Bulletin No. 2000–14

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Bulletin No. 2000–14

April 3, 2000

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. 2000–18, page 847.

Recapture of gain on disposition of qualified replacement

property. The transfer of qualified replacement property to a

partnership in exchange for a partnership interest by a taxpayer

that has elected to defer the recognition of gain under section

1042(a) of the Code is a disposition of the qualified replacement

property resulting in recapture of the deferred gain under section 1042(e).

of general tax principles to certain abuses regarding foreign

currency losses under section 987 of the Code and announces a prospective regulatory change to the anti-abuse

rule in the proposed regulations.

Announcement 2000–24, page 855.

This announcement contains corrections to T.D. 8834

(1999–34 I.R.B. 251) relating to the treatment of distributions

to foreign persons.

Rev. Rul. 2000–19, page 849.

ESTATE AND GIFT TAX

Federal rates; adjusted federal rates; adjusted federal

long-term rate, and the long-term exempt rate. For purposes of sections 1274, 1288, 382, and other sections of the

Code, tables set forth the rates for April 2000.

Announcement 2000–25, page 855.

Notice 2000–20, page 851.

Request for comments on the revision of proposed section 987 regulations. This notice discusses the application

Finding Lists begin on page ii.

Index for January through March begins on page iv.

Department of the Treasury

Internal Revenue Service

This announcement contains corrections to T.D. 8819

(1999–20 I.R.B. 5) relating to the use of actuarial tables in

valuing annuities, interests for life or terms of years, and remainder or reversionary interests.

The IRS Mission

Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities

and by applying the tax law with integrity and fairness to

all.

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 are consolidated semiannually into

Cumulative Bulletins, which are sold on a single-copy basis.

It is the policy of the Service to publish in the Bulletin all 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.

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 published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and proce-

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.

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).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The first Bulletin for each month includes a cumulative index

for the matters published during the preceding months.

These monthly indexes are cumulated on a semiannual basis,

and are published in the first Bulletin of the succeeding 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.

April 3, 2000

2000–14 I.R.B.

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

Section 42.—Low-Income

Housing Credit

Section 483.—Interest on

Certain Deferred Payments

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

fied replacement property resulting in recapture of the deferred gain under section

1042(e).

Rev. Rul. 2000–18

ISSUE

Section 280G.—Golden

Parachute Payments

Section 642.—Special Rules for

Credits and Deductions

Federal short-term, mid-term, and long-term

rates are set forth for the month of April 2000. See

Rev. Rul. 2000–19, page 849.

Federal short-term, mid-term, and long-term

rates are set forth for the month of April 2000. See

Rev. Rul. 2000–19, page 849.

Section 382.—Limitation on Net

Operating Loss Carryforwards

and Certain Built-In Losses

Following Ownership Change

Section 721.—Nonrecognition of

Gain or Loss on Contribution

The adjusted applicable federal long-term rate is

set forth for the month of April 2000. See Rev. Rul.

2000–19, page 849.

Section 412.—Minimum Funding

Standards

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

Section 467.—Certain Payments

for the Use of Property or

Services

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

Section 468.—Special Rules for

Mining and Solid Waste

Reclamation and Closing Costs

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

Section 482.—Allocation of

Income and Deductions Among

Taxpayers

Federal short-term, mid-term, and long-term

rates are set forth for the month of April 2000. See

Rev. Rul. 2000–19, page 849.

2000–14 I.R.B.

If qualified replacement property is transferred to

a partnership in exchange for a partnership interest

by a taxpayer that has elected to defer the recognition of gain under section 1042(a) of the Code, is the

transfer a disposition of the qualified replacement

property resulting in recapture of the deferred gain

under section 1042(e) or do the nonrecognition provisions of section 721 apply? See Rev. Rul.

2000–18, on this page.

Section 807.—Rules for Certain

Reserves

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

Section 846.—Discounted

Unpaid Losses Defined

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

Section 1042(e).—Recapture of

Gain on Disposition of Qualified

Replacement Property

(Also section 721)

Recapture of gain on disposition of

qualified replacement property. This

ruling holds that the transfer of qualified

replacement property to a partnership in

exchange for a partnership interest by a

taxpayer that has elected to defer the

recognition of gain under section 1042(a)

of the Code is a disposition of the quali-

847

Whether the transfer of qualified replacement property to a partnership in exchange for a partnership interest by a taxpayer that has elected to defer the

recognition of gain under section 1042(a)

of the Internal Revenue Code is a disposition of the qualified replacement property

resulting in recapture of the deferred gain

under section 1042(e).

FACTS

The taxpayer is a shareholder of Company A, a closely held domestic C corporation. Company A maintains an employee stock ownership plan (ESOP) that

satisfies the requirements of section

4975(e)(7). Company A has one class of

common stock that constitutes employer

securities within the meaning of section

409(l) of the Code. The taxpayer did not

receive the shares in a distribution from a

plan described in section 401(a), or a

transfer pursuant to an option or other

right to acquire stock to which section 83,

422 or 423 applied. The taxpayer sells all

of the Company A shares to the Company

A ESOP and reinvests the proceeds of the

sale in qualified replacement property

(QRP), as defined in section 1042(c)(4),

within 12 months of the date of the sale.

The taxpayer makes a timely election

under section 1042(a) to defer recognition

of the gain realized from the sale of the

qualified securities to the ESOP. Under

section 1042(d), the basis of the QRP is

reduced to reflect the deferred gain on the

sale. After the section 1042 election, the

taxpayer contributes the QRP to a partnership in exchange for an interest in the

partnership.

LAW AND ANALYSIS

Section 1042(a) provides that a taxpayer or executor may elect in certain

cases not to recognize long-term capital

gain on the sale of “qualified securities”

to an employee stock ownership plan (as

April 3, 2000

defined in section 4975(e)(7)) or eligible

worker- owned cooperative if the taxpayer purchases “qualified replacement

property” (as defined in section

1042(c)(4)) within the replacement period

of section 1042(c)(3) and the requirements of section 1042(b) and section

1.1042–1T of the Temporary Income Tax

Regulations are satisfied.

A sale of “qualified securities” meets

the requirements of section 1042(b) if: (1)

the qualified securities are sold to an employee stock ownership plan (as defined

in section 4975(e)(7)) or an eligible

worker-owned cooperative; (2) the plan

or cooperative owns (after application of

318(a)(4)), immediately after the sale, at

least 30 percent of (a) each class of outstanding stock of the corporation (other

than stock described in section

1504(a)(4)) which issued the securities or

(b) the total value of all outstanding stock

of the corporation (other than stock described in section 1504(a)(4)); (3) the taxpayer files with the Secretary a verified

written statement of the employer whose

employees are covered by the employee

stock ownership plan or an authorized officer of the cooperative consenting to the

application of sections 4978 and 4979A

with respect to such employer or cooperative; and (4) the taxpayer’s holding period

with respect to the qualified securities is

at least three years (determined as of the

time of the sale).

Section 1042(c)(1) provides that qualified securities are employer securities (as

defined in section 409(l)) which are issued by a domestic C corporation that has

no stock outstanding that is readily tradable on an established securities market

and were not received by the taxpayer in a

distribution from a plan described in section 401(a) or a transfer pursuant to an option or other right to acquire stock to

which section 83, 422, or 423 applied (or

to which section 422 or 424 (as in effect

on the day before the date of the enactment of the Revenue Reconciliation Act

of 1990) applied).

The taxpayer must purchase “qualified

replacement property” within the “replacement period” which is defined in

section 1042(c)(3) as the period which begins 3 months before the date on which

the sale of qualified securities occurs and

which ends 12 months after the date of

such sale.

April 3, 2000

Section 1042(c)(4)(A) defines “qualified replacement property” as any security issued by a domestic “operating corporation” (as defined in section

1042(c)(4)(B)) which did not, for the taxable year preceding the taxable year in

which such security was purchased, have

passive investment income (as defined in

section 1362(d)(3)(C)) in excess of 25

percent of the gross receipts of such corporation for such preceding taxable year

and is not the corporation which issued

the qualified securities that such security

is replacing or a member of the same controlled group of corporations (within the

meaning of section 1563(a)(1)) as such

corporation.

Section 1042(d) provides that the basis

of the taxpayer in qualified replacement

property purchased by the taxpayer during the replacement period is reduced by

the amount of gain not recognized by reason of such purchase and the application

of section 1042(a). If more than one item

of qualified replacement property is purchased, the basis of each of such items is

reduced by an amount determined by

multiplying the total gain not recognized

by reason of such purchase and the application of subsection (a) by a fraction the

numerator of which is the cost of such

item of property and the denominator of

which is the total cost of all such items of

property.

Section 1042(e)(1) states that “[i]f a

taxpayer disposes of any qualified replacement property, then, notwithstanding

any other provision of this title, gain (if

any) shall be recognized to the extent of

the gain which was not recognized under

subsection (a) by reason of the acquisition

by such taxpayer of such qualified replacement property.”

The legislative history of section

1042(e) indicates that section 1042(e) was

added to coordinate the requirement that

deferred gain be recognized on the disposition of any qualified replacement property with other nonrecognition provisions

of the Code. “Effective for dispositions

made after the date of enactment, the Act

overrides all other provisions permitting

nonrecognition and requires that gain realized upon the disposition of qualified

replacement property be recognized at

that time.” S. Rep. 99–313, 99th Cong.,

2nd Sess., 1032 (1986), 1986–3 C.B., v. 3,

1032. Thus, gain realized from the dispo-

848

sition of any qualified replacement property by a taxpayer who made an election

under section 1042 must be recognized at

the time of the disposition regardless of

any other nonrecognition provisions of

the Code that may otherwise be applicable.

Section 721(a) provides that generally

no gain or loss is recognized to a partnership or to any of its partners in the case of

a contribution of property to the partnership in exchange for an interest in the

partnership.

Limited exceptions to the rule of section 1042(e)(1) are provided in section

1042(e)(3) which provides that the recapture rules of section 1042(e)(1) do not

apply to any transfer of qualified replacement property that occurs: (1) in any reorganization (within the meaning of section

368) unless the person making the election under section 1042(a)(1) owns stock

representing control of the acquiring or

acquired corporation and such property is

substituted basis property in the hands of

the transferee; (2) by reason of the death

of the person making the election; (3) by

gift; or (4) in any transaction to which

section 1042(a) applies.

The contribution of qualified replacement property to a partnership in exchange for an interest in the partnership is

not a transfer of qualified replacement

property described in any of the exceptions in section 1042(e)(3).

In the present situation, the taxpayer

disposed of qualified replacement property by contributing it to a partnership in

exchange for an interest in the partnership. Therefore, although a contribution

of property to a partnership in exchange

for an interest in the partnership is ordinarily a nonrecognition event under section 721, section 1042(e)(1) requires that

any gain realized on the contribution be

recognized to the extent of the gain that

was deferred under section 1042(a).

HOLDING

The transfer of qualified replacement

property to a partnership in exchange for

a partnership interest by a taxpayer that

has elected to defer the recognition of

gain under section 1042(a) is a disposition of the qualified replacement property under section 1042(e). Accordingly,

under section 1042(e), any gain realized

on the disposition is required to be rec-

2000–14 I.R.B.

ognized by the taxpayer at the time of

the transfer to the extent of the gain that

was not recognized under section

1042(a) by reason of the acquisition by

the taxpayer of the qualified replacement

property.

EFFECT ON OTHER REVENUE

RULING(S): N/A

PROSPECTIVE APPLICATION: N/A

DRAFTING INFORMATION

The principal author of this revenue

ruling is John Ricotta of the Associate

Chief Counsel (Employee Benefits & Exempt Organizations) (CC:EBEO:Br5).

For further information regarding this

revenue ruling contact John Ricotta on

(202) 622-4290 (not a toll-free call).

Section 1274.—Determination

of Issue Price in the Case of

Certain Debt Instruments Issued

for Property

(Also sections 42, 280G, 382, 412, 467, 468, 482,

483, 642, 807, 846, 1288, 7520, 7872.)

Federal rates; adjusted federal rates;

adjusted federal long-term rate, and

the long-term exempt rate. For purposes

of sections 1274, 1288, 382, and other

sections of the Code, tables set forth the

rates for April 2000.

Rev. Rul. 2000–19

This revenue ruling provides various

prescribed rates for federal income tax

purposes for April 2000 (the current

month.) Table 1 contains the short-term,

mid-term, and long-term applicable federal rates (AFR) for the current month for

purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the

short-term, mid-term, and long-term adjusted applicable federal rates (adjusted

AFR) for the current month for purposes

of section 1288(b). Table 3 sets forth the

adjusted federal long-term rate and the

long-term tax-exempt rate described in

section 382(f). Table 4 contains the appropriate percentages for determining the

low-income housing credit described in

section 42(b)(2) for buildings placed in

service during the current month. Finally,

Table 5 contains the federal rate for determining the present value of an annuity, an

interest for life or for a term of years, or a

remainder or a reversionary interest for

purposes of section 7520.

REV. RUL. 2000–19 TABLE 1

Applicable Federal Rates (AFR) for April 2000

Period for Compounding

Short-Term

AFR

110% AFR

120% AFR

130% AFR

Mid-Term

AFR

110% AFR

120% AFR

130% AFR

150% AFR

175% AFR

Long-Term

AFR

110% AFR

120% AFR

130% AFR

Annual

Semiannual

Quarterly

Monthly

6.46%

7.12%

7.78%

8.44%

6.36%

7.00%

7.63%

8.27%

6.31%

6.94%

7.56%

8.19%

6.28%

6.90%

7.51%

8.13%

6.71%

7.39%

8.08%

8.76%

10.15%

11.88%

6.60%

7.26%

7.92%

8.58%

9.90%

11.55%

6.55%

7.20%

7.84%

8.49%

9.78%

11.39%

6.51%

7.15%

7.79%

8.43%

9.70%

11.28%

6.49%

7.15%

7.82%

8.48%

6.39%

7.03%

7.67%

8.31%

6.34%

6.97%

7.60%

8.23%

6.31%

6.93%

7.55%

8.17%

REV. RUL. 2000–19 TABLE 2

Adjusted AFR for April 2000

Period for Compounding

Annual

Semiannual

Quarterly

Monthly

Short-term

adjusted AFR

4.39%

4.34%

4.32%

4.30%

Mid-term

adjusted AFR

5.00%

4.94%

4.91%

4.89%

Long-term

adjusted AFR

5.75%

5.67%

5.63%

5.60%

2000–14 I.R.B.

849

April 3, 2000

REV. RUL. 2000–19 TABLE 3

Rates Under Section 382 for April 2000

Adjusted federal long-term rate for the current month

5.75%

Long-term tax-exempt rate for ownership changes

during the current month (the highest of the adjusted

federal long-term rates for the current month and the

prior two months.)

5.84%

REV. RUL. 2000–19 TABLE 4

Appropriate Percentages Under Section 42(b)(2)

for April 2000

Appropriate percentage for the 70% present

value low-income housing credit

8.55%

Appropriate percentage for the 30% present

value low-income housing credit

3.66%

REV. RUL. 2000–19 TABLE 5

Rate Under Section 7520 for April 2000

Applicable federal rate for determining the present

value of an annuity, an interest for life or a term

of years, or a remainder or reversionary interest

Section 1288.—Treatment of

Original Issue Discounts on TaxExempt Obligations

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

April 3, 2000

8.0%

Section 7520.—Valuation Tables

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

850

Section 7872.—Treatment of

Loans With Below-Market

Interest Rates

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of April 2000. See Rev. Rul. 2000–19, page 849.

2000–14 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous

Request for Comments on the

Revision of Proposed Section

987 Regulations

Notice 2000–20

Treasury and the IRS plan to review

and possibly replace the proposed regulations issued under section 987 of the Internal Revenue Code of 1986. The current proposed regulations provide rules

for determining the timing, source, character, and amount of foreign currency

gain or loss recognized with respect to a

qualified business unit (QBU) with a

functional currency different from that of

the taxpayer (i.e., different from that of

the taxpayer’s home office) if the QBU

does not use the dollar approximate separate transactions method of accounting.

Treasury and the IRS are concerned that

the proposed regulations may not have

fully achieved their original goal of providing rules that are administrable and result in the recognition of foreign currency

gains and losses under the appropriate circumstances. Accordingly, Treasury and

the IRS request comments concerning issues that should be addressed in revised

regulations under section 987.

Further, Treasury and the IRS are concerned about certain abusive transactions

designed to create an inappropriate acceleration of foreign currency losses under

section 987. These abusive transactions

may involve a circular flow of funds between a foreign QBU and its U.S. parent.

Treasury and the IRS intend to challenge

these transactions under general tax principles and to issue regulations to prevent

these abuses.

I. BACKGROUND

Treasury and the IRS published proposed regulations under section 987 on

September 25, 1991. The proposed regulations provide rules for determining the

timing, source, character, and amount of

foreign currency gain or loss recognized

with respect to a QBU branch (as defined

in Prop. Treas. Reg. §1.987–1(a)(2)) that

has a functional currency different from

that of the taxpayer. The proposed regulations adopt the profit and loss method of

computing foreign currency gain or loss

2000–14 I.R.B.

for purposes of section 987. Prop. Treas.

Reg. § 1.987–1(b)(1).

Prop. Treas. Reg. §1.987–2(a)(1) provides that a taxpayer applying this profit

or loss method recognizes gain or loss

under section 987 upon a remittance (as

defined in Prop. Treas. Reg.

§1.987–2(b)(4)) from the QBU branch or

upon the QBU branch’s termination.

Prop. Treas. Reg. §1.987–2(a)(2) provides

an anti-abuse rule with respect to contributions to (or distributions from) a QBU

branch that do not have a significant business purpose.

Prop. Treas. Reg. §1.987–2(b)(4) provides that the term “remittance” means

the amount of any transfer (as defined

below) from a QBU branch to the taxpayer to the extent that the aggregate

amount of such transfers during the taxable year does not exceed the positive

year-end balance of the equity pool as determined in Prop. Treas. Reg.

§1.987–2(c)(1) (without regard to the decreases described in Prop. Treas. Reg.

§1.987–2(c)(1)(iii)(B)). Prop. Treas. Reg.

§1.987–2(b)(2) provides, in part, that the

term “transfer” means the amount of

property that, on any day, either is distributed from a QBU branch to the taxpayer

(or to another QBU branch of the taxpayer) or is contributed by the taxpayer

(or another QBU branch of the taxpayer)

to the QBU branch. If contributions to

the QBU branch from the taxpayer occur

on the same day as distributions from the

QBU branch to the taxpayer, these contributions and distributions are netted

against one another, and only the net

amount is treated as a transfer to (or from)

the QBU branch. This rule is generally

referred to as the “daily netting rule.”

Section 987 gain or loss equals the difference between a remittance, translated

into the taxpayer’s functional currency

using the spot rate at the date of the remittance, and the portion of the basis pool,

determined under Prop. Treas. Reg.

§1.987–2(c)(2), attributable to the remittance. Prop. Treas. Reg. § 1.987–2(d)(1).

II. REQUEST FOR COMMENTS ON

THE PROPOSED SECTION 987

REGULATIONS

As noted above, Treasury and the IRS

851

are currently reviewing the proposed section 987 regulations to determine if such

regulations are administrable and provide

rules that call for the appropriate recognition of foreign currency gain or loss. Accordingly, Treasury and the IRS request

comments on the application of section

987 generally and on the interaction of

section 987 with other provisions of the

Code, particularly with respect to the issues outlined below. With respect to any

comments submitted under this notice,

Treasury and the IRS request explanations of the extent to which the taxpayer’s

comments would differ depending on the

type of QBU at issue, e.g., a QBU that

constitutes a branch, partnership, or trust.

A. Treatment of Contributions and Distributions of Capital to or from a QBU

Branch Under Section 987

Treasury and the IRS are reevaluating

the treatment under section 987 of contributions of capital to, and distributions of

capital from, a QBU branch. Under the

proposed section 987 regulations, the equity pool includes contributions of property to a QBU branch. Further, distributions of property from the QBU branch

are treated as transfers that may constitute

remittances and thus may trigger currency

gain or loss, even if the property consists

of tangible property previously contributed to the QBU branch (or acquired

with funds previously contributed to the

QBU branch), whose value is not affected

by exchange rate fluctuations.

An approach different from the proposed regulations might compute currency gain and loss only on remittances of

earnings, rather than taking remittances of

capital into account. In most cases, this

approach would align section 987 principles more closely with the principles of

section 986(c). Treasury and the IRS request comments regarding the adoption of

such an approach in the section 987 regulations, including comments on the use of

a stacking or other rule to determine the

extent to which remittances are attributable to earnings. Treasury and the IRS

are also considering whether it might be

appropriate to maintain a historic dollar

basis in certain tangible assets for purposes of adjusting the equity and basis

pools in lieu of calculating exchange gain

or loss. Treasury and the IRS also request

April 3, 2000

comments regarding whether special rules

should apply to assets the value of which

is significantly affected by exchange rate

fluctuations or to taxpayers who hold significant amounts of such assets in the ordinary course of their trade or business.

B. Definitions of Transfer and Remittance

1. Use of an Annual Netting Convention

Treasury and the IRS are considering

providing detailed guidance on the definition of the term “transfer.” For example,

Treasury and the IRS are considering an

annual netting rule to determine the existence and amount of a transfer. Under

this rule, a transfer to or from any QBU

branch would consist of the net amount of

property that, in any taxable year of the

taxpayer, either is distributed from the

QBU branch to the taxpayer (or to any

other QBU branch of the same taxpayer)

or is contributed by the taxpayer (or by

any other QBU branch of the taxpayer) to

the QBU branch. In comparison with the

proposed regulations, this approach

would be closer to the approach used in

section 884 to determine the “dividend

equivalent amount” of a U.S. branch of a

foreign corporation. Treasury and the

IRS expect that an annual netting rule

would benefit taxpayers by decreasing the

administrative burden associated with calculating the amount of a transfer. If an

annual netting rule were adopted, the regulations might also provide that, for purposes of determining the existence or

amount of any transfer, the IRS could disregard any distribution or contribution in

appropriate circumstances to the extent

that such conveyance is offset by either a

distribution or a contribution (whether or

not to or from the same QBU branch that

was a party to the original distribution or

contribution) made within 30 days (or

other designated period) of the last day of

the taxpayer’s taxable year.

As discussed in Part III, Treasury and

the IRS are concerned that the daily netting rule in the definition of “transfer” in

Prop. Treas. Reg. § 1.987–2(b)(2) is susceptible to manipulation by taxpayers and

question whether it should be retained.

Accordingly, Treasury and the IRS request comments regarding whether the

daily netting rule yields a sufficiently accurate measurement of transfers during

the taxable year, whether such a rule is

April 3, 2000

conceptually consistent with the regime

applied to controlled foreign corporations

under section 986, whether the rule is administratively burdensome for taxpayers,

and whether the rule can be retained without giving rise to abuse.

2. Transfers Between QBU Branches

Under the proposed section 987 regulations, a property conveyance between two

QBU branches of the taxpayer receives

the same treatment as a property conveyance from a QBU branch to its home

office. Comments are requested regarding whether it is appropriate to treat a

property transfer between such QBU

branches as a transfer from the distributing QBU branch to the home office, followed by a contribution of the same property from the home office to the recipient

QBU branch. These comments should

consider whether different results would

be appropriate depending on the type of

transaction, on whether the QBU

branches share the same functional currency, or otherwise.

C. Types of Property Whose Distribution Can Constitute a Transfer

Under the proposed section 987 regulations, the term “transfer” includes the net

amount of any property distributed by a

QBU branch. Treasury and the IRS seek

comments with respect to whether distributions of certain classes of property (e.g.,

inventory or other property normally

transferred between the home office and

the QBU branch in the ordinary course of

business) should be distinguished from

distributions of property more in the nature of a repatriation of earnings or capital

and, if so, how such a distinction might be

applied to prevent manipulation of section

987.

D. Interaction Between Section 987

Regulations and the Partnership Rules

Because a partnership is a QBU of each

partner (under Treas. Reg. §

1.989(a)–1(b)(2)(i)), the notice of proposed rulemaking requested comments on

the manner in which section 987 could be

better coordinated with Subchapter K.

Only one comment was received in response to this request. Due to the implementation of the “check-the-box” rules

under Treas. Reg. §301.7701–3, Treasury

and the IRS expect increased taxpayer use

of partnerships and disregarded entities,

leading to increased interest in the interaction of the partnership and section 987

852

regimes. In addition to general comments

on the interaction of section 987 and Subchapter K, Treasury and the IRS invite

comments on the interaction of section

987 with the rules relating to actual and

deemed partnership distributions and

transfers of interests in partnerships. For

example, as noted in the notice of proposed rulemaking, it is anticipated that

section 987 will operate independently

from the general rules in Subchapter K.

Accordingly, although no gain or loss on

a partnership distribution may be recognized under section 731, a partnership

distribution (remittance) may give rise to

currency gain or loss under section 987.

Additionally, the proposed regulations

under section 987 provide for the recognition of currency gain or loss on the termination of a QBU branch. However, the

proposed regulations reserve on the appropriate treatment of a termination of a

QBU that is classified as a partnership.

See Prop. Treas. Reg. § 1.987–3(e).

Treasury and the IRS request comments

addressing whether section 987 gain or

loss should be triggered by reason of a

partnership termination under section

708(b), including terminations under

Treas. Reg. § 1.708–1(b)(1)(ii) (relating

to termination due to the sale or exchange

of a fifty percent or greater interest in the

partnership). Moreover, Treasury and the

IRS are examining whether currency gain

or loss recognition under section 987 is

appropriate where a partner terminates its

interest in a partnership by reason of a

sale or exchange of its partnership interest

to a third party, rather than having its interest redeemed by the partnership.

Finally, comments are requested regarding the approach the section 987 regulations should take with respect to tiered

partnerships and other tiered arrangements.

E. Interaction with Financial Accounting Rules

Financial accounting rules addressing

the reporting of foreign currency gain or

loss with respect to branches under FAS

No. 52 differ materially from the statutory

rules enacted by Congress in section 987.

While these rules cannot be perfectly

aligned, Treasury and the IRS request

comments on whether, and the manner in

which, the regulations should be more

closely harmonized with financial accounting principles, either for policy rea-

2000–14 I.R.B.

sons or to reduce the administrative burden of complying with the regulations.

F. Section 351 Transactions and Related Issues

The proposed regulations treat the

transfer of a QBU branch’s assets in a section 351 transaction described in section

367(a) as a QBU branch termination. See

Prop. Treas. Reg. § 1.987–3(c)(1). The

regulations, however, reserve on providing guidance on other types of section 351

transactions. See Prop. Treas. Reg. §

1.987–3(c)(2). Treasury and the IRS request comments on examples of QBU

branch asset transfers in section 351

transactions that should not be treated as

QBU branch terminations. One such example might include the transfer of a

QBU branch’s assets between domestic

members of a U.S. consolidated group.

Treasury and the IRS request comments

on the most appropriate method of determining section 987 gain and loss in the

context of nonrecognition transactions involving other types of entities, such as

partnerships and trusts.

G. Other Issues

Treasury and the IRS also request comments regarding other major issues that

should be addressed as the section 987

proposed regulations are reexamined.

III. ABUSIVE ARRANGEMENTS

A. Applicability of Current Legal Principles

Treasury and the IRS have become

aware that some taxpayers argue that the

rule in the proposed section 987 regulations requiring daily netting of contributions and distributions allows them to recognize foreign currency losses

prematurely with respect to purported

transfers that do not constitute actual economic remittances (i.e., from transactions

that are undertaken for tax purposes and

lack meaningful non-tax economic consequences). This opportunity is present

when the spot rate is less than the historical rate used to determine the amount of

capital and earnings in the basis pool. In

such a situation, taxpayers have attempted

to use circular cash flows consisting of a

transfer of property from the QBU branch

to the taxpayer on one day followed

closely by a transfer of property from the

taxpayer to the QBU branch on another

day to recognize foreign currency losses

without economically affecting the net

2000–14 I.R.B.

asset position of the QBU branch.

Treasury and the IRS believe that circular cash flows and similar transactions

lacking economic substance will not result in recognition of foreign currency

losses under general tax principles because such transactions are not properly

treated as transfers or remittances under

section 987. See, e.g., ACM Partnership

v. Commissioner, 157 F.3d 231 (3d Cir.

1998), cert. denied, 526 U.S. 1017 (1999)

(denying tax benefits from a transaction

lacking economic substance); Rev. Rul.

99–14, 1999–13 I.R.B. 3 (denying tax deductions from a transaction lacking economic substance, citing, among other factors, the use of a circular flow of funds);

Erhard v. Commissioner, 46 F.3d 1470

(9 th Cir. 1995), aff ’g T.C. Memo

1993–25, cert. denied, 516 U.S. 930

(1995) (denying tax benefits with respect

to circular cash flow). See also Rev. Rul.

83–142, 1983–2 C.B. 68 (ignoring a circular flow of funds in determining the

characterization of a transaction).

The following examples illustrate cases

in which the IRS may challenge foreign

currency losses under general tax principles. For purposes of these examples, assume P is a domestic corporation (with

the dollar as its functional currency) that

has QBU branch 1 in country X and QBU

branch 2 in country Y. QBU branch 1

uses the u as its functional currency.

Example 1

On January 1 of year 5, P contributes 100u to

QBU branch 1. On January 2 of year 5, QBU

branch 1 distributes 50u to P. On January 4 of year

5, QBU branch 1 distributes another 50u to P. Assume the spot rate on these three days is less than the

historical rate used to determine the amount of capital and earnings in the basis pool of QBU branch 1,

so that a remittance would potentially result in

recognition of a foreign currency loss. Further assume that the total of all transfers during the taxable

year does not exceed the positive year end balance

of the equity pool. Because the distributions by

QBU branch 1 are offset by a contribution from P

that occurred in close temporal proximity, the IRS

will scrutinize this type of transaction and may disregard the contribution and distributions for purposes of section 987.

Example 2

On January 1 of year 5, QBU branch 1 distributes

100u to P. On January 4 of year 5, P contributes

100u to QBU branch 2. QBU branch 2 uses the account to which the 100u was deposited to pay the

operating expenses and other costs of QBU branch

1. Assume the spot rate on January 1 of year 5 is

less than the historical rate used to determine the

amount of capital and earnings in the basis pool of

QBU branch 1, so that a remittance would potentially result in recognition of a foreign currency loss.

853

Further assume that the total of all transfers from

QBU branch 1 during the taxable year does not exceed the positive year end balance of the equity pool

for QBU branch 1. Because QBU branch 1 continues to have use of the distributed property, the IRS

will scrutinize this type of transaction and may disregard the 100u conveyance from QBU branch 1 to

P for purposes of section 987.

B. Regulations to be Issued pursuant to

this Notice

1. Clarification of Transfer and Remittance Definitions

Treasury and the IRS plan to issue regulations which will alter the definition of

the terms “transfer” and “remittance” to

clarify that transactions lacking economic

substance will not be respected for purposes of recognizing currency losses on

transfers between a QBU branch and its

home office or between QBU branches of

a single taxpayer (or related taxpayers).

Circular cash flows, or any property distribution from a QBU branch followed or

preceded (within a relatively short time

period) by a contribution to that QBU

branch or a distribution from a second

QBU branch of the same taxpayer to that

QBU branch, may not be treated as a

transfer to the extent of the offsetting

amount.

In addition, a contribution or distribution of property may be disregarded (i.e.,

not treated as a transfer) if the unit making the contribution or distribution does

not lose the use of the property for a significant period. For example, a distribution from a QBU branch to a bank account to which the QBU branch has

access may be disregarded if the QBU

branch retains the use or control of the

property.

2. Change in Anti-Abuse Rule

Treasury and the IRS plan to modify

the anti-abuse rule of Prop. Treas. Reg.

§1.987–2(a)(2) to provide that if a contribution to or a distribution from (or a series of contributions to or distributions

from) a QBU branch, or a termination of a

QBU branch, lacks economic substance

or is otherwise inconsistent with the purposes of section 987, then the Commissioner may make appropriate adjustments

to properly reflect the economic effects of

the transaction or any related or concurrent transaction.

Under the regulations to be issued

under this notice, the above-described

change to the anti-abuse rule will apply to

contributions, distributions, and terminations occurring on or after March 21,

April 3, 2000

2000. Notwithstanding the above-described change to the anti-abuse rule, economic substance case law continues to

apply to periods before (as well as after)

the date this change takes effect.

VI. SUBMISSION OF COMMENTS

Written comments may be submitted to

the Associate Chief Counsel (International),

Attention: Rebecca Rosenberg (Notice

April 3, 2000

2000–20), Room 4562, CC:Intl:Br5, Internal

Revenue Service, 1111 Constitution Avenue

NW, Washington DC 20224. Alternatively,

taxpayers may submit comments directly to

the IRS Internet site at http://www.irs.

ustreas.gov/prod/tax_regs/comments.htm

l. Comments will be available for public inspection and copying. Treasury and the IRS

request comments by June 19, 2000.

For further information regarding this

notice, contact Rebecca Rosenberg of the

854

Office of the Associate Chief Counsel (International) at 202-622-3870 (not a tollfree call).

2000–14 I.R.B.

Part IV. Items of General Interest

Treatment of Distributions to

Foreign Persons Under Sections

367(e)(1) and 367(e)(2);

Correction

Announcement 2000–24

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Correction to final regulations.

SUMMARY: This document contains

corrections to T.D. 8834 (1999–34 I.R.B.

251), which were published in the Federal Register on Monday, August 9, 1999

(64 F.R. 43072), relating to the treatment

of distributions to foreign persons under

section 367(e)(1) and (2) as added to the

Internal Revenue Code by the Tax Reform Act of 1986, which affects U.S. corporations.

DATES: This correction is effective August 9, 1999.

FOR FURTHER INFORMATION CONTACT: Guy A. Bracuti, 202-622-3860

(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final regulations that are subject to

these corrections are under section

367(e)(1) and (2) of the Internal Revenue

Code.

Need for Correction

As published, final regulations (TD

8834) contain errors that may prove to be

misleading and are in need of clarification.

Correction of Publication

Accordingly, the publication of the

final regulations (TD 8834), which was

the subject of FR Doc. 99–20092, is corrected as follows:

§1.367(e)–1 [Corrected]

1. On page 43076, column 2 ,

§1.367(e)–1(b)(2), lines 19, 20 and 21

from the bottom of the column, the language “entity (disregarded entity) under

§1.7701–3(b)(1)(ii) or (b)(2)(i)(C) are” is

2000–14 I.R.B.

corrected to read “entity separate from its

owner (disregarded entity) under

§301.7701–3 of this chapter are”.

2. On page 43076, column 3,

§1.367(e)–1(d)(1), lines 2 and 3 from the

bottom of the column, the language “described in paragraph (b)(1) of this section

are” is corrected to read “described in section 355 in which the distributing corporation is domestic and the controlled corporation is foreign are”.

§1.367(e)–2 [Corrected]

3. On page 43078, column 1,

§1.367(e)–2(b)(1)(ii)(B)(2), lines 7, 8 and

9 from the bottom of the Example, the

language “allocate $45 (60 X .75) of the

recognized capital loss to Asset B and will

allocate the remaining $15 (60 X .25) of”

is corrected to read “allocate $15 (60 X

.25) of the recognized capital loss to Asset

B and will allocate the remaining $45 (60

X .75) of”.

4. On page 43078, column 1,

§1.367(e)–2(b)(1)(ii)(C), lines 16 and 17,

the language “shall not offset loss” is corrected to read “shall not be offset by a

loss”.

5. On page 43081, column 1,

§1.367(e)–2(b)(2)(iii)(A)(2), line 2, the

language “(directly)” is corrected to read

“(directly and without regard to paragraph

(b)(1)(iii) of this section)”.

6. On page 43081, column 1,

§1.367(e)–2(b)(2)(iii)(A)(3), line 2, the

language “(directly)” is corrected to read

“ (directly and without regard to paragraph (b)(1)(iii) of this section)”.

7. On page 43081, column 1,

§1.367(e)–2(b)(2)(iii)(B), lines 7 through

11, the language “(or was a U.S. real

property holding corporation with respect

to the foreign distributee corporation during the five year period ending on the date

of liquidation)” is corrected to read “(or is

a former U.S. real property holding corporation the stock of which is treated as a

U.S. real property interest for five years

under section 897(c)(1)(A)(ii))”.

8. On page 43081, column 1,

§1.367(e)–2(b)(2)(iii)(C)(2), line 8 from

the bottom of the paragraph, the language

“disposes of” is corrected to read “disposes of (whether in a recognition or nonrecognition transaction)”.

855

9. On page 43081, column 1,

§1.367(e)–2(b)(2)(iii)(C)(2), the last three

lines of the paragraph, the language “that

a principal purpose of the liquidation was

not the avoidance of U.S. tax” is corrected

to read “that the avoidance of U.S. tax

was not a principal purpose of the liquidation”.

10. On page 43081, column 2,

§1.367(e)–2(b)(2)(iii)(D), line 10 from

the bottom of the paragraph, the language

“to such stock” is corrected to read “to the

distributed stock”.

11 On page 43081, column 2,

§1.367(e)–2(b)(3)(i), the last sentence of

the paragraph is removed.

12. On page 43081, column 3,

§1.367(e)–2(c)(2)(i)(A), line 7, the language “gain on the” is corrected to read

“gain (or loss in accordance with principles contained in paragraph (b)(1)(ii) of

this section) on the”.

13. On page 43082, column 2,

§1.367(e)–2(c)(3)(i), the last sentence of

the paragraph is removed.

14. On page 43082, column 2,

§1.367(e)–2(e), lines 2 and 3, the language “occurring 30 days after August 9,

1999 or” is corrected to read “occurring

on or after September 7, 1999 or”.

Dale D. Goode,

Federal Register Liaison,

Assistant Chief Counsel (Corporate).

Use of Actuarial Tables in

Valuing Annuities, Interests for

Life or Term of Years, and

Remainder or Reversionary

Interests; Correction

Announcement 2000–25

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Correction of final and temporary regulations.

SUMMARY: This document contains

corrections to T.D. 8819 (1999–20 I.R.B.

5) which were published in the Federal

F.R. 23187), relating to the use of actuarial tables in valuing annuities, interests

April 3, 2000

for life or terms of years, and remainder

or reversionary interests.

DATES: This correction is effective May

1, 1999.

FOR FURTHER INFORMATION CONTACT:

William L. Blodgett at (202)

622-3090 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

Need for Correction

§1.664–2 [Corrected]

As published, the final regulations (TD

8819) contain an error that may prove to

be misleading and is in need of clarification.

1. On page 23229, in the table in

amendatory instruction Par. 32, the entry

for 1.664–2(c) is corrected to read as follows:

Correction of Publication

Accordingly, the publication of the

final regulations (TD 8819), which were

the subject of FR Doc. 99–10533, is corrected as follows:

Dale D. Goode,

Federal Register Liaison,

Assistant Chief Counsel (Corporate).

The final regulations that are subject of

these corrections are under section 7520

of the Internal Revenue Code.

Section

Remove

Add

April 30, 1989

April 30, 1999

*****

1.664–2(c), sixth sentence

*****

April 3, 2000

856

2000–14 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.

2000–14 I.R.B.

April 3, 2000

Numerical Finding List1

Bulletins 2000–1 through 2000–13

Announcements:

2000–1, 2000–2 I.R.B. 294

2000–2, 2000–2 I.R.B. 295

2000–3, 2000–2 I.R.B. 296

2000–4, 2000–3 I.R.B. 317

2000–5, 2000–4 I.R.B. 427

2000–6, 2000–4 I.R.B. 428

2000–7, 2000–6 I.R.B. 586

2000–8, 2000–6 I.R.B. 586

2000–9, 2000–9 I.R.B. 733

2000–10, 2000–9 I.R.B. 733

2000–11, 2000–10 I.R.B. 739

2000–12, 2000–12 I.R.B. 835

2000–13, 2000–11 I.R.B. 771

2000–14, 2000–11 I.R.B. 772

2000–15, 2000–12 I.R.B. 837

2000–16, 2000–12 I.R.B. 837

2000–17, 2000–13 I.R.B. 846

2000–18, 2000–13 I.R.B. 846

Notices:

2000–1, 2000–2 I.R.B. 288

2000–2, 2000–9 I.R.B. 727

2000–3, 2000–4 I.R.B. 413

2000–4, 2000–3 I.R.B. 313

2000–5, 2000–3 I.R.B. 314

2000–6, 2000–3 I.R.B. 315

2000–7, 2000–4 I.R.B. 419

2000–8, 2000–4 I.R.B. 420

2000–9, 2000–5 I.R.B. 449

2000–10, 2000–5 I.R.B. 451

2000–11, 2000–6 I.R.B. 572

2000–12, 2000–9 I.R.B. 727

2000–13, 2000–9 I.R.B. 732

2000–14, 2000–10 I.R.B. 737

2000–15, 2000–12 I.R.B. 826

2000–16, 2000–12 I.R.B. 826

2000–17, 2000–12 I.R.B. 827

2000–18, 2000–13 I.R.B. 845

2000–19, 2000–13 I.R.B. 845

Proposed Regulations:

REG–208280–86, 2000–8 I.R.B. 654

REG–209135–88, 2000–8 I.R.B. 681

REG–208254–90, 2000–6 I.R.B. 577

REG–209601–92, 2000–12 I.R.B. 829

REG–100276–97, 2000–8 I.R.B. 682

REG–101492–98, 2000–3 I.R.B. 326

REG–106012–98, 2000–2 I.R.B. 290

REG–110311–98, 2000–11 I.R.B. 767

REG–103831–99, 2000–5 I.R.B. 452

REG–103882–99, 2000–8 I.R.B. 706

REG–105089–99, 2000–6 I.R.B. 580

REG–105279–99, 2000–8 I.R.B. 707

REG–105606–99, 2000–4 I.R.B. 421

REG–111119–99, 2000–5 I.R.B. 455

REG–113572–99, 2000–7 I.R.B. 624

REG–116048–99, 2000–6 I.R.B. 584

REG–116567–99, 2000–5 I.R.B. 463

REG–116704–99, 2000–3 I.R.B. 325

REG–100163–00, 2000–7 I.R.B. 633

REG–103735–00, 2000–11 I.R.B. 770

Proposed Regulations—continued:

REG–103736–00, 2000–11 I.R.B. 768

Railroad Retirement Quarterly Rate:

2000–9 I.R.B. 721

Revenue Procedures:

2000–1, 2000–1 I.R.B. 4

2000–2, 2000–1 I.R.B. 73

2000–3, 2000–1 I.R.B. 103

2000–4, 2000–1 I.R.B. 115

2000–5, 2000–1 I.R.B. 158

2000–6, 2000–1 I.R.B. 187

2000–7, 2000–1 I.R.B. 227

2000–8, 2000–1 I.R.B. 230

2000–9, 2000–2 I.R.B. 280

2000–10, 2000–2 I.R.B. 287

2000–11, 2000–3 I.R.B. 309

2000–12, 2000–4 I.R.B. 387

2000–13, 2000–6 I.R.B. 515

2000–15, 2000–5 I.R.B. 447

2000–16, 2000–6 I.R.B. 518

2000–17, 2000–11 I.R.B. 766

2000–18, 2000–9 I.R.B. 722

2000–19, 2000–12 I.R.B. 785

2000–20, 2000–6 I.R.B. 553

Treasury Decisions—continued:

8868, 2000–6 I.R.B. 491

8869, 2000–6 I.R.B. 498

8870, 2000–8 I.R.B. 647

8871, 2000–8 I.R.B. 641

8872, 2000–8 I.R.B. 639

8873, 2000–9 I.R.B. 713

8874, 2000–8 I.R.B. 644

8875, 2000–11 I.R.B. 761

8876, 2000–11 I.R.B. 753

8877, 2000–11 I.R.B. 747

Revenue Rulings:

2000–1, 2000–2 I.R.B. 250

2000–2, 2000–3 I.R.B. 305

2000–3, 2000–3 I.R.B. 297

2000–4, 2000–4 I.R.B. 331

2000–5, 2000–5 I.R.B. 436

2000–6, 2000–6 I.R.B. 512

2000–7, 2000–9 I.R.B. 712

2000–8, 2000–7 I.R.B. 617

2000–9, 2000–6 I.R.B. 497

2000–10, 2000–8 I.R.B. 643

2000–11, 2000–10 I.R.B. 734

2000–12, 2000–11 I.R.B. 744

2000–13, 2000–12 I.R.B. 774

2000–14, 2000–12 I.R.B. 779

2000–15, 2000–12 I.R.B. 774

2000–16, 2000–12 I.R.B. 780

2000–17, 2000–13 I.R.B. 842

Treasury Decisions:

8849, 2000–2 I.R.B. 245

8850, 2000–2 I.R.B. 265

8851, 2000–2 I.R.B. 275

8852, 2000–2 I.R.B. 253

8853, 2000–4 I.R.B. 377

8854, 2000–3 I.R.B. 306

8855, 2000–4 I.R.B. 374

8856, 2000–3 I.R.B. 298

8857, 2000–4 I.R.B. 365

8858, 2000–4 I.R.B. 332

8859, 2000–5 I.R.B. 429

8860, 2000–5 I.R.B. 437

8861, 2000–5 I.R.B. 441

8862, 2000–6 I.R.B. 466

8863, 2000–6 I.R.B. 488

8864, 2000–7 I.R.B. 614

8865, 2000–7 I.R.B. 589

8866, 2000–6 I.R.B. 495

8867, 2000–7 I.R.B. 620

1 A cumulative list of all revenue rulings, revenue

procedures, Treasury decisions, etc., published in

Internal Revenue Bulletins 1999–27 through

1999–52 is in Internal Revenue Bulletin 2000–1,

dated January 3, 2000.

April 3, 2000

2000–14 I.R.B.

Finding List of Current Actions on

Previously Published Items1

Revenue Procedures—Continued:

92–13A

Modified, amplified, and superseded by

Rev. Proc. 2000–11, 2000–3 I.R.B. 309

99–13

Modified and superseded by

Rev. Proc. 2000–16, 2000–6 I.R.B. 518

92–41

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

99–31

Modified and superseded by

Rev. Proc. 2000–16, 2000–6 I.R.B. 518

Notices:

93–9

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

88–125

Obsoleted by

T.D. 8870, 2000–8 I.R.B. 647

93–10

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

99–49

Modified and amplified by

Rev. Rul. 2000–4, 2000–4 I.R.B. 331

Rev. Rul. 2000–7, 2000–9 I.R.B. 712

Notice 2000–4, 2000–3 I.R.B. 313

92–48

Obsoleted by

Notice 2000–11, 2000–6 I.R.B. 572

94–12

Modified, amplified, and superseded by

Rev. Proc. 2000–11, 2000–3 I.R.B. 309

97–19

Modified by

Rev. Proc. 2000–1, 2000–1 I.R.B. 4

95–42

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

98–22

Obsoleted by

T.D. 8870, 2000–8 I.R.B. 647

96–13

Modified by

Rev. Proc. 2000–1, 2000–1 I.R.B. 4

2000–8

Modified by

Rev. Proc. 2000–16, 2000–6 I.R.B. 518

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

98–52

Modified by

Notice 2000–3, 2000–4 I.R.B. 413

98–22

Modified and superseded by

Rev. Proc. 2000–16, 2000–6 I.R.B. 518

2000–16

Corrected by

Announcement 2000–17, 2000–13 I.R.B. 846

98–61

Modified and superseded by

Rev. Proc. 2000–15, 2000–5 I.R.B. 447

98–27

Superseded by

Rev. Proc. 2000–12, 2000–4 I.R.B. 387

Revenue Rulings:

99–8

Obsoleted by

Rev. Proc. 2000–12, 2000–4 I.R.B. 387

98–64

Superseded by

Rev. Proc. 2000–9, 2000–2 I.R.B. 280

2000–4

Corrected by

Announcement 2000–9, 2000–9 I.R.B. 733

98–65

Superseded by

Rev. Proc. 2000–19, 2000–12 I.R.B. 785

Proposed Regulations:

99–1

Superseded by

Rev. Proc. 2000–1, 2000–1 I.R.B. 4

Bulletins 2000–1 through 2000–13

Announcements:

99–50

Modified by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

REG–101492–98

Corrected by

Announcement 2000–16, 2000–12 I.R.B. 837

Revenue Procedures:

80–18

Modified by

Rev. Proc. 2000–13, 2000–6 I.R.B. 515

89–9

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

89–13

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

90–21

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

91–66

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

92–13

Modified, amplified, and superseded by

Rev. Proc. 2000–11, 2000–3 I.R.B. 309

99–2

Superseded by

Rev. Proc. 2000–2, 2000–1 I.R.B. 73

99–51

Superseded by

Rev. Proc. 2000–3, 2000–1 I.R.B. 103

2000–6

Modified by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

88–36

Modified by

Rev. Rul. 2000–6, 2000–6 I.R.B. 512

89–89

Obsoleted by

Rev. Rul. 2000–2, 2000–3 I.R.B. 305

92–19

Supplemented by

Rev. Rul. 2000–17, 2000–13 I.R.B. 842

98–30

Amplified and superseded by

Rev. Rul. 2000–8, 2000–7 I.R.B. 617

Treasury Decisions:

99–3

Superseded by

Rev. Proc. 2000–3, 2000–1 I.R.B. 103

8734

Modified by

T.D. 8856, 2000–3 I.R.B. 298

99–4

Superseded by

Rev. Proc. 2000–4, 2000–1 I.R.B. 115

8804

Modified by

T.D. 8856, 2000–3 I.R.B. 298

99–5

Superseded by

Rev. Proc. 2000–5, 2000–1 I.R.B. 158

8845

Corrected by

Announcement 2000–6, 2000–4 I.R.B. 428

99–6

Superseded by

Rev. Proc. 2000–6, 2000–1 I.R.B. 187

8846

Corrected by

Announcement 2000–3, 2000–2 I.R.B. 296

99–7

Superseded by

Rev. Proc. 2000–7, 2000–1 I.R.B. 227

8847

Corrected by

Announcement 2000–13, 2000–11 I.R.B. 771

99–8

Superseded by

Rev. Proc. 2000–8, 2000–1 I.R.B. 230

8852

Corrected by

Announcement 2000–18, 2000–13 I.R.B. 846

1 A cumulative list of current actions on previously

published items in Internal Revenue Bulletins

1999–27 through 1999–52 is in Internal Revenue

Bulletin 2000–1, dated January 3, 2000.

2000–14 I.R.B.

iii

April 3, 2000

Index

Internal Revenue Bulletins

2000–1 Through 2000–13

The abbreviation and number in parenthesis following the index entry refer to

the specific item; numbers in roman and

italic type following the parenthesis refer

to the Internal Revenue Bulletin in which

the item may be found and the page

number on which it appears.

Key to Abbreviations:

Ann

Announcement

Court Decision

Delegation Order

Executive Order

Public Law

PTE

Prohibited Transaction

Exemption

Revenue Procedure

Revenue Ruling

SPR

Statement of Procedural

Rules

Tax Convention

Treasury Decision

TDO

Treasury Department Order

EMPLOYEE PLANS

Areas in which advance letter rulings and

determination letters will not be issued

from Associate Chief Counsel,

Domestic (RP 3) 1, 103

Areas in which advance letter rulings and

determination letters will not be issued

from Associate Chief Counsel,

International (RP 7) 1, 227

Cash or deferred arrangements:

Elective deferrals (RR 8) 7, 617

Nondiscrimination (Notice 3) 4, 413

Determination letters, issuing procedures

(RP 6) 1, 187

Eligible rollover distributions, safe harbor explanations (Notice 11) 6, 572

EPCRS, closing agreements (RP 16) 6, 518;

correction (Ann 17) 13, 846

Full funding limitations, weighted average interest rate for:

January (Notice 8) 4, 420

February (Notice 2) 9, 727

March (Notice 18) 13, 845

Letter rulings, determination letters and

information letters issued by Associate

Chief Counsel (RP 1) 1, 4

Letter rulings, information letters, etc.

(RP 4) 1, 115

Master and prototype plans, unified pro-

April 3, 2000

EMPLOYEE PLANS

cont.

ESTATE TAX

cedures (RP 20) 6, 553

Minimum funding standards, waiver of

(RP 17) 11, 766

Mortality tables (Ann 7) 6, 586

New comparability plans, nondiscrimination (Notice 14) 10, 737

New technologies in retirement plans,

distribution notices and consents (TD

8873) 9, 713

Qualified retirement plans, remedial

amendment period (TD 8871) 8, 641

Regulations:

26 CFR 1.401(b)–1T, removed; remedial amendment period (TD 8871)

8, 641

26 CFR 1.402(f)–1, amended;

1.411(a)–11, amended; new technologies in retirement plans (TD

8873) 9, 713

Reporting requirements, section 457

plans (Ann 1) 2, 294

Technical advice to district directors and

chiefs, appeals offices, from Associate

Chief Counsel (RP 2) 1, 73

Technical advice to IRS employees (RP

5) 1, 158

User fees, request for letter rulings (RP

8) 1, 230

Marital / charitable deduction, valuation

of property; administration expenses

(Ann 3) 2, 296

QTIP elections, individual retirement

accounts and testamentary trusts (RR

2) 3, 305

EMPLOYMENT TAX

Electronically filed information returns,

due dates (REG–105279–99) 8, 707

EPCRS, closing agreements (RP 16) 6,

518; correction (Ann 17) 13, 846

Information reporting:

Election workers (RR 6) 6, 512

New technologies in retirement plans,

distribution notices and consents (TD

8873) 9, 713

Proposed Regulations:

26 CFR 31.3402(q)–1, revised;

31.6053–3, revised; 31.6071(a)–1,

revised; extension of due date for

electronically filed information

returns (REG–105279–99) 8, 707

Railroad retirement, quarterly rate

beginning January 1, 2000, 9, 721

Regulations:

26 CFR 35.3405–1, redesignated as

35.3405–1T, revised; 35.3405–1,

added; new technologies in retirement plans (TD 8873) 9, 713

EXCISE TAX

Minimum funding standards, waiver of

(RP 17) 11, 766

Prepaid telephone cards (TD 8855) 4,

374

Regulations:

26 CFR 49.4251–4, added; 602.101,

amended; prepaid telephone cards

(TD 8855) 4, 374

Return filing and deposits (Ann 5) 4, 427

EXEMPT

ORGANIZATIONS

Areas in which advance letter rulings and

determination letters will not be issued

from Associate Chief Counsel,

Domestic (RP 3) 1, 103

Information letters available for public

inspection (Ann 2) 2, 295

Letter rulings, information letters, etc.

(RP 4) 1, 115

List of organizations classified as private

foundations (Ann 8) 6, 586

Private foundation disclosure rules (TD

8861) 5, 441

Proposed Regulations:

26 CFR 1.170A–9(e)(6)( i ), amended;

1.509(a)–3(f)(1), amended;

1.512(a)–1(e), amended; 1.513–4,

withdrawn; 1.513–4, added; taxation

of tax-exempt organizations’ income

from corporate sponsorship

(REG–209601–92) 12, 829

Regulations:

26 CFR 1.513–7, added; travel and

tour activities of tax-exempt organizations (TD 8874) 8, 644

26 CFR 301.6104(d)–1, removed;

301.6104(d)–2, redesignated as

301.6104(d)–0, revised;

301.6104(d)–3, redesignated as

301.6104(d)–1, amended;

301.6104(d)–4, redesignated as

301.6104(d)–2, amended;

301.6104(d)–5, redesignated as

2000–14 I.R.B.

EXEMPT

ORGANIZATIONS cont.

INCOME TAX

cont.

INCOME TAX

cont.

301.6104(d)–3, amended; private

foundation disclosure rules (TD

8861) 5, 441

Revocations (Ann 15) 12, 837

Sponsorship payments, taxation of

(REG–209601–92) 12, 829

Technical advice to district directors and

chiefs, appeals offices, from Associate

Chief Counsel (RP 2) 1, 73

Technical advice to IRS employees (RP

5) 1, 158

Travel tours, taxation of (TD 8874) 8,

644

User fees, request for letter rulings (RP

8) 1, 230

Low-income housing credit:

Compliance monitoring (TD 8859)

5, 429

Resident population estimates

(Notice 13) 9, 732

Puerto Rico and possession tax credit,

termination of (TD 8868) 6, 491

Research credit, controlled group

(REG–105606–99) 4, 421

Debt instrument (RR 12) 11, 744

Depletion, treatment of delay rental

(REG–103882–99) 8, 706

Depreciation:

MACRS property, involuntary conversion or like-kind exchange (Notice

4) 3, 313; correction (Ann 9) 9, 733

Determination of underwriting income,

non-life insurance companies (TD

8857) 4, 365

Disclosure of return information, Census

of Agriculture (TD 8854) 3, 306;

(REG–116704–99) 3, 325

Electronically filed information returns,

due dates of (REG–105279–99) 8, 707

Equity options with flexible terms, special rules and definitions (TD 8866) 6,

495

Estimated taxes:

Closely-held real estate investment

trust, penalty relief (Notice 5) 3,

314

Filing requirements:

Northeastern taxpayers, due dates

(Notice 17) 12, 827

Financial asset securitization investment

trusts, general (REG–100276–97;

REG–122450–98) 8, 682

Foreign corporations:

Exclusion of shipping income

(REG–208280–86) 8, 654

Information reporting (TD 8850) 3,

265

Stock transfer rules:

General provisions (TD 8862) 6, 466

Nonrecognition (TD 8863) 6, 488;

(REG–116048–99) 6, 584

Foreign currency, hyperinflation; definition (REG–116567–99) 5, 463; (TD

8860) 5, 437

Foreign partnerships:

Information reporting (TD 8850) 3,

265

U.S. persons with reportable event,

reporting requirement (TD 8851) 2,

275

Form SS-4, interim waiver of signature

(Notice 19) 13, 845

Fringe benefits, aircraft valuation (RR

13) 12, 774

Guidance priority list (Notice 10) 5, 451

Information letters available for public

inspection (Ann 2) 2, 295

Information reporting:

Barter exchange (Notice 6) 3, 315

Foreign partnerships and foreign corporations (TD 8850) 3, 265

Innocent spouse, equitable relief (RP 15)

5, 447

Installment agreements, limitation of failure to pay penalty (REG–105279–99)

8, 707

Insurance companies:

Differential earnings rate, tentative

(Notice 16) 12, 826

Prevailing state assumed interest

rates (RR 17) 13, 842

Interest:

Investment:

Federal short-term, mid-term, and

long-term rates for:

January 2000 (RR 1) 2, 250

February 2000 (RR 9) 6, 497

March 2000 (RR 11) 10, 734

Rates:

Underpayment and overpayment,

quarter beginning April 1, 2000

(RR 16) 12, 780

Inventory:

LIFO:

Price indexes, department stores:

November 1999 (RR 3) 3, 297

December 1999 (RR 10) 8, 643

January 2000 (RR 14) 12, 779

Letter rulings, determination letters and

information letters issued by Associate

Chief Counsel (RP 1) 1, 4

Low-income housing credit:

Compliance monitoring (TD 8859) 5,

429

Resident population estimates (Notice

13) 9, 732

Major disaster and emergency areas,

losses (RR 15 ) 12, 774

Nonqualified preferred stock, exchanges

and distributions (REG–105089–99) 6,

580

Partnerships:

Adjustments following sales (Ann 13)

11, 771

Allocation of nonrecourse liabilities

INCOME TAX

Accounting period change, automatic

consent (RP 11) 3, 309

Acquisitions, recognition of gain on distributions (Ann 10) 9, 733

Adequate disclosure of gifts (Ann 6) 4,

428

Allocation of partnership debt, nonrecourse liabilities (REG–103831–99) 5,

452

Amortization of intangible property (TD

8865) 7, 589

Appeals, test of arbitration procedure

(Ann 4) 3, 317

Areas in which advance letter rulings and

determination letters will not be issued

from Associate Chief Counsel,

International (RP 7) 1, 227

Asset acquisitions, allocation of purchase

price (TD 8858) 4, 332

Automobile owners and lessees (RP 18)

9, 722

Barter exchanges, information reporting

(Notice 6) 3, 315

Business Expenses:

ISO 9000 costs (RR 4) 4, 331

Substantiation (TD 8864) 7, 614

Traveling expenses, per diem

allowances (RP 9) 2, 280

Canadian banking legislation, repeal,

deferral of termination (Notice 7) 4,

419

Closely-held real estate investment trust,

estimated tax payments, penalty relief

(Notice 5) 3, 314

Contribution in aid of construction, definition (REG–106012–98) 2, 290

Credits:

2000–14 I.R.B.

April 3, 2000

INCOME TAX

cont.

(REG–103831–99) 5, 452

Amortization of intangible property

(REG–100163–00) 7, 633

Mergers and divisions

(REG–111119–99) 5, 455

Passive foreign investment companies:

Marketable stock (TD 8867) 7, 620

Qualified electing fund (TD 8870) 8,

647

Pre-filing agreement pilot program

(Notice 12) 9, 727

Presidentially declared disaster and combat zone, relief (REG–101492–98) 3,

326; correction (Ann 16) 12, 837

Private foundations:

Disclosure rules (TD 8861) 5, 442

Organizations now classified as (Ann

8) 6, 586

Proposed Regulations:

26 CFR 1.41–0, amended; 1.41–8,

revised; credit for increasing

research activities

(REG–105606–99) 4, 421

26 CFR 1.118–2, added; contribution

in aid of construction, definition

(REG–106012–98) 2, 290

26 CFR 1.132–0, amended; 1.132–9,

added; qualified transportation

fringes (REG–113572–99) 7, 624

26 CFR 1.197–2, amended; amortization of intangible property

(REG–100163–00) 7, 633

26 CFR 1.337(d)–5T, added,

1.852–12, added; 1.857–11, added;

certain asset transfers to regulated

investment companies and real

estate investment trusts

(REG–209135–88) 8, 681

26 CFR 1.354–1, amended; 1.355–1,

amended; 1.356–7, added;

1.1036–1, amended; treatment of

nonqualified perferred stock and

other preferred stock in certain

exchanges and distributions

(REG–105089–99) 6, 580

26 CFR 1.367(b)–3, amended; stock

transfer rules (REG–116048–99) 6, 584

26 CFR 1.612–3, amended; depletion,

treatment of delay rental

(REG–103882–99) 8, 706

26 CFR 1.708–1, amended; 1.743–1,

amended; treatment of partnership

mergers and divisions

(REG–111119–99) 5, 455

26 CFR 1.752–3, amended; 1.752–5,

April 3, 2000

INCOME TAX

cont.

revised; allocation of nonrecourse

liabilities by a partnership

(REG–103831–99) 5, 452

26 CFR 1.860E–1, amended;

1.860H–0, –1, –2, –3, –4, –5, –6,

added; 1.860I–1, –2, added;

1.860J–1, added; 1.860L–1, –2, –3,

–4, added; 1.861–9T, amended;

1.861–10T, amended; financial asset

securitization investment trusts; real

estate mortgage investment conduits

(REG–100276–97;

REG–122450–98) 8, 682

26 CFR 1.861–4, amended; source of

compensation for labor or personal

services (REG–208254–90) 6, 577

26 CFR 1.883–0, added; 1.883–1,

revised; 1.883–2, –3, –4, –5, added;

exclusions from gross income of

foreign corporations

(REG–208280–86) 8, 654

26 CFR 1.988–1, revised; hyperinflationary currencies, definition

(REG–116567–99) 5, 463

26 CFR 1.6011–4, added; tax shelter

disclosure statements

(REG–103735–00) 11, 770

26 CFR 1.6041–2, revised; 1.6041–6,

revised; 1.6042–2, revised;

1.6043–2, revised; 1.6044–2,

revised; 1.6045–1, added; 1.6045–2,

revised; 1.6045–4, revised;

1.6047–1, revised; 1.6049–4,

revised; 1.6049–7, revised;

1.6050A–1, revised; 1.6050D–1,

revised; 1.6050E–1, revised;

1.6050H–2, revised; 1.6050J–1T,

revised; 1.6050P–1, revised;

1.6052–1, revised; 301.6651–1,

amended; extension of due date for

electronically filed information

returns; limitation of failure to pay

penalty for individuals during period of installment agreement

(REG–105279–99) 8, 707

26 CFR 301.6103(j)(5)–1, added; disclosure of return information;

Census of Agriculture

(REG–116704–99) 3, 325

26 CFR 301.6111–2, added; corporate

tax shelter registration

(REG–110311–98) 11, 767

26 CFR 301.6112–1, amended;

requirements to maintain list of

investors in potentially abusive tax

INCOME TAX

cont.

shelters (REG–103736–00) 11, 768

26 CFR 301.7508–1, added;

301.7508A–1, added; relief for service in combat zone and for

Presidentially declared disaster

(REG–101492–98) 3, 326; correction (Ann 16) 12, 837

Publications:

515, changes to Tables 1 and 2 (Ann

11) 10, 739

1167, substitute forms, general

requirements (RP 19) 12, 785

1212, supplemental information (Ann

14) 11, 772

Qualified transportation fringe benefits

(REG–113572–99) 7, 624

Qualified Zone Academy Bonds (RP 10)

2, 287

Real estate investment trusts, asset transfers to (TD 8872) 8, 639;

(REG–209135–88) 8, 681

Real estate mortgage investment conduits, safe harbor (REG–100276–97;

REG–122450–98) 8, 682

Recharacterizing financing arrangements,

fast-pay stock (TD 8853) 4, 377

Regulated investment companies, asset

transfers to (TD 8872) 8, 639;

(REG–209135–88) 8, 681

Regulations:

26 CFR 1.42–5, –6, amended; 1.42

–11, –12, –13, amended; 1.42–17,

added; compliance monitoring and

miscellaneous issues relating to the

low-income housing credit (TD

8859) 5, 429

26 CFR 1.62–2, amended; 1.62–2T,

removed; 1.274–5, added;

1.274–5T, amended; substantiation

of business expenses (TD 8864) 7,

614

26 CFR 1.162–11, amended;

1.167(a)–3, amended; 1.167(a)–6,

amended; 1.167(a)–14, added;

1.197–0, added; 1.197–2, added;

amortization of goodwill and certain

other intangibles (TD 8865) 7, 589

26 CFR 1.337(d)–5, added, certain

asset transfers to regulated investment companies and real estate

investment trusts (TD 8872) 8, 639

26 CFR 1.338–0, –1, –2, –3, removed;

1.338–4, redesignated as 1.338–8;

1.338–5, redesignated as 1.338–9;

1.338–4T, –5T, –6T, –7T, –10T,

2000–14 I.R.B.

INCOME TAX

cont.

added; 1.338(b)–1, added;

1.338(b)–2T, –3T, removed;

1.338(h)(10)–1, removed;

1.338(i)–1, removed; 1.338(i)–1T,

added; 1.1060–1T, revised; purchase

price allocations in deemed and

actual asset acquisitions (TD 8858)

4, 332

26 CFR 1.367(a)–3, amended;

1.367(b)–0, added; 1.367(b)–1, –2,

revised; 1.367(b)–3, added;

1.367(b)–4, revised; 1.367(b)–5, –6,

added; 1.367(b)–7, –8, –9, removed;

1.381(b)–1, amended; 7.367(b)–1,

–2, –3, –4, –5, –6, –7, –8, –9, –10,

–11, removed; 7.367(b)–12, amended; 7.367(b)–13, removed; stock

transfers rules (TD 8862) 6, 466

26 CFR 1.367(b)–3T, added; stock

transfer rules, (TD 8863) 6, 488

26 CFR 1.401(b)–1, amended;

1.401(b)–1T, removed; remedial

amendment period (TD 8871) 8, 641

26 CFR 1.513–7, added; travel and

tour activities of tax-exempt organizations (TD 8874) 8, 644

26 CFR 1.663(a)–1, amended;

1.663(c)–1, amended; 1.663(c)–2,

revised; 1.663(c)–3, amended;

1.663(c)–4, redesignated as

1.663(c)–5, amended; 1.663(c)–4,

added; 1.663(c)–6, added; separate

shares rule applicable to estates (TD

8849) 2, 245

26 CFR 1.743–1, 1.754–1, 1.755–1,

corrected; adjustments following

sales of partnership interests (Ann

13) 11, 771

26 CFR 1.871–14, revised; 1.1441–1,

–4, –5, –6, –8, –9, revised;

1.1443–1, revised; 1.6042–3,

revised; 1.6045–1, revised;

1.6049–5, revised; withholding of

tax on certain U.S. source income

paid to foreign persons; delay of

effective date (TD 8856) 3, 298

26 CFR 1.936–11T, removed;

1.936–11, added; termination of

Puerto Rico and possession tax

credit (TD 8868) 6, 491

26 CFR 1.988–0, amended; 1.988–2,

amended; treatment of income and

expenses from certain hyperinflationary currencies; nonperiodic payments (TD 8860) 5, 437

2000–14 I.R.B.

INCOME TAX

cont.

26 CFR 1.1092(c)–1, added; equity

options with flexible terms (TD

8866) 6, 495

26 CFR 1.1291–1T, redesignated as

1.1291–1, revised; 1.1293–1T,

redesignated as 1.1293–1, revised;

1.1295–0, amended; 1.1295–1T,

redesignated as 1.1295–1, amended;

1.1295–3T, redesignated as

1.1295–3, amended; general rules

for making and maintaining qualified electing fund elections (TD

8870) 8, 647

26 CFR 1.1296(e)–1, added; passive

foreign investment companies, marketable stock (TD 8867) 7, 620

26 CFR 1.1361–0, –1; amended;

1.1361–2, –3, –4, –5, –6, added;

1.1362–0, amended; 1.1362–2,

amended; 1.1362–8, added;

1,1368–0, amended; 1.1368–2,

amended; 1.1374–8, amended;

301.6109–1, amended; subchapter S

subsidiaries (TD 8869) 6, 498

26 CFR 1.1366–0, –1, added;

1.1366–2, revised; 1.1366–3, –4, –5,

added; 1.1367–0, –1, amended;

1.1367–3, revised; 1.1368–0, –1, –2,

–3, amended; 1.1368–4, revised;

passthrough of items of an S corporation to its shareholders (TD 8852)

2, 253

26 CFR 1.1441–10, added;

1.7701(1)–0, added; 1.7701(1)–3,

added; 602.101(b), amended;

recharacterizing financing arrangements involving fast–pay stock (TD

8853) 4, 377

26 CFR 1.6011–4T, added; tax shelter

disclosure statements (TD 8877) 11,

747

26 CFR 1.6038–3, added; 1.6038–2,

amended; 1.6038B–1, amended;

1.6038B–2, amended; information

reporting with respect to certain foreign partnerships and certain foreign

corporations (TD 8850) 2, 265

26 CFR 1.6046A–1, added; return

requirement for U.S. persons acquiring or disposing of an interest in a

foreign partnership (TD 8851) 2,

275

26 CFR 301.6103(j)(5)–1T, added;

disclosure of return information;

Census of Agriculture (TD 8854) 3,

vii

INCOME TAX

cont.

306

26 CFR 301.6104(d)–1, removed;

301.6104(d)–2, redesignated as

301.6104(d)–0, revised;

301.6104(d)–3, redesignated as

301.6104(d)–1, amended;

301.6104(d)–4, redesignated as

301.6104(d)–2, amended;

301.6104(d)–5, redesignated as

301.6104(d)–3, amended;

602.101(b), amended; private foundation disclosure rules (TD 8861) 5,

442

26 CFR 301.6112–1T, amended;

requirements to maintain list of

investors in potentially abusive tax

shelters (TD 8875) 11, 761

26 CFR 301.6111–2T, added; corporate tax shelter registration (TD

8876) 11, 753

Removal costs, capital expenditures (RR

7) 9, 712

Reorganizations:

Divisive mergers, definition (RR 5) 5,

436

Solely for voting stock requirement

(Notice 1) 2, 288

Research credit, controlled group

(REG–105606–99) 4, 421

S corporations:

Passthrough items (TD 8852) 2, 253;

correction (Ann 18) 13, 846

Subsidiaries (TD 8869) 6, 498

Separate shares rules (TD 8849) 2, 245

Short-term Treasury bills (Ann 14) 11,

772

Sources of income, compensation for

labor or services (REG–208254–90) 6,

577

Tax conventions:

New treaties with Estonia, Latvia,

Lithuania, Venezuela;

Publication 515 changes (Ann 11)

10, 739

Treaties with Austria, Ireland, South

Africa; Publication 515 changes (Ann

11) 10,

739

United Kingdom; repeal of advance

corporation tax (RP 13) 6, 515

Tax shelters:

Confidential corporate, registration

(TD 8876) 11, 753;

(REG–110311–98) 11, 753

Disclosure statements (TD 8877) 11,

April 3, 2000

INCOME TAX

cont.

747; (REG–103735–00) 11, 770

Listed transactions (Notice 15) 12, 826

Office of Tax Shelter Analysis (Ann

12) 12, 835

Potentially abusive, list of investors

(TD 8875) 11, 761;

(REG–103736–00) 11, 768

Technical advice to district directors and

chiefs, appeals office, from Associate

Chief Counsel (RP 2) 1, 73

Variable annuity contracts, closing agreements (Notice 9) 5, 449

Withholdings:

Qualified intermediary withholding

agreements (RP 12) 4, 387

U.S. source income payments to foreign persons, delay of effective date

(TD 8856) 3, 298

April 3, 2000

viii

2000–14 I.R.B.

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