Internal Revenue Bulletin 1997-34 (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. 97–33, page 4.
Fringe benefits aircraft valuation formula. For pur-
poses of section 1.61–21(g) of the regulations, relating to
the rule for valuing non-commercial flights on employer-pro-
vided aircraft, the Standard Industry Fare Level, cents-per-
mile rates and terminal charges in effect for the second
half of 1997 are set forth.
Rev. Rul. 97–34, page 4.
Low-income housing credit; satisfactory bond; “bond
factor” amounts for the period July through Septem-
ber 1997. This ruling announces the monthly bond factor
amounts to be used by taxpayers who dispose of qualified
low-income buildings or interests therein during the period
July through September 1997.
EMPLOYEE PLANS
T.D. 8727, page 5.
Final and temporary regulations under section 401 of the
Code relate to the remedial amendment period during which
a sponsor of a qualified retirement plan or an employer main-
taining a qualified retirement plan can make retroactive
amendments to the plan to eliminate certain qualification
defects for the entire period.
Announcement 97–81, page 12.
Form 5310, Application for Determination for Terminating
Plan; Form 6088, Distributable Benefits From Employee
Benefit Pension Plans; and Form 5310A, Notice of Plan
Merger or Consolidation, Spinoff, or Transfer of Plan Assets
or Liabilities—Notice of Qualified Separate Lines of
Business, have been revised as of June 1997.
EXEMPT ORGANIZATIONS
T.D. 8726, page 7.
Final regulations under section 501(c)(5) of the Code clarify
requirements an organization must meet in order to be
exempt from tax.
Announcement 97–83, page 13.
A list is provided of organizations that no longer qualify as
organizations for which contributions are deductible under
section 170 of the Code.
Announcement 97–84, page 13.
A list is provided of organizations now classified as private
foundations.
EXCISE TAX
Announcement 97–78, page 11.
This announces the excise tax changes made by the
Taxpayer Relief Act of 1997 that affect Form 720, Quarterly
Federal Excise Tax Return, for the 3rd quarter.
ADMINISTRATIVE
Notice 97–46, page 10.
T.D. 8145, 1987–2 C.B. 47, relating to the allocation of
interest expense among a taxpayer’s expenditures, is cor-
rected.
Rev. Proc. 97–32A, page 10.
Reproduction of forms: Forms 1096, 1098, 1099
series, 5498, and W–2G. This addendum to Rev. Proc.
97–32, 1997–27 I.R.B. 9, allows for the location of the pol-
icyholder’s name and address, and the location of the
insured’s name and address to be reversed on Copy C, Form
1099–LTC. Rev. Proc. 97–32 modified and amplified.
Announcement 97–80, page 12.
An updated edition of Publication 1544, Reporting Cash Pay-
ments of over $10,000 (revised August 1997), is now avail-
able.
Announcement 97–82, page 12.
T.D. 8718, 1997–22 I.R.B. 4, relating to arbitrage and related
restrictions applicable to tax-exempt bonds issued by state
and local governments, is corrected.
Internal Revenue
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Bulletin No. 1997–34
August 25, 1997
Finding Lists begin on page 16.
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

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

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 of a permanent nature are consoli-
dated 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.
With the exception of the Notice of Proposed Rulemaking
and the disbarment and suspension list included in this part,
none of these announcements are consolidated in the Cumu-
lative Bulletins.
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 quarterly and
semiannual basis, and are published in the first Bulletin of the
succeeding quarterly and semiannual period, respectively.
3
Introduction
The contents of this publication are not copyrighted and may be reprinted freely. Acitation 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.

August 25, 199741997–34 I.R.B.
Section 42.—Low-Income
Housing Credit
Low-income housing credit; satisfac-
tory bond; “bond factor” amounts for
the period July through September
1997.This ruling announces the monthly
bond factor amounts to be used by tax-
payers who dispose of qualified low-in-
come buildings or interests therein during
the period July through September 1997.
Rev. Rul. 97–34
In Rev. Rul. 90–60, 1990–2 C.B. 3, the
Internal Revenue Service provided guid-
ance to taxpayers concerning the general
methodology used by the Treasury De-
partment in computing the bond factor
amounts used in calculating the amount of
bond considered satisfactory by the Sec-
retary under § 42(j)(6) of the Internal
Revenue Code. It further announced that
the Secretary would publish in the Inter-
nal Revenue Bulletin a table of “bond fac-
tor” amounts for dispositions occurring
during each calendar month.
This revenue ruling provides in Table 1
the bond factor amounts for calculating
the amount of bond considered satisfac-
tory under § 42(j)(6) for dispositions of
qualified low-income buildings or inter-
ests therein during the period July
through September 1997.
Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
TABLE 1
REV. RUL. 97–34
MONTHLYBOND FACTOR AMOUNTS FOR DISPOSITIONS EXPRESSED
AS APERCENTAGE OF TOTALCREDITS
CALENDAR YEAR BUILDING PLACED IN SERVICE
OR, IF SECTION 42(f)(1) ELECTION WAS MADE,
THE SUCCEEDING CALENDAR YEAR
MONTH OF
DISPOSITION 19871988198919901991199219931994199519961997
JUL‘9778.3380.6583.1986.1589.6193.5497.58101.48105.30109.33112.52
AUG ‘9778.1180.4382.9685.9289.3693.2797.30101.18105.01109.06112.52
SEP‘9777.9080.21 82.7485.6889.1293.0197.03100.90104.73108.81112.52
For a list of bond factor amounts ap-
plicable to dispositions occurring during
other calendar years, see the following
revenue rulings: Rev. Rul. 90-60, 1990–2
C.B. 3, for dispositions occurring during
calendar years 1987, 1988, and 1989;
Rev. Rul. 90–88, 1990–2 C.B. 7, for dis-
positions occurring during calendar year
1990; Rev. Rul. 91–67, 1991–2 C.B. 13,
for dispositions occurring during calendar
year 1991; Rev. Rul. 92–101, 1992–2
C.B. 9, for dispositions occurring during
calendar year 1992; Rev. Rul 93–83,
1993–2 C.B. 6, for dispositions occurring
during calendar year 1993; Rev. Rul.
94–71, 1994–2 C.B. 4, for dispositions
occurring during calendar year 1994; Rev.
Rul. 95–83, 1995–2 C.B. 8, for disposi-
tions occurring during calendar year
1995; Rev. Rul. 96–16, 1996–1 C.B. 3,
for dispositions occurring during the pe-
riod January through March 1996; Rev.
Rul. 96–33, 1996–27 I.R.B. 4, for disposi-
tions occurring during the period April
through June 1996; Rev. Rul. 96–45,
1996–39 I.R.B. 5, for dispositions occur-
ring during the period July through Sep-
tember 1996; Rev. Rul. 96–59, 1996–50
I.R.B. 4, for dispositions occurring during
the period October through December
1996; Rev. Rul. 97–16, 1997–13 I.R.B. 4,
for dispositions occurring during the pe-
riod January through March 1997; and
Rev. Rul. 97–25, 1997–23 I.R.B. 4, for
dispositions occurring during the period
April through June 1997.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Jack Malgeri of the Office of As-
sistant Chief Counsel (Passthroughs and
Special Industries). For further informa-
tion regarding this revenue ruling, contact
Mr. Malgeri at (202) 622-3040 (not a toll-
free call).
Section 61.—Gross Income
Defined
26 CFR 1.61–21: Taxation of fringe benefits.
Fringe benefits aircraft valuation
formula.For purposes of section
1.61–21(g) of the regulations, relating to
the rule for valuing non-commercial
flights on employer-provided aircraft, the
Standard Industry Fare Level, cents-per-
mile rates and terminal charges in effect
for the second half of 1997 are set forth.
Rev. Rul. 97–33
For purposes of the taxation of fringe
benefits under section 61 of the Internal
Revenue Code, section 1.61-21(g) of the
Income Tax Regulations provides a rule
for valuing noncommercial flights on em-
ployer-provided aircraft. Section 1.61-
21(g)(5) provides an aircraft valuation
formula to determine the value of such
flights. The value of a flight is determined
under the base aircraft valuation formula
(also known as the Standard Industry Fare
Level formula or SIFL) by multiplying
the SIFLcents-per-mile rates applicable
for the period during which the flight was
taken by the appropriate aircraft multiple
provided in section 1.61-21(g)(7) and
then adding the applicable terminal

1997–34 I.R.B.5August 25, 1997
charge. The SIFLcents-per-mile rates in
the formula and the terminal charge are
calculated by the Department of Trans-
portation and are reviewed semi-annually.
The following chart sets forth the ter-
minal charges and SIFLmileage rates:
Period During Which Terminal SIFLMileage
the Flight Is Taken Charge Rates
7/1/97-12/31/97 $31.72Up to 500 miles
= $.1735 per mile
501-1500 miles
= $.1323 per mile
Over 1500 miles
= $.1272 per mile
DRAFTING INFORMATION
The principal author of this revenue
ruling is Felicia A. Daniels of the Office
of the Associate Chief Counsel (Em-
ployee Benefits and Exempt Organiza-
tions). For further information regarding
this revenue ruling contact, Ms. Daniels
on (202) 622-6050 (not a toll-free call).
Section 401.—Qualified
Pension, Profit-Sharing, and
Stock Bonus Plans
26 CFR 1.401(b)–1: Certain retroactive changes in
plan.
T.D. 8727
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
Remedial Amendment Period
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final and temporary regula-
tions.
SUMMARY: This document contains
final and temporary regulations relating
to the remedial amendment period, dur-
ing which a sponsor of a qualified retire-
ment plan or an employer that maintains
a qualified retirement plan can make
retroactive amendments to the plan to
eliminate certain qualification defects
for the entire period. These final and
temporary regulations clarify the scope
of the Commissioner’s authority to pro-
vide relief from plan disqualification
under the regulations, to enable the
Commissioner to provide appropriate re-
lief for plan amendments relating to
changes to the plan qualification rules
made in the Small Business Job Protec-
tion Act of 1996 and the Uruguay Round
Agreements Act of 1994. These final
and temporary regulations affect spon-
sors of qualified retirement plans, and
employers that maintain qualified retire-
ment plans. The text of the temporary
regulations also serves as the text of the
proposed regulations set forth in
REG.–106043–97.
DATES: These regulations are effective
August 1, 1997.
FOR FURTHER INFORMATION CON-
TACT: Linda S. F. Marshall, (202) 622-
6030 (not a toll-free number).
SUPPLEMENTARYINFORMATION:
Background
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) under section 401(b). The tempo-
rary regulations provide guidance to clar-
ify the scope of the Commissioner’s au-
thority to provide relief from plan
disqualification under section 401(b) and
the regulations. This guidance will en-
able the Commissioner to provide appro-
priate relief concerning the timing of plan
amendments relating to changes to the
plan qualification rules made in the Small
Business Job Protection Act of 1996,
Pub. L. No. 104–188, and the Uruguay
Round Agreements Act of 1994, Pub. L.
No. 103–465, as well as for other plan
amendments that may be needed as a re-
sult of future changes to the Internal Rev-
enue Code.
Explanation of Provisions
Section 401(b) provides that a plan is
considered to satisfy the qualification re-
quirements of section 401(a) for the pe-
riod beginning with the date on which it
was put into effect, or for the period be-
ginning with the earlier of the date on
which any amendment that caused the
plan to fail to satisfy those requirements
was adopted or put into effect, and ending
with the time prescribed by law for filing
the employer’s return for the taxable year
in which that plan or amendment was
adopted (including extensions) or such
later time as the Secretary may designate.
The relief provided under section 401(b)
applies only if all provisions of the plan
needed to satisfy the qualification require-
ments are in effect by the end of the spec-
ified period and have been made effective
for all purposes for the entire period.
Section 1.401(b)–1(b) lists the plan
provisions that may be amended retroac-
tively pursuant to rules of section 401(b).
These plan provisions, termed “disquali-
fying provisions,” include the plan provi-
sions listed in section 401(b), as well as
plan provisions that result in failure of a
plan to satisfy the qualification require-
ments of the Code by reason of a change
in those requirements effected by the leg-
islation listed in §1.401(b)–1(b)(2)(i) and
(ii). Under §1.401(b)–1(b)(2)(ii), a dis-
qualifying provision also includes a plan
provision that is integral to a qualification
requirement changed by specified legisla-
tion. Section 1.401(b)-1(b)(2)(iii), as in
effect prior to amendment by the final
regulations, provided that a disqualifying
provision includes a plan provision that
results in failure of the plan to satisfy the
Code’s qualification requirements by rea-
son of a change in those requirements ef-

August 25, 199761997–34 I.R.B.
fected by amendments to the Code, that is
designated by the Commissioner, at the
Commissioner’s discretion, as a disquali-
fying provision.
Former §1.401(b)–1(c), which has been
redesignated §1.401(b)–1(d) under the
final regulations, provides rules for deter-
mining the period for which the relief pro-
vided under section 401(b) applies (the
“remedial amendment period”). Former
§1.401(b)–1(c)(1) defines the beginning
of the remedial amendment period for the
disqualifying provisions listed in
§1.401(b)–1(b)(1) and §1.401(b)–1(b)(2)-
(i) and (ii).
The temporary regulations make cer-
tain changes to clarify the scope of the
Commissioner’s authority to provide re-
lief from plan disqualification under sec-
tion 401(b). These changes are needed to
clarify the rules relating to the plan provi-
sions that may be designated by the Com-
missioner as disqualifying provisions
based on amendments to the plan qualifi-
cation requirements of the Internal Rev-
enue Code. Section 1.401(b)–1T(b)(3)
provides that a disqualifying provision
includes a plan provision designated by
the Commissioner, at the Commis-
sioner’s discretion, as a disqualifying
provision that either (1) results in the fail-
ure of the plan to satisfy the qualification
requirements of the Code by reason of a
change in those requirements; or (2) is in-
tegral to a qualification requirement of
the Code that has been changed. Section
1.401(b)–1T(c)(2) provides the Commis-
sioner with explicit authority to impose
limits and provide additional rules re-
garding the amendments that may be
made with respect to disqualifying provi-
sions during the remedial amendment pe-
riod. Section 1.401(b)–1T(d)(1)(iv) and
(v) provide conforming rules regarding
the beginning of the remedial amendment
period for disqualifying provisions de-
scribed in §1.401(b)–1T(b)(3).
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in EO 12866.
Therefore, a regulatory assessment is not
required. It also has been determined that
section 553(b) of the Administrative Pro-
cedure Act (5 U.S.C. chapter 5) does not
apply to these regulations and, because
the regulation does not impose a collec-
tion of information on small entities, the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant to
section 7805(f) of the Internal Revenue
Code, these temporary regulations will be
submitted to the Chief Counsel for Advo-
cacy of the Small Business Administra-
tion for comment on their impact on small
business.
Drafting Information
The principal author of these regula-
tions is Linda S. F. Marshall, Office of the
Associate Chief Counsel (Employee Ben-
efits and Exempt Organizations). How-
ever, other personnel from the IRS and
Treasury Department participated in their
development.
*****
Amendments to the Regulations
Accordingly, 26 CFR part 1 is amended
as follows:
PART1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding one entry for
§1.401(b)–1 to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
§1.401(b)–1 also issued under 26
U.S.C. 401(b). * * *
§1.401(b)–1 [Amended]
Par. 2. Section 1.401(b)–1 is amended
as follows:
1. Paragraphs (c), (d) and (e) are redes-
ignated as paragraphs (d), (e) and (f), re-
spectively.
2. Following newly redesignated para-
graph (d)(2)(iv), the two undesignated
paragraphs are designated as paragraphs
(d)(3) and (d)(4), respectively.
Par. 3. In the list below, for each sec-
tion indicated in the left column, remove
the language in the middle column, and
add the language in the right column.
SECTIONREMOVEADD
1.401(b)–1 (a), first sentence(c), (d) and (e)(d), (e) and (f)
1.401(b)–1 (b)(1) effective oreffective.
1.401(b)–1 (d)(1)(ii)earlier), orearlier),
1.401(b)–1 (d)(1)(iii)such provision.such provision, or
1.401(b)–1 (d)(2) introductory textparagraph (d)paragraph (e)
1.401(b)–1 (d)(3)(c)(2)(i), (c)(2)(ii), and (c)(2)(iii)(d)(2)(i), (d)(2)(ii) and (d)(2)(iii)
1.401(b)–1 (d)(4)(c)(2)(d)(2)
1.401(b)–1 (d)(4)(c)(2)(i)(d)(2)(i)
1.401(b)–1 (e)(1)(ii)(C), third sentenceparagraph (d)(1)paragraph (e)(1)
1.401(b)–1 (e)(2)(ii)(C), third sentenceparagraph (d)(2)paragraph (e)(2)
1.401(b)–1 (e)(3) introductory textthis paragraph (d)this paragraph (e)
1.401(b)–1 (e)(3) introductory textwhich paragraph (d)(1) or (2)which paragraph (e)(1) or (2)
1.401(b)–1 (e)(3) introductory textin paragraph (d)(1) or (2)in paragraph (e)(1) or (2)
1.401(b)–1 (e)(4)paragraph (d)(3)paragraph (e)(3)
1.401(b)–1 (e)(4)paragraph (c)paragraph (d)
1.401(b)–1 (e)(5) introductory textsubdivisions (i), (ii) and (iii) of this paragraphs (e)(5)(i), (ii) and
subparagraph (iii) of this section
1.401(b)–1 (e)(5) introductory textparagraph (c)paragraph (d)
1.401(b)–1 (e)(5)(iii)paragraph (d)(5)(ii)paragraph (e)(5)(ii)

Par. 4. Section 1.401(b)–1 is further
amended as follows:
1. Paragraph (b)(2)(iii) is removed.
2. Paragraphs (b)(3), (c) and (d)(1)(iv)
are added.
The additions read as follows:
§1.401(b)–1 Certain retroactive changes
in plan.
*****
(b) * * *
(3) Aplan provision described in
§1.401(b)–1T(b)(3).
(c) Special rules applicable to disquali-
fying provisions.For special rules applic-
able to disqualifying provisions, see
§1.401(b)–1T(c).
(d) * * *
(1) * * *
(iv) In the case of a disqualifying provi-
sion described in §1.401(b)–1T(b)(3), the
date described in §1.401(b)–1T(d)(1)(iv)
or (v), whichever applies to the disquali-
fying provision.
Par. 5. Section 1.401(b)–1Tis added to
read as follows:
§1.401(b)–1TCertain retroactive
changes in plan (temporary).
(a) [Reserved]. For further informa-
tion, see §1.401(b)–1(a).
(b) Disqualifying provisions.For pur-
poses of §1.401(b)–1, with respect to a
plan described in §1.401(b)–1(a), the term
“disqualifying provision” means:
(1) and (2) [Reserved]. For further in-
formation, see §1.401(b)–1(b)(1) and (2).
(3) Aplan provision designated by the
Commissioner, at the Commissioner’s
discretion, as a disqualifying provision
that either—
(i) Results in the failure of the plan to
satisfy the qualification requirements of
the Code by reason of a change in those
requirements; or
(ii) Is integral to a qualification require-
ment of the Code that has been changed.
(c) Special rules applicable to disquali-
fying provisions—(1) Absence of plan
provision. For purposes of paragraph
(b)(3) of this section and §1.401(b)–
1(b)(2), a disqualifying provision in-
cludes the absence from a plan of a provi-
sion required by, or, if applicable, integral
to the applicable change to the qualifica-
tion requirements of the Internal Revenue
Code, if the plan was in effect on the date
the change became effective with respect
to the plan.
(2) Method of designating of disquali-
fying provisions. The Commissioner may
designate a plan provision as a disqualify-
ing provision pursuant to paragraph (b)(3)
of this section only in revenue rulings, no-
tices, and other guidance published in the
Internal Revenue Bulletin. See §601.601-
(d)(2)(ii)(b) of this chapter.
(3) Authority to impose limitations.In
the case of a provision that has been des-
ignated as a disqualifying provision by
the Commissioner pursuant to paragraph
(b)(3) of this section, the Commissioner
may impose limits and provide additional
rules regarding the amendments that may
be made with respect to that disqualifying
provision during the remedial amendment
period. The Commissioner may impose
these limits and provide these additional
rules only in revenue rulings, notices, and
other guidance published in the Internal
Revenue Bulletin. See §601.601(d)-
(2)(ii)(b) of this chapter.
(d) Remedial amendment period.(1)
The remedial amendment period with re-
spect to a disqualifying provision begins:
(i) through (iii) [Reserved]. For further
information, see §1.401(b)–1(d)(1)(i)
through (iii).
(iv) In the case of a disqualifying provi-
sion described in paragraph (b)(3)(i) of
this section, the date on which the change
effected by an amendment to the Internal
Revenue Code became effective with re-
spect to the plan, or
(v) In the case of a disqualifying provi-
sion described in paragraph (b)(3)(ii) of
this section, the first day on which the
plan was operated in accordance with
such provision, as amended, unless an-
other time is specified by the Commis-
sioner in revenue rulings, notices, and
other guidance published in the Internal
Revenue Bulletin. See §601.601(d)-
(2)(ii)(b) of this chapter.
(2) [Reserved]
Michael P. Dolan,
Acting Commissioner of
Internal Revenue.
Approved July 22, 1997.
(Filed by the Office of the Federal Register on July
31, 1997, 8:45 a.m., and published in the issue of the
Federal Register for August 1, 1997, 62 F.R. 41272)
Section 501.—Exemption From
Tax on Corporations, Certain
Trusts, Etc.
26 CFR 1.501(c)(5)–1: Labor, agricultural, and hor-
ticultural organizations.
T.D. 8726
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
Requirements for Tax Exempt
Section 501(c)(5) Organizations
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final Regulations.
SUMMARY: This document contains
final regulations clarifying certain re-
quirements of section 501(c)(5). The re-
quirements are clarified to provide needed
guidance to organizations on the require-
ments an organization must meet in order
to be exempt from tax as an organization
described in section 501(c)(5).
DATES: These regulations are effective
on December 21, 1995.
FOR FURTHER INFORMATION CON-
TACT: Robin Ehrenberg, (202) 622-6080
(not a toll-free number).
SUPPLEMENTARYINFORMATION:
Background
On December 21, 1995, the IRS pub-
lished in the Federal Register(60 F.R.
66228 [EE–53–95, 1996–1 C.B. 766]) a
notice of proposed rulemaking under sec-
tion 501(c)(5). The proposed regulations
clarified that organizations whose principal
activity is administering retirement plans
are not section 501(c)(5) organizations.
Apublic hearing was held on June 5,
1996. Written comments were received.
After consideration of all of the com-
ments, the proposed regulations under
section 501(c)(5) are adopted as revised
by this Treasury Decision. The comments
and revisions are discussed below.
Explanation of Revisions and Summary of
Comments
Section 501(c)(5) describes certain
1997–34 I.R.B.7August 25, 1997

labor, agricultural and horticultural orga-
nizations. Section 401(a) sets forth the
requirements for exemption for qualified
employee benefit pension trusts. Section
501(a) exempts from federal income taxes
organizations described in section 401(a)
or section 501(c). Thus, section 401(a)
and section 501(c)(5) should be read as
enactments of Congress in pari materia,
taken together as one consistent body of
law. Pacific Co. v. Johnson,285 U.S.
480, 495 (1932).
The Treasury and IRS believe that sec-
tion 501(c)(5) should be interpreted in a
manner consistent with the Employee Re-
tirement Income Security Act of 1974,
Pub. L. No. 93–406, 88 Stat. 829 (1974)
(ERISA), as amended. ERISAwas en-
acted as a “comprehensive and reticulated
statute” to regulate retirement plans and
trusts, “the product of a decade of Con-
gressional study of the Nation’s private
employee benefit system.” Mertens v.
Hewitt Assoc., 508 U.S. 248, 251 (1993),
citing Nachman v. PBGC, 446 U.S. 359,
361 (1980). Congress intended that pen-
sion trusts satisfy the comprehensive re-
quirements of section 401(a), as amended
by ERISA, in order to be tax exempt. See
S. Rep. No. 383, 93d Cong., 1st Sess. at
33, reprinted in1974–3 C.B. (Supp.) 112;
H. Rep. No. 807, 93d Cong., 1st Sess. at
33, reprinted in1974–3 C.B. (Supp) 236,
266.
Accordingly, Treasury and the IRS
continue to believe that an organization
whose principal purpose is managing em-
ployer-sponsored retirement plans is not
an exempt labor organization described in
section 501(c)(5). (However, an em-
ployer-sponsored pension trust may nev-
ertheless qualify for exemption under sec-
tion 501(a) if it meets the requirements of
section 401(a).) Morganbesser v. United
States, 984 F.2d 560 (2d Cir. 1993),
nonacq. 1995–2 C.B. 2.; In re Mor-
ganbesser, AOD CC-1995-016 (Dec. 26,
1995).
Consistent with ERISAand interpret-
ing section 401(a) and section 501(c)(5)
as part of a consistent whole, these regu-
lations provide a general rule that an orga-
nization is not described in section
501(c)(5) if its principal activity is to re-
ceive, hold, invest, disburse or otherwise
manage funds associated with savings or
investment plans or programs, including
pension or other retirement savings plans
or programs. However, to the extent that
ERISAprovides special rules for certain
types of retirement savings plans, it is ap-
propriate to take those rules into account
in interpreting provisions of the Code re-
lating to such plans, including section
501(c)(5).
As noted by one commentator, ERISA
excepts certain dues-financed plans from
Parts 2 and 3 of Title I of ERISA(vesting,
funding and certain other qualification re-
quirements). Those pension trusts spon-
sored by labor organizations for their
members, which accept no employer con-
tributions, do not qualify for exemption
under section 401(a) because they are not
maintained by an employer. Section
401(a), Rev. Rul. 80–306, 1980–2 C.B.
131. Accordingly, the regulations provide
that an organization (including a pension
trust) may qualify as an organization de-
scribed in section 501(c)(5) if it meets all
of the following requirements:
(1) the organization is established and
maintained by another labor organization
described in section 501(c)(5) (deter-
mined without reference to the tests in
Treas. Reg. § 1.501(c)(5)–1(b)(2));
(2) the organization is not directly or
indirectly established or maintained in
whole or in part by any employer or by
any government (or any agency, instru-
mentality or controlled entity thereof);
(3) the organization is funded by mem-
bership dues paid to the labor organiza-
tion establishing and maintaining the or-
ganization and earnings thereon; and
(4) after September 2, 1974 (the date of
enactment of ERISA, 88 Stat. 829), the
organization’s governing documents have
not permitted or provided for nor did the
organization accept, any contribution
from any employer or from any govern-
ment (or any agency, instrumentality or
controlled entity thereof). Treas. Reg. §
1.501(c)(5)–1(b)(2).
Treas. Reg. § 1.892-2T(c) governs the
tax status of a pension trust that is wholly
owned and controlled by a foreign sover-
eign.
Scope
These regulations solely address the tax
exempt status of organizations under sec-
tion 501(c)(5) whose principal activity is
to receive, hold, invest, disburse, or other-
wise manage funds associated with sav-
ings or investment plans or programs.
Other Code sections and tax principles
apply to the tax exempt status of these or-
ganizations and the tax consequences of
these arrangements to employers and par-
ticipants in these arrangements.
One commentator requested that the
IRS clarify that the regulations do not
apply to health and welfare benefits not
specifically mentioned in the regulations,
such as retiree health benefits, death ben-
efits, and group legal services. The regu-
lations address only savings or investment
plans or programs, (including pension or
other retirement savings plans or pro-
grams) and do not address other types of
benefits. Cf. Rev. Rul. 62–17, 1962–1
C.B. 87.
Special Analyses
It has been determined that this Trea-
sury Decision is not a significant regula-
tory action as defined in EO 12866.
Therefore, a regulatory assessment is not
required. It also has been determined that
section 553(b) of the Administrative Pro-
cedure Act (5 U.S.C. chapter 5) does not
apply to these regulations, and because
the notice of proposed rulemaking pre-
ceding the regulations was issued prior to
March 29, 1996, the Regulatory Flexibil-
ity Act, (5 U.S.C. chapter 6) does not
apply. Pursuant to section 7805(f) of the
Internal Revenue Code, the notice of pro-
posed rulemaking preceding these regula-
tions was submitted to the Chief Counsel
for Advocacy of the Small Business Ad-
ministration for comment on its impact on
small business.
Drafting Information
The principal author of these regula-
tions is Robin Ehrenberg, Office of Asso-
ciate Chief Counsel (Employee Benefits
and Exempt Organizations). However,
other personnel from the IRS and Trea-
sury Department participated in their de-
velopment.
*****
Adoption of Amendments to the Regula-
tions
Accordingly, 26 CFR part 1 is amended
as follows:
PART1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
August 25, 199781997–34 I.R.B.

Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.501(c)(5)-1 is
amended by:
1. Redesignating paragraph (b) as
paragraph (c).
2. Adding a new paragraph (b).
The addition reads as follows:
§ 1.501(c)(5)-1 Labor, agricultural, and
horticultural organizations.
*****
(b)(1) General rule.An organization
is not a organization described in section
501(c)(5) if the principal activity of the
organization is to receive, hold, invest,
disburse or otherwise manage funds as-
sociated with savings or investment
plans or programs, including pension or
other retirement savings plans or pro-
grams.
(2) Exception.Paragraph (b)(1) of this
section shall not apply to an organization
which—
(i) Is established and maintained by an-
other labor organization described in sec-
tion 501(c)(5), (determined without re-
gard to this paragraph (b)(2));
(ii) Is not directly or indirectly estab-
lished or maintained in whole or in part
by one or more—
(A) Employers;
(B) Governments or agencies or instru-
mentalities thereof; or
(C) Government controlled entities;
(iii) Is funded by membership dues
from members of the labor organization
described in this paragraph (b)(2) and
earnings thereon; and
(iv) Has not at any time after Septem-
ber 2, 1974 (the date of enactment of the
Employee Retirement Income Security
Act of 1974, Pub. L. 93–406, 88 Stat.
829) provided for, permitted or accepted
employer contributions.
(3) Example. The principles of this
paragraph (b) are illustrated by the fol-
lowing example:
Example. Trust Ais organized in accordance
with a collective bargaining agreement between
labor union K and multiple employers. Trust A
forms part of a plan that is established and main-
tained pursuant to the agreement and which covers
employees of the signatory employers who are
members of K. Representatives of both the employ-
ers and K serve as trustees. Areceives contributions
from the employers who are subject to the agree-
ment. Retirement benefits paid to K’s members as
specified in the agreement are funded exclusively by
the employers’contributions and accumulated earn-
ings. Aalso provides information to union members
about their retirement benefits and assists them with
administrative tasks associated with the benefits.
Most of A’s activities are devoted to these functions.
From time to time, Aalso participates in the renego-
tiation of the collective bargaining agreement. A’s
principal activity is to receive, hold, invest, disburse,
or otherwise manage funds associated with a retire-
ment savings plan. In addition, Adoes not satisfy all
the requirements of the exception described in para-
graph (b)(2) of this section. (For example, Aaccepts
contributions from employers). Therefore, Ais not a
labor organization described in section 501(c)(5).
*****
Acting Commissioner of
Internal Revenue
Assistant Secretary of the Treasury
(Filed by the Office of the Federal Register on July
28, 1997, 8:45 a.m., and published in the issue of the
Federal Register for July 29, 1997, 62 F.R. 40447)
1997–34 I.R.B.9August 25, 1997

August 25, 1997101997–34 I.R.B.
Income Tax; Allocation of
Interest Expense Among
Expenditures; Correction
Notice 97–46
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correcting amendment.
SUMMARY: This document contains a
correction to temporary regulations (T.D.
8145), which were published in the Fed-
eral Register on Thursday, July 2, 1987
(52 F.R. 24996) relating to the allocation
of interest expense among a taxpayer’s
expenditures.
EFFECTIVE DATE: July 2, 1987.
FOR FURTHER INFORMATION CON-
TACT: John Fischer, (202) 622-4950,
(not a toll-free number).
SUPPLEMENTARYINFORMATION:
Background
The temporary regulations that are the
subject of this correction are under sec-
tion 163 of the Internal Revenue Code.
Need for Correction
As published, temporary regulations
(T.D. 8145 [1987–2 C.B. 47]) contains an
error which may prove to be misleading
and is in need of clarification.
*****
Correcting Amendment to Regulations
Accordingly, 26 CFR part 1 is cor-
rected by making the following correcting
amendment:
PART1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
§ 1.163-8T[Corrected]
Par. 2. In § 1.163-8T, paragraph (e) im-
mediately following Example (2). in para-
graph (c)(2)(iii) is redesignated as para-
graph (c)(3)(i) to read as follows:
§ 1.163-8TAllocation of interest expense
among expenditures (temporary).
*****
(c) * * *
(3) Allocation of debt; proceeds not
disbursed to borrower—(i) Third-party fi-
nancing.* * *
*****
Cynthia E. Grigsby,
Chief, Regulations Unit
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on July
25, 1997, 8:45 a.m., and published in the issue of the
Federal Register for July 28, 1997, 62 F.R. 40269)
Rev. Proc. 97–32A
This revenue procedure modifies and
amplifies Part A., Sections 3.02 and 7.03
(2) of Rev. Proc. 97–32, 1997–27 I.R.B.
9, which provides the Rules and Specifi-
cations for Private Printing of Forms
1096, 1098, 1099 Series, 5498 and
W–2G. Please add the following sen-
tence at the end of those sections, “Note:
On Copy C, Form 1099–LTC, you may
reverse the location of the policyholder’s
name, street address, city, state, and ZIP
code with the location of the insured’s
name, street address, city, state, and ZIP
code for ease in mailing.”
Effect On Other Documents
Rev. Proc. 97–32 is modified and am-
plified.
Part III. Administrative, Procedural, and Miscellaneous

1997–34 I.R.B.11August 25, 1997
Changes to Excise Taxes
Announcement 97–78
Purpose To announce excise tax changes made by the Taxpayer Relief Act of 1997 (P.L. 105-34) that take
effect during August of 1997. These changes affect:
•The tax on the use of international air travel facilities
•Deposits of certain air transportation taxes
•Vaccine taxes
Taxpayers need to follow the procedures in this announcement to report these taxes on the Form
720 for the 3rd quarter. The Form 720 for the 4th quarter will reflect these changes and others that
take effect later.
Note:
Aseparate announcement will be released at a later date to cover changes made by the Act
that take effect on October 1, 1997, or later.
Use of internationalRate.The rate is increased to $12.00 per person for the use of international air travel facilities.
airtravel facilities,This tax applies to arrivals as well as departures. For domestic flight segments that begin
IRS No. 27or end in Alaska or Hawaii there is no change; the tax remains at $6.00 and applies only to departures.
Effective date.Tax is imposed at the new rate for amounts paid after August 12, 1997, for trans-
portation that begins after September 30, 1997.
How to report.Report the total of both the $6 and the $12 rate for the quarter on the line for IRS No. 27.
Delayed depositsAny deposit of taxes for IRS No. 26,transportation of persons by air, and IRS No. 27,use of inter-
national air travel facilities, that would otherwise be due after August 14, 1997, and before October
1, 1997, is due October 10, 1997.
Vaccine taxesRate. Auniform tax on alltaxable vaccines is imposed at $.75 per dose. The tax liability at the
new rate is reported under IRS No. 97.
Effective date.The changes to vaccine taxes are effective for sales after August 5, 1997.
Taxable vaccines. After August 5, 1997, the vaccine is taxable if it:
•Contains diphtheria toxoid;
•Contains tetanus toxoid;
•Contains pertussis bacteria, extracted or partial cell bacteria, or specific pertussis antigens;
•Contains polio virus;
•Is against measles;
•Is against mumps;
•Is against rubella;
•Is any HIB vaccine;
•Is against hepatitis B; or
•Is against chicken pox.
Combination vaccines.If any taxable vaccine is combined with one or more additional taxable
vaccines, then the amount of tax imposed is the sum of the amounts for the vaccines included in the
combination.
How to report.For sales after June 30, 1997, and before August 6, 1997, report the vaccine tax lia-
bility under IRS Nos. 81, 82, 83,and 84.For sales after August 5, 1997, report your vaccine tax lia-
bility on a separate sheet and attach it to Form 720 for the 3rd quarter. Include the following informa-
tion on the sheet:
Part IV. Items of General Interest

Availability of Publication 1544,
Reporting Cash Payments of
Over $10,000 (Revised Aug.
1997)
Announcement 97–80
Publication 1544, recently updated, is
now available from the Internal Revenue
Service. This publication is also available
in Spanish as Publication 1544SP.
The publication is for persons who may
receive large cash payments in the course
of their business. Generally, any person in
a trade or business who receives more than
$10,000 in cash in a single transaction or in
related transactions must file Form 8300,
Report of Cash Payments Over $10,000
Received in a Trade or Business.
You can get a copy of Publication 1544
(or Publication 1544SP) by calling 1-800-
829-3676. You can also write to the IRS
Forms Distribution Center nearest you.
If you have access to a personal com-
puter and modem, you can also get the
publication electronically. You can get
the publication at:
1) World Wide Web - www.irs.us-
treas.gov,
2) FTP- ftp.irs.ustreas.gov, and
3) Direct Dial (by Modem) - IRIS at
FEDWORLD - (703)321-8020.
Revision of Forms 5310,
5310A, and 6088
Announcement 97–81
Form 5310, Application for Determina-
tion for Terminating Plan; Form 6088,
Distributable Benefits From Employee
Pension Benefit Plans; and Form 5310A,
Notice of Plan Merger or Consolidation,
Spinoff, or Transfer of Plan Assets or Lia-
bilities—Notice of Qualified Separate
Lines of Business have been revised. The
new revision date for all forms is June
1997 (Rev. 6/97).
Form 6088 and information only copies
of Forms 5310 and 5310Awill available
through IRS electronic information ser-
vices by July 25, 1997 at the following
addresses:
Modem: 703-321-8020 (modem settings
are N,8,1)
Internet: http://www.irs.ustreas.gov
However, except for Form 6088, these
forms are printed in special ink suitable
for use with optical reading equipment.
Therefore, copies downloaded from the
bulletin board are for information only
and are not acceptable for submission to
Covington or Brooklyn. The official ver-
sions will be available by the end of Au-
gust by calling 1-800-TAX-FORM.
Except for the revision date, no signifi-
cant changes have been made to Form
5310 and Form 6088. Therefore, the cur-
rent revision (Rev. 1/96) may continue to
be used until the form is next revised.
Persons having approval to computer
generate this form may continue to use
existing programs. Alternatively, the re-
vision date may be changed from 1/96 to
6/97 without requesting reapproval, if no
other changes are made to the OCR data
sheet. The original SAN approval num-
ber must be transferred to the revised
OCR data sheet.
Significant changes have been made to
Form 5310A. Therefore, the 6/97 revi-
sion must be used for submissions after
January 1, 1998. All Form 5310Asub-
missions must now be filed with the IRS
at P.O. Box 192, Covington, KY41012-
0192. Persons having approval to com-
puter generate this form must update their
programs to incorporate the changes
made to this application. The revised
OCR data sheet must be resubmitted for
reapproval to: EPOCR Coordinator,
CP:E:EP:FC, Room 2232, 1111 Constitu-
tion Ave., Washington, DC 20224.
As stated in Announcement 96-54,
1996-23 IRB 12, persons using IRS soft-
ware to computer generate Form 5307
may continue to do so until further notice.
Form 5307 produced by IRS software has
a 5/93 revision date and the approval
number “SAN 50000”.
Arbitrage Restrictions on Tax-
Exempt Bonds; Correction
Announcement 97–82
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regulations.
SUMMARY: This document contains
corrections to final regulations (T.D.
8718) which were published in the Fed-
eral Registeron Friday, May 9, 1997 (62
F.R. 25502 [1997–22 I.R.B. 4]). The final
regulations relate to arbitrage and related
restrictions applicable to tax-exempt
bonds issued by State and local govern-
ments.
DATES: This correction is effective May
9, 1997.
FOR FURTHER INFORMATION CON-
TACT: David White, (202) 622-3980 (not
a toll-free number).
SUPPLEMENTARYINFORMATION:
Background
The final regulations that are the sub-
ject of these corrections are under section
148 of the Internal Revenue Code.
Need for Correction
As published, the final regulations (T.D.
8718) contain errors that may prove to be
misleading and are in need of clarification.
Correction of Publication
Accordingly, the publication of final
regulations (T.D. 8718) which are the
subject of F.R. Doc. 97–12062 is cor-
rected as follows:
1. On page 25505, column 3, in the pre-
August 25, 1997121997–34 I.R.B.
•The words “VACCINE TAX” across the top of the sheet;
•Your name (as shown on the return) and employer identification number (EIN);
•IRS No. 97; and
•The amount of tax.
On Form 720, include the tax liability for IRS No. 97in the total line for Part I taxes on page 2.

amble, under the paragraph heading “F.
Effective Dates”, line 2, the language “ef-
fective for bonds issued on or after” is
corrected to read “effective for bonds sold
on or after”.
2. On page 25505, column 3, in the pre-
amble, under the paragraph heading “F.
Effective Dates”, the last line, the lan-
guage “issued before July 8, 1997.” is
corrected to read “sold before July 8,
1997.”
Cynthia E. Grigsby,
Chief, Regulations Unit
Assistant Chief Counsel (Corporate)
(Filed by the Office of the Federal Register on July
25, 1997, 8:45 a.m., and published in the issue of
the Federal Register for July 28, 1997, 62 F.R.
40270)
Deletions From Cumulative List
of Organizations Contributions
to Which Are Deductible Under
Section 170 of the Code
Announcement 97–83
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 August 25, 1997,
and would end on the date the court first
determines that the organization is not de-
scribed in section 170(c)(2) as more par-
ticularly set forth in section 7428(c)(1).
For individual contributors, the maximum
deduction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual who was responsible, in whole or in
part, for the acts or omissions of the orga-
nization that were the basis for revocation.
The Fern Leigh Equine Research Founda-
tion
Staunton, VA
Jack and Jill Day Care Center
Chicago, IL
Foundations Status of Certain
Organizations
Announcement 97–84
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 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 founda-
tions:
African Awareness Expos, Inc., Aurora,
CO
African Children Fund, Columbus, OH
Associates of Chicago Urban Day School,
Chicago, IL
Bahamian American Cultural Society,
New York, NY
Ben Rose Softball League, Inc., New
Bedford, MA
Beth Meir Yehuda Foundation, Inc.,
Brooklyn, NY
Bird Island Trust Inc., Boynton Beach, FL
Bishop Cheverus Society, Inc., Boston,
MA
Booker T. Anderson Scholarship Fund,
Lower Hills, MA
BPD Inc., Kapaa, HI
Bridge Homes, Inc., New York, NY
Bronx Residents Against Grafitti, Bronx,
NY
Broomstones Curling Foundation,
Framingham, MA
Chaim Foundation, Chicago, IL
Citizens Against Pollution Northwest, Inc.,
Torrington, CT
Clowns on Rounds, Inc., Albany, NY
Connecticut Youth Theatre, Inc., Tolland,
CT
Constantin Brancust International
Foundation, Inc., New York, NY
Council for Equal Rights in Adoption,
Inc., New York, NY
District 26 Foundation for Education,
Flushing, NY
Divers Environmental Survey, Inc.,
Billerica, MA
East Longmeadow Athletic Booster Club,
East Longmeadow, MA
East New York Partnership Housing
Development Fund Company, Inc.,
New Rochelle, NY
Edgartown Patrolmens Association, Inc.,
Edgartown, MA
Ellen Gilman Sylvia Solomon Scholarship
Fund, Inc., Chestnut Ridge, NY
Falmouth Youth Initiatives, North
Falmouth, MA
Feminist Network of Western Maine,
Farmington, ME
F.G.P., Inc., Warwick, RI
Foundation for Chinese Humanistic
Studies, Honolulu, HI
Franklin Housing Alliance, Inc.,
Greenfield, MA
Friends and Alumni of the Mendon
Upton Regional School District,
Mendon, MA
Friends of Maine’s Natural Areas, Inc.,
Augusta, ME
Friends of the Playgound of Shelton,
Shelton, CT
Friends of the Rochester Senior Center,
Inc., Rochester, MA
Friends of the Society for Coptic
Archaeology, Inc., New York, NY
Friends of Westborough State Hospital,
Inc., Westborough, MA
Good Shephards Christmas, Inc.,
Needham, MA
Greenwich Citizens Committee, Inc.,
Greenwich, NY
Guard & Reserve Family Relief Fund,
East Hebron, NH
Hartford Late Night, Inc., Hartford, CT
1997–34 I.R.B.13August 25, 1997

Health Care Professional Association, Inc.,
Brooklyn, NY
Hearn Historical and Preservation Society,
Inc., New York, NY
Heritage Initiative for Responsible
Economic Development-Hired, Bar
Harbor, ME
Hope Community House, Inc.,
Morganville, NJ
Imani House, Brooklyn, NY
Information Consolidation Bureau, Inc.,
Boston, MA
Insight Mediation Center, Inc., Newbury,
MA
Institution of Housing and Community
Development, Maywood, IL
International Center for Jewish Christian
Understanding, Inc., New York, NY
International Student Education Fund,
New York, NY
King Spike Theatre, Inc., New York, NY
Kollel Zichron Brocha, Brooklyn, NY
Kurdistan Forum, Inc., New York, NY
La Candelaria East Harlem Community
Center, Inc., New York, NY
Language & Learning Intervention in a
Family Environment, Inc., Dobbs Ferry,
NY
La Primera Orquesta De Cuatro De
Connecticut, Inc., Hartford, CT
Lifelearn Center for Lifelong Learning,
San Anselmo, CA
Loon Preservation Committee, Laconia,
NH
Loradore Institute, Bronx, NY
Louis Latimer Garden Community Center,
Flushing, NY
Maine Paramedic Association, Waterville,
ME
The Matlovich Society, Portland, ME
Maywood Renaissance Center Inc.,
Maywood, IL
Mission Metro New York, Inc.,
Saddlebrook, NJ
Nassau Placement Network, Inc., Valley
Stream, NY
National Center to Save Our Schools,
Westbury, NY
National Committee for the Rights of the
Child, Durham, NC
Neighbor Care, Dover, MA
New Century Conservation Trust, Inc.,
Brunswick, ME
New England Microfocus Users Group,
Inc., Boston, MA
New York State Science Education
Leadership Association, Clinton
Corners, NY
Prototype Housing, Inc., New York, NY
Public Compound-7, Inc., New York, NY
Restore Olmsteds Waterway Coalition,
Brookline, MA
Rhino Realty, Inc., Boston, MA
Rhode Island Childrens Advocacy Center,
Providence, RI
Rhode Island Securities Awareness
Corporation, Inc., Providence, RI
Right Side Up, Divide, CO
River Side Peers Assisting Peers, Inc., Port
Jervis, NY
Robertson Scientific Research, Inc., Tulsa,
OK
Roots of Evangelism, Mt. Vernon, NY
Roots Revisited, Inc., Brooklyn, NY
Safety at Sea Institute, Newport, RI
Salisbury Historical Society, Inc.,
Salisbury, MA
Santa Claus Anonymous, Inc., Cambridge,
MA
Saratoga Teen and Recreation Foundation,
Inc., Saratoga Springs, NY
Save American Manufacturing
Foundation, Inc., Tonawanda, NY
Save Our Schwarzmanns Mill, Inc.,
Burlington, CT
Schuyler Village Day Care, Inc.,
Schuylerville, NY
Seed & Harvest Ministries, Inc., Flagler,
CO
Shadagee Hill, Inc., Holland, NY
Sikh Education Foundation of North
America, Pittsford, NY
Toras Olam, Brooklyn, NY
Ysleta Education Foundation, El Paso, TX
If an organization listed above submits
information that warrants the renewal of its
classification as a public charity or as a pri-
vate operating foundation, the Internal
Revenue Service will issue a ruling or de-
termination letter with the revised classifi-
cation as to foundation status. Grantors and
contributors may thereafter rely upon such
ruling 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 classifi-
cation of foundation status in the Internal
Revenue Bulletin.
August 25, 1997141997–34 I.R.B.

1997–34 I.R.B.15August 25, 1997
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior 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 Abut not
to B, and the new ruling holds that it ap-
plies to both Aand 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. Aruling
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

August 25, 1997161997–34 I.R.B.
Numerical Finding List
1
Bulletins 1997–27 through 1997–33
Announcements:
97–61, 1997–29 I.R.B. 13
97–67, 1997–27 I.R.B. 37
97–68, 1997–28 I.R.B. 13
97–69, 1997–28 I.R.B. 13
97–70, 1997–29 I.R.B. 14
97–71, 1997–29 I.R.B. 15
97–72, 1997–29 I.R.B. 15
97–73, 1997–30 I.R.B. 86
97–74, 1997–31 I.R.B.16
97–75, 1997–32 I.R.B. 28
97–76, 1997–32 I.R.B. 28
97–77, 1997–33 I.R.B. 58
Court Decisions:
2061, 1997–31 I.R.B. 5
2062, 1997–32 I.R.B. 8
Delegation Orders:
172 (Rev. 5), 1997–28 I.R.B. 6
Notices:
97–37, 1997–27 I.R.B. 4
97–38, 1997–27 I.R.B. 8
97–39, 1997–27 I.R.B. 8
97–40, 1997–28 I.R.B. 6
97–41, 1997–28 I.R.B. 6
97–42, 1997–29 I.R.B. 12
97–43, 1997–30 I.R.B. 9
97–44, 1997–31 I.R.B. 15
97–45, 1997–33 I.R.B. 7
Railroad Retirement Quarterly Rate:
1997–28 I.R.B. 5
Proposed Regulations:
REG–104893–97, 1997–29 I.R.B. 13
REG–107644–97, 1997–32 I.R.B. 24
Revenue Procedures:
97–32, 1997–27 I.R.B. 9
97–33, 1997–30 I.R.B. 10
97–34, 1997–30 I.R.B.14
97–35, 1997–33 I.R.B. 11
97–36, 1997–33 I.R.B. 14
97–37, 1997–33 I.R.B. 18
97–38, 1997–33 I.R.B. 43
97–39, 1997–33 I.R.B. 48
97–40, 1997–33 I.R.B. 50
97–41, 1997–33 I.R.B. 5
97–42, 1997–33 I.R.B. 57
Revenue Rulings:
97–27, 1997–27 I.R.B. 4
97–28, 1997–28 I.R.B. 4
97–29, 1997–28 I.R.B. 4
97–30, 1997–31 I.R.B.12
97–31, 1997–32 I.R.B.4
97–32, 1997–33 I.R.B. 4
Treasury Decisions:
8722, 1997–29 I.R.B. 4
8723, 1997–30 I.R.B. 4
1
Acumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 1997–1 through 1997–26
will be found in Internal Revenue Bulletin 1997–27,
dated July 7, 1997.

1997–34 I.R.B.17August 25, 1997
Finding List of Current Action on
Previously Published Items
1
Bulletins 1997–27 through 1997–33
*Denotes entry since last publication
Revenue Procedures:
96–36
Superseded by
97–34, 1997–30 I.R.B. 14
96–42
Superseded by
97–27, 1997–27 I.R.B. 9
Revenue Rulings:
89–42
Supplemented by
97–31, 1997–32 I.R.B. 4
1
Acumulative finding list for previously published
items mentioned in Internal Revenue Bulletins
1997–1 through 1997–26 will be found in Internal
Revenue Bulletin 1997–27, dated July 7, 1997.

Notes
August 18, 1997181997–33 I.R.B.

Notes
1997–33 I.R.B.19August 18, 1997

Notes
August 18, 1997201997–33 I.R.B.

Notes
1997–33 I.R.B.21August 18, 1997

Notes
August 18, 1997221997–33 I.R.B.

INTERNAL REVENUE BULLETIN
The Introduction on page 3 describes the purpose and content of this publication. The weekly Internal Revenue Bulletin is sold
on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superintendent of
Documents when their subscriptions must be renewed.
CUMULATIVE BULLETINS
The contents of this weekly Bulletin are consolidated semiannually into a permanent, indexed, Cumulative Bulletin. These are
sold on a single copy basis and are not included as part of the subscription to the Internal Revenue Bulletin. Subscribers to the week-
ly Bulletin are notified when copies of the Cumulative Bulletin are available. Certain issues of Cumulative Bulletins are out of print
and are not available. Persons desiring available Cumulative Bulletins, which are listed on the reverse, may purchase them from the
Superintendent of Documents.
HOW TO ORDER
Check the publications and/or subscription(s) desired on the reverse, complete the order blank, enclose the proper remittance,
detach entire page, and mail to the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. Please
allow two to six weeks, plus mailing time, for delivery.
WE WELCOME COMMENTS ABOUT THE
INTERNAL REVENUE BULLETIN
If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we
would be pleased to hear from you. You can e-mail us your suggestions or comments through the IRS Internet Home Page
(www.irs.ustreas.gov) or write to the IRS Bulletin Unit, T:FP:F:CD, Room 5560, 1111 Constitution Avenue NW, Washington, DC
20224. You can also leave a recorded message 24 hours a day, 7 days a week at 1–800–829–9043.
Internal Revenue Service
Washington, DC 20224
Official Business
Penalty for Private Use, $300
First Class Mail
Postage and Fees Paid
IRS
Permit No. G–48

INTERNAL REVENUE BULLETIN
The Introduction on page 3 describes the purpose and content of this publication. The weekly Internal Revenue Bulletin is sold
on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superintendent of
Documents when their subscriptions must be renewed.
CUMULATIVE BULLETINS
The contents of this weekly Bulletin are consolidated semiannually into a permanent, indexed, Cumulative Bulletin. These are
sold on a single copy basis and are not included as part of the subscription to the Internal Revenue Bulletin. Subscribers to the week-
ly Bulletin are notified when copies of the Cumulative Bulletin are available. Certain issues of Cumulative Bulletins are out of print
and are not available. Persons desiring available Cumulative Bulletins, which are listed on the reverse, may purchase them from the
Superintendent of Documents.
HOW TO ORDER
Check the publications and/or subscription(s) desired on the reverse, complete the order blank, enclose the proper remittance,
detach entire page, and mail to the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. Please
allow two to six weeks, plus mailing time, for delivery.
WE WELCOME COMMENTS ABOUT THE
INTERNAL REVENUE BULLETIN
If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we
would be pleased to hear from you. You can e-mail us your suggestions or comments through the IRS Internet Home Page
(www.irs.ustreas.gov) or write to the IRS Bulletin Unit, T:FP:F:CD, Room 5560, 1111 Constitution Avenue NW, Washington, DC
20224. You can also leave a recorded message 24 hours a day, 7 days a week at 1–800–829–9043.
Superintendent of Documents
U.S. Government Printing Office
Washington, DC 20402
Official Business
Penalty for Private Use, $300
First Class Mail
Postage and Fees Paid
GPO
Permit No. G–26