# Bulletin No. 1997–39

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A0c17a071b68709a7

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

Internal Revenue

bulletin

Bulletin No. 1997–39
September 29, 1997

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.

INCOME TAX
Rev. Rul. 97–39, page 4.
Mark-to-market accounting method for dealers in
securities. This ruling provides guidance to enable taxpayers to comply with the mark-to-market requirements of section 475 of the Code. Rev. Ruls. 94–7 and 93–76 clarified,
modified, partially obsoleted, and superseded.

Rev. Rul. 97–40, page 8.

change accounting methods is provided to certain taxpayers
that become subject to section 475(a) of the Code. In order
to receive automatic consent, the taxpayer must file a completed Form 3115, including a list of securities identified
under section 475(b)(2), in the manner provided in this revenue procedure.

EXEMPT ORGANIZATIONS

Interest rates; underpayments and overpayments. The
rate of interest determined under section 6621 of the Code
for the calendar quarter beginning October 1, 1997, will be
8 percent for overpayments, 9 percent for underpayments,
and 11 percent for large corporate underpayments. The rate
of interest paid on the portion of a corporate overpayment
exceeding $10,000 is 6.5 percent.

Announcement 97–98, page 15.

Rev. Proc. 97–43, page 12.

Announcement 97–96, page 15.

Consent to change accounting method to comply with
section 475 mark-to-market rules. Automatic consent to

The Service announces the number of medical savings accounts established as of June 30, 1997.

Finding Lists begin on page 18.

Department of the Treasury
Internal Revenue Service

A list is given of organizations now classified as private foundations.

ADMINISTRATIVE

Mission of the Service
ucts and services; and perform in a manner warranting
the highest degree of public confidence in our integrity, efficiency, and fairness.

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-

Statement of Principles
of Internal Revenue
Tax Administration
The Service also has the responsibility of applying and
administering the law in a reasonable, practical manner.
Issues should only be raised by examining officers when
they have merit, never arbitrarily or for trading purposes.
At the same time, the examining officer should never hesitate to raise a meritorious issue. It is also important that
care be exercised not to raise an issue or to ask a court to
adopt a position inconsistent with an established Service
position.

The function of the Internal Revenue Service is to administer the Internal Revenue Code. Tax policy for raising revenue
is determined by Congress.
With this in mind, it is the duty of the Service to carry out that
policy by correctly applying the laws enacted by Congress;
to determine the reasonable meaning of various Code provisions in light of the Congressional purpose in enacting them;
and to perform this work in a fair and impartial manner, with
neither a government nor a taxpayer point of view.

Administration should be both reasonable and vigorous. It
should be conducted with as little delay as possible and
with great courtesy and considerateness. It should never
try to overreach, and should be reasonable within the
bounds of law and sound administration. It should, however, be vigorous in requiring compliance with law and it
should be relentless in its attack on unreal tax devices and
fraud.

At the heart of administration is interpretation of the Code. It
is the responsibility of each person in the Service, charged
with the duty of interpreting the law, to try to find the true
meaning of the statutory provision and not to adopt a
strained construction in the belief that he or she is “protecting the revenue.” The revenue is properly protected only
when we ascertain and apply the true meaning of the statute.

2

Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing official 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 consolidated semiannually into Cumulative Bulletins, which are sold
on a single-copy basis.

dures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances
are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements
of internal practices and procedures that affect the rights
and duties of taxpayers are published.

Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions, and Subpart B, Legislation and Related
Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to
these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Administrative Rulings
are issued by the Department of the Treasury’s Office of the
Assistant Secretary (Enforcement).

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.

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 Cumulative Bulletins.

Rulings and procedures reported in the Bulletin do not have
the force and effect of Treasury Department Regulations,
but they may be used as precedents. Unpublished rulings
will not be relied on, used, or cited as precedents by Service
personnel in the disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and proce-

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.

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.

3

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 446.—General Rule for
Methods of Accounting
26 CFR 1.446–1: General rule for methods of
accounting.
Questions and answers about the application of
section 475 and the regulations thereunder. See Rev.
Rul. 97–39, page 4.
26 CFR 1.446–1: General rule for methods of
accounting.
What information must a taxpayer provide in
order to obtain automatic consent to change accounting method when section 475(a) becomes applicable as a result of the taxpayer making an election (i) to treat transactions within a consolidated
group as transactions with customers as provided by
section 1.475(c)–1(a), or (ii) not to be governed by
the exemptions from the status of a dealer in securities provided by section 1.475(c)–1(b) or –1(c)? See
Rev. Proc. 97–43, page 12.

Section 475.—Mark-to-Market
Accounting Method for Dealers
in Securities
26 CFR 1.475(b)–2: Exemptions—identification
requirements. (Also §§ 446, 475, 7805; 1.446–1,
1.475(c)–1, 301.7805–1.)

Mark-to-market accounting method
for dealers in securities. This ruling provides guidance to enable taxpayers to
comply with the mark-to-market requirements of section 475 of the Code. Rev.
Ruls. 94–7 and 93–76 clarified, modified,
partially obsoleted, and superseded.

Rev. Rul. 97–39
PURPOSE
This revenue ruling provides guidance
under § 475 of the Internal Revenue Code
to enable taxpayers to comply with the
mark-to-market requirements of § 475.
Rev. Rul. 93–76, 1993–2 C.B. 235 (which
was previously modified by Rev. Rul.
94–7, 1994–1 C.B. 151), is clarified,
modified, partially obsoleted, and superseded.
LAW
Section 475 of the Code was enacted
on August 10, 1993, in the Omnibus Budget Reconciliation Act of 1993 (the
“1993 Act”), section 13223, 1993-3 C.B.
1, 69. It requires mark-to-market accounting treatment for certain securities

September 29, 1997

held by a “dealer in securities” as defined
in § 475(c)(1). This requirement is effective for all taxable years ending on or
after December 31, 1993. Section 475
was amended on August 5, 1997, in the
Taxpayer Relief Act of 1997 (the “1997
Act”), section 1001(b) (redesignating
old § 475(e) as § 475(g) and adding new
§ 475(e) and (f) to allow dealers in commodities and traders in securities and
commodities to elect mark-to-market accounting, effective for taxable years ending after August 5, 1997). This revenue
ruling is limited to issues arising under
the 1993 Act and does not address issues
arising under the 1997 Act.
Section 475(a) sets forth two mark-tomarket rules. First, any security that is inventory in the hands of a dealer must be
included in inventory at its fair market
value. Second, any security that is not inventory in the hands of a dealer and that is
held at the close of any taxable year is
treated as sold by the dealer for its fair
market value on the last business day of
that taxable year, and any gain or loss is
required to be taken into account for that
taxable year.
Section 475(b)(1) provides that the
mark-to-market rules do not apply to: (1)
any security held for investment; (2) any
evidence of indebtedness that is acquired
(including originated), or any obligation
to acquire an evidence of indebtedness
that is entered into, by a dealer in the ordinary course of its trade or business, but
only if the evidence of indebtedness or
obligation to acquire an evidence of indebtedness is not held for sale; (3) any
security that is a hedge with respect to a
security that is not subject to the mark-tomarket rules; and (4) any security that is
a hedge of a position, right to income, or
liability that is not a security in the hands
of the taxpayer. Under § 475(b)(2), a security must be clearly identified in the
dealer’s records as being covered by one
of the exceptions described in §
475(b)(1) before the close of the day on
which the dealer acquired, originated, or
entered into the security.
In addition to the identification requirements in § 475(b), § 475(c)(2)(F)(iii) requires a dealer in securities to identify a
position that is not a security described in
§ 475(c)(2)(A)–(E), but that is treated as a

4

security because it is a hedge with respect
to such a security.
ISSUES AND HOLDINGS
Issue 1: If a taxpayer is not otherwise a
dealer in securities within the meaning of
§ 475(c)(1) but, nevertheless, timely identifies all of its securities as being covered
by one of the exceptions in § 475(b)(1),
does that “protective identification” cause
the taxpayer to be treated as a dealer?
Holding 1: No. A taxpayer that is not a
dealer in securities within the meaning of
§ 475(c)(1) does not become a dealer in
securities or create an inference that it is a
dealer in securities by making a protective
identification of its securities.
Issue 2: Is a bank or an insurance company excepted from the mark-to-market
rules on the grounds that it is, per se, not a
dealer in securities within the meaning of
§ 475(c)(1)?
Holding 2: No. A bank or an insurance company is subject to the mark-tomarket rules if its activities bring it
within the definition of a dealer in securities in § 475(c)(1). For example, many
banks are dealers because they regularly
originate and sell loans. As another example, an insurance company that regularly makes and sells policyholder loans
is a dealer for purposes of § 475.
Issue 3: If a taxpayer’s sole business
consists of trading in securities (that is,
the taxpayer does not purchase from,
sell to, or otherwise enter into transactions with customers), is the taxpayer a
dealer in securities within the meaning
of § 475(c)?
Holding 3: No. A taxpayer whose sole
business consists of trading in securities is
not a dealer in securities within the meaning of § 475(c) because that taxpayer does
not purchase from, sell to, or enter into
transactions with, customers in the ordinary course of a trade or business.
Issue 4: Does the classification of a security under financial accounting principles, including FASB Statement No. 115
(Accounting for Certain Investments in
Debt and Equity Securities), determine
whether the security qualifies for one of
the exceptions to the mark-to-market
rules under § 475(b)(1)?
Holding 4: No. The classification of
a security under financial accounting

1997–39 I.R.B.

principles is not dispositive of the treatment of the security for federal income
tax purposes. For example, for purposes
of § 475, a security may in certain cases
qualify for the held-for-investment exception to the mark-to-market rules even
though, under applicable financial accounting principles, the security is classified as available for sale.
Issue 5: Does an identification of a security as “held for investment” under
§ 1236 serve to identify that security as
“held for investment” (within the meaning of § 475(b)(1)(A)) or as “not held for
sale” (within the meaning of
§ 475(b)(1)(B))?
Holding 5: No. Taxpayers may choose
not to identify under § 475(b)(2) some or
all of the securities that they identify
under § 1236(a)(1). (For a transitional
rule applicable to securities held as of the
close of the last taxable year ending before December 31, 1993, however, see
§ 1.475(b)–4(a) of the Income Tax Regulations.) Accordingly, even if a § 1236
identification has been made, an identification of a security or hedge is a valid
identification for purposes of § 475(b)(2)
only if it contains a specific reference to
§ 475; this specific reference, however,
may be effected by any reasonable
method. For instance, certain accounts
may be identified in such a way that placing a security or hedge in the account
identifies the security or hedge for purposes of both § 1236(a)(1) and
§ 475(b)(1)(A), (B), or (C). See Holding
6 below. See Holding 15 below for a
transitional rule that requires less specificity for identification of securities held
by certain taxpayers that were not dealers
in securities under § 1.475(c)–1T (as contained in 26 CFR part 1 revised April 1,
1996).
Issue 6: Is a dealer in securities required to use a special procedure to comply with the identification requirements
under § 475?
Holding 6: No. Unless the Commissioner otherwise prescribes, a dealer may
comply with the identification requirements under § 475 using any reasonable
method (see, for example, guidance concerning identification requirements under
§§ 988(a)(1)(B), 1221, 1236(a)(1), and
1256(e)(2)(C)). The identification, however, must be made on, and retained as
part of, the dealer’s books and records.

1997–39 I.R.B.

The dealer’s books and records must
clearly indicate the specific security or
hedge being identified, and the identification must clearly indicate that it is being
made for purposes of § 475. Alternatively, the dealer may identify specific accounts as containing only securities or
hedges that are covered by a particular exception, so that placing a security or
hedge in the account identifies the security or hedge as being covered by that exception. Under § 1.475(b)–2(a), an identification need not distinguish between an
exception under § 475(b)(1)(A) (concerning certain securities held for investment)
and one under § 475(b)(1)(B) (concerning
securities not held for sale). Exceptions
under either of these provisions, however,
must be distinguished from exceptions
under § 475(b)(1)(C) (concerning securities held as hedges).
In addition, rather than identifying specific securities or accounts as being covered by an exception described in
§ 475(b)(1), a dealer may comply with the
identification requirement under § 475(b)
by clearly indicating the specific securities or accounts that are not covered by a
particular exception (that is, indicating
that they are covered by some other exception or that they are not exempt) and
identifying all other securities or accounts
as being covered by a particular exception.
For example, a dealer may place on its
books and records a statement that, unless otherwise identified, all of its securities for which an identification is still
timely (including securities yet to be acquired) are identified as exempt under
either § 475(b)(1)(A) or (B). This statement is effective to identify under
§ 475(b)(1)(A) or (B) each security covered by its terms unless, before the expiration of the period during which the security may be timely identified, the
dealer identifies it as not exempt or as
exempt under § 475(b)(1)(C).
Analogously, under Rev. Rul. 64–160,
1964–1 (Part I) C.B. 306, modified by
Rev. Rul. 76–489, 1976–2 C.B. 250,
dealers can identify specified accounts as
containing only securities held for investment for purposes of § 1236(a)(1). Accordingly, dealers can satisfy the identification requirements of § 475(b)(2) by
unambiguously indicating that all of the
securities in one or more of these ac-

5

counts are also described, for example, in
§ 475(b)(1)(A) or (B). Once such an
identification of an account is made,
placing a security in the account identifies the security not only as being “held
for investment” for purposes of § 1236
but also as being described in the applicable subparagraph of § 475(b)(1).
Issue 7 in Rev. Rul. 93–76 concerned
transitional identification issues for securities acquired, originated, or entered into
between August 10, 1993, and October
31, 1993. As the transition period has
now ended, Issue 7 is obsolete and is not
reprinted in this revenue ruling.
Issue 8: If a dealer in securities originates or acquires an evidence of indebtedness in the ordinary course of a trade or
business, are there any exceptions to the
requirement that the dealer make an identification under § 475(b)(2) before the
close of the day on which it originates or
acquires the security?
Holding 8: Yes. Pending further guidance, if a financial institution (as defined
in § 265(b)(5)) originates or acquires an
evidence of indebtedness in the ordinary
course of a trade or business, an identification of the evidence of indebtedness is
timely if it is made in accordance with the
dealer’s accounting practice, but no later
than 30 calendar days after the date of
origination, or acquisition, by the financial institution. The preceding sentence
applies to any dealer in securities for evidences of indebtedness that are mortgage
loans.
Also, pending further guidance, a
dealer in securities that enters into commitments to acquire mortgage loans may
identify those commitments as being held
for investment if the dealer acquires the
mortgage loans and holds the mortgages
as investments. This identification of
commitments to acquire mortgage loans
must be made in accordance with the
dealer’s accounting practice, but no later
than 30 calendar days after the date of acquisition of the mortgage loans.
Issues 9, 10, and 11 discussed transitional issues concerning proper identification, computation of adjustments, and the
period over which to spread any adjustments, for taxable years that included December 31, 1993. As the transition period
has now passed, Issues 9, 10, and 11 are
obsolete and are not reprinted in this revenue ruling.

September 29, 1997

Issue 12: May a taxpayer use an
amended return to make an election under
§ 1.475(c)–1(c)(1)(ii) (which concerns
taxpayers that purchase securities from
customers but make no more than negligible sales of securities)?
Holding 12: For any taxable year for
which an original federal income tax return is filed after October 31, 1997, an
election under § 1.475(c)–1(c)(1)(ii) must
be made on an original federal income tax
return that is filed on or before the due
date (including any extensions of time) for
that return. For any taxable year for which
an original federal income tax return was
filed on or before October 31, 1997, an
election under § 1.475(c)– 1(c)(1)(ii) also
may be made on an amended return filed
not later than October 31, 1997. Not later
than December 15, 1997, compliance with
§ 475 must be reflected on an original or
amended return for every other taxable
year which is subject to the election and
the original return for which is due on or
before October 31, 1997. Note that
amended returns must be filed before the
expiration of the statute of limitations on
assessment under § 6501(a).
As is noted in Holding 17 below, a taxpayer subject to more than one exemption
must affirmatively elect out of all applicable exemptions to be treated as a dealer in
securities.
Issue 13: If a taxpayer wishes to use an
amended return to make an election out of
the customer paper exemption under
§ 1.475(c)–1(b)(4)(i)(B), by what date
must the taxpayer file the amended return?
Holding 13: Section 1.475(c)–1(b)
(4)(i)(B) provides a June 23, 1997, deadline to make the customer paper election
on an amended return. Notice 97–37,
1997–27 I.R.B. 8, provides that additional
guidance will extend that deadline. Accordingly, that deadline to file an amended
return is extended to October 31, 1997.
Not later than December 15, 1997, compliance with § 475 must be reflected on an
original or amended return for every other
taxable year which is subject to the election and the original return for which is
due on or before October 31, 1997. Note
that amended returns must be filed before
the expiration of the statute of limitations
on assessment under § 6501(a).
Issue 14: What is the general rule for
identifying a security as excepted from
mark-to-market accounting?

September 29, 1997

Holding 14: For a security to be exempt
from mark-to-market accounting, the taxpayer must make an identification that is
timely under § 475(b)(2), which generally
requires a security to be identified before
the close of the day on which it is acquired.
For the only current exceptions to this rule,
see Holding 8 above (identifications of securities by financial institutions and dealers
in mortgages), § 1.475(b)–1(b)(4)(ii)(A)
(identification of securities to which
§ 1.475(b)–1(b)(1) ceases to apply), and
Holding 15 below (special identification
rules for taxpayers not treated as dealers
under § 1.475(c)–1T). For information
about the required specificity of the identification, see Holding 5 above.
Issue 15: If a taxpayer makes an election
out of either § 1.475(c)–1(b)(1) (customer
paper exemption) or § 1.475(c)–1(c)(1)
(negligible sales exemption) and the election has the effect of causing the taxpayer
to be treated as a dealer in securities for a
taxable year starting before the date the taxpayer filed the documentation effecting the
election (date of the election), how does the
taxpayer identify securities that were acquired before the date of the election?
Holding 15: A special identification
regime applies to taxpayers that satisfy
the following criteria:
First, the taxpayer is making an election out of the customer paper exemption,
the negligible sales exemption, or both.
Second, the taxpayer was not treated as
a dealer in securities under § 1.475(c)–1T
(as contained in 26 CFR part 1 revised
April 1, 1996).
The special identification regime applies
only to securities (“transition securities”)
for which an identification would have
been timely under the general rule (described in Holding 14 above) only if made
on or before October 31, 1997. In applying the preceding sentence, a taxpayer may
choose to substitute any earlier date that is
on or after December 24, 1996. To make
this substitution, the taxpayer must place in
its books and records no later than October
31, 1997, an unambiguous statement that
the taxpayer chooses to apply the general
identification rule described in Holding 14
for all securities acquired on or after the
specific date selected by the taxpayer.
Under the special identification regime,
a transition security was properly identified
as exempt for the purposes of § 475(b)(2)
or (c)(2)(F)(iii) if the information that is

6

contained in the taxpayer’s books and
records and that was entered substantially
contemporaneously with the date of acquisition of the transition security supports a
conclusion that the transition security was
described by § 475(b)(1)(A), (B), or (C).
This rule applies even if the information in
the books and records does not meet the
specificity that Holding 5 generally requires for identification. The status of a
transition security that was acquired before
the first day of the taxable year for which
the election is being made is determined by
examining the books and records as of the
last day of the preceding taxable year.
The taxpayer must, by October 31,
1997, place in its books and records a
statement resolving ambiguities, if any,
concerning which transition securities are
properly identified within the meaning of
the preceding paragraph. Any information that supports treating a transition security as being described in § 475(b)(2) or
(c)(2)(F)(iii) must be applied consistently.
A taxpayer, in determining whether a
transition security must be identified, must
apply the following principles: if the transition security was identified under
§ 1.1221–2 or § 1256(e) and the item
being hedged is described in
§ 475(b)(1)(C)(i) or (ii), the § 1.1221–2 or
§ 1256(e) identification constitutes an
identification for purposes of § 475(b)(2);
and, if the item being hedged was ordinary
property, as defined in § 1.1221–2, and the
taxpayer did not identify the transition security as a hedging transaction, the transition security cannot be identified under
§ 475(b)(1)(C).
If a taxpayer made a protective identification (as described in Issue 1 above) of a
transition security, and subsequent to the
protective identification the taxpayer
makes an election that causes the taxpayer
to be a dealer in securities for purposes of
§ 475, the protective identification is recognized and the taxpayer is subject to the
general rules governing identifications for
all transition securities that were eligible
to be timely identified after the date that
the taxpayer began making protective
identifications. Thus, if a transition security was properly and timely identified as
exempt from being marked to market and
remains eligible for the exemption
claimed, that transition security is not
marked to market even though § 475 applies to the taxpayer. If a transition secu-

1997–39 I.R.B.

rity was properly and timely identified
and thereafter ceases to be held for investment or as a hedge, see § 475(b)(3). If a
transition security was not eligible to be
identified as exempt, see § 475(d)(2).
Issue 16: If an issuer of an evidence of
indebtedness has the right to prepay at
any time without a penalty (for example,
a revolving credit card balance), does that
right preclude that indebtedness from
having a fair market value that is greater
than the face value of the obligation?
Holding 16: No. Securities must be
marked to fair market value based on all the
facts and circumstances. For example, in
light of contractual interest rates and general
payment history on customer obligations,
the fair market value of a customer obligation may be greater than the face amount,
even if the customer has the right to repay
the debt at its face amount at any time.
Issue 17: If a taxpayer would meet the
definition of a dealer in securities under
§ 475 but otherwise satisfies more than
one exemption from dealer status, must
the taxpayer elect out of all applicable
exemptions to be a dealer in securities
for the purpose of § 475?
Holding 17: Generally, a taxpayer must
make an election out of all applicable exemptions in order to be treated as a dealer
under § 475. A taxpayer subject to multiple exemptions from § 475 must file all
the documentation required to elect out of
each applicable exemption. Sometimes,
the documentation required for one election satisfies all of the filing requirements
for another election. For example, if a taxpayer is subject to both the customer paper
exemption under § 1.475(c)–1(b) and the
negligible sales exemption under
§ 1.475(c)–1(c), the taxpayer may make
an election under § 1.475(c)–1(b)(4) that
is effective as of January 1, 1993, and
timely file an amended 1993 federal income tax return using mark-to-market accounting for securities. The amended
1993 return itself represents an election
out of the negligible sales exemption.
Issue 18: How does a taxpayer that
is in its first year of existence elect out
of an exemption from dealer status
under § 475?
Holding 18: If a taxpayer decides for its
first year of existence to make an election
out of the negligible sales exemption to account for securities on a mark-to-market
basis, the taxpayer should attach to its orig-

1997–39 I.R.B.

inal return for that first year the following
statement: “[Insert name and taxpayer
identification number of the taxpayer]
hereby elects not to be governed by §
1.475(c)–1(c)(1)(i) of the income tax regulations for the taxable year ending [describe the last day of the year] and for subsequent taxable years.” If a taxpayer
decides for its first year of existence to
make an election out of the customer paper
exemption or to make the intragroup-customer election, the taxpayer must meet the
requirements of § 1.475(c)–1.
Issue 19: Which changes of accounting
method are covered by the consent provisions of § 13223(c)(2) of the 1993 Act?
Holding 19: Under § 13223(c)(2) of the
1993 Act, certain changes of accounting
method are treated as made with the consent of the Commissioner. This treatment
extends only to a change in method that
was effected by a taxpayer who (1) became
a dealer for the taxable year that includes
December 31, 1993, merely by virtue of
the passage of the 1993 Act, and (2) who
accounted for securities as a dealer under
§ 475 on its original federal income tax return for that year. Consent for other
changes of method to comply with § 475
must be obtained either on a taxpayer-bytaxpayer basis or as part of automatic consent contained in published guidance. See
Rev. Proc. 97–43, page 12, this Bulletin.
Issue 20: If a taxpayer is accounting
for securities by marking them to market
under § 475(a), may the taxpayer, without
the consent of the Commissioner, file a
federal income tax return for a later taxable year that does not account for securities on a mark-to-market basis?
Holding 20: No. Once a taxpayer has
used the § 475 mark-to-market method as
its method of accounting for securities,
the taxpayer may not change that method
of accounting without obtaining the consent of the Commissioner. See § 446(e).
Unless the Commissioner otherwise prescribes, to request consent the taxpayer
must comply with the requirements of
Rev. Proc. 97–27, 1997–21 I.R.B. 10. For
example, if a taxpayer accounts for securities by marking them to market because
the taxpayer made more than negligible
sales of securities and in a later year
makes only negligible sales of securities,
the taxpayer must obtain the consent of
the Commissioner to change its method of
accounting for securities. If a taxpayer

7

made no more than negligible sales of securities but, pursuant to § 1.475(c)–1(c)(1)(ii), accounted for securities on a
mark-to-market basis and the taxpayer
makes no more than negligible sales of
securities in a subsequent year, the taxpayer must obtain the consent of the
Commissioner to change its method of accounting for securities. Especially in the
latter example, consent for the change
will be granted only in unusual circumstances.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 93–76 as modified by Rev.
Rul. 94–7, is clarified, modified, partially
obsoleted, and superseded. Notice 97–37,
1997–27 I.R.B. 8, is obsoleted.
PROSPECTIVE APPLICATION
Pursuant to § 7805(b), if an identification is made on or before June 30, 1997,
and the identification complies with the
requirements set forth in the third paragraph of Holding 6 of Rev. Rul. 93-76,
the identification will not be treated as
failing to satisfy the requirements of §
475(b)(2) solely on the grounds that it
failed to identify the operative subparagraph of that provision.
PAPERWORK REDUCTION ACT
The collections of information contained in this revenue ruling have been reviewed and approved by the Office of
Management and Budget in accordance
with the Paperwork Reduction Act (44
U.S.C. 3507) under control number
1545–1558.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless the collection of information displays a valid
control number.
The collections of information in this
revenue ruling are in sections 26 CFR
1.475(b)–2, 26 CFR 1.475(b)–4, and 26
CFR 1.475(c)–1. This information is required to facilitate the administration of §
475 of the Internal Revenue Code. This
information will be used to facilitate audits of taxpayers that elect to not be governed by certain exemptions under § 475
of the Code. The collections of information are required to obtain a benefit. The
likely respondents are business or other
for-profit institutions.

September 29, 1997

The recordkeeping burden described in
Holding 6 was reviewed and approved by
the Office of Management and Budget in
accordance with the Paperwork Reduction
Act (44 U.S.C. 3507) under control number
1545–1496.
The estimated total annual recordkeeping burden described in Holding 15 is
450,000 hours.
The estimated annual burden per
recordkeeper varies from 15 hours to 45
hours, depending on individual circumstances, with an estimated average of 22.5
hours. The estimated number of recordkeepers is 20,000.
Books or records relating to a collection
of information must be retained as long as
their contents may become material in the
administration of any internal revenue
law. Generally tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
DRAFTING INFORMATION
The principal authors of this revenue
ruling are Pamela Lew and Robert B.
Williams of the Office of the Assistant
Chief Counsel (Financial Institutions
and Products). For further information
regarding this revenue ruling contact
Ms. Lew at (202) 622-3950 or Mr.
Williams at (202) 622-3960 (not tollfree calls)
26 CFR 1.475(c)–1: Exemptions—identification
requirements.
Questions and answers about the application of
section 475 and the regulations thereunder. See Rev.
Rul. 97–39, page 4.

26 CFR 1.475(c)–1; Definitions—dealer in
securities.
What information must a taxpayer provide in
order to obtain automatic consent to change accounting method when section 475(a) becomes applicable as a result of the taxpayer making an election (i) to treat transactions within a consolidated
group as transactions with customers as provided by
section 1.475(c)–1(a), or (ii) not to be governed by
the exemptions from the status of a dealer in securities provided by section 1.475(c)–1(b) or –1(c)? See
Rev. Proc. 97–43, page 12.

September 29, 1997

Section 6621.— Determination
of Interest Rate
26 CFR 301.6621–1: Interest rate.

Interest rates; underpayments and
overpayments. The rate of interest determined under section 6621 of the Code for
the calendar quarter beginning October 1,
1997, will be 8 percent for overpayments,
9 percent for underpayments, and 11 percent for large corporate underpayments.
The rate of interest paid on the portion of
a corporate overpayment exceeding
$10,000 is 6.5 percent.

Rev. Rul. 97–40
Section 6621 of the Internal Revenue
Code establishes different rates for interest on tax overpayments and interest on
tax underpayments. Under § 6621(a)(1),
the overpayment rate is the sum of the
federal short-term rate plus 2 percentage
points, except the rate for the portion of a
corporate overpayment of tax exceeding
$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 underpayment rate is the
sum of the federal short-term rate plus 3
percentage points.
Section 6621(c) provides that for purposes of interest payable under § 6601 on
any large corporate underpayment, the underpayment rate under § 6621(a)(2) is determined by substituting “5 percentage points”
for “3 percentage points.” See § 6621(c)
and § 301.6621–3 of the Regulations on
Procedure and Administration for the definition of a large corporate underpayment
and for the rules for determining the applicable rate. 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 shortterm rate for the first month in each calendar 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.

8

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 accordance 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, announced that in determining the quarterly interest rates to be used for overpayments and underpayments of tax
under § 6621, the Internal Revenue Service will use the federal short-term rate
based on daily compounding because
that rate is most consistent with § 6621
which, pursuant to § 6622, is subject to
daily compounding.
Rounded to the nearest full percent, the
federal short-term rate based on daily compounding determined during the month of
July 1997 is 6 percent. Accordingly, an
overpayment rate of 8 percent and an underpayment rate of 9 percent are established for the calendar quarter beginning
October 1, 1997. The overpayment rate
for the portion of corporate overpayments
exceeding $10,000 for the calendar quarter
beginning October 1, 1997, is 6.5 percent.
The underpayment rate for large corporate
underpayments for the calendar quarter beginning October 1, 1997, is 11 percent.
These rates apply to amounts bearing interest during that calendar quarter.
Interest factors for daily compound interest for annual rates of 6.5 percent, 8
percent, 9 percent, and 11 percent are
published in Tables 18, 21, 23, and 27 of
Rev. Proc. 95–17, 1995–1 C.B. 556, 572,
575, 577, and 581.
Annual interest rates to be compounded
daily pursuant to § 6622 that apply for
prior periods are set forth in the accompanying tables.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Marcia Rachy of the Office of
Assistant Chief Counsel (Income Tax and
Accounting). For further information regarding this revenue ruling, contact Ms.
Rachy on (202) 622-4940 (not a toll-free
call)

1997–39 I.R.B.

TABLE OF INTEREST RATES
PERIODS BEFORE JUL. 1, 1975 — PERIODS ENDING DEC. 31, 1986
OVERPAYMENTS AND UNDERPAYMENTS
PERIOD

Before Jul. 1, 1975
Jul. 1, 1975—Jan. 31, 1976
Feb. 1, 1976—Jan. 31, 1978
Feb. 1, 1978—Jan. 31, 1980
Feb. 1, 1980—Jan. 31, 1982
Feb. 1, 1982—Dec. 31, 1982
Jan. 1, 1983—Jun. 30, 1983
Jul. 1, 1983—Dec. 31, 1983
Jan. 1, 1984—Jun. 30, 1984
Jul. 1, 1984—Dec. 31, 1984
Jan. 1, 1985—Jun. 30, 1985
Jul. 1, 1985—Dec. 31, 1985
Jan. 1, 1986—Jun. 30, 1986
Jul. 1, 1986—Dec. 31, 1986

RATE

DAILY RATE TABLE
IN 1995–1 C.B.

6%
9%
7%
6%
12%
20%
16%
11%
11%
11%
13%
11%
10%
9%

Table 2, pg. 557
Table 4, pg. 559
Table 3, pg. 558
Table 2, pg. 557
Table 5, pg. 560
Table 6, pg. 560
Table 37, pg. 591
Table 27, pg. 581
Table 75, pg. 629
Table 75, pg. 629
Table 31, pg. 585
Table 27, pg. 581
Table 25, pg. 579
Table 23, pg. 577

TABLE OF INTEREST RATES
FROM JAN. 1, 1987—PRESENT

Jan. 1, 1987—Mar. 31, 1987
Apr. 1, 1987—Jun. 30, 1987
Jul. 1, 1987—Sep. 30, 1987
Oct. 1, 1987—Dec. 31, 1987
Jan. 1, 1988—Mar. 31, 1988
Apr. 1, 1988—Jun. 30, 1988
Jul. 1, 1988—Sep. 30, 1988
Oct. 1, 1988—Dec. 31, 1988
Jan. 1, 1989—Mar. 31, 1989
Apr. 1, 1989—Jun. 30, 1989
Jul. 1, 1989—Sep. 30, 1989
Oct. 1, 1989—Dec. 31, 1989
Jan. 1, 1990—Mar. 31, 1990
Apr. 1, 1990—Jun. 30, 1990
Jul. 1, 1990—Sep. 30, 1990
Oct. 1, 1990—Dec. 31, 1990
Jan. 1, 1991—Mar. 31, 1991
Apr. 1, 1991—Jun. 30, 1991
Jul. 1, 1991—Sep. 30, 1991
Oct. 1, 1991—Dec. 31, 1991
Jan. 1, 1992—Mar. 31, 1992
Apr. 1, 1992—Jun. 30, 1992
Jul. 1, 1992—Sep. 30, 1992
Oct. 1, 1992—Dec. 31, 1992

1997–39 I.R.B.

OVERPAYMENTS
RATE TABLE
PG
1995–1 C.B.

UNDERPAYMENTS
RATE TABLE
PG
1995–1 C.B.

8%
8%
8%
9%
10%
9%
9%
10%
10%
11%
11%
10%
10%
10%
10%
10%
10%
9%
9%
9%
8%
7%
7%
6%

9%
9%
9%
10%
11%
10%
10%
11%
11%
12%
12%
11%
11%
11%
11%
11%
11%
10%
10%
10%
9%
8%
8%
7%

21
21
21
23
73
71
71
73
25
27
27
25
25
25
25
25
25
23
23
23
69
67
67
65

9

575
575
575
577
627
625
625
627
579
581
581
579
579
579
579
579
579
577
577
577
623
621
621
619

23
23
23
25
75
73
73
75
27
29
29
27
27
27
27
27
27
25
25
25
71
69
69
67

577
577
577
579
629
627
627
629
581
583
583
581
581
581
581
581
581
579
579
579
625
623
623
621

September 29, 1997

TABLE OF INTEREST RATES — Continued
FROM JAN. 1, 1987—PRESENT

Jan. 1, 1993—Mar. 31, 1993
Apr. 1, 1993—Jun. 30, 1993
Jul. 1, 1993—Sep. 30, 1993
Oct. 1, 1993—Dec. 31, 1993
Jan. 1, 1994—Mar. 31, 1994
Apr. 1, 1994—Jun. 30, 1994
Jul. 1, 1994—Sep. 30, 1994
Oct. 1, 1994—Dec. 31, 1994
Jan. 1, 1995—Mar. 31, 1995
Apr. 1, 1995—Jun. 30, 1995
Jul. 1, 1995—Sep. 30, 1995
Oct. 1, 1995—Dec. 31, 1995
Jan. 1, 1996—Mar. 31, 1996
Apr. 1, 1996—Jun. 30, 1996
Jul. 1, 1996—Sep. 30, 1996
Oct. 1, 1996—Dec. 31, 1996
Jan. 1, 1997—Mar. 31, 1997
Apr. 1, 1997—Jun. 30, 1997
Jul. 1, 1997—Sep. 30, 1997
Oct. 1, 1997—Dec. 31, 1997

OVERPAYMENTS
RATE TABLE
PG
1995–1 C.B.

UNDERPAYMENTS
RATE TABLE
PG
1995–1 C.B.

6%
6%
6%
6%
6%
6%
7%
8%
8%
9%
8%
8%
8%
7%
8%
8%
8%
8%
8%
8%

7%
7%
7%
7%
7%
7%
8%
9%
9%
10%
9%
9%
9%
8%
9%
9%
9%
9%
9%
9%

19
19
19
19
19
19
21
23
23
25
23
23
71
69
71
71
23
23
23
23

RATE

TABLE
PG
1995–1 C.B.

13%
12%
12%
12%
11%
10%
10%
9%
9%
9%
9%
9%
9%
9%
10%
11%
11%
12%
11%

31
29
29
29
75
73
73
71
23
23
23
23
23
23
25
27
27
29
27

17
17
17
17
17
17
19
21
21
23
21
21
69
67
69
69
21
21
21
21

571
571
571
571
571
571
573
575
575
577
575
575
623
621
623
623
575
575
575
575

573
573
573
573
573
573
575
577
577
579
577
577
625
623
625
625
577
577
577
577

TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991—PRESENT

Jan. 1, 1991—Mar. 31, 1991
Apr. 1, 1991—Jun. 30, 1991
Jul. 1, 1991—Sep. 30, 1991
Oct. 1, 1991—Dec. 31, 1991
Jan. 1, 1992—Mar. 31, 1992
Apr. 1, 1992—Jun. 30, 1992
Jul. 1, 1992—Sep. 30, 1992
Oct. 1, 1992—Dec. 31, 1992
Jan. 1, 1993—Mar. 31, 1993
Apr. 1, 1993—Jun. 30, 1993
Jul. 1, 1993—Sep. 30, 1993
Oct. 1, 1993—Dec. 31, 1993
Jan. 1, 1994—Mar. 31, 1994
Apr. 1, 1994—Jun. 30, 1994
Jul. 1, 1994—Sep. 30, 1994
Oct. 1, 1994—Dec. 31, 1994
Jan. 1, 1995—Mar. 31, 1995
Apr. 1, 1995—Jun. 30, 1995
Jul. 1, 1995—Sep. 30, 1995

September 29, 1997

10

585
583
583
583
629
627
627
625
577
577
577
577
577
577
579
581
581
583
581

1997–39 I.R.B.

TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS — Continued
FROM JANUARY 1, 1991– PRESENT
RATE

Oct. 1, 1995—Dec. 31, 1995
Jan. 1, 1996—Mar. 31, 1996
Apr. 1, 1996—Jun. 30, 1996
Jul. 1, 1996—Sep. 30, 1996
Oct. 1, 1996—Dec. 31, 1996
Jan. 1, 1997—Mar. 31, 1997
Apr. 1, 1997—Jun. 30, 1997
Jul. 1, 1997—Sep. 30, 1997
Oct. 1, 1997—Dec. 31, 1997

TABLE PG
1995–1 C.B.

11%
11%
10%
11%
11%
11%
11%
11%
11%

27
75
73
75
75
27
27
27
27

581
629
627
629
629
581
581
581
581

RATE

TABLE PG
1995–1 C.B

6.5%
7.5%
6.5%
6.5%
6.5%
5.5%
6.5%
6.5%
6.5%
6.5%
6.5%
6.5%

18
20
18
18
66
64
66
66
18
18
18
18

TABLE OF INTEREST RATES FOR CORPORATE
OVERPAYMENTS EXCEEDING $10,000
FROM JANUARY 1, 1995 — PRESENT

Jan. 1, 1995—Mar. 31, 1995
Apr. 1, 1995—Jun. 30, 1995
Jul. 1, 1995—Sep. 30, 1995
Oct. 1, 1995—Dec. 31, 1995
Jan. 1, 1996—Mar. 31, 1996
Apr. 1, 1996—Jun. 30, 1996
Jul. 1, 1996—Sep. 30, 1996
Oct. 1, 1996—Dec. 31, 1996
Jan. 1, 1997—Mar. 31, 1997
Apr. 1, 1997—Jun. 30, 1997
Jul. 1, 1997—Sep. 30, 1997
Oct. 1, 1997—Dec. 31, 1997

572
574
572
572
620
618
620
620
572
572
572
572

Section 7805.—Rules and Regulations
26 CFR 301.7805–1: Rules and regulations.
Questions and answers about the application of section 475 and the regulations thereunder. See Rev. Rul. 97–39, page 4.

1997–39 I.R.B.

11

September 29, 1997

Part III. Administrative, Procedural, and Miscellaneous
26 CFR 601.204: Changes in accounting periods
and in methods of accounting.
(Also Part I, §§ 446, 475; 1.446–1, 1.475(c)–1.)

Rev. Proc. 97–43
SEC. 1. PURPOSE
This revenue procedure tells taxpayers
how to request consent to change methods
of accounting to comply with elections
out of certain exemptions from dealer status for purposes of § 475 of the Internal
Revenue Code. See § 1.475(c)–1(a)(3) of
the Income Tax Regulations (concerning
taxpayers buying securities from or selling securities to members of the same
consolidated group); § 1.475(c)–1(b)
(concerning sellers of nonfinancial goods
and services); and § 1.475(c)–1(c) (concerning taxpayers that engage in no more
than negligible sales of securities).
SEC. 2. BACKGROUND
.01 Under § 475(a), dealers in securities must use a mark-to-market accounting method for securities other than certain securities timely identified as exempt
under § 475(b)(2). Section 475(c)(1) defines dealer in securities for purposes of
§ 475.
.02 One component of the definition of
dealer in securities in § 475(c)(1) is entering into transactions in securities with
customers. Members of the same consolidated group are ordinarily not each
other ’s customers for purposes of
§ 475(c)(1). Section 1.475(c)–1(a)(3)(ii).
A consolidated group may, however, elect
to treat its members as potential customers of one another for purposes of
§ 475(c)(1) (the intragroup-customer
election). Unless the Commissioner otherwise prescribes, the election is made by
filing a specified statement with a timely
filed consolidated federal income tax return. Section 1.475(c)–1(a)(3)(iii)(B).
.03 A taxpayer is ordinarily exempt
from treatment as a dealer in securities if
the taxpayer would not be a dealer in securities but for its purchases and sales of
debt instruments that are customer paper
as defined in § 1.475(c)–1(b)(2) with respect to the taxpayer or another member
of its consolidated group (the customer
paper exemption). Section 1.475
(c)–1(b)(1). Taxpayers may elect not to

September 29, 1997

be governed by the customer paper exemption. Section 1.475(c)–1(b)(4). Unless the Commissioner otherwise prescribes, the election generally is made by
filing a specified statement with a timely
filed federal income tax return (or, in limited cases, an amended return). Section
1.475(c)–1(b)(4)(i); see also Rev. Rul.
97–39, page 4, this Bulletin, Holding 13.
.04 A taxpayer’s purchases of securities
from customers do not make the taxpayer
a dealer in securities if the taxpayer engages in no more than negligible sales of
securities as defined in § 1.475(c)–1(c)(2)
(the negligible sales exemption). Section
1.475(c)–1(c)(1)(i). Taxpayers may elect
not to be governed by the negligible sales
exemption. This is done on a timely filed
original federal income tax return (or, in
limited cases, on an amended return).
Section 1.475(c)–1(c)(1)(ii); see also Rev.
Rul. 97–39, Holding 12.
.05 In general, making one of these
elections results in the taxpayer being required to change its method of accounting
to reflect the application of § 475(a). But
see Rev. Rul. 97-39, Holding 17 (discussing circumstances in which more than
one election must be made for § 475(a) to
apply). A taxpayer must obtain the consent of the Commissioner to change an
accounting method. Section 446(e).
.06 A taxpayer that accounts for securities under § 475(a) may change that
method only with the consent of the Commissioner. Section 446(e). See Rev. Rul.
97–39, Holding 20; see also Rev. Proc.
97–27, 1997–21 I.R.B. 10, or its successor on how to request consent to change.
SEC. 3. SCOPE
This revenue procedure applies to taxpayers required to change methods of accounting as a result of elections under
§ 1.475(c)–1(a)(3)(iii), –1(b)(4), or
–1(c)(1)(ii) (including taxpayers that
made those elections prior to September
10, 1997).
SEC. 4. PROCEDURE
.01 If a taxpayer elects to be governed
by the intragroup-customer election and
the election results in the taxpayer being
required to change its method of accounting, then the taxpayer must attach both

12

the statement described in § 1.475(c)–
1(a)(3)(iii)(B) and the additional documents required by section 4.07 of this revenue procedure to the taxpayer’s timely
filed original federal income tax return for
the first year subject to the election. If
that return is filed on or before October
31, 1997, however, the additional documents may be filed at a later date in accordance with section 4.04. In addition, a
copy of those documents must be filed as
required by section 4.05 and, if applicable, section 4.06.
.02 If a taxpayer elects not to be governed by the customer paper exemption
and the election results in the taxpayer
being required to change its method of accounting, then the taxpayer must attach
both the statement described in
§ 1.475(c)–1(b)(4)(i) and the additional
documents required by section 4.07 of
this revenue procedure to a timely filed
federal income tax return or to an
amended return, as appropriate under
§ 1.475(c)–1(b)(4)(i)(A) or (B) or Holding 13 of Rev. Rul. 97-39. If that return is
filed on or before October 31, 1997, however, the additional documents may be
filed at a later date in accordance with section 4.04. In addition, a copy of those documents must be filed as required by section
4.05 and, if applicable, section 4.06.
.03 If a taxpayer elects not to be governed by the negligible sales exemption
and the election results in the taxpayer
being required to change its method of accounting, then the taxpayer must attach
the documents required by section 4.07 of
this revenue procedure to the timely filed
original federal income tax return described in § 1.475(c)–1(c)(1)(ii) or the
amended return described in Rev. Rul.
97–39, Holding 12 (discussing when the
election not to be governed by the negligible sales exemption may be made by filing an amended return). If that return is
filed on or before October 31, 1997, however, the additional documents may be
filed at a later date in accordance with section 4.04. In addition, a copy of those documents must be filed as required by section
4.05 and, if applicable, section 4.06.
.04 A taxpayer that files the return described in section 4.01, 4.02, or 4.03 of
this revenue procedure on or before October 31, 1997, need not attach the docu-

1997–39 I.R.B.

ments required by section 4.07 to that return if the taxpayer instead attaches these
documents to the first federal income tax
return or amended return filed by the taxpayer after October 31, 1997, that is for a
taxable year subject to the election.
.05 The taxpayer must file a copy of the
documents required by section 4.07 of this
revenue procedure with the Commissioner
of Internal Revenue, Attention:
CC:DOM:IT&A, P.O. Box 7604, Benjamin
Franklin Station, Washington, DC 20044
(or, in the case of a designated private delivery service: Commissioner of Internal
Revenue, Attention: CC:DOM:IT&A,
1111 Constitution Avenue, NW, Washington, DC 20224). This filing must occur on
or before the later of October 31, 1997, and
the time the taxpayer files the return described in section 4.01, 4.02, or 4.03. The
documents must contain the name and telephone number of the examining agent, appeals office, or counsel of record for the
government, if any, described in section
4.06.
.06 If a taxpayer files an amended return
on which the taxpayer elects not to be governed by the customer paper exemption or
the negligible sales exemption and, at the
time of filing, the taxable year to which the
amended return applies or any subsequent
taxable year is before the Service or before
a federal court, then the taxpayer must provide a copy of the documents required by
section 4.07 of this revenue procedure to
the persons provided below.
(1) If a taxable year in question is before the Service, a copy of the documents
required by section 4.07 of this revenue
procedure must be provided to the taxpayer’s examining agent or, instead, if the
taxable year has been assigned to an appeals office, to such appeals office. The
taxpayer must provide the copy by the
later of October 31, 1997, and the day that
is 30 days after the date the taxable year
in question first came before the Service.
For purposes of this section, a taxable
year shall be considered before the Service from the time the taxpayer (or any
member of a consolidated group of which
taxpayer was a member during the taxable
year) has been contacted in any manner
by a representative of the Service for the
purpose of scheduling any type of examination of its federal income tax return for
that year until the receipt of a no-change
letter for that year, the execution of a

1997–39 I.R.B.

waiver of restrictions on assessment and
collection of deficiency in tax and acceptance of overassessment, the expiration of
the period for filing a petition with the
Tax Court for that year, or the filing of a
petition with the Tax Court.
(2) If a taxable year in question is before a federal court, a copy of the documents required by section 4.07 of this revenue procedure must be provided to
counsel of record for the government.
The taxpayer must provide the copy by
the later of October 31, 1997, and the day
which is 30 days after the date the taxable
year in question first came before a federal court. For purposes of this section, a
taxable year will be considered before a
federal court if the treatment of any item
(whether or not involving a method of accounting) for such taxable year would be
considered before a federal court for the
purpose of Rev. Proc. 97–27, 1997–21
I.R.B. 10, section 3.08(3).
.07 The taxpayer must properly complete and execute a Form 3115. A legend
must be typed on the top of the first page
of the Form 3115 that identifies the applicable parts of section 4 of this revenue
procedure (other than section 4.04 and
section 4.07). The legend should read
substantially as follows: “Filed under section[s] 4.** [and 4.**] of Rev. Proc.
97–43.”
(1) Form 3115 requires an explanation
of the legal basis of the proposed change
in method of accounting. That explanation must state specifically which election(s) the taxpayer made under
§ 1.475(c)–1. See also Rev. Rul. 97–39,
Holding 17 (discussing the need for multiple elections).
(2) The taxpayer must attach to the
Form 3115 a statement describing all identifications, if any, that are or were effective
for the purposes of § 475(b)(2) of securities acquired prior to the date of executing
the Form 3115 (or the date of filing if filed
more than 30 days after executing). For
identifications that are not subject to Holding 15 of Rev. Rul. 97–39, the statement
must describe the procedures or systems
used to make each identification, the date
on which the identifications were made,
and the content and location of the identifications in the taxpayer ’s books and
records. See Rev. Rul. 97–39, Holding 14
(discussing when an identification under
§ 475(b)(2) is timely made). If the tax-

13

payer holds, or held, transition securities,
which are subject to identification under
Holding 15 of Rev. Rul. 97–39, the statement must describe the basis for concluding that the securities were or were not described in § 475(b)(1)(A), (B), or (C),
including the date, content, and location of
documents in the taxpayer’s books and
records that support such conclusions. If
there were no identifications, or if none of
the taxpayer’s securities were transition securities, then the statement should convey
this information.
SEC. 5. CONSENT
.01 If a taxpayer described in section 3
of this revenue procedure complies with
the requirements set forth in section 4,
then the Commissioner hereby grants
consent for the taxpayer to change its
method of accounting for securities to reflect the application of § 475(a).
.02 Pending further guidance, in the
case of any taxpayer granted automatic
consent to change an accounting method
by this revenue procedure, § 475(a) applies only to changes in value of securities
occurring after the start of the year of
change, and any built-in gain or loss as of
the beginning of the year of change must
be taken into account under rules similar
to § 1.475(a)–3(b)(2).
SEC. 6. EFFECTIVE DATE
This revenue procedure is effective September 10, 1997, the date this revenue procedure was made available to the public.
SEC. 7. PAPERWORK REDUCTION
ACT
The collections of information contained in this revenue procedure have
been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act
(44 U.S.C. 3507) under control number
1545–1558.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless the collection of information displays a valid
control number.
The collections of information in this
revenue procedure are in sections 2.02,
2.03, 2.04, and 4.07(2). This information
is required by the Service in order to facilitate monitoring taxpayers changing ac-

September 29, 1997

counting methods resulting from making
the elections provided by § 1.475(c)–
1(a)(3)(iii), –1(b)(4), or –1(c)(1)(ii). The
information collected will be used if a taxpayer making the change is audited. The
collection of information is required to obtain a benefit. The likely respondents are
business or other for-profit institutions.
The collection of information contained
in sections 2.02, 2.03, and 2.04 were reviewed and approved by the Office of Management and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C. 3507)
under control number 1545–1496.
The estimated total annual reporting

September 29, 1997

burden described in section 4.07(2) is
100,000 hours.
The estimated annual burden per respondent varies from .25 hours to 50
hours, depending on individual circumstances, with an estimated average of 5
hours. The estimated number of respondents is 20,000.
The estimated annual frequency of responses is once in the existence of each
respondent.
Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal

14

revenue law. Generally, tax returns and
tax return information are confidential, as
required by 26 U.S.C. 6103.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Kenneth P. Christman of the
Office of Assistant Chief Counsel (Financial Institutions and Products). For further information regarding this revenue
procedure, contact Mr. Christman at 202622-3950 (not a toll-free call).

1997–39 I.R.B.

Part IV. Items of General Interest
Medical Savings Accounts
Announcement 97–96
PURPOSE
Sections 220(i) and (j) of the Internal
Revenue Code provide that if the number
of medical savings accounts (MSAs) established as of June 30, 1997, exceeds
525,000, then October 1, 1997, is a “cutoff” date for the MSA pilot project. The
Internal Revenue Service has determined
that the applicable number of MSAs established as of June 30, 1997, is 17,145.
Consequently, October 1, 1997 is not a
“cut-off” date and 1997 is not a “cut-off”
year for the MSA pilot project.
BACKGROUND
The Health Insurance Portability and
Accountability Act of 1996 added section
220 to the Code to permit eligible individuals to establish MSAs under a pilot project effective January 1, 1997. The pilot
project has a scheduled “cut-off” year of
2000, but may have an earlier “cut-off”
year if the number of individuals who
have established MSAs exceeds certain
numerical limitations. See sections 220(i)
and (j).
If a year is a “cut-off” year, section
220(i)(1) generally provides that no individual will be eligible for a deduction or
exclusion for MSA contributions for any
taxable year beginning after the “cut-off”
year unless the individual (A) was an active MSA participant for any taxable year
ending on or before the close of the “cutoff” year, or (B) first became an active
MSA participant for a taxable year ending
after the “cut-off” year by reason of coverage under a high deductible health plan
of an MSA-participating employer.
Section 220(j)(1) provides that the numerical limitation for 1997 is exceeded if
the number of MSAs established as of
June 30, 1997, is more than 525,000.
Under section 220(j)(3), in determining
whether any calendar year is a “cut-off”
year, the MSA of any previously uninsured individual is not taken into account.
In addition, section 220(j)(4)(D) specifies
that, to the extent practical, all MSAs established by an individual are aggregated
and two married individuals opening sep-

1997–39 I.R.B.

arate MSAs are to be treated as having a
single MSA for purposes of determining
the number of MSAs.
Based on Forms 8851 filed by MSA
trustees and custodians, it has been determined that 22,051 taxpayers have established MSAs as of June 30, 1997. Of this
total, 3,670 taxpayers were reported as
previously uninsured, and are therefore
not taken into account in determining
whether 1997 is a “cut-off” year. In addition, 1,236 taxpayers were reported as excludable from the count because their
spouse also established an MSA. Accordingly, because the applicable number of
MSAs established as of June 30, 1997,
17,145 (22,051 minus (3,670 plus 1,236))
is less than 525,000, 1997 is not a “cutoff” year for the MSA pilot project.
Questions regarding this announcement
may be directed to Felix Zech in the Office of Associate Chief Counsel (Employee Benefits and Exempt Organizations) at (202) 622-4606 (not a toll free
number).

Foundations Status of Certain
Organizations
Announcement 97–98
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 designations in the Cumulative List of Organizations (Publication 78), or on the presumption arising from the filing of notices
under section 508(b) of the Code. This
listing does not indicate that the organizations have lost their status as organizations described in section 501(c)(3), eligible to receive deductible contributions.
Former Public Charities. The following
organizations (which have been treated as
organizations that are not private foundations described in section 509(a) of the
Code) are now classified as private foundations:
Asian-Amerasian Youth, Inc., Albany, NY
Association for Rescue at Sea Inc.,
Webster Groves, MO
Association of Friends of Passages, Inc.,
New York, NY

15

Association to Promote Intercultural
Relations, Inc., Climax, MI
Athena Telematics Foundation, Inc.,
White Plains, NY
Avrohom Z. Shfronsky Torah Fund, Inc.,
Staten Island, NY
Bangladesh Cultural Exchange, Jamaica
Estates, NY
Basic Housing Needs, Inc., New Canaan,
CT
Believers of San Jose De Oasis, Inc.,
Bronx, NY
Big Green Apple Corp., New York, NY
Bill Weete Memorial Fund, Inc.,
Cambridge, MA
Bon Accord Theatre Company of New
York, Inc., New York, NY
Boston Rugby Football Foundation, Inc.,
Newton, MA
Branch Brook Parent Teacher
Association, Smithtown, NY
Brooklyn Community Correction Center
Advisory Board, Inc., Brooklyn, NY
Brooklyn Shipbuilding Foundation, Inc.,
Brooklyn, NY
Burrus Residential Group Home,
Washington, CT
Business Enterprise Assistance of
Connecticut, Inc., Bolton, CT
Causa–Peru, Inc., East Hartford, CT
Cambiata Chamber Players, Inc.,
Kingston, NY
Center for Advancement of International
Relations through Broadcast, New
City, NY
Center for Art and Earth, Inc.,
New York, NY
Chosen Children From Romania,
Barre, VT
Christian Clothing Drive, Inc.,
Merrick, NY
Circle of Children Charitable Foundation,
Inc., Lexington, MA
Citizen Empowerment, Inc., Bennington,
NH
Citizens Radiological Monitoring
Network Pilgrim, Inc., Duxbury, MA
Citizens United for the Rehab of Errants
Life Long Care, Inc., Jamaica Plain,
MA
Clothe the Children Foundation, New
York, NY
Clyde E. Wheeler Group, Mastic, NY
Coalition for Sustainable Agriculture,
Castile, NY

September 29, 1997

Cobble Hill Foundation, Inc.,
Brooklyn, NY
Columbus Avenue Committee, Inc., New
York, NY
Columbus Outdoor Club, Columbus, OH
Communication for Development and
Change, Inc., New York, NY
Connecticut Environment Roundtable,
Inc., Hartford, CT
Cooley Center for Indian Unity, Inc.,
Providence, RI
Diversified Educational Resources, Inc.,
Northfield Falls, VT
Don Costa Scholarship Fund, Lowell, MA
Drop In Club of Danbury CT Inc.,
Danbury, CT
Drum—The Heartbeat of the Native
American Community, Inc.,
Chicchester, NH
Eastcor, Inc., Hampton Bays, NY
East End Seaport and Marine Foundation,
Inc., Greenport, NY
Eastern Cashmere Association,
Shoreham, VT
Eaton Fire Reserve Association,
Eaton, NH
Ebony Horsewomen, Inc., Hartford, CT
E Call, Inc., Boston, MA
Echo Evangelique De Boston, Inc.,
Mattapan, MA
Ecletic Theatre Co., Inc., New York, NY
Educational Partnership, New York, NY
Education Law Project, Inc.,
Willimantic, CT
Environment Technology Education
Center, Inc., Cambridge, MA

September 29, 1997

Essex Firefighters Association,
Essex, VT
European Child Care Day Care Center,
Inc., Brooklyn, NY
Everybuddy, Incorporated, Manchester
Center, VT
Family and Child Therapies, Inc., New
York, NY
Faran Club International, Inc.,
Jamaica, NY
Father Peter G. Young, Jr. Foundation,
Inc., Albany, NY
First Baptist Church Development
Corporation, Strafford, CT
First Responders Emergency Medical
Services Association, Saranac
Lake, NY
Flag Acres Zoo, Inc., Hoosick Falls, NY
Flower City Down Syndrome Network,
Rochester, NY
Footnotes Corp., New York, NY
Force Athletic Club, Inc.,
Swampscott, MA
Foundation for International Environmental Law & Development, Inc.,
New York, NY
Foundation for the Fiftieth Anniversary
of the United Nations, New York, NY
Franklin County Mens Education Network, Inc., Greenfield, MA
Free Gift, Hudson, ME
French Cultural Heritage Society, Ltd.,
Brooklyn, NY
Friends of Fort Knox, Bucksport, ME
Friends of Frederick Douglass, Inc.,
Rochester, NY

16

Friends of Frederick E. Samuels
Foundations, Inc., New York, NY
Friends of Greenfield Public Schools,
Greenfield, MA
Friends of Kids Kreations, Inc.,
Monroe, CT
Friends of Ohel Moshe Institute, Inc.,
New York, NY
Friends of Salem Woods, Inc.,
Salem, MA
Hamilton Senior Center Foundation,
Hamilton, TX
National Black United Front Educational
Fund, Kansas City, MO
Pennsylvania Childrens Services, Inc.,
Harrisburg, PA
Public Lands Action Network, Silver
City, NM
Renewable Energy for African
Development, Inc., Arlington, VA
Saugus Business Education
Collaborative, Inc., Saugus, MA
If an organization listed above submits
information that warrants the renewal of its
classification as a public charity or as a private operating foundation, the Internal
Revenue Service will issue a ruling or determination letter with the revised classification 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 classification of foundation status in the Internal
Revenue Bulletin.

1997–39 I.R.B.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior published position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is 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 confusion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously
published ruling and points out an essential 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 published ruling that is not considered determinative with respect to future transactions. 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 substance has been included in regulations
subsequently adopted.
Revoked describes situations where the
position in the previously published ruling 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 period of time in separate rulings. If the

new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example, modified
and superseded describes a situation
where the substance of a previously published 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 superseded.
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 published 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

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.

The following abbreviations in current use and formerly used will appear in material published in the
Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C.—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.

1997–39 I.R.B.

17

September 29, 1997

Numerical Finding List1
Bulletins 1997–27 through 1997–38
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
97–78, 1997–34 I.R.B. 11
97–79, 1997–35 I.R.B. 8
97–80, 1997–34 I.R.B. 12
97–81, 1997–34 I.R.B. 12
97–82, 1997–34 I.R.B. 12
97–83, 1997–34 I.R.B. 13
97–84, 1997–34 I.R.B. 13
97–85, 1997–35 I.R.B. 8
97–86, 1997–35 I.R.B. 9
97–87, 1997–35 I.R.B. 9
97–88, 1997–35 I.R.B. 9
97–89, 1997–36 I.R.B. 10
97–90, 1997–36 I.R.B. 10
97–91, 1997–37 I.R.B. 25
97–92, 1997–37 I.R.B. 26
97–93, 1997–36 I.R.B. 11
97–94, 1997–36 I.R.B. 12
97–95, 1997–36 I.R.B. 12
97–97, 1997–38 I.R.B. 22
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

Proposed Regulations:
REG–104893–97, 1997–29 I.R.B. 13
REG–105160–97, 1997–37 I.R.B. 22
REG–106043–97, 1997–37 I.R.B. 24
REG–107644–97, 1997–32 I.R.B. 24
REG–208151–91, 1997–38 I.R.B. 21
Revenue Procedures:
97–32, 1997–27 I.R.B. 9
97–32A, 1997–34 I.R.B. 10
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
97–33, 1997–34 I.R.B. 4
97–34, 1997–34 I.R.B. 14
97–35, 1997–35 I.R.B. 4
97–36, 1997–36 I.R.B. 5
97–37, 1997–37 I.R.B. 15
97–38, 1997–38 I.R.B. 14
Treasury Decisions:
8722, 1997–29 I.R.B. 4
8723, 1997–30 I.R.B. 4
8724, 1997–36 I.R.B. 4
8725, 1997–37 I.R.B. 16
8726, 1997–34 I.R.B. 7
8727, 1997–34 I.R.B. 5
8728, 1997–37 I.R.B. 4
8729, 1997–38 I.R.B. 4
8730, 1997–38 I.R.B. 16

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
97–46, 1997–34 I.R.B. 10
97–47, 1997–35 I.R.B. 5
97–48, 1997–35 I.R.B. 5
97–49, 1997–36 I.R.B. 8
97–50, 1997–37 I.R.B. 21
97–51, 1997–38 I.R.B. 20
97–52, 1997–38 I.R.B. 20
Railroad Retirement Quarterly Rate:
1997–28 I.R.B. 5

1
A cumulative 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.

September 29, 1997

18

1997–39 I.R.B.

Finding List of Current Action on
1
Previously Published Items
Bulletins 1997–27 through 1997–38
*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
97–32
Modified and amplified by
97–32A, 1997–34 I.R.B. 10
Revenue Rulings:
89–42
Supplemented by
97–31, 1997–32 I.R.B. 4

1

A cumulative 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.

1997–39 I.R.B.

19

September 29, 1997

Notes

September 29, 1997

20

1997–39 I.R.B.

Notes

1997–39 I.R.B.

21

September 29, 1997

Notes

September 29, 1997

22

1997–39 I.R.B.

1997–39 I.R.B.

23

September 29, 1997

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 weekly 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

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 weekly 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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A0c17a071b68709a7. Public record. Not legal advice.