Q-6: Are there examples that illustrate
the provisions of Q&A-2 and Q&A-5 of
this section?
A-6: The following examples illustrate
the provisions of Q&A-2 and Q&A-5 of
this section:
Example 1.A qualified plan (Plan A) permits
participants to request distributions by e-mail.
Under Plan A’s system for such transactions, a par-
ticipant must enter his or her account number and
personal identification number (PIN); this informa-
tion must match that in Plan A’s records in order for
the transaction to proceed. If a participant changes
his or her PIN, the participant may not proceed with
a transaction until Plan A has sent confirmation of
the change to the participant. If a participant re-
quests a distribution from Plan A by e-mail and the
distribution is an eligible rollover distribution, the
plan administrator provides the participant with a
section 402(f) notice by e-mail. The plan adminis-
trator also advises the participant that he or she may
request the section 402(f) notice on a written paper
document and that, if the participant so requests, the
written paper document will be provided at no
charge. To proceed with the distribution by e-mail,
the participant must acknowledge receipt, review,
and comprehension of the section 402(f) notice.
Plan A does not fail to satisfy the notice requirement
of section 402(f) merely because the notice is pro-
vided to the participant other than through a written
paper document.
Example 2.A qualified plan (Plan B) permits
participants to request distributions through the Plan
B web site (Internet or intranet). Under Plan B’s
system for such transactions, a participant must
enter his or her account number and personal identi-
fication number (PIN); this information must match
that in Plan B’s records in order for the transaction
to proceed. If a participant changes his or her PIN,
the participant may not proceed with a transaction
until Plan B has sent confirmation of the change to
the participant. A participant may request a distribu-
tion from Plan B by following the applicable in-
structions on the Plan B web site. After the partici-
pant has requested a distribution that is an eligible
rollover distribution, the participant is automatically
shown a page on the web site containing a section
402(f) notice. Although this page of the web site
may be printed, the page also advises the participant
that he or she may request the section 402(f) notice
on a written paper document and that, if the partici-
pant so requests, the written paper document will be
provided at no charge. To proceed with the distribu-
tion through the web site, the participant must ac-
knowledge review and comprehension of the section
402(f) notice. Plan B does not fail to satisfy the no-
tice requirement of section 402(f) merely because
the notice is provided to the participant other than
through a written paper document.
Example 3.A qualified plan (Plan C) permits
participants to request distributions through Plan C’s
automated telephone system. Under Plan C’s sys-
tem for such transactions, a participant must enter
his or her account number and personal identifica-
tion number (PIN); this information must match that
in Plan C’s records in order for the transaction to
proceed. If a participant changes his or her PIN, the
participant may not proceed with a transaction until
Plan C has sent confirmation of the change to the
participant. Plan C provides the section 402(f) no-
tice in the summary plan description, the most recent
version of which was distributed to participants in
1997. A participant may request a distribution from
Plan C by following the applicable instructions on
the automated telephone system. In 1999, a partici-
pant, using Plan C’s automated telephone system,
requests a distribution that is an eligible rollover dis-
tribution. The automated telephone system refers
the participant to the most recent occasion on which
the section 402(f) notice was provided in the sum-
mary plan description, informs the participant where
the section 402(f) notice may be located in the sum-
mary plan description, and provides an oral sum-
mary of the material provisions of the section 402(f)
notice. The system also advises the participant that
the participant may request the section 402(f) notice
on a written paper document and that, if the partici-
pant so requests, the written paper document will be
provided at no charge. Before proceeding with the
distribution, the participant must acknowledge com-
prehension of the summary. Under Plan C’s system
for processing such transactions, the participant’s
distribution will be made no more than 90 days and
no fewer than 30 days after the participant requests
the distribution and receives the summary of the sec-
tion 402(f) notice (unless the participant waives the
30-day period). Plan C does not fail to satisfy the
notice requirement of section 402(f) merely because
Plan C provides a summary of the section 402(f) no-
tice or merely because the summary is provided to
the participant other than through a written paper
document.
Example 4.The facts are the same as in Example
3,except that, pursuant to Plan C’s system for pro-
cessing such transactions, a participant who so re-
quests is transferred to a customer service representa-
tive whose conversation with the participant is
recorded. The customer service representative pro-
vides the summary of the section 402(f) notice by
reading from a prepared text. Plan C does not fail to
satisfy the notice requirement of section 402(f)
merely because Plan C provides a summary of the
section 402(f) notice or merely because the summary
of the section 402(f) notice is provided to the partici-
pant other than through a written paper document.
Example 5.The facts are the same as in Example
3,except that Plan C does not provide the section
402(f) notice in the summary plan description. In-
stead, the automated telephone system reads the sec-
tion 402(f) notice to the participant. Plan C does not
satisfy the notice requirement of section 402(f) by
oral delivery of the section 402(f) notice through the
automated telephone system.
Par. 3. Section 1.411(a)–11 is amended
by:
1. Revising paragraphs (c)(2)(i) and
(iii).
2. Adding paragraphs (f) and (g).
3. Removing the language “Written
consent” in paragraph (c)(2)(ii) and (c)(3)
and adding the language “Consent” in its
place.
The revisions and additions read as fol-
lows:
§1.411(a)–11 Restriction and valuation of
distributions.
* * * * *
(c) * * *
(2) Consent. (i) No consent is valid un-
less the participant has received a general
description of the material features of the
optional forms of benefit available under
the plan. In addition, so long as a benefit
is immediately distributable, a participant
must be informed of the right, if any, to
defer receipt of the distribution. Further-
more, consent is not valid if a significant
detriment is imposed under the plan on
any participant who does not consent to a
distribution. Whether or not a significant
detriment is imposed shall be determined
by the Commissioner by examining the
particular facts and circumstances.
* * * * *
(iii) A plan must provide a participant
with notice of the rights specified in this
paragraph (c)(2) at a time that satisfies ei-
ther paragraph (c)(2)(iii)(A) or (B) of this
section:
(A) This paragraph (c)(2)(iii)(A) is sat-
isfied if the plan provides a participant
with notice of the rights specified in this
paragraph (c)(2) no less than 30 days and
no more than 90 days before the date the
distribution commences. However, if the
participant, after having received this no-
tice, affirmatively elects a distribution, a
plan will not fail to satisfy the consent re-
quirement of section 411(a)(11) merely
because the distribution commences less
than 30 days after the notice was provided
to the participant, provided the plan ad-
ministrator clearly indicates to the partici-
pant that the participant has a right to at
least 30 days to consider whether to con-
sent to the distribution.
(B) This paragraph (c)(2)(iii)(B) is sat-
isfied if the plan—
(1) Provides the participant with notice
of the rights specified in this paragraph
(c)(2);
(2) Provides the participant with a sum-
mary of the notice within the time period
described in paragraph (c)(2)(iii)(A) of
this section; and
(3) If the participant so requests after
receiving the summary described in para-

March 29, 1999201999–13 I.R.B.
graph (c)(2)(iii)(B)(2) of this section, pro-
vides the notice to the participant without
charge and within the period specified in
paragraph (c)(2)(iii)(A) of this section
(disregarding the 90-day period described
in paragraph (c)(2)(iii)(A) of this section).
The summary described in paragraph
(c)(2)(iii)(B)(2) of this section must ad-
vise the participant of the right, if any, to
defer receipt of the distribution, must set
forth a summary of the distribution op-
tions under the plan, must refer the partic-
ipant to the most recent occasion on
which the notice was provided (and, in
the case of a notice provided in any docu-
ment containing information in addition
to the notice, must identify that document
and must indicate where the notice may
be found in that document), and must ad-
vise the participant that, upon request, a
copy of the notice will be provided with-
out charge.
* * * * *
(f) Medium for notice and consent—
(1) Notice.The notice of a participant’s
rights described in paragraph (c)(2) of this
section or the summary of that notice de-
scribed in paragraph (c)(2)(iii)(B)(2) of
this section may be provided either on a
written paper document or through an
electronic medium reasonably accessible
to the participant. A notice or summary
provided through an electronic medium
must be provided under a system that sat-
isfies the following requirements:
(i) The system must be reasonably de-
signed to provide the notice or summary
in a manner no less understandable to the
participant than a written paper document.
(ii) At the time the notice or summary is
provided, the participant must be advised
that he or she may request and receive the
notice on a written paper document, and,
upon request, that document must be pro-
vided to the participant at no charge.
(2) Consent.The consent described in
paragraphs (c)(2) and (3) of this section
may be given either on a written paper
document or through an electronic
medium reasonably accessible to the par-
ticipant. A consent given through an elec-
tronic medium must be given under a
system that satisfies the following re-
quirements:
(i) The system must be reasonably de-
signed to preclude any individual other
than the participant from giving the con-
sent.
(ii) The system must provide the par-
ticipant with a reasonable opportunity to
review and to confirm, modify, or rescind
the terms of the distribution before the
consent to the distribution becomes ef-
fective.
(iii) The system must provide the par-
ticipant, within a reasonable time after the
consent is given, a confirmation of the
terms (including the form) of the distribu-
tion either on a written paper document or
through an electronic medium under a
system that satisfies the requirements of
paragraph (f)(1) of this section.
(g) Examples. The provisions of para-
graph (f) of this section are illustrated by
the following examples:
Example 1.A qualified plan (Plan A) permits
participants to request distributions by e-mail.
Under Plan A’s system for such transactions, a par-
ticipant must enter his or her account number and
personal identification number (PIN); this informa-
tion must match that in Plan A’s records in order for
the transaction to proceed. If a participant changes
his or her PIN, the participant may not proceed with
a transaction until Plan A has sent confirmation of
the change to the participant. If a participant re-
quests a distribution from Plan A by e-mail, the plan
administrator provides the participant with a section
411(a)(11) notice by e-mail. The plan administrator
also advises the participant that he or she may re-
quest the section 411(a)(11) notice on a written
paper document and that, if the participant so re-
quests, the written paper document will be provided
at no charge. To proceed with the distribution by e-
mail, the participant must acknowledge receipt, re-
view, and comprehension of the section 411(a)(11)
notice and must consent to the distribution within
the time required under section 411(a)(11). Within a
reasonable time after the participant’s consent, the
plan administrator, by e-mail, sends confirmation of
the distribution to the participant and advises the
participant that he or she may request the confirma-
tion on a written paper document that will be pro-
vided at no charge. Plan A does not fail to satisfy the
notice or consent requirement of section 411(a)(11)
merely because the notice and consent are provided
other than through written paper documents.
Example 2.The facts are the same as in Example
1,except that, instead of sending a confirmation of
the distribution by e-mail, the plan administrator,
within a reasonable time after the participant’s con-
sent, sends the participant an account statement for
the period that includes information reflecting the
terms of the distribution. Plan A does not fail to sat-
isfy the consent requirement of section 411(a)(11)
merely because the consent is provided other than
through a written paper document.
Example 3.A qualified plan (Plan B) permits
participants to request distributions through the Plan
B web site (Internet or intranet). Under Plan B’s
system for such transactions, a participant must
enter his or her account number and personal identi-
fication number (PIN); this information must match
that in Plan B’s records in order for the transaction
to proceed. If a participant changes his or her PIN,
the participant may not proceed with a transaction
until Plan B has sent confirmation of the change to
the participant. A participant may request a distribu-
tion from Plan B by following the applicable instruc-
tions on the Plan B web site. After the participant has
requested a distribution, the participant is automati-
cally shown a page on the web site containing a sec-
tion 411(a)(11) notice. Although this page of the web
site may be printed, the page also advises the partici-
pant that he or she may request the section 411(a)(11)
notice on a written paper document and that, if the
participant so requests, the written paper document
will be provided at no charge. To proceed with the
distribution through the web site, the participant must
acknowledge review and comprehension of the sec-
tion 411(a)(11) notice and must consent to the distri-
bution within the time required under section
411(a)(11). The web site requires the participant to
review and confirm the terms of the distribution be-
fore the transaction is completed. After the partici-
pant has given consent, the Plan B web site confirms
the distribution to the participant and advises the par-
ticipant that he or she may request the confirmation
on a written paper document that will be provided at
no charge. Plan B does not fail to satisfy the notice
or consent requirement of section 411(a)(11) merely
because the notice and consent are provided other
than through written paper documents.
Example 4.A qualified plan (Plan C) permits
participants to request distributions through Plan C’s
automated telephone system. Under Plan C’s sys-
tem for such transactions, a participant must enter
his or her account number and personal identifica-
tion number (PIN); this information must match that
in Plan C’s records in order for the transaction to
proceed. If a participant changes his or her PIN, the
participant may not proceed with a transaction until
Plan C has sent confirmation of the change to the
participant. Plan C provides only the following dis-
tribution options: a lump sum and annual install-
ments over 5, 10, or 20 years. A participant may re-
quest a distribution from Plan C by following the
applicable instructions on the automated telephone
system. After the participant has requested a distrib-
ution, the automated telephone system reads the sec-
tion 411(a)(11) notice to the participant. The auto-
mated telephone system also advises the participant
that he or she may request the notice on a written
paper document and that, if the participant so re-
quests, the written paper document will be provided
at no charge. Before proceeding with the distribu-
tion transaction, the participant must acknowledge
comprehension of the section 411(a)(11) notice and
must consent to the distribution within the time re-
quired under section 411(a)(11). The automated
telephone system requires the participant to review
and confirm the terms of the distribution before the
transaction is completed. After the participant has
given consent, the automated telephone system con-
firms the distribution to the participant and advises
the participant that he or she may request the confir-
mation on a written paper document that will be pro-
vided at no charge. Because Plan C has relatively
few and simple distribution options, the provision of
the section 411(a)(11) notice over the automated

1999–13 I.R.B.21March 29, 1999
telephone system is no less understandable to the
participant than a written paper notice. Plan C does
not fail to satisfy the notice or consent requirement
of section 411(a)(11) merely because the notice and
consent are provided other than through written
paper documents.
Example 5.The facts are the same as in Example
4,except that, pursuant to Plan C’s system for pro-
cessing such transactions, a participant who so re-
quests is transferred to a customer service represen-
tative whose conversation with the participant is
recorded. The customer service representative pro-
vides the section 411(a)(11) notice from a prepared
text and processes the participant’s distribution in
accordance with predetermined instructions of the
plan administrator. Plan C does not fail to satisfy the
notice or consent requirement of section 411(a)(11)
merely because the notice and consent are provided
other than through written paper documents.
PART 35–TEMPORARY
EMPLOYMENT TAX AND
COLLECTION OF INCOME TAX AT
SOURCE REGULATIONS UNDER
THE TAX EQUITY AND FISCAL
RESPONSIBILITY ACT OF 1982
Par. 4. The authority citation for part
35 is revised to read as follows:
Authority: 26 U.S.C. 6047(e), 7805;
68A Stat. 917; 96 Stat. 625; Pub. L. 97–
248 (96 Stat. 623).
Section 35.3405–1 also issued under 26
U.S.C. 3405(e)(10)(B)(iii).
Par. 5. Section 35.3405–1 is amended
by adding d-35 and d-36 to read as fol-
lows:
§35.3405–1. Questions and answers
relating to withholding on pensions,
annuities, and certain other deferred
income.
* * * * *
d-35. Q. Through what medium may a
payor provide the notice required under
section 3405 to a payee?
A. A payor may provide the notice re-
quired under section 3405 (including the
abbreviated notice described in d-27) to a
payee either on a written paper document
or through an electronic medium reason-
ably accessible to the payee. A notice
provided through an electronic medium
must be provided under a system that sat-
isfies the following requirements:
(a) The system must be reasonably de-
signed to provide the notice in a manner
no less understandable to the payee than a
written paper document.
(b) At the time the notice is provided,
the payee must be advised that the payee
may request and receive the notice on a
written paper document, and, upon re-
quest, that document must be provided to
the payee at no charge.
d-36. Q. Are there examples that illus-
trate the provisions of d-35 of this section?
A. The provisions of d-35 of this sec-
tion are illustrated by the following exam-
ples:
Example 1.An employer deferred compensation
plan (Plan A) permits participants to request distrib-
utions by e-mail. Under Plan A’s system for such
transactions, a participant must enter his or her ac-
count number and personal identification number
(PIN); this information must match that in Plan A’s
records in order for the transaction to proceed. If a
participant changes his or her PIN, the participant
may not proceed with a transaction until Plan A has
sent confirmation of the change to the participant.
The plan administrator is the payor. If a participant
requests a distribution from Plan A by e-mail, the
plan administrator provides the participant with the
notice required under section 3405 by e-mail. The
plan administrator also advises the participant that
he or she may request the notice on a written paper
document and that, if the participant so requests, the
written paper document will be provided at no
charge. To proceed with the distribution by e-mail,
the participant must acknowledge receipt, review,
and comprehension of the notice. The plan adminis-
trator does not fail to satisfy the notice requirement
of section 3405 merely because the notice is pro-
vided to the participant other than through a written
paper document.
Example 2.An employer deferred compensation
plan (Plan B) permits participants to request distrib-
utions through the Plan B web site (Internet or in-
tranet). Under Plan B’s system for such transac-
tions, a participant must enter his or her account
number and personal identification number (PIN);
this information must match that in Plan B’s records
in order for the transaction to proceed. If a partici-
pant changes his or her PIN, the participant may not
proceed with a transaction until Plan B has sent con-
firmation of the change to the participant. The plan
administrator is the payor. A participant may request
a distribution from Plan B by following the applica-
ble instructions on the Plan B web site. After the
participant has requested a distribution, the partici-
pant is automatically shown a page on the web site
containing the notice required by section 3405. Al-
though this page of the web site may be printed, the
page also advises the participant that he or she may
request the notice on a written paper document and
that, if the participant so requests, the written paper
document will be provided at no charge. To proceed
with the distribution through the web site, the partic-
ipant must acknowledge review and comprehension
of the notice. The plan administrator does not fail to
satisfy the notice requirement of section 3405
merely because the notice is provided to the partici-
pant other than through a written paper document.
Example 3.An employer deferred compensation
plan (Plan C) permits participants to request distrib-
utions through Plan C’s automated telephone sys-
tem. Under Plan C’s system for such transactions, a
participant must enter his or her account number and
personal identification number (PIN); this informa-
tion must match that in Plan C’s records in order for
the transaction to proceed. If a participant changes
his or her PIN, the participant may not proceed with
a transaction until Plan C has sent confirmation of
the change to the participant. The plan administrator
is the payor. A participant may request a distribution
from Plan C by following the applicable instructions
on the automated telephone system. After the partic-
ipant has requested a distribution, the automated
telephone system reads the notice required by sec-
tion 3405 to the participant. The automated tele-
phone system also advises the participant that he or
she may request the notice on a written paper docu-
ment and that, if the participant so requests, the writ-
ten paper document will be provided at no charge.
Before proceeding with the distribution transaction,
the participant must acknowledge comprehension of
the notice. The plan administrator does not fail to
satisfy the notice requirement of section 3405
merely because the notice is provided to the partici-
pant other than through a written paper document.
Example 4.The facts are the same as in Example
3,except that, pursuant to the system for processing
such transactions, a participant who so requests is
transferred to a customer service representative
whose conversation with the participant is recorded.
The customer service representative provides the
notice required by section 3405 by reading from a
prepared text. The plan administrator does not fail
to satisfy the notice requirement of section 3405
merely because the notice is provided to the partici-
pant other than through a written paper document.
* * * * *
John M. Dalrymple,
Acting Deputy Commissioner
of Internal Revenue.
(Filed by the Office of the Federal Register on De-
cember 17, 1998, 8:45 a.m., and published in the
issue of the Federal Register for December 18, 1998,
63 F.R. 70071)
Supplemental Instructions for
Form 8606, Nondeductible IRAs
Announcement 99–18
This announcement provides supple-
mental instructions for the proper comple-
tion of Form 8606, Nondeductible IRAs,
for Roth IRA conversions and recharac-
terizations. It also clarifies the proper
computation of the 10% additional tax for
early distributions in the case of Roth IRA
conversions and subsequent withdrawals
from Roth IRA accounts. Finally, it cor-
rects the computation of modified AGI for
purposes of Roth IRAs on page 2 and the
Ed IRA Contribution Worksheet on page
3 in the separate instructions for Form
8606.

March 29, 1999221999–13 I.R.B.
I. Reporting Roth IRA Conversions
and Recharacterizations
Holders of traditional IRAs may con-
vert these accounts to Roth IRAs if they
meet the eligibility requirements and in-
clude any previously untaxed amounts
converted in their gross income for the
year of conversion. For conversions in
1998, the includible amount may be
spread over 4 years, at the election of the
taxpayer. A conversion may be undone
by recharacterizing the converted
amounts back to the traditional IRA.
Some questions have arisen about the
proper reporting of conversions, recharac-
terizations, and reconversions to Roth
IRAs, particularly regarding the reconcili-
ation of amounts on Forms 1099-R issued
by account trustees with amounts to be
entered on Form 8606 and Form 1040.
The following comprehensive example
clarifies this reporting.
Example:Mr. Smith has the following
IRA activity in 1998:
DateActivity
2/19/98Mr. Smith contributes $2,000
to a Roth IRA.
2/19/98Mr. Smith converts the entire
$8,000 balance in his tradi-
tional IRA to a Roth IRA. The
converted amount was placed
into an account separate from
the Roth contribution account.
His total basis in the traditional
IRA was $2,000 (from a nonde-
ductible contribution in an ear-
lier year).
9/10/98The fair market value of Mr.
Smith’s conversion account de-
creased from $8,000 to $7,000.
Mr. Smith recharacterizes the
entire remaining balance of
$7,000 to a traditional IRA.
9/10/98M r. Smith reconverts the
$7,000 from the traditional
IRA back to a Roth IRA.
In 1999, Mr. Smith receives three
Forms 1099-R: one for the original con-
version of $8,000, another for the $7,000
recharacterization, and a third one for the
subsequent reconversion of $7,000.
Completion of Form 8606:Mr. Smith
should complete the identifying informa-
tion above Part I. He should leave Part I
blank. Mr. Smith completes Part II of
Form 8606 as follows:
Line 14a.Mr. Smith enters $15,000 on
this line. This is the sum of the amounts
reported to him in box 1 of the Forms
1099-R he received for the $8,000 con-
version on February 19, 1998, and the
$7,000 reconversion on September 10,
1998.
Line 14b.Although Mr. Smith recharac-
terized $7,000 from his Roth conversion
account to his traditional IRA, he reports
$8,000 on line 14b. This is because line
14a includes $8,000 from his original
conversion and he recharacterized the en-
tire remaining balance of $7,000. He en-
ters $8,000 on line 14b to “zero out” the
conversion and subsequent recharacteri-
zation. Otherwise, Mr. Smith would be
taxed on the $1,000 decline in market
value in his Roth conversion account be-
fore the recharacterization.
Line 14c.Mr. Smith reports $7,000 on
this line ($15,000-$8,000).
Line 15.Mr. Smith refers to the chart on
page 5 of the Form 8606 instructions to
determine the amount to enter on this line.
As a result, he enters $2,000, which is his
prior year nondeductible contribution to a
traditional IRA.
Line 16.The taxable amount of the con-
version is $5,000 ($7,000-$2,000).
Line 17. Mr. Smith elects to have the tax-
able amount spread over 4 years. In 1998
and in each of the next 3 years, Mr. Smith
is taxed on $1,250.
Part III. Mr. Smith does not complete
Part III. Although he received a Form
1099-R for his recharacterization of
$7,000 from the Roth IRA to a traditional
IRA, the recharacterization is not a distri-
bution that is to be reported on line 18 of
Part III. It is merely a trustee-to-trustee
transfer of funds between IRA accounts.
Completion of Form 1040:Mr. Smith
includes $22,000 on line 15a. This is the
total IRA distributions that were reported
to him in box 1 of the Forms 1099-R he
received. Mr. Smith includes $1,250, the
amount of the conversion that is taxable
in 1998, on line 15b. This is the amount
from line 17 of Form 8606.
II. Clarification of Amount Subject to
10% Additional Tax
The Noteafter line 26 of Form 8606 is
incomplete. Regardless of whether you
have an amount on line 22 or 25 of Form
8606, you may be subject to an additional
10% tax. The Noteshould read as fol-
lows:
“Note:If you receive a Roth IRA dis-
tribution before reaching age 59
1
⁄
2
, you
may be subject to an additional 10% tax.
See Form 5329. Include on line 1 of
Form 5329 the smallerof the amount on
line 20 orthe sum of the amounts on lines
16 and 25.”
Please disregard the paragraph headed
Lines 22 and 25-Additional 10% Taxon
page 6 of the instructions for Form 8606,
as well as the first complete paragraph in
the middle column of page 3 of the in-
structions for Form 5329.
III. Correction to Computation of
Modified AGI for Purposes of
Roth IRAs
Under Roth IRAson page 2 of the
Form 8606 instructions, item 1 under
Modified AGI for purposes of Roth
IRAs should include a reference to Form
1040A, line 10b.
IV. Correction to Ed IRA
Contribution Worksheet
Line 2 of the worksheet on page 3 of
the Form 8606 instructions should read:
“Enter $150,000 if married filing jointly;
or $95,000 for all other filers.” The refer-
enced amount for married filing sepa-
rately should be deleted.
Foundations Status of Certain
Organizations
Announcement 99–27
The following organizations have
failed to establish or have been unable to
maintain their status as public charities or
as operating foundations. Accordingly,
grantors and contributors may not, after
this date, rely on previous rulings or des-
ignations in the Cumulative List of Orga-
nizations (Publication 78), or on the pre-
sumption arising from the filing of notices
under section 508(b) of the Code. This
listing does notindicate that the organiza-

1999–13 I.R.B.23March 29, 1999
tions have lost their status as organiza-
tions described in section 501(c)(3), eligi-
ble to receive deductible contributions.
Former Public Charities.The following
organizations (which have been treated as
organizations that are not private founda-
tions described in section 509(a) of the
Code) are now classified as private foun-
dations:
Adolescent Interchange Service Inc.,
Shreveport, LA
African Haitian American Operation
Hope for Democracy for Rebuilding,
Newburg, IN
American Friends of the International
Disability Foundation Inc., New York,
NY
American Relief Services Inc., Walnut
Creek, CA
Arcadia Academy Valley Inc., Ironton,
MO
Beauty of Life, Brooklyn, NY
Blazer Mat Club, Douglassville, PA
Brothers Empowering African Minds,
Raleigh, NC
Career Kids Incentive Program, Seattle,
WA
Cheerleading Association of Stratford
High School, Goose Creek, SC
Chicago Lawn and Gage Park
Community Youth Center Inc.,
Chicago, IL
City Wide Resident Management
Corporation Inc., Gary, IN
Community Homeowners Association
Inc., Dorchester, MA
Creative Bridges Inc., San Francisco, CA
David S Brown Foundation Inc., Boston,
MA
Dejesus Foundation Inc., Castle Point,
NY
Dobbs Ferry Schools Foundation Inc.,
Dobbs Ferry, NY
Downstate AIDS Projects, Springfield, IL
Dutchman Chapel Corporation, Enoree,
SC
Earth Camp International Inc.,
Los Angeles, CA
Family Wellness Center Inc., North Palm
Beach, FL
Firefighters Museum and Hall of Fame,
College Station, TX
Franklin County Legal Childrens
Services Inc., Malone, NY
Friendly Neighbors Club of N C,
Asheville, NC
Friends of the BBC Marshall Plan of the
Mind Trust Inc., Bethesda, MD
Gaffney Main Street Corporation,
Gaffney, SC
Greater Ottumwa Vocal Arts Project Inc.,
Ottumwa, IA
Hayes School Alumni Inc., Brooklyn, NY
HIV-AIDS Planning & Management
Organization Inc., Miami, FL
Housing Authority of the City of Laredo,
Laredo, TX
Imani & Friends Incorporated, Chicago,
IL
IMPACTInstitute Inc., Oakland Park,
FL
Iberia Pro Bono Project, New Iberia, LA
Idaho Empowerment Program Inc.,
Boise, ID
Idaho Freedom Chorus Inc., Boise, ID
IHS Inc., Winslow, AZ
Ila Gail Educational Foundation Inc., Salt
Lake City, UT
Illinois Education First Foundation,
Springfield, IL
Image Productions, Colorado Springs,
CO
Imagication Childrens Television,
Mansfield Ctr., CT
Imani Inc., Detroit, MI
Immunet Inc., New York, NY
Impact Community & Economic
Development Corporation, Portland,
OR
In Christ International, Santa Ana, CA
In His Service Ministries Inc.,
Ponchatoula, LA
In-Reach Foundation, Pittsburg, CA
In Recital, New York, NY
Incentives Inc., Jamacia, NY
Independence for Physically Disabled
Children Inc., Oceanside, NY
Independent Democratic Education
Association Ideas Inc., Great Neck,
NY
Independent School Board Members of
Wisconsin Inc., Hales Corners, WI
Indian Nations Recreation Trail Inc.,
Muskogee, OK
Indiana Raiders Girls Softball Club,
Portage, IN
Indianapolis AIDS Housing Corp.,
Indianapolis, IN
Indianapolis Neighborhood Resource
Center Inc., Indianapolis, IN
Indigenous Arts Foundation Inc.,
Belmont, MA
Indo-U S Bio-Medical Research
Foundation, Burton, MI
Indonesian Society of Portland, Lake
Oswego, OR
Indy Tres Dias Inc., Indianapolis, IN
Infancia Mexicana Inc., South Bend, IN
Infinity Systems for Nonprofits Inc.,
Minneapolis, MN
Injured Athletes Recovery Fund,
Providence, RI
Inland Empire Pride Inc.,
San Bernardino, CA
Inland Northwest Mens Evolvement
Network, Spokane, WA
Inn Fellowship Inc., St. Louis, MO
Inner City Community Development Inc.,
Knoxville, TN
Inner-City Ministries Inc., Ellendale,
ND
Inner-City Vision Ministries, Mercer
Island, WA
Inner City Youth Foundation, Cleveland,
OH
Inner Development Inc., Staten Island,
NY
Inner Essence Deliverance Ministries,
Kalamazoo, MI
Innervision, Denver, CO
Inside Out Productions, Houston, TX
Insight Alaska, Anchorage, AK
Inspirational Moments Inc., West
Chester, PA
Inspirit Counseling Center, San Anselmo,
CA
Inspirit Inc. A Non-Profit Corporation,
Wheat Ridge, CO
Institute for Family Education and
Economic Development IFEED,
Greenville, MS
Institute for Christian Leadership Inc.,
Portland, OR
Institute for Competition Inc.,
Cambridge, MA
Institute for Disability Resources,
Washington, DC
Institute for Financial Economics and
Public Policy, Bethesda, MD
Institute for Multi-Cultural Enrichment,
Portland, OR
Institute for Multi-Party Democracy Inc.,
Washington, DC
Institute for Naturopathic Medicine,
Van Nuys, CA
Institute for Psycho Social Studies Inc.,
N Wales, PA
Institute for School Board Effectiveness,
Austin, TX
Institute for Strategic Servanthood,
Thousand Oaks, CA
Institute for Sustainable Tropical
Resource Management Inc., Pittsboro,
NC

March 29, 1999241999–13 I.R.B.
Institute for the Advanced Study of
Culture, Waterford, VA
Institute for the Study of Distributed
Work, Walnut Creek, CA
Institute for University Studies,
Arlington, TX
Institute for the Study of Family
Violence, Mt. Sinai, NY
Institute for Water Policy Studies,
Santa Fe, NM
Institute for World Religions, Irvine, CA
Institute for Young Leaders Inc.,
Marietta, GA
Institute of Caribbean Studies,
Washington, DC
Institute of Tuition Scholarships and
Grants Inc., Wilmington, DE
Institute on Cultural Dynamics and
Social Change Inc., Rochester, MN
Intelcross Inc., Kentfield, CA
Inter-Disciplinary Developmental
Assessment Studies for Kids Corp.,
Chicago, IL
Inter Institute for Infant Nutri &
Gastrointestinal Disease, Haverford,
PA
Inter-Neighborhood Housing, Bronx, NY
Interamericas Hash 95 Inc., Longwood,
FL
Interexchange Network Inc., Kansas City,
MO
Interfaith Hunger Services Inc.,
Bridgeport, CT
Interfaith Pastoral Counseling Service
Inc., Biddford, ME
International Alcohol and Drug Institute,
Mentor, OH
International Association for the Study of
Jewish Mysticism, Cambridge, MA
International Cancer Association Inc.,
Orange City, FL
International Center for Disarmament and
Conversion, Davidson, NC
International Center for Dispute
Resolution, Reno, NV
International Center for Study of Jewish
Heroism Inc., New York, NY
International Christian Training Institute,
New Smyrna Beach, FL
International Committee Invalid
Assistance Cambodia, Portland, ME
International Congress for Environmental
Comm and Technology, Chattanooga,
TN
International Congress on Toxicology
VII, Research Triangle Park, NC
International Development Research and
Initiatives Inc., Gainesville, FL
International Eye Project Inc., Port Saint
Lucie, FL
International Fund for Children, Chicago,
IL
International Fund for Humanitarian Aid
& Development Inc., Roswell, GA
International Guild of Musicians In
Dance, Tucson, AZ
International Mind Dynamics Institute
Inc., Chamblee, GA
International Multicultural Inc.,
Beaverton, OR
International Nepali Literary Society,
Washington, DC
International Network of Lesbian and
Gay Officials, Minneapolis, MN
International Nippon Karate-Do
Federation, Alexandria, VA
International Quarterly, Tallahassee, FL
International Roma Federation
Corporation, New York, NY
International Society for Intraoperative
Card Ultrasound Inc., Durham, NC
International Trade Club of Southern
California, Long Beach, CA
International Witness Inc., Cambridge,
MA
International Woode Foundation Inc.,
Brooklyn, NY
International Womens Independence
Network, Houston, TX
Interreligious Council of Linn County
Incorporated, Cedar Rapids, IA
Intro International Inc., Sterling, VA
IOB Productions Inc., Springfield, VA
Irish Focus Inc., Boston, MA
Iroquois Environmental and Educational
Services Inc., Perrysburg, NY
Isabella Community Playscape Inc.,
Mount Pleasant, MI
Isabella International Institute, Bethesda,
MD
Isaiah House Incorporated, Upper
Marlboro, MD
Islamic Education Institute of Texas Inc.,
Houston, TX
Islamic Federation of New Jersey Inc.,
Jersey City, NJ
Islamic Information Center of the
Americas, La Jolla, CA
Issachar Institute Inc., Tupelo, MS
Ithaca Performing Arts Center Inc.,
Ithaca, NY
Its a Kids World Inc., Albuquerque, NM
Ivy Plaza Housing Corporation, Shaker
Heights, OH
Ivy Self Help Publishing Inc., Santa
Barbara, CA
James L Leinwand Foundation, North
Palm Beach, FL
Joe Marzari Foundation, New York,
NY
Lawrence Foundation, Lawrence, KS
Local Community Associates Inc.,
Fairport, NY
Main Street Playground Project, Hyannis,
MA
Marion County Three-Point Club Inc.,
Lebanon, KY
Martha for the Homeless Incorporated,
Petersburg, VA
Mesa Martin Luther King Jr Celebration
Inc., Mesa, AZ
Missouri Research Institute, Kansas City,
MO
Mustang Basketball Association
Incorporated, Merritt Island, FL
National Alliance of Pan African
Seminarians, Antioch, CA
National Amputee Sports Foundation,
Thornton, CO
New Caney AG Supporters Inc.,
New Caney, TX
New Life Options Inc., Palm, FL
New Mexico Middle School Assn.,
Tijeras, NM
New Mexico Society for Perenteral and
Enteral Nutrition, Albuquerque, NM
New Women Entrepreneur Center
Corporation, Miami, FL
Operation Lookout for Missing Children
Inc., Brooklyn, NY
Outreach Foundation Inc., Dallas, TX
Pacific Northwest Aleut Council, Seattle,
WA
Perch America Inc., Hammond, IN
Pleasant Valley Stingray Swim Team,
Davenport, IA
Progress & Freedom Foundation,
Washington, DC
Riverdale High School Band Boosters,
Riverdale, GA
Scottish Rite Tower Development
Corporation, Philadelphia, PA
Smacks Peace Brigades Inc., New York,
NY
Southeastern Massachusetts Round-Up
Inc., New Bedford, MA
St Judes Fund of Tappahannock Inc.,
Tappahannock, VA
Stuff for Kids Inc., Boston, MA
Surrogate Father Program Inc.,
Mt Vernon, NY
Tarrant County Dental Study Group,
Bedford, TX

1999–13 I.R.B.25March 29, 1999
The Mount Airy Community
Development & Resource Association,
Philadelphia, PA
Troy Chavez Foundation, Denver, CO
United States Hispanic Chamber of
Commerce Inc., Washington, DC
Vision Earth Society Incorporated,
Miami, FL
Washington Center for Policy &
Research Inc., Washington, DC
Washingtonville Centennial Celebration
Inc., Washingtonville, NY
West Branch Athletic Booster Club Inc.,
Salem, OH
West Virginia Society for Parenteral and
Enteral Nutrition, Elkview, WV
Youth-in-Action, St. George, UT
If an organization listed above submits
information that warrants the renewal of
its classification as a public charity or as a
private operating foundation, the Internal
Revenue Service will issue a ruling or de-
termination letter with the revised classi-
fication as to foundation status. Grantors
and contributors may thereafter rely upon
such ruling or determination letter as pro-
vided in section 1.509(a)–7 of the Income
Tax Regulations. It is not the practice of
the Service to announce such revised clas-
sification of foundation status in the Inter-
nal Revenue Bulletin.
Adequate Disclosure of Gifts;
Correction
Announcement 99–28
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to notice of pro-
posed rulemaking.
SUMMARY: This document contains a
correction to the notice of proposed rule-
making (REG–106177–98, 1999–12
I.R.B. 25), which was published in the
Federal Register Tuesday, December 22,
1998 (63 F.R. 70701 [I.R.B.]), relating to
changes made by the Taxpayer Relief Act
of 1997 and the Internal Revenue Service
Restructuring and Reform Act of 1998 re-
garding the valuation of prior gifts in de-
termining estate and gift tax liability, and
the period of limitations for assessing and
collecting gift tax.
FOR FURTHER INFORMATION CON-
TACT: William L. Blodgett (202) 622-
3090 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The notice of proposed rulemaking that
is the subject of this correction is under
sections 2001 and 2504 of the Internal
Revenue Code.
Need for Correction
As published, REG–106177–98 con-
tains an error which may prove to be mis-
leading and is in need of clarification.
Correction of Publication
Accordingly, the publication of the no-
tice of proposed rulemaking (REG–
106177–98), which was the subject of FR
Doc. 98–33648, is corrected as follows:
§20.2001–1 [Corrected]
On page 70704, column 3, §20.2001–
1(c) introductory text, line 2, the language
“of paragraph (a) of this section, the” is
corrected to read “of paragraph (b) of this
section, the”.
Michael L. Slaughter,
Acting Chief, Regulations Unit,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 5, 1999, 8:45 a.m., and published in the issue
of the Federal Register for March 8, 1999, 64 F.R.
10964)
General Revision of Regulations
Relating to Withholding of Tax
on Certain U.S. Source Income
Paid to Foreign Persons and
Related Collection, Refunds, and
Credits; Revision of Information
Reporting and Backup
Withholding Regulations; and
Removal of Regulations Under
Parts 1 and 35a and of Certain
Regulations Under Income Tax
Treaties; Correction
Announcement 99–29
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to technical
amendments.
SUMMARY: This document contains a
correction to final regulations (T.D. 8804,
1999–12 I.R.B. 5), which were published
in the Federal RegisterThursday, De-
cember 31, 1998 (63 F.R. 72183), relating
to the withholding of income tax on cer-
tain U.S. source income payments to for-
eign persons.
DATES: This correction is effective Janu-
ary 1, 2000.
FOR FURTHER INFORMATION CON-
TACT: Lilo Hester, (202) 622-3840 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of these corrections are under sec-
tions 1441, 1442, and 1443 of the Internal
Revenue Code.
Need for Correction
As published, TD 8804 contains errors
which may prove to be misleading and are
in need of clarification.
Correction of Publication
Accordingly, the publication of the
final rule; technical amendments (TD
8804), which was the subject of FR Doc.
98-34359, is corrected as follows:
§§1.6041–1 and 1.6042–2 [Corrected]
On page 72188, in the table following
“Par. 15.”, two entries are added in nu-
merical order to read as follows:

March 29, 1999261999–13 I.R.B.
SectionRemoveAdd
* * * * *
1.6041–1(d)(5), first sentence . . . . . . .December 31, 1998 . . . . . . . . . . . . . . . . .December 31, 1999 . . . . . . . . . . . . . . .
* * * * *
1.6042–2(a)(l)(iii), first sentence . . . .1099A . . . . . . . . . . . . . . . . . . . . . . . . . . . .1099 . . . . . . . . . . . . . . . . . . . . . . . . . . .
* * * * *
Michael L. Slaughter,
Acting Chief, Regulations Unit,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 8, 1999, 8:45 a.m., and published in the issue
of the Federal Register for March 9, 1999, 64 F.R.
11378)
Recharacterizing Financing
Arrangements Involving
Fast-pay Stock; Correction
Announcement 99–30
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to notice of pro-
posed rulemaking.
SUMMARY: This document contains a
correction to REG–104072–97, which
was published in 1999–11 I.R.B. 12, re-
lating to financing arrangements involv-
ing fast-pay stock.
FOR FURTHER INFORMATION CON-
TACT: Jonathan Zelnik, (202) 622-3940
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The notice of proposed rulemaking that
is the subject of this correction is under
section 7701 of the Internal Revenue Code.
Need for Correction
As published, REG–104072–97 con-
tains errors which may prove to be mis-
leading and are in need of clarification.
Correction of Publication
Accordingly, the publication of the no-
tice of proposed rulemaking (REG–
104072–97), which is the subject of FR
Doc. 99–178, is corrected as follows:
§1.1441–7 [Corrected]
1. On page 810, column 1, §1.1441–
7(g)(4) Example 2,line 4, the language
“that A entered the arrangement with a” is
corrected to read ”that A entered into the
arrangement with a”.
§1.7701(l)–3 [Corrected]
2. On page 810, column 3, §1.7701(l)–
3(c)(3)(iv)(A), line 3, the language “at-
tributable to financing instruments)” is
corrected to read “attributable to the fi-
nancing instruments)”.
3. On page 811, column 3, §1.7701(l)–
3(e) Example 5(i), line 3 from the bottom
of the paragraph, the language “Y’s 1996
deduction attributable to financing” is
corrected to read “Y’s 1996 deduction at-
tributable to the financing”.
Cynthia E. Grigsby,
Chief, Regulations Unit,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on Feb-
ruary 25, 1999, at 8:45 a.m., and published in the
issue of the Federal Register for March 3, 1999, 64
F.R. 10262)
Notice of Significant Reduction
in the Rate of Future Benefit
Accrual; Correction
Announcement 99–31
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regulations.
SUMMARY: This document contains
corrections to Treasury Decision (T.D.
8795, 1999–7 I.R.B. 8) relating to defined
benefit plans and to individual account
plans that are subject to the funding stan-
dards of section 302 of the Employment
Retirement Income Security Act of 1974.
DATES: These corrections are effective
December 14, 1998.
FOR FURTHER INFORMATION CON-
TACT: Diane S. Bloom, (202) 622-6214
or Christine L. Keller, (202) 622-6090
(not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of these corrections are under section
411 of the Internal Revenue Code.
Need for Correction
As published, T.D. 8795 contains errors
which may prove to be misleading and are
in need of clarification.
Correction of Publication
Accordingly, the publication of the
final regulations (T.D .8795), which was
the subject of FR Doc. 98–32925, is cor-
rected as follows:
1. On page 68680, column 2, in the
preamble under the paragraph heading
“Special Analyses”, line 12, the language
“24, 1996, the Regulatory Flexibility Act”
is corrected to read “29, 1996, the Regula-
tory Flexibility Act”.
§602.101 [Corrected]
2. On page 68684, column 1,
§602.101(c), in the table under the col-
umn heading Current OMB control No.,
the OMB number “1545–1447” is cor-
rected to read “1545–1477”.
Cynthia E. Grigsby,
Chief, Regulations Unit,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 2, 1999, at 8:45 a.m., and published in the
issue of the Federal Register for March 3, 1999, 64
F.R. 10218)

1999–13 I.R.B.27March 29, 1999
NameAddressDate of Resignation
Ellis, Ronald C.Billings, MTOctober 6, 1998
Announcement of the Consent Voluntary Suspension of Attorneys,
Certified Public Accountants, Enrolled Agents, and Enrolled Actuaries
From Practice Before the Internal Revenue Service
Under 31 Code of Federal Regulations,
Part 10, an enrolled agent, in order to
avoid the institution or conclusion of a
proceeding for his disbarment or suspen-
sion from practice before the Internal
Revenue Service, may offer his resigna-
tion from such practice. The Director of
Practice, in his discretion, may suspend
an enrolled agent in accordance with the
consent offered.
Attorneys, certified public accountants,
enrolled agents, and enrolled actuaries are
prohibited in any Internal Revenue Ser-
vice matter from directly or indirectly em-
ploying, accepting assistance from, being
employed by or sharing fees with, any en-
rolled agent who has resigned from prac-
tice before the Internal Revenue Service.
To enable attorneys, certified public ac-
countants, enrolled agents, and enrolled
actuaries to identify former enrolled
agents who have resigned from practice
before the Internal Revenue Service, the
Director of Practice will announce in the
Internal Revenue Bulletin the names and
addresses of former enrolled agents who
have resigned from such practice, and
date of resignation. This announcement
will appear in the weekly Bulletin at the
earliest practicable date after such action
and will continue to appear in the weekly
Bulletins for five successive weeks or for
as many weeks as is practicable for each
enrolled agent, who has resigned, and will
be consolidated and published in the Cu-
mulative Bulletin.
The following individual has offered
his resignation as an enrolled agent:

March 29, 1999281999–13 I.R.B.
Announcement of the Expedited Suspension of Attorneys, Certified Public
Accountants, Enrolled Agents, and Enrolled Actuaries From Practice
Before the Internal Revenue Service
Under Title 31 of the Code of Federal
Regulations, section 10.76, the Director
of Practice is authorized to immediately
suspend from practice before the Internal
Revenue Service any practitioner who,
within five years, from the date the expe-
dited proceeding is instituted, (1) has had
a license to practice as an attorney, certi-
fied public accountant, or actuary sus-
pended or revoked for cause; or (2) has
been convicted of any crime under title 26
of the United States Code or, of a felony
under title 18 of the United States Code
involving dishonesty or breach of trust.
Attorneys, certified public accountants,
enrolled agents, and enrolled actuaries are
prohibited in any Internal Revenue Service
matter from directly or indirectly employ-
ing, accepting assistance from, being em-
ployed by, or sharing fees with, any practi-
tioner disbarred or suspended from practice
before the Internal Revenue Service.
To enable attorneys, certified public ac-
countants, enrolled agents, and enrolled ac-
tuaries to identify practitioners under expe-
dited suspension from practice before the
Internal Revenue Service, the Director of
Practice will announce in the Internal Rev-
enue Bulletin the names and addresses of
practitioners who have been suspended
from such practice, their designation as at-
torney, certified public accountant, en-
rolled agent, or enrolled actuary, and date
or period of suspension. This announce-
ment will appear in the weekly Bulletin at
the earliest practicable date after such ac-
tion and will continue to appear in the
weekly Bulletins for five successive weeks
or for as many weeks as is practicable for
each attorney, certified public accountant,
enrolled agent, or enrolled actuary so sus-
pended and will be consolidated and pub-
lished in the Cumulative Bulletin.
The following individual have been
placed under suspension from practice be-
fore the Internal Revenue Service by virtue
of the expedited proceeding provisions of
the applicable regulations:
NameAddressDesignationDate of Suspension
Pierce, Steven J.Aventura, FLAttorneyIndefinite from October 15, 1998
Baker, Charles C.Monteagle, TNAttorneyIndefinite from October 15, 1998
Kantor, Stanley L.New York, NYAttorneyIndefinite from October 15, 1998
Wagner, Richard E.Spencerport, NYEnrolled AgentIndefinite from October 15, 1998
Tuohey, SeamusMontclair, NJAttorneyIndefinite from October 15, 1998
Burke, Beau E.Santa Rosa, CACPAIndefinite from October 15, 1998
Marn, Eric Y.Honolulu, HIAttorneyIndefinite from October 15, 1998
Todd, KennethTulsa, OKAttorneyIndefinite from November 4, 1998

1999–13 I.R.B.29March 29, 1999
NameAddressDesignationEffective Date
Shaw-Boatner, DeborahAustin, TXCPASeptember 24, 1998
Hannum, DavidPhiladelphia, PAEnrolled AgentSeptember 30, 1998
Miller, TheodoreNeshaminy Valley, PACPAFebruary 27, 1999
Announcement of the Disbarment and Suspension of Attorneys, Certified
Public Accountants, Enrolled Agents, and Enrolled Actuaries From
Practice Before the Internal Revenue Service
Under 330, Title 31 of the United
States Code, the Secretary of the Trea-
sury, after due notice and opportunity for
hearing, is authorized to suspend or dis-
bar from practice before the Internal Rev-
enue Service any person who has vio-
lated the rules and regulations governing
the recognition of attorneys, certified
public accountants, enrolled agents, or
enrolled actuaries to practice before the
Internal Revenue Service.
Attorneys, certified public accountants,
enrolled agents, and enrolled actuaries are
prohibited in any Internal Revenue Service
matter from directly or indirectly employ-
ing, accepting assistance from, being em-
ployed by, or sharing fees with, any practi-
tioner disbarred or under suspension from
practice before the Internal Revenue Ser-
vice.
To enable attorneys, certified public ac-
countants, enrolled agents, and enrolled
actuaries to identify such disbarred or sus-
pended practitioners, the Director
of Practice will announce in the Internal
Revenue Bulletin the names and ad-
dresses of practitioners who have been
suspended from such practice, their desig-
nation as attorney, certified public ac-
countant, enrolled agent, or enrolled actu-
ary, and date of disbarment or period of
suspension. This announcement will ap-
pear in the weekly Bulletin for five suc-
cessive weeks or as long as it is practica-
ble for each attorney, certified public
accountant, enrolled agent, or enrolled ac-
tuary so suspended or disbarred and will
be consolidated and published in the Cu-
mulative Bulletin.
After due notice and opportunity for
hearing before an administrative law
judge, the following individuals have
been disbarred from further practice be-
fore the Internal Revenue Service:

March 29, 1999301999–13 I.R.B.
NameAddressDesignationDate of Suspension
Cohn, IrvingBaltimore, MDAttorneySeptember 4, 1998 to September 3, 2000
Hwang, Catherine T.Livingston, NJCPAOctober 1, 1998 to September 30, 1999
Bratek, RonaldN. Brunswick, NJCPAOctober 5, 1998 to July 4, 2000
Walker, Frank O.Bay City, TXCPAOctober 5, 1998 to April 4, 2001
Ng, Peter J.Monticello, NYAttorneyOctober 5, 1998 to May 4, 2002
Sopkovich, CarolGirard, OHAttorneyOctober 5, 1998 to October 4, 2001
Kappler, John E.Evansville, INCPAOctober 8, 1998 to October 7, 1999
Sarcia, Jerry J.Libertyville, ILCPAOctober 30, 1998 to August 29, 2002
Spey, Gregory E.Youngstown, OHCPANovember 1, 1998 to April 30, 2001
Jacobson, KennethJacksonville, FLCPANovember 9, 1998 to November 8, 2000
Lopshire, LarryWhiteland, INCPADecember 2, 1998 to December 1, 1999
Lederer, Christine L.Somers, CTAttorneyDecember 7, 1998 to December 6, 2001
Kieffer, Richard D.Olney, ILCPADecember 15, 1998 to December 14, 1999
Cleaver Jr., Thomas E.Severna Park, MDEnrolled AgentDecember 23, 1998 to June 22, 2002
Trent, Douglas I.Allen, TXCPAJanuary 1, 1999 to December 31, 1999
Winters, John E. Bayonne, NJCPAJanuary 1, 1999 to September 30, 1999
Todd Jr., Emory S.Chester SpringsCPAJanuary 15, 1999 to July 14, 1999
Hawkins, William M.Indianapolis, INAttorneyFebruary 1, 1999 to January 31, 2002
Gimbal, PeterUnion City, NJCPAApril 1, 1999 to September 30, 2000
Ryan, Thomas J.Danbury, CTAttorneyMay 1, 1999 to October 30, 2000
Announcement of the Consent Voluntary Suspension of Attorneys,
Certified Public Accountants, Enrolled Agents, and Enrolled Actuaries
From Practice Before the Internal Revenue Service
Under 31 Code of Federal Regulations,
Part 10, an attorney, certified public ac-
countant, enrolled agent, or enrolled ac-
tuary, in order to avoid the institution or
conclusion of a proceeding for his disbar-
ment or suspension from practice before
the Internal Revenue Service, may offer
his consent to suspension from such prac-
tice. The Director of Practice, in his dis-
cretion, may suspend an attorney, certi-
fied public accountant, enrolled agent, or
enrolled actuary in accordance with the
consent offered.
Attorneys, certified public accountants,
enrolled agents, and enrolled actuaries are
prohibited in any Internal Revenue Ser-
vice matter from directly or indirectly em-
ploying, accepting assistance from, being
employed by, or sharing fees with any
practitioner disbarred or suspended from
practice before the Internal Revenue Ser-
vice.
To enable attorneys, certified public ac-
countants, enrolled agents, and enrolled
actuaries to identify practitioners under
consent suspension from practice before the
Internal Revenue Service, the Director
of Practice will announce in the Internal
Revenue Bulletin the names and ad-
dresses of practitioners who have been
suspended from such practice, their desig-
nation as attorney, certified public ac-
countant, enrolled agent, or enrolled actu-
ary, and date or period of suspension. This
announcement will appear in the weekly
Bulletin at the earliest practicable date
after such action and will continue to ap-
pear in the weekly Bulletins for five suc-
cessive weeks or for as many weeks as is
practicable for each attorney, certified
public accountant, enrolled agent, or en-
rolled actuary so suspended and will be
consolidated and published in the Cumu-
lative Bulletin.
The following individuals have been
placed under consent suspension from
practice before the Internal Revenue Ser-
vice:

1999–13 I.R.B.31March 29, 1999
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:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
with modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some 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 essen-
tial difference between them.
Modified is used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it ap-
plies to both A and B, the prior ruling is
modified because it corrects a published
position. (Compare with amplified and
clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used
in a ruling that lists previously published
rulings that are obsoleted because of
changes in law or regulations. A ruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.
Revoked describes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the
new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example, modified
and superseded describes a situation
where the substance of a previously pub-
lished ruling is being changed in part and
is continued without change in part and it
is desired to restate the valid portion of
the previously published ruling in a new
ruling that is self contained. In this case
the previously published ruling is first
modified and then, as modified, is super-
seded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and
that list is expanded by adding further
names in subsequent rulings. After the
original ruling has been supplemented
several times, a new ruling may be pub-
lished that includes the list in the original
ruling and the additions, and supersedes
all prior rulings in the series.
Suspended is used in rare situations to
show that the 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 for-
merly 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 Procedral 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.
Definition of Terms

March 29, 1999321999–13 I.R.B.
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 1998–1 through 1998–52
will be found in Internal Revenue Bulletin 1999–1,
dated January 4, 1999.
Numerical Finding List
1
Bulletins 1999–1 through 1999–12
Announcements:
99–1, 1999–2 I.R.B. 41
99–2, 1999–2 I.R.B. 44
99–3, 1999–3 I.R.B. 15
99–4, 1999–3 I.R.B. 15
99–5, 1999–3 I.R.B. 16
99–6, 1999–4 I.R.B.24
99–7, 1999–2 I.R.B. 45
99–8, 1999–4 I.R.B.24
99–9, 1999–4 I.R.B. 24
99–10, 1999–5 I.R.B. 63
99–11, 1999–5 I.R.B. 64
99–12, 1999–5 I.R.B. 65
99–13, 1999–6 I.R.B. 18
99–14, 1999–7 I.R.B.60
99–15, 1999–8 I.R.B.78
99–16, 1999–8 I.R.B. 80
99–17, 1999–9 I.R.B. 59
99–19, 1999–10 I.R.B. 63
99–20, 1999–11 I.R.B.53
99–21, 1999–11 I.R.B. 55
99–22, 1999–12 I.R.B. 32
99–25, 1999–12 I.R.B. 35
Notices:
99–1, 1999–2 I.R.B. 8
99–2, 1999–2 I.R.B. 8
99–3, 1999–2 I.R.B. 10
99–4, 1999–3 I.R.B. 9
99–5, 1999–3 I.R.B. 10
99–6, 1999–3 I.R.B. 12
99–7, 1999–4 I.R.B.23
99–8, 1999–5 I.R.B. 26
99–9, 1999–4 I.R.B. 23
99–10, 1999–6 I.R.B. 14
99–11, 1999–8 I.R.B.56
99–12, 1999–9 I.R.B. 44
99–13, 1999–10 I.R.B. 26
99–14, 1999–11 I.R.B.7
99–15, 1999–12 I.R.B.20
Proposed Regulations:
REG–209103–89, 1999–11 I.R.B. 10
REG–209619–93, 1999–10 I.R.B. 28
REG–245562–96, 1999–9 I.R.B. 45
REG–104072–97, 1999–11 I.R.B. 12
REG–114663–97, 1999–6 I.R.B. 15
REG–114664–97, 1999–11 I.R.B. 21
REG–116826–97, 1999–10 I.R.B. 40
REG–118620–97, 1999–9 I.R.B. 46
REG–120168–97, 1999–12 I.R.B. 21
REG–121806–97, 1999–10 I.R.B. 46
REG–104924–98, 1999–10 I.R.B.47
REG–105964–98, 1999–12 I.R.B. 22
REG–106177–98, 1999–12 I.R.B. 25
REG–106219–98, 1999–9 I.R.B. 51
REG–106386–98, 1999–12 I.R.B. 31
REG–106388–98, 1999–11 I.R.B. 27
REG–106564–98, 1999–10 I.R.B.53
REG–106902–98, 1999–8 I.R.B. 57
REG–106905–98, 1999–11 I.R.B. 39
REG–110524–98, 1999–10 I.R.B. 55
REG–111435–98, 1999–7 I.R.B. 55
REG–113694–98, 1999–7 I.R.B. 56
REG–111435–98, 1999–7 I.R.B. 55
REG–113744–98, 1999–10 I.R.B. 59
Proposed Regulations—Continued
REG–114841–98, 1999–11 I.R.B. 41
REG–115433–98, 1999–9 I.R.B. 54
REG–116099–98, 1999–12 I.R.B. 34
REG–116824–98, 1999–7 I.R.B.57
REG–117620–98, 1999–7 I.R.B. 59
REG–119192–98, 1999–11 I.R.B. 45
REG–121865–98, 1999–8 I.R.B.63
Revenue Procedures:
99–1, 1999–1 I.R.B. 6
99–2, 1999–1 I.R.B. 73
99–3, 1999–1 I.R.B. 103
99–4, 1999–1 I.R.B. 115
99–5, 1999–1 I.R.B. 158
99–6, 1999–1 I.R.B. 187
99–7, 1999–1 I.R.B. 226
99–8, 1999–1 I.R.B. 229
99–9, 1999–2 I.R.B. 17
99–10, 1999–2 I.R.B. 11
99–11, 1999–2 I.R.B. 14
99–12, 1999–3 I.R.B. 13
99–13, 1999–5 I.R.B. 52
99–14, 1999–5 I.R.B. 56
99–15, 1999–7 I.R.B. 42
99–16, 1999–7 I.R.B. 50
99–17, 1999–7 I.R.B. 52
99–18, 1999–11 I.R.B.7
Revenue Rulings:
99–1, 1999–2 I.R.B. 4
99–2, 1999–2 I.R.B. 5
99–3, 1999–3 I.R.B. 4
99–4, 1999–4 I.R.B.19
99–5, 1999–6 I.R.B.8
99–6, 1999–6 I.R.B. 6
99–7, 1999–5 I.R.B. 4
99–8, 1999–6 I.R.B.8
99–9, 1999–7 I.R.B.14
99–10, 1999–10 I.R.B. 10
99–11, 1999–10 I.R.B. 18
99–12, 1999–11 I.R.B. 6
99–13, 1999–10 I.R.B. 4
99–15, 1999–12 I.R.B.4
Treasury Decisions:
8789, 1999–3 I.R.B. 5
8791, 1999–5 I.R.B. 7
8792, 1999–7 I.R.B.36
8793, 1999–7 I.R.B.15
8794, 1999–7 I.R.B.4
8795, 1999–7 I.R.B.8
8796, 1999–4 I.R.B. 16
8797, 1999–5 I.R.B. 5
8798, 1999–12 I.R.B. 16
8799, 1999–6 I.R.B. 10
8800, 1999–4 I.R.B. 20
8801, 1999–4 I.R.B. 5
8802, 1999–4 I.R.B. 10
8803, 1999–12 I.R.B. 15
8804, 1999–12 I.R.B. 5
8805, 1999–5 I.R.B. 14
8806, 1999–6 I.R.B.4
8807, 1999–9 I.R.B. 33
8808, 1999–10 I.R.B. 21
8809, 1999–7 I.R.B.27
8810, 1999–7 I.R.B.19
8811, 1999–10 I.R.B. 19
8812, 1999–8 I.R.B. 19
8813, 1999–9 I.R.B. 34
Treasury Decisions—Continued
8814, 1999–9 I.R.B. 4
8815, 1999–9 I.R.B. 31
8816, 1999–8 I.R.B. 4
8817, 1999–8 I.R.B. 51

1999–13 I.R.B.33March 29, 1999
Finding List of Current Action on
Previously Published Items
1
Bulletins 1999–1 through 1999–12
Revenue Procedures:
78–10
Obsoleted by
99–12, 1999–3 I.R.B. 13
94–56
Superseded by
99–9, 1999–2 I.R.B. 17
97–23
Superseded by
99–3, 1999–1 I.R.B. 103
98–1
Superseded by
99–1, 1999–1 I.R.B. 6
98–2
Superseded by
99–2, 1999–1 I.R.B. 73
98–3
Superseded by
99–3, 1999–1 I.R.B. 103
98–4
Superseded by
99–4, 1999–1 I.R.B. 115
98–5
Superseded by
99–5, 1999–1 I.R.B. 158
98–6
Superseded by
99–6, 1999–1 I.R.B. 187
98–7
Superseded by
99–7, 1999–1 I.R.B. 226
98–8
Superseded by
99–8, 1999–1 I.R.B. 229
98–22
Modified and amplified by
99–13, 1999–5 I.R.B. 52
98–56
Superseded by
99–3, 1999–1 I.R.B. 103
98–63
Modified by announcement
99–7, 1999–2 I.R.B. 45
Revenue Rulings:
92–19
Supplemented in part by
99–10, 1999–10 I.R.B. 10
1
A cumulative finding list for previously published
items mentioned in Internal Revenue Bulletins
1998–1 through 1998–52 will be found in Internal
Revenue Bulletin 1999–1, dated January 4, 1999.

Notes
March 29, 1999341999–13 I.R.B.

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