Internal Revenue Bulletin 2001-39 (PDF rendition): IRS Revenue Rulings

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

INCOME TAX
Rev. Rul. 2001–47, page 293.
Interest rates; underpayments and overpayments. The
rate of interest determined under section 6621 of the Code
for the calendar quarter beginning October 1, 2001, will be
7 percent for overpayments (6 percent in the case of a cor-
poration), 7 percent for underpayments, and 9 percent for
large corporate underpayments. The rate of interest paid on
the portion of a corporate overpayment exceeding $10,000
will be 4.5 percent.
Rev. Proc. 2001–49, page 300.
This procedure revokes Rev. Proc. 83–78 (1983–2 C.B.
595) and Rev. Proc. 84–84 (1984–2 C.B. 782) which have
governed the procedures to identify and investigate abusive
tax shelter promotions. In the future, these procedures will
be outlined in the Internal Revenue Manual or other forms of
published guidance. Rev. Procs. 83–78 and 84–84 revoked.
EMPLOYEE PLANS
Notice 2001–58, page 299.
Weighted average interest rate update. The weighted
average interest rate for September 2001 and the resulting
permissible range of interest rates used to calculate current
liability for purposes of the full funding limitation of section
412(c)(7) of the Code are set forth.
EXEMPT ORGANIZATIONS
Notice 2001–55, page 299.
This notice provides guidance to section 529 qualified tuition
programs and to program participants regarding the restric-
tion on investment direction described in section 529(b)(5)
of the Code.
Announcement 2001–94, page 301.
A list is provided of organizations now classified as private
foundations.
Announcement 2001–95, page 303.
A list is provided of organizations that no longer qualify as
organizations to which contributions are deductible under
section 170 of the Code.
EMPLOYMENT TAX
Announcement 2001–92, page 301.
This document announces that the reporting of an employ-
ee’s income arising from the exercise of nonstatutory stock
options on Form W-2 in box 12, using Code V, is optional for
2002 Forms W-2. This announcement also requests com-
ments and suggestions as to alternative methods of collect-
ing the information that employers would report in box 12
using Code V.
ADMINISTRATIVE
Rev. Proc. 2001–49, page 300.
This procedure revokes Rev. Proc. 83–78 (1983–2 C.B.
595) and Rev. Proc. 84–84 (1984–2 C.B. 782) which have
governed the procedures to identify and investigate abusive
tax shelter promotions. In the future, these procedures will
be outlined in the Internal Revenue Manual or other forms of
published guidance. Rev. Procs. 83–78 and 84–84 revoked.
Internal Revenue
bbuulllleettiinn
Bulletin No. 2001–39
September 24, 2001
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
Department of the Treasury
Internal Revenue Service
Announcement of Declaratory Judgment Proceedings Under Section 7428 begins on page 303.
Finding Lists begin on page ii.

September 24, 20012001–39 I.R.B.
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 Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to
these subjects are contained in the other Parts and 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.
The IRS Mission
Provide America’s taxpayers top quality service by help-
ing them understand and meet their tax responsibilities
and by applying the tax law with integrity and fairness to
all.
Introduction
The 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.

2001–39 I.R.B.293September 24, 2001
Section 6621.— Determination
of Interest Rate
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 October 1,
2001, will be 7 percent for overpayments
(6 percent in the case of a corporation), 7
percent for underpayments, and 9 percent
for large corporate underpayments. The
rate of interest paid on the portion of a
corporate overpayment exceeding
$10,000 will be 4.5 percent.
Rev. Rul. 2001–47
Section 6621 of the Internal Revenue
Code establishes the rates for interest on
tax overpayments and tax underpay-
ments. Under § 6621(a)(1), the over-
payment rate beginning October 1,
2001, is the sum of the federal short-
term rate plus 3 percentage points (2
percentage points in the case of a corpo-
ration), except the rate for the portion of
a corporate overpayment of tax exceed-
ing $10,000 for a taxable period is the
sum of the federal short-term rate plus
0.5 of a percentage point for interest
computations made after December 31,
1994. Under § 6621(a)(2), the under-
payment 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 percent-
age points.” See § 6621(c) and
§ 301.6621–3 of the Regulations on Pro-
cedure and Administration for the defin-
ition of a large corporate underpayment
and for the rules for determining the ap-
plicable 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)(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 quar-
terly interest rates to be used for over-
payments and underpayments of tax
under § 6621, the Internal Revenue Ser-
vice 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 July 2001 is 4 percent. Accord-
ingly, an overpayment rate of 7 percent (6
percent in the case of a corporation) and
an underpayment rate of 7 percent are es-
tablished for the calendar quarter begin-
ning October 1, 2001. The overpayment
rate for the portion of a corporate over-
payment exceeding $10,000 for the calen-
dar quarter beginning October 1, 2001, is
4.5 percent. The underpayment rate for
large corporate underpayments for the
calendar quarter beginning October 1,
2001, is 9 percent. These rates apply to
amounts bearing interest during that cal-
endar quarter.
Interest factors for daily compound in-
terest for annual rates of 4.5 percent, 6
percent, 7 percent, and 9 percent are pub-
lished in Tables 14, 17, 19, and 23 of Rev.
Proc. 95–17 (1995–1 C.B. 556, 568, 571,
573, and 577).
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.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Raymond Bailey of the Office of
Associate Chief Counsel (Procedure &
Administration), Administrative Provi-
sions & Judicial Practice Division. For
further information regarding this revenue
ruling, contact Mr. Bailey at (202) 622-
6226 (not a toll-free call).
Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

September 24, 20012942001–39 I.R.B.
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
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—Continued
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATETABLEPGRATETABLEPG
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
2001–39 I.R.B.295September 24, 2001
TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 - PRESENT
NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
1995–1 C.B.
RATE TABLEPAGE
Jan. 1, 1999—Mar. 31, 19997%19573
Apr. 1, 1999—Jun. 30, 19998% 21575
Jul. 1, 1999—Sep. 30, 19998%21575
Oct. 1, 1999—Dec. 31, 19998%21575
Jan. 1, 2000—Mar. 31, 2000 8% 69623
Apr. 1, 2000—Jun. 30, 20009% 71625
Jul. 1, 2000—Sep. 30, 2000 9%71625
Oct. 1, 2000—Dec. 31, 20009%71625
Jan. 1, 2001—Mar. 31, 20019%23 577
Apr. 1, 2001—Jun. 30, 20018%21575
Jul. 1, 2001—Sep. 30, 20017%19573
Oct. 1, 2001—Dec. 31, 20017% 19 573

TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 - PRESENT
CORPORATE OVERPAYMENTS AND UNDERPAYMENTS
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATETABLEPGRATETABLEPG
Jan. 1, 1999—Mar. 31, 19996%175717% 19573
Apr. 1, 1999—Jun. 30, 19997%195738%21575
Jul. 1, 1999—Sep. 30, 19997% 195738%21575
Oct. 1, 1999—Dec. 31, 19997% 195738%21575
Jan. 1, 2000—Mar. 31, 20007%676218%69623
Apr. 1, 2000—Jun. 30, 20008% 696239%71625
Jul. 1, 2000—Sep. 30, 20008% 696239%71625
Oct. 1, 2000—Dec. 31, 20008% 696239%71625
Jan. 1, 2001—Mar. 31, 20018%215759%23577
Apr. 1, 2001—Jun. 30, 20017%19 5738%21575
Jul. 1, 2001—Sep. 30, 20016%175717%19573
Oct. 1, 2001—Dec. 31, 20016%17571 7% 19573
September 24, 20012962001–39 I.R.B.
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
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

TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 - PRESENT—Continued
1995–1 C.B.
RATETABLEPG
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
Jul. 1, 1999—Sep. 30, 199910%25579
Oct. 1, 1999—Dec. 31, 199910%25579
Jan. 1, 2000—Mar. 31, 200010%73627
Apr. 1, 2000—Jun. 30, 200011%75629
Jul. 1, 2000—Sep. 30, 200011%75629
Oct. 1, 2000—Dec. 31, 200011%75629
Jan. 1, 2001—Mar. 31, 200111%27581
Apr. 1, 2001—Jun. 30, 200110%25579
Jul. 1, 2001—Sep. 30, 20019%23577
Oct. 1, 2001—Dec. 31, 20019%23577
2001–39 I.R.B.297September 24, 2001
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, 19986.5%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, 19994.5%14568
Apr. 1, 1999—Jun. 30, 19995.5%16570
Jul. 1, 1999—Sep. 30, 19995.5%16570
Oct. 1, 1999—Dec. 31, 19995.5%16570
Jan. 1, 2000—Mar. 31, 20005.5%64618
Apr. 1, 2000—Jun. 30, 20006.5%66620
Jul. 1, 2000—Sep. 30, 20006.5%66620
Oct. 1, 2000—Dec. 31, 20006.5%66620
Jan. 1, 2001—Mar. 31, 20016.5%18572

September 24, 20012982001–39 I.R.B.
TABLE OF INTEREST RATES FOR CORPORATE
OVERPAYMENTS EXCEEDING $10,000
FROM JANUARY 1, 1995 - PRESENT—Continued
1995–1 C.B.
RATETABLEPG
Apr. 1, 2001—Jun. 30, 20015.5%16570
Jul. 1, 2001—Sep. 30, 20014.5%14568
Oct. 1, 2001—Dec. 31, 20014.5%14568

Section 529—Programs
Notice 2001–55
This notice provides guidance to quali-
fied tuition programs described in § 529
of the Internal Revenue Code and partici-
pants in § 529 programs regarding the re-
striction on investment direction de-
scribed in § 529(b)(5). This notice sets
forth a special rule under which a pro-
gram may permit investments in a § 529
account to be changed annually, and upon
a change in the designated beneficiary of
the account.
Section 529(b)(5) states that a program
shall not be treated as a § 529 program
unless it provides that any contributor to,
or designated beneficiary under, such pro-
gram may not directly or indirectly direct
the investment of any contributions to the
program (or any earnings thereon). The
proposed regulations under § 529, which
were published in the Federal Register on
August 24, 1998 (63 F.R. 45019), provide
that a program does not violate this re-
quirement if it permits a person who es-
tablishes a § 529 account to select among
different investment strategies designed
exclusively by the program, only at the
time when the initial contribution is made
establishing the account. Prop. Treas.
Reg. § 1.529–2(g).
Several commenters on the proposed
regulations suggested that permitting a
participant in a § 529 program to select
among various broad-based investment
strategies offered by a program, both at
the time that contributions are made, and
at certain other times, would be consistent
with § 529(b)(5). For example, these
commenters suggested that it would be
appropriate to allow a change in the in-
vestment strategy selected for an account
where there has been a significant change
in market circumstances since the account
was initially established, where there is a
change in the designated beneficiary of an
account (as permitted under § 529(c)(3)
(C)) and the new beneficiary has a differ-
ent expected matriculation date, or where
the program establishes new investment
options.
The Internal Revenue Service and the
Treasury Department recognize that there
are a number of situations that might war-
rant a change in the investment strategy
with respect to a § 529 account. Accord-
ingly, the Internal Revenue Service and
the Treasury Department expect that the
final regulations under § 529 will provide
that a program does not violate
§ 529(b)(5) if it permits a change in the
investment strategy selected for a § 529
account once per calendar year, and upon
a change in the designated beneficiary of
the account. It is expected that the final
regulations will also provide that, to qual-
ify under this special rule, a program must
(1) allow participants to select only from
among broad-based investment strategies
designed exclusively by the program; and
(2) establish procedures and maintain ap-
propriate records to prevent a change in
investment options from occurring more
frequently than once per calendar year or
upon a change in the designated benefi-
ciary of the account. The Internal Rev-
enue Service and the Treasury Depart-
ment believe that permitting a change in
investment options once per calendar
year, and upon a change in designated
beneficiary should provide sufficient flex-
ibility to address concerns raised by com-
menters.
Section 529 programs and their partici-
pants may rely on this notice pending the
issuance of final regulations under § 529.
The Internal Revenue Service invites
comments on the matter described in this
notice and any other comments relating to
§ 529, including the amendments made
by the Economic Growth and Tax Relief
Reconciliation Act of 2001 (Pub. L. No.
107–16, 115 Stat. 38). Please send writ-
ten comments by December 24, 2001, to:
CC:ITA:RU (Notice 2001–55), room
5226, Internal Revenue Service, POB
7604, Ben Franklin Station, Washington
DC 20044. Submission may be hand-de-
livered Monday through Friday between
the hours of 8 a.m. and 5 p.m. to
CC:ITA:RU (Notice 2001–55), Courier’s
Desk, Internal Revenue Service, 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 submitting com-
ments directly to the IRS Internet site at
http://www.irs.gov/prod/tax_regs/regslist
.html.Comments will be available for
public inspection.
DRAFTING INFORMATION
The principal author of this notice is
Monice Rosenbaum of the Office of Divi-
sion Counsel/Associate Chief Counsel
(Tax Exempt and Government Entities).
For further information regarding this no-
tice contact Ms. Rosenbaum at (202) 622-
6070 (not a toll-free number).
Weighted Average Interest Rate
Update
Notice 2001–58
Notice 88–73 provides guidelines for
determining the weighted average interest
rate and the resulting permissible range of
interest rates used to calculate current lia-
bility for the purpose of the full funding
limitation of § 412(c)(7) of the Internal
Revenue Code as amended by the Om-
nibus Budget Reconciliation Act of 1987
and as further amended by the Uruguay
Round Agreements Act, Pub. L. 103–465
(GATT).
The average yield on the 30-year Trea-
sury Constant Maturities for August 2001
is 5.48 percent.
The following rates were determined
for the plan years beginning in the month
shown below.
2001–39 I.R.B.299September 24, 2001
90% to 105%90% to 110%
WeightedPermissiblePermissible
MonthYearAverageRangeRange
September20015.775.20 to 6.065.20 to 6.35
Part III. Administrative, Procedural, and Miscellaneous

Drafting Information
The principal author of this notice is
Todd Newman of the Employee Plans,
Tax Exempt and Government Entities Di-
vision. For further information regarding
this notice, please call Mr. Newman at
(202) 283-9702 (not a toll-free number).
26 CFR 601.105: Examination of returns and
claims for refund, credit or abatement;
determination of correct tax liability.
(Also Part I, Sections 6700, 6701, 7408).
Rev. Proc. 2001–49
SECTION 1. PURPOSE
This revenue procedure revokes Rev.
Proc. 83–78 (1983–2 C.B. 595) and Rev.
Proc. 84–84 (1984–2 C.B. 782) which de-
scribe procedures which had been used by
the Internal Revenue Service to identify
and investigate abusive tax shelter promo-
tions. The procedures being revoked are
inconsistent with the Service’s current
practices and new organizational struc-
ture. In the future, the Service’s proce-
dures for the identification and investiga-
tion of abusive tax shelter promotions will
be set forth in the Internal Revenue Man-
ual or other forms of published guidance.
SECTION 2. BACKGROUND
.01 Section 7408 of the Internal Rev-
enue Code authorizes the United States, at
the request of the Secretary, to seek an in-
junction to enjoin any person from further
engaging in conduct subject to a penalty
under section 6700 or section 6701.
.02 Section 6700 of the Code imposes
monetary penalties on promoters of abu-
sive tax shelters and other tax avoidance
schemes. These penalties are in addition
to all other penalties provided by law.
Persons subject to the penalties include
any person who organizes, assists in the
organization of, or participates in the sale
of, any interest in an entity, plan or
arrangement, and who makes or furnishes
a statement with respect to any material
tax matter either that the person knows or
has reason to know is a false statement or
that is a gross valuation overstatement.
.03 Section 6701 imposes a penalty on
any person who aids, assists, procures, or
advises with respect to, the preparation or
presentation of any portion of a return, af-
fidavit, claim, or other document, pro-
vided that such person knows (or has rea-
son to believe) that such portion will be
used in connection with any material mat-
ter arising under the internal revenue laws
and also provided that such person knows
that such portion (if so used) would result
in an understatement of the liability for
tax of another person. The penalty im-
posed by section 6701 is in addition to all
other penalties provided by law.
.04 Rev. Proc. 83–78 (1983–2 C.B.
595) provided procedures for the identifi-
cation and investigation of abusive tax
shelter promotions which might be sub-
ject to penalties under section 6700 or in-
junction under section 7408. Rev. Proc.
84–84 (1984–2 C.B. 782) modified Rev.
Proc. 83–78 and described additional
measures the Service was taking to ad-
dress abusive tax shelters. Those revenue
procedures set forth duties for organiza-
tional units of the Service that no longer
exist because of a reorganization of the
Service under the requirements of the In-
ternal Revenue Service Restructuring and
Reform Act of 1998.
.05 The IRS is establishing new proce-
dures for identifying and investigating
abusive tax shelter promotions. These
new procedures will be set forth in the In-
ternal Revenue Manual or in other forms
of published guidance that will be issued
in the future.
SECTION 3. EFFECT ON OTHER
DOCUMENTS
.01 Rev. Proc. 83–78 is revoked.
.02 Rev. Proc. 84–84 is revoked.
SECTION 4. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Brinton T. Warren of the Of-
fice of Associate Chief Counsel, Proce-
dure and Administration (Administrative
Provisions and Judicial Practice Divi-
sion). For further information regarding
this revenue procedure, contact Brinton T.
Warren at (202) 622-4940 (not a toll-free
call).
September 24, 20013002001–39 I.R.B.

Separate Reporting of
Nonstatutory Stock Option
Income in Box 12 of the Form
W-2, Using Code V, Optional for
Year 2002
Announcement 2001–92
I. PURPOSE
This announcement extends through
year 2002, the relief from mandatory re-
porting of compensation resulting from
employer-provided nonstatutory stock op-
tions in box 12 of the Form W-2, using
Code V. In particular, this announcement
provides that, with respect to Forms W-2
issued for the year 2002, the use of Code
V is optional.
The announcement also invites public
comment and suggestions regarding po-
tential methods that would enable more
efficient and cost effective means of col-
lecting the information that would be re-
ported using Code V. Specifically, this
announcement requests proposals for bet-
ter and less burdensome methods of col-
lecting the information about employee
income that arises from the exercise of
nonstatutory stock options, including in-
formation about the presence and amount
of nonstatutory stock option income on an
employee (or former employee) basis.
II. BACKGROUND
When an employee (or former em-
ployee) exercises nonstatutory stock op-
tions, employers are required to report the
excess of the fair market value of the
stock received upon exercise of the option
over the amount paid for that stock. That
amount is reported on Form W-2 in boxes
1, 3 (up to the social security wage base),
and 5.
1
Announcement 2000–97 (2000–48
I.R.B. 557) advised employers that, be-
ginning for 2001 Forms W-2, income
from the exercise of nonstatutory stock
options would also be required to be re-
ported in box 12 and identified by a new
code, Code V – Income from the exercise
of nonstatutory stock options.
In response to employer concerns, An-
nouncement 2001–7 (2001–3 I.R.B. 357)
provided that the use of Code V would be
optional for the 2001 Forms W-2.
III. EXTENSION OF RELIEF
The separate reporting of the amount of
any compensation relating to the exercise
of a nonstatutory stock option in box 12,
using Code V, is optional for the 2002
Forms W-2.
Treasury and the Service will consider
replacing the separate reporting of this
compensation in Box 12, using Code V,
now mandatory for 2003 Forms W-2,
with other cost effective alternatives that
would allow for collection of the informa-
tion regarding the presence and amount of
income from the exercise of nonstatutory
stock options that employers would other-
wise be required to report under Code V.
However, if the comment process out-
lined in Section IV, below, does not result
in the development of cost effective alter-
natives, the new Code V reporting re-
quirement will be mandatory for the 2003
Forms W-2. Therefore, absent future
guidance modifying or eliminating this
reporting requirement, beginning with
year 2003 Forms W-2, any amounts of
compensation relating to the exercise of a
nonstatutory stock option included in
boxes 1, 3 (if applicable), and 5 of the
Form W-2 must also be shown separately
in box 12, using Code V.
IV. REQUEST FOR COMMENTS
This announcement requests comments
and suggestions proposing cost effective
alternatives that would allow the collec-
tion of information regarding the presence
and amount of income from the exercise
of nonstatutory stock options that em-
ployers will be required to report under
Code V beginning with 2003 Forms W-2.
The information to be collected refers not
only to the aggregate amount of nonstatu-
tory stock option income, but also infor-
mation about the presence and amount of
nonstatutory stock option income on an
employee (or former employee) basis.
Comments must be submitted by De-
cember 14, 2001. Treasury and the Ser-
vice will carefully consider all of the
comments received, although Treasury
and the Service will not be able to re-
spond to each comment. Comments
should reference Announcement
2001–92, and be addressed to:
Internal Revenue Service
Tax Forms and Publications Division
W:CAR:MP:FP:F:R—GPF
1111 Constitution Ave., NW
Washington, DC 20224
V. Drafting Information
The principal author of this announce-
ment is Stephen Tackney of the Office of
Division Counsel/Associate Chief Coun-
sel (Tax Exempt and Government Enti-
ties). For further information regarding
this announcement contact Stephen Tack-
ney at (202) 622-6040 or Gerald Fournier
at (202) 622-3186 (not toll-free calls).
Foundations Status of Certain
Organizations
Announcement 2001–94
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-
tions have lost their status as organiza-
tions described in section 501(c)(3), eligi-
ble to receive deductible contributions.
Former Public Charities.The follow-
ing organizations (which have been
treated as organizations that are not pri-
vate foundations described in section
509(a) of the Code) are now classified as
private foundations:
A Better Way Community Development
Corporation, Miami, FL
Abundant Harvest Ministries, Dania, FL
Academy of Business and Commerce,
Inc., Ft. Lauderdale, FL
Adonis Family Farms, Inc.,
Fort Myers, FL
2001–39 I.R.B.301September 24, 2001
Part IV. Items of General Interest
1
For purposes of the special rule under § 1.83
–6(a)(2) that provides that an employee or former
employee is deemed to have included the amount in
gross income, an employer’s inclusion of the non-
statutory stock option income in Box 1 of the Form
W-2 will be sufficient.

Agape Communications Institute, Inc.,
Fort Lauderdale, FL
Aqua Trek Marine Education Center,
Inc., Ft. Myers, FL
Art for Humanity, Inc., Tamarac, FL
Awareness America, Inc.,
Boca Raton, FL
Berean Benevolent Fund, Inc.,
Albany, LA
Big Brothers Big Sisters Association of
Florida, Inc., Ft. Lauderdale, FL
Birmingham Music Club Endowment,
Birmingham, AL
Branches of Love, Inc., Miami, FL
Broward Center for Living, Inc.,
Fort Lauderdale, FL
Canton Community Development
Corporation, Canton, MS
Caribbean Agricultural Research
Institute, Inc., Miami, FL
Caribbean Aid, Inc., Johnstown, PA
Caribbean Development Research
Institute, Inc., Miami, FL
Center for African Cultural Studies, Inc.,
Miami, FL
Childrens & Survivors Fun, Inc.,
Miami, FL
Coalition for Mississippi’s Children,
Jackson, MS
Community Alliance for Economic
Development, Miami, FL
Community Development & Housing
Alliance, Ridgeland, MS
Community of People, Inc., Jackson, MS
Cortez Community Center, Inc.,
Bradenton, FL
Creating Jobs for Life Worldwide, Inc.,
Coral Gables, FL
Cultura Italiana, Inc., Coral Gables, FL
Dennis Dreams Ministries, Inc.,
West Palm Beach, FL
Diabetic Foundation of America, Inc.,
West Palm Beach, FL
Dothan-Houston County Rotary
Foundation, Inc., Dothan, AL
E-Comb, Inc., Miami Beach, FL
Ecudrama Ministries, Inc., Clinton, MS
Ekdikeo Rising, Inc., Coral Springs, FL
Emmanuel Haitian Christian Community
Center, Inc., Miami, FL
Equal Housing Fund of Florida Corp.,
Miami, FL
Faith House International, Inc.,
Boca Raton, FL
Family Approach to Child Enrichment,
Inc., Miami, FL
Family Life Matters Institute, Inc.,
Riverdale, GA
Family Resource Connection, Inc.,
Venice, FL
Feeding the Mind Foundation, Inc.,
Miami, FL
Female and Safe, Inc., New York, NY
Flames Youth Basketball,
Riviera Beach, FL
Fort Lauderdale Community
Development Corporation, Inc.,
Ft. Lauderdale, FL
Friends of Sandoway House Nature
Center, Inc., Boca Raton, FL
Friends of the West Palm Beach Public
Library, Inc., W. Palm Beach, FL
Future Champs, Inc., Hialeah, FL
Gamma Theta Educational Foundation,
Inc., Starkvile, MS
Glades Jim Wilson Real Life Crusade,
Inc., Belle Glade, FL
Gods Rest Ministries, Inc.,
Okeechobee, FL
Gold Coast DMDA, Inc., Coral Gable, FL
Golden Wattle Refuge, Inc.,
Vero Beach, FL
Good Ole Boys Club, Inc., Parrish, FL
Grand Prix Foundation, Inc.,
Homestead, FL
Greater Mt. Calvary - Calvary Care
(Community Vision Development
Agency, Inc.), Jackson, MS
Guatemalan-American Childrens
Foundation, Inc., Coral Gables, FL
Heart Acts to Follow, Inc., Miami, FL
Heartland Safety Clowns, Inc.,
Sebring, FL
Hialeah Athletic Association, Inc.,
Hialeah, FL
Historical Foundation of Palm Beach
County, Inc., West Palm Beach, FL
Historical Knights Building, Inc.,
Pt. Charlotte, FL
Holy Redeemer Independent Episcopal
Church, Inc., Ft. Lauderdale, FL
Hope House of Jackson, Jackson, MS
Hope Springs, Inc., Boca Raton, FL
House of Refuge, Inc., Latana, FL
Iglesia Biblica Buenos Nuevas, Inc.,
Palm Beach Gardens, FL
Jazz Hall Friends, Birmingham, AL
Key West Aids Memorial, Inc.,
Keywest, FL
Kids Prep. Child & Train Ctr.,
Grenada, MS
La Hora Bautista, Miami, FL
Latin American Communications
Network, Inc., Miami, FL
Lees Tae Kwan Do Charity, Inc.,
N. Palm Beach, FL
Light Up Miami, Inc., Miami, FL
Look Organization-Literacy of Our Kids,
McComb, MS
Loving Family Foundation, Inc.,
West Palm Beach, FL
Marine Mammal Conservancy, Inc.,
Key Largo, FL
Medical Foundation of Southwest
Florida, Inc., Ft. Myers, FL
Miami Affordable Housing, Inc.,
Miami, FL
Miami Wildcats, Inc., Miami, FL
Mission Possible Ministries, Inc.,
Naples, FL
Mississippi Confederated Child Care
Nutrition, Inc., Tunica, MS
Mississippi Criminal Justice Assoc.,
Jackson, MS
Mount-Horeb Community Action
Agency, Inc., Hollandale, MS
Mr. B’s Learning Center, Inc., Pearl, MS
Narrow Gate Publications, Inc., Dania, FL
National Retinoblastoma Research &
Support Foundation, Inc., Miami, FL
Opportunities and Enrichment Services,
Inc., Miami, FL
Opportunities, Inc., Milford, CT
Palm Beach County Childrens Cultural
Community Center, Inc., West Palm
Beach, FL
Patton Lane Community Civic Center,
Enid, MS
Peterbos Outreach, Belzoni, MS
Phlex Diversified Service, Inc.,
Jackson, MS
Pike County United Way, Inc.,
(Association of Pike County Charities,
Inc.), Troy, AL
Project Debby, Inc., Hypoluxo, FL
Protecting Our Loved Ones-Polo-
International, Miami, FL
PWA Nourishment Organization, Inc.,
Margate, FL
Quality Housing Foundation, Inc.,
Miami, FL
Recovery Haven, Inc., North Miami, FL
Redland Tropical Gardens Botanical
Foundation, Inc., Homestead, FL
Rescue Autistic Society Corp.,
Miami Beach, FL
Sarasota Youth Baseball Club, Inc.,
Sarasota, FL
Seabreeze Elementary-PTO,
Brandenton, FL
Second Home Daycare Center, Inc.,
Ellisville, MS
Set Free Ministries, Richland, MS
Sheridan Foundation, Inc., Miami, FL
September 24, 20013022001–39 I.R.B.

South Florida Storm, Inc., Miami, FL
South Florida Super Bowl Host
Committee Foundation, Inc.,
Miami, FL
South Florida Veterans Foundation, Inc.,
Miami, FL
South Florida Youth Scholarship
Foundation, Inc., Boca Raton, FL
St. Columbia Interfaith Schools, Inc.,
Utica, MS
St. Francis Village, Inc.,
Coral Springs, FL
St. Thomas Community Services, Inc.,
Hollywood, FL
Strong Families, Inc., Hattiesburg, MS
Sunlight Ministries, Inc.,
Brookhaven, MS
Temple Finance, Inc., Louin, MS
Tender Loving Care Complex, Inc.,
Cape Coral, FL
Tomorrows Leaders, Inc., Avon Park, FL
Trinity Parents League, Natches, MS
Trumpeter Foundation, Inc., Miami, FL
Tuscaloosa Voices of Tomorrow, Inc.,
Tuscaloosa, AL
USA Police Athletic League, Inc.,
Palm Beach Gardens, FL
Visionaries Incorporated, Lauderhill, FL
Vulcan Charity Golf Foundation, Inc.,
Birmingham, AL
W. H. Roberts Foundation, Inc.,
Coconut Grove, FL
Walthal County Animal Shelter,
Tylertown, MS
Wayne Johnsons Pre-School, Inc.,
Oxford, MS
Wesley Youth Foundation, Inc.,
Jackson, MS
Wiregrass STEP Foundation, Dothan, AL
Witnesses for the Eucharistic Jesus
Foundation, Jackson, MS
Women Fighters for Democracy Corp.,
Miami, FL
Womens Coalition for the Disadvantaged,
Inc., Plantation, FL
Womens Institute for Creativity, Inc.,
Miami, FL
Wonder Education, Inc., Miami, FL
World Nature Preserve, Inc., Miami, FL
Youth Philharmonic Orchestra, Inc.,
Miami, FL
If an organization listed above sub-
mits information that warrants the re-
newal of its classification as a public
charity or as a private operating founda-
tion, the Internal Revenue Service will
issue a ruling or determination letter
with the revised classification as to
foundation status. Grantors and contrib-
utors may thereafter rely upon such rul-
ing or determination letter as provided
in section 1.509(a)–7 of the Income Tax
Regulations. It is not the practice of the
Service to announce such revised classi-
fication of foundation status in the Inter-
nal Revenue Bulletin.
Deletions From Cumulative List
of Organizations Contributions
to Which are Deductible Under
Section 170 of the Code
Announcement 2001–95
The name of an organization that no
longer qualifies as an organization de-
scribed in section 170(c)(2) of the Internal
Revenue Code of 1986 is listed below.
Generally, the Service will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the Service is not
precluded from disallowing a deduction
for any contributions made after an orga-
nization ceases to qualify under section
170(c)(2) if the organization has not
timely filed a suit for declaratory judg-
ment under section 7428 and if the con-
tributor (1) had knowledge of the revoca-
tion of the ruling or determination letter,
(2) was aware that such revocation was
imminent, or (3) was in part responsible
for or was aware of the activities or omis-
sions of the organization that brought
about this revocation.
If on the other hand a suit for declara-
tory judgment has been timely filed, con-
tributions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue to
be deductible. Protection under section
7428(c) would begin on September 24,
2001, and would end on the date the
court first determines that the organiza-
tion is not described in section 170(c)(2)
as more particularly set forth in section
7428(c)(1). For individual contributors,
the maximum deduction protected is
$1,000, with a husband and wife treated
as one contributor. This benefit is not
extended to any individual, in whole or
in part, for the acts or omissions of the
organization that were the basis for revo-
cation.
San Diego World Heritage Foundation,
Inc., San Diego, CA
Section 7428(c) Validation of
Certain Contributions Made
During Pendency of Declaratory
Judgment Proceedings
This announcement serves notice to po-
tential donors that the organization listed
below has recently filed timely declara-
tory judgment suit under section 7428 of
the Code, challenging revocation of it’s
status as an eligible donee under section
170(c)(2).
Protection under section 7428(c) of the
Code begins on the date that the notice of
revocation is published in the Internal
Revenue Bulletin and ends on the date on
which a court first determines that an or-
ganization is not described in section
170(c)(2), as more particularly set forth in
section 7428(c)(1). In the case of individ-
ual contributors, the maximum amount of
contributions protected during this period
is limited to $1,000.00, with a husband
and wife being treated as one contributor.
This protection is not extended to any in-
dividual who was responsible, in whole or
in part, for the acts or omissions of the or-
ganization that were the basis for the re-
vocation. This protection also applies
(but without limitation as to amount) to
organizations described in section
170(c)(2) which are exempt from tax
under section 501(a). If the organization
ultimately prevails in its declaratory judg-
ment suit, deductibility of contributions
would be subject to the normal limitations
set forth under section 170.
San Diego World Heritage Foundation,
Inc., San Diego, CA
2001–39 I.R.B.303September 24, 2001

September 24, 2001i2001–39 I.R.B.
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 Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Definition of Terms

2001–39 I.R.B.iiSeptember 24, 2001
Numerical Finding List
1
Bulletins 2001–27 through 2001–38
Announcements:
2001–69, 2001–27 I.R.B. 23
2001–70, 2001–27 I.R.B. 23
2001–71, 2001–27 I.R.B. 26
2001–72, 2001–28 I.R.B. 39
2001–73, 2001–28 I.R.B. 40
2001–74, 2001–28 I.R.B. 40
2001–75, 2001–28 I.R.B. 42
2001–76, 2001–29 I.R.B. 67
2001–77, 2001–30 I.R.B. 83
2001–78, 2001–30 I.R.B. 87
2001–79, 2001–31 I.R.B. 97
2001–80, 2001–31 I.R.B. 98
2001–81, 2001–33 I.R.B. 175
2001–82, 2001–32 I.R.B. 123
2001–83, 2001–35 I.R.B. 205
2001–84, 2001–35 I.R.B. 206
2001–85, 2001–36 I.R.B. 219
2001–86, 2001–35 I.R.B. 207
2001–87, 2001–35 I.R.B. 208
2001–88, 2001–36 I.R.B. 220
2001–89, 2001–38 I.R.B. 291
2001–90, 2001–35 I.R.B. 208
2001–91, 2001–36 I.R.B. 221
Court Decisions:
2070, 2001–31 I.R.B. 90
Notices:
2001–39, 2001–27 I.R.B. 3
2001–41, 2001–27 I.R.B. 2
2001–42, 2001–30 I.R.B. 70
2001–43, 2001–30 I.R.B. 72
2001–44, 2001–30 I.R.B. 77
2001–45, 2001–33 I.R.B. 129
2001–46, 2001–32 I.R.B. 122
2001–47, 2001–36 I.R.B. 212
2001–48, 2001–33 I.R.B. 130
2001–49, 2001–34 I.R.B. 188
2001–50, 2001–34 I.R.B. 189
2001–51, 2001–34 I.R.B. 190
2001–52, 2001–35 I.R.B. 203
2001–53, 2001–37 I.R.B. 225
2001–54, 2001–37 I.R.B. 225
2001–56, 2001–38 I.R.B. 277
2001–57, 2001–38 I.R.B. 279
Proposed Regulations:
REG–110311–98, 2001–35 I.R.B. 204
REG–106917–99, 2001–27 I.R.B. 4
REG–103735–00, 2001–35 I.R.B. 204
REG–103736–00, 2001–35 I.R.B. 204
REG–100548–01, 2001–29 I.R.B. 67
REG–106431–01, 2001–37 I.R.B. 272
Railroad Retirement Quarterly Rates:
2001–27, I.R.B. 1
Revenue Procedures:
2001–39, 2001–28 I.R.B. 38
2001–40, 2001–33 I.R.B. 130
2001–41, 2001–33 I.R.B. 173
2001–42, 2001–36 I.R.B. 212
2001–43, 2001–34 I.R.B. 191
2001–44, 2001–35 I.R.B. 203
Revenue Procedures—Continued:
2001–45, 2001–37 I.R.B. 227
2001–46, 2001–37 I.R.B. 263
Revenue Rulings:
2001–30, 2001–29 I.R.B. 46
2001–33, 2001–32 I.R.B. 118
2001–34, 2001–28 I.R.B. 31
2001–35, 2001–29 I.R.B. 59
2001–36, 2001–32 I.R.B. 119
2001–37, 2001–32 I.R.B. 100
2001–38, 2001–33 I.R.B. 124
2001–39, 2001–33 I.R.B. 125
2001–40, 2001–38 I.R.B. 276
2001–41, 2001–35 I.R.B. 193
2001–42, 2001–37 I.R.B. 223
2001–43, 2001–36 I.R.B. 209
2001–44, 2001–37 I.R.B. 223
Treasury Decisions:
8947, 2001–28 I.R.B. 36
8948, 2001–28 I.R.B. 27
8949, 2001–28 I.R.B. 33
8950, 2001–28 I.R.B. 34
8951, 2001–29 I.R.B. 63
8952, 2001–29 I.R.B. 60
8953, 2001–29 I.R.B. 44
8954, 2001–29 I.R.B. 47
8955, 2001–32 I.R.B. 101
8956, 2001–32 I.R.B. 112
8957, 2001–33 I.R.B. 125
8958, 2001–34 I.R.B. 183
8959, 2001–34 I.R.B. 185
8960, 2001–34 I.R.B. 176
8961, 2001–35 I.R.B. 194
8962, 2001–35 I.R.B. 201
8963, 2001–35 I.R.B. 197
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2001–1 through 2001–26
is in Internal Revenue Bulletin 2001–27, dated July
2, 2001.

September 24, 2001iii2001–39 I.R.B.
Finding List of Current Actions on
Previously Published Items
1
Bulletins 2001–27 through 2001–38
Announcements:
2000–48
Modified by
Notice 2001–43, 2001–30 I.R.B. 72
Notices:
98–52
Modified by
Notice 2001–56, 2001–38 I.R.B. 277
2001–4
Modified by
Notice 2001–43, 2001–30 I.R.B. 72
2001–9
Modified by
Notice 2001–46, 2001–32 I.R.B. 122
2001–15
Supplemented by
Notice 2001–51, 2001–34 I.R.B. 190
2001–42
Modified by
Notice 2001–57, 2001–38 I.R.B. 279
Proposed Regulations:
LR–97–79
Withdrawn by
REG–100548–01, 2001–29 I.R.B. 67
LR–107–84
Withdrawn by
REG–100548–01, 2001–29 I.R.B. 67
REG–110311–98
Supplemented by
T.D. 8961, 2001–35 I.R.B. 194
REG–106917–99
Corrected by
Ann. 2001–86, 2001–35 I.R.B. 207
REG–103735–00
Supplemented by
T.D. 8961, 2001–35 I.R.B. 194
REG–103736–00
Supplemented by
T.D. 8961, 2001–35 I.R.B. 194
REG–107186–00
Corrected by
Ann. 2001–71, 2001–27 I.R.B. 26
REG–130477–00
Supplemented by
Ann. 2001–82, 2001–32 I.R.B. 123
REG–130481–00
Supplemented by
Ann. 2001–82, 2001–32 I.R.B. 123
Revenue Procedures:
93–27
Clarified by
Rev. Proc. 2001–43, 2001–34 I.R.B. 191
Revenue Procedures—Continued:
97–13
Modified by
Rev. Proc. 2001–39, 2001–28 I.R.B. 38
98–44
Superseded by
Rev. Proc. 2001–40, 2001–33 I.R.B. 130
99–27
Superseded by
Rev. Proc. 2001–42, 2001–36 I.R.B. 212
99–49
Modified and amplified by
Rev. Proc. 2001–46, 2001–37 I.R.B. 263
2000–20
Modified by
Notice 2001–42, 2001–30 I.R.B. 70
2000–39
Corrected by
Ann. 2001–73, 2001–28 I.R.B. 40
2001–2
Modified by
Rev. Proc. 2001–41, 2001–33 I.R.B. 173
2001–6
Modified by
Notice 2001–42, 2001–30 I.R.B. 70
Revenue Rulings:
57–589
Obsoleted by
REG–106917–99, 2001–27 I.R.B. 4
65–316
Obsoleted by
REG–106917–99, 2001–27 I.R.B. 4
68–125
Obsoleted by
REG–106917–99, 2001–27 I.R.B. 4
69–563
Obsoleted by
REG–106917–99, 2001–27 I.R.B. 4
70–379
Obsoleted by
Rev. Rul. 2001–39, 2001–33 I.R.B. 125
74–326
Obsoleted by
REG–106917–99, 2001–27 I.R.B. 4
78–127
Modified by
Rev. Rul. 2001–40, 2001–38 I.R.B. 276
78–179
Obsoleted by
REG–106917–99, 2001–27 I.R.B. 4
92–19
Supplemented by
Rev. Rul. 2001–38, 2001–33 I.R.B. 124
Treasury Decisions:
8948
Corrected by
Ann. 2001–90, 2001–35 I.R.B. 208
1
A cumulative list of current actions on previously
published items in Internal Revenue Bulletins
2001–1 through 2001–26 is in Internal Revenue
Bulletin 2001–27, dated July 2, 2001.

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